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tv   CBS Evening News With Katie Couric  CBS  August 24, 2010 4:30pm-5:00pm PST

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>> smith: tonight, home sales take their biggest plunge on record. is it time to overhaul the mortgage industry? i'm harry smith. also tonight, making the grade. nine more states and d.c. score big money for their schools under the race to the top program. >> we win! that's great! >> smith: alleged scammers accused of trying to swindle the b.p. oil spill compensation fund. and how an author who writes about the children of yesterday got to be so popular with the children of today. captioning sponsored by cbs from cbs news world headquarters in new york, this is the "cbs evening news" with katie couric. >> smith: good evening, everyone. how bad is the housing market? america's realtors reported
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today used homes were selling last month at the slowest pace in 15 years. sales plunged a record 27%. and how's this for a glut? there are nearly four million unsold homes out there. that's a twelve and a half month supply, the most in three decades. the reasons including the slow economy and expiration of the tax credit for first time home buyers. but some say what's also needed is an overhaul of the home mortgage system. anthony mason is our senior business correspondent and has that story. anthony? >> reporter: the steep falloff in housing a sales highlights the degree to which the government has been propping up the housing market and the two biggest pillars of that support system-- fannie mae and freddie mac-- are facing a crisis. in florida this month, fannie mae auctioned off nearly 100 foreclosed properties. in chicago, freddie mac was offering help to homeowners in distress. the two troubled mortgage giants
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seized by the government nearly two years ago now own or guarantee nearly 31 million home loans-- more than half of all american mortgages, and they're bleeding billions in losses. >> fixing this system is one of the most consequential and one of the most complicated economic policy problems we face as a nation. >> reporter: the treasury kicked off the debate over how to fix fannie and freddie at a washington conference last week. the stakes are huge. even now fannie mae; freddie mac and the federal housing authority are propping up the housing market. >> more than nine out of every ten mortgages originated today are filtered through one of those three institutions. >> reporter: the government has already pumped nearly $150 billion into fannie and freddie to keep them afloat and some say taxpayers could end up with a trillion dollar bill. >> reporter: fannie mae and freddie mac are going to incur the losses of our neighbors who default on their mortgages. >> reporter: set up by congress as private companies to expand
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home ownership, fannie and freddie buy up mortgages from lenders so those banks have money to lend again. but they're now holding hundreds of billions of dollars in bad loans and the government-- which always unofficially backed fannie and freddie-- is stuck with them. >> it goes to the very heart of the american dream. it really goes to the very heart of what role should government play, if any, in housing. >> reporter: the treasury aims to come up with a plan for fannie and freddie by january but reforming them will be difficult. while the housing market is still so fragile. harry? >> smith: anthony, these housing numbers are discouraging to say the least. they make you wonder if the stimulus has had any effect at all. >> reporter: in fact, the congressional budget office came out with a report today that suggested the stimulus added as many as 3.3 million jobs to the economy and boosted g.d.p. by 4.5%. if that's accurate, the stimulus in fact, saved us from another recession. >> smith: anthony mason, thanks. turning to the gulf oil spill, b.p. set aside $20 billion so
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far to compensate the victims, money that could prove very tempting to crooks. today, mark strassmann reports, the justice department gave warning: it's on the lookout for anyone who ties to submit a phony claim. >> you're all covered! you're all eligible. >> reporter: ken feinberg is willing to spend $20 million to make people whole after the oil spill, but not one penny on scammers. he's overseeing b.p.'s new compensation fund. how are you going to handle the fraud aspect? >> fraud, i've got the complete cooperation of the department of justice and that criminal fraud division is the best there is. >> reporter: in baton rouge, this is the division's national center for disaster fraud created after widespread fraud following hurricane katrina. $80 billion was earmarked for reconstruction but an estimated $4 to $6 billion was linked to insurance fraud. among the criminal convictions, a mississippi mayor, a louisiana minister, and a parish councilman.
