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CNN NEWSROOM

Barack Obama Delivers Remarks on the Economy; All Cases to Be Heard Monday in Sandusky Case; No Triple Crown, I'll Have Another Pulled From Belmont; Conservatives Head to Chicago, Audition Potential; V.P.s; Obama Hammers Congress to Act; Miss Pennsylvania Sticking to Story of Fraudulent Miss USA Pageant

Aired June 8, 2012 - 11:07   ET

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


WOLF BLITZER, ANCHOR, "NEWSROOM": All right, so there you have the president of the United States answering some questions, making a statement on the economy.

The questions were on the economy, except that third question was on the allegations that the White House has been deliberately leaking classified information, sensitive information to try to promote the president's re-election and you heard the president get rather animated and emotional, categorically denying that, the president saying these allegations were offensive.

These are allegations coming from several, influential Republican leaders in Congress, including Senator John McCain, among others, the ranking member of the Senate armed services committee and other chairmen of various committees, Republicans in the House as well, as Republican leaders in the Senate.

There's going to be a lot more short fallout on this. I suspect the president wanted to focus almost exclusively on the economy, the economic recovery, what's going on in Europe, the spillover effect in the United States, but his answer to that third question on the leaks will certainly be dominating the news and I'm sure will generate further reaction.

We're already, by the way, being told that the Republican leaders in Congress will hold a separate news conference around 12:30 p.m. Eastern to react to what we just heard from the president and we fully anticipate that the presidential nominee, the presumptive nominee, Mitt Romney, will react, as well.

Jessica Yellin was in the briefing room. She's joining us now. Jessica is our chief White House correspondent.

You saw the president get pretty animated there in response to that question about the leaks of sensitive classified information.

JESSICA YELLIN: Yeah. He was forceful on that one, Wolf, and emphatic in saying that the writers maintain that the leaks did not come from this White House.

But can you definitively say that they didn't? Of course, I'm guessing they can't say that definitely. They have to rely on the writers of these articles to assert that.

He also did not make clear -- he suggested that there's no current investigation at the White House right now on this issue. It's clear that this is going be an ongoing story and something that is going to be a headache for this White House for some time.

Because, no doubt, as it continues they can't stay away -- you know, that answer alone is not going to keep the questions from coming and it is one of those issues because of the bipartisan nature of the inquiry on the Hill that will continue to pound away at the White House.

As for the rest of this, it did seem the president was on a bit of the defensive, raising concern about Europe, something that seemed sort of vague and out, you know, sort of a vague threat to the U.S., a potential possible threat down the road.

Really what he was doing was hammering Congress, yet again, with, as we've said, proposals that have been out there since September. He did not propose any new compromises. He did not propose even new ideas that are Democratic ideas, for example, not even a, you know, Republican idea.

It is, again, the president facing off, squaring off against Congress in an election year, saying, we can't get our agenda done because the Republicans are obstructing.

And true or not, the bottom line is what the American people see is Washington not working. And his data is accurate. You know, the private sector, you can talk to Ali and Christine, the private sector has grown under him, jobs have grown. The public sector jobs are suffering.

But the bottom line, the economy is suffering sluggish growth and Washington could be doing more to help and so everybody in Washington now is looking sort of lame and helpless and everybody wants somebody here to be doing something.

And I'm not sure this is enough to make Congress change its position or to even make the American people feel that the president is moving forward to change, in a way, to do something different, to make the economy feel on a forward foot, Wolf.

BLITZER: Yes, I suspect you're right, Jessica. I suspect gridlock, at least, over the next five months, between now and the election in November will continue.

Let me bring Candy Crowley into this conversation. Candy you've covered Congress for a long time. You know anything really important in the Senate needs 60 votes to break a filibuster. The Republicans have a significant, lopsided majority in the House of Representatives.

