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Fed Expected to Make Aggressive Cut in Key Interest Rate Today; Baby Boomers and a Boom in Alzheimer's; High Court Considering Whether Individuals Have Right to Bear Arms

Aired March 18, 2008 - 09:00   ET

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

TONY HARRIS, CNN ANCHOR: And good morning, everyone. You are in the CNN NEWSROOM. I'm Tony Harris.
HEIDI COLLINS, CNN ANCHOR: Hi there, everybody. I'm Heidi Collins. Watch event come into the NEWSROOM live on Tuesday morning, March 18th. Here's what's on the rundown.

Barack Obama, his outspoken preacher and race in America. The presidential candidate talks about it live in the NEWSROOM.

HARRIS: How low will they go? The Fed expected to make an aggressive cut in a key interest rate today. Why a rate cut matters to you.

COLLINS: Baby boomers and a boom in Alzheimer's disease. Startling numbers in the NEWSROOM.

HARRIS: The man who wants to be the country's first African- American president putting race in the room. Barack Obama is scheduled to speak about race, politics and unity next hour in Philadelphia. Presumably he's trying to move beyond the controversy over divisive comments by his former pastor. You can watch Obama's speech live on CNN at 10:15 Eastern Time.

Fellow Democratic presidential hopeful Hillary Clinton is also in Philadelphia today. She appears at city hall this afternoon, then campaigns in central Pennsylvania. All this ahead of the state's important April 22nd primary.

Republican John McCain, meantime, continues his Mideast swing fresh from a visit to Iraq. He met with Jordan's King Abdullah. Now he's moving on to Jerusalem.

COLLINS: A dead heat in the presidential race. That's according to a new poll by CNN and Opinion Research Corporation. It finds John McCain in a statistical tie against either Hillary Clinton or Barack Obama. Matched up against Clinton, McCain gets 47 percent, 49 percent favor Clinton. When up against Obama, it's even narrower. McCain 46 percent, Obama 47. The difference is well within the poll's sampling error.

HARRIS: It looks like there won't be any revote in Florida. The state's Democrats have rejected plans for a mail-in revote. Florida was punished for moving up its primary. Hillary Clinton won the original vote in January, but the 210 delegates won't count. Michigan is in the same boat but it's moving closer to holding another primary on June 3rd.

COLLINS: Of interest to us all, the economy and "Your Money." This is a live picture now of the Federal Reserve, one of the nation's top economists are considering a massive rate cut today. That cut could be as much as a full percentage point. But will it be enough to ease the nation's credit crisis or calm a jittery Wall Street.

Another part of the sour economy, the housing crunch. More dismal news just minutes ago. Fewer homes are being built in the United States and fewer homes are being planned. The latest painful reminder few believe a turnaround is just around the corner.

HARRIS: The economy is issue number one. And our money team is following today's developments.

CNN personal finance editor Gerri Willis will look at interest rates and "Your Wallet" a little later on. But first, here's senior business correspondent Ali Velshi in New York.

Ali, where do you want to start this morning?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, I want to start by thanking you, because you guys have been very supportive of, you know, pretty much everything we do when it comes to money and really trying to get down to the bottom of it. Yes.

HARRIS: Well, you guys are so smart. I mean come on. You can help us all.

VELSHI: No. I appreciate that. So when we decided we wanted to do this "Issue Number One" thing and really focus it, you, you know, you guys sort of jumped in with both feet. We've been with you a lot. And the good news about the whole thing is that we have this brand new poll out that was taken by CNN and Opinion Research Corporation just over the weekend. And guess what issue number one is?

HARRIS: There you go.

VELSHI: Thank goodness for that.

HARRIS: Yes.

VELSHI: Because we would have had to say issue number one to, you know, 12 percent of you. Issue number one is the economy, by a long shot. By double the next closest, which is Iraq. And then you got health care, terrorism and below that you got immigration. In many cases, health care, to some degree, immigration actually play into the economy. They're economic concerns. If we all had all the money in the world, health care and immigration wouldn't be those problems.

HARRIS: Yes. VELSHI: So an overwhelming majority of Americans think that the economy is issue number one. That's the good news. Now you're looking at the bad news. The bad news is every month we ask this question to Americans and every month more and more people are telling us that it is -- we are in a recession.

Most thinking economists are sort of saying we are, and as you and I have discussed, Tony, it might be irrelevant as to whether we are or aren't.

HARRIS: Yes.

