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Deadly Deluge Final Week of Winter; Five Years in Iraq; Hillary Clinton Holds Campaign Event in Detroit

Aired March 19, 2008 - 10:59   ET

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

TONY HARRIS, CNN ANCHOR: And unfolding this hour, vicious spring-like storms slamming a big chunk of the U.S. this final week of winter. Torrential rains falling from Texas to Ohio. At least three people are dead and three missing in the floods.
CNN's T.J. Holmes is checking in from the scene there in Ozark, Missouri.

And T.J., you want to talk about a simple truth, you said it last hour. A lot of water where it shouldn't be.

T.J. HOLMES, CNN CORRESPONDENT: A lot of water where it shouldn't be. You can see behind me, those are back yards, and water should not be there.

Really, just take a look at it for yourselves. Those are back yards, seriously, that we're looking at there. You can make out a few things popping up here and there that were in those back yards, but those yards are covered right now.

Keep swinging around here to my left and you see folks have been gathering, coming out to see what they can see out here. They hadn't seen anything like this in a while.

But look through there. It looks like rushing rapids. That's not supposed to look like that.

It was described to me earlier as a meandering stream, as what it's like normally. But take a look at what it is right now. This is the Finley River, and it is a rushing river right about now. But this is what folks all over the state are dealing with at this time.

Hundreds of roads closed, hundreds of people having to be evacuated all over the state, mostly in the Ellington area, also the other area of Piedmont, southwest, both about 100 miles southwest of the city of St. Louis. I talked to a gentleman earlier with the water patrol. The water patrol around the state has been very busy with rescues right now. And you know what? The guy says we don't really have to be busy if people would just listen.

(BEGIN VIDEO CLIP)

CAPT. GARY HAUPT, MISSOURI STATE WATER PATROL: It's frustrating for any rescue personnel under those circumstances. You know, our primary mission is protecting human life and public safety issues, but all that -- most of that can be prevented if people would just take the necessary precautions.

This concept of turn around, don't drown, that's what we advocate. And it makes it very difficult for all the rescue personnel in these kinds of circumstances.

(END VIDEO CLIP)

HOLMES: So, it's difficult and dangerous, of course, for people to be out in it, but it also makes it difficult and dangerous for those rescue personnel, who, of course, want to keep people safe and want to save lives. But the best way they can do it is for people just to not take those chances and get themselves in those bad situations with those flooded streets in the first place.

Tony, we have gotten lucky out here. At least there hasn't been any more rain. It rained on us first thing this morning, but it hasn't been raining anymore.

They were standing by possibly for some more rain at some point today, but if it can hold off to give a chance for some of these waters to recede, that would be very good news. But right now, this part of the state, here in Ozark, right outside Springfield, and really other parts of the state do not need any more rain right now -- Tony.

HARRIS: Boy, that's the truth. It looks like a pretty miserable scene around you there, T.J. We probably should just get another check of weather conditions right now.

T.J. Holmes for us in Ozark, Missouri.

T.J., thanks.

(WEATHER REPORT)

COLLINS: Quickly, we want to go ahead and let you know what is happening right now.

We have two presidential candidates almost at the microphones. Barack Obama obviously already at the microphone there in Fayetteville, North Carolina. Going to be talking about the war and national security as well.

And Hillary Clinton, you see her on the right-hand side of the screen, in Michigan today, talking a little bit more about moving ahead with a second primary there. Going to be a very interesting speech, I'm sure. And here she comes to the microphone as well.

Let's go ahead and listen in for just a moment to, first, Senator Barack Obama.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: President Bush failed Wilson's test. And so did Congress when it voted to give him the authority to wage war.

Five years have gone by since that fateful decision. This war has now lasted longer than World War I, World War II, or the Civil War.

Nearly 4,000 Americans have given their lives. Thousands more have been wounded.

Even under the best-case scenario, this war will cost American taxpayers well over a trillion dollars. And where are we for all this sacrifice?

We are less safe and less able to shape events abroad. We are divided at home, and our alliances around the world have been strained.

The threats of a new century have roiled the waters of peace and stability, and yet America remains anchored in Iraq. And history will catalogue the reasons why we waged a war that didn't need to be fought. But two stand out.