I assume you agree with all of us that what the president said today is not necessarily going to inspire the Republicans to change their attitude and there's going to all of a sudden be extensive, bipartisan cooperation. CANDY CROWLEY, CNN PENTAGON CORRESPONDENT: No. It's not going to get anyone to change their mind. In general, what's happened with a lot of these things that he's talking about, for instance, the help for state and local government.

The Republicans have argued we've done that and now we're back to putting money in so that handing money to states and local government whose have to balance their budgets and, therefore, can't operate in the red the way federal government can. We've done that before.

As far as helping those who have kept up with their homes but are underwater and could take advantage of really low interest rates, that particular bill, they said the other housing programs that we've spent money on have not worked the way they should have worked.

When you look at the proposal that would put people back to work in those, we used to call them shovel-ready projects, Republicans also argue that doesn't do it. We need the big ball game, not this small ball game. So I suspect you'll hear that from the Republicans.

What's interesting to me is everyone says a lot of these big decisions that you look at, not these particularly, but the bigger decisions about the debt ceiling and the tax cuts and the spending cuts, the tax hikes and the spending cuts, we're going wait and the election will settle this.

And yet, I have not yet talked to any politician who actually believes that the election will settle anything, that suddenly in the Senate there will be 60 votes for one party. Nobody thinks that will happen.

So they are waiting for an election for results to show them which way to go and the results are not likely to do that, so I suspect at the end of this year, there will be a lot of people hanging out on Christmas Eve and New Year's Eve. trying to figure out the same problems, by the way, they were trying to figure out last New Year's Eve.

BLITZER: Yeah, that lame duck session after the election will be really, really important.

Christine Romans is watching all of this. The president opened with a strong statement about the European economic problems, Christine. He said that there are fears of a renewed recession in Europe right now and, if, in fact, that were to happen, given Europe's being America's largest economic trading partner, that would have a spill over effect on the recovery here in the United States.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's not hypothetical or it's not a prognosis. It's already happening. We're seeing that and that's the difference between, as Candy was talking about, last New Year's Eve to this New Year's Eve.

Look, we're already seeing it happen. U.S. exports to the eurozone have slowed almost 5 percent from January to April and, whether the president talked about Paris and Madrid, Pittsburgh and Milwaukee, what happens in those weak-kneed economies there affects the companies that are doing business here in this country and that's a real concern.

So even as we have a concern about how slowly we're seeing job creation in this country, Europe's problems, if they get worse, will continue to hit export-related companies in the U.S. and that's going to be more job loss, more political pressure for this president.

And it really brings to the fore, Wolf, that the number one issue here is your job, your job security, your neighbor's job, your ability to get a job, and the feeling that we're just not creating them robustly.

The president did say something that I think was interesting. He said the private sector is doing fine. It's the state and local government jobs that we're concerned about and the cuts from that level.

I think there are some in the private sector that are doing just fine, but we need to see private sector job creation better than we're seeing it, as well. This has been a slow jobs recovery.

He pointed out that it is more robust than the last jobs recovery from a recession and that may be true, but it still doesn't make people feel better about only 69,000 jobs created last month.

BLITZER: And we'll see what happens this month.

It's a significant development when you take a look at what he's saying about private sector jobs, you know, increasing steadily, the problem being state and local jobs, construction jobs. He says a million construction jobs need to be created right now.

But some of these huge corporations, these Fortune 500 companies, as you know, Christine, are sitting on hundreds of billions of dollars, maybe even a trillion or a couple trillion dollars that they've stashed.

ROMANS: $2 trillion.

BLITZER: They really don't want to invest this money and start creating jobs because they are nervous what's going to happen after the election. They are nervous about the tax structure. They are nervous about the European situation. You really can't blame some of these companies for doing it.

How do you convince these companies to take that money, that cash that they have that they are sitting on, and use it to start building infrastructure, creating jobs?

ROMANS: It's all about confidence. When they have confidence that demand in the U.S. and their revenues in the U.S. are going to grow and that there's going to be clarity on the political front and on the tax-front, then they will begin to spend that money.

