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THE SITUATION ROOM
Irene's Aftermath; Congress Speech Dispute
Aired August 31, 2011 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: A new warning today the United States is not as secure as it could be. The heads of the 9/11 Commission say that nine of the panel's 41 recommendations have not been carried out including stronger measures to detect explosives at airport screening checkpoints and more secure I.D. cards. The White House says it got the message
(BEGIN VIDEO CLIP)
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: There is no doubt that there are many things that we need to continue to work to improve on. There's no question.
I believe, again, if you look at the report, and the number of recommendations that the commission put forward that have been met, it is substantial. The percentage is very high and there are still issues that need to be addressed.
(END VIDEO CLIP)
BLITZER: Also today, FEMA has released for the first time video shots at Ground Zero in the hours and days after the attack.
Fragments from the World Trade Center rubble now are on display in Washington. CNN's Athena Jones got a tour today.
Athena, what did you see?
ATHENA JONES, CNN CORRESPONDENT: Well, as the 10th anniversary of September 11th approaches, the Newseum here in Washington, a museum dedicated to the news, is set to open an exhibit called "War on Terror: The FBI's New Focus." It's a look at how the FBI's mission has changed since 9/11, and it includes artifacts from the World Trade Center site that really bring back that unforgettable day.
It's also the first time the public will have a chance to see many of these items, Wolf.
JONES (voice-over): They are haunting symbols of grief found in the rubble of the World Trade Center site, a mother's wallet and credit cards packed for a trip cut short when United Flight 175 struck the south tower.
SUSAN BENNETT, VICE PRESIDENT, NEWSEUM: Ruth McCort (ph), who lived in New London, Connecticut, was going to take her 4-year-old daughter to Disneyland. There were some families that got no human remains back, so it was really important for them to get anything, whether it was a wedding ring or a credit card, a wallet, a shoe, because it brought some closure to them.
JONES: Sixty artifacts make up the Newseum's "War on Terror" exhibit, items used as evidence in the FBI's investigation into the September 11th attacks, like engine parts from Flight 175 found several blocks from Ground Zero; hijackers' passports found in Shanksville, Pennsylvania; and part of a five-page letter translated from Arabic here that was given to each of the 19 hijackers with instructions on how to spend their last night. And there are several more personal items that belong to victims, like cell phones and pagers that rang for days after the towers fell.
A team of 30 from the Newseum worked closely with the FBI for eight months to put the exhibit together, part of an effort to remember and to educate.
CATHY TROST, NEWSEUM DIRECTOR: The story was not only the investigation, but also how it changed the FBI forever. The FBI's mission was indelibly changed by 9/11.
JONES: The FBI's top priority after 9/11 was to prevent another attack, and the exhibit includes articles from the "Shoe Bomber" case, like Richard Reid's boarding pass, shoes, and the four matches he struck in his attempt to bring down his transatlantic flight in December, 2001. But it's the items from September 11 that hit home the most for this visitor.
UNIDENTIFIED MALE: It would be emotional for any American, because it's just so searing. It's still so hard to believe, at least for me, even though it's been 10 years.
JONES: Now, the museum expects thousands of visitors to come see this new exhibit over the coming weeks. In fact, 7,000 are expected on September 10 alone. Admission will be free that day -- Wolf.
WOLF BLITZER, CNN ANCHOR: Athena, thank you.
And you are in THE SITUATION ROOM.
Happening now: an unfolding flood disaster in communities across the Northeast United States. And now another storm in the Atlantic expected to reach hurricane strength within hours.
Also, President Obama and the House speaker, John Boehner, locked in an unusual dispute over the president's request to address Congress.
And the FBI going on heightened alert. How big is the threat of a new terror attack on the 9/11 anniversary that is coming up?
We want to welcome our viewers in the United States and around the world. Breaking news, political headlines and Jeanne Moos all straight ahead. I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Hundreds of thousands of people across the Northeast are still in crisis days after Hurricane Irene's deluge. Flood warnings are still in effect and almost two million people remain without power.
On Sunday, President Obama will visit Paterson, New Jersey, parts of which remain underwater. And in Vermont, airdrops are being made into some towns caught off by floodwaters while the National Guard is carrying supplies into other communities.
CNN's Amber Lyon is in Wilmington, Vermont, for us.
Amber, what's the latest there?
AMBER LYON, CNN CORRESPONDENT: Wolf, there has been an active cleanup going on in this town all day long. About 1,800 people live here and earlier this week, a wall of water about 10 feet high would have been over my head, swept through the center of town, destroying almost every business here and all day we have been seeing people like these two who own a consignment shop out here just trying to salvage any type of inventory that they can.
And we are starting to seeing more and more of these junk piles out in front of businesses. Take a look at this. We have got some Vermont maple syrup. Vermont is famous for that, also some cheese and just thousands of dollars worth of items destroyed by the mud and the muck.