In 2002, when the fateful decision about Iraq was made, there was a president for whom ideology overrode pragmatism, and there were too many politicians in Washington who spent too little time reading the intelligence reports and too much time reading public opinion. The lesson of Iraq is that when we are making decisions about matters as grave as war, we need a policy rooted in reason and facts, not ideology and politics.

Now we are debating who should be our next commander in chief. And I am running for president because it's time to turn the page on a failed ideology and a fundamentally flawed political strategy so that we can make pragmatic judgments to keep our country safe.

That's what I did when I stood up and opposed this war from the start and said that we needed to finish the fight against al Qaeda. And that's what I'll do as president of the United States.

Senator Clinton says that she and Senator McCain have passed a commander in chief test, not because of the judgments they've made, but because of the years they've spent in Washington. She made a similar argument when she said her vote for war was based on her experience at both ends of Pennsylvania Avenue.

But here is the stark reality. There's a security gap in this country, a gap between the rhetoric of those who claim to be tough on national security and the reality of growing insecurity caused by their decisions, a gap between Washington experience and the wisdom of Washington's judgments, a gap between the rhetoric of those who tout their support for our troops and the overburdened state of our military and the enormous stresses of our military families.

It is time to have a debate with John McCain about the future of our national security. And the way to win that debate is not to compete with John McCain over who has more experience in Washington, because that's a contest he will win. The way to win a debate with John McCain is not to talk, act, and vote like him on national security, because then we all lose. The way to win that debate and to keep America safe is to offer a clear contrast, and that's what I will do when I'm the nominee of the Democratic Party, because since before this war in Iraq, I've made different judgments, I have a different vision, and I will offer a clean break from the failed policies and politics of the past.

(APPLAUSE)

Nowhere is that break more badly needed than in Iraq. In the years since President Bush announced the surge, the bloodiest year of the war for America, the level of violence in Iraq has been reduced. Our troops, including so many from Ft. Bragg and Pope Air Force Base have done a brilliant, magnificent job under the most difficult of circumstances.

Yet, while we have a general who has used improved tactics to reduce violence -- and General Petraeus deserves enormous credit for that -- we still have the wrong strategy. As General Petraeus has himself acknowledged, the Iraqis are not achieving the political progress needed to end their civil war.

Beyond Iraq, our military is badly overstretched, and we have neither the strategy nor the resources to deal with nearly every other national security challenge that we face. This is why the judgment that matters most on Iraq and on any decision to deploy military force is the judgment made first.

If you believe we are fighting the right war, as John McCain does, as George Bush does, then the problems we face are purely tactical in nature. And that is what Senator McCain wants to discuss -- tactics.

What he and the administration have failed to present is an overarching strategy how the war in Iraq enhances our long-term security or how it might enhance our long-term security in the future. That's why this administration cannot answer the simple question posed by Republican Senator John Warner in hearings last year -- are we safer because of this war? And that is why Senator McCain can argue, as he did last year, that we couldn't leave Iraq because violence was up, and then argue this year that we can't leave Iraq because violence is down.

When you have no overarching strategy, there is no clear definition of success. Success comes to be defined as the ability to maintain a flawed policy indefinitely.

Here is the truth. Fighting a war without end will not force the Iraqis to take responsibility for their own future. And fighting in a war without end will not make the American people safer.

So, when I am commander in chief, I will set a new goal on day one. I will end this war. Not because politics compels it, not because our troops cannot bear the burden, as heavy as it is, but because it is the right thing to do for our national security...

COLLINS: There you have a portion of the speech that Senator Barack Obama is making today on this five-year anniversary -- or five- year marking of the Iraq war, talking mostly about national security and the war, of course. Also want to get you over to Hillary Clinton, his opponent, standing in Detroit, Michigan, talking, I assume, a little bit more on the war, as well as the idea of moving ahead with a second primary there.

Let's go ahead and listen in to her.

(JOINED IN PROGRESS)

SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: And frankly, it is un-American, and we cannot let that continue.

(APPLAUSE)

You know, my very first job in politics working for the Democratic National Committee, going door to door, registering voters in Texas in 1972, I threw myself into that hard work because I believed then, as I believe now, that every American has a right to be part of our great democracy. Every voice should have the chance to be heard, and every vote counted.

