the battle for november. congressional veterans turn back outsider challenges in arizona and florida's primaries. the blame game. republicans and democrats point fingers as the economy shows new signs of trouble. a feline furor. a british woman gets death threats after she was caught dumping a cat in a trash can. this is the "cbs morning news" for wednesday, august 25, 2010. good morning, everybody. thanks for joining us this morning. we've got a lot to tell you about. first up, will this be the political year for the outsider? maybe not if you look at the results from tuesday's primary battles in arizona, florida and alaska where most of the voters are choosing insiders over outsiders. randall pinkston has more on

that. good morning. >> reporter: good morning. an exciting evening it was for political junkies. the voters have spoken in several hard-fought primaries where money, the tea party and dissatisfaction with incumbents were key factors. arizona republicans are sticking with a familiar face this november. >> this was a tough, hard-fought primary. >> reporter: senator john mccain won his bid for a fifth term over conservative challenges j.d. hayworth, just one of several key primaries that pitted the washington establishment against outsiders. >> i take nothing for granted. i'll fight with every ounce of strength and conviction i possess. >> reporter: in florida's bitter democratic race, four-term congressman kendrick meek scored a victory over real estate tycoon jeff greene. if he beats marco rubio and charlie crist this fall, meek will become the state's first african-american senator. >> this election is not about those running for office.

it's about the people of this state. and we have to continue to keep that focus. >> reporter: in alaska's gop primary, it's still too close to call. early vote counts have tea party favorite and sarah palin-backed joe miller slightly in the lead over lisa murkowski. >> reporter: with the primary season almost over, the focus fully shifts to the midterm election and the control for congress. >> i will be the next senator from this state. >> reporter: some analysts believe swing voters will be key. >> on any election it comes down to independents, often comes down to moderates. they make up a good chunk of the midterm electorate. >> reporter: polls show like many americans, independents are primarily concerned with the economy. experts say, whichever candidate can offer the best solution will have the greatest chance of winning in november. come november, florida's political showdown will be especially interesting to watch not only because of the three-way senate race but also because of the governor's contest where the winner will

preside over redistricting. >> randall pinkston joining us live in washington. thank you. for the first time a new poll shows most americans disapprove of president obama's job performance. 50% of people in the reuters/ipsos poll gave him thumbs down. 45% gave him a positive rating. the poll also shows nearly half of americans support extending all tax cuts that are about to expire. president obama wants to limit those tax cuts to people making less than $200,000 a year. on tuesday john boehner said the president should keep the tax cuts and get rid of timothy geithner and other top economic officials in order to target what he called ongoing economic uncertainty. >> we do not have the luxury of waiting months for the president to pick scapegoats for his failing stimulus policies. we tried 19 months of government as community organizer and it hasn't worked. our fresh start needs to begin now.

>> a short time later vice president joe biden said boehner and the republicans want to give help to taxpayers who don't need it. >> what mr. boehner wants to do is extend the tax cut to the remaining 2%. that means going out to have to borrow another $70 billion over the next ten years to give $100,000 tabs tax cuts to someone making $1 million. >> the vice president also said republican leaders have not offered any constructive ideas to help the economy. well, the latest sign of trouble, the biggest drop in existing home sales ever recorded. existing homes, in other words, not new homes, are selling at the lowest rate in 15 years after a 27% decline last month. right now, there are nearly 4 million unsold homes in the u.s. and 12 1/2-month supply. that is the largest in 30 years. at the same time, congress can't decide how to reform money-losing fannie mae and freddie mac, which are responsible for more than half

of all mortgages in the u.s. anthony mason has that story. >> fixing this system is one of the most consequential problems and complicated economic policy problems we face as a nation. >> reporter: in florida this month, fannie mae auctioned off nearly 100 foreclosed properties. in chicago, freddie mac was offering help to homeowners in distress. >> okay. >> reporter: the two troubled mortgage giants 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. 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. >> fannie mae and freddie mac will incur the losses of our neighbors who default on their mortgages. >> reporter: set up by congress as private companies to expand

homeownership, fannie and freddie buy up mortgages from lenders so those banks have money to lend again. 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 goes to the very heart of what role should government play, if any, in housing. >> reporter: the treasury ames 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. anthony mason, cbs news, new york. this morning wikileaks is about to release more leaked documents according to its twitter feed. last month wikileaks made headlines when it put on its website 67,000 classified documents from the wars in iraq and afghanistan. pentagon officials call that a threat to u.s. troops and the people helping them and demanded the documents be returned. there was deadly violence across iraq this morning.