This store has been around since 1836; it's a family-owned business, the Country Store. A big question today has been do these business owners have flood insurance? It's about half and half, Wolf, I have got to tell you. Luckily this store does, but I talked to another family down the road, $300,000 worth of damages, their carpet, tile, an ironically enough, flood restoration business, and they say they don't have insurance and they don't know how they will pay for all these damages.
And I want to introduce you to someone who is in an even worse situation out here.
This is Bert Wurzberger. And Bert is a big fish fan. He loves animals and he had an aquarium shop that just got washed away from the back here. You can see it just resting against those trees. A total loss.
And, Bert, what is it like for you to see your business in this condition and all this damage everywhere?
BERT WURZBERGER, BUSINESS OWNER: It's really sad. It's been also very traumatic. The experience itself was very traumatic.
It was very sad to lose the fish. That was really what struck me first. I had a lot of really beautiful fish and it really hurt.
LYON: And when this flood hit, Bert was actually able to rescue a 10-year-old boy as a telephone pole was falling and about to fall on him as he stood near the water and Bert pulled this boy to safety.
And then you say the propane tanks came into town. Tell us about that.
WURZBERGER: That's true. As the floodwaters rose, I had to vacate the buildings here and vacate our other building here.
And I went across the street to the lawn of the Wilmington Inn across the street. And some time during that time period, we were out on the lawn standing in on the driveway. And there was a stream of water coming down the driveway directly connected to the river coming down Main Street. The telephone pole started coming down and I yelled out that the telephone pole is dropping, everybody get out of the water.
And everybody ran quickly to get out. But there was a 10-year- old boy who was standing there in the stream not moving quickly enough. And I grabbed him and pulled him up on to the porch as quick as I could. And within two seconds, the telephone pole hit the water and exploded with lightning.
LYON: And then you saw giant 500-gallon drums of propane floating down the river.
WURZBERGER: About five to 10 minutes later, a 500-gallon propane tank came down and landed right next to the telephone pole, with its gas valve being broken off on the telephone pole.
It's not the tank itself, but an explosion of propane came out. And we were up on the porch at that time. And we just ran as fast as we could up into the forest, fearing that the sparks from the telephone poll were going to ignite the propane tank. And fortunately it didn't.
But we spent the next half-hour up in the forest just listening to the sound of the propane gushing out of this tank and hoping it wouldn't explode and trying to stay safe basically.
LYON: And do you have flood insurance for your aquarium shop, Bert?
WURZBERGER: We have some insurance on the whole property. It is connected to our other businesses. But it's certainly nowhere near enough to cover the full loss. It's only going to be a partial coverage.
LYON: OK. Best of luck to you.
WURZBERGER: Thank you.
LYON: Thank you for the help.
LYON: And something that has been helping Bert out and these other business owners, hundreds of volunteers from the state of Vermont came out here, people that they don't even know and have been out here helping Bert and his father in his shop just get this inventory out and really clean up today. And they were able to save some Vermont snow globes here and a couple little things, but really it was kind of a total loss -- Wolf.
BLITZER: Total loss indeed. Heartbreaking stuff for all those families. Amber, thanks very much.
The extent of the damage from Hurricane Irene still being revealed.
CNN's Alina Cho continues our coverage from East Haven, Connecticut -- Alina.
ALINA CHO, CNN CORRESPONDENT: Wolf, I'm standing inside one of the homes that was just decimated during Hurricane Irene.
And as we widen out here, you can see that there is not much left of the home except amazingly the flat-screen TV. All you have to do is take a walk along this stretch of beach and you will find that nearly every home was either damaged or destroyed.
And to give you an idea of just how bad it is, take a walk over here with me to the house next door. It's now sitting at a 45-degree angle. And if you look inside here, you can see this was the kitchen and it used to be on the second floor of this home. It is now hugging the beach at ground level. Residents here call this area a war zone in the wake of Irene.
But the mayor says the good news, there were no fatalities and no injuries. As for the power situation, nearly a half-million residents in Connecticut are still without power, a quarter of the residents in East Haven. And when I asked the mayor when will the power come back on, she said: "That's a very good question. I have no idea" -- Wolf.
BLITZER: Heartbreaking stuff in Connecticut as well. Alina, thank you.
Hurricane Irene has revealed more cracks in the Washington Monument, by the way, which was damaged by that powerful earthquake only days before the storm. The National Park Service in Washington says small pools of standing water were discovered in post-hurricane inspections, indicating more extensive cracks in the monument's mortar than realized.
Officials say the monument will remain closed until repairs are finished.
BLITZER: The president asks to address Congress. The House speaker, John Boehner, says not so fast. We're learning new details of an extraordinary dispute.
And fear of a new terror attack on the approaching 10th anniversary of 9/11. Now the FBI is about to go on heightened alert. We will tell you why.
Plus, a warning from experts that pilots may be relying too much on autopilot, a so-called automation addiction, with potentially deadly consequences.
