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STARTING POINT WITH SOLEDAD O'BRIEN

Interview with Senator Dick Durbin; Stopping The Sale of Children; Two Girls Go Missing in Iowa; Interview with FEMA Administrator Craig Fugate; From Karate to Gypsies; Living Life to Make a Positive Difference

Aired July 17, 2012 - 08:00   ET

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


SOLEDAD O'BRIEN, CNN ANCHOR: Our STARTING POINT this morning, needles found in airline food. This morning, there's a search on for just who's responsible.

And heading towards the fiscal cliff. The Democrats and Republicans are refusing to work out their problems. Could it drag us back into recession? We're going to chat with Illinois Senator Dick Durbin, straight ahead.

And Jada Pinkett Smith is back with us. She's going to be joined by her 11-year-old daughter, Willow, to tell us why they are joining the fight against human trafficking.

Plus, the original "Karate Kid". I had such a great crush with Ralph Macchio. He got a new project, though, take us to never-before- seen look at "American Gypsies". That's his new project.

It's Tuesday, July 17th, 2012. STARTING POINT starts right now.

(MUSIC)

O'BRIEN: I was going to say --

MARGARET HOOVER, CNN CONTRIBUTOR: I have this on my playlist.

O'BRIEN: All loving Ralph this morning, because we played Bruce Springsteen.

RON BROWNSTEIN, CNN POLITICAL ANALYST: You weren't even born when this came out.

O'BRIEN: Maybe just a little.

HOOVER: You weren't born when the French Revolution happened, but you still know what happened there.

O'BRIEN: A little pushback, little pushback.

Ron Brownstein, kind of being ages with us this morning.

BROWNSTEIN: Yes.

O'BRIEN: He's the editorial director of the "National Journal."

William Durst is with us this morning. He's a comedian.

Margaret Hoover, author of "American Individualism." nice to have everybody back.

I'm so excited to talk to Ralph Macchio. He is the executive producer of this new project to look at American gypsies. He'll talk about that in just a moment.

But first, though, let's talk about the fiscal cliff, shall we? It could give Americans a much smaller paycheck on January 1st. The Bush tax cuts and payroll tax cuts expire. While the automatic cuts included in last year's debt ceiling deal go into effect, which means obviously those two things happen at the exact same time. Problem -- a Democratic senator says she doesn't see any compromise anytime in the near future. Listen.

(BEGIN VIDEO CLIP)

SEN. PATTY MURRAY (D), WASHINGTON: Looking back at the offers from the other side that represented the greatest attempts at compromise, it's clear that while we were close on the spending side, Republicans hadn't even left their corner when it came to revenue. Once again, if Republicans won't work with us on a balanced approach, we are not going to get a deal.

(END VIDEO CLIP)

O'BRIEN: That was Senator Patty Murray.

Do you -- we've got Dick Durbin, Senator Dick Durbin, with us this morning. He's the assistant majority leader. He's a Democrat from Illinois.

Nice to see you, sir. Thanks for talking with us.

Do you think we're going to go into 2013 with no deal?

SEN. RICHARD DURBIN (D), ILLINOIS: Well, I think we can work out an agreement, but we have to start with the premise that if we are going to realistically reduce the deficit, the top earners of America have to pay their fair share toward the solution. Otherwise, we'll be facing dramatic cuts in Medicare and programs like education. I don't think it's fair to working families across America for that outcome.

O'BRIEN: You heard what Patty Murray said just a moment ago. If it comes down to let them all expire for everybody, or extend them all for everybody, what would you pick?

DURBIN: Well, I certainly don't want to see any tax increase for working families. That's the president's position. That's my position. And it's within the power of Congress to avoid that.

But if we have to have this day of reckoning in order to finally break through and have meaningful deficit reduction that still creates a growing economy, then let's face it.

O'BRIEN: What does that mean? Does that mean that you're saying that if we have to have a day of reckoning that in fact you'd let them expire, which then would raise the taxes on the middle class people you just said you don't want to raise taxes on?

DURBIN: There's a very real possibility, unless there's an agreement. But people of goodwill in both political parties should work to avoid it. I want to work to avoid it. Let's start with the basic premise. Everybody in America has to do their fair share to reduce our debt and keep this economy moving forward, and that means saying to the top 2 percent of wage earners in America -- listen, you're not getting the tax breaks did you in the past, but you're doing this for the good of our country and frankly in the end, we're all going to be better off, including the wealthy.

O'BRIEN: Senator Durbin, let me talk to Ron Brownstein for a moment.

BROWNSTEIN: Soledad, the magic number in the modern Senate is 40. So, the real question for Senator Durbin is -- are there 40 Senate Democrats who today or in December are willing to let the tax cuts for everyone expire, rather than extending them for those in the top earners earning $250,000 or more? Are there 40 Democratic voters that would bring them down rather than extending them?

O'BRIEN: What would be the political implications of bringing the whole thing down?

