so om. who needs cupcakes when you have buns? >> i don't even want to comment. continue the conversation on today's stories, go to our blog, cnn.com/am fix. that's going to wrap it up for us. >> thank goodness for that. here's "cnn newsroom" with heidi collins. hell care reform. congress hits a wall. president obama hits the road. he takes his pitch to the american people. and new developments in new jersey's massive corruption scandal, unof the accused power brokers is found dead. the high cost of obesity. is a tax on fattening foods the best way to lighten the load? good morning, everybody. i'm heidi collins. today is wednesday, july 29th. you are in the "cnn newsroom." we have a lot going on this morning. our crews are ready for it all. first off this morning, ed henry is in bristol, virginia. that's where president obama is

today trying to generate more support for his health care reform plan. and dr. sanjay gupta's going to be separating the facts from the fears. the question this morning, is health care rationing a real possibility? finally, jim acosta is going to be looking at the democrats who have actually blocked the reform plans on capitol hill. these blue dogs are having their day. we will get to it all. first on capitol hill, as you know, negotiations are still playing out. at the white house the focus goes beyond the beltway. today the president takes part in two town hall meetings, including one at a kroger supermarket. cnn's ed henry has the dust-up on aisle one. >> reporter: they're rolling out the red carpet in rural virginia. but the president could get a chilly reception in the frozen food aisle where we found this clerk, a mccain voter who fears health care reform's being rushed just like the stimulus. >> like the last package they pushed through, i think it was

too hurried, a lot of mistakes, a lot of things that shouldn't be. >> reporter: but kathy montgomery, assistant produce manager, voted for the president and is pumped up he's getting tough with congress. thousands of this region showed up in a health expo offering free medical care this past weekend, exposing a problem all too familiar that doctors hear. >> clearly we all recognize, any physician in the hospital would recognize that it is a system in crisis. >> reporter: but like most employees back at the kroger supermarket, produce manager steve shipplet gets generous health benefits. despite being a obama voter, he's nervous the benefits may be taxed to cover the uninsured. he needs more specifics from the president. >> he's going to have to spit out some numbers and let the public know exactly what it's going to cost them and what they're going to have to give up. >> reporter: he says if the president steps up and sells it,

then he's willing to step up himself. >> we've got to do something, and if it means me paying those taxes to get this reform through, then i'd begrudgingly do it, yes. >> reporter: and back in the frozen food aisle, this republican is ready to do his share, too. >> no matter what kind of plan you're going to come up with, somebody has to pay for it. so eventually it comes down to us, the people that's working, and paying taxes, we're going to have to pay for it one way or the other. i just hope we can come up with a plan that's worth paying for. >> ed henry joins us now from bristol, virginia with more on this. ed, this place in virginia is very important in the president's heart. he didn't pick this place by accident. did he? >> that's right. you'll remember back in those bruising primaries with hillary clinton, when barack obama finally won and became the democratic nominee, his kick-off for the general election campaign was right here in bristol, virginia.

and so obviously that might be symbolic, if you will. maybe at that time it was sort of a victory against the odds. now another battle against the odds. he's hoping to come back and get a victory here on health reform. i think what's significant beyond the politics back in washington is that those employees i talked to here at this kroger down the frozen food aisle, produce aisle, they're saying, look, contrary to maybe conventional wisdom out there that people with insurance don't want to pay higher taxes to cover those without, they're saying they're willing to step up if two things happen -- if the rich pay their fair share and also if the president steps up his own sales job and really gets specifics and explains to the american people what they've got to give, what kind of skin they've got to give here to help out. >> that's certainly the question, ed. i'm sure the answer from everybody is going to be very, very different on that. ed henry from the grocery store this morning, nice to see you, ed. all of those plans, the pitches, the facts, figures, it is enough to give you a headache. to help clear things up a bit,

we're calling on our insider, cnn chief medical kaernt acorre and practicing neurosurgeon is with us. you worked on this issue closely with the clinton administration, health care reform the first time around, if you will. a lot of questions still this time around, we know that. let's start with one from our own i-reporter. jason rogers has this question. >> four years ago my father was diagnosed with terminal brain cancer. for 18 months we fought that disease with everything that we had, because we felt like every day was precious. we felt like every day that we kept him alive we were one day closer to a cure for that disease. i guess my question is, under a public option or government-run health care system, would that type of care be possible? is that something that ten years from now we'll have to sacrifice or come up with a tremendous amount of cash to pay for, because it would be rationed under our government-run health care system. >> jason, first, thanks for sharing that personal story. our best wishes are with you and your family. the idea of rationing really

strikes at the core of all that we're talking about with regard to health care. this idea of lowering costs, trying to increase access. the question is will we have to ration health care as a result. some people get the same health care as others? there was a "new york times" editorial a couple of weeks ago where it was put like this -- peter singer, a biocyethicist a prince son, "the death of a teenager is a greater tragedy than the death of an 85-year-old and this should be reflected in our priorities." think about that for a second. he's saying are we going to assign value of life differently in certain situations. we took jason's story specifically to the white house and asked them, here's a story, how would you respond to this specifically? they gave us a statement. they called us and gave us a specific statement. they said, "our heart goes out to jason and his family as well. we know families across america are dealing with issues like this every day. there are a number of different bills making their way through congress right now but we do know that the reform bill that the president signs will not lead to rationing and will be fully paid for and bring down costs over the long term."

they went on to say, the president won't sign a bill that doesn't guarantee coverage to all people of all ages despite any specific health conditions. those pre-existing conditions. but jason's story really strikes a nerve with a lot of people. >> absolutely. the answer from the white house sounds great. but the fact of the matter is there are analysts out there who say despite what he says he intends to do, the numbers just don't add up. >> part of this is that you're dealing with moving targets. when i worked at the white house, it was a few years after health care reform so i got to see port mortem in many ways on this. but trying to find numbers, moving targets is a tough thing to do. the cato institute, a nonpartisan public policy institute looked at medicare when it was conceived in '65. projected costs 25 years later in 1990 -- $9 billion. the actual cost? $67 billion. you can see how far off costs for medicare were based on initial projections. much, much higher. again the president says, we'll add prevention programs an wellness programs, create a

healthier population and that will be a cheaper population with regard to health care costs. who knows? >> who knows if the population stays on track. you've got more people that you're trying to cover, the whole thing is kind of -- >> more people, more tests, more screening. how does that all add up. >> you have a lot more work to do. we'll see you again. still ahead this morning, blue dog defiance. are these conservative democrats ready to xrom economicompromise care reform? a possibly eighth member of a home grown terror group. the others are in custody right now charged with planning murders overseas. jeanne meserve has more on the case and the suspected ring leader. >> reporter: daniel boyd fought in afghanistan in the early 1990s but has settled in willow spring, north carolina. he and his two sons were among seven people arrested monday on terrorism charges.

his wife sabrina tells cnn they are innocent. >> i no that he my husband and my son are frefree of guilt and hopeful that the truth will come to light. >> reporter: in court documents the government says the group stockpiled a cache of high-powered weapons. boyd's wife says they were only responding to news reports that guns and ammunition were becoming scarce. >> i will say that we do have -- we do own guns in our home, as our constitutional right allows us. and i don't think there is a crime in that. >> reporter: the government says the group trained for jihad in rural north carolina. but sabrina boyd says her husband was just helping his boy scout sons with marksmanship. >> one of the merit badges they use, you know, to become an eagle scout. so it wouldn't be beyond him to take them out for target practice. not usual.

