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Obama Prepares for Cabinet Shuffle; EPA Administrator Defends Agency; Hugo Chavez's Cancer Returns; Newark Mayor Talks Food Stamp Diet, Fiscal Cliff; Gabby Douglas Almost Missed the Gold; Special Needs Mom Worries About Fiscal Cliff Impasse; Foggy Weather Send Off for Obama; Liquefied Natural Gas May Replace Diesel.

Aired December 10, 2012 - 13:30   ET



EMILY SCHMIDT, CNN CORRESPONDENT (voice-over): Kerry is also listed as a potential defense secretary to replace Leon Panetta. It's a list that includes Michelle Flournoy, who held what's considered the number-three job at the Pentagon. Senior Democrats say deputy defense secretary, Ashton Carter, is on the list. And former Nebraska Senator, Chuck Hagel, a Republican, could represent a reach across the aisle.

TIMOTHY GEITHNER, TREASURY SECRETARY: We're in a much stronger position today as a country than we were in '07.

SCHMIDT: Treasury Secretary Tim Geithner has said he will stay at his post until at least inauguration. President Obama's chief of staff, Jack Lew, is often named as a potential replacement.

(on camera): A CNN/ORC post-election poll asked if people thought President Obama would pick good cabinet members. 58 percent said they thought he would. 42 percent said he would not.

Emily Schmidt, CNN, Washington.


SUZANNE MALVEAUX, CNN ANCHOR: One cabinet member who has been on the president team of advisers since the very beginning, EPA administrator, Lisa Jackson. I had a chance to talk with her one on one Friday night after an event that I moderated by the environmental group, Captain Planet Foundation, here in Atlanta. We started off talking about the importance of the EPA, the efforts by some Republicans to actually get rid of the agency.


LISA JACKSON, ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY: If you ask the average American, talk about stripping the politics away, are you for it, what does it mean to live in America, part of what they say is, I have clean water and air to breathe. I have a right to go to my government if I think there's contamination in my community and have it cleaned up. MALVEAUX: In light of all those points, you still have folks you have folks, like Newt Gingrich, who say the EPA, get rid of it. These are job killers and regulators, and this is bad for business. How do you confront Republicans like Newt Gingrich, who's still putting that out there, and says, look, I don't know the agency should exist?

JACKSON: Well, I start by disagreeing and saying that's not where the American people are. You know, moms across the country speak up right now saying we need stronger standards for soot in our country because we're in the process of setting that. We did a mercury standard last year. It was 21 years in the making under the Clean Air Act, and the results were overwhelming. We did a proposed rule to deal with greenhouse gases from new power plants. We got three million comments largely in favor. So I think it's easy to say. I think right now the American people rightly want their government to be efficient. They don't want it to waste money. They want to know they get something. When you have a regulatory agency, we should regulate smartly. We shouldn't be oppressive. We should be smart about it, but we shouldn't go away.

MALVEAUX: You deal with making the environment cleaner and better from a government's perspective. How do you attract businesses and money and private investment into climate change and protecting the environment?

JACKSON: Well, I think they need certainty. What I hear from businesses is -- and I've been doing this almost 23 years -- is that we need certainty. We want to invest or money, but we want to know that the rules aren't going to change. That if carbon pollution is a bad thing, which we know we need to control it, that I'm not going to be disadvantaged because I'm clean. In fact, it would be great if I'm advantaged, but don't put me on a playing field that makes it harder for me to compete.

And I think what we have to do, we're finding businesses all over the country cutting their energy use, cutting their water use, increasing their profits by doing it. We have to lift them up, because they can show the way for other businesses that might be too small or too busy to realize the opportunities are there.

MALVEAUX: What's your plan for the second term? Are you sticking around?


JACKSON: You know what? What I can say is I'm very committed to these issues. It's been 23 years since I started as a staff-level scientist. And we have so much work to do.

MALVEAUX: So if the opportunity presents itself, would you stay for the second term?

JACKSON: I'm still committed to everything --


-- in terms of the environment.


MALVEAUX: You can watch the full interview on

I also sat down with Ted Turner, Richard Branson and former President Jimmy Carter. I interviewed them before the Captain Planet Foundation gale, where we conducted a panel discussion, talking about clean energy, among other things. We'll roll out those interviews later in the weeks in the days to come. Tomorrow, I'll bring you my interview with President Jimmy Carter and his views on legalizing marijuana.

New Jersey's Governor Chris Christie says he may have a challenger when his term is up. Mayor Cory Booker, opening up about his political future, as well as taking the food stamp challenge.


