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CNN NEWSROOM

House Reconvenes This Hour; Unemployment Holds Steady at 7.8 Percent; Investors Eye New Jobs Numbers; More Buyers Picking Volt Over Corvette; Knicks' Smith Throws Down Sweet Dunk; Malala Discharged from Hospital; Chavez Fights "Severe" Lung Infection; FTC Clears Google in Antitrust Probe; Sperm Donor Liable for Child Support

Aired January 4, 2013 - 10:00   ET

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


VICTOR BLACKWELL, CNN NACHOR: The next hour of CNN NEWSROOM begins right now.

Stories we're watching right now:

Victims from Superstorm Sandy could soon be getting $9.7 billion in aid. The House is set to vote on that today, but hear why some people are telling lawmakers to vote no.

Malala is out of the hospital. The teen shot by the Taliban gets to stay with her family, but her treatment is far from over.

A controversial new question could be popping up on census forms. "Is being Hispanic a race?" Why that question has a Latino community up in arms.

And no good deed goes unpunished. You heard that before. A man helps a couple conceive a child, and now the state is asking him for child support. He joins us with his story next, live. NEWSROOM starts right now.

I'm Victor Blackwell in for Carol Costello. Happening now: the U.S. House Of Representatives is conceiving or rather convening and getting to work. It's day two for the newly elected congressmen and women and already they have their work cut out for them.

First, they're set to vote on that $9.7 billion in aid for Sandy victims. That bill caused a lot of controversy a few days ago when House Speaker John Boehner canceled a vote on the aid package.

They also have to address the upcoming sequester for automatic spending cuts pushed back two months as part of the fiscal cliff deal.

Now the pulse of the economy, this morning the feds released new employment numbers, 155,000 jobs were created in December. Not enough to push down the jobless rate from its revised level of 7.8 percent.

We're covering all angles of this, from the politics to the ripple effect. Let's start with chief business correspondent, Ali Velshi and what the numbers mean so, again, 155,000 new jobs.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

BLACKWELL: Up a bit from November, but we've heard from Alison Kosik earlier that reaction from the market is ehh. What's your reaction?

VELSHI: Yes, same thing. This is treading water, 153,000 jobs. Actually it was up but it was actually down from November because they revised the November numbers. But, you know, if you look at the chart over the last several months it's kind of all been in the same place.

This is OK. It's 34 months of private sector job growth. It's OK. It's not fantastic. I'll tell you, Victor, I think it would have been better if not for two things. One we don't know how this whole Hurricane Sandy stuff is panning out into the job hunt, but more importantly, what we saw is a dip in consumer confidence starting in October.

And consumer confidence had been zooming along. People were feeling really good about this economy for good reason and then the fiscal cliff discussion started people thinking, I'll have less money in my paycheck. I might lose my job, they started spending less.

We had a weaker holiday season and as a result businesses are not hiring as much as they otherwise would have been. So you see the stock market reaction. Alison will talk to you more about that. It's OK. More importantly, 2013, Victor, is poised to be a good year in the economy.

We have a natural gas boom. We have an oil boom. We have a housing boom. Not a boom, but we've got housing doing particularly well and low interest rates, and Congress stands to mess that up. This was supposed to be over by January 1st.

We now have a debt limit debate that's going to go on in about a month, maybe two months. We've got the fiscal cliff debate again, the sequester, a stupid name for a stupid thing, that we'll be discussing until the last minute I'll bet you at the end of March.

So the bottom line is, what could have been a strong economy is now going to be pared back, remember the Federal Reserve wants the unemployment to come down to 6.5 percent. If we don't fix the fiscal cliff stuff, the sequester that we're talking about, until the end of March.

The unemployment could go up to 9 percent. So at this point I don't know what to make of it. The markets don't know what to make of it. It's OK. It needs to be better and with everything going on in Washington it's probably not going to get better for a few months.

BLACKWELL: All right, Ali Velshi, we'll see what happens in Washington as we move in through debt ceiling and sequester and the budget. Now let's see how the markets are reacting to the job numbers.

