foreclosure mess. revelations that big banks cut corners on mortgage payment work could deepen the home sale crisis. earmarked deal. one of the most powerful lawmakers in washington is now on the anti-earmark bandwagon. and scanning backlash. a new airport security scanner causes long lines, frustration, a new airport security scanner causes long lines, frustration, and anger for travelers. captioning funded by cbs good morning, everybody, and thanks for joining us, i'm betty nguyen. we begin this morning with what could be another severe blow to the u.s. housing market. outlined in a new report from a congressional watchdog panel. let's go straight to the "cbs moneywatch" and ashley morrison here in new york.

what does this new report say, ashley? >> good morning to you, betty. the report released today warns the mess involving those foreclosure documents could get much worse and potentially have severe consequences to banks and the economy as a whole. the congressional oversight panel says nearly $6.5 trillion in mortgages are involved. federal and state regulators are already investigating whether mortgage firms cut corners when they moved to repossess homes. the problem, the panel warns, is that banks discovered they still owned bad mortgages they assumed had been sold. losses could reach billions. judges could end up blocking all foreclosures, leaving prospective buyers in limbo. the panel's chairman senator ted kaufman said serious threats remain that has the potential to damage financial stability. turning now to asia where stock markets slipped lower this morning after south korea hiked its key interest rate. japan's nikkei shed a third of a percent while hong kong's hang seng finished down more than one

percent. we'll see how wall street reacts to some key economic reports out this morning including producer price index and the housing market. on monday the dow inched up nine points while the nasdaq lost four. meanwhile, last month was a big month for retail sales. the biggest increase in the past seven months. auto sales are the reason. sales in other categories were more modest. analysts say settling higher inventories and sales are signs the economic recovery will continue. but consumers are still struggling with little income gains, high debt, and unemployment, which remains stuck at 9.6%. and hunger remains a pressing problem in this country. a federal report finds hunger in the u.s. remains the highest it's been in 15 years. the department of agriculture says about 14.7% of american households were food insecure last year. that means they had difficulty feeding one or more of their family members at some point because of financial issues.

and betty, in this country, there really shouldn't be any issue with regards to food. everyone should be able to have access to that. >> unfortunately there is. all right, ashley. do thank you for that report. let's take you now to capitol hill where the tea partiers have won an early squirmish in the coming battle over the federal deficit. under pressure from the conservative insurgents, senate republican leader mitch mcconnell is bowing to the new reality. whit johnson is in washington with more on that. good morning, whit. >> reporter: betty, good morning to you. well, top republicans appear to be falling in line with the tea party when it comes to earmarks. the longtime washington practice that has held countless lawmakers, both win and lose elections, may be on its way out. senator mitch mcconnell's longtime support for pork barrel spending has suddenly ended. >> and what i've concluded is that on the issue of congressional earmarks, as the leader of my party in the senate, i have to lead first by example. >> reporter: mcconnell's change of attitude sets off a battle

with gop conservatives. >> he's under a lot of pressure. a lot of attacks from the right wing of his party. he realized, you know what, it's better to join them, rather than keep fighting with them. >> reporter: a flurry of tea party-backed candidates rolled to victory earlier this month, with many campaigning against the practice of tacking pet projects to spending bills. they call it a flagrant example of out-of-control government spending. president obama welcomed mcconnell's new position. but most democrats are not ready to ban earmarks. any vote on earmarks will likely come after the new congress takes office. for now, the lame duck congress has a more pressing issue, what to do about the expiring bush-era tax cuts. republicans want to permanently extend them, while president obama says the nation, and its trillion dollar deficit, can't afford that. the president wants to extend the cuts only for individuals making less than $200,000 a year. leaders have been meeting behind closed doors. and one compromise is said to be gaining traction.