VELSHI: Because your economy, your personal economy, your situation is kind of more important to you than what a national average is. And your personal situation with higher gas prices, with inflation, maybe with lower home costs, maybe with a mortgage that is adjusted higher, that all makes it relevant to you. And if you're spending more on all of these things, you're spending a little less on other things. And that's slowing the economy down.

HARRIS: You know it feels as though if you ever heard the "R" word from, say, the treasury secretary or the president that psychologically that might do a little bit of damage.

VELSHI: Yes. And every time they're interviewed you have somebody asking them, are we in a recession?

HARRIS: Yes.

VELSHI: It's a tough place to be in because you want to be a cheerleader for the economy on some -- at some point. I mean you really want to be able to -- it's like a fireman. You never want to see a fireman running, you know.

HARRIS: Exactly.

VELSHI: Because you don't want them to be worried. So you want your treasury secretary...

HARRIS: That's a good point.

VELSHI: ...your Fed chairman and your president to be confident about the economy. But so many Americans are saying it seems out of touch because we know that times are tough. Why don't you just admit it and then we can solve the problem. So, you know, I wouldn't want to be...

HARRIS: Right.

VELSHI: ...in any of those top jobs. It's tough to make a decision.

HARRIS: So, Ali, I want the Fed's rate cut today to impact me.

VELSHI: Right.

HARRIS: I want it to impact my mortgage rate. I want it to impact my reset. I want all of that.

VELSHI: Yes. Well, it's going to happen. Something's going to happen. At 2:15 today, the Fed is going to cut rate and estimates are anywhere from half a percentage point to a full percentage point. And if you -- the Fed rate is directly linked to the prime rate. So right now the Fed rate is 3 percent, the prime rate 6 percent. Whenever the Fed moves down, the prime rate will move down the same amount. That means any adjustable loans that you have, whether it's on your house, your car, your credit card...

HARRIS: Yes.

VELSHI: ...they should come down. Later in the afternoon, we will report that the banks have cut the prime rate. But the U.S. dollar will weaken. When the U.S. dollar weakens, it sometimes sends the price of oil back up. We saw a nice big discount on oil yesterday. It also stokes inflation. And by the way, when inflation gets stoked, the bonds go down and the bond interest rates go up and the bonds are where your fixed mortgages are set. So you'll actually notice -- you might actually see higher fixed mortgage rates as a result of the Fed cutting rates today.

HARRIS: Oh, my goodness.

VELSHI: Yes.

HARRIS: Boy, Ali. See you at noon if not before. OK?

VELSHI: Well, yes. We'll talk all day.

HARRIS: Right. All right. Keep watching CNN, everyone, because all this week our money team has a special report on money issues. It's called "Issue One: The Economy." Watch today. Is it issue number one -- yes, "Issue Number One: The Economy." Watch today noon, Eastern, only on CNN.

COLLINS: A landmark case heading to the Supreme Court today on the second amendment and a 32-year-old handgun ban in the nation's capital. People started gathering in front of the Supreme Court before dawn.

For the first time ever, the high court is considering whether individuals, not just the state, have the right to bear arms.

CNN's justice correspondent Kelli Arena has the story.

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): Drug dealers, gunshots at night. Constant threats.

SHELLY PARKER, GUN RIGHTS PLAINTIFF: I had my front window broken. I had the back window of my car broken in and cameras stolen off my house. It was routinely threatened as I was walking around the neighborhood with my dog.

ARENA: Shelly Parker wanted a gun for protection to feel safe.

PARKER: I believe that the second amendment is written for the purpose of allowing individuals to have a gun.

ARENA: When Parker became too afraid, she moved to a safer neighborhood. But she doesn't want to live in fear again, and she still wants that gun. The problem is, she lives in Washington, D.C., where handguns are banned.

Elilta Habtu lives just outside the city and comes in often. The last thing she wants is more guns.

ELILTA HABTU, GUN CONTROL ADVOCATE: It's enough. It's more than enough. I mean how many more lives do we have to waste before we take action?

ARENA: Habtu is a survivor of the Virginia Tech massacre and still has a bullet lodged close to her brain. She says no one should ever have to live through what she did and is now an advocate for tighter gun laws.

HABTU: I am still suffering inside the pain and mental torment from that day. I will always live with this. Forever.

ARENA: Two women with a common goal -- a safer city -- and completely different ideas about how to get there.

(END VIDEOTAPE)

COLLINS: Kelli Arena joining us now live in front of the Supreme Court building this morning.

So, Kelli, what is the history here? Remind us. Hasn't the high court ruled on second amendment issues before now?