This goes way beyond this election. And it goes way beyond who's running, because no matter where you were born, or how much money you were born into, no matter where you worship, or the color of your skin, it is a bedrock American principle that we are all equal in the voting booth. And for me...

(APPLAUSE)

... it has been a long struggle to get to the point where barriers were knocked down and doors opened, and we still haven't completed that journey. But it is the vote that has given voice to the voiceless and power to the powerless. It is through that vote that women, African-Americans, Latinos, and so many others have claimed their rights as full and equal citizens.

You know, we have made our laws more just and our society more fair. Each vote is a declaration of our dreams for our children and a reflection of our prayers for our nation's future.

That is why generations of brave men and women marched and protested, risked and gave their lives for this right. And it is because of them that both Senator Obama and I stand before you as candidates for the Democratic nomination. It is because of all those...

(APPLAUSE)

It is because of all those who came before that we are both in this race today. And we should carry on that legacy by saying clearly that we will protect and cherish the right to vote for all people.

I've always stood up for voting rights. I'm proud of the legislation I've sponsored in the Senate to ensure that every eligible voter can vote and every vote is counted. And I will always defend your right to vote, no matter whom you choose to vote for in the end. It is not about that at all.

(APPLAUSE)

Because I believe that Michigan's families are just as important as the families of any other state. The father in Detroit wants the same opportunities for his children as the father in Des Moines. And he deserves the same voice in the future.

The mother in Lansing needs access to health care just as much as the mother in Los Angeles. And she deserves the same voice in how we will provide quality, affordable health care to everyone.

The families in the U.P. need good-paying jobs that stay right here in America just as much as the families in central P.A. And they deserve the same voice in trying to get that done.

And the soldiers from across this great state need a commander in chief who will end the war in Iraq and bring them home.

(APPLAUSE)

And they certainly deserve the same voice in choosing that person. That's why I've been saying for some time that the people of Michigan and Florida must have a voice in selecting our nominee for president.

I have called repeatedly for an agreement that would seat Michigan's delegates at our national convention, because I believe your voices and your votes should count. When others made the decision to remove their names from the ballot, I didn't, because I believed your voices and your votes should count.

(APPLAUSE)

And that's why I've been saying we need to either count the votes that have already been cast in Michigan and Florida, or have new, full, and fair elections so that we can have your voices and your votes counted.

(APPLAUSE)

Senator Obama speaks passionately on the campaign trail about empowering the American people. Today, I'm urging him to match those words with actions, to make sure the people of Michigan and Florida have a voice and a vote in this election.

(APPLAUSE)

I have accepted the plan for a new vote in Michigan proposed in draft legislation and approved by the Democratic National Committee. In fact, the DNC put out a statement earlier this morning making clear that the proposal fits within the DNC rules. It is fully within the party's rules.

(APPLAUSE)

I call on senator Obama to do the same. This is a crucial test. Does he mean what he says or not?

And I am pleased and grateful that on this issue, the people of Michigan have had such outstanding advocates in their Democratic leaders. And there are so many, including the governor and Senator Stabenow and members of the legislature, but I especially want to thank four who have really been at the forefront: Senator Carl Levin, Congresswoman...

COLLINS: All right. Once again, just giving you a little bit of flavor from each of the candidates today who are holding events.

Senator Hillary Clinton mentioning Iraq there, as we mentioned, but more importantly, her point in being in Detroit and talking there today, trying to make the case to move ahead with a second primary there. So, that is what's going on in Detroit. And Barack Obama there in Fayetteville, North Carolina.

Jessica Yellin is standing by covering the Hillary Rodham Clinton campaign from Washington today with more details.

I did assume that she would make some comments about Iraq given that today is the five-year anniversary, but really, she is there talking about this second primary.

What are the chances that that could happen?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: The chances are about -- well 50/50 right now.

COLLINS: Yes.

YELLIN: There's really -- they're in crunch time. The clock is running out.

If there is going to be a revote in Michigan, the legislature has to decide essentially today, maybe tomorrow morning, because there is only so much lead time they have until -- until -- to plan it, and they go on vacation at the end of this week. So, Senator Clinton is there pressing the case.