extending the cuts for a couple of years, until the economy improves. the bush tax cuts expire at the end of the year. failure to reach an agreement means everyone gets a tax hike. that's something both democrats and republicans want to avoid. betty? >> all right. whit johnson joining us from washington. whit, thank you. it's been two weeks since the election, and one veteran senator still isn't sure she's been re-elected. alaska's lisa murkowski. after losing the republican nomination to a tea party favorite, murkowski ran as a write-in candidate and with the last ballots being counted murkowski leads by about 1700 votes. she told katie couric why voters supported her. >> i do not pass the test that the tea party has set out. it's just as simple as that. but i don't think most people in my state pass that. there's a lot of people in alaska that are pretty anti-government. but i think they would also agree that, well, maybe the best thing is not that we shut government down. >> if murkowski's lead holds up she'll be the first writen

candidate elected to the senate since strom thurmond in 1954. in the house an ethics panel resumes deliberations this morning on misconduct charges against another veteran lawmakers, new york representative charles rangel. the 20-term democrat faces 13 counts of alleged financial and function raising violations that could lead to a full house vote on sanctions against him. now to the flap over the latest twist in air travel security. full body x-ray scanners. travelers are being told they must go through a scanner, or have a security officer pat down even intimate parts of their body. more than 80% of those answering a cbs news poll said airports should use the scanners. but some strongly disagree. kendis gibson has the story. >> reporter: john tyner was boarding a flight in san diego on saturday when he was asked to go through one of the tsa's new body scanners. he said no. >> i opted out. they walked me around, and explained to me that they were going to do a pat down.

>> reporter: tyner refused that, too, recording his exchange with the agent on his cell phone. >> i don't understand how a sexual assault can be made a condition of my flying. >> this is not. this is not considered a sexual assault. >> it would be if you weren't the government. >> reporter: that video went viral and overnight he became the public face of passenger frustration. >> i don't know. i think it invades a little privacy. >> but i'd rather be intimate and we get on the plane safely than not. >> reporter: travelers complain that the scanners show too much, revealing body parts through clothing. and they say the pat-downs are invasive, and humiliating. passengers have been complaining about the new security procedures here at l.a.x. and other airports since they went into effect in july. but with recent cargo bomb incidents, and holiday travel about to start, officials are making no apologies about being more aggressive. and the tsa plans to be tough on tyner. >> we'll look at the incident from start to finish as to what occurred and the potential, the actual civil penalties could go

as high as $11,000. >> reporter: homeland security officials say they plan to listen to passenger ideas on how to improve the procedures. but with the backlash from passengers growing, they may hear a lot. kendis gibson, cbs news, los angeles. new testimony in the elizabeth smart kidnapping trial in salt lake city gave jurors plenty to think about. yesterday, they watched a video of accused kidnapper brian david mitchell being questioned by police. he claims to be a religious prophet, and won't admit kidnapping smart in 2002, saying, god delivered her to him. just ahead on the "morning news," the search for three people missing into ohio turns into a recovery effort. plus, arrests made in a deadly high rise fire in shanghai after dozens are killed. first, though, katie couric has a preview of tonight's "cbs evening news." >> it's a conversation we often avoid. when it comes to end of life care, what do you need to think about? our dr. jon lapook has the

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castrol edge. it's more than just oil. it's liquid engineering. in colorado, 34 vehicles were involved in a pileup on interstate 25 south of denver yesterday. the road was icy at the time. the crash closed the northbound lanes of a highway for about four hours. 12 people were taken to the hospital, but none had life-threatening injuries. the search has intensified in ohio for three missing people. they were apparently kidnapped along with a teenage girl who was found bound and gagged in a nearby home. one man is under arrest. manuel gallegus reports. >> reporter: investigators focused on a park in mount vernon, ohio, combing through the pond with divers, searching by air, and on the ground. they're looking for any sign of three people missing since wednesday. tina hermann, her son kody maynard and family friend stephanie sprang. >> we have hope that we will see

our loved ones soon. >> we still want to remain optimistic that tina, stephanie and kody are alive, maybe being held against their will at some location. >> reporter: but the sheriff warned there might not be a happy ending. >> we've got to be realistic that there's a possibility that these folks are dead. >> reporter: the fourth missing person, 13-year-old sarah maynard, was found alive sunday, tied up in the basement of this house belonging to 30-year-old matthew hoffman. hoffman is facing kidnapping charges. sarah is now safe at home with relatives. >> i would call her the epitome of bravery. >> reporter: with few answers a vigil was held here in town at a local church. investigators won't say if the only suspect they have in custody is talking. neighbors of matthew hoffman had their suspicions. >> he is a weirdo. i mean he really was a weirdo. >> reporter: his house is around the corner from the park. searching into the night, police