Alison Kosik is at the New York Stock Exchange. Alison, is it fair to say investors just are not impressed by this? ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, they're sitting on the fence literally. You see, the stocks are as flat as flat can be. You know, I talked to a couple of analysts, Victor, one telling me, you know what this report shows? It shows the job market is lacklustre.

Another is saying pretty much what Ali has said. It's OK. The thing is not much has changed and he's right because you look at the year as a whole 1.8 million jobs were added in 2012. Well, guess what, the same amount of jobs were added in 2011.

So you've got this job market that's really not moving forward very much. And also you look at what happened from November to December, the unemployment rate, it hasn't changed. The total number of people who are unemployed that stayed the same.

Long-term unemployed, that number hasn't changed, so you get the idea here, it's more of the same. And that's why you're seeing the market flat. Now, you want to see some optimism here? I want you to check out this, the average hourly earnings are up 2.1 percent in 2012.

This is an interesting number to look at because this is a precursor before companies hire, because what seems to be happening here is companies are maxing out the number of hours that each of their employees is working so meaning too much work for too few people.

So it could be that companies could be on the verge of hiring more, so that numbers not up huge, but it is up. Same with job growth, it's not huge, but the economy is adding jobs. So, you see Wall Street just kind of sitting down and kind of watching things happen. Not really going strong one way or the other -- Victor.

BLACKWELL: All right, thank you, Alison.

Let's go now from New York to Honolulu and when President Obama awakens in Hawaii this morning it may be understandable if his thoughts are 5,000 miles away in Washington.

When he returns from his vacation, the president has a long, long to- do list waiting for him and his second term. Dan Lothian is in Honolulu. Dan, the White House is now reacting to this jobs report. What do you have?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, and it's pretty much as we had discussed in the last hour, that there's some good news here, but there's still a lot of work to be done.

Alan Krueger who is the chairman of the President's Council of Economic Advisers saying in a statement, quote, "While more work remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to heal from the wounds inflicted by the worst downturn since the great depression."

He also points out at least from his point of view that the president's policies are helping to strengthen the economy. Also discusses the fact that now there's more certainty in the marketplace because of this passage of this fiscal cliff bill, if you will. And then this caution that the White House always issues every time these numbers come out, that they're often revised either up or down and that you should not read too much into one month's numbers -- Victor.

BLACKWELL: So, we've talked about at the top, the president has a long to-do list. He's got a cabinet to offer appointments for to be confirmed. He has promised that there would gun control legislation or a plan coming from the White House in January.

And he also has the debt ceiling fight that's coming up. He's got a lot to do and we saw on the front page of the "Post" this morning, immigration is the next topic of discussion.

LOTHIAN: That's right. I mean, it's a long list of things that the president needs to do, and I think the question that a lot of people are asking is when you see the kind of battles that we -- unfolded over the last four years and most recently to avoid the fiscal cliff.

The question is, how will the president be able to advance his agenda if he can't get, you know, strong bipartisan support, will we see fights at every turn? And that's the big issue. And that will be a big challenge for the president.

But as you pointed out, while here on vacation, he is mulling over who will be filling these key cabinet positions over at the Defense Department, Treasury, at the CIA. We expect that some of those names could be unveiled as early as next week.

But in addition, there are those economic challenges that will be unfolding over the next couple of months as well. Those are things that the president will have to deal with. And we'll have to wait and see how it will all play out, if the tough fights that we have seen over the last four years will continue into the second term.

BLACKWELL: All right, Dan Lothian, traveling with the president in Honolulu.

Top stories this morning -- one of the first things the new Congress is expected to do later this morning is take up the inaction of its past members. In about two hours the House and Senate will vote on the first of two bills aimed at helping victims of Superstorm Sandy. The almost $10 billion bill will help to pay for flood insurance.

In money news, would you pick electricity or speed? It looks like Chevy customers are picking electricity. In 2012, more people bought a Chevy Volt than a Chevy Corvette. The Corvette is one of Chevrolet's best-known brands, more than 23,000, though, electric Chevy Volts were sold last year, the sales of Corvettes, 14,000.

Plus this -- yes, an early contender for dunk of the year in the NBA. Carmelo likes it. Let's watch it again. The Knicks' J.R. Smith throws down an insane spinning reverse alley-oop dunk last night at Madison Square Garden.