ARENA: You know, believe or not, Heidi, this is the first time that the high court is going to be asked to actually deal with the fundamental constitutional question of whether individuals have a right to bear arms, which is why, you know, legal experts say this is such an amazing blockbuster case, you know, finally before the high court. We do expect that we'll get a ruling sometime in June, Heidi. So take a few months.

COLLINS: All right. But we will be watching, of course, alongside you. A highly charged issue certainly.

Kelli Arena, this morning. Thanks, Kelli.

ARENA: You're welcome.

HARRIS: Unfolding overseas this morning. High-level response today to Tibet's anti-Chinese riots. The Dalai Lama threatens to step down if the violence spirals out of control and China's premier lashes out at the Dalai Lama's supporters.

CNN's John Vause joins us now. Several hundred miles east of Tibet.

Boy, John, if you would, give us the very latest.

JOHN VAUSE, CNN CORRESPONDENT: Well, Tony, Tibetan exile groups have made some serious allegations against the Chinese government accusing security forces in one instance of killing more than 30 people, including monks, women and children, who are taking part in a peaceful province in a place called Abba County. That's in the northwest part of Sichuan Province where we are right now.

And to back up their -- their case, they've e-mailed us a lot of photographs, some of them showed bodied, lying on the ground, with a large crowd gathered around, apparently their outside a monastery. Others images show a large number of Chinese troops moving into that area and also police deployed on the streets apparently guarding buildings.

So we tried to find out exactly what was happening there in Abba County. But police have set up checkpoints. We made it through four of those checkpoints. By the time we got to the fifth, we were stopped. They ordered us out of the car. They took our passports. They recorded our details and after a time, they told us to turn around and go back the way we came.

But while we were on the road over the last two days, we saw a significant military build-up. Today I counted a convoy of about 30 army trucks. Some of those trucks were carrying heavily armed soldiers. There are also communications as well as fuel supply vehicles. They are all heading north to Abba County. Just what they were doing, we don't know. We asked the foreign ministry in Beijing about this today. We asked the spokesperson about those photographs coming out of Abba County. His response, well, he didn't know. He said he wasn't familiar with the situation there.

So the bottom line is this right now, Tony, to try and find out exactly what's happening in places like Abba County and many other areas around China. It's next to impossible and it seems right now the Chinese government is determined to try and keep it that way -- Tony.

HARRIS: And it looks that way. John Vause for us from Shindu, China, that's east of Tibet.

John, thank you.

COLLINS: Let's take a moment to check the weather information which, obviously, has been one of the -- maybe issue number two as of late around here anyway. Still a lot of cleanup going on, Rob. But now we're talking about the southwest this morning.

(WEATHER REPORT)

COLLINS: Teachers in trouble. Struggles in the housing market leading one state to replace report cards with pink slips. The story still ahead right here in the CNN NEWSROOM.

ANNOUNCER: CNN NEWSROOM brought to you by...

(COMMERCIAL BREAK)

COLLINS: Welcome back, everybody. I'm Heidi Collins. You are in the CNN NEWSROOM.

Talking race in the city of brotherly love. We'll hear from Barack Obama expected to confront the issue head-on next hour.

(COMMERCIAL BREAK)

HARRIS: The Federal Reserve is expected to cut its key interest rate today. Maybe as much as a full percentage point. It's all part of "Issue Number One: The Economy."

CNN's personal finance editor -- there she is -- Gerri Willis.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there, Tony. Good morning.

HARRIS: Good. Hey, you were all over the "USA Today" yesterday. I meant to mention that. Congratulations on the success of the book, by the way.

WILLIS: Thank you so much.

HARRIS: Yes, yes, yes, yes. Gerri, you know, I want this...

WILLIS: How rich?

HARRIS: I want this rate cut today to mean...

WILLIS: Yes.

HARRIS: ...a lower rate for my credit card, my auto loan. How about my reset on my mortgage? Will it?

WILLIS: Well, OK. Let's start with if you're trying to get a mortgage right now...

HARRIS: Yes.

WILLIS: ...what can you expect? Because I think people think they're going to get a huge rate cut today and mortgage rates probably not, in fact, it's possible the rates could actually move higher. And here's why. Mortgage rates aren't tied to what the Fed is doing. They're tied to long-term treasuries.

So take a look at this. This is what's happened in the last six months for the 30-year fixed rate mortgages. They've actually increased a little bit. 6.25 percent to 6.37 percent. So we haven't seen a big benefit there and we're not really expecting one today when you talk to folks out there who follow this day-to-day.