Now, as you mentioned, she's been talking about Iraq all this week and held events on that yesterday. But right now, what she is doing is really throwing down the gauntlet to Barack Obama, saying -- you heard the headline there -- this is a crucial test, does he mean what he says? And her campaign is outright accusing him of him trying to disenfranchise voters in Michigan and Florida.

The bottom line is that Senator Clinton desperately wants a revote, particularly in Michigan, because she wants those delegates. The campaign believes she would win there, and they need as many as they can get.

As you know, the scoreboard now, Heidi, shows that Barack Obama has 1,621 pledged delegates. Senator Clinton has 1,479 pledged delegates.

COLLINS: Right.

YELLIN: Michigan has 156 at stake. So, Senator Clinton really wants to see those delegates seated in some way, shape, or form.

She won the last vote, but Barack Obama was not on the ticket, so it's very hard to argue that those delegates should be seated. She needs to find a way to make it reasonable and rational for delegates to be seated for Michigan.

She's saying she's accepting this plan, and Barack Obama's campaign, while not rejecting it, is really hedging on it. She's trying to put the pressure on him to really say yes today, and we'll see how this plays out -- Heidi.

COLLINS: Yes. It sounds like it's going to be pretty tough though given the decision made in Florida. So we will certainly follow that very closely.

Jessica Yellin, thanks so much, from Washington, D.C., this morning.

HARRIS: Hillary Clinton and her plan to fix the economy, what she would do on day one to ease your concerns.

And what would John McCain do to fix the economy on day one? A closer look at the McCain money plan.

(COMMERCIAL BREAK)

COLLINS: Take it to the bank, but is it smart? How safe are your savings or brokerage accounts during this credit crunch?

Gerri Willis is here now with some tips on all of this.

And we just really can't talk to you enough, Gerri, about our money these days. So what about these brokerage accounts?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: There's a lot going on.

COLLINS: I know.

Are these brokerage accounts safe?

WILLIS: Well, that's a great question. You know, there are safeguards out there. There are rules the brokerages have to follow.

First off, companies have to have enough assets and reserves to pay customer obligations if there are financial problems. And also, the Securities & Exchange Commission has a rule. Brokerage firms have to keep your account segregated from their accounts. Now, this means that the firm can't dip into your funds or securities to pay off their debts.

And finally, there is insurance in case a bank gets into financial trouble. This is called the Securities Investor Protection Corporation, or SIPC. Basically, your accounts are backed by SIPC up to $500,000. If the worst happens, SIPC is behind.

COLLINS: OK. So, all of them are backed up with insurance? Or how do you know? How can investors find out if, yes, indeed, I do have insurance?

WILLIS: Well, you'll want to look for the SIPC membership on your monthly statement account. And if you don't see it, ask your broker.

Before you sign on with a brokerage account, you should look for it. Look at the track record, too, with regulatory agencies. Have they been in trouble before? Go to FINRA.org to get more info.

COLLINS: All right. So what about bank accounts or credit unions? I know a lot of people who use credit unions.

WILLIS: You know, there are safeguards there, to. It's not just people with brokerage accounts out there who are nervous.

We're hearing from people who are nervous about putting their money in bank accounts, but you should know the protections are strong.

Your deposits, both savings and checking, CDs, IRAs, and trusts accounts, are all insured by the Federal Deposit Insurance Corporation up to $100,000. Now, the limits are higher for married couples with joint accounts. You should know that IRAs are insured up to $250,000.

Just make sure your bank is a member of the FDIC, and they usually have it in their advertising. Or you can go to the Web, FDIC.gov. And if you use a credit union, there are similar safeguards. Those protections are afforded by the FDIC counterpart, which is the National Credit Union Administration.

So, good news there.

COLLINS: Yes. Well, I think a lot of people have been, you know, really focusing on their 401(k)s -- right or wrong -- right about now.

WILLIS: That's true.

COLLINS: What happens to your 401(k) if, god forbid, your company goes under?

WILLIS: Oh. Well, yes, if your company goes under, your 401(k) should be safe.

Look, the company has to keep 401(k) money separate, in a separate trust from employer assets. They can't get to it. So basically, if they go out of business, you'll have two choices. You can roll over the 401(k), you can take the cash, but you never want take the cash.