Stay with us. You are in THE SITUATION ROOM.
BLITZER: Jack Cafferty is here with "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Here we go, as promised.
Turns out "drama" may be Sarah Palin's middle name. You probably already knew that.
A source close to the half-term dropout governor of Alaska tells CNN that Palin will, in fact, appear at a Tea Party rally in Iowa on Saturday.
This comes after Palin's staff indicated earlier today that her appearance was being -- quote -- "put on hold."
They cited what they called issues with the planning, and said that event organizers had been dishonest about the speakers.
Palin had been talking for months about attending this thing, keynoting it, in fact. Supporters from around the country have booked plane tickets and bus tickets and flocking in there to attend this thing over the Labor day weekend.
It looks like Ms. Palin wasn't happy that former Republican Senate candidate Christine O'Donnell was also supposed to speak at this event. Perhaps Palin thought the stage wasn't big enough for the two of them.
Well, guess who's no longer speaking at that Tea Party rally in Iowa? That's right. Once Palin threatened to pull out of the event, organizers removed O'Donnell from the program, for the second time in 48 hours.
Meanwhile, O'Donnell is no day at the beach either. She walked off the set of "PIERS MORGAN" here on CNN because she didn't want to answer questions about public statements that she had already made which were in a book which she was on Piers Morgan's show to promote for free. She was getting free television time.
So now O'Donnell is out and Palin is in. And in the end, I guess Sarah Palin got her way again.
The whole thing is kind of pretty puzzling and petty. This Tea Party event has been highly anticipated since Palin is expected to make a decision about a 2012 run by the end of September.
It's all just so high school.
Here's the question: Provided she shows up at the event, what would you like to hear Sarah Palin say in Iowa?
Go to CNN.com/caffertyfile. Post a comment on my blog or you can go to our post on THE SITUATION ROOM's Facebook page.
This is pretty pathetic stuff, Wolf.
BLITZER: Pretty petty, but you know what? It's good politics. We enjoy listening to it.
CAFFERTY: It's what?
BLITZER: It's something like that. It's petty.
BLITZER: Jack, stand by.
BLITZER: I want to get to something extraordinary right now, the escalating fight between President Obama and House Republican leaders. The president today asked to address a joint session of Congress a week from tonight.
The House speaker, John Boehner, saying no, telling the president -- and I'm quoting now -- "It is my recommendation that your address be held on the following evening, when we can ensure there will be no parliamentary or logistical impediments that might detract from your remarks. I respectfully invite you to address a joint session of Congress on Thursday, September 8, 2011, in the House chamber at a time that works best for your schedule."
Let's talk about this with our senior political analyst, David Gergen and our chief White House correspondent, Jessica Yellin.
First of all to you, Jessica. What's the latest reporting you're getting? Because this is getting amazingly ugly right now.
JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: It really is, Wolf.
The latest is that a White House official says, well, they consulted Speaker Boehner's office in advance of releasing their letter asking for this date and the speaker's office raised no objections. They went ahead and said it would be September 7. Speaker Boehner's office has released its own statement saying, wait, we were notified just moments before you released the letter and that they essentially weren't given a chance to sign off on the date. They say that this ignores decades, if not centuries, of the protocol of working out a mutually agreeable date and time before making a public announcement. And finally just in, Wolf, a senior House Democratic aide is calling all of this childish behavior and saying it's unheard of for the speaker's office to reject a presidential request of this nature.
The bottom line is it's such a mess, it does seem that consensus opinion on the Hill seems to be that despite it all, the president would be wise to just put it off until Thursday, because then he would avoid anybody raising some kind of parliamentary objection at the last minute that could mar the speech on Wednesday night.
BLITZER: I have covered Washington, David, for a long time. You have served four presidents. Have you ever seen anything like this before?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No. And it certainly doesn't bode well for many more agreements in the next few weeks, does it, on jobs or on the deficit, if they can't even agree on a date to do it?
Wolf, as you well know and Jessica knows, the protocol is that the White House always get the consent of the both House and the Senate leadership and then sends a pro forma letter. So it's automatic. When the letter goes up, you know the deal is done.
It appears here they didn't have a full deal. And of course there's the additional context that -- the surprise to the public when the president's letter first went up is that the time that the president suggested conflicts with a Republican debate at the Reagan Library, which was going to be broadcast by CNBC and MSNBC.
So there are all sorts of Republican objections to that. But if the president moves it to Thursday night, he has a conflict with the NFL opener with the Green Bay Packers, who won the series -- won the championship last year.
So either night, he's going to have a lot of issues. But this is a circus.
BLITZER: Why not just do it, Jessica? What is the White House saying from the Oval Office or the East Room from the White House? Why does he need a joint session of Congress?
YELLIN: Well, the point of going before Congress is that he is calling on Congress to take action on explicit legislation, on clearly defined proposals for jobs plans.