MALVEAUX: Hugo Chavez is back in Cuba today for cancer treatment. He left Caracas early this morning. The 58-year-old has been battling cancer for the past year and a half. He underwent surgery and radiation therapy before declaring himself cancer-free in July. Before leaving, Chavez spoke publicly about his health.


HUGO CHAVEZ, PRESIDENT OF VENEZUELA (through translation): Unfortunately, this is how I am telling the country, that in that overall checkup, malignant cells show up in the same affected area. We have had to review the diagnostic, the evolution of the treatment, and we have had to check with experts. And we have decided it's absolutely necessary and it is absolutely essential to undergo another surgery.


MALVEAUX: Newark Mayor Cory Booker is on the sixth day of his food stamps challenge diet. He said, on his LinkedIn page, he's getting tired of sweet potatoes and canned beans and canned vegetables. He's living for a week on New Jersey's version of food stamp to call attention to the nutritional needs of low-income folks. He said the program could be cut as politicians try to cut spending in Washington. And, of course, that worries him.

Another thing that worries him is the tax hike that will hit about everybody if we go off the so-called fiscal cliff.

Here's what he told CNN this morning.


CORY BOOKER, (D), MAYOR OF NEWARK, NEW JERSEY: People, who don't have the extra money to spend, then hurt the stores they would shop at, the food they would be buying and so on and so forth. This is a time in our fragile economy we cannot have a government, especially Republicans, who is holding hostage all of this country. (END VIDEO CLIP)

MALVEAUX: Booker also says he's trying to decide whether or not he's going to run for U.S. Senate or for governor. He told us this morning that Governor Christie is vulnerable to a challenge because of his stand on the environment as well as women's issues.

16-year-old gymnast, Gabby Douglas, catapulted into our hearts when she won the gold medal at the Summer Olympics, but she almost didn't make it there. In her new book, "Grace, Gold and Glory," she talks about how, at one point, right before the games, she was ready to just forget the whole thing. Well, now, something else a little different. Listen to what she said.


GABBY DOUGLAS, OLYMPIC GYMNAST: I wanted to quit right before the Olympic Games, and I wanted to work at Chick-Fil-A and join other sports like track and field and --


DOUGLAS: I was very homesick. My family came to Iowa to celebrate Christmas with me, and before I knew it, it was all said and done and went by so fast. They were ready to pack up and go back to Virginia and I wanted to go with them because I was very homesick and wanted to go home because I missed it so bad.


MALVEAUX: She says her brother, also an athlete, talked her into sticking with it. Good for you.

President Obama in Michigan at the Detroit Diesel Corporation. We're looking at remarks there. He's going to address middle class families. President talking about the economy, focusing mainly on the expiring tax cuts as we near this fiscal cliff. We're going to bring the remarks live as they happen.

But first, Christine Romans has a look at what it would be like he if the country let those tax cuts expire, and we go off the so-called fiscal cliff.


CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Marketing firm, RealtyTrac, reports one in three homes sold in the third quarter sold short. That is when you sell a house for less than you owe on it and the bank agrees to absorb the loss. Right now, you don't owe taxes on the forgiven debt. On the other side of the fiscal cliff, you do. The Mortgage Forgiveness Debt Relief Act gives homeowners a tax break on unpaid mortgage debt. It expires on December 31st, unless Congress acts.

DAREN BLOMQUIST, VICE PRESIDENT, REALTYTRAC: The average amount that homeowners are short in a short sale is $95,000. And if this tax break goes away as part of the so-called fiscal cliff, those homeowners could be taxed on that $95,000 as additional income starting in 2013.

ROMANS: How much homeowners will owe in taxes on that amount depends on the tax bracket they're in. But on average, it would be about $20,000 to $25,000.

The banks have an extra incentive to sell short and absorb the loss. Under the National Mortgage Settlement Act that went into affect earlier this year, the nation's biggest lenders get a credit for short sales as a form of foreclosure relief. Foreclosures also sell on average for $30,000 less than homes sold via short sale. So as we nearing the fiscal cliff, you can expect short sales even more as homeowners look to avoid getting hit with bank taxes and banks get stuck with foreclosed properties.

If we go over the cliff, the tax bill homeowners face with a short sale may be steep enough to walk away instead. And that would push the foreclosure rates higher for 2013.

For "Smart is the New Rich," I'm Christine Romans.