>> reporter: the government alleges boyd and one of his sons traveled to israel to wage holy war. but boyd's wife says they just wanted to pray in jerusalem for another son who had died in a car crash. since their arrest, she has not been able to talk to her husband or older son, and the strain is showing. >> i just want to say that i am very proud to be muslim and i am very proud to be married to daniel boyd. i'm very proud of my children. >> jeanne meserve joins us now live from raleigh, north carolina. it is clear from the incident the government's been tracking these people for a while. any idea why they were actually busted this week? >> well, a law enforcement source tells me that there were indications that some members of this group may have been about to change locations. the source will not say where authorities believe they may have been headed or what they might have been up to. one possible indicator that he's talking about, some of the

neighbors in this -- that lived around the boyd family stay tha last weekend they had a garage sale. sometimes that is an indication people are trying to get rid of possessions before they move. >> all right, well, jeanne meserve, our homeland security correspondent, thank you. one step closer to the supreme court bench for sonia sotomayor. the vote is expected to happen next week. yesterday the senate judiciary committee endorsed her bid, this after holding four days of hearings to examine her. are we really seeing the end of the mortgage meltdown or is that just wishful thinking? we'll be hearing both sides of the debate. and there is no relief from the oppressive heat and stagnant air in the pacific northwest. we can expect another round of record setting temperatures and record rainfall in the central united states. what's in the forecast? we'll let you know.

glimmers of home in the real estate market. numbers picking up for new and existing homes. some people are wondering are we starting to come out of the mortgage meltdown? personal finance editor gerri willis joins us from new york with more.

why do these analysts say we may not have reached rock bottom yet? >> critics say keep this mind this is a monthly number and one month doesn't make a trend. other signs experts say they are looking for that would indicate a real bottom to the market -- decrease in housing inventory. right now we have a backlog of homes of almost ten months. median time to sell a home is at an all-time high of almost a year. there is also unemployment, that rate is at its highest in nearly 26 years and is headed to double-digit levels. that's important for the housing market as well. foreclosures need to start following from their record pace. >> then we still see a lot of these -- besides all the for-sale signs out there, there are certainly a lot of for-rent signs, too. is that still bias buyers are having a hard time getting loans? the credit markets are still an issue. >> that's a really good observation. the credit markets still are

tight. for example, jumbo loans, loans over $729,000, $750,000, very difficult to find in some markets. the two biggest issues for people who really want to buy right now is credit and the down payment. lenders want to see you put some skin in the game. right? you have to clean up your credit as much as possible. you have to be prepared to make a down payment of 15% to 20% of your purchase price. a lot of people just aren't prepared to do that. you also have to make sure if you're refinancing, which would also help the market continue, that you have sizable equity in your house so the credit markets here still holding back the housing market, still giving people a hard time when they want to buy. there are still obstacles in the way, and critics say, hey, don't jump too fast and think this market has totally recovered because we have a long way to go. >> no question about it. i think everybody -- well, not everybody. some people are still very afraid to do that after everything we've seen in the last couple of months. years actually. all right.

thanks very much. we'll check back later with you. karen maginnis joins us now from the severe weather center because it is like burning up in the northwest. right? >> yeah. and it's continuing now, this is about the third day of the record setting heat. look at these temperatures. portland, oregon, 106. seattle, 97. seattle today, heidi, is expected to be about 100. that's very hot. it's going to stet a record. the thing is, it is going to set an all-time record high. they will never, ever have been that hot, ever, since they've been keeping records. we've got a soggy forecast all the way from dallas to abilene along the interstate there. it is not making its way toward austin and san antonio just yet. a little further south they are in desperately dry conditions. big thunderstorms roared across the midwest and yesterday in topeka, kansas they saw about three inches of rainfall, a record for the day. i want to point out -- i'm from

charleston, south carolina. they had a huge waterspout just offshore. i hope -- >> folly beach? been there! >> folly beach, lovely resort area. you can see atlanta now expects some delays with the low visibility at the airport there. delays later on. i want to show you what's happening in atlanta right now. this is the reason for the delays for this afternoon. we were looking at a ground stop meaning planes trying to come in to atlanta. we're not going to be allowed to because of visibility so low. we've got some rain showers in the forecast, some thunderstorms behind it. let's show you what's happening as far as that precipitation goes across the midwest. want to show you -- okay, there we go. sometimes you just have to improvise a little bit. this is what we're looking at as far as the hot temperatures go. for seattle, just about 100. by this weekend, i think we'll start to see a little bit of a break, heidi. they're looking forward to -- they don't have a lot of air

conditioning in the northwest. they don't really need it. >> except for now. >> typically. right. >> we want to look at the waterspout, too. maybe somebody can send us an i-report. >> that would be great. >> karen, thank you. the battle over health care reform. some blue dog democrats are in the spotlight and on the hot seat. will they compromise with their will they compromise with their own party? to your dodge, chrysler,

the health care debate on the rise of the blue dog democrats. they've challenged their president on his top domestic issue but say they won't betray their values as fiscal conservatives. so, is a compromise even possible? cnn's jim acosta takes a look. >> reporter: the blue dogs just might be the most breed of politician on capitol hill these days. do all the blue dogs have a picture of a blue dog in their office? >> they better. >> reporter: arkansas congressman mike ross and the rest of the 52 house democrats who make up the fiscally conservative blue dog coalition may block their party's push for health care reform. that is, unless changes are made to rein in the plan's costs. >> as it stands now, it would not have the support to get it

out of committee and would not have the support to pass on the house floor. >> reporter: so it would die. >> well, i would hope that health care reform wouldn't die. >> today we're not just offering -- >> reporter: the blue dogs were born in 1995 after republicans took control of congress. at the time, southern democrats like tennessee's john cantor felt they were choked blue, driven out of power by liberals in their party. >> we're in the the middle. when you're in the middle you're going to catch it from the left and right. >> reporter: you're catching it pretty good right now? >> from the left and right. we must be doing something right. >> reporter: congressman ross is not only the blue dog's point man on health care, he also represents hope, arkansas, hometown of president clinton. you talk to president clinton from time to time? >> we talked yesterday. >> reporter: has he talked to you at all about health care? >> we've talked a lot about health care. he shares many of my concerns. he understands the challenges we have in rural america. >> reporter: once an owner of a

drugstore, ross says he will get something done for the more than 450,000 people in arkansas with no health care. >> i live in a small town of 3,600 people. the lady that owns the broadway cafe cannot afford health insurance for herself or her employees. >> reporter: does that weigh on your mind that you could let those folks down? >> no, we're not going to let them down. in fact, i'll make a prediction here. we'll get health care reform done this year. >> all right. jim acosta joins us now from washington with more on this. jim, where do the negotiations stand? >> well, they're in trouble right now, heidi. last night the president's chief of staff rahm emanuel was at the house meeting with house democratic leaders, some these blue dogs, trying to hash out an agreement. right now they're at an impasse over this idea of a public option, this idea of giving americans the option of joining a government-run health care program. the blue dogs are just not going for it right now. they're saying they're not dead

against that idea, they just want to see that somehow rein in the costs of a public option and they haven't seen a proposal that does that as of yet. so this is potentially threatening what they had hoped to do by the end of this week, which was to get a full house vote on health care reform over in the house. it looks like that's not going to happen at this point. but there is also the possibility they may delay the august recess. it is supposed to happen on friday. they may push that back a couple of days. >> really? >> absolutely. could happen. they are talking about that right now. over in the senate, they have another week to go before their august recess so they have a little bit more time. the blue dogs are kind of watching what's happening over in the senate because the senate finance committee comes out with the proposal that the blue dogs like, they may say, okay, let's talk about this over august and come back in the fall and vote on this. congressman ross was saying, that's why he was saying "by the end of the year" they think they'll get health care reform

done now. everybody is now talking about this happening in the fall now. >> all right, jim acosta, sure appreciate it. enjoy your vacation. the so-called syntaxes. we see them on alcohol and tobacco. should junk food and fattening treats also be added to the list? it is part of the debate over health care. whoah whoah whoa! honey honey honey honey honey! okay... i mean... you can't... this isn't a stove, alright? i mean... what if i just walked into the kitchen and started making a salad? - that'd be weird. - right? i mean, look, there's a technique. - okay... - ( strikes match )

