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Hillary Clinton Address Economy Issues in Pennsylvania, Gas Prices Continue to Strain Wallets of Consumers; Death Toll in Iraq Reaches 4,000
Aired March 24, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris.
Stay informed all day at the CNN NEWSROOM. Here's what's on the rundown for you.
Everybody is talking about the economy. This hour, Hillary Clinton turn a major policy speech from the next primary battleground.
COLLINS: A tough number to take. U.S. military death toll reaches 4,000 in Iraq. Reaction from Baghdad ahead.
HARRIS: And got debt? We've got tips on keeping more of your cash in hand. It is Monday, March 24. And you are in the CNN NEWSROOM. Our top story this morning is issue No. 1, your money. Wall Street opening about 30 minutes ago now. And bumping up more than 100 points after a long holiday weekend. But that trip to the pump still painful.
AAA putting the cost of a gallon of regular gas at $3.26 this morning. Down about a half cent since yesterday. The Lundberg survey reports the price of gas jumped seven cents over the past two weeks.
A better price in the works for the investment bank Bear Stearns, five times better. JPMorgan and Chase is confirming a short time ago that it is sweetening it's offer to try and calm down Bear Stearns investors while keeping the government's blessing. Checking the latest numbers on Wall Street. The Dow up, bang! Look at that -- 156 points.
COLLINS: It's being described as a major policy speech. Senator Hillary Clinton on the economy, making a push for Pennsylvania with just over a month to go until the primary in that state. CNN's Dan Lothian in is in Philadelphia this morning with the latest on all of this.
So, Dan, do we know the specifics yet of what Senator Clinton will talk about? We know it's economy but we don't know much more than that at this point.
DAN LOTHIAN, CNN CORRESPONDENT: That's right, Heidi. And as you mentioned, it is going to be focusing on the economy. And what we're expecting is for Senator Clinton to essentially touch on some of the same themes that she rolled out last week, and that is focusing on the terrible housing market and the crisis - the mortgage crisis.
Last week, when she brought forth this plan that she feels we need sort of a second stimulus package to help some of the hardest hit areas in which she's calling for some $30 billion rather to be injected into the economy to help some of these areas, helping local governments and state governments to either buy back some properties or create other programs in order to help some of the residents there who are having a hard time paying for their mortgages or who have already lost their home.
This is obviously a theme that resonates with voters all across the country. Here in the state of Pennsylvania, it is a state that hasn't been as hard hit as perhaps some states like Florida or Nevada. You have sectors of the state that have been hard hit with the mortgage crisis, but certainly as I mentioned, not like other states.
But nonetheless, it is important for her to mention or bring this speech here in this state because it really resonates with voters. I mean, this is something they can connect with. As we've been talking about, this is issue number one, and certainly important for voters here in Pennsylvania. Heidi.
COLLINS: All right. CNN's Dan Lothian watching things from Pennsylvania as we are too. April 22 is what we're looking forward to there. Thanks so much, Dan.
HARRIS: And Iraq now. A somber milestone, the U.S. death toll has reached 4,000. Big questions remain unanswered as to the way forward. CNN's Kyra Phillips is on assignment in Baghdad.
And Kyra, in your time and your piece just a short time ago you raised some of those questions with some of those students, talking about the way forward and what's to come for Iraq.
KYRA PHILLIPS, CNN ANCHOR: Still so many questions for Iraqis here, Tony. It was so ironic that this number of 4,000 U.S. men and women that have died in this war since it began that number came to that total on Easter Sunday where Iraqi Christians and American Christians were celebrating the resurrection of Jesus Christ, new beginnings, the beginning of spring. No doubt this Easter Sunday has been a challenge not only for U.S. soldiers, no loss of life there but also Iraqi Christians.
(BEGIN VIDEOTAPE)
PHILLIPS (voice-over): This is no ordinary Easter Sunday. It's a celebration of the resurrection of Jesus Christ in a war zone where Christians in a Muslim country not only honor the life of Jesus but thank him for protecting their own.
For the Tammas family, their faith sustains them.
"Because I have a deep faith in Jesus, I decided to come to church and not let the violence stop me. We shouldn't be afraid of the terrorists because the strongest thing in a human is faith." And back at home there was something else that wasn't going stop Salwa.
(on-camera): So you couldn't find white eggs, you only found brown eggs?
"I searched everywhere and could only find brown eggs, so we couldn't color them."
(voice-over): This is Easter Sunday, Iraqi style.