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the national center's mission now: protect b.p.'s money for legitimate victims. >> it is harder to get away with it. that's not to say people won't try. >> reporter: just this month, three louisiana fishermen were arrested for felony fraud. all received thousands in b.p. compensation checks after allegedly filing phony claims. >> i cannot pay claims without documentation. >> reporter: but weeding out scammers will also slow payments for spill victims like emma who has a struggling souvenir shop. she's received only one b.p. check, $5,000, way back in may. >> i mean, how long does it take to look at paperwork? >> reporter: fraud investigators worry frustration can lead to desperation and worse. >> anger at b.p. or any other corporate entity out there will not justify a fraudulent attempt to obtain money that they're not entitled to. >> reporter: the fraud potential here goes well beyond b.p.'s fund, from scamming contractors to bogus charity drives. but investigators say one of
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katrina's many costly but valuable lessons, they're better now at spotting the scammers. mark strassmann, cbs news, new orleans. >> smith: attention wal-mart shoppers, there is a major recall over at the deli counter. 380,000 pounds of processed meat ham, and roast beef sold in pre- packaged sandwiches labeled "marketside grab and go." they may be tainted with listeria, a potentially deadly bacterium. so far no illnesses have been reported. still no firm word on the number of people who got sick after eating tainted eggs. there could be more than a thousand and the recall is growing. a california distributor is recalling about 300,000 eggs it got from an iowa farm at the center of the salmonella scare. elaine quijano has the latest on the investigation. >> reporter: as investigators try to pinpoint the exact source of the salmonella that tainted more than half a billion eggs, cbs news has obtained a series
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of state inspection reports of one of the companies linked to the recall, right county egg. each report shows during an april visit the inspector did not check any of the 27 points on his safety checklist, including whether the facility was free from the presence of birds, insects, rodents and whether equipment was in clean and sanitary condition. the state says the inspector did not do more because the facility had a full-time u.s.d.a. inspector on site but the u.s.d.a. says its official on sight was not an inspector at all and was only there measuring eggs and looking for cracked shells. inspections are ultimately the responsibility of another agency, the food and drug administration, which had never inspected the farm. >> when you have multiple agencies in charge of a single issue, sometimes no one's in charge. >> reporter: and that may be the case at more than half the nation's food production facilities. another report found most have gone without an f.d.a.
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inspection for at least five years despite recent recalls of tainted spinach, tomatoes and peanut butter. the f.d.a. and critics agree, the next step lies with congress to pass a food safety bill that's now stalled in the senate. it would require the f.d.a. conduct more frequent inspections and provide the resources to do them. elaine quijano, cbs news, new york. >> smith: in northeastern china, a passenger jet went down today while trying to land in a thick fog. chinese television says 43 people on board were killed but 53 others survived, some with serious burns. the brazilian-made embraer jet was on a domestic flight when it overshot the runway and burst into flames. now to that amazing survival story in chile. 33 miners discovered alive 17 days after being trapped in a cave-in. authorities said today each miner got by on just two spoonfuls of tuna, a sip of milk and a bite of crackers every
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other day. tonight, seth doane reports they're getting much-needed supplies as they wait to be rescued. >> reporter: heavy trucks head toward the mine through cheering crowds. they carry special drilling equipment and ride on the fate of an anxious nation. two small shafts have already been drilled about half a mile straight down to where the miners are waiting. these channels act as a sort of umbilical cord so that rescuers can deliver capsules of medicine, foot, water, and communications equipment. that provides a chance to hear from the men deep underground. ( cheers and applause ) >> reporter: the trained miners applauded the rescuers above and even sang the national anthem. and in return, the minister of mines encouraged them. to reach the miners nearly 2,300 feet down, rescuers plan to use a larger drill to slowly bore
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down as much as 100 feet per day. the tunnel will be 26 inches wide, but once rescue equipment is lowered, miners will only have about 19 inches of space in which to squeeze. >> they have to go slow because the mine has already collapsed. and so not knowing the condition of the mine and the area where they're going to drill, they don't want to cause the mine to further collapse. >> reporter: chilean officials say the delicate operation could take up to four months. meanwhile, loved ones wait near the mine in a makeshift village aptly named "camp hope." right now that's all many have. seth doane, cbs news, new york. >> smith: in this country, the obama administration announced the winners in the second round of the race to the top competition for education money. tennessee and delaware won the first round, they are joined now by florida, georgia, hawaii, massachusetts, maryland, new york, north carolina, ohio, rhode island, and the district of columbia.
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congressional correspondent nancy cordes tells us the latest winners will share nearly $3.5 billion in grants. >> congratulations! >> reporter: we were there today when the head of washington, d.c.'s e.l. hanes charter school got the good news. >> the good news is that d.c. has won the big grant called race to the top. >> ooh! >> reporter: the reform proposal she helped author had garnered her city $75 million. that's a tenth of d.c.'s entire annual public school budget. how long will it take before kids at this school can actually feel the effects of that money? >> i think will be nearly immediately. >> reporter: to compete in the race to the top, states were required to adopt rigorous reading and math standards. 35 of them plus the district of columbia took on the challenge and 19 of them with ambitious plans for reform made it to the finals. today the administration announced the winners-- nine states plus d.c.