Another important point here, and this is something that has not happened under this administration or even this and the last administration, but for many years now, companies have been getting more and more of their revenue from overseas, quite frankly.

And so you look at some of these big companies where 40, 50, 60 percent of their revenue is coming from overseas. that's where they are creating jobs. That's where they're spending the money on research and development and that's a bigger story than just a political story for the right now.

That's a structural employment story in this country that kind of gets lost in the shuffle about pass this or don't do this or tax the rich to put construction workers to work building bridges. That's a near-term cyclical problem in this country with the jobs situation, but the structural problems bear watching as well. Companies are sitting on cash because they want to spend cash overseas.

BLITZER: They are not sure what will happen over here.

All right, Christine, thanks very much.

Kyra Phillips is standing by in the CNN "Newsroom," as well. Kyra, the economy, jobs, issue number one, but you also heard the president weighing in on these allegations from some Republicans, including Senator John McCain that the Obama administration has deliberately leaked classified information to score political points and then president get re-elected.

And you heard the president of the United States express his outrage about that. He says that's offensive. That is wrong. People need to get a better sense. I think he was reacting directly to Senator John McCain, among others.

KYRA PHILLIPS, ANCHOR, "NEWSROOM": Yeah, we heard our Jessica Yellin right there at the White House say this is definitely a story that's not going to go away, Wolf, so we'll continue to follow all the details on that. Wolf, thank you so much.

We're also following a major worldwide roundup of suspected child predators right now. We're being told 190 arrests in the U.K., U.S., Spain, Argentina and the Philippines have taken place, 18 rescues, also, of underage victims.

It's called Operation Orion and it took place throughout the month of May targeting anybody believed to possess, receive, transport, distribute, advertise or produce child pornography.

It was actually led by the child exploitation investigations unit of the U.S. Homeland Security. We will follow more on that story as well.

Another story happening this hour. A deadly outbreak of E. coli spreading in the South. Already 14 people in six states have gotten sick. One person has died and we still don't know where the bacteria originated.

Senior medical correspondent Elizabeth Cohen is here. I was asking you a number of questions about this because, as a parent I'm even more concerned about this. What do we know at this point about where this possibly has come from?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: All we know is that it's a strain of E. coli called 0145. This is a vicious strain of E. coli because it produces toxins.

You have the bacteria and then it produces toxins that can shut down your entire body and we've already seen one death.

Now, we're told that they suspect that this has come from one source and that's because, when they look at this under the microscope, the molecular fingerprint is identical when you look at person to person to person.

And you can see, right here, this is how they do this is they collect specimens from all the people and now they have to figure out what the source is.

PHILLIPS: All right, so we have one infant that has died New Orleans, right?

COHEN: Right.

PHILLIPS: And then a number of people that have gotten sick. You were explaining to me they are doing very intense interviews with these individuals to try to track down the source. Tell me how that works.

COHEN: They sit down with the CDC investigators, state investigators will sit down with people and get a list of everything they eat. They want to know everything.

They will particularly pay attention to meat products and to produce. We've seen E. coli in beef, we've seen it in lettuce, for example, and they want to know what people ate and when they ate it.

They have been seeing these cases since April 15th. This is not an entirely new thing. They know that something was out there in the food system since April 15th and that it seems like it's still out there because they are still hearing new cases.

We were told, earlier today, 13 cases. Now, we're hearing 16 cases. So this appears to be growing.

PHILLIPS: So pretty much, it didn't take place at a restaurant.

COHEN: Right. Let me correct myself. I said 16 cases, I should have said 14 cases. So we were hearing of fewer cases and now we're hearing of more cases.

So it's probably not just, you know, Joe's restaurant in one place that had one sick waiter who got everybody sick. You're seeing this spread across six states, which is what we're being told now. Six states. When you're seeing that, it makes you think it's a food that's gotten into the food system. For example, perhaps it's a meat product which is distributed widely. Perhaps it's spinach. Perhaps it's lettuce. We just don't know.