Adjustable rate mortgages. If you're shopping for an adjustable rate mortgage right now, you may get no help there. You know how this works. Typically if people can't afford the 30-year then they start looking at adjustables. The one-year ARM just reset .9 percent in the last week alone.

HARRIS: Yes.

WILLIS: So that's not great news.

Now you asked about, though, resetting ARMs.

HARRIS: Yes.

WILLIS: If you have an adjustable rate mortgage where it's resetting and you're really worried or maybe you're struggling now with higher payments, this is good news for you because this will reduce what you are paying month to month. Home equity lines of credit, same thing. They're based on short-term rates. They will go down. Credit cards, it's a little debate out there. Some folks think there'll be a benefit there. Others don't. But you can always call them and ask for a low are rate. Student loans, those folks will get a benefit as well. So there is some good news. There's a silver lining out there. But if you're looking for a new loan today...

HARRIS: Yes, Yes.

WILLIS: Maybe not.

HARRIS: Wow. All right, Gerri, you know, there's a big change at the Department of Housing and Urban Development that I think you've been telling us about that could help people with those jumbo mortgages. What is it and how can it help?

WILLIS: I want people to be aware of this, because this was in the stimulus package but it wasn't talked about a lot. The limits for jumbo mortgage rates and these are rates on loans, $417,000 and now much higher. That's going up.

In some markets you'll be able to get one of these government- backed loans at a level of over $700,000. So what's considered jumbo is changing, but only until the end of the year. So if you have a big loan and you've been unable to refinance, now is the time to pick up the phone and call a mortgage broker or call your lender and say, hey, I heard about these new rates. What can you do for me?

HARRIS: That' right.

WILLIS: And I think you'll be surprised. It will drive your rate lower than you anticipate. Jumbo rates have been really through the roof here. So I know people struggling out there really want some help. And you don't have to be a millionaire to have a jumbo loan anymore.

HARRIS: Got the point.

Hey, you know, before I ask you this last question, I guess I should draw people's attention to the ticker there at the bottom of the screen because on the ticker we've got all kinds of financial news for you. And that's pretty much what we have devoted the ticker to today is financial news.

Speaking of which, give us a preview of what's ahead on "Issue Number One" today, Gerri.

WILLIS: Well, you know, we're talking about a lot of great topics. We talk about jobs, w e talk about the economy. We talk about your savings. I know people are worried about their savings and their investment, your home, your mortgage. We're all over your debt. You didn't send us an e-mail. We'll answer your questions live on the air. We'll be doing that as well. We've got an interesting little story today, too, about finding gold where you think none may exist. So join us at noon.

HARRIS: Get ready.

WILLIS: Ali Velshi and I will be there and we'll be talking all about the economy.

HARRIS: Good stuff. Good stuff. Can't wait.

All right. Gerri, great to see you. Thanks.

WILLIS: Great to see you, Tony.

COLLINS: Baby boomers, listen up. Startling news this morning about your chances of developing Alzheimer's disease.

(COMMERCIAL BREAK)

COLLINS: Baby boomers and Alzheimer's. A new report today estimates 10 million of them will get the disease.

CNN medical correspondent Elizabeth Cohen joins us now with details on this.

And boy, Elizabeth, it seems like when you look at this number that most baby boomers expect to deal with Alzheimer's at some point in their lives.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Right. This is a huge problem, Heidi, because we have this big group of people who are now moving into becoming senior citizens and that means a lot of Alzheimer's, a huge strain on families and on the health care system. One out of eight baby boomers will get Alzheimer's disease. So what does that mean in the big picture? It is not a pretty picture.

Right now, there are five million people who have Alzheimer's disease. In 2030, so in less than 30 years, there's going to be eight million people with Alzheimer's disease. In 2050, it's going to be 11 to 16. So look at that, from five to eight to at least 11 million people with Alzheimer's.

And Heidi, what experts are telling us is that this country is just not set up. We don't have the facilities. We don't have the manpower, we don't have the living facilities, to handle that many people with Alzheimer's disease. COLLINS: When we get such an increase like that, I always feel like I need to ask the question, you know, how big was the sample size? What type of research was done? This was conducted by the Alzheimer's Association, right?

COHEN: Right. This is conducted by the Alzheimer's Foundation. And so what they do is they use modeling that looks at, there's going to be this many senior citizens, this many senior citizens, this many senior citizens, as time goes on. So they can pretty accurately predict how many people will get this disease because the disease doesn't change. It's just the population that changes.

COLLINS: Right. Well, then what's being done to prepare for this potential increase in Alzheimer's patients?