Man! It brought the crowd at the garden to their feet and the Knicks bench you saw they hit the ceiling, too. And the Knicks beat the Spurs 100-83. We're back in a moment with more.

But let's go to weather first, Interstate 10 near El Paso remains closed in both directions while a major blizzard hits the region. El Paso got 2.9 inches of snow on Thursday, more than double the previous record. That's three times more snow in one day than what Chicago has received all season. The snow is expected to move out later today.

People around the world have followed a Pakistani girl's story, you know her name, Malala and now three months after being shot by the Taliban, she's leaving the hospital. We'll tell you what's next for Malala.

(COMMERCIAL BREAK)

BLACKWELL: There's a major step in the long-term recovery of a Pakistani school girl whose story has really captured the world, Malala, the 15-year-old who was shot by Taliban gunmen in October has been discharged from a British hospital.

Our Matthew Chance is in London. Matthew, so many people around the world have really grown fond of this girl, have taken up her cause. What's next for her?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, you're right. Hundreds of thousands of people, in fact, around the world have signed a petition to get her awarded the Nobel Peace Prize because of the courageous stance that she took against Taliban, calling for girls' education in her native Pakistan.

It is remarkable, though, and very heart warming, isn't it, to see these images of Malala Yousefzai, the 15-year-old girl, walking away almost unaided, holding the hand of a nurse, in the hospital. She even had the strength to wave to the staff that has been looking after her over the course of the past three months or so since she was evacuated from Pakistan with the terrible head injuries.

She's going to be located at her temporary home. Her family have moved over from Pakistan to Birmingham in Central England near to the hospital. She's going to be going back with her father and mother and two younger brothers. The doctors at the hospital say that will be best for her, but she'll still come back and forth from the hospital to get clinical treatment.

And she'll also have to be re-admitted according to the hospital as well for cranial reconstruction surgery. Her skull was obviously smashed by the bullet that was fired into her head by the Taliban gunmen back in October and she still has to undergo a lot of surgery to, you know, kind of make that damage good, so she's recovering but she's at the start of a very, very long road -- Victor.

BLACKWELL: So, that's what's happening in the short term. What is the plan for her family long term? Are they going to go back to Pakistan, would Malala be in danger there?

CHANCE: I think there are security considerations. And indeed the father, the brothers, the rest of the family as well as Malala have received renewed death threats from the Taliban who say essentially they're going to come in and finish off the job that they didn't complete and so there is a real security concern.

There's also the medical concern as well. She does have to have this very important treatment and therapy and the best place for her to do that is in Britain. And so the family have taken this decision to relocate for the foreseeable future here to England.

In fact, just last week, her father has been given a job by the Pakistani government as the education attache to the Pakistani Consulate in Birmingham so he can earn money and be close to his daughter as she's being treated at the hospital in Birmingham. Stable future for the next three years at least, they'll be located here it seems.

BLACKWELL: A lot of work to do and a lot of recovery ahead, but still she's moving forward. Matthew Chance in London for us, thank you.

Time check, 10:15 on the East Coast, 7:15 on the West Coast. The woman who herself was a target of a gunman is planning a trip to the scene of another national tragedy.

Former Arizona Congresswoman Gabrielle Giffords is planning to visit Newtown, Connecticut, today. Giffords resigned from Congress last year so she could focus on her recovery after being shot in the head during an event with voters almost two years ago.

Venezuelan President Hugo Chavez's health is in a delicate state. A top official said Chavez a battling a severe lung infection that has caused respiratory failure. Chavez has been hospitalized in Cuba since undergoing cancer surgery last month.

After a two-year investigation, the Federal Trade Commission said Google is not in violation of U.S. Antitrust laws. Competitors had complained the world's largest search engine engaged in unfair business practices. Well, the FTC disagrees. Google still faces a similar investigation in Europe for antitrust laws are much more stringent.

You could call it a big win for free speech on the internet. The Virginia Supreme Court is supporting one woman's right to write a nasty review online. But that may not stop her from a big lawsuit.