divers found not one, but two cars submerged in the pond. at first investigators and the crowd watching thought it could be a grim clue. but neither vehicle appeared related to the case. manuel gallegus, cbs news, mount vernon, ohio. at least 53 people died in a massive fire in shanghai, china. a 28-story high rise apartment building was being renovated when the fire broke out yesterday. 70 people were hospitalized. 17 in critical condition. four unlicensed welders who may have accidentally started the fire have been detained by police. in new delhi, india, rescue workers are digging through the rubble of a five-story apartment building that collapsed last night. the death toll has reached 65. dozens were injured. one official said water damage from monsoon rains may have caused that collapse. accused russian arms trafficker viktor bout is on his way from thailand to the u.s. he was extradited by thailand today to face terrorism related charges. the 43-year-old is known as the merv and of death and was

arrested more than two years ago in bangkok during a u.s.-led sting operation. in haiti, the cholera outbreak continues to kill. nearly 1,000 people have died, and more than 14,000 people have been hospitalized. yesterday, protesters who blame united nations troops for the cholera outbreak attacked u.n. peacekeepers. one protester was killed. straight ahead, your tuesday morning weather, and in sports, it was the michael vick show on monday night football. dad: here's my new windows phone.

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here's a look at the weather in some cities around the country. new york, rain, 57. miami, sunny, 80. chicago partly cloudy, 54. also partly cloudy in denver, 55 there. but it is a sunny 73 in l.a. time now for a check of the national forecast. the latest satellite picture shows much of the southeast will see rain and storm clouds. the wet weather will eventually head into the northeast. the southwest has clear skies. over the northwest, there is plenty of snow and rain. but later today, wet and windy conditions are blowing into the northwest. coastal areas will get rain. while higher elevations will see snow. the southeast has to worry about soaking rains and thunderstorms. it's going to be cloudy and cool in the northern plains and the southwest will enjoy sunshine and mild temperatures.

sounds pretty good there. in sports michael vick stole the show on monday night football. the eagles' quarterback threw a touchdown on the first play of the game. vick accounted for a total of six touchdowns, four of them passing, and two running. he had 413 total yards, a career best. philadelphia had 45 points by halftime, and went on to win 59-28 over washington. in the nba, the last undefeated team was beaten. in dallas, jason cherry of the mavericks scored 26 points including the go-ahead jumper in the final minute against new orleans and dallas got the win 98-95 over the hornets, which had won their first eight games. in college basketball. number 7 kansas was an easy winner. marcus morris had 22 points against valparaiso as the jaw hawks won their 61st straight home game. and twin brother added 12 points as kansas rolled to a 79-44 win. when we return, another look

at this morning's top stories. and patriotic pedaler. a california boy who just wanted to fly the american flag gets plenty of backup. the american flag gets plenty of backup. ♪ yummy, yummy, yummy, i got love in my tummy ♪ ♪ and i feel like... [ female announcer ] kellogg's wants to make kids happy one tummy at a time. because 9 out of 10 kids don't get the fiber they need, that's why froot loops, apple jacks and corn pops have 3 grams of fiber in every yummy bowl. they're the cereals your kids love and the fiber their tummies love...

which makes for a whole lotta happy. froot loops, apple jacks and corn pops, an oh-so-good source of fiber. kellogg's® makes fiber fun. the dramatic takedown in the east bay.. and what we're learning about the suspects' criminal history. apple's big announcement. how it could involve one of the most popular bands in music history. and.. a royal wedding! prince william's plans to finally tie the knot. and.. a new battle over body scanners. how security officials are responding to complaints they go too far. join us for cbs 5 early edition ... beginning at five. developing news.. a wild police,

on the "cbs morning news" here's a look at today's weather. folks in the eastern half of the country will need an umbrella today. a wintry mix of snow and freezing rain is expected to fall over the northern rockies from nebraska to idaho. it will rain by the northwestern coastline. here's another look at this morning's top stories. a congressional watchdog panel warns in a report out this morning that a new home foreclosure crisis may be looming. the reason, big banks and other mortgage issuers cut corners on paperwork which could lead countless homes in foreclosure limbo. and senate republican leader mitch mcconnell has suddenly