COHEN: Well, one of the things they're doing, Heidi, is a lot of research. A lot of money going into research to find better drugs for Alzheimer's disease. They're not thinking about curing it as much as just a disease that would put off by even five years at the age at which someone gets Alzheimer's disease would be huge. That would be incredibly helpful. And so they are hoping to find that they don't have that now.

But again, as we were saying, also what they want is the want more money to go into care for these people and right now that's not happening.

COLLINS: Sure. Sure, wow. Boy, the numbers definitely cause you to ask the questions, don't they?

COHEN: That's right.

COLLINS: CNN's Elizabeth Cohen. Appreciate that, Elizabeth. Thanks.

HARRIS: No over-the-counter sleep remedies for our intrepid reporter in Baghdad.

(BEGIN VIDEO CLIP)

KYRA PHLLIPS, CNN CORRESPONDENT: The tongue of ox? Oh, boy.

(END VIDEO CLIP)

HARRIS: Kyra Phillips visits Hassan's House of Herbs, oils, prayers, potions. Can I get a candle, please?

(COMMERCIAL BREAK)

ANNOUNCER: Live in the CNN NEWSROOM, Tony Harris and Heidi Collins.

HARRIS: And welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.

COLLINS: Hi there, everybody. I'm Heidi Collins. One of the most jagged points of this rocky economy, the price of gas. You are reminded every time you go to the pump or the checkout line. Well, that impact may force changes. Take a look.

(BEGIN VIDEOTAPE)

ED LAVANDERA, CNN CORRESPONDENT (voice over): Massive gas- guzzling trucks rumble across the country's highway. It's a crucial link in the nation's economy. How else is someone in Denver going to enjoy a Florida orange? Someone has to drive through to the grocery stores.

MATTHEW SIMMONS, ENERGY ANALYST: Today, in stores all around the world, you can go in and get food from all around the world, fish and poultry and meat and vegetables and fruits and so forth. The energy content of that luxury is unbelievable.

LAVANDERA: The latest government figures show there are about three million trucks on the roads every day. While the U.S. burns through more than 20 million barrels of oil a day, much of that energy is used to support daily business. From florists delivering bouquets near Charleston, South Carolina, a jump in prices gets passed along to the customer, $10 to $15 for delivery says florist Chris Williams.

CHRIS WILLIAMS, FLORIST OWNER: I have to, you know, raise my delivery charges accordingly. I have a driver I have to pay. I have to pay gas, vehicle maintenance, and it's tough, it really is. It's tough on us all.

LAVANDERA: To moving companies loading furniture, employees are forced to make less money on each job.

TREY INGRAM, MOVING COMPANY OWNER: The competition for the moves is so great that our prices are basically have remained steady for the last seven years.

LAVANDERA: Some say the only solution is to fundamentally change how we do business.

SIMMONS: We really don't have an alternative to a shortage of oil other than traveling less, growing food at home, producing goods where we use them. It's really reversing globalization.

(END VIDEOTAPE)

COLLINS: CNN's Ed Lavandera reporting for us today.

(MARKET REPORT)

COLLINS: Unfortunately I have to tell you this story, though: New this morning, an attack near the U.S. embassy in Yemen. Authorities say the embassy closed after a mortar round exploded near the compound. A statement says no embassy personnel were injured. An embassy statement, though, says there are reports of injuries at a nearby girls school. And the Associated Press reporting a Yemeni security guard was killed. We are checking into that. We'll bring you more information just as soon as we get it. Also, a high-level response today to Tibet's anti-Chinese riots. The Dalai Lama and China's premier speak out. As the world watches the conflict ahead of the Summer Olympics in Beijing, CNN's Hugh Riminton is following the developments from there and has the very latest now.

Hugh, good morning.

HUGH RIMINTON, CNN CORRESPONDENT: Heidi, look, we're coming to the end here of a really extraordinary day. It's just almost unbelievable how much has changed. Started off China under pressure over the death of an unknown number of people. No one knows how many have died in Tibet and other provinces of China, where there's a high Tibetan population.

By the end of the day, what's happened, it's not China under pressure; it's the Dalai Lama, who's offering to resign as the head of the Tibetan government in exile.

Why did this turn about? It's because of this. The Chinese government has said that the Dalai Lama, a man who is known around the world as a cuddly, nice kind of guy, Nobel Prize winner, an advocate for peaceful resolutions of conflict, and said he's none of those things. He's a hypocrite, says the Chinese Premier Wen Jiabao; he's a liar. And when you look at the street of Lhasa, the Tibetan capital, who Wen Jiabo says behind it, one else but the Dalai Lama himself.