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unfortunately. there was a quote in today's "wall street journal" which i think kind of sums it up -- a trader saying that his brief manic episode is coming to a close. what he's talking about is that two-week rally that we saw. there was such appreciation that things were looking better. but unfortunately now we're giving some back. we're set for a lower open, and this comes amid a new report showing orders for big-ticket items plunged 2.5% last month. that's the biggest drop in five months due largely to weak demand for commercial aircraft and cars. as we know, estimates can be wrong, heidi. in this case, the estimate was way off. we should also mention that monthly orders for durable goods can be volatile. some other headlines quickly to run through -- it appears microsoft has finally convinced yahoo! that they have a better chance of mounting a meanful challenge to google's dominance

on the web together rather than separately. it doesn't include an exchange of money. rather, their search platforms and advertising will be integrated. yahoo! shares are down, microsoft's are up a little bit. google's giving a little back. here's something we don't hear much of. laid-off workers being called back to work. "wall street journal" says u.s. steel called back 800 workers this month. it plans to restart a facility in minnesota. u.s. steel says prices are firming. though it continues to operate at a loss. losses are what we're seeing in the first minute of trading. the dow, nasdaq, s&p 500, each down about .5%. >> i did read that memo early this morning. >> we'll check with you later on. thanks, susan. pizza, ice cream, french fries. lot of people love to eat that stuff. at least sometimes. but the measurable costs of treating obesity related

illnesses are skyrocketing and we're all pay are fog that. a new study suggests a tax on fattening foods could help pay for health reform and help curb obesity. christine romans is in new york to explain. so how many people are going to like the idea of this? >> well, it depends on who you talk to and what side of the argument you are on. this study from the urban institute argues tax is fattening food could raise an awful lot of money to help pay for the cost to society of obesity. i want to be clear, there's overweight, and this there is obese. obesity is a medical condition that can be an aggravating factor for heart disease, it can be a cause of diabetes, it is a very serious, serious illness. we aren't talking about putting on a few pounds here and trying to be -- trying to beat up on fat people here. this is about obesity. it is a very serious issue. so this is obesity among adults, age 20 to 74. in 1960, 13.4% of adults were

obese. today it's 40%. we know two-thirds of the population overall is overweight and that's the first step toward moving toward obesity. we are talking about the ways that they can maybe think about taxing some of the things that cause people to be obese. i want to be clear here that there are some in the health reform debate, there has been some talk about taxing soda pop, taxing 3 cents for a can of pop, for example. that looks like that move is dead. but you're still seeing some health policy experts who are still doing the studies and talking about ways to try to treat some of these foods more like tobacco, for example. and they can look at all the rates of tobacco use went down and how that was good overall for society and the cost to society. they're using food in the same category. >> i just don't get it. if i can get a hold of tobacco, i can probably roll my own cigarettes. right? but if i get ahold of a bunch of ingredients, i take them home and i make fattening foods, what

exactly -- only talking about fast food? >> we're talking about -- well, that is true, where is the line. some people say, look, it's not fair, there are parts of the country where you can't get a fresh vegetable if you tried. it is a lot of convenience food, in a lot of areas there isn't a supermarket. cdc has been having a conference this week to talk about ways to get better food to different parts of the country. this urban institute study said its fat food tax proposal, a 10% tax on foods that aren't good for you, frankly, would get $530 billion in revenue over ten years. that would go a long way to helping treat some of these illnesses, but also more importantly, they say it would help deter, disincentivize eating some of these foods. beverage industry, a spokesman late yesterday told me, look, in the past ten years, frankly, when you've seen obesity rates rise and the cost of obesity go up, you've actually seen soda pop consumption go down. they're kind of saying there is not really a link here.

some people say that it would only hurt poor people, people who can only get quick, convenience, fast food, and that would just hurt those people. >> there are a lot of good deals out there by some of these fast food companies. it's hard to argue, to some people anyway, if i'm going to spend $2, $3 on a meal versus going to the grocery store and getting my -- i don't know -- organic or good vegetables or whatever, i'm going to pay less. >> you're right. the big thing here, what's happened to the economics of food that it's cheaper to eat something that's more complicated an has been processed and isn't good for you and it is more expensive to eat the simple, single ingredient. that's what a lot of these folks are looking. also some of the costs of obesity is prescription drugs. that's part of the cost of treating obesity as well. it is part of the discussion. when you talk about controlling costs in the health care debate, this is why we're zeroing in so many health policy experts are

zeroing in on this conversation, which is all it is at this point, is a conversation. because a source over at the senate finance committee tells us, look, a pop or soda tax, a tax on a can of coke, for example, isn't going to make it probably in this health care reform. >> all right. wow. lots and lots and lots of questions. "romans numeral"? >> 18 minutes. just to make you think a little bit, heidi. a can of pop, soda, whatever you want to call it, it takes about 18 minutes of jogging for the average woman -- i used a woman because you and i are women -- the average time it takes to jog off a can of soda. 18 minutes. think about that the next time you -- >> diet? >> diet's not as much. diet's fewer calories. about 140 calories takes about 18 minutes to jog off. >> that's depressing. sure do appreciate it. >> this is inspiring, heidi! >> yeah. all right, we appreciate all the info. sure want to take this discussion in fact further with our viewers at home.

so you just heard it here, taxing fast food is just one way to pay for health care reform. we are also hearing about this -- taxing nose jobs, liposuction, botox, teeth whitening. there is a lot of stuff out there kind of in the discussion mode. so we do want to know what you think. here's a question -- what would you tax to help fund health care system? go to cnn.com/heidi and hit the "comment" button. or you can always call on the brand-new "hotline to heidi, 4 1-877-742-5760. a 61-year-old jack shaw was found in his jersey city home. that's him in the blue shirt there. police have ruled out homicide. he was accused of taking a $10,000 bribe. in all, 44 people were arrested in corruption crackdown.

one of them, secaucus mayor, has now resigned but he still says he hasn't done anything wrong. ellwell is the first elected official to step down. let's bring in a columnist who's been following this story, joining me now from new york. steve, nice to see you again. can you give us any more information on these latest developments? first the reds nation of the secaucus mayor now. >> it is not entirely surprise given the circumstances. mayor of secaucus, dennis elwell. the question is, is this sort of the first domino to force the other elected officials caught up in this to do the same thing. there is immense pressure on the mayor of hoboken, the mayor -- another mayor from jersey city, they've all refused. there have been big protests in front of hoboken city hall from irate residents. >> they all want him to go.