BROWNSTEIN: Among other things, people say they are concerned about the deficit. Going off the fiscal cliff would have a significant reduction of the deficit. There's also the risk of having a tremendous contraction in the economy.

But are Democrats -- are there, in fact, 40 Democrats willing to do a Patty Murray yesterday and what Senator Durbin today implied that they are willing to do, tear the whole thing down?

O'BRIEN: Do you think, sir, that you have another 38 who are willing to say, OK, let's rip it down? Done and done.

DURBIN: Let's just say this, let's start with this premise, a majority of the Senate, and that would be virtually all of the Democratic senators, a majority, are prepared to vote today to protect middle income families from any tax increase. We are saying the top 2 percent should pay their fair share of the limited amount. If you're asking whether or not we are going to give away this or that before the day of reckoning, I agree with Senator Murray. We have to face this honestly and responsibly. I hate to use that old cliche but we can't kick it down the road anymore.

O'BRIEN: But would you vote today in letting them all expire? So, that's where I thought you were going when you start --

DURBIN: Yes.

O'BRIEN: You would vote today to let them all expire, which would raise taxes on the middle class.

DURBIN: What I'm saying today is I'm not going to take that off the table. We're going to face this once and for all in a bipartisan way. We're going to solve the problems facing this country.

Those who want to choose, oh, let's take this off the table, let's that off the table, no. We're going to face this thing once and for all and get the right solution for America's future.

O'BRIEN: Earlier this morning I was talking to Senator Ron Johnson, and he was saying -- you know, and as you know, I think there's attempted shift if not a shift by the GOP to start talking about Solyndra and move all of conversations about Bain and taxes. And here's what he said about the cronyism around Solyndra. Listen.

(BEGIN VIDEO CLIP)

SEN. RON JOHNSON (R), WISCONSIN: Solyndra, it doesn't -- it doesn't make the investment a good investment. It still is half a billion dollars of taxpayer money that was squandered. There's about $35 billion of these energy loans that have been, you know, guaranteed to different companies, $16 billion of it went into one program where you've only created 2,300 jobs, which if those loans go bad like Solyndra went bad, there's over $16 million per job.

I mean, that's really the main problem here. President Obama simply doesn't understand that it's the free enterprise system, the private sector, the productive sector. Not the government sector that creates long-term, self-sustaining jobs.

(END VIDEO CLIP)

O'BRIEN: Fact check, took a look at his numbers and it's not $16 billion but it was $10 billion. And he's got a point. It was a bad deal.

You know, doesn't he have sort of a point in re-raising this debate, especially since you're trying to move the conversation away from Bain and taxes for Governor Romney?

DURBIN: Both Mitt Romney and the Republican senators, all of them, are trying to race away from Bain Capital. They cannot explain or defend the policies in this country that exported good American jobs overseas to low wage countries. That's why Mitt Romney is saying he was retroactively retired. What in the world does that mean?

O'BRIEN: He doesn't say that. His people said that. But he specifically did not say that.

DURBIN: Part of his campaign. But he has been paid $100,000 a year from this firm that he supposedly retroactively retired from and was still listed as the CEO and president of.

Let's step aside. Back to Senator Johnson's point. Throughout our history, our government has made investments in research and basic investment. Think about all of the pharmaceutical breakthroughs that came through because the National Institutes of Health did the research, the basic research that led to new drugs.

The same thing is true on clean energy. If we're going to move forward to have the energy in the 21st century, we have to invest in new opportunities. Some of them will pay off. Most of them will, but not all of them. And to condemn this government investment in the infrastructure and energy of America's future is just plain wrong.

O'BRIEN: One tax reform that Governor Romney is suggesting and proposing is a territorial tax system. What do you think of that?

DURBIN: Well, if I understand what he's saying, it basically would allow those who have businesses overseas to repatriate their profits to the United States at a lower tax rate. Sadly, that is another tax code incentive to send business overseas.

I know those incentives worked for Bain Capital. They made millions of dollars for Mitt Romney. But it's exactly opposite of what we should do. We're going to move this week on a matter that is sponsored by Senator Debbie Stabenow ands Senator Sherrod Brown of Ohio to stop putting incentives in the tax code to move American jobs overseas, instead reward companies in the tax code that bring jobs back to America.

We need good paying jobs right here at home.

O'BRIEN: The territorial tax system would mean that companies with employees overseas would only pay taxes in the country where they are operating.

DURBIN: Exactly.

O'BRIEN: And actually there's bipartisan support for that. And there's groups like the Simpson-Bowles Commission on Fiscal Responsibility that supports it. Members of President Obama's Export Council, they support that. The Council on Job and Competitiveness, they support that. So what you're saying, and what Debbie Stabenow was saying is not supported by many of the president's own committee members.

DURBIN: Well, let me tell you, I voted for Bowles-Simpson, but that's one provision -- I didn't agree with all of it. And that's one provision I disagreed. Why?