(BEGIN VIDEO CLIP)

WEN JIABO, CHINESE PREMIER (through translator): There is ample fact, and we also have plenty of evidence proving that this incident is -- was organized, premeditated, masterminded and incited by the Dalai clique. This has all the more revealed that consistent claims made by the Dalai clique, that they pursue not independence but peaceful dialogue are nothing but lies.

(END VIDEO CLIP)

RIMINTON: Now the Chinese leadership knows that with the Beijing Olympics coming up in August, this is a battle that's really playing out in world opinion. Everyone watching this program is part of the jury in this. And so they're taking an aggressive stand. They've gone right after the greatest strength that the Tibetan people in exile have, and that is the personality, the reputation of the Dalai Lama himself. The Dalai Lama was stunned by it. He said, look, if there is more violence, I will resign as the political leader of the Tibetans in exile. And he offered this indignant reply to the Chinese leadership.

(BEGIN VIDEO CLIP)

DALAI LAMA (through translator): China's prime minister accused me all these things I started. Actually not. Hey, prime minister, come here and investigate thoroughly all our files or record my speech. The prime minister will know. That prime minister knows how much was started by local official. If things get out of control, then my only option is to completely resign.

(END VIDEO CLIP)

RIMINTON: Now in the meantime, this huge, relatively sparsely populated area, Tibet and these other Chinese provinces with this large ethnic Tibetan minority remain under a tight security crackdown at the moment. The Chinese premier saying China will not waver. It's got the power to enforce stability and order in these areas. That's exactly what it intends to do. Any further protest of any kind would simply be futile -- Heidi.

COLLINS: Well, obviously, historic things happening there, and we are glad you are there. Hugh Riminton for us this morning. Thank you, Hugh.

HARRIS: Baghdad shaken by a pair of car bomb blasts this morning. Three people were killed. Two of them police officers, 11 others were wounded. Those attacks come a day after a female suicide bomber killed at least 50 people in the Shiite holy city of Karbala. And the attack targeting worshipers came just before evening prayers. As many as 74 other people were hurt in the blast.

HARRIS: With more and more doctors leaving Iraq, the people are turning to other ways to heal themselves.

Our Kyra Phillips is in Baghdad. And, Kyra, how are Iraqis getting their treatment?

KYRA PHILLIPS, CNN CORRESPONDENT: Well, Tony, 8,000 doctors have either fled Iraq or been killed. The health care crisis is an absolute nightmare here right now. And you've seen the hospitals. They're absolutely deplorable. So Iraqis are turning to something else, herbal remedies. They say they're cheaper, they're easier to get and they're working.

(BEGIN VIDEOTAPE)

PHILLIPS (voice-over): Tucked away in this old Baghdad alley, an ancient tradition thrives -- herbal remedies for the sick and suffering. Herbal therapist Hassan Jabbar (ph) says he can help with skin disease and prostate cancer, aching joints and acne, kidney stones and low sex drive. Whatever your ailment, this Iraqi medicine man has your cure.

"I used to take diabetes tablets and they didn't work. When I use this herbal medicine, my high levels of blood sugar dropped."

"I have kidney stones and my doctors cost me a lot of money. So I turn to herbal medicine. After 15 days, I felt a difference."

Hassan produces his potions through the pages of "Abasina's (ph) Ancient Practice." Iraq's most famous philosopher, spiritualist and scientist, who died nearly 1,000 years ago.

(on camera): Why do you believe in Abasina? (voice-over): "He wrote about all types of herbs, their uses and treatments. He has so many amazing remedies. Every herb can be used to treat four to six infections and diseases."

Herbal practice has been in Hassan's family for decades.

"I never let any chemicals enter my house, only herbs."

(on camera): You never use any type of medicine besides herbs?

(voice-over): "Only for emergency cases like surgeries.

I decided to seek out the secrets. I have a lot of trouble sleeping.

However, Hassan says, he can help me.

"We will start with the al-hetma (ph) flower. This is used to resist stress and help with sleep."

He then adds spence (ph) seed, piala (ph) seeds and mawi (ph) flower.

(on camera): The tongue of ox? Oh, boy.

(voice-over): Hassan says not only will this help me sleep, but it will relax my entire nervous system. He adds the last two herbs, fencine (ph) and kajara (ph).

(on camera): What's kajara for?

(voice-over): "It's an ancient Arab medicine. Men used to carry it with them all the time for the flu, reducing stress and helping to sleep. But above all, high blood pressure."