>> there is no mechanism in hoboken to get rid of an elected mayor in his first year in office. there is a recall mechanism but it only kicks in after one year in office. and the city council has no impreechlt mechanism either. so he can dig his heels in. if he's not convicted over the next year, there's technically nothing that anybody can do to get him out. and that seems to be what he's doing right now. >> fascinating. i did not know that. yeah, what you're saying is whatever happens in secaucus here may sort of set the bar for what the others -- >> yeah, increase an expectation in hoboken. >> we don't know the cause of political consultant jack shaw's death but we know he died in his home after going to jail last thursday. are most of these guys already out on bond? >> yeah. most are now -- the mayor of hoboken is actually back in his office now claiming that he can do the people's business and refusing to talk about this.

everybody's pretty much out now as long as they could come up with the money, which i think they all did. might ask how they got that money. >> yeah. >> in terms of jack shaw in jersey city, listen. we'll wait to see what the police report says in the end. we'll wait to see what the autopsy says but the suspicion is there is a chance this is self-inflicted, this is a suicide. reports i've seen say he was -- there were bottles of pills around him when his body was found. he was arrested last week, charged with not just accepting a bribe, he was also -- the significance of this actually is the suggestion in the criminal complaint is that he acted as, or was willing to act as, a middleman between the government informant or witness and the mayor of jersey city. the mayor of jersey city was not among those arrested, was not among those charged with anything but he was named in all of these complaints as jersey city official number four. the fact now that jack shaw is tragically off the scene might change that. because one of the assumptions was some of these people who were arrested are mow lore low,

mid-level fixers. the jersey city mayor definitely a bigger fish. people have wondered if jack shaw's arrest would lead to something with the jersey city mayor. this will make that more difficult. >> it is just an incredible story. we talk about 44 arrests. this whole other side -- we're running out of time, unfortunately, steve -- but some headlines are in israel about this scandal. there is this whole other portion about rabbis in new york, five, accused of taking hundreds of thousands of dollars in bribes making front page news in israel. >> it's funny, israel always seems to pop up in these jersey scandals. you can remember three, four, five years ago when jim mcgreevey, the former governor, was forced to resign, it was with a male israeli who he met on a trip to israel who he brought back and made him his homeland security director. that precipitated jim mcgreevey's downfall. now you have the rabbis, the

kidney salesmen. why does new jersey always make so much news an corruption? i say because it is so colorful. >> you can't make it up. >> yeah, this is the stuff of a hollywood script. >> how does this affect governor corzine? >> you talk to any democratic insider in the state, there's no tape roird around, they'll tell you jon corzine is cooked. he's up for re-election this year. he was already 10, 15 points behind before this. the republicans running against him is the u.s. attorney who began these investigations that resulted in this dragnet last week. the expectation, democrats are now saying can we get corzine out of this race and replace him with somebody else? that's wishful thinking. corzine will never do that but i can't imagine a circumstances he wins right now. >> steve, thanks for all the info. we will stay in touch with you. in desperate need of rain. parts of texas gripped by extreme drought now. an extended period of triple-digit temperatures drying up lakes and drinking up the water supply. esesesesesesesesess

in central and southern texas, they are praying for rain every day. that's because those parts of the state are suffering through extreme drought conditions now. the worst many people have seen in 50 years. jacqui jeras joins us now live from austin, texas this morning. how bad is it? it looks just dry, dry, dry behind you there. >> it is. it is incredible, heidi. the situation is just really intensifying, even as we speak. about half of the state of texas is under some type of drought condition. 77 counties now are under what

we call exceptional drought which is just the worst of all of the categories. reservoirs are literally evap waiting from the record temperatures and no rain. you can see right behind me here at lake travis in austin, the level is just a fraction what have it should be. the agricultural community is in a state of crisis. farmers are getting a very small yield from their crops, if anything at all. cattle men are having to sell their herds because they can't afford to feed them. agricultural losses now are estimated to be near $4 million, which will likely reach the record for the state of texas. agricultural officials say that this impact is going to be felt across the entire country. >> real consequence is not just today, but it's long term. it means a reduction in farming families when that's one of the biggest threats to domestic food supply today, is having our farmers and ranchers sustainable in the agricultural business. that's what really all american

consumers should be worried about today. >> reporter: while the agricultural community is suffering, so is recreation. here at lake travis, marinas are having to close their doors, and all but one boat ramp is closed. you can see this right behind me, this is normally a floating dock and the water here should be about 30 feet over my head. this reservoir usually supplies water to about 1 million people in austin, but they say it's not at a level yet where they're worried about the water supply but restrictions are in place. it is at 54% of the normal pool. if you take a look behind me, you can see that ledge of rocks up there is how high the lake should be. it's also unearthing some really interesting things. last week there were two cars that were discovered that had been stolen years ago so they found that. i'm finding golf balls here. there are shells and beer bottles and all kinds of things. heidi, no rain really in the

forecast here. so the situation continues, unfortunately, to get worse. >> any help though on the way for people? are they going to have to start worrying about the drinking supply? >> well, they're not worried about the drinking supply just yet. there is help on the way, hopefully for farmers. of course they're looking for their insurance claims and there was also a law passed in 2008 which should help give them some money. but unfortunately, not all the rules are in place with that just yet. they think it will probably be 2010 before they get that money. of course the farmers say that they need to mann now. >> all right, jacqui jeras, sure do appreciate the live report coming to us from a very dried-out austin, texas. we'll follow this story all week long. thanks again. to the big question, karen. not a lot of rain in sight for the state of texas. >> no. take a look at this. we've kind of zoomed in on the state of texas. from dallas, extending westward,

south westward along the interstate, pretty big thunderstorms here. in the past hour, more than 2,300 lightning strikes. let's move on and show you what's happening further toward the north. what we're looking at is a lot of drought, as we just mentioned actually. i'll show you another graphic in just one second. corpus christi has seen less than a quarter of what they would normally see for this time of year. they really desperately need the rainfall from about corpus christi towards brownville. here are some of the other rainfall deficits that we've seen. you can see in some instances that is more than, or less than half of what they typically would see for this time of year. also some pretty big storms being reported further to the north. we're watching flash flooding across portions of the dakotas, into the northeast in new england. we've also seen quite a bit of rainfall and temperatures have been exceptionally cool. in new york city, they hit 85

degrees one day. they have not hit 90 degrees. and as we take a look once again across the south central united states, this is the united states, this is the area that jackie was referring to. extreme drought, some of the worst they have ever seen. unless we see a tropical system, heidi, they just won't see it. >> karen, thank you. facebook not for just keeping up with friends and family any more.

it was almost the perfect get away if the suspect didn't brag about it on facebook. the police caught a teenage doing 85 and later someone reported that the teenager posted all the details on facebook. that's how police found him, charging him with reckless driving and fleeing an officer. colin powell weighing in on the arrest of henry gates last night on cnn's "larry king."

powell faulted both gates and the cambridge police officer for letting the situation escalate. >> you're saying gates was wrong? >> i said skip, perhaps in this instance, may have waited a while. come outside, talk to the officer and that may have been the end of it. i think he should have reflected on whether or not this was the time to make that big a deal. just home from china, just home from new york. all he wanted to do was get to bed, his door was jammed. he was in the mood where he said something. >> he brings that whole history into the body of a blook movement. >> that may still be the case, still might be resolved in a different matter if we didn't have the verbal altercation between the two of them. >> the woman who made the 911 call to report the possible break in reports publicly for the first time. holding a news conference today at noon eastern. the arrest of professor gates has spurred a passionate discussion in the media over

race relations in america and we want to hear from you. have you been a victim of racial profiling? if you work in law enforcement, what are the challenges you face. sharing your personal stories on video and you could be featured on cnn. a lot going on in the next hour of "newsroom" and our crews are in place to bring it to you. ed henry in virginia. hey, ed. >> the conventional wisdom back in washington is that people don't want to pay more taxes to cover the uninsured so people here at the kroger may turn it on their head. that story at the top of the hour. >> i'm poppy harlow in new york. last summer the trading commission said it was excessive speculation by oil traders that did not cause oil prices to jump over $140 a barrel. now, the commission is proposing new regulations, heidi, to curb excessive speculation. will it reverse its position on

that, too? we'll tackle that in the next hour. >> i'm elizabeth cohen in atlanta. when swine flu hits season, it is expected to hit hard. this fall, who needs to be the most worried about swine flu? i'll have that answer at the top of the hour. >> thanks, guys. we will also take you inside an operating room seeing a patient being put under with propofol. powerful sedative michael jackson may have been given before he died.