The last time we tried this, and so did companies, if you move the jobs overseas and made a lot of money, and want to bring the money back, we're going to reduce your taxes, you're going to promise you're going to create jobs back in America with this corporate profit. It turned they didn't do it. They took it in compensation for their executives and dividends for the shareholders. They didn't create new jobs in America.

We have to focus laser-like on creating jobs in this country, not rewarding companies that want to push jobs overseas.

O'BRIEN: Senator Dick Durbin, joining us this morning. It's nice to see you, sir. Thanks for your time. Appreciate it.

DURBIN: Thanks, Soledad.

O'BRIEN: You could see the debate obviously that's brewing now. I thought it was fascinating. And his tone sounded like he's confident they have 38 other Democrats who would say, let's go off the fiscal cliff.

WILLIAM DURST, COMEDIAN: He is in the majority of the Senate.

BROWNSTEIN: Well, for a different proposition, to extend them for the 98 percent.

Margaret, you know, you're pointing, when you were talking, that there are some Democrats who say they only are willing to raise taxes on people, $1 million or above. Think about what that says about the shifting class bases for our politics, that you have Democrats who are now worried about losing the support of people between $250,000 and $1 million. It really is an incredible inversion --

HOOVER: But, Ron, as you --

BROWNSTEIN: The allegiances that we've seen in the most of our political --

HOOVER: As you understand, though, there are a lot of Americans who are paying $200,000 to $250,000 in their taxes because they are filing as private business or filing as S corp. So, to call them millionaires --

O'BRIEN: Right, but relatively small --

HOOVER: But to call them millionaires, people who are getting $250,000, to lump them in the category of millionaires and billionaires, it isn't fair. Is that disingenuous?

BROWNSTEIN: Just one thing, though, if you do extend it up to $1 million, you severely reduce the amount of revenue that you'll be bringing in. I mean, $250,000 or above, you're talking about $800 billion over a decade which is a significant contribution to an overall deficit reduction --

(CROSSTALK)

DURST: You're only talking about the money after $250,000.

BROWNSTEIN: Right.

HOOVER: That's also an important point --

BROWNSTEIN: Don't forget, federal revenue as a share of the overall economy is the lowest level since the early 1950s.

HOOVER: But the economy is not growing.

BROWNSTEIN: Also because of the reductions that were imposed under the Bush tax cuts of 2001 and 2003. Federal taxes as a share of income for American families is as low now as it has been since the late 1970s.

HOOVER: If the economy were growing, we would have higher revenues.

O'BRIEN: Right. But percentagewise, there's also the calculation. I mean --

BROWNSTEIN: Right. We significantly reduced taxes in 2001 and 2005. The only time in American history we cut taxes during a war. Ten years later, the median income was lover. Fewer people who are working. And poverty was much higher.

And we are left with a situation where we are looking at huge deficits from both ends. Spending that is much higher than the historical average, and revenue that is much lower.

O'BRIEN: Which brings us back to the fiscal cliff.

BROWNSTEIN: And it's hard to believe you don't have to deal with both to deal with the problem.

O'BRIEN: And will it happen in January, though, is the big question.

Let's get to the other stories making the news. Zoraida has got that.

Hey, Z. Good morning.

ZORAIDA SAMBOLIN, CNN ANCHOR: Good morning to you.

And just in to CNN -- a gunman on the loose this morning, wanted for an early-morning mass shooting at a bar in Tuscaloosa, Alabama. And this surveillance video shows a suspect walking with the gun in his hands. This was around 12:30 a.m.

Police say he shot 17 people, at least one of them critically wounded. Three people are seriously injured there.

Police are planning a news conference. And of course we will bring you any new information as soon as we get it.

And the FBI is launching a criminal investigation this morning working with authorities overseas to find out how sewing needles ended up in four sandwiches on delta airlines flights. The needles were discovered on four separate flights all traveling to the United States from Amsterdam. Officials say one passenger was injured, but declined medical treatment.

Sandra Endo joins us from D.C.

And, Sandra, what have authorities uncovered so far?

SANDRA ENDO, CNN CORRESPONDENT: Hey there, Zoraida.

The investigation is still underway, and the FBI and local authorities in the Netherlands are still trying to find out how the needles got into those turkey sandwiches. A Delta spokesperson says that the needles were found in sandwiches on flights from Amsterdam to Minneapolis, Seattle, and two flights to Atlanta.

Two of the needles were found by passengers, and one was discovered by an air marshal. When Delta found out about the needles in the food, the airline said it notified all 18 flights from Amsterdam to stop serving the sandwiches. Here's what one passenger who got one of the contaminated sandwiches said when he spoke to KSTP.

(BEGIN VIDEO CLIP)

DR. JACK DROGT, PASSENGER WHO FOUND NEEDLE IN SANDWICH: I bit down on it so that I wasn't biting down on the sharp side but on the flat side. It could have been, you know, a bad injury orally. But had I taken a big swallow and swallowed that down, I'd have a needle inside. That would be very concerning to me.