COLLINS: No, no. WILLIS: Because you have to pay penalties and taxes.

Now, one thing you should watch out for, if you have a lot of company stock in your 401(k) -- this happened to the folks at Bear Stearns -- and the stock price, you know, plummets, nobody's going to help you out with that problem. So, you know, you're always wise not to put a lot of money into the company's stock, because at the end of the day, you're sort of doubling, tripling up your risk.

COLLINS: Yes, absolutely. It kind of makes my hair stand up on my arms a little bit.

WILLIS: Yes.

COLLINS: All right. So we have "ISSUE #1" again today.

WILLIS: That's right.

COLLINS: Talking about the economy, which we should explain to people, a lot of the bulls out there now saying that when people go to the voting booth, yes, it's the economy that is the number one issue of importance to them.

So what are you guys going to be talking about today?

WILLIS: Well, you know, we're talking about your job, your housing, your mortgage -- is it safe? Your debt, your investments. How to keep your wallet, your money, your investments safe, how to grow them in this volatile market.

I know we've had a couple of good updates on the stock market, but I don't know about you, that makes me more nervous than feeling safe out there. So we'll tell you what you need to think about, what you need to do.

We'll also be looking at inflation today. But that's something you should be worried about.

COLLINS: Yes. Especially with this rate cut that we just had. A lot of people talking about that, certainly.

CNN personal finance editor, Gerri Willis.

We'll be watching in about a half hour, Gerri. Thanks.

WILLIS: My pleasure.

HARRIS: Boy, let's see if we can sort of drill down on this a little more. We're talking about your money, their plans.

We're taking a closer look at the economic plans of the presidential candidates. We heard from the Obama campaign earlier. We will talk with the McCain campaign at the bottom of the hour. But with us right now from New York, economic adviser for the Clinton campaign, Roger Altman.

Roger, good to see you. Thanks for your time.

ROGER ALTMAN, ECONOMIC ADVISER, CLINTON CAMPAIGN: Thanks for having me.

HARRIS: Hey, Roger, we want to start with inflation. It's going on now in terms of the price for a barrel of oil, what it means in terms of gas prices -- over $3, $3.30 in many places around the country, $4 in some places, as well, as you know.

I'm wondering, is there some kind of elixir out there, or should people just get used to the idea of maybe anywhere from $2.50 to $3 as the new floor for a gallon of gas?

ALTMAN: Well, you've asked two questions, really. You've asked about inflation, more broadly, and you've asked about energy.

HARRIS: Yes.

ALTMAN: I don't think we have -- we're seeing an upsurge in broad-based inflation. And the most recent numbers, including the last 48 hours, would confirm that.

What we are seeing are specific increases in commodities generally, and in particular energy-related commodities. And that's a separate and critical problem. But if you're asking whether we have an inflation upsurge in this country, I think the answer is no. The problem actually...

HARRIS: But what about consumer prices? Would you take that as part of an inflation equation, if you're paying for more milk and eggs and cheese today than you were six months ago or a year ago? Would you factor that in? Folks at home would probably call that inflation.

ALTMAN: Well, as I said, we're seeing commodity prices rise very rapidly, and what you just said, milk, eggs, and so forth are reflecting that.

But I'm trying to make a distinction between that and past periods when we've headed into a period of widespread, broad inflation, and we don't have that.

HARRIS: Well, can I ask you to make -- because I don't want to get caught in a whole bunch of technical talk here. Can I ask you to make the distinction that makes the most sense for people at home?

ALTMAN: Well, the No. 1 concern that I think most Americans have is this recession, and the economic weakness that it represents. And normally, inflation comes about when economies are stronger and you have what economists call demand poll impacts on prices and you have wages going up, and neither of those two factors are present. So the main concern I think most Americans have today is this recession and this spreading economic weakness. We're seeing it...

HARRIS: Can I show you a poll from March 14th through the 16th from -- a CNN/Opinion Research Corporation poll...

ALTMAN: Please.

HARRIS: ... that says the rate of inflation is the No. 1 concern at 65 percent.

ALTMAN: Well, I can't...

HARRIS: OK, well, then let's move on.

ALTMAN: ... deny your poll. I just think that the biggest economic problem the country faces today is not inflation; it's this recession and the prospect of Americans losing their jobs and their incomes coming under pressure.