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>> we're rewarding states willing to take bold new steps to change the way we educate our children. >> reporter: the rewards range from $75 to $700 million per state. a big boost at a time when school budgets are strapped. the winning states must use the funds to turn around low- performing schools, recruit and reward top teachers, and track student performance. >> we already have a team that's ready to implement what we put in that proposal. and so we're already ready to hit the ground running. >> why are you here? >> to get an education! >> reporter: but, like every race, this one had losers as well as winners. minority groups like the n.a.a.c.p. worry that the states that didn't make the grade are the ones that need the money most. >> the premise that the race to the top program is going to allow our country to race to the top is flawed. it's two too little change and too few dollars. >> reporter: the losing states might get another shot next year if the secretary of education is able to add a billion dollars to his budget.
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but that's still nowhere near the $4 billion in stimulus funds he had at his disposal this year. harry? >> smith: nancy cordes in washington, thanks. one more note from washington, shirley sherrod, ousted from her job at the u.s.d.a. after she was wrongly accused of racial discrimination today turned down an offer to return to the department. but at a news conference with agriculture secretary tom vilsack who'd fired her, sherrod said she may do some consulting for him on racial issues. still ahead on the "cbs evening news," she wrote "once upon a time," but kids have been reading her books happily ever after. and up next, the obama administration appeals court ruling that stopped federal funding of embryonic stem cell research. [ male announcer ] if you have type 2 diabetes, you struggle to control your blood sugar.
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i'm chef michael, and i love to delight bailey's senses.too.. don't i? [ barks ] because i think food speaks a language of love. that's what inspired me to rethink dry dog food. [ female announcer ] chef michael's canine creations. [ chef michael ] mmm. tender shredded pieces made with real meat... and crunchy garnishes to enhance the mealtime experience. yes, bailey-- just for you. [ barks ] [ female announcer ] chef inspired, dog desired. chef michael's canine creations. >> smith: as expected, the obama administration said today it will appeal the court ruling that bars temporarily federal funding of embryonic stem cell research. wyatt andrews looks tonight at the possible impact of that ruling if it stands. >> reporter: for this doctor, who has been fighting cancer in children for 35 years, the court's ruling was a shock. the ban on federal funding could halt a half million dollar research project both the
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university of maryland and johns hopkins have been using to study childhood leukemia. >> we had the tool, we had the tool in our hands and it seems to us, we fear, that this will be turned off. >> reporter: the same fear surfaced at children's hospital in boston where dr. leonard zon could lose a $1 million stem cell project studying down syndrome. >> to stop this work just seems crazy at this moment and we're certainly hoping that this ruling can be challenged in some way. >> reporter: that ruling came late on monday when a federal court in washington said that in a 1996 budget law congress was crystal clear that no federal funds shall be used for research in which a human embryo or embryos are destroyed, a process that does happen when embryonic stem cells are taken. the ruling does not apply to private funding or to other types of stem cells. but medical researchers are still confused right now over one central question: what about all those embryonic stem cell experiments going on right now
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where the destruction to the embryo has already happened? must those experiments stop, or can they continue? the national institutes of health immediately put 62 pending stem cell projects on hold and warned that more than 200 existing stem cell experiments could continue for now but may not be renewed. several groups lobbying for more federal funding said the ruling would delay the search for cures. >> and that's unacceptable to people with diseases and people who have disease in their family which, let's face it, is everyone. >> reporter: still, some medical ethicists applauded the court's decision for protecting life. >> the debate we're having right now is, do human embryos count as human beings? >> reporter: the administration's appeal of the rule willing likely be heard quickly, but in the meantime, hundreds of federally funded experiments and the answers they were seeking face an uncertain future. wyatt andrews, cbs news, baltimore.
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>> smith: 104 million americans take prescription drugs regularly and a new poll by "consumer reports" may shed light on how they feel about it. about 70% believe drug makers have too much sway over doctors. nearly half think that's because of gifts doctors get from drug companies. one-fifth of those taking a prescription drug have asked their doctor for one they've seen advertised. and 38% of uninsured patients under 65 say they've skipped filling prescriptions to save money. we'll be right back. thank you for calling usa prime credit. my name is...peggy. what is problem, please? peggy? sure...well...suddenly it looks like i'm being charged a $35 annual fee. yes? tell me it's a mistake. yes? are you saying yes or are you asking yes? yes? peggy?