(on-camera): You think about the life and death of Christ and here you're dealing with life and death in a war zone.
"Of course. This is our life here in Iraq. At any moment we could die so we have to believe in life and death, just like Jesus taught us."
(voice-over): Death that came knocking at this family's door three times. This is from the car bomb that blew up just outside their window.
UNIDENTIFIED FEMALE: This is the car.
PHILLIPS (on-camera): That's the car?
UNIDENTIFIED FEMALE: Yes.
PHILLIPS: So you saw the dead bodies and all of the destruction?
"Yes, I did. Seven bodies."
"But today, is the day of forgiveness, joy, we should live in harmony. We as Iraqis should be able to live together without discrimination and love each other."
(voice-over): Tests of faith, commitment to their religion. The Tammas family gives thanks for yet one more Easter Sunday.
(END VIDEOTAPE)
PHILLIPS: And the Tammas family also asking why, why five years of this war do things still have to be so unsafe. Now back to the U.S. soldiers and death count of 4,000 now. A U.S. chaplain held a service yesterday also on Easter Sunday, Tony, for Christian there's.
He had a powerful quote. When he was speaking to them, he said, "with regard to these men and women who have died thus far in this war, why does it seem that the good guys are always the first ones to fall."
HARRIS: Boy, what a statement that is. You know, let me circle back to the Tammas family for just a moment, Kyra. The idea that there could be something for a search for white eggs to color on Easter Sunday makes one believe perhaps that that particular neighborhood is relatively safe, but I don't want to presume that. PHILLIPS: Tony, nothing's relatively really safe, truly. I mean, they do the best that they can. And, yes, she went all over trying to find white eggs so the kids could color them this year. It was neat to see that and just that human side of Easter for Iraqi Christians.
But they just know they have no other choice. They can't afford to leave. They want to stay. This is their home. This is where the father works. This is where the girls are going to school. And so they live with the risk. It's just a part of their life.
ROBERTS: Kyra Phillips for us, outstanding reporting from Baghdad for us. Kyra, thanks.
COLLINS: I want to get back to the White House where CNN's Kathleen Koch is standing by to give us a little bit more information about things, Kathleen, that the president said after the ceremonies this morning for the Easter egg roll. I know that he reacted to that new U.S. death toll in Iraq.
KATHLEEN KOCH, CNN CORRESPONDENT: Heidi, actually, we have the reaction from this, this is from Dana Perino, spokesperson for the president, White House press secretary. And she was asked what the president did think about the U.S. reaching this milestone. And she said that he's obviously grieved by the moment but Perino says that the president mourns, every single life that has been lost in the conflict, from the very first one to the lives that were lost just recently, those four U.S. soldiers who died in the roadside bombing.
And she said the president does realize he bears the responsibility for the decisions that he's made and she said the one thing that he does hear virtually every time that he meets with the families of the fallen is that they want him to complete the mission. And she says he's committed to doing that.
She says he's constantly concerned about the well being of the families that they left behind. He grieves for them. And he wants them to know that he's going to do everything he can, she said, to make sure that sacrifice was not in vain -- Heidi.
COLLINS: All right. I understood again those comments coming from Dana Perino as opposed to the president himself. We just want to be clear on that. CNN's Kathleen Koch live for us this morning at the White House. Thanks, Kathleen.
KOCH: You bet.
HARRIS: Cleaning up and waiting for more trouble to come. We are thinking about our friends in Missouri and Arkansas where it is a muddy, muddy mess this morning. There is a flash flood watch for areas along the White River in the eastern part of Arkansas.
This was the scene in Randolph County yesterday. The Black River levee busted in three different places. And they are pumping out in Eureka, Missouri. The Merrimack River finally crested over the weekend. The swollen waterway submerged. As you can imagine here, hundreds of homes. Boy.
COLLINS: Yes. That's for sure. We've been watching this for days, too, obviously. Rob Marciano is standing by now at the weather center to talk a little bit more about this. I guess there are some flood warnings that are continuing in this same area. Probably not too much of a surprise.
But boy, the people, there Rob, such a mess.
ROB MARCIANO, AMS METEOROLOGIST: Yes. It's a mess. We just got to get all this water into the ocean or in this case the Gulf of Mexico via usually the Mississippi River. So we are trying to feed everything into the Mississippi. That's actually going to cause some problems for folks who live in the southern part of the Mississippi. And we'll get to that in a second.