it may be next week before we learn the cause of michael jackson's death. yesterday investigators searched the las vegas home and office of jackson's doctor. cnn's ted rowlands has an update. >> reporter: investigators left, according to murray's attorney with cell phones and a computer hard drive. another warrant was served at murray's las vegas clinic where agents spent the innire day. >> they are looking through records and documents and

looking to any that pertain to the search warrants themselves and those documents will be seized as evidence. >> reporter: the search warrant authorize investigators to look for medical records relating to michael jackson and all of his reported aliases, meaning investigators believe jackson and/or murray may have used fake names on some records. >> it's very significant to me that the search warrant refers to aliases. remember in the anna nicole case, they were charged for felonies for prescribing to anna nicole under assume names. >> reporter: waiting on that l.a. county coroner's report which will have a cause of death for michael jackson, the coroner's office tells cnn that will not be completed this week and will not be made public, until at the earliest, some time next week. ted rowlands, cnn, las vegas. looking for an eighth terror

suspect. federal authorities say they're trying to find another member of the alleged group of home-grown jihadists. jeanne meserve has more on the investigation and the supposed ringleader arrested in north carolina. >> reporter: willow spring, north carolina, seems an unlikely place to find terrorists, but on monday, a s.w.a.t team swept down on this house to arrest daniel boyd, two of his sons and four other suspect were also picked up. >> they had all sworn to be martyrs and all sworn to be -- carry out jihad operations and all sworn their hatred of the united states. >> reporter: in the early 1990s daniel boyd fought against the soviets in afghanistan. mere recently he used his street cred and evidence to recruit young men to wage jihad overseas. according to court documents they had a cache of weapons and trained with them in north

carolina. >> i would compare this potential in this case to conduct another mumbai-type attack. they could have traveled to a more populated area in the united states and using that tremendous arsenal before being stopped by the police. >> reporter: but they did not target the u.s. members of the group traveled to gaza, israel, jordan and pakistan to wage violent jihad without success. a friend of boyd's wife, sabrina, read a statement on her behalf. >> charges have not been substantiated. we have a right to justs and we believe that justice will prevail. >> reporter: authorities say they're looking for an eighth man in connection with this investigation, but he may still be in pakistan, where he allegedly went to wage holy war. jeanne meserve, cnn, raleigh, north carolina. janet napolitano is talking about terror this morning, speaking in new york city just last hour.

she said we all need to be more vigilant in our own communities and both federal agencies need to react to terror threats. >> now, president obama has been very forceful about seeing the threat of terrorism in all of its complexity and in bringing all of our resources, not just the federal government to bear against violent extremism. so, today, i will speak candidly about the urgent need to refocus our counterterror approach to make it a shared endeavor. >> napolitano went on to say the department of homeland security is looking for a better alert system and if they find one, the color coded threat levels will be retired. health care reform may be solved on capitol hill, but the debate being carried to the people. yesterday, he focused on older americans during a town hall meeting with aarp. this hour, he heads south. first stop, raleigh, north

carolina, then bristol, virginia. and blue dog democrats are about to explain why they've opposed their own party's plans and fiscal conservatives are holding a news conference as we speak. this hour the president hits the road and he's taking part in two town hall meetings, including one at a kroger super market. ed henry joins us from bristol, virginia, with more on that. ed? >> good morning, heidi. significant about this town hall later today, with kroger employees who have pretty generous health benefits and they're not uninsured and people with good benefits who are insured don't want to pay higher taxes in order to cover the 46 million people who don't have that insurance. i can tell you from talking to people in these supermarket aisles, that conventional wisdom may be turned on it head. they're rolling out the red carpet in rural virginia, but the president could get a chilly reception in the frozen food aisle where we found a mccain

voter that health reform is being rushed, just like the stimulus. >> like the last package they pushed through, it was too hurried and a lot of mistakes, a lot of things that shouldn't be. >> reporter: cathy mcguntry voted for the president and is pumped up he is getting tough with congress. >> i like the fact that he stepped up and he's being aggressive. i really do. i'm all for that. >> reporter: thousands in this region showed up at a health expo offering free medical care this past weekend, exposing a problem all too familiar to doctors here. >> clearly we all recognize any position in the hospital would recognize it's a system in crisis. >> reporter: but like most employees back at the kroger supermarket, steve gets generous health benefits, despite being an obama voter, he's nervous those benefits may be taxed to cover the uninsured and demanding more specifics from the president. >> he is going to have to spit out some numbers and let the

public know exactly what it is going to cost them and what they're going to have to give up. >> reporter: if the president steps up and sells it, then he's willing to step up and sell. >> we've got to do something and if it means me paying those taxes to get this reform through, then i'd do it, yes. >> reporter: and back in the frozen food aisle, this republican is ready to do his share, too. >> no matter what kind of plan you're going to come up with, somebody has to pay for it. so, eventually, it comes down to us, the people that's working and paying taxes. we're going to have to pay for it one way or the other. i just hope we can come up with a plan that's worth paying for. >> now, it's important to note that all these employees told us they make less than $250,000 a year and the president has reirated his campaign promise that he will not raise taxes for people in that area. they'd be willing to pay more taxes as long as the president

does get more specific and also, they say, they want to make sure that the rich pay their fair share and not just the middle class taking that burden. we'll step up, if others do, as well, heidi. >> depending on where you live in the country, it's just plain different. wouldn't i add that he seems to be sort of refining his pitch on health care reform because a lot of them are worried about their plans and their costs changing, too. >> that's bright. you're absolutely right. in advance of the two town halls this one in virginia and north carolina, e-mailing the new talking points. the eight-point plan the president will have where he will lay out eight specifics about why people with insurance will have more stability and security with their insurance if there is reform. bottom line, a couple quick examples that if you have a pre-existing condition, no longer with the insurance companies be able to deny you coverage and also a cap on what you pay out of pocket.

something very important to people who, right now, they may have insurance but all of a sudden they get sick and some of these out-of-pocket expenses just balloon and balloon, heidi. >> very complicated story from right there at the grocery store. thanks so much. ed henry, sure do appreciate it. the health care debates and the blue dog democrats. a live look at their news conference happening as we speak. lawmakers have challenged the president, along with republicans, on his top domestic issue but say they won't betray their values as fiscal conservatives. we'll watch this news conference and bring you more details later in "the newsroom." live coverage of president obama's town hall meeting in raleigh, north carolina, scheduled to begin next hour at 11:55 eastern and 8:55 pacific. a powerful political consultant caught up in a bribery scandal is dead. jack shaw was found in his jersey city home. police have ruled out homicide

and shaw was accused of taking a $10,000 bribe. in all, 44 people were arrested in the corruption crackdown. you're looking at the video of those arrests. one of them, mayor has since resigned. he is the first elected official to step down. but he still says he has not done anything wrong. all-day rain in topeka, kansas. police trying to shut down major roads, including one to its goodyear plant. the city is getting a bit of a break right now before storms hit. karen maginnis is with us today to talk more about this. boy, if you could move that topeka rain to kansas -- >> that would be perfect. that is not going to hapern. right across this area, extreme drought. but we're going to leave that for jackie to describe coming up in a few minutes. right now a few big thunderstorms rumbling around dallas. wow, if that doesn't look a

little on the gloomy side. they're expecting a 50/50 chance of storms, i dare say about 100% chance that in the next few minutes you will see some thunderstorms rumbling around there. let's move on towards the northeast and this last two months of summer in new york has been the coolest, the top three coolest. they made it to 85 degrees one time and beyond that, the last 45 days, the temperature has been at or below seasonable levels. then we move on towards the midwest. matter of fact, the janes river filling up and thunderstorms across this region, as well. show you some of the airport delays. now, for atlanta, it's gloomy, it's overcast and they had delays and the delays went away and now the delays are back again. these departure delays, about 30 minutes. san francisco, visibility is greatly reduced in san francisco and seeing delay there's and in newark and later on this

afternoon, heidi, it looks like for the major airports in new york and washington, impacted by pretty big thunderstorms later on. >> okay, tanks for the update. karen maginnis, appreciate it. $1 billion shot in the arm for police forces across the nation, but not all law enforcement agencies are getting their share of the federal stimulus funds. who's in and who's out? we'll tell you coming up.