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with the chantix and with the support system, it worked for me. [ male announcer ] talk to your doctor about chantix. find out how you can save money on your prescription and learn terms and conditions at >> smith: in the battle for control of congress, congressman kendric meek defeated real estate billionaire jeff green for the democratic nomination. meek will now face republican marco rubio and independent charlie crist for the seat currently held by the g.o.p. in arizona's republican primary, incumbent john mccain is favored over former congressman j.d. hayworth. and in alaska, incumbent republican lisa murkowski is being challenged by joe miller who is backed by sarah palin and the tea party. for britain's prime minister, politics took a backseat to family life today. david cameron's wife samantha gave birth to a girl.
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they also have a son and a daughter, another child born severely disabled died last year just six years old. no name yet for the newest addition to their family. also from england tonight, outrageous cruelty caught on tape. security video shows a woman stopping to pet a kitten then, for some reason, she dumps it into a garbage bin. the owners found the kitten 15 hours later shaken but unhurt, then they posted the video online. now the woman is trapped in her home with guards outside to keeping angry crowds away. in ohio, a crash at 100 miles an hour. watch the left side of the screen. a car flies past the police car on i-675 outside dayton, hits a divider and slams into an overpass. the 19-year-old driver is in critical condition. the police say he'd been released from jail just 15 minutes before the crash. i know who works differently than many other allergy medications. hoo?
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we have 19 centers in 4 states. we've made over 120,000 claims payments, more than $375 million. we've committed $20 billion to an independent claims fund to cover lost income until people impacted can get back to work. we'll keep looking for oil, cleaning it up if we find it and restoring the gulf coast. i was born in new orleans. my family still lives here. bp is gonna be here until the oil is gone and the people and businesses are back to normal... until we make this right.
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toi switched to a complete0, multivitamin with more. only one a day women's 50+ advantage has gingko for memory and concentration plus support for bone and breast health. a great addition to my routine. [ female announcer ] one a day women's. next on cbs 5. no id's tuesday no id's tuesday >> smith: it may surprise you to learn that in this electronic age a lot of children still like to read. a survey found half of nine- year-olds read for fun almost everyday. what may also surprise you is the books they are reading. here's john blackstone. >> reporter: seven-year-old ella biehle is a thoroughly modern girl riding a skateboard, listening to an ipod, reading books on a kindle.
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>> "she went to her room and in a moment returned...". >> reporter: but the book she's reading is about a girl from another time, ramona quimby written by an author from another time, beverly cleary. >> i have no idea what a kindle is like or an ipod. >> reporter: somehow cleary, now 94, still connects with today's children. she retired from writing more than a decade ago, but her 39 books remain popular, selling more than 75 million copies in the united states and translating into 14 languages. the children in your books, they don't have computers and ipods and facebook pages. >> no, but inside children are very much the same. >> ramona! >> ramona! >> reporter: this summer ramona, cleary's most popular character, made it on to the big screen for the first time. >> she's right! no charge for that. >> reporter: the movie, like cleary's books, doesn't have
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superheroes, just normal kids being kids, something cleary saw was missing when she started writing back in 1950. >> i was a children's librarian and a little boy said to me "where are the books about kids like us?" well, there weren't any. >> reporter: now, generations of kids have seen themselves in cleary's books. ella is not the first in her family to be captivated by ramona. >> i just remember identifying with her because she was always getting in trouble and she was always dirty and her older sister was always doing everything right. and that seemed sort of a lot like my life. >> reporter: the continuing popularity of cleary's books show that in a changing world some things about growing up don't change. >> i threw up in the library at school. it was really embarrassing. john blackstone, cbs news, carmel california. >> smith: for katie couric, i'm harry smith. i'll see you in the morning. captioning sponsored b
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ing your realtime captioner is linda marie macdonald. caption colorado, l.l.c. good evening, i'm allen martin. >> i'm dana king. we want to get straight to this breaking news. you are looking at live pictures of a fire in contra costa county. it could be on the verge of being out of hand, exploding. it comes on a day when bay area temperatures are breaking records as you well know. the fire about burning close to clayton and blackhawk near curry canyon road. cal fire says structures near the road are threatened but homes in clayton and blackhawk are not. so far the flames have burned 125 acres. crews are expecting the fire may grow much larger than. that just got off the phone with cal fire battalion chief jim crawford. >> the fire is heading actually into a more rural area or more -- an area where there aren't homes at, further


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