Hassan buys these herbs from Iraq, India and China. Mixing in this mortar, a cross-cultural cure created from centuries of belief.

Meanwhile, back at Hassan's House of Herbs, Oils, Prayers and Potions, his faithful flocks, waiting for his modern-day miracles.

(END VIDEOTAPE)

PHILLIPS: So, Tony, Hassan even tells me doctors are sending patients to him because his remedies are doing so well and word is spreading around town.

Now as for the little sleep concoction he made me, it worked. And it worked even more for my producer Muhammad (ph), who took twice the amount. Didn't realize he was doing that. And not only did he sleep through the night, he was sleeping all the next day. So he stayed off the herbal remedy for sleep.

HARRIS: Hey, I like this, Hassan's House of Herbs. Maybe we can franchise it here in the States.

On a serious note, though, Kyra...

PHILLIPS: That's how Red Bull started.

HARRIS: That is? Is it really? Wow.

PHILLIPS: Yes, it started from an herb in like Thailand.

HARRIS: Oh, that is crazy.

HARRIS: Hey, Kyra, on a more serious note, tomorrow, as you know, tomorrow marks the five years of the war in Iraq. I am just curious, anyone talking about it there?

PHILLIPS: Oh, is anybody talking about it? It's amazing to think that it's been five years. I remember five years ago this week, Tony, I was on the USS Abraham Lincoln, the carrier, and strike fighters were launching off and conducting Shock and Awe. So now I'm here on the ground; I'm actually seeing where those bombs had dropped. Still a lot of areas haven't been rebuilt. We're going to talk about the changes, the progress and also the enormous amount of challenges tomorrow.

You know, the next U.S. president is going to inherit this very controversial war, and there's still a lot to do.

HARRIS: Boy, let's do several segments with you tomorrow, if we could.

Kyra, great to see you. Thanks.

PHILLIPS: Thanks, Tony.

COLLINS: The price of gas. Tough shelling out all that cash when you go to the pump, or even the checkout line.

CNN's Ed Lavandera is on the road now. He's joining us via broadband just outside Columbia, South Carolina.

Ed, good morning to you.

LAVANDERA: Good morning, Heidi.

Well, we just wrapped up a 211-mile drive from Atlanta, Georgia. We are here with Ted Ginnick (ph), and he invited us along, allowed us into the truck. We've outfitted this with a couple of cameras and made his drive a little bit more memorable here this morning here.

But we're doing this to kind show people what it is that drivers like Ted are having to do. It was actually something very interesting on the way down here. We were looking at the billboards for the price of diesel.

Ted, what's your...

UNIDENTIFIED MALE: The first time I pulled in Georgia, over $4. It was 14 cents higher than what I paid yesterday. LAVANDERA: So he had just filled up yesterday as we were getting ready to do this trip, and did not to do that this morning. So that actually turned out to be a smart move.

Well, how does this affect the way you do business on a daily basis?

UNIDENTIFIED MALE: Well, there are certain factors that we can control as independent truck drivers. And you have to pay a lot more attention on those less (INAUDIBLE) miles, which is the miles between your delivery and your pickup. The economics from driving speeds, each truck has a speed that's the best speed for that truck to get the best fuel economy, and that type of thing. And basically I've been doing shorter runs instead of running cross-country like I used to.

LAVANDERA: And one of the things you used to do, is you used to go from Atlanta to Seattle (INAUDIBLE) twice a month (INAUDIBLE)...

COLLINS: You know, I hate to do this, but I think we're going to have to give up, just for the time being, because it is definitely a story that everyone is talking about, is how much money we are paying for gas. So we're going to check in with Ed Lavandera. Ed and Ted, I think it was, Ted the truck driver there, trying to learn a little bit more about how tough it is to get from point to point, certainly when you're paying the prices that we're seeing at the gas pump.

So keep on watching CNN. All this week our money team does have special reports on your money. The special show, "ISSUE #1," the economy, coming your way noon Eastern all week long only on CNN. Some really good information there, so don't miss that.

Ready to stimulate the economy? Yes, me, too. New information about that tax rebate check headed your way.

(COMMERCIAL BREAK)

(WEATHER REPORT)

COLLINS: Issue No. 1,. how is the economy playing out on the campaign trail? Good question. We have the numbers, coming up.

(COMMERCIAL BREAK)

HARRIS: OK, "LOU DOBBS TONIGHT," 7:00, right to bear arms.