your stimulus dollars at work. the newest beneficiary, police forces across the nation. here's cnn's mary snow. >> reporter: the major cities were skipped, but more than 1,000 law enforcement agencies dloosz country, even stretching to the u.s. territory of guam are getting $1 billion in stimulus money. the goal is to prevent layoffs and even hire new officers. attorney general eric holder said in a sign of how tough economic times are, the justice department could only provide money to a fraction of the justice department receiving aid. >> more than 7,000 cities and towns and made funding decisions based on crime rate, financial need and community policing activities. >> reporter: it means there were plenty of cities not getting grants through the program known as cops, community oriented police services. new york, houston, seattle and pittsburgh were among those on the empty-handed list. the vice president tried to soft on the blow. >> i know our friends in new

york were very disappointed. they didn't get any c.o.p.s. money today. >> reporter: but new york city's police commissioner said the nation's largest police force has different challenges than other cities. he says new york deserves additional federal money and hoping to put more officer os on the ground. >> been attacked successfully here twice. we had eight major plots since september 11th. we know terrorists want to come here, if they can. >> reporter: not the first time new york and washington haven't seen eye-to-eye over police c.o.p.s. funds cut under the bush administration that caused an uproar. this time around new york mayor says while he's frustrated maybe it's a compliment that new york didn't get grant money because its crime rate is down. >> it's not a compliment that i like the results of, but i do like the recognition that we are doing well. >> reporter: the departments that did get money, the attorney

general says these grants will allow nearly 4,700 police officers to remain on the job for three years. departments must retain those officers for a fourth year on their own. mary snow, cnn, new york. so, just which cities are getting the money and which aren't? our josh lev s is joining us no with some examples of this. good morning, josh. >> good morning, heidi. what i want to do is take you to the map here because i want to give you some examples around the country of some places getting some money and we'll get a sense of it here. philadelphia, we've been hearing about the crime in philadelphia. philadelphia from this is getting $10.9 million. that is a pretty big chunk of the bit that is being sent out. let's go to a couple smaller cities. we'll zoom over west. huntsville, alabama. one place getting $2.6 million. here we are in huntsville. $2.6 million and some other cities saying, hey, if they can get that much, why can't we?

>> josh, excuse me, one second. do we know the situation there? how many people have they had to lay off and how many police officers are working and what is the crime rate, population. i imagine they took all of that into analysis when they decided what was going to go where. >> they look at the latest crime rates and they looked at how many officers have been let go. some cities out there challenging it saying, hey, we looked at these cities and when you compare what really happened to us that we apply, as well. you got the government saying we are absolutely confident that we crunched the numbers and that was affected by the stimulus is why they made these choices. the government standing by this, heidi. i think we're over at fresno, california. getting another $10.2 million, as well. you're hearing, again, the federal government saying these are the reasons for it. the president is really affected. up to anchorage, alaska. anchorage has been in the news because of the governor's situation, as you know.

anchorage is getting the same amount there. $2.6 million. we also heard from mary snow, several cities that are not getting funds. some of the big ones, at least from this specific pot. let's shoot down to miami. miami is one of the cities getting zero. we have a statement coming out today from the miami police department. we'll open up across the whole screen. miami-dade police department. these officers would have been assigned to community oriented policing units to strengthen part internerships for safer communities. it is unfortunate that our agency was not awarded these federal recovery dollars. some police departments are really unhappy. $8.3 billion total, is what was being requested. you had police departments all over the country asking for a total of 39,000 officers. obviously, not enough funds for that. $1 billion to go to 4,699

officer positions. we knew from the beginning, heidi, unhappy people out there. let's keep in mind, this is not the total that they have. one other bit of funding here. the stimulus includes a total of $4 billion to help law enforcement agencies and not just establishing police departments, but also helping community crime units and helping community agencies that are in other ways fighting crime. we are seeing a few different ways that the stimulus is helping. this is going to continue for a while, heidi. >> all right, josh levs, thanks for the breakdown. a warning now for pregnant women. be aware of swine flu. the latest recommendations from the cdc.

the military may step in to help out if there is a major outbreak of swine flu. the pentagon is considering a plan in which the military would work in conjunction with fema and provide support to relief efforts. that may include everything from air transport to testing viral samples from infected patients. the proposal needs final approval from defense secretary robert gates himself. a new study released by the cdc reveals interesting information about swine flu and pregnant women.

cnn medical correspondent eliz dth cohen is here to explain. tell us what's in the report. >> what they found in the report is that pregnant women are more likely to get complications from swine flu than people who aren't pregnant. these numbers are very revealing. pregnant women infected with h1n1 are four times as likely to be hospitalized as people who aren't pregnant. when you look, it's a little scary. 266 people have died in this country from swine flu so far and 15 of those have been pregnant women, which means that 6% of deaths have been pregnant women. that sounds small, but that is more than the percentage of people who are pregnant at any one time. sort of overrepresented in this group of deaths. they're more likely to die from swine flu than someone who is not pregnant. >> is this specific to swine flu or more at risk with the regular flu, as well? >> with swine flu it's particularly bad. these numbers are particularly high?

>> why, why pregnant women? >> a couple reasons why. i don't know if you remember when you were pregnant,ia don't have a lot of room in your lungs. >> i remember everything about it. >> it's not a pleasant sensation. your lungs get kind of squished when you're pregnant and affects your entire respiratory process. the other reason is a pregnant woman's immune system is more easily compromised than someone else's two reasons why they have this reaction to swine flu. >> where do we stand on the vac even? we have been talking about that for a while. >> they're still hoping when it comes out in october. when it first comes out they won't have enough for everyone who wants one. pregnant women are on the list of people with high priority. pregnant women right up at the top of the list. >> are they going to want it? when you're pregnant you're told over and over again be very careful about medications that you take. >> i think they're going to have

a tough time convincing pregnant women to get invaccine. they've done studies that show, for years they say get a flu shot if you're pregnant. you definitely need one. pregnant women don't listen and doctors and nurses, studies shown, don't listen either. i remember when i was pregnant standing in line going to get a flu shot and the nurse tried to talk me out of it. i should get a flu shot, i had to talk her into it. >> then she gave me one that really hurt. >> exactly. the cdc will have to turn this whole concept on its head because pregnant women and their health care providers sometimes think they shouldn't be getting it. >> boy, it's confusing when you're the actual pregnant person. >> it's true. >> elizabeth cohen, thanks. the woman who called police to report a possible break-in said she's being hounded by the media and set to speak publicly since the controversy ignited on

racial profiling.