But we know it's in Alabama, Florida, Georgia, Louisiana and then two more states and no one has told us the names of those two states, but we are told there are two more states, in addition to the four I just named.

PHILLIPS: Final question. How quickly will we know something?

COHEN: When they sit down and talk to people, they actually can figure out relatively quickly what the connection is. Think of it as epidemiological detective work. This is what they do. These epidemiological investigators do this for a living. They get to it pretty quickly.

PHILLIPS: We'll definitely stay on the story. Keep us updated, OK.

COHEN: Thanks.

PHILLIPS: Thank you.

We'll keep all of you updated as we get information. Until then, you can stay safe by remembering to wash your hands, make sure that all food that you eat is fully cooked and, of course, there's a lot more information on the E. coli bacteria. All you have to do is visit e-coli.gov.

(COMMERCIAL BREAK)

PHILLIPS: The mounting violence in Syria is creating a dire situation for diplomats who haven't been able to come together to solve this crisis. This hour, former U.N. Secretary-General and peace envoy Kofi Annan is meeting with Secretary of State Hillary Clinton.

The two actually posed for photos this morning just before that meeting and then Annan went before the security council yesterday warning that Syria is on the brink of civil war and he urged the divided council to come together.

Annan also blamed Syria for the failure of a six-point peace plan. Bottom line, the situation is grim and diplomatic efforts are at a standstill.

Jill Dougherty is at the State Department, so, Jill, what now?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: If we knew that, Kyra, only if we knew that.

But what now is basically the only game in town and that is this plan -- you can still call it the Kofi Annan plan, the six-point plan -- but what they are trying to do is bring it into a contact group and that contract group, in a way, would bring it offline from the U.N. security council, bring it into a group of countries, a rather wide group of countries that would try to figure out who they individually can influence and affect.

That would mean the Russians would, hopefully, work on President Assad, convince him that he has to go. The Americans and others would work on the opposition, convince them that they have to somehow come to the table, begin to talk and get this process going.

It's a real long shot. And I'll tell you, Kyra, you know, I was at that session upstairs before they went into the meeting. Neither Secretary Clinton nor Kofi Annan really had anything very concrete to say.

It's a very, very big challenge and one of the keys is trying to get al-Assad to realize that it's game over, but he certainly hasn't realized that yet.

PHILLIPS: What if the U.N. security council -- why continue to be so divided? Why can't it come to terms on something?

DOUGHERTY: You know, that's the place where you have the power of veto and that's the idea of this contact group. In the security council, you know, Russia wants to use its veto for a variety of things.

Right now, for instance, it feels that the opposition is carrying out violence, as well. So what they say is, look, the government can't stop violence if the opposition is doing it too. So it becomes kind of a Catch-22, circular type of thing.

What the plan for Kofi Annan is to take it out of that area where they just get locked into using vetoes, right and left.

PHILLIPS: All right. Jill Dougherty. We will follow this story, obviously, with you at the State Department. Thank you so much.

According to the U.N., more than 9,000 people have died in Syria since the protests started in March of last year, but opposition groups put the figure at 12,000 to more than 14,000.

(COMMERCIAL BREAK)

PHILLIPS: Breaking news for you now. An important ruling coming down in the Jerry Sandusky case.

CNN contributor, Sarah Ganim, on the phone for us.

Sarah, what exactly happened?

SARAH GANIM, REPORTER, HARRISBURG PATRIOT NEWS & CNN CORRESPONDENT (voice-over): The judge basically said all 10 cases are going to be heard by jurors when opening arguments begin on Monday. Joey Amendola made his last effort for some of the cases to be dismissed last month. He made arguments in three of the 10 cases and, this morning, the judge denied all three of his requests. And so those three cases along with the other seven will be heard by a jury. And Joey Amendola's argument -- and Joey Amendola is Sandusky's attorney -- was the more case to go before the jury the more likely they are to convict. He was trying to get some of them thrown out based on legal issues before the case began. Now that won't happen.