And so he wants the audience before Congress and he wants the prime-time address. But the other issue, Wolf, is that Congress is not here that many nights next week. Essentially, both houses are only really here on Wednesday and Thursday, so it doesn't really give him that many options to choose from. You got NFL one night, as David points out, and you have got the debate the other night.
And so one of the issues is, when is Congress in town? Their hands were tied to some extent at the White House.
BLITZER: Looks to me like if he wants to do it before a joint session of Congress, he has no option but to do it Thursday night, as the speaker says. He's actually a guest of Congress when he comes before a joint session, an equal branch of government.
Guys, thanks very much.
The Gadhafis are lying low, but they are not keeping quiet. Just ahead, Moammar Gadhafi's sons have a defiant answer for the rebels who are frantically searching for them.
That and an inside look at the heart of Gadhafi's state, that is coming up right here in THE SITUATION ROOM.
BLITZER: Defiant messages from the sons of Libya's Moammar Gadhafi, whose whereabouts are still unknown 11 days after rebels took his capital.
Our senior international correspondent, Dan Rivers, is joining us now from Tripoli.
Dan, Gadhafi's sons spoke out today, but is there any sign of where their father is?
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: There isn't, Wolf.
But Saif al-Islam, the second eldest son, spoke for the first time since the fall of Tripoli. He was speaking on a pro-Gadhafi TV channel that is broadcast out of Damascus. And it was a message of defiance once again from the Gadhafi family.
He described the rebels as rats and gangsters and said even that he had been in the suburbs of Tripoli talking to people there. And it was really a rallying call. He said they had 20,000 armed young people ready, willing, and able in the town of Sirte to fend off the rebels. So no sign at all of any compromise or an olive branch of negotiation at all from Saif al-Islam.
BLITZER: Dan, you also got an inside look at Gadhafi's intelligence headquarters. What did you find?
RIVERS: A rare and privileged glimpse inside this building, Wolf.
This is a building that would have been off-limits to most Libyans, let alone any foreigners. It was the very heart of the secret state of Gadhafi's regime. And we managed to penetrate right into the heart of it. NATO had hit it in a number of places, but there were still several buildings that were intact, where we got an idea of just how pervasive the monitoring of Libyan civilians were who were deemed to be enemies of the state.
RIVERS (voice-over): This was the gateway into Gadhafi's secret state, now firmly in the control of the rebels. Only the privileged few could enter the military intelligence headquarters, but now these buildings are slowly yielding their secrets.
We pick our way through the rubble of one building that was hit by a NATO airstrike and find others intact with shredded documents on the floor.
But there were also plenty of files still here.
(on camera): This intelligence headquarters is full of the evidence of the pervasiveness of Gadhafi's police state. These documents here talk about erasing people from the intelligence database. No one knows what that means. Does that mean simply taking their names off the computer or does erasing allude to something much more sinister?
(voice-over): And then we were ushered through a crowd of rebels into the inner sanctum. This office belonged to Abdullah Senoussi. He is the brother-in-law of Colonel Gadhafi and head of intelligence, wanted for crimes against humanity by the International Criminal Court.
Was it at this desk that he plotted to blow up an airliner over Niger in a 1989, a crime he was convicted of in absentia in France? Was it around this conference table that the massacre of 1,200 people in Abu Salim prison was orchestrated?
In an antechamber, an ornate bed now occupied by a rebel commander. In the offices nearby, more files with photos, spies or targets for spies. It's not clear.
(on camera): This document gives an idea of the sophisticated nature of the Gadhafi security apparatus. It's a file on one individual and goes into incredible depth about how much money he has, who he is friends with, where he has been. It's dated from 2007, but this room is full of similar file on hundreds of other individuals.
(voice-over): Gadhafi's regime is now shattered. And the true Orwellian nature of his Libya is slowly becoming clear.
RIVERS: We have been talking to lawyers who are desperately keen, Wolf, to preserve those files, because they are not only part of Libya's history. They may also form vital evidence in any forthcoming trial.
BLITZER: Dan Rivers reporting for us from Tripoli, thanks for that report, Dan.
Will the 9/11 anniversary prove to be irresistible to terrorists plotting their next attack? The government here in the United States preparing carefully. And it seems unimaginable, companies making billions of dollars paying next to nothing in taxes to the federal government.
And if you fly, we are going to tell you how technology may inadvertently be putting your life at risk.
Stay with us. You are in THE SITUATION ROOM.
BLITZER: As I've been reporting for weeks, there's heightened concern out there that al Qaeda and an affiliate, perhaps even a lone wolf sympathizer, might try to do something on the upcoming tenth anniversary of 9/11. Let's discuss what's going on.
Joining us now, two guests. Tom Fuentes is a CNN contributor, a former director -- assistant director of the FBI. And Ron Kessler is the author of a new book entitled "The Secrets of the FBI." He's also a correspondent for Newsmax.