MALVEAUX: "In Depth" now. The fiscal cliffhanger has one Maryland mother waiting and worrying. She stands to lose a lot of needed assistance if lawmakers fail to reach a compromise. No deal would mean no support for her son with special needs.

Renee Marsh has the story.


UNIDENTIFIED FEMALE: Want to lay down?

RENEE MARSH, CNN CORRESPONDENT (voice-over): 11-year-old Cara Ambanca (ph) is reluctant to lie down on the examination table.

UNIDENTIFIED FEMALE: Let me see your finger.

MARSH: He's still learning about compromise, something hard to come by in Washington. Cara is autistic. He and his mother, Lisa, depend heavily on state, local and private programs that get grants from Washington. One state program helps pay for his special private school. A single mother of three, she worries no deal on Capitol Hill could mean support services for children with special needs will dwindle or disappear.

LISA SLIFER, MOTHER OF SPECIAL NEEDS CHILDS: I don't think we would be able to basically afford the kind of services that we have for him now at home. Then there's the emotional consequence of that.

MARSH: Her worst fear? Not being able to provide what's need to keep Cara home and out of an institution. SLIFER: You have people around you who really understand your child and are really willing to support you and support you in keeping your child at home, and so the thought that some of that would go away and that we would have a difficult time maintaining him at home, is probably the most devastating thing.

MARSH (on camera): If there's no deal here, that could mean across- of-board cuts for agencies, including the federal office of Special Education and Rehabilitation Services.

(voice-over): In this fiscal year, Maryland, where Lisa lives, received more than $300 million in federal funds. The State Board of Education says just under 113,000 students depend on that money.

Maryland Governor Martin O'Malley's office tells CNN cuts could mean less access to medical, psychological and counseling services, and job training for special needs students.

ANNE STAUFFER, PEW CENTER ON THE STATES: The top five grants that would be subject to sequester are Title 1 grants to local education agencies that are for low-income children basically, and special education grants, Headstart, the nutrition programs for low-income women and children, and public housing.

SLIFER: It's frustrating to watch them just sort of posture constantly and not move in terms of being willing to negotiate. So it's almost as if they're not taking into account the stresses that middle income families are going through.

MARSH: For Cara and his mom, not knowing exactly what will be cut is just as troubling as the possible of the cuts.

SLIFER: I think that's really the most terrifying thing for us.

Give me five, man. All right.

MARSH: Renee Marsh, CNN, Washington.


MALVEAUX: We're sitting by waiting for the president to address the economy at the Detroit Diesel Corporation. That is a live event that's going to take place. You're looking at pictures of Air Force One there. Fog and rain impacting the president's trip from D.C. to Detroit. We'll take a quick look at the weather that is impacting everyone across the nation.


MALVEAUX: Had a chance to attend that concert last night. The first family getting in the holiday spirit, the taping of the Christmas and Washington concert, pretty cool. Korean pop star, Psy, was among the special guests, really stole the show at one point. The concert set to air later this month. Meantime, first dog, Bo, the feature of the 2012 White House holiday card. Pretty cool. Professional artist, La Ressa Cable (ph), designed this year's card. Cable is a dog owner, which is why she decided to feature Bo.

No sunny skies for President Obama as he left for Michigan today. He was met by fog, dreary weather as he boarded Air Force One. He's on the road to push his plan to avoid the fiscal cliff. Where the skies any sunnier in Detroit?

Want to bring in Chad Myers.

Just foggy out there.

CHAD MYERS, AMS METEOROLOGIST: Not foggy in Detroit so much, but certainly, it is cloudy. So, no, not sunnier. The fog this morning was everywhere. Like from Maine down to Atlanta.


MYERS: Because there was so much humidity in the air, feels like spring out there now. Skies cleared above. When that happens, all of the cold air sinks to the surface and that cold air makes it -- the clouds on the surface, wall it fog, just everywhere. The visibility in D.C. was down to a quarter of a mile. Some planes were very slow. Trying to get back tonight, going to be very slow again.

MALVEAUX: Slow travel.

MYERS: The rain will be all the way from New York City down to the D.C. area later on tonight. Here we go. That's what the rain looks like right now. Rain in Pennsylvania, West Virginia, Ohio, out to west, where the president is. It is clearing out but still cold. About 35 degrees in Detroit now. And then farther down to the south, here, where we are, thunder and lightning around Atlanta, Georgia, now, the south and east of town. Farther down to the south, still have a tornado watch in effect. There could be some storms that could rotate a little bit. But those big yellow flashes you see, lightning today. It is out there today. A spring type day out there today. Make sure you stay inside when the sun approaches.