(END VIDEO CLIP)

ENDO: Gate Gourmet provided the sandwiches which were prepared in Amsterdam to Delta. In a statement, a spokesperson for the company says, "This is a terribly upsetting situation. First and foremost is the safety of the traveling public. There's nothing more important to us at all than the safety of the passengers and crews."

Gate Gourmet said it's fully cooperating with the FBI and local authorities in the Netherlands. And it's conducting its own full- scale investigation. Now, the company says it does provide food to other airlines but so far have received no other reports or complaints -- Zoraida.

SAMBOLIN: Boy, that is very scary. We're going to continue to follow that developing story. Sandra Endo, thank you.

And a desperate search in Iowa this morning for a pair of young cousins. Eight-year-old Elizabeth Collins (ph) and 10-year-old Leric Cook (ph) were last seen before they went on a bicycle ride on Friday. Crews have now started draining a nearby lake for a sign of the girls. Leric's mother talked to Anderson Cooper.

(BEGIN VIDEO CLIP)

MISTY COOK-MORRISSEY, MOTHER OF MISSING GIRL: They smile a lot. They're pretty persistent in the things that they want. They're great. They're really great, you know what I mean?

UNIDENTIFIED FEMALE: Yes, they are.

COOK-MORRISSEY: And we really look forward to what they had to offer in their future and the life that God had for them.

(END VIDEO CLIP)

SAMBOLIN: A live report on the search effort from Iowa at the bottom of the hour. And the two Americans held captive in Egypt for three days are now in Israel this morning waiting to return home. Both tell CNN they are happy and relieved. Egyptian police say they negotiated with the kidnappers but did not give in to their demands for the release of an imprisoned relative.

And a heart stopping save by an off-duty New York City bus driver. Cell phone video shows a seven-year-old girl jumping up and down on an air conditioner in her third floor apartment window right outside. That's when Steve St. Bernard sprang into action.

(BEGIN VIDEO CLIP)

STEVE ST. BERNARD, CAUGHT GIRL AFTER FALL FROM 3RD FLOOR WINDOW: I ran over there hoping that she wouldn't fall. And when I got there, she was still standing there, and I just like positioned myself. Hopefully, I would catch her.

(END VIDEO CLIP)

SAMBOLIN: Well, the little girl's mother says she was watching her son when that incident happened. She said the air conditioner's panels were supposed to be secure, but the machine she purchased was damaged and dangerous. The NYPD says the parents will not be charged with a crime. Back to you, Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: That is so crazy to see that crowd that had gathered.

SAMBOLIN: So grateful that that man was there to save her.

O'BRIEN: Yes. You just tore a muscle in his arm.

SAMBOLIN: Yes.

O'BRIEN: So, like, that was the only damage to him. That's lucky. All right. Thanks, Z.

Still ahead this morning on STARTING POINT, Jada Pinkett-Smith and her daughter, Willow, go to Washington, D.C. They with us live to explain what they're doing to try to stop sex trafficking.

And then, our "Tough Call" this morning, a mother is trying to teach her 13-year-old daughter a lesson by posting this for all her friends to see. Did she go too far? STARTING POINT is back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back to STARTING POINT. A recent report from the state department shows that more than 27 million people around the world are victims of human trafficking. It's a $32 billion industry, and in many cases, girls, sometimes boys, as young as 11 are bought and sold into prostitution.

The Senate Foreign Relations Committee is going to hold a hearing in just about an hour, trying to address the problem of human trafficking both at home and abroad. That brings us back to actress, Jada Pinkett-Smith and her daughter, Willow. They're going to be putting their celebrity power behind the cause.

They join us from Washington, D.C., this morning with Minh, Monica, and Jaquan (ph) who were all survivors of human trafficking. It's nice to see all of you. Jada, I'll start with you. We were talking just a couple of weeks ago about this very issue. What's the focus of today's hearing? What's your role going to be?

JADA PINKETT SMITH, ACTRESS & SINGER: Today is just basically testifying about what I have experienced and what I've seen in regards to human trafficking here in the United States as well as abroad.

O'BRIEN: So, Willow, your mom told me a couple of weeks ago that you were actually the one who got her involved, because you'd been doing some research on this. What do you think that kids, your age, and then adults also, what can we possibly do even for the human trafficking that's happening here in the United States? Like what do we do?

(LAUGHTER)

WILLOW SMITH, SINGER & ACTRESS: What can you guys do to stop it?

O'BRIEN: Yes. Or just be part of the awareness.

(CROSSTALK)

O'BRIEN: Yes, absolutely.

WILLOW SMITH: Well, I feel like you can do a lot of research. Go out and find some people and kind of get them together, make a group, and make an actual movement. And help people go out and help them.