Guys, thanks very much for coming in.
Ron, you intrigued me by writing this overnight, and I'll read a little excerpt of your latest blog. You say, "Every office will be on heightened alert," referring to the FBI. "We are going to treat that period as having significance, but there is no information of a specific threat."
What are you learning, Ron, about what's going on in anticipation of a possible attempt by al Qaeda or some affiliate to do something on the tenth anniversary?
RON KESSLER, AUTHOR, "THE SECRETS OF THE FBI": Well, first of all, no agent will be given leave. So almost all or, in fact, all of the roughly 14,000 FBI agents will be on duty.
And in the material that they seized in the compound of bin Laden, they found that he did have an interest in doing something on the tenth anniversary. There has been no specific threat. But you know, with -- with lone wolfs, with al Qaeda in the Arabian Peninsula, with al Qaeda still being in existence, even though it's degraded, there are so many opportunities for an attack.
And it really doesn't take that much to pull off a WMD attack involving ricin, for example, radiological materials, anthrax, or for any other kind of attacks. So I interviewed Bob Mueller, the FBI director for this book, "The Secrets of the FBI," and he said that what keeps them up at night is the possibility of such an attack or even an attack on airplanes.
BLITZER: Let me interrupt -- let me interrupt for a second, Ron. Because I -- we checked with the FBI. And maybe in Washington or New York, there might not be any leaves, but elsewhere around the world, they're saying there will be leaves. There will be some individuals who will not have to work. Were you talking about no leaves in Washington and in New York or all over, every FBI field office? KESSLER: My understanding was every office. But either way, they're on a heightened state of alert, according to my sources.
BLITZER: Let me bring Tom Fuentes into the conversation. Tom, what are you hearing? How concerned is the FBI right now that, as a result of the killing of bin Laden, there will be an effort to get some revenge on the tenth anniversary of 9/11?
TOM FUENTES, CNN CONTRIBUTOR: The feeling is, Wolf, for most of the people I talked to, is that if al Qaeda had the capability to conduct a large-scale attack earlier, they would have already done so. They wouldn't postpone it just so it would coincide with the ten-year anniversary, despite bin Laden's interest in doing so.
But to carry out a large-scale attack for the type of command and control, communications, financing, training, selection of the attackers, coordination of the attack, most experts believe that they really aren't capable of that large scale of an attack without it being noticed by someone, given the elaborate security apparatus that has been created around the world since 9/11.
BLITZER: And that may help explain the president's answer. I interviewed him the other day in Iowa, Ron. Let me play the clip. I asked him about how concerned he was that al Qaeda or some related group would seek revenge for the killing of bin Laden on the tenth anniversary. Listen to -- listen to his answer.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Obviously, on a seminal event like the tenth anniversary of 9/11, that makes us more concerned. That means we've got heightened awareness. The biggest concern we have right now is not the launching of a major terrorist operation, although that risk is always there.
The risk that we're especially concerned of right now is the lone-wolf terrorist. Somebody with a single weapon being able to carry out wide-scale massacres of the sort that we saw in Norway recently. When you've got one person who is deranged or driven by a hateful ideology, they can do a lot of damage, and it's a lot harder to trace those lone-wolf operators.
So we're spending a lot of time monitoring and gathering information. I think that we generally have to stay vigilant. There may be a little extra vigilance during 9/11.
(END VIDEO CLIP)
BLITZER: That lone-wolf threat, Ron, I take it that's the real fear right now. Is that right?
KESSLER: That's the major theory. And it's absolutely true that the FBI has a lot of tricks up its sleeve now, since 9/11. One is that it's become very prevention oriented and emphasizes getting clues and leads to the next plot as opposed to putting someone in jail right away. It also has trip wires in place, what they call trip wires, where, for example, a chemical company will report to the FBI if there's any suspicious purchase of chemicals that can be used for explosives. That was what led to the roll up of the alleged terrorist, who wanted to blow up George W. Bush's home in Dallas.
Another is that they now check out every lead, no matter how crazy it may sound, and they investigate to the point where they want to prove that it could not be true. And that's quite different from before, where they would just say, "Well, there's just no basis for this."
For example, if a swimming pool company is buying chemicals, now they will investigate the swimming pool company to actually establish that it really is in that business. And that's quite a change from before.
BLITZER: The bottom line, Tom, is that the world over these 10 years for the FBI really has changed.
FUENTES: Yes, it has. And everyone's on alert all the time. I think Ron is exactly correct. The trip wires that are place, the leads that are followed up on continuously, every day all year long. It's not just on the tenth anniversary.
And these kind of alerts have gone on since 9/11. Everybody went into a heightened concern when it was the Fourth of July or it was Thanksgiving or it was Christmas or Easter. So really, everybody went into these alerts, whether it was a Christian, a Jewish holiday, or American holiday. Everybody was waiting.