There is nothing all that severe going on right now there, but when it does, it can come very quickly and go very quickly too. But be in side when that does come in the --


MALVEAUX: Chad, do we expect this will impact travel as well?

MYERS: I think Atlanta will be OK. We have 30 minutes to an hour there. You're going back up to D.C., New York City, when the skies start to cloud up and start to get visibilities down to half a mile, the planes have to separate more, so the pilots cannot bump into another plane. You don't want to be doing that. That does kind of reduce the number of planes that can get on the ground at any one time, but you should be OK.

MALVEAUX: Good. Hopefully, not many delays.

MYERS: That's right. MALVEAUX: Thank you.

MYERS: You're welcome.

MALVEAUX: Thank you, Chad.

MYERS: All right.

MALVEAUX: We're moments away from the president's live address on the economy. He's in Michigan talking about the economy at the Detroit Diesel Corporation. We'll bring you the remarks live as soon as they start.


MALVEAUX: President Obama out promoting his plan to avoid the so- called fiscal cliff. He's taking his message directly to the American people. The president is taking a tour of the Detroit Diesel Corporation. That is in Redford, Michigan. The company is owned by Daimler. Makes diesel engines. In just a few minutes, he's going to address the economy there. We'll bring the president's remarks live as soon they happen.

But for the truckers who rely on diesel fuel, there might be a big change down the road. Many believe that liquefied natural gas is the next big thing in long-haul trucking.

That story from Tory Dunnan.


TORY DUNNAN, CNN CORRESPONDENT (voice-over): Diesel is king here at the Flying J Truck Stop near Richmond, Virginia. With it, Nathaniel Keating has pushed his rig 3.5 million miles.

NATHANIEL KEATING, TRUCK DRIVER: You name it, I've hauled it.

DUNNAN: But truckers here don't have to look far to see the future. Alone in a corner, sits a new liquefied natural gas island.

LNG, as it's called is cheaper, cleaner and, supporters say, more plentiful than diesel.

But there is a problem.

(on camera): Say you want to drive a truck like this coast to coast using only liquid natural gas. Here's what you would be up against. These are the only open and public LNG fueling stops across the country, and they're actually only 30 of them. A tank of LNG would take you about 700 miles. So going westward from Washington, D.C., unless you go completely out of your way, you would run out of your gas just outside Nashville.

(voice-over): It is what the industry calls the chicken-and-egg dilemma. What comes first, new trucks or new pumps?

The American Trucking Association recently held a sold-out summit about just that.

T. BOONE PICKENS, TEXAS OIL MAN & NATURAL GAS CRUSADER: It is going to happen. I promise you, it is going to happen.

DUNNAN: Texas oil man-turned natural gas crusader, T. Boone Pickens, says Henry Ford faced the same problem.

PICKENS: If somebody said to poor Henry, have you thought about it, you don't have any filling stations? He said, oh, gosh, I never thought about that. Well, I'll forget this idea. That's not what he said. He said, don't worry about it. You'll get filling stations. If the car shows up, the filling stations will come.

DUNNAN: By spring, the number of LNG stops will skyrocket to about 150. But when they'll open is uncertain.

You'd think environmentalists would be thrilled at the prospect of replacing dirty diesel with clean natural gas. Not quite.

FRED KRUPP, ENVIRONMENTAL DEFENSE FUND: We think a rush to liquefied natural gas is a mistake.

DUNNAN: While natural gas may burn cleaner, problems arise when the gas leaks.

KRUPP: The leakage of that gas itself is such a potent greenhouse gas, 70 times more potent than carbon dioxide. That undermines the greenhouse gas advantage.

DUNNAN: Bottom line, the industry says LNG is cheaper than diesel fuel.

KEATING: But I think it will work in the end.

DUNNAN (on camera): Just a matter of time?

KEATING: Matter of time.

DUNNAN (voice-over): Tory Dunnan, CNN, Washington.


MALVEAUX: CNN NEWSROOM continues right now with Brooke Baldwin.

Hey, Brooke.

BROOKE BALDWIN, CNN ANCHOR: Hey, Suzanne. Thanks so much.

Good to be with all of you on a Monday. I'm Brooke Baldwin.

Let's show you live pictures. We're watching and we're awaiting the president. Packed room here. These are live pictures from Redford, the Redford Plant. Daimler's Redford Engine Plant, to be specific. Today, this is the greater Detroit area. We're expecting the president. This is an invitation-only audience. We're expecting to hear themes of the economy and middle class.