O'BRIEN: So, a movement, Jada, would do what? Because as we talked about the last time, I think for a lot of people, they're stunned to learn that there's human trafficking here in the United States. And then when you find out, it's like, all right, well, then what's the next step?

JADA PINKETT SMITH: Well, yes. I think at this point, it is about educating yourself and realizing how it exists. And today, we'll be talking about the TVPA, the Trafficking Victims Protection Act, which has not been reauthorized on a federal level quite yet. And so, we want to push to make that happen.

And then, of course, we have the case act in California for this November. We'll be pushing to make sure that that bill gets passed. It will be the toughest anti-trafficking law in this country. And so, those will be our two actions right now.

O'BRIEN: Let me talk to some of the young women that you have with you today. Minh, I know that you were trafficked by your own parents. Can you tell me about your situation? What happened? MINH, SURVIVOR OF HUMAN TRAFFICKING: Yes. I was sexually abused as a young child, physically abused and neglected and really had the foundation of them prostituting and selling me. So, because they were my parents, I would do anything for them. And (INAUDIBLE).

O'BRIEN: Well, I had a hard time hearing you a little bit, but I could hear most of your story. You were saying because they were your parents, you love them, and you would do anything for them. And I know that your story is not all that unusual. Monica, I hope your microphone is a bit better. You were kidnapped when you were 15 years old. Tell me what happened.

MONICA, SURVIVOR OF HUMAN TRAFFICKING: Just like many other survivors of child exploitation, everybody's story is different, whether they're being kidnapped, whether they're being coerced (INAUDIBLE).

O'BRIEN: I had a little difficulty hearing you there. Let me go back to Jada. And Jada, Jaquan (ph), who's with us as well this morning, was a run away. And Jada, I know that that's very typical sort of portal into sex trafficking, isn't it?

JADA PINKETT SMITH: Absolutely. You find a lot of young people who through the foster care system or falling through the foster care system or young people who have actually run away that become vulnerable to being exploited. And young people who are, you know, being abused at home as well. And so, there's a variety of different ways in which young people get involved and being exploited.

O'BRIEN: Well, good for both of you for using your star power, Jada and Willow, to make a big difference. And this issue, obviously, we talk about this a lot, because it's an issue that we care about a lot here on this show.

JADA PINKETT SMITH: Absolutely.

O'BRIEN: We appreciate your time. Please pass along to the young women with you this morning, Minh and Monica and Jaquan (ph), as well, if they can hear me. I know I'm having a little difficulty hearing them, that we appreciate them joining us, and I know that they'll be there with you while you testify and probably be testifying as well. We appreciate their time.

Big audio problems. I don't know what that noise was. That's our audio system going down.

We got to take a short break. We're back in just a moment.

(COMMERCIAL BREAK)

O'BRIEN: Our "Tough Call" this morning, a mom in Ohio trying to teach her teenage daughter a lesson is using a little cyber discipline after the girl was disrespectful of the mother in front of her friends.

Denise Abbott (ph) is the mom's name. She created a Facebook profile picture showing her daughter, right there, 13-year-old daughter, Ava, red X across her mouth and the words, "I do not know how to keep my mouth shut. I'm no longer allowed to use Facebook or my phone. Please ask why. My mom says I have to answer everyone that asks." People will reach out to her and ask, and she has to type a response.

WILLIAM DURST, COMEDIAN: And now it's on national TV. Do you know what's going to happen to that poor little girl?

O'BRIEN: She is totally humiliated.

DURST: Is that a tough call? Is it too much?

MARGARET HOOVER, AUTHOR, "AMERICAN INDIVIDUALISM": More than 30 people have inquired what's going on. And she's had to say I treated my mom disrespectfully. She emailed them, I have decided not to do this again. I have learned my lesson. In about a week, she can go back on Facebook and use her cell phone.

O'BRIEN: I don't know. Is this a tough call?

RON BROWNSTEIN, CNN CONTRIBUTOR: I'm the parent of one teenager and one teenager emeritus. I am not second guessing anybody's ways of getting through 13 to 21.

HOOVER: There is cyber bullying and now cyber discipline. I asked a mom before I came on, and she said you've got to hit them where it hurts. Apparently, this is not obviously physically hitting a child. But this is disciplining a child where, you know, where it actually will make a difference in their behavior. It seems certainly reasonable to me.

DURST: Thank god there's a subject that I can actually mock and scoff and taunt, because we have been talking about human trafficking. Senators Ron Johnson and Dick Durbin, not the funniest humans on the planet.

BROWNSTEIN: You couldn't find the light side of human trafficking?

O'BRIEN: I would think this election would be tons of material for you.

DURST: It's the best ever. There have been other elections where there's a lot of candidates, but none have always had a shot at the presidency like this one. Every Republican -- except for Jon Huntsman, who was too reasonable, and he's not going to get the vice presidential slot.

(CROSSTALK)

BROWNSTEIN: The one man who speaks Mandarin in the White House, right?

DURST: It's a Broadway musical.