Hey, you know we're podcasting later in the day. Boy, get the podcast. what you do is you go to CNN.com and you download the CNN NEWSROOM daily podcast. I would suspect we will follow up on comments from Barack Obama and his speech this morning, oh, in the next few minutes, actually, here in the NEWSROOM, on race, politics and unity in the country, get some reaction to that. And then, of course, Heidi, as always, some of the stories that have no way of making it into the three-hour thrill ride that is...

COLLINS: Secret stories. HARRIS: Secret stories. So what you do is you go to the CNN.com and you download the CNN daily news podcast, available to you 24/7 on your iPod.

COLLINS: New this morning. The IRS says tax rebates will start going out in early May. Veronica de la Cruz is here to show you how to go online to figure out the size of your check and when it might arrive. Everybody wants to know that.

So what do we need to do, Veronica?

VERONICA DE LA CRUZ, CNN INTERNET CORRESPONDENT: you want to cross your fingers and hope for the best.

COLLINS: Exactly. Because not everybody is even going to get one.

DE LA CRUZ: That's right. I'm just kidding around, Heidi. First of all, you want to get those tax documents handy. You're going definitely going to need those. And then you want to jump online and you want to head to this Web site. Grab a pen. It's a very long URL. It's irs.gov/app/espc. It's right there on your screen. That's where the government has set up an online calculator. You have to answer a series of questions about your filing status, things like your salary, adjusted gross income and tax credits.

And if you have already done your taxes already, Heidi, you've calculated all of this, then this whole process will be really easy for you. Once you plug it all in, that's going to allow you to see how much you can expect to receive. If you are like me and nowhere near being finished, it's going to be kind of tough.

COLLINS: What, about April 14th or so, is that when you're done?

DE LA CRUZ: Exactly. Yes.

COLLINS: So talk a little bit about the people out there who are not going to be entitled to a rebate.

DE LA CRUZ: Well, the rebate, first of all, is based on how much you make, whether you are married, whether you have dependent children or not. And that's why this calculator actually comes in really handy. The key is getting that tax return in. Remember, April 15th is the deadline. There are lots of folks out there who are normally exempt from filing, maybe seniors, low-wage workers. And they're going to want to file anyway this year to make sure they get the rebate check. So make sure you file. That's key.

COLLINS: And once you do file and maybe you are a person that's going to get some money back, when? When do you see the money?

DE LA CRUZ: That's all you care about?

COLLINS: Exactly.

DE LA CRUZ: Well, if you want that rebate check sooner, here's the secret. You want to file that 2007 return by April 15th, the deadline. It does help if you e-file, and then you have the money direct deposited. And the IRS has made this very simple. They've posted a tax rebate-payment schedule to their Web site. It goes by the last two digits of your Social Security number. If those numbers are between 00 and 20, that payment should be sent to your banking account by May 2nd; 21 to 75, that's may 9th; 76 to 99 on May 16th. And the schedule for paper checks is a lot later, Heidi. Those go out starting on May 16th. The last batch will hit mailboxes July 11th, which is why you want to e-file.

If you have an extension for your income tax you have to file by October 15th to get the stimulus at all this year. And again, if you didn't grab a pen you can find those links to both the rebate calculator and the payment calculator on the IRS web site. That is irs.gov. So where do you know what day you fall, Heidi? Do you know what day?

COLLINS: Yes, on the first one.

DE LA CRUZ: Oh, really. Good for you. And you're going to e- file, right? You're going to do all of that.

COLLINS: Yes, but you know, I got to say, there's probably a lot of people who don't want a direct deposit; they want to see that check from the IRS.

DE LA CRUZ: You think so?

COLLINS: They want to check it. Absolutely.

DE LA CRUZ: I'm not like that, but there you go. I trust the government.

Hey, Heidi.

COLLINS: You're not even getting one, come on.

DE LA CRUZ: Hey, Heidi, put your right hand up.

COLLINS: High-five.

HARRIS: Outstanding.

COLLINS: OK, Veronica, thank you. Good to see you.

DE LA CRUZ: You, too.

HARRIS: Still to come in the NEWSROOM this morning, Barack Obama talks about race in America. His speech and the controversy that prompted it, coming up in just a few minutes from Philadelphia. A live look at the room there. That speech, again, 10:15 a.m. Eastern Time, right here in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: Good morning, everybody. I'm Heidi Collins. HARRIS: And I'm Tony Harris. Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown: Barack Obama on race, a key speech live this hour. Is it risky? Why now? We break it down before and after the address.

COLLINS: The Fed trying to pump life into the economy by bringing interest rates down. The right remedy?

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