And of course inflation plays a role in that, but if Senator Clinton, I think, were president today she would address primarily this economic weakness with a series of stimulus proposals and housing-specific proposals, and that would be priority No. 1.

HARRIS: All right. Let's talk about housing, then. Let's talk about that sector. What would the senator's plan be for dealing with the foreclosures problem?

ALTMAN: Well, she was the first candidate, either Democrat or Republican, to call for a voluntary moratorium, 90 days, on foreclosures, mortgage foreclosures, and a voluntary freeze for five years on rates on subprime mortgages.

And now, more recently, the Bush administration has embraced that and others are embracing it. Second, her stimulus proposal, which was also the first to be put out there by either Democrat or Republican candidate, would have included $30 billion for states and localities to try to deal directly at the community level with the mortgage and housing crisis, including using those funds to buy up foreclosed homes.

HARRIS: Yes.

ALTMAN: OK, at least that aspect sounds similar to the Barack Obama plan.

Let me move you quickly because I'm about to run out of time with you, to jobs and what Senator Clinton would do about jobs and the creation of jobs; 63,000 jobs lost last month. What's the definition of a good job to Senator Clinton and how would she go about creating more of them as president?

ALTMAN: Well, Senator Clinton thinks that the next generation of good, high-paying jobs in this country are going to be so-called green-collar jobs, and they're going to come about through the type of bold energy plan that we haven't seen in this country really in 30 or 40 years, a plan centered around her strategic energy fund, $50 billion, which would be financed by a windfall profits tax, a huge set of initiatives on energy efficiency, and development of renewables, wind, solar and so forth, and fundamentally a crash effort to move this country from a carbon-based economy to an alternatives and renewable-based economy. And that crash effort can produce giant numbers, as many, perhaps, as five million, of new, good, high-paying jobs.

HARRIS: Well, Roger, let's leave it there. We'll have a number of opportunities, I hope, to drill down on some of these ideas in the Clinton plan.

Roger Altman is an economic adviser for the Clinton campaign. Roger, thanks.

ALTMAN: Thanks for having me.

HARRIS: And again, we encourage you to keep watching CNN all this week. Our money team has a special report on your money. It's called "ISSUE #1," the economy. That's at noon Eastern, right here on CNN.

COLLINS: Fixing the economy. What would John McCain do on day one? we'll have that coming up for you in just a couple of moments.

Meanwhile, I want to San Francisco on this five-year anniversary of the beginning of the Iraq war. We're looking at some shots now from obviously way up above, our helicopter, our affiliate there, KGO, in San Francisco, looking at an anti-war protests. Kind of difficult for us to show you what we were seeing. Of course just moments before we took the live shot -- it kind of seems to happen every now and then. But we'll keep our eye on this for you. We want to show you in perspective how big this protest may be. Again, coming from our affiliate, KGO, San Francisco. ,

We'll be back in just a moment.

(COMMERCIAL BREAK)

HARRIS: On the fifth anniversary of the Iraq war, and I suspect there might be incidents of this around the country today. You're looking on the streets San Francisco right now as a protest has broken out. No real sense of just how big it is, and no indication at this point that it's violent in nature. No suggestion of that at this point. Police are on scene. This is just a situation that we're going to keep an eye on for you.

Our affiliate KGO providing the pictures of this protest on the fifth anniversary of the Iraq war from San Francisco.

COLLINS: You tell us it is issue No. 1, so we tell you what the presidential candidates plan to do about it, and that is the economy. Earlier, we heard from the Obama and Clinton campaigns. So with us right now from Washington senior economic adviser for the McCain campaign, Doug Holtz-Eakin. Thanks for being with us, Doug.