All of these red boxes and pink boxes are flood rivergates that are either moderate or severe flooding at the moment. So let's zoom in here to Des Arc, which is east of Little Rock, Arkansas. This is along the river which is downstream of the Black River.
We saw those levees break, which is part of the video that we have just shown you. This is the White River. And this is the community here at Des Arc which has flood warnings that are happening right now and the river has yet to crest.
So, pull up the flood gauge or river gauge right there and show you the chart and how it looks like as far as how the river - the water is rising. Moderate flooding here. Severe, major flooding here. And we're almost at 33 feet.
The forecast actually just in the last half hour has been bumped up. So difficult to nail these down exactly what point that river is going to crest. Expect to crest tomorrow at 33 and-a-half feet. But that's half a foot above where they expect to it crest as of yesterday.
All right. Mississippi River, there is Louisiana, goes past Baton Rouge. Flood warning out for Baton Rouge, not going to crest there until Saturday afternoon. No flood warning in effect for New Orleans at this time. Check out New Orleans, the big easy.
Live shot for you. Beautiful day going there. Looks like that is Lake Ponch. WGNO is our affiliate. Thanks, guys. Fifty-four degrees currently. You'll get up to 61 under bright, blue, severe clear skies. A couple of showers with the rain and maybe snow variety across Virginia.
No big deal there. So-called across the deep south that we've seen flurries in the smokies just north of Georgia. And there are freeze warnings out again tonight, guys, for northern and parts of western Texas. It was kind of chilly this morning.
COLLINS: It was very chilly. I was full length down. I didn't think I would have any use for that coat here but I was wrong.
MARCIANO: One more day for you.
COLLINS: Super. Thank you, Rob.
MARCIANO: No problem.
COLLINS: Trouble on the high seas. This morning four people are dead, one person missing after a commercial fishing boat sank off the coast of Alaska. The boat was about 120 miles west of Dutch Harbor when it started taking on water. Reports of rudder trouble came in at that time.
This morning the U.S. Coast Guard is searching for that last crew member. Captain Michael Inman spoke with CNN's "AMERICAN MORNING" earlier today.
(BEGIN VIDEO CLIP)
VOICE OF CAPT. MICHAEL INMAN, U.S. COAST GUARD: Coast guard Cutterman Roe is on scene, searching and searched throughout the night. And at first light this morning, we will have a HH-60 Jayhawk helicopter coming our to St. Paul to search the area for about probably five to six hours and we will look at that. Our results that the point and see where we stand.
(END VIDEO CLIP)
COLLINS: The Coast Guard says 42 crew members in life boats were rescued from the frigid water. Meanwhile, news is spreading to the relatives of those who died.
(BEGIN VIDEO CLIP)
AMY ROMAN, UNCLE DIED IN SHIP SINKING: My uncle has called his family down in San Diego and told them that they pulled my uncle from the boat. And he was dead. Ultimately, he died how he wanted to. If you're a fisherman, you want to die out at sea. You live to fish. This is -- if you're a true fisherman, this is how you want to go.
(END VIDEO CLIP)
COLLINS: The Coast Guard says it is not clear what caused the boat to sink.
HARRIS: Choosing sides. A former candidate and Clinton insider now backing Obama. We will ask a couple of political strategists if this is really a big blow to the Clinton campaign. That's next in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Welcome back everyone to the CNN NEWSROOM.
I'm Tony Harris.
More pain at the pump, but investors smiling this morning. Your money, it is issue No. 1. (COMMERCIAL BREAK)
COLLINS: "ISSUE #1" coming today at noon. Guess what that issue is? The economy leads us to this, the big board. Futures say it's going to be up a little bit today. Right now, about 45 minutes into the trading day, we're up by 175 points. And Nasdaq up about 48 points. Right now resting at about 12.5 or so on the Dow Jones industrial averages. We will watch those numbers for you.
HARRIS: The economy, pretty shaky. Make sure your choices aren't. How to insulate yourself ahead in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: You have been hearing a lot about just how bad the economy is recently, but you know you can't insulate yourself by making some right choices. Gerri Willis is here with the tips.
Gerri, good morning, good morning.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Good morning, Tony. Good to see you.
HARRIS: You know what, if I can't save a lot of money, I just don't want to give it away. You know, that's the key here. What are some of the things that I should be looking at right away here to insulate myself in these difficult times?
WILLIS: Well, don't forget the rebate's coming. Uncle Sam will be mailing those checks out in May. If the last two digit of your social security number is in the lower digits, you will get them sooner. For example, the last two digits of your social security number is 00 to 20, your rebate check will be sent out by May 2. And retailers have decided of course that this is a terrific thing.