the face behind the 911 call. the woman whose phone call brought to henry louis gates home where the incident ended with police arresting him. elaine quijano is following the developments in cambridge,mous ps. i understand the president will soon have that beer with gates and officer crowley, as well. >> that's right. that's tomorrow. i'll get to that in just a moment, heidi. but a lot of the anger, some of the anger and emotion stirred up by this controversy has been aimed squarely at the 911 caller. her name is wayland and just a short time ago i got the phone with her attorney and she told me the reason her client wants to come forward is because of a couple things. as you can imagine, the media

has been hounding her since all of this happened and not just her, but members of her family, as well. in addition to that, wendy murphy tells me that her client has really been the target of some very vicious verbal attacks and some people try to paint her as being racist and a white woman who was cared to see black men in her neighborhood and that's why she called 911. now we know the reality that , n fact, she never mentioned two black men on that 911 tape. let's take a listen. >> i don't know if they live there and they just had a hard time with their key. i did notice that they kind of used their shoelder to try to barge in and they got in. i don't know if they had a key or not because i couldn't see from my angle, but, you know when i looked a little closely -- >> white or hispanic? are they still in the house? >> they're still in the house, i believe. >> white black or hispanic? >> two larger men. one looks kind of hispanic, i'm not really sure. the other one entered and i

didn't see what he looked like at all. i just saw it from a distance and this older woman was worried that someone is breaking in someone's house and they're barging in and she interrupted me and that's when i had noticed otherwise i probably wouldn't have noticed it at all, to be honest with you. i was just calling because she was a concerned neighbor, i guess. >> okay. are you standing outside? >>m i standing outside, yes. >> what's your name? >> my name is -- >> we're on our way. >> i guess i'll wait, thanks. >> so, there you have it. lucia wayland, we'll hear from her at a news conference coming up in the noon hour in nearby cambridge. tomorrow night that meeting is set to take place with president obama, sergeant james crowley and harvard professor henry gates. they'll sit down to talk things over over some beers at a picnic table on the south lawn of the white house, heidi. we'll see what take-away lesson

os there might be from what president obama has called a teachable moment. heidi? >> elean quijano, appreciate that. secretary of state colin powell weighing in on the arrest of officer gates. powell blamed gates and the police officer to let the situation escalate. >> you're saying gates was wrong? >> i am saying skip, in this instance, may have waited a while, came outside, talked to the officer and that may have been the end of it. he should have reflected if whether or not this was the time to make that big of a deal. he's just home from china and just home from new york and all he wanted to do was get to bed and his door was jammed and he was in the mood when he said something. when you're faced with an officer trying to do his job and get to the bottom of something, this is not the time to get in an argument with him. i was taught that as a child. in fact, in our schools today, in order to make sure that we

don't have things escalate out of control and lead to very unfortunate situations, we tell our kids, when you're being asked something by a police officer, being detained by a police officer, cooperate. if you don't like what happened or if you think that you have been exposed to something that's racist or prejudicial or something that's wrong, then you make a complaint. >> were you ever ralsy profiled? >> yes, many times. >> did you ever bring anger to it? >> of course. but, you know, anger is best controlled and sure i got mad. i got mad as a national security adviser of the president of the united states and i went down to meet somebody at reagan national airport and nobody recognized and nobody thought i could possibly be the national security adviser of the president. i was just a black guy at reagan national airport. it is only when i went up to the counter and said is my guest here waiting for me and they said, oh o, you're general

powell. >> how do you deal with it? >> what are you going to do? it was a teaching point for him. i'm the national security adviser and i'm black and, watch, i can do the job. so, you have this kind of -- there's no african-american in this country who has not been exposed to this kind of situation. do you get angry? yes. do you manifest that anger? you protest, you try to get things fixed, but it's kind of better course of action to take it easy and don't let your anger make the current situation worse. >> the professor's arrest has spurred a discussion in the media over race relations in america. so, we want to hear from you. have you been a victim of racial profiling or if you work in law enforcement, what are the challenges you face while policing diverse communities. share your personal stories on video and you can be featured here on cnn. last year america made history by electing its first black president.

this weekend soledad o'brien leads a panel of some of the influential american voices. critical issues facing the black community. cnn and essence presents "black in america reclaiming the dream" saturday and sunday night 8:00 p.m. eastern only on cnn. car buyers could get new financing options. the biggest automaker jumping back into the leasing game now. susan lisovicz at the new york stock exchange with details. hi, suzen . >> hi, heidi. this has important reprucussions for us consumers. gm tells cnn it is looking at ways to get back into leasing. now, we don't know a lot of details, for instance, which model. that is still being worked out but there are reports this could happen by august, which is just around the corner now. gm stopped offering leases last august.

different story then. resale values were sinking and sales overall were tanking and cash reserves were dwindling, but then uncle sam stepped in. and between gm and gmac, $60 billion, really actually closer to $65 billion administered to both of them, so, we're starting to see the car resale values, heidi, are rising. gm, of course, emerged from bankruptcy court this month. so, this is an important tool for them for overall sales and it could happen very quickly, heidi. >> but people have been getting at least some financing from credit unions, other lenders. how important exactly is this? >> well, to gm it's huge. really to almost any car. i mean, leasing by some estimates 20 to 25% of gm sales. and you know, i mean, how many people do you know that's leased their cars, especially high-end cars. so, this is something gm wants to get a piece of the action

and, of course, to do the financing and to do one-stop shopping that's what they want to do. so, that's what's happening with gm. we did get a report on big-ticket items such as cars and took the biggest drop since january and you're seeing stocks dropping, too, right now. one hour into trading. the dow and the nasdaq each down about 0.5%. heidi? >> all right, susan lisovicz, we'll keep our eye on those numbers, as always. meanwhile, microsoft is on a mission to change the habits of computer users who normally use google to find websites. the software giant has reached a long-awaited partnership with yahoo!. ned the ten-year deal, searches on yahoo.com will be powered by microsoft's new bing search engine. yahoo! in turn, will be responsible for attracting premium advertisers. child welfare, aids prevention, even state parks. all targets of last-minute cuts

in california's $85 billion budget. signed by governor arnold schwarzenegger yesterday. the associated press says the governor called the cuts, ugly. but he used his line item veto on them to have more money to close california's massive deficit. democrats are asking whether some of those vetoes went beyond the governor's authority. a move is on in california to legalize marijuana for personal use. supporters filed paperwork yesterday to put the measure on the state ballot in november 2010. last week oakland became the first city to vote to tax medical marijuana. the proposed measure would allow adults 21 and older to possess up to one ounce of pot. >> cannabis doesn't kill you, alcohol, alcohol causes violence. cannabis does neither of those. citizens should have the right to choose a less dangerous substance. >> it compromises your ability to drive a car, it causes many compromises to your behavior.

of course, you can make comparisons to alcohol, but, again, i'm not arguing here that alcohol is a good thing. >> okay, so talking two issues here. medical marijuana and then legalizing pot as a whole. backers need more than 400,000 signatures to put the issue on the ballot. they claim legalized pot could bring the state nearly $1.4 billion in revenue. so, lots of talk lately about things like marijuana to bring in extra money for state or federal programs for that matter. we want to know this from you. what would you actually tax to help pay for health care? in specific, what would you tax to pay for health care? here are some of the comments we got from our blog. go to cnn.com/heidi. the first one says this, how about a premium tax on computer games, especially the violent ones. tax the one thing that has truly replaced god in the hearts of many americans, sports. especially football. if they would tax alcohol, anything to do with sex and

sports, they would be able to pay for a great many things that benefit the decent people of this country. this one says mother-in-laws when they stay over at your house for more than two days. all right. i'd like to get more on that story. text congress, $1 for each word that comes out of a mouth that doesn't answer the question that was asked of them. finally, this one here. i would text toilet paper, that way overen with pays. that is why we love our viewers. not too late to sound off, either. go to cnn.com/heidi to post your thoughts on the blog or call the hotline to heidi. that number is, once again 877-742-5760. the agency in charge of regulating commodities like crude oil says it has a responsibility to protect the american people from skyrocketing prices. now, it's proposing new rules to prevent a spike in oil prices,

like the one we saw last summer. cnnmoney.com poppy harlow has our energy fix from new york. >> this is known as a commodity futures trading commission. they're holding hearings this week, rather controversy getting a lot of questions this week trying to protect us from surging prices and paying full prices that pump because of excessive speculation. i want to separate this because you have airlines that buy their oil to run their planes through these futures contracts. that's an attempt for them to save money in the long run. but there's hedge funds, investment banks and everyday investors like me and you and we don't collect the oil in the end, that's the big difference. we just bet on the price as an investment. we have seen more and more investors over recent years pouring their money into oil and driving the price higher. in fact, cnn allan chernoff reported on this back in 2007.