O'BRIEN: What has been the source of all of your jokes?

DURST: The best ones have been Romney is a font of mountain. I think he is electile dysfunctional. I really do. And President Obama is always good, because no matter what you think of his policies, you have to admire his ability not to get involved in them.

(LAUGHTER)

O'BRIEN: We have to take a break. You guys can talk on the commercial break.

Still ahead this morning, the karate kid is all grown up. We'll talk to Ralph Macchio about his new documentary series called "American Gypsies." It's fascinating.

Plus, drought is threatening crops in half of our nation. What do we do about it?

And here is one of Craig's playlist, the Rolling Stones, "Jumping Jack Flash." And you might notice he has flat Stanley and his little girlfriend. We'll talk about why FEMA is using those two characters to try to reach out to kids. That's ahead.

(COMMERCIAL BREAK)

O'BRIEN: Welcome back. Let's start with Zoraida with a look at the day's headlines. Hey, Z.

ZORAIDA SAMBOLIN, CNN ANCHOR: Hey, Soledad. Their bikes were found, but they are gone. It's a desperate search resuming this morning in Iowa. Authorities have now started to drain a nearby lake for any sign of Elizabeth Collins and 10-year-old lyric cook. The two are cousins and were last seen by their grandmother before they went on a bicycle ride on Friday. Jim Spellman is live in Evansdale, Iowa. Jim, what is the latest there? How far have they gotten in draining the lake?

JIM SPELLMAN, CNN CORRESPONDENT: Well, we'll take a look here. You can see how fast this water level has gone down. They started this yesterday. They think by maybe late tomorrow, the lake could be completely drained. In a sense, they admit they are grasping at straws. They have already gone through the lake searching what they can using poles from small row boats. But they just don't have anything else to go on. They had about 1,000 volunteers over the weekend trying to search all sorts of wooded areas around here, and they found nothing. The good news, they also have no indication that there was any kind of abduction. But with no progress being made in the case, it's unbelievably stressful for this family. Here's what an aunt told Anderson Cooper last night.

(BEGIN VIDEO CLIP)

TAMMY BROUSSEAU, AUNT OF MISSING GIRLS: It's very baffling to understand how someone got off with a 10-year-old and an eight-year- old at the same time, because it's as though they disappeared into thin air in broad daylight. (END VIDEO CLIP)

SPELLMAN: I just spoke with an investigator on this case who told me it's like these girls evaporated, Zoraida.

SAMBOLIN: Very sad. I know that you are following all of the developments there for us. Jim Spellman live in Evansdale, Iowa. Thank you.

Three more men are now coming forward telling police they were abused by Jerry Sandusky in the 1970s or '80s. They are the first people to accuse him of abuse before the 1990s, and it could mean that the 68-year-old coach began preying on children in his early 20s. There is no mention of victims before the '90s in the report by former FBI director Louie Freeh.

And it's one of the first signs that Penn State may be moving past Joe Paterno after the Freeh report. According to statecollege.com, the university is changing the name of the student camp ground right outside beaver stadium from Paterno-ville to Nittany-ville.

George and Barbara Bush will not be attending the Republican convention in Tampa next month. A spokesman for the 88-year-old former president says he's confined to a wheelchair by a disease that's limiting his mobility and his ability to travel from his home in Maine. Back to you, Soledad.

O'BRIEN: I bet he would hate to miss that. One has to imagine at that age and his experience he'd love to be there. Z, thank you.

Well, the wildest drought in decades is now gripping more than half the country -- 55 percent of the U.S. was in a moderate to extreme drought at the end of June. Last time that happened was in 1956 when 58 percent was covered in drought. On top of that, 80 percent of the U.S. is abnormally dry.

And it's really, really hot, 12 months from July, July, 2011 to June this year were also the warmest on record. And that could mean more wildfires and emergency situations. And also it's the beginning of hurricane season. Are you prepared?

All of this brings us to talk about what FEMA is doing, and FEMA administrator Craig Fugate is with us this morning. Let's start with the wildfires, if we can. What do you do at this point? They are burning so much.

CRAIG FUGATE, FEMA ADMINISTRATOR: Well, you know, we talk about wildfires. You get certain conditions where in many cases the only thing you can do is evacuate people, and you try to hope you get better conditions and it rains. But really these fires are a condition of the drought. Until the drought gets better, wildfires will be present throughout the west.

O'BRIEN: And then to flash flooding. FUGATE: Right, because of all of the cover being burnt off. When we do get rains they will probably also run the risk of increased flash flooding.

O'BRIEN: How about hurricane season? We are a month in.

FUGATE: We are still early in the hurricane season. We already had a couple of named storms. But the peak is usually the latter part of August, September, and October. So we have a long way to go, and we need to keep our guard up and pay attention to what's happening in the Gulf and the Atlantic.

O'BRIEN: Is there any way to predict the number of storms? I know those predictions aren't always accurate.