In fact, some states like Illinois and Missouri and New York City are considering sales tax holidays for the spring. Hey, but don't be swayed. While the government may encourage you to spend your check, your best opt to pay off your credit card bills and high interest debt. You may also want to make an extra mortgage or car payment.
HARRIS: See, I love this because you have been amazingly consistent with that point throughout which means you really believe it.
WILLIS: I do.
HARRIS: I know you do. And I know it's probably featured in your book as well. So, we'll work it in.
WILLIS: I love it.
HARRIS: Let me ask you about another area where I believe that we can probably insulate ourselves, at least not give the money away. We're talking about all those pesky fees there, Gerri.
WILLIS: Don't you hate that?
HARRIS: You know I do.
WILLIS: Let's talk about banks fees. Find out if you are eligible to join a credit union where the fees and surcharges may be lower than your bank if you're really under pressure here. Go to the National Credit Union Association Web site at ncua.gov. and, hey, Congress is turning a spotlight on some of those 401(K) fees.
HARRIS: Good.
WILLIS: If you're not sure what fees you're being charged, you talk to your plan's administrator or someone in the H.R. Department. And here's another one avoid balance transfer fees on credit cards. You can find out about it in the credit card agreement. Look for a reference to a maximum balance transfer fee. If you don't see any dollar amount, call the credit card issuer, get the details. Balance transfer where you can add hundreds of dollars to your debt.
HARRIS: I did not know that.
WILLIS: Yes.
HARRIS: Let's, for example, we're in the soup now, look, we're going through it. Times are tough. And all of this stuff is piling up for us. Is there a lifeline out there?
WILLIS: Well, typically what people have done, if they have equity in their home, and that's a big if for people nowadays, you may be able to take out a home equity line of credit. With the home equity line, you will be approved for a specific amount of credit depending on the equity that you have on your home. And you can borrow from that line of credit when you need it.
You may be allowed to deduct the interest because the debt is secured by your home. And, hey, for some folks it makes more sense to reach out to friends and family. You probably won't take advantage of it. If you keep current on your payments it could be a good solution for you.
Now, one place not to go before with your 401(K). Don't top it early. You will be missing out on money, your money's ability to compound interest. It's a real negative for folks out there.
HARRIS: And then the taxes and all the implication of that. Yes, you definitely want to stay away from that. You know, what and I'm not asking you to look into a crystal ball here, Gerri, because you're way smarter than that. As you look at the indicators, the trends, is there a light at the end of the tunnel out here for folks?
WILLIS: I think it's easy to forget what, you know, all economies have their ups and their downs. Look, a recent CNN opinion research poll finds that more than half of respondents think hey, economic condition also be good by next year. We're all optimists out there. Plus, 90 percent of the people had confidence they would be able to meet their monthly mortgage payments for the duration of the mortgage. OK. So, there is good news. Whatever you do, don't try to time the market. If you have money in a 401(K) or mutual fund, keep it there. Long-term investing is the way to go.
HARRIS: Yes, Gerri, I know "ISSUE #1" is back today. What are you working on?
WILLIS: well, at noon we're focusing on jobs, debt, housing and savings. One big question we're answering today, where, where are the jobs going to be, where to go. You'll definitely want to tune in for that at noon Eastern.
HARRIS: There she is, CNN's personal finance editor Gerri Willis. Good Monday morning to you, Gerri.
WILLIS: My pleasure. Good to see you, Tony.
HARRIS: See you. The economy is affecting you in more ways than you know. Check out CNNMoney.com. Special report "ISSUE #1" America's money.
There you can find tons of information that could save you money and the misery plus interactive tools and a lot more that. All that again, at CNNMoney.com.
COLLINS: The battle for Pennsylvania. Senator Hillary Clinton back on the campaign trail, ready to give what's being called a major policy speech on the economy. Back in a moment.
(COMMERCIAL BREAK)
HARRIS: Good Monday morning to you. Welcome back, everyone, to the CNN NEWSROOM.
I'm Tony Harris.
COLLINS: Hi there, everybody. I'm Heidi Collins.
I want to get straight to politics now. A former Clinton insider switches sides. Plus, what to make of John McCain's world tour. Here to help us wade through the latest campaign news is republican strategist Joe Hicks coming to us from Los Angeles.
Hi there, Joe.
JOE HICKS, REPUBLICAN STRATEGIST: Good morning, Heidi.