Let's talk for a minute about this poll that we had, CNN/Opinion Research Corporation poll, on which economic issue concerns voters the most. You can see it, by about six points or so, the inflation rate. Meanwhile, we just talked to Hillary Clinton's camp, and they say, no, that it's the possible recession people are worried about. What are your thoughts? DOUGLAS HOLTZ-EAKIN, SR. ECON. ADVISER, MCCAIN CAMPAIGN: I think the American family knows that when they go to the store and have to reach into their pocket and take out more dollars to meet their bills NEVILLE: at inflation is a pressing issue. One source of that inflation is the weak U.S. dollar, and I think there's no question that when you take a look at the landscape and you hear Democrats promising to raise taxes, promising big government spending programs, rattling sabers on breaking international trade agreements, the international community, you know, is worried about that and the dollar is weaker. We could strengthen the dollar. That would help us with oil prices. That take some of the pressure off inflation and make life better for American families, which is ultimately the goal.

COLLINS: Well, what about the notion that the Iraq War has been sort of a factor in all of this, may have provoked some of this economic downturn? What does John McCain's camp think about that?

HOLTZ-EAKIN: I think that the Iraq War has been, obviously, a terrible toll in lives and in casualties that Americans have suffered. It's had obvious dollar impact on the federal budget.

But the real issues that are facing the economy are mortgage problems in the subprime area, declines in housing values, the credit crunch. And the result is that for those Americans who make something for a living, they're hanging in there, but it's tough times right now.

COLLINS: But ...

HOLTZ-EAKIN: Those Americans that finance something, it's been obvious distress.

COLLINS: Yes, absolutely. But back up for just a moment and are you saying that minus the Iraq War, if we were not in this conflict, we would be in the exact same situation economically that we are today?

HOLTZ-EAKIN: I think that if you look at the housing bubble, the dramatic rise in housing prices, the complete loss of lending standards and people not putting a down payment down and investing in houses for speculative purposes, those are factors that have had huge impacts on this economy, and I think cleaning up from that is a major challenge.

COLLINS: OK, OK, so here you go, then. What will John McCain do on day one to clean up that?

HOLTZ-EAKIN: I think if you look at the mortgage problem in particular, you always want to look at it through the lens of how can we reform this at the same time we're cleaning up? So, let's make sure that people can understand a mortgage when they sign it. You can put the information on a page. Let's make sure that people have a down payment. No more loans without some investment in the house. Let's make sure that, you know, lenders have some stake in whether the mortgage works out.

COLLINS: OK, but isn't that a little after the fact? What do you do about the people who are going through it right now?

HOLTZ-EAKIN: You find the right people. We do not think it's appropriate -- the Senator feels strongly that the American taxpayer, who's facing higher prices and paying taxes already, should be bailing out financial speculators or people who didn't do due diligence on lending their money.

So, let's find the people who have the financial ability to be in a home, but are in the wrong mortgage, target any assistance to them, and let's make sure everyone shares in any effort to keep them in that house. They have a stake in it, make them take a piece. Lenders have to take a piece. It shouldn't all be on the backs of the American taxpayer.

COLLINS: Well, speaking of the taxpayer, last question for you. We are running out of time. What about taxes? I mean, the middle class going to see some relief under the direction of John McCain?

HOLTZ-EAKIN: He has already called for immediate elimination forever of the alternative minimum tax. Why, well, it was supposed to be a tax for well-off Americans and it's creeping into the middle class and threatening them. It makes the tax code terribly complicated. And what we need and what the Senator has pledged to seek is a system which taxes are simpler, they're fair and they're not going up year after year.

COLLINS: Simpler taxes, I don't know anyone who could argue with you on that, but we can't give into the details here. Doug Holtz- Eakin, thanks so much, senior economic ...

HOLTZ-EAKIN: My pleasure.

COLLINS: ...adviser to Senator John McCain's campaign. Appreciate it.

HARRIS: Five years of fighting. The Iraq War, the real people, the grim statistics in the NEWSROOM.

(COMMERCIAL BREAK)

COLLINS: As we continue to focus on issue No. 1, the economy, news of help for the ailing mortgage markets. The federal government is taking some big steps to ease the pain.

Stephanie Elam is at the New York Stock Exchange with all of the details on this. Hi there, Stephanie.

STEPHANIE ELAM, CNN CORRESPONDENT: Hi, Heidi.

This is true. Regulators are loosening the restrictions on two behemoths in the mortgage industry. The government reduced the amount of money that Fannie Mae and Freddie Mac are required to keep on hand. The rule change could could pump $200 billion into the struggling mortgage market.