so, this isn't a new issue. what is new, though. the cftc is proposing trade limits on those financial companies, those hedge funds and those banks in order to not see the spikes in oil that we have seen. there's widespread support for this, heidi. interestingly enough, the chicago mercantile exchange came out saying they are in support of that and that is, of course, the world's largest commodity exchange where all of that oil, heidi s traded. >> sounds really tricky, though. they said last summer, in fact, that excessive speculation did not actually cause prices to go up and that it was mainly a supply and demand issue. >> exactly right. you know what, officially on the record to us, they're not reversing that statement, but i'll tell you, the "wall street journal" is reporting that that exact agency is going to issue a report next month saying that n deed, speculation played a significant role in the surging oil prices and therefore the surging gas prices that we all felt last summer. if that happens, heidi, and we

will be watching, a complete reversal of what they said about six months ago when they came out with that previous report, but they said the journal's report is premature and inaccurate and they did tell us they're in favor of curbing speculation to protect consumers from surging charts. give you the real numbers and you can't argue with these numbers. what you see there, first of all, if you see consumption and what you see is consumption bottoming out in september of 2008. and then i want to show you the price of oil and what you see there is the price spiking above 140 bucks in july and then bottoming out after that, heidi. put the two numbers side by side and an increase in demand caused that spike in oil prices. >> very, very big picture to all of it. obviously, important. we have been hearing a lot about propofol the powerful sedative michael jackson may have been given before he died. we go inside an operating room

we go inside an operating room to see exactly how it works.

it may be next week before we learn the cause of michael jackson's death. that's when the coroner's office is expected to release autopsy results. yesterday investigators searched the las vegas home of dr. conrad murray, jackson's personal physician. he left with cell phones and a computer hard drive. investigators also searched murray's office. jackson's attorney said the warrant allowed investigators to look for jackson's medical records. the search came one day after a source with knowledge of the case confirmed murray gave jackson the powerful drug propofol. authorities believe that drug is what killed the pop star. normally propofol or

diprivan is administered in a hospital setting. our chief medical correspondent and surgeon dr. sanjay gupta shows us why. >> there's been a lot of discussion regarding propofol how exactly to use it and is it considered safe in any setting other than a hospital or medical setting. i'm going to take you inside my operating room to show you first hand what really happens. come on in. so, we are here inside the operating room with the chief of anesthesiology here. propofol is the medication he uses all the time. milk of amnesia they call it. >> milk of amnesia. vincent, you okay? >> we have to monitor his ekg and we have to make sure he's breathing and see a saturation. >> that's all typical stuff any time -- >> standard of care, yes. >> so, the propofol.

>> get a little sleepy, vincent. give me some good, deep breaths. take a look at his eyes. >> deep breath, vincent. you're doing great, may feel a little burning. >> eight, seven, six, five, f r four, three, two, one. >> there is a reason for his heart rate increase. his eyes are closed. >> his eyes closed. >> he stopped breathing. so, this is watching his co2 and he's not breathing and it's going to help him breathe. >> take a look over here. all the breathing is taking place at this bag and this mask. without that medication, he couldn't breathe on his own without those things. there you can see that problem. just with that much propofol

there he has stopped breathing and will need a breathing tube. what's so attractive about this medication? >> in the last 10 years, 15 years, just basically a quick on and quick off. that may answer why people think it is something they can do at home because if it gets out of hand t goes away quickly. if it gets out of hand and nobody can resuscitate you, nobody can bring you back. >> that was pretty quick. you just gave some of the medication. five, ten minutes gone from being completely awake to completely asleep. >> i'm breathing for him. >> one thing worth pointing out this hospital uses this medication thousands of times a year and they use it at outpatient clinics. doctors here will tell you they never heard of it being used in a home. >> in case you were wondering the patient going under there

gave us permission to videotape him during the procedure. he is awake today and no complications. on to this story now. extremely dry in texas. the state dealing with an extreme drought this summer. so, how are people handling it? ( shouting ) this is crazy. you. let's run a free upgrade check. see if you're due for a new smartphone. don't i need to go to my carrier's store for that? no, you don't have to. we sell phones and plans on all the major networks. ok. well, is time travel possible? yes, i am from the future. announcer: phones, plans, and advice from thousands of people eager to help. because of one word,

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want to take you over to the suvore weather center now where karen mu ginsis standing by because we're talking about the unbelievable temperatures, like i never heard of this in the

northwest. >> it is really crazy and we'll expect some of the all-time record high temperatures right around seattle. now, some forecast models are saying just about 100, maybe 99 and could be 101 for all we know. where you see this red-shaded area that's where we have excessive heat warnings out all the way from seattle and into portland. yesterday seattle set a record high temperature. they were in the upper 90s, but you also take a look further to the south and some of these inland valleys. portland is going to see over 100 degrees again for today. then we head out towards the valley region and some of the tri-city areas we're expecting temperatures under this heat advisory with some breezy conditions, mostly in the triple-digit range, once again. now, i want to go ahead and show you what we anticipate as far as the forecast goes for the seattle area. and look what happens over the next few days for seattle. 98, 100 degrees and then we'll see hot temperatures again on

thursday. so, our heat wave continues. sunny, little bit cooler, you'll notice a big difference when the temperatures in the upper 80s on friday and upper 80s on saturday and then we start to creep back up again on sunday, but this has really been an unprecedented heat wave. want to show you some of the temperatures we have outside right now. seattle 75 degrees and a big, sharp temperature difference. yesterday salem, oregon, 107 and, heidi, seattle, with 97. could see 100 degrees today. >> holy cow. all right, we're watching closely. appreciate that, karen. thanks so much. also, want to get to this weather story, too. parts of texas in dire straits right now dealing with an extreme lack of rain and temperatures topping 100 and way too often those conditions have led to a drought, the likes of which many haven't seen in 50 years. jacqui jeras is working on that part of the story live from austin, texas. hello again to you, again.

explain to people again why this is really bad. >> it is really bad and really widespread. drought conditions incompass nearly 50% of the state of texas now and 77 counties are under what we call exceptional drought and that is the highest of all categories. you mention those temperatures and you mention no rain, it's literally evaporating the reservoirs lake travis and the lake levels about half of what it should be. it's also hitting the community really hard and farmers are in a state of crisis. numbers are staggering, too. about $3.6 billion have already been lost, farmers are selling their cattle because they can't afford to feed them and crop yields are at a small percentage of what they should be or even a complete loss. state agriculture officials say it will impact the entire country. >> the real consequence is not just today, but it's long term. it means a reduction in farming a families when that's one of

the biggest threats to domestic food supply today. having our farmers and ranchers sustainable in the agricultural business and that's what really all american consumers should be worried about today. >> and farmers are hoping for some help through their insurance claims and also government subsidies. now, recreation is suffering, obviously. check out these dry docks. the boats can't get into the water, marinas are having to close their door. not all of them, but some of them and there you can see the boat ramp behind me. yeah, only one that's open still on the lake. this is also the drinking supply, heidi, for much of austin. about a million people get their water from here. they put very tough restrictions in place and not just in austin, but dallas, san antonio, houston, 200 other communities. it's also unearth some very interesting things. the lake should be 30 feet over my head where i am. just broke it, not like it

platters. a boom box, old wires here, a tire over here and in addition to all of this, heidi, we're also very concerned about the danger of wildfires. so much dry grass everywhere you look across the state. of course, that has firefighters on edge. one other note, check out the skies. look at that. yeah, little bit of gray clouds and some rain up to the north. everybody's hoping it comes a little further on down to the south, but, unfortunately, nothing real significant in the forecast, as karen will tell you. >> sounds like they'll need an awful lot. jacq jacqui, we sure do appreciate it. we'll stay on top of the story all week long. jacqui jeras live in austin. i'm heidi collins, "cnn newsroom" continues with tony harris right after a quick break.