PHILLIPS: OK. So we're looking towards this Monday then for sure?

GANIM: We're looking at this Monday for sure. He's been making continuous arguments for a delay, but none of them have worked in his favor. A jury was -- they finished picking a jury two days ago. So they are ready to go. They gave the jury yesterday and today off, and they will be back in court on Monday morning.

Now the cases that were dismissed, it's important to note, some of the most notorious, the ones we've been talking about the most, including the one that happened on the Penn State campus, where an assistant coach walked in and said he witnessed something. Another one was the case a prosecutor back in 1988 decided there wasn't enough evidence to pursue. These are cases that have been talked about a lot in the last seven months, and now it turns out the jury will hear about them.

PHILLIPS: OK. We'll keep following it.

Sarah Ganim, keep checking in with us, please, as you learn more. Appreciate it.

More than two million U.S. troops have been deployed to Iraq and Afghanistan. Unfortunately, far too many of them are coming home wounded, mentally wounded. But there are many people, people like "CNN Heroes'," Mary Cortani (ph), who are helping to make a difference.

(BEGIN VIDEOTAPE)

UNIDENTIFIED VETERAN: When I got back from Iraq I stood away from large crowds, malls, movies.

UNIDENTIFIED VETERAN: I wouldn't leave the house.

UNIDENTIFIED VETERAN: I stayed inside. The windows were blacked out.

UNIDENTIFIED VETERAN: I was really numb.

UNIDENTIFIED VETERAN: Didn't feel I had a purpose any more.

UNIDENTIFIED VETERAN: Nightmares constantly, flashbacks. Everything to me is still combat zone.

MARY CORTANI (ph), CNN HERO: Veterans with invisible wounds -- we can see a wheelchair a prosthetic leg. They appear like you and I. But their suffering goes so deep it touches the soul.

I learned how to train dogs while I served in the Army. I knew that a dog can add a lot to your life. I realized this is what I was supposed to do.

My name is Mary Cortani (ph). I match veterans with service dogs, train them as a team so that they can navigate life together.

(on camera): Sam?

(voice-over): When a veteran trains their own service dog, they have a mission and a purpose again.

(on camera): Talk to them. Tell them they did good.

(voice-over): Dogs come from shelters, rescue groups. They're taught to create a spatial barrier and can alert them when they start to get anxious.

(on camera): You OK? You getting overwhelmed? Focus on Maisey (ph).

(voice-over): The dog is capable of keeping them grounded.

(on camera): You're focusing on him and he's focusing on everything around you.

(voice-over): You start to see them get their confidence back, communicate differently. They venture out and begin to participate in life again.

Being able to help them find that joy back in their life. It's priceless.

(END VIDEOTAPE)

PHILLIPS: To get a glimpse inside the mind of an Iraq combat vet who has PTSD, just go to CNNheroes.com. Mary was nominated for "CNN Heroes" from a viewer like you. You can nominate somebody who is making a difference in your community as well. Just visit CNNheroes.com.

(COMMERCIAL BREAK)

PHILLIPS: A lot of breaking, developing news this hour. This has come in from Belmont Park. I'll Have Another will not be racing in tomorrow's Belmont Stakes, dashing hopes of the first Triple Crown victory since 1978. Gone.

CNN's Richard Roth at the track.

What the heck happened?

RICHARD ROTH, CNN SENIOR CORRESPONDENT: We don't know much. But we spoke by phone briefly with the spokesman for the trainer of I'll Have Another, Doug O'Neill. The spokesman saying, in a rush, the horse is scratched. There's a press conference scheduled at 1:00 in the barn area by the trainer and owner of the horse.