flipped his position on pork barrel earmarks saying he now supports banning them. it's seen as a victory for tea party republicans. in california, an emotional bike ride for a 13-year-old boy. yesterday a huge crowd turned out to support the teenager, who won a personal battle to fly the american flag. sandra hughes reports. >> reporter: at the front of a parade of about 100, cody elisia was still flying his american flag on his bike as he rode to his california middle school. >> i pledge allegiance -- >> reporter: earlier this month, a school official told the 13-year-old he had to take the flag off his bike because it could be offensive. supporters swarmed the small town of denair to escort him to school, including this veteran who was wounded while serving overseas. >> i want to give this to you. >> reporter: this is the week officials said the flag had to be removed from his bike, but cody refused.

>> how does it feel to see all the support for you? >> reporter: the school explained that it had banned all national flags because of tension after a cinco de mayo incident. but officials now say they made a mistake. and cody will be allowed to keep waving his flag. sandra hughes, cbs news, los angeles. >> quite a story there. apple is expected to announce today that it's won the rights to sell beatles albums on itunes. this would be the first time any beatles music has been sold on an internet music service. in canada, a rodeo bull gone wild. the incident was caught on tape friday. a bull hopped the rail and into the spectators. four people were hurt before the animal was corralled. among the injured, a 53-year-old woman who suffered a fractured pelvis and broken jaw. this morning on "the early show," a warning about growing bed bug scams. i'm betty nguyen. this is the "cbs morning news."

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today at the white house, army staff sergeant salvatore gunta will receive the military's highest award, the medal of honor. the 25-year-old veteran will be the first living recipient to be honored since vietnam. lara logan spoke to gunta, who remains humble about his bravery three years ago in afghanistan. >> reporter: afghanistan became known to americans as the valley of death. a place that saw some of the toughest fighting of the afghan war. for staff sergeant gunta and his soldiers in the 173rd airborne brigade, it was hell on earth. but the worst night of all was october 26th, 2007. >> everything all of a sudden happened. tracers, bullets, rpgs.

>> reporter: about a dozen taliban fighters ambushed the americans as they were heading back to base. firing at them from two sides simultaneously. sergeant junta's squad leader sergeant eric gal ardo was among the first to be hit. >> i got shot in the helmet. i remember thinking, did i just get shot in the helmet. >> reporter: you had to get him out of that spot? >> i just grabbed him and pulled him back. >> before i knew it gunta is coming into the open and pulling me out of the opening. >> reporter: while saving his squad leader he was shot in his body armor. with no regard for his own life he then charged once again into the taliban guns to rescue another american soldier. sergeant joshua brennan had been gravely wounded and was being carried away by taliban fighters. >> one guy had his arms and one guy had his legs and they were dragging him. >> reporter: did you see their faces?

>> i saw their hats and their beards. and i saw their guns. i saw their guns slung on their backs because their hands were full. >> reporter: joshua brennan died later that night in surgery. but sal gunta's actions had saved him from dying in enemy hands. defeated the enemy ambush and deprived the taliban of a significant propaganda victory. what kind of soldier are you? >> i'm average. i'm mediocre. >> reporter: you're mediocre? >> yes. this is only one moment. i mean, i don't think that i did anything that anyone else that i was with wouldn't have done. >> reporter: this is the single greatest honor that the military can bestow on its own. and it comes right from the president of the united states himself. that's pretty good for a mediocre soldier. >> think how good the great soldiers are. >> reporter: for the white house, this mediocre soldier will take his place among the nation's greatest military heroes. lara logan, cbs news, new york.

>> coming up a little bit later on the "early" show, we will hear from john tyner, who caused a firestorm over the privacy of airline passengers when he refused a full body scan at the airport. also a warning about growing bed bug scams and dishonest exterminators. and actor billy bob thornton stops by with his new movie "faster." that's the "cbs morning news" for this tuesday. thanks for watching. i'm betty nguyen. have a great day. [ male announcer ] how do you say...

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