(COMMERCIAL BREAK)

BLACKWELL: If you post reviews online, listen up. The Virginia Supreme Court ruled in favor of a woman who was sued for a nasty review she wrote on Yelp and Angie's List. The court overturned a previous court's ruling ordering her to remove parts of her review.

Here's the story, Jane Perez claimed that a contractor, Chris Dietz, damaged her home while repairing it and implied he may have stolen her jewelry. He's suing her for internet defamation for $750,000 and last month they were on this show and spoke with CNN's Don Lemon.

(BEGIN VIDEOTAPE) DON LEMON, CNN ANCHOR: Does this lawsuit hurt your business more since customers are afraid you might sue them if they complain?

CHRIS DIETZ, FOUNDER AND PRESIDENT, DIETZ DEVELOPMENT LLC: I hope not. I'm standing up for what's right. The truth needs to be told. She accused me of criminal activity, of false statements, presenting them as facts with no basis for it.

MILT JOHNS, ATTORNEY FOR CHRIS DIETZ: I might ad --

LEMON: Go ahead.

JOHNS: This isn't about free speech. Defamation has never been protected speech in the history of the United States. And this isn't about the ability to give a review, something that's a statement of opinion. It's when statements of facts are made and those facts are untruthful and they damage someone's reputation, damage someone's business, that the -- there has to be some accommodation, there has to be some making right of the situation.

LEMON: Can I ask you this, so, then, there's no concern here, Mr. Johns, that you're setting some sort of precedence when it comes to free speech and people posting things online? Because the internet is fairly open now. You can pretty much say what you want about anything or anybody and get away with it.

JOHNS: Well, I think there's a notion that there's an internet privilege for defamation and it just doesn't exist. And I don't think it's fair just because someone is posting something on the internet doesn't give them the right to make untruthful statements that could ruin someone's business or their professional reputation.

DIETZ: I think also, too, we need to hold the service providers accountable, Angie's List and Yelp, they need to be held accountable.

LEMON: Do you think this was your only recourse? You didn't think you could go back on the site and explain, you didn't think that's enough?

DIETZ: Don, thank you for that question. No. No, actually -- when she didn't pay me a cent on the original invoice for work performed, services provided, she went out there and continued to defame me and claim I was a criminal.

I tried to get those postings removed with legal documents from different sources, disproving her statements or claims, and Yelp and Angie's List refused saying we're just a forum. We don't get between two parties.

(END VIDEOTAPE)

BLACKWELL: Well, in yesterday's ruling the Virginia Supreme Court said that Dietz could still sue Perez for libel. His attorney said that's what they intend to do. A lawyer for Perez said, quote, "The decision confirms the importance of not shutting down public discussion on the internet just because someone doesn't like what's being talked about."

A man helps a lesbian couple conceive a child, and three years later he's being told he has to pay child support. And it's not the couple. It's the state telling him that. We'll hear from him next.

(COMMERCIAL BREAK)

BLACKWELL: The latest threat for victims of Superstorm Sandy, mold. Just in the Rockaway neighborhood of New York, 65 percent of the homes still have mold problems. That's according to a community group there. Some homeowners are worried the government won't offer any help to remove it.

(BEGIN VIDEO CLIP)

DEREK CASEY, MOLD IS GROWING IN HIS HOME: The mold it's here, and we're, what, eight weeks later? And it's still growing. We should have had it removed by now. I'm very concerned about what we cannot see, more so than what we can see.

(END VIDEO CLIP)

BLACKWELL: Another family says mold removal may cost them as much as $10,000.

(BEGIN VIDEO CLIP)

JAVIER TORRES, SANDY STORM VICTIM: The 40 percent of the exterior walls are covered in mold.

LESLY ESCOBAR, SANDY STORM VICTIM: We don't have anyone to remove it.

TORRES: Yes. Nor do we have the funds.

ESCOBAR: Yes, we don't have the finances to be able to.

(END VIDEO CLIP)

BLACKWELL: Well, this morning the House is set to vote on a Sandy aid bill for $9.7 billion, another $51 billion is being put on the back burner at least until the first legislative day, that's the 15th.

Our national political correspondent, Jim Acosta, is in Washington. So, where are we on this bill, likely to pass?