FUGATE: There's a lot of people that predict. My prediction is you ought to be ready for the one that hits your community. And nobody can tell you whether or not that will happen. So just get ready and be prepared.

O'BRIEN: Some of the advice and getting ready part is sort of what you brought with us, the props you brought. Hold them up and show everybody. You now are using Flat Stanley and his friend, Flat Stella, to talk about the message of getting ready. And this is for the kids.

FUGATE: This is for the kids. We talk about disasters. It's kind of a scary subject.

O'BRIEN: Yes, it is.

FUGATE: One of the lessons from Katrina was we don't do a good job making sure we are focused on children and their needs and issues. So kind of a happenstance, my nephew Conner sent me his Flat Stanley, and people were paying attention to it. And I thought maybe this would be a different way to communicate with children about something that can be real scary but things they need to know. So we partnered with the Flat Stanley organization, and we now have our two newest employees, Flat Stanley and Flat Stella.

O'BRIEN: They travel well.

FUGATE: Yes, they travel well. And they are going to help tell the story in the words of a child to help take away some of the fear so they are better prepared and understand things that are going on.

O'BRIEN: Three ways that people should be prepared. What are they?

FUGATE: Have a plan. Probably the biggest part is make sure you have good family communication plan as we saw with the power outages. Make sure you can let people know if you're ok. Know an evacuation route, but also for the wildfires. Be ready to go. And the third thing is, sit down with the kids and make sure they know what the plan is in case their school, they are not at home, you're not around when something happens. The first couple of hours are always the most critical. So have a good plan.

O'BRIEN: And most terrifying when you can't reach people, Craig Fugate, it's nice to have you. I like Flat Stella. I have never seen her before. Thank you. And everyone can go to the blog.

FUGATE: Good to fema.gov and go to the blog and learn about their first day at FEMA.

O'BRIEN: All right. Thank you.

Still ahead this morning, we'll talk one-on-one with the original karate kid, current "American Gypsies" executive producer Ralph Macchio in our studio live. Come on out, Ralph because I had the biggest crush out a few years ago.

RALPH MACCHIO, ACTOR: Is that had?

O'BRIEN: Well, let's see how it turns out after the interview. His playlist, Bruce Springsteen, I've been waiting to see you.

MACCHIO: Good to see you.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

PAT MORITA, ACTOR: First, wash all the cars. Then the wax. Remember deal, no questions.

RALPH MACCHIO, EXECUTIVE PRODUCER, "AMERICAN GYPSIES": Yes, but I --

MORITA: Wax on, right hand. Wax off, left hand. Wax on, wax off.

(END VIDEO CLIP)

SOLEDAD O'BRIEN, CNN ANCHOR: Who does not remember that scene? Ralph Macchio is the original Karate Kid. He's got a new role now, though. He's the executive producer behind a new docu series which is called "American Gypsies." And it follows the traditional gypsy clan, the Johns family.

Here the main character, Bobby, sits down and talks with his daughter.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What do you want to do?

UNIDENTIFIED FEMALE: You're going to be mad.

UNIDENTIFIED MALE: Remember I promised you I won't be mad at you. Just tell me what it is you want to do.

UNIDENTIFIED FEMALE: I think I want to try acting. UNIDENTIFIED MALE: Well, hold on. Don't do that. It's not our tradition to do things like that.

Now the gypsy rule is we're not supposed to mix with non-gypsy people. Performing, public schools, it's all part of that. The elders are worried that the children will choose to be exploited. I think it's crazy, but most gypsies just don't want to take that gamble.

(END VIDEO CLIP)

O'BRIEN: Wow. Ralph Macchio, nice to have you with us this morning.

MACCHIO: It's great to be here. Thanks.

O'BRIEN: Why -- why gypsies?

MACCHIO: Well, you know this project came to me. A film student, a friend of mine and his -- and his partner were making a documentary for their graduate project. And they showed me this footage. And they say we think this would make a great TV series.

And I was just fascinated with the subculture. I was just -- does this exist? And where is it? It's in New York. And the -- and the characters started popping off the screen. They were like "The Sopranos" meets "Jersey Shore" a little bit, but yet with this all -- this culture and these age-old traditions. I just found it fascinating, and it's taken almost five years to get it up and running.

But fortunately for us, National Geographic is giving us a big push.

MARGARET HOOVER, AUTHOR, "AMERICAN INDIVIDUALISM": So how did you -- I mean how did you see -- did you identify them because somebody brought you the tape?

MACCHIO: Yes, yes.

O'BRIEN: You don't think of NatGeo when you think of "Sopranos" meets "Jersey Shore".

MACCHIO: Right meets the "Jersey Shore" exactly. Exactly, I think that that's -- you know how networks go through new world orders with new regimes of people, administrations. I think there are -- you know, it falls within that yellow -- yellow frame of National Geographic based on the fact that it's, you know, age-old traditions. The culture, the Romany culture, which is how they -- you know it's what they like to be called. Gypsies is slang. But it makes for a -- but makes for a better, you know, title for TV.