And all these years later the closest that they came was the Christmas Day attempt by Abdulmutallab to blow up the airliner over Detroit. So other than that attack -- and there was no clear indication that bin Laden had knowledge that attack was even in progress. So that's the issue here, is that any one person, as Ron mentioned, could attack. Trying to do one on a large scale would be very, very difficult today.
BLITZER: Let's hope nothing happens. All right, guys. Thanks very much, Ron Kessler, Tom Fuentes. Thanks very much for joining us.
We're going to have much more news coming up. I'm heading over to the CNN Dialogues over at the Carter Center here in Atlanta. But Lisa Sylvester is standing by with a lot more news when we come back
LISA SYLVESTER, CNN CORRESPONDENT: Little to no tax obligations and huge CEO salaries. That's now standard operating procedure for some of the largest U.S. companies. And there are many who say that's simply not fair.
SYLVESTER (voice-over): Tax havens, tax breaks and loopholes. Companies can get very creative at reducing their tax bills. A new study by the liberal group the Institute for Policy Studies found in 2010 more than two dozen companies paid more to their CEOs than they paid in federal income taxes.
According to the report, General Electric made $5 billion in U.S. profits last year but claimed a $3.3 billion tax credit. G.E.'s CEO, Jeffrey Immelt, who is also the head of President Obama's Jobs Council, received a compensation of more than $50 million that year.
Regulatory filings show Verizon in 2010 claimed a $705 million credit, despite posting billions in profits, thanks to deferred taxes. Its CEO made more than $18 million.
Scott Klinger, one of the report's authors says putting off tax payments until future years is one way companies have been able to reduce their tax burden.
SCOTT KLINGER, INSTITUTE FOR POLICY STUDIES: We think of deferred taxes as saying to the IRS "The check is in the mail." It may be delivered next year or it may be delivered 25 years from now. That's not something that U.S. families get to do.
SYLVESTER: Some companies also use offshore subsidiaries like in the Cayman Islands to shelter some of their profits.
It's all perfectly legal. But the companies featured in the study took issue. GE said in a statement, quote, "GE pays what it owes, including significant income taxes in 2010 for previous years."
And while GE's federal income tax liability was zero, the company says it did pay more than $1 billion in payroll, state and local taxes.
Verizon says it has paid, quote, "a total of more than $7.5 billion in taxes over the past five years."
Many companies, including CNN's parent company Time Warner, use various tax breaks and provisions to reduce their tax burden.
Dan Mitchell with the Libertarian group the Cato Institute is pushing for a more simplified tax system.
DAN MITCHELL, CATO INSTITUTE: We have a tax code that runs to 70,000 plus pages. Well, guess what's in that 70,000 plus pages? All sorts of credits, deductions, exemptions, preferences, shelters, loopholes. And if you're rich and powerful, and you have the lawyers and the lobbyists and the accountants, then you can manipulate this tax system until the cows come home. It's ordinary people that wind up paying the very high tax rates.
SYLVESTER: The Institute for Policy Studies says the 25 companies featured in the reports spent a combined total of more than $150 million on lobbying and campaign contributions to lawmakers last year. New numbers also coming out of several major cities. Minorities are now the majority in a big demographic turnaround. CNN's Tom Foreman is digging deeper for us.
Tom, what's going on here?
TOM FOREMAN, CNN CORRESPONDENT: What's going on, Lisa, is that "Wall" -- "The Washington Post" created quite a stir when they came up with the headline today, pointing out that ten more cities -- several more cities have jumped on board here in this trend that showed up in the new census, 2010, where the white populations are slightly less than 50 percent when you combine all of the nonwhite population. Memphis, Modesto, Las Vegas, Jackson, San Diego, Washington, Oxnard, New York, for example.
Now, you may look at a place like Washington and say hasn't that long been a place where the minority groups have been the majority? It is if you're talking about the center city. What we're talking about here and why it is notable is we're talking about going beyond the center city.
For example, if you look at the Mall of the capital, all of downtown Washington that you may have seen if you came here on vacation or something like that, that's a sense of Washington as we know it. But when you widen out, what we're talking now is about adjacent counties, adjacent towns. The metro area. And all of that tipped over this edge into slightly more than 50 percent for minority groups.
Let's look at the nation as a whole, because that's also a very interesting way to look at this. If you look at the whole country, see all these dark blue spots in here? The dark blue spots are places where they had almost 58 percent growth in the minority population from 2000 to 2010. Around 58 percent of the dark blue spots, you can see that's all over the country. The light blue is around 30 to up to 57 percent growth. That's all over the country. So you think this is settled everywhere.
But you have to bear this in mind. In some places, you may be talking about like North Dakota here, a county that had a very small minority population, and it doubled or even tripled. So that's massive growth, but the aggregate is what really matters.