The government says the move also allows Fannie and Freddie to play a larger role in subprime refinancing and loan modifications. That's significant since Fannie and Freddie hold or guarantee nearly $5 trillion in mortgages. So, it's a big deal, Heidi.

COLLINS: Oh, yes. Well, this seems to be a shift, though, for the government. So far, it's sort of shied away from proposals that exposed the government to the mortgage market?

ELAM: Yes, it's definitely a change of tone. The president and his economic team have been focusing more on voluntary programs in the mortgage industry, getting lenders to willingly refinance loans or ease the terms for borrowers. But now, Fannie and Freddie's restrictions aren't as tight and various reports say the Bush administration and Democrats have also begun talks over a new plan to go ahead and limit foreclosures.

(BUSINESS HEADLINES)

HARRIS: Because we acted, the world is better and the United States of America is safer. Those words today from President Bush marking the fifth anniversary of the Iraq War.

Here's a look back.

(BEGIN VIDEOTAPE)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: My fellow citizens, at this hour, American and coalition forces are in the early stages of military operations to disarm Iraq, to free its people, and to defend the world from grave danger.

UNIDENTIFIED MALE: These are live pictures of the Seventh Cavalry racing across the deserts in southern Iraq.

CROWD: (YELLING)

UNIDENTIFIED MALE: There it goes, there it goes!

BUSH: And now, our coalition is engaged in securing and reconstructing that country.

CROWD: (YELLING)

UNIDENTIFIED MALE: Watch out!

UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE)

ROBERT GATES, DEFENSE SECRETARY: The full impact of the surge is really just beginning to be felt.

(APPLAUSE)

(END VIDEOTAPE)

(COMMERCIAL BREAK)

COLLINS: Paper airplanes fill the garage, basement, storage shed and barn, all because a boy's story filled the hearts of people everywhere.

Addie Bradshaw of our affiliate WGRZ reports.

(BEGIN VIDEOTAPE)

ADDIE BRADSHAW, WGRZ REPORTER (voice-over): If it weren't for the bald head ...

CHERYL WINSHIP, MOTHER: Don't drink it like that.

BRADSHAW: ...Hunter Winship would seem like a typical kid. He looks healthy and happy.

HUNTER WINSHIP: What to do now.

BRADSHAW: But this five-year-old's fight began in January, when Hunter was diagnosed with a rare form of lymphoma.

C. WINSHIP: The worst part about it is you see him like this and he's playing and he's jumping up and down and sledding and you want to think that he's all right. You want to believe that he's over it.

BRADSHAW: Yet, Cheryl Winship knows that's far from the truth.

H. WINSHIP: (SCREAMING)

BRADSHAW: Hunter will need more chemo and more hospital stays, but it's come to a point she's even grateful for those.

C. WINSHIP: I cry because we're going to spend Easter in the hospital, but then I cry because, well, at least he's going to get another Easter.

BRADSHAW: Believe it or not, this isn't the family's only fight. Hunter is also battling his way into the Guinness Book of World Records for collecting the most paper airplanes.

H. WINSHIP: This one isn't an airplane, it's a helicopter.

BRADSHAW: Cheryl was right when she thought it would be a way to take Hunter's mind off his illness. What she didn't know is that the response would blow their minds.

(on camera): Tell me what you envisioned happening when you said, send Hunter some airplanes.

C. WINSHIP: Well, we have a 15-passenger van. And when I sent this e-mail out, I had intentions, you know, not being home, just have them put the airplanes in the van.

BRADSHAW (voice-over): The first day, it was filled, and now, so is the barn, the basement, and the garage.

C. WINSHIP: "My name is Jason. I'm eight-years-old. Sorry to hear that you have cancer."

BRADSHAW: Each day, the plane count climbs even higher as the post office service drops off yet another box.

C. WINSHIP: Thanks. Have a good day.

(END VIDEOTAPE)

COLLINS: Mom says they hope to make the record books by June when Hunter celebrates his 6th birthday. What a beautiful birthday I imagine it will be.

CNN NEWSROOM continues just one hour from now.

HARRIS: "ISSUE #1" with Gerri Willis and Ali Velshi is next. I'm Tony Harris.

COLLINS: I'm Heidi Collins. We'll see you tomorrow, everybody.

(COMMERCIAL BREAK)

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