a suicide car bomber killed at least 11 people near a police station in northern baghdad. 34 others were wounded. two policemen were killed in separate attacks as well. the violence comes as u.s. ends combat operations there. well, the drug war in mexico gets more brutal by the day. the bodies of 72 people killed and left behind by drug cartels were found neert border city of matamoros after police had a shootout with one of the cartels. on the "cbs moneywatch," another tough day for stocks in asia. we have the latest on that. good morning, peggy. >> good morning. tough day in asia, tough day yesterday on wall street. asian markets saw a big selloff after news of a slow growth for japanese exports. japan's nikkei dropped more than 1.5% to a 10 -- 16-month low. hong kong's hang seng was also lower. today wall street gets the july durable goods report. stocks took a beating after home

sales were the lowest in 15 years. the dow sank 134 points. the nasdaq lost 35. chrysler says it's cooperating with a investigation as to whether gas tanks on grand care keys can rupture and catch on fire in accidents. no recall has been announced. the investigation covers 3 million grand cherokees for model years 1993 to 2004. regulators are also looking into complaints of stalled engines on toyota corolla sedan and matrix hatchbacks for model years 2005 to 2007. the government says they've received more than 160 complaints as of last week. cable tv has lost customers for the first time ever. cable companies lost more than 700,000 customers. the problem doesn't appear to be the economy, however. satellite and telecom providers actually added subscribers during that same period. and more americans are paying down their credit card debt. the average amount customers

owed for all of their credit cards over the second quarter dropped to just under $5,000. that is the lowest in five years. betty, looks like a lot of people are paying attention to the new credit card -- you know, they're hiking up their rates and people are paying off those cards. >> getting rid of that debt. we all need to take that advice. >> good thing to do. >> peggy joining us live. thank you. just ahead on the morning news, an out of this world find. scientists discover a solar system just like ours. plus, oregon inferno. a wildfire sweeps through a neighborhood. neighborhood.

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solar system. in other news, at least 11 homes were destroyed by a fire in oregon. the fast-moving fire burned a barn and a trailer before it moved into a subdivision. strong winds fanned the flames. residents in the area were evacuated and could only watch as helicopters tried to douse the flames. no injuries were reported. in california, fire crews are working through the night against a grass fire near mt. diablo state park. the 375-acre fire sent thick smoke across the san francisco bay area. several structures were threatened for a time but none have burned. so far evacuation orders have been issued. three people died when a truck crashed into a house in california. the truck was hauling tons of gravel tuesday in santa barbara when the driver lost control. reports say the brakes may have failed. the truck hit two cars and flew off an embankment. a man, woman and child were killed when the truck crushed a small house. >> the house -- there was no house. his truck was in the spot where the house used to be.

>> the victims came to the u.s. from mexico about five years ago. the driver was treated for a facial cut. no immediate charges were filed. lindsay lohan is free this morning. on tuesday the actress was released early from a rehabilitation center in los angeles. she served only 22 days of a court-ordered three-month program. there are media reports that doctors decided lohan did not suffer from drug or psychiatric problems that had been previously diagnosed. pro golfer erica blasberg's death has been ruled a suicide. blasberg died at her home on may 9th. a coroner said asphyxia was the main cause of death and no foul play is suspected. but an arrest warrant has been issued for dr. thomas hess for obstruction. police say he found blasberg's body and removed items from the sustain, including a suicide note. straight ahead, your wednesday morning weather. in sports, a pitcher covers left field in a 16-inning game. left field in a 16-inning game.

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later today, the northeast can expect another gloomy day. showers and chilly winds. the southeast is not looking too good either with rain likely. in the southwest, the heat is on, with many areas seeing triple digits. in sports, the phillies ran out of position players in extra innings against houston. in the 14th inning ryan howard argued a called third strike and was ejected. so, philadelphia sent pitcher roy oswalt to left field where he caught a fly ball. but in the 16th inning the astros scored and held on for a 4-2 win. in his first game for the dodgers, rod barajas blasted a three-run homer as los angeles defeated milwaukee 5-3. the dodgers are in fourth place in the national league west. and seven games back in the wild card race. in the american league, texas just keeps winning. michael young of the rangers singled in the seventh inning to break a tie and texas beat