JIM ACOSTA, CNN NATIONAL POLITICAL CORRESPONDENT: Likely to pass, expected to happen within the hour, Victor. We heard from a House leadership aide earlier this morning that they do expect this $9.7 billion to pass. This basically covers the money that FEMA was concerned about running out, which is basically the flood insurance program.

So this money's going to go to people who have been filing claims to get some of that money. And just a few moments ago, we heard from congressman Peter King, the Republican from New York, who was outraged earlier this week, you'll remember that, Victor, when the House declined to pass this Sandy relief aid package that came over from the Senate.

That set off a firestorm of controversy. There were lawmakers from both sides of the aisle from New Jersey and New York. Chris Christie held that news conference and said shame on you, shame on Congress. Well, Peter King came out this morning to assure his colleagues there is no pork in this bill, not to be worried about that, so everybody expects that to pass.

Now, the remaining $51 billion that those lawmakers up in New York and New Jersey that would like to see passed, that is going to be coming up on January 15th, and according to Republicans here on the Hill, that is also not expected to be laden with pork.

Although there are folks over on the Senate side, a Senate Democratic leadership aide is saying, when the House passes its package on January 15th, we still have to take a look at it over on the Senate side. So, that remaining big $51 billion chunk that those lawmakers and the president would like to see passed and sent to those victims of Superstorm Sandy.

That is not -- not a sure thing, at least not at this point, so we're going to have to wait to see what happens on that. And, you know, at the same time, Republicans here on the Hill are getting some pressure from conservatives to block even what's up for a vote today.

The Conservative Club for Growth sent out a statement this morning urging Republicans to vote against this $9.7 billion saying that the government shouldn't be in the flood insurance business, and saying that this will be on their congressional scorecard if Republicans do pass it.

But that's probably not going to be enough to block this from getting passed, Victor. It's expected to go down rather easily within an hour from now. And I should tell you at around 1:00 this afternoon, Congress will be getting to come constitutional business.

Vice President Joe Biden will be presiding over a joint session of Congress to officially count the electoral votes that will make President Obama president once again for a second term.

So a somewhat busy day or busy morning you might say here on Capitol Hill, but then Congress is going to get out of town. They're off next week and then we'll see things get back to business next week.

BLACKWELL: All right, Jim Acosta in Washington for us, thank you.

ACOSTA: OK.

BLACKWELL: So, yesterday we told you about an unusual case in Kansas. William Marotta donated sperm to a lesbian couple and he is now being told by the state to pay child support for the child that was born.

This is despite agreements by all parties involved in the birth that Marotta had no financial responsibility after his donation. Well, William Marotta and his attorney, Benoit Swinnen, they're both with us now. Thank you for joining us, gentlemen. UNIDENTIFIED MALE: You're welcome. Good morning.

UNIDENTIFIED MALE: Good morning.

BLACKWELL: William, I want to start with you. Why did you respond to this ad? How did you find this in the first place?

WILLIAM MAROTTA, MIGHT HAVE TO PAY CHILD SUPPORT AFTER SPERM DONATION: Cruising Craigslist just almost like window shopping, just looking around, and ran across an ad that was asking for sperm donor. For what reason, intrigued my interest, answered the ad.

BLACKWELL: So, you answered the ad, and they -- you found out it was a lesbian couple who wanted to conceive. When you approached them, when did you find out there would be no doctor involved?

MAROTTA: I didn't know that there was no doctor involved.

BLACKWELL: So, from start to finish until you got this information from the state, you did not know that no doctor had been involved with this conception?

MAROTTA: Correct.

BLACKWELL: Ben, William signed a contract with the women. What is your argument for the legality of this contract? Was there an attorney involved with this?

BENOIT SWINNEN, ATTORNEY, SWINENN AND ASSOCIATES: There was no attorney involved with this contract at all. The main argument for the legality is that when they signed this contract was entered into, there was no child. The child was not bargained away. You cannot exist before conception I think. Even the most conservative views would agree with that so --

BLACKWELL: Was there money exchanged hands here? Were you paid, William?

MAROTTA: Yes.

BLACKWELL: How much?

MAROTTA: I'm sorry. I didn't understand the question.

BLACKWELL: Were you paid for your donation?

MAROTTA: No.