Let's change where we stand today. When you look at the aggregate and you say, "Where are the counties and the towns where minorities are now in the majority?" That's the dark blue areas all through here. And you see much of the country is largely untouched. But it still matters where it's happening, because where it's hitting is in population, political and economic centers.
New York, Florida, Texas, California, the states with the largest populations, the largest produce from this country that creates the most economically and that have huge political clout. That's why these changes can change your life all over this country as the political system adjusts to what's going on in these demographics -- Lisa. SYLVESTER: Yes. And Tom, it seems that they're moving from out of the city to the suburbs, aren't they? Moving out a little further out.
SYLVESTER: All right. Thank you very much, Tom, for that report.
Well, computers in the cockpit. They were supposed to make pilots' lives easier, but have they made our lives less safe? CNN looks at the danger posed by autopilot to all of us.
SYLVESTER: So you heard the phrase "use it or lose it." Well, it can apply to a lot of job skills. Take flying an airplane. Pilots are highly trained, but when computers make decisions for them, pilots can lose the skills that help them do their jobs and keep us safe. Brian Todd joins me now with more on this story -- Brian.
BRIAN TODD, CNN CORRESPONDENT: Well, Lisa, the autopilot system is credited overall with making air travel safer, but some independent experts are now out with a new report saying that the technology, the standards have evolved to the point where pilots are simply relying too much on that system. They call it automation addiction, and it's been a key factor in some high-profile crashes.
TODD (voice-over): June 2009. The autopilot system on Air France Flight 447 disconnects. A stall warning goes off. A co-pilot repeatedly says, "climb," points the nose up. It's the opposite of what he's supposed to do.
The pilot comes into the cockpit and says, "No, no, no. Don't climb." It's too late. The Airbus A-330 plummets into the Atlantic Ocean, killing all 228 people on board. An investigation revealed questions about the pilots' training and their ability to respond to surprises.
KEVIN HIATT, FORMER AIRLINE PILOT: They were misreading their cues and, therefore, unfortunately the aircraft continued its stall.
TODD: Former airline pilot Kevin Hiatt is part of a group of independent experts out with a new report commissioned by Congress and loosely overseen by the FAA. They found that overall, pilots are relying too much on autopilot systems.
HIATT: They're becoming very dependent upon using the autopilot, the auto throttles, the auto flight system, the computers to actually operate the entire flight.
TODD (on camera): And they're getting rusty as a result of this?
HIATT: Yes, because what happens is you don't actually hand fly or manipulate the controls, where it's a control yolk or a side stick controller. Therefore, your computer skills get greatly enhanced, but your flying skills start to get rusty.
TODD (voice-over): It's sometimes called automation addiction. January, 2009, as the Colgan Air regional plane approaches Buffalo, New York, the pilot countermands what the computer tells him to do to get out of a stall. The plane crashes, killing 50 people.
Hiatt and his panel say it's another example of a pilot possibly forgetting some key procedures.
(on camera) Kevin Hiatt and other experts say part of the problem is that standards have evolved to the point where, in recent years, pilots have only been flying manually for between 1 1/2 and 3 minutes of every flight at takeoff and landing.
(voice-over) And these days, Hiatt says, landings can also be done on autopilot. Experts say the problem may get worse because of the way younger pilots are trained.
JIM TILMON, FORMER COMMERCIAL PILOT: When you bring on a new pilot who has not been through some of the things the older guys have, they've never flown an airplane that had anything but some computer activity on it. They don't understand what to do necessarily when something goes wrong with that computer.
TODD: The authors of this report say this is not really the fault of the FAA or anyone in particular. It's just how the technology and the standards have evolved over the years.
The FAA would not comment on this report. The Airline Pilots Association e-mailed CNN, saying, quote, "The safety of airline operations today is a testament to the high levels of skill brought to the cockpit by the professional airline pilot" -- Lisa.
SYLVESTER: Brian, this is very troubling. Is the flying public in any danger? Because that's what people really want to know.
TODD: Right. And experts say no, because the -- the autopilot system has made air travel safer overall. It allows more planes in the air at one time. They can fly closer than they ever have, more safely. It's fuel efficient.
They just said that pilots have to be made to sharpen their skills, fly a certain amount of the flight on manual, train more on manual, that kind of thing. They just have to sharpen up.
SYLVESTER: Yes. It sounds like they need more recurring training. Thanks, Brian, for that report.
It's time now to chat -- check in with Jack Cafferty for "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN CORRESPONDENT: I love it. We've got planes crashing because the pilots apparently have forgotten how to fly them, but it's nobody's fault.
SYLVESTER: Yes. You know, it's one of those things. We rely on technology, Jack. We love technology, but you know, we have to remember there's supposed to be a person sitting behind the cockpit control and certainly got to take off and land that plane but...
CAFFERTY: And don't -- don't the taxpayers fund some government agency that's supposed to see that that's going on? I believe we do.
SYLVESTER: A certain agency called the FAA perhaps, Jack?
CAFFERTY: Yes, that would be it.