minnesota 4-3. texas has an 8 1/2 game lead in the western division. before the game a member of the u.s. army golden knights parachute team got stuck on the flagpole. but he was able to unhook himself and climb down with no injuries. that's definitely a first. when we return, another look at this morning's top stories. and stem cell ruling. what it means for researchers on the hunt for breakthrough cures. archers on the hunt for breakthrough cures. but it's just the beginning of our work. i'm iris cross. bp has taken full responsibility for the clean up in the gulf and that includes keeping you informed. my job is to listen to the shrimpers and fishermen, hotel and restaurant workers and find ways to help. that means working with communities. 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. i'm john kessler. and i'm sydnie kohara. that fire on mount diablo was spotted late yesterday afternoon. no word on how it started. coming up at five: the all-out effort to contain it... and how much of a line is around it at this hour. another scorcher "weather-wise" today... but not quite as hot as yesterday. how some public transit may be affected today if

there are more record-breaking temperatures. and when we can expect a cool-down. two people remain in critical condition after an s-u-v slams into a group of people at a bus stop. what the driver believes happened... the citation she receieved. and a popular sandwich shop in san francisco gets a reprieve. join us for cbs 5 eyewitness news early edition ... beginning at five. on the "cbs morning news," here's a look at today's weather. a cold front and a canadian high pressure are bringing much needed changes to the country. the southern plains will be less humid and warm. the northern plains will get a break from severe storms and clouds and showers remain in the northeast. here's another look at this morning's top stories. senator john mccain easily won

arizona's republican primary tuesday defeating tea party sponsored challenger j.d. hayworth. in florida congressman kendrick meek was chosen by democratic voters to run for senate. sales of existing homes have hit a 15-year low even with the lowest mortgage rates in decades. analysts say buyers are waiting for prices to go down. the government has announced that it's appealing a court ruling that temporarily blocks federal funding of embryonic stem cell research. wyatt andrews takes a closer look at the far-reaching impact of monday's decision. >> reporter: for dr. kurt, who's been fighting cancer in children for 35 years, the court's ruling was a shock. the ban on federal funding could halt a $500,000 research project both the university of maryland and john hopkins have been using to study childhood leukemia. >> we've had the tool in our hands. and now it seems to us, we fear, that this will be turned off. >> reporter: but medical researchers are still confused

right now over one central question. what about all those embryonic stem cell experiments going on right now where the destruction of 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 result for a cure. >> that's unacceptable for people with diseases. >> reporter: still some 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 ruling will 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. here's a story that has plenty of people talking. a british woman is facing death threats and forced into hiding for what some people are calling animal cruelty. mary bale was caught on a surveillance camera meeting a cat, petting it, befriending it, before abruptly dumping it in a trash can then walking away. well, there was some panic, and the cat owners were worried, but they were able to find the cat about 15 hours later. >> i just don't know how anyone could go to bed sleeping at night knowing they just locked a cat in a wheelie bin. >> video of the incident hit the internet sparking thousands of threats against bale from cat lovers. she said she did it as a joke and expected the cat to wriggle out of the bin. two police are guarding her home as a precaution. on a happy note, the cat is doing just fine.

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an injured sperm whale was found strand next to a marina in florida tuesday. the whale, thought to be a calf, appears to have gashes on it's back. the search is on for its mother so they can be reunited. in washington shirley sherrod has decided not to go back to the department of agriculture. she met with tom vilsack on tuesday, who offered her a new job. last month, as you recall, she was forced to resign after a racial remark she made during a speech that was taken out of context. she says she hopes for, quote, some type of relationship with the agriculture department in the future. the obama administration has announced the winners in the second round of the race to the top competition for education money. as nancy cordes reports, the latest winners will share nearly $3.5 billion in grants. >> d.c. wins!

>> ymentd amounted ymentd every have >> yea! >> reporter: we were there when the head of washington, d.c.'s e.l. haynes charter school has got the good news. >> d.c. won the big grant called race to the top. >> reporter: the reform proposal she helped author helped garner 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 it 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. the administration announced the winners. nine states, plus d.c. >> the rewarding states were 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. so, we're ready to hit the ground running. >> reporter: but like every race, this one had losers as well as winners. minority groups like the naacp worry 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 too little change and too few dollars. >> reporter: the losing states might get another shot next year if the secretary of education can add $1 billion to his budget, but that's still nowhere near the $4 billion in stimulus funds he had at his disposal this year. nancy cordes, cbs news, washington. and that's the "cbs morning news" for this wednesday. thanks for watching. we hope you'll join us a little

later for "the early show." i'm betty nguyen. have a great day. ,,,,

your realtime captioner is linda marie macdonald. caption colorado, l.l.c. the wildfire on mt. diablo is still burning. firefighters making significant progress overnight, though. >> but lower nighttime temperatures did help