COLLINS: In New York, our political strategist Keli Goff who worked on Hillary Clinton's first senatorial campaign that is but now identifies herself as an Independent.
Keli, hi to you as well.
Let's start with this if we could. There was news certainly over the weekend on the political front regarding Governor Bill Richardson and how he endorsed Barack Obama. In fact, let's listen to a moment that he shared with us on AMERICAN MORNING earlier today.
(BEGIN VIDEO CLIP)
GOV. BILL RICHARDSON (D), NEW MEXICO: There's something out there that he has that attracted me to endorse him. And you know, you've got to put these personal ties aside, what is best for the country, who can bring this country together. That's why I made that decision.
(END VIDEO CLIP)
COLLINS: But then you have somebody like James Carville who compared Richardson to Judas, you know, as a total traitor. How significant is this endorsement and what kind of a blow is this really to the Clinton campaign.
Keli, I'll start with you.
KELI GOFF, POLITICAL STRATEGIST: First of all, I don't want to get in any trouble so I started my career off as an intern on her campaign and that is how my career in politics had start out. So, I have, you know, a lot of ties and friends on that side. But what I would say is, look, I think this is actually one of those things where it's less about the tangible impact on the ground.
I don't think Bill Richardson is going to save Pennsylvania for Obama but look, it does say something that here's a man he knows the Clinton a lot better than a lot of other elected officials out there, who said in his endorsement speech that he has great affection for them and yet he thinks Obama is such a great candidate that he still went with him. So, I think that that's actually -- it's more about shipping the media narrative of the story and also Obama had been struggling this week. So, it's significant that he ended on a high note.
COLLINS: Joe, is this also possibly about fast forwarding to November and Richardson along with other people jumping on Obama's camp because maybe they see him as a better candidate against John McCain.
HICKS: Well, it's true. I think that we are looking forward to November. It's clear that even in the polling though it's still very close, that in a heads up battle with John McCain, Obama comes out looking better now. So, I think a lot of folks are beginning to line up on that side.
It's clear -- the math indicates it's going to be very hard to dislodge Obama for the nomination, which means these delegates and superdelegates are going to be critical in terms of deciding this. And I think also Richardson's right, if these folks beat each other up going into November, John McCain's got to be sitting back rubbing his hands, licking his lips going, this is great for me.
COLLINS: Yes, he stayed out of the fodder at least so far. But, thinking of Bill Clinton who is still talking about some things, and some people would say stirred up a little bit of controversy with this comment, and we'll put it on the screen.
He said this, I think it would be a great thing if we had an election year where you had two people who loved this country and were devoted to the interest of this country and people could actually ask themselves who is right on these issues instead of all this other stuff that always seems to intrude itself on our politics. Is he taking sort of a potshot at Barack Obama's patriotism here, Keli?
GOFF: You know, honestly, who knows at this point, Heidi? It's one of those things where -- I've been writing a lot about what he said, she said, who said, along this campaign. And at this point, it sort of starting to resemble reading pee wees, where it's sort of hard to know who is taking a potshot where.
I will say this much that Bill Clinton is probably one of the greatest political masterminds of modern politics. So usually, when he says something it's pretty smart, it's pretty calculated. So, I would have a hard time believing that this is a total accident. Do we know that for a fact? Absolutely not.
COLLINS: Joe, maybe he was just trying to be nice and trying to sort of maybe bring about this idea of the dream ticket, both of them love America, running together? Yes?
HICKS: No, I think Bill Clinton has become a liability for his wife. This man's been saying some pretty embarrassing kinds of things here. I don't get he's such a political mastermind that he's been a liability. This is a guy that's raised the race issue more than almost anybody else outside of Reverend Jeremiah Wright in this entire campaign.
So, I think as much as the Clinton camp has tried to put a muzzle on this guy he keeps putting his foot in his mouth. So I think he's going to be a problem for this camp, for the Clinton campaign if they can't contain this guy and find something productive for him to say and do.
COLLINS: All right, Joe -- go ahead, Keli.
GOFF: I was going to say this, Heidi. The other thing I would say on top of that, that Joe's completely right. I think that the problem is when you have sort of the Carville comment in tandem with Bill Clinton's comments, it re-enforces this image of the Clintons as sort of being vindictive and being poor sports. That's a problem for them. That's a real problem.
COLLINS: Joe, let's talk about John McCain for a minute because you bring up the idea that he's kind of been in his own little camp. He