Now, I'll Have Another came out much earlier than usual for a practice run at about 6:00 a.m. this morning. And some racetrack observers said that was a little bit out of the ordinary. Now perhaps that was a real run and then they found something that was wrong with the horse afterwards. The horse had been loaded into a state barn detention area, along with all the other contenders for the Belmont Stakes, and some thought that some of the horses were not too happy with different surroundings. Either way, we'll know in 40 minutes or so why I'll Have Another, hard to be believe, scratched on the eve of racing glory going for the Triple Crown of horse racing, the Kentucky Derby, the Preakness in the triple crown. Since 1978, and for another year, it appears, there will be no Triple Crown this year -- Kyra?

PHILLIPS: Wow. So more than likely this is a physical problem, a health problem?

ROTH: Well, don't know. It would appear it would have to be something for them to not to want to enter this house. We can't imagine anything else in the past. The trainer has had -- in California, has been cited for many violations. We'll have to wait and see. It would appear there has to be something not sound with the horse, whether something happened in the cantering around Belmont's oval this morning. For some reason, he was out early, at 5:30, 6:00 a.m., and whether that was to avoid a lot of other prying eyes. We had some video of it. The horse raced by here, galloping, as he has for several weeks here, getting accustomed to the track. Doug O'Neill, the trainer, was not putting him into full workout. This was the procedure that worked to win the derby, the Preakness, by and large, so this is a big shock. And Belmont could have had at least 125,000 fans on a nice early summer, late spring day. I don't think that could happen.

He was trying to be the 12th winner of the Triple Crown of horse racing. So, I'll Have Another, if you're just tuning in, scratched from the Belmont Stakes.

PHILLIPS: All right. Richard Roth, thanks so much. We'll follow the story.

Fresh off their victory in the Wisconsin recall, conservatives are converging on Chicago to plan their next moves, and audition some potential vice presidents.

CNN's Shannon Travis at the Midwestern CPAC conference.

Shannon, we talk about the political landscape, but landscape, especially noteworthy. You're in Barack Obama's backyard.

SHANNON TRAVIS, CNN POLITICAL CORRESPONDENT: That's right. In fact, we're not even that far from President Obama's campaign re- election headquarters in downtown Chicago. We're in Rosemont, Illinois. Downtown Chicago is about 20 minutes away.

I want to get to some news that's being made at this Conservative Political Action Conference already. Rick Santorum, he just got off stage a few moments ago. He spoke with reporters before his actual speech, and said that he's going to come out and campaign with and for Governor Romney. Now this is significant, Kyra, because this is the first time that the two men, if and when they appear publicly together, would essentially be putting the wounds of the GOP, the primary GOP behind them.

I pressed Senator Santorum about details, if he spoke with the campaign and worked out details of when and where these campaign events, these joint campaign events between them might happen, and he said, you know, he didn't go into details. He said, I've done some things at state conventions on their behalf but he didn't go into anything further than that. We know Santorum earlier announced the formation of his political action committee with the express goal of pushing some of his pet issues, but also electing Mitt Romney. And so that's one of the things that we're watching. We're going take a listen at some of the other speakers coming up, some other potential V.P. candidates coming up. Kyra, we'll report back.

Sounds good. We'll talk then. Shannon, thanks so much.

We'll bring the results of that V.P. straw poll as soon as we get them this evening.

(COMMERCIAL BREAK)

PHILLIPS: We know it's a common sexually transmitted disease but here's the catch, gonorrhea is showing signs that it's mutating and because of that, the World Health Organization is warning that we could be facing a major public health crisis. And this super bug could be on its way to the U.S.

Senior medical correspondent, Elizabeth Cohen, joining me with all the details.

Why don't we talk how dangerous this new strain is first?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Gonorrhea is dangerous in general. Sometimes we take it for granted. Oh, people can get treated. If gonorrhea can't get treated it can cause infidelity in men and women. It can cause blindness in newborns. This is a dangerous bug. What they are finding -- or spontaneous abortion. What they're finding is that gonorrhea is getting smart and it's beginning to out wit the class of drugs we use right now to treat it.