UNIDENTIFIED MALE: Romanys go home.

MACCHIO: Romany's go home right. RON BROWNSTEIN, CNN SENIOR POLITICAL ANALYST: So one of the questions people obviously wonder about reality TV, is how much is reality and how much is TV. How much do you think the act of filming changed what you ultimately were able to record?

MACCHIO: Well, that's a good -- that's a good question. I mean, I think this is my first foray into the non-scripted world, the docu series world. It's -- to me, it's all about story telling. If I connect to the characters, and if you're -- if you invest in the characters and what they are going through, and you're also educated by some -- some of what I didn't know, which is what you will get from the show. And yet have the entertainment factor up there, there is a blurred line with, you know, this -- you can argue there's little reality in reality television.

And you know, but -- but this is our family. I mean, the Johns family is the family. This isn't cast like, you know, we found our Snooki, we found our Pauley D. You know we found you know what I mean? This is the family. This is their story. And it's one family and one story. Not maybe indicative of all.

O'BRIEN: Your premiere is tonight. You said this is your first foray. Are you nervous? To have the world watching?

MACCHIO: No, no, because I think, listen, I'm not nervous. I think that you know it's been a long journey. As I said, it's taken five years of development over a few networks. And -- and for me, it was just, you know, collaborating with the production company, which is Stick Figure Productions. And -- and getting -- you know, pushing that rock up the mountain.

So where it falls -- it is very entertaining and also eye opening to a culture that exists right here.

UNIDENTIFIED MALE: So five years in production.

MACCHIO: Pre-production.

UNIDENTIFIED MALE: And how recent was what we're going to see?

MACCHIO: What you're going to see in this pilot episode is probably a little bit over a year. And then as the -- you know, because it's tough -- you're not -- as much as the -- you know, you're producing a show, and you're still documenting what is happening. So it's not --

UNIDENTIFIED MALE: Part of the culture of the Romanys is to be underground.

MACCHIO: Right exactly.

UNIDENTIFIED MALE: Now you've released them.

MACCHIO: Great question. That's a -- and it's not really a question but I'm making it a question because I know it's coming. The Johns family, Bob Sr., who is the father, the patriarch of the family, is ailing and he has five sons. It's very "Godfather". We have our Fredo. We have our Sonny. We have our Michael. And an age -- age order.

They respect their elders. That's one thing that's very relatable. The family is the first. And the elders are paramount ,of utmost importance even. When they settle disputes, it's through an elder court system where they hear out.

He -- Bob Sr., feels that the traditions are waning and over time will be lost. And he sees the pull of the American dream versus you know, one foot in, one foot out. And that he sees that even within his own five sons. So he doesn't want that to be lost. And they are doing this based on his wishes.

O'BRIEN: Oh interesting.

MACCHIO: And may not be embraced by everyone, but that's -- that's the Johns family story.

O'BRIEN: It's a fascinating story. Ralph Macchio it's nice to have you. Yes, my crush is still alive.

MACCHIO: Thanks.

O'BRIEN: We've to take a break. STARTING POINT is back in a moment.

(COMMERCIAL BREAK)

O'BRIEN: Today a story of a man who always dreamed of helping the sick. But never imagined that he'd have to fight his own health battle first. Here is Dr. Sanjay Gupta with this week's "Human Factor".

(BEGIN VIDEO CLIP)

RICHARD DICKENS, CANCERCARE SOCIAL WORKER: I'm going to ask you first to just take three deep breaths.

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): Richard Dickens is a social worker who works exclusively with cancer patients. Here he is using meditation to help patients cope.

DICKENS: It really is just calming the body and quieting the mind.

GUPTA: Dickens knows all too well the emotional struggle of being sick. As he was looking forward to graduate school to become a social worker, he got devastating news.

DICKENS: I got the invitation to Columbia University, my number one choice on a Monday and a cancer diagnosis the next day.

GUPTA: At 37, he was diagnosed with advanced non-Hodgkin's Lymphoma. He underwent six months of aggressive chemo and a bone marrow transplant. But he didn't give up his dream of helping others. DICKENS: Without ever anticipating I'd get cancer, I wanted to work with cancer or aids patients.

GUPTA: During his illness, he stumbled across CancerCare, it's an organization that helps people through the emotional and financial maze that comes with cancer. Once in remission, he was able to start grad school at Columbia.

DICKENS: Well, we do have a very small grant.

GUPTA: After graduating, he began working for CancerCare and started to run the very support group he previously participated in as a patient. Today, he's CancerCare's Mind-Body project coordinator.

DICKENS: My life is definitely very rich, very rewarding, and I feel I'm where I'm supposed to be.

GUPTA: Dr. Sanjay Gupta, CNN reporting.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

O'BRIEN: We're out of time. "CNN NEWSROOM" with Carol Costello begins right now. Hey Carol.