SYLVESTER: Yes, that's it.
CAFFERTY: All right. The question this hour: "Provided Sarah Palin shows up at that Tea Party thing in Iowa this weekend, what would you like to hear her say?"
Michael in Hawaii writes, "I'd like the momma grizzly to fess up to being a hypocrite and go live in her multimillion dollar house in Arizona. Stop portraying herself as a Wal-Mart mom who shares our values. And please, zip her lip and spare us her endless goofy ramblings on any issue that comes before her."
Jenny writes on Facebook, "I'm not running, and I just bought a condo in Russia."
Brad in Portland: "I finally realized how dumb I sound, so I'm retiring from public life, going home to Wasilla. Don't even call me."
Lou writes, "I'd like to hear Palin thank the lamestream media for making her a star and a millionaire. Lord knows she didn't have the capability to get there on her own."
Doug in Massachusetts: "I'm running. Lindsay Graham ought to run, too. Wouldn't change anything politically, but it would make it an entertaining race."
Finally in Alabama, "I'd like to hear her apologize to women for attempting to set us back a century; to men for thinking they're so testosterone driven she can win their votes with her looks; to the American people for wasting our time and taking up valuable time on the news that can keep us less informed about more important issues than her latest uninformed idiotic comments; to the animals who have been victimized by helicopter hunting; and to Russia for spying on them from their front porch."
Rob writes from Georgia, "I'd like to hear Palin say how about voting for a candidate with experience that has proven he or she knows the issues, and is willing to fight for our liberties. You know, somebody like Ron Paul."
And Burt writes from California, "Jack, to paraphrase Nixon, I'd like to hear, 'You won't have Palin to kick around any more, because gentlemen, this is my last tweet'."
If you want to read more on this, go to my blog, CNN.com/CaffertyFile, or through our post on "THE SITUATION ROOM's" Facebook page.
This is kind of fun, Lisa. We should do this more often.
SYLVESTER: I know. I love being here. I love being with you, Jack. Thanks very much for your report.
And Jeanne Moos is coming up next.
SYLVESTER: It's not easy to upstage a state trooper caught with a woman on the hood of a car. Here's Jeanne Moos.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): If you think they're shocking pictures...
UNIDENTIFIED MALE: Oh!
MOOS (on camera): Yes.
UNIDENTIFIED MALE: Oh!
MOOS (voice-over): ... imagine the mortification felt by the state police officer caught having sex on the hood of a car with a brunette woman.
(on camera) This has gone viral.
UNIDENTIFIED FEMALE: Oh, my God!
MOOS (voice-over): In broad daylight in uniform. At least he still had his clothes on.
UNIDENTIFIED MALE: I'm just glad it wasn't one of my deputies.
MOOS: The two surveillance photos were given to Santa Fe County Sheriff Robert Garcia. They came from a camera aimed at deterring vandalism, pointed at the entrance to a county-owned ranch. But instead of graffiti vandals, the cameras captured a New Mexico state police officer having sex on the hood in this desolate spot.
(on camera) The state police have conducted an internal investigation. A spokesman says they don't believe there was any criminal activity but that the action on the hood in uniform does violate the state police code of conduct.
(voice-over) The unidentified officer has been placed on administrative leave with pay as his fate is being decided, but there's something else.
(on camera) Do you see anything else odd about this picture?
UNIDENTIFIED MALE: A very voyeuristic animal?
UNIDENTIFIED FEMALE: Look at the animal watching him.
MOOS (voice-over): The only eyewitness was variously described as a prairie dog, small mammal pervert.
(on camera) What is the creature that's watching? Is it a Chihuahua? Is it a prairie dog? What is it?
UNIDENTIFIED MALE: I would say it looks like a little dog. It looks like a little Chihuahua.
UNIDENTIFIED MALE: It's a squirrel watching them have sex, right?
MOOS: We think it's a Chihuahua.
UNIDENTIFIED MALE: Gathering nuts? Oh, I'm sorry.
MOOS (voice-over): Either it belongs to one of the participants or it stumbled on the scene.
(on camera) Some have even said they thought they recognized the Chihuahua.
UNIDENTIFIED MALE: Ay yi yi!
MOOS (voice-over): Nah, the Taco Bell Chihuahua died of a stroke years ago.
UNIDENTIFIED FEMALE: The dog is participating.
MOOS (on camera): No, the dog is not participating.
UNIDENTIFIED FEMALE: It's, like, getting upset.
UNIDENTIFIED MALE: It's probably hot and sexy and with all the stress in the world right now, it's somebody's fantasy and escape, so obviously, it's working for all three of them.
UNIDENTIFIED MALE: Mucho mucho, baby.
MOOS: Jeanne Moos...
(on camera) Wait.
(voice-over) ... CNN, New York.
SYLVESTER: What can you say?
Well, I'm Lisa Sylvester. The news continues on CNN.