PHILLIPS: Will antibiotics still work or is it the type of thing -- they will, but we're just running out of time?

COHEN: Exactly. So in this country they found that antibiotics still work, but when they put the bug under the microscope, they can see it's getting smarter. They can see it's beginning to out wit it. In Japan and Australia and parts of Europe, they've seen cases they are having trouble treating with antibiotics. They try it and they have to use big doses where they have to combine it with other antibiotics. That's where we're afraid we're heading, we're heading to a place where these antibiotics won't world.

(CROSSTALK)

COHEN: We're not there yet.

PHILLIPS: We're not seeing in the U.S. right, correct?

COHEN: Right. We're not seeing in the U.S. the untreatable, any kind of untreatable gonorrhea. We can treat it but we can see that it's getting smart. And gonorrhea has a history of being smart. It's outwitted four classes of antibiotics already over the decades.

PHILLIPS: What's the solution?

COHEN: You need to find a new antibiotic. As these bacteria get smart and figure out a work-around, you have to invent a new one. The problem is they are not seeing a lot in the pipeline.

PHILLIPS: Got you.

Elizabeth, thanks so much.

COHEN: Thanks.

#: Did you know thousands of people die every year because of fixable mistakes by their doctors. CNN correspondent, Elizabeth Cohen, will count down her list of "25 Shocking Medical Mistakes," and how you can keep it from happening to you. Tune in this Saturday night, 8:00 eastern.

(COMMERCIAL BREAK)

PHILLIPS: Construction workers back to building roads, teachers back in the classroom, and police and firefighters back out into the communities -- that was the public message today from President Obama to Congress. It happened 45 minutes ago. The president hammered Congress to act in remarks that he made less than 30 minutes ago.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They left most of the jobs plan just sitting there. And in light of the head winds that we're facing right now, I urge them to reconsider because there are steps we can take right now. There's work to be done. There are workers to do it. Let's put them back to work right now.

(END VIDEO CLIP)

PHILLIPS: Let's get straight to Kate Bolduan on Capitol Hill.

Kate, what's the buzz on the Hill right now about the speech?

KATE BOLDUAN, CNN WHITE HOUSE CORRESPONDENT: The buzz, you know, of course, we're always looking for congressional reaction, specifically with this Democratic president, Republican reaction. We will hear kind of -- maybe we could call it the official Republican reaction coming up at 12:30 eastern because during the president's remarks we received notice that House Speaker John Boehner and the majority leader, Eric Cantor, would be holding a press conference, a media availability, at 12:30 eastern. We will be waiting to hear from him.

But just a moment ago, I received a statement from the top Republican in the Senate that may serve as a bit of a preview of what I am sure you can expect to hear from House Speaker John Boehner and Eric Cantor. Senator Mitch McConnell, in this statement -- I will read it to you in part. He says, "Whether the president wants to acknowledge it or not, we are now living in the Obama economy, and no Post-It note proposal can reverse the damage done by his policies over the past three-and-a-half years."

Senator McConnell goes on to slam the president on one thing in particular, the desire to let the Bush-era tax cuts on higher income earners expire at the end of the year. That's something that's obviously been in the news a lot recently. And Mitch McConnell goes on to say, "Raising taxes on job creators in this slow economy is simply on the elixir for his failed policies."

So, our viewers are thinking, what's changed here? It seems the reaction is not much. It doesn't seem the president's words have had the impact maybe he was hoping for or he probably himself didn't really think those remarks in that press conference, Kyra, were going to drastically change the partisan environment up here because they have very different positions on how to get the economy going again. And those job proposals you listed out in the introduction have not gone anywhere in the House or really the Senate so far since they were introduced. And you can't really expect they're going to go anywhere now either.

PHILLIPS: Well, and for months and months and months, we've been talking about partisan politics, right?

BOLDUAN: Yes.

PHILLIPS: And we've talked about Congress being dubbed the do- nothing Congress. And the president pointed to that in this speech saying, look, this is why a lot of legislation hasn't gone anywhere.

Let's take a listen to what the president said and let's talk about this.

BOLDUAN: OK.

(BEGIN VIDEO CLIP)

OBAMA: If Congress decides, despite all that, that they aren't going to do anything about this simply because it's an election year, then they should explain to the American people why. There's going to be plenty of time to debate our respective plans for the future. That's a debate I'm eager to have. But right now, people in this town should be focused on doing everything we can to keep our recovery going.

(END VIDEO CLIP)

PHILLIPS: But you've even pointed out that we really haven't seen much change, and we really haven't seen much hope that everybody is going to get on board here.

BOLDUAN: And part of it is -- and a lot of it is -- we talk about this all the time, is the fact that we are in an election year. The president is accusing Republicans, and Democrats are accusing Republicans of not wanting to come together and work on a bipartisan fashion because they want the economy to look bad so it helps their -- so it's politically advantageous for them. Republicans on the flip side say the same thing that -- not that the president is trying to hurt the economy, but they say what he is proposing isn't going to do anything for the economy in the short term to really spur economic growth.

Just some of the proposals we're talking about, Kyra, he talked about money for roads and bridges and construction. Well, that points to a transportation bill that negotiations right now, without getting into the detail, is deadlocked here on capitol hill over cost and a couple of other issues. The money for state and local governments to put teachers and firefighters back to work, that was proposed way back when, and that has gone nowhere. And Republicans aren't likely to want to get on board with it this time because, for them, that reminds them of the stimulus package, and we know how much they like that.

(LAUGHTER)

PHILLIPS: As she says with a grin.

(LAUGHTER)

Kate Bolduan there on the Hill. Thanks so much.

And the president also did focus on Europe's debt crisis and asked Congress to adopt another legislation, or more legislation rather, to help counter economic headwinds from Europe that are holding back the nation's economic recovery.

(COMMERCIAL BREAK)

PHILLIPS: The Miss USA contestant, who claims the pageant is rigged, is sticking to her story. Former Miss Pennsylvania, Sheena Monnin, called the contest fraudulent and lacking in morals. Monnin claims Miss Florida told her she had seen a list of the top-five finalists before the top 16 had even been announced. Donald Trump, who is a co-owner of this pageant, has now threatened to sue her for trashing his competition.

Here is what Monnin told the "Today" show this morning.

(BEGIN VIDEO CLIP)

SHEENA MONNIN, MISS PENNSYLVANIA: I feel disappointed that he has made some statements he has said about me. And I feel prepared to continue to pursue the truth. I know what I heard, and I know what, in turn, witnessed, come true based on what I heard. The contestant said she saw he list, so I'm prepared to continue to march forward.

(END VIDEO CLIP) PHILLIPS: Monnin said she gave up her crown because the results were fixed. Miss USA organizers say an e-mail she sent this week said she quit because she disapproved of allowing transgender contestants into the pageant.

"American Idol" winner, Phillip Phillips, has undergone surgery to remove several kidney stones. "Entertainment Weekly" is report that he had a 6.5-hour surgery to remove them. The singer endured excruciating pain during his run on the show. A source close to the show says the surgery went well though and he's looking forward to the idol tour in July.

After serving five years behind bars for a rape he didn't commit, NFL hopeful Brian Banks is getting the shot that he always wanted, an offer to try out for a team. 26-year-old Banks was 17 and a high school football standout when he was charged with the rape and kidnapping of a childhood acquaintance. His accuser eventually admitted that she had lied and Banks was exonerated last month. Yesterday's workout with the Seattle Seahawks went so well that Banks was invited to a formal tryout next week during the team's off-season mini camp.

Thanks for watching, everyone. You can continue the conversation with me on Twitter, @kyraCNN, or Facebook.

CNN continues with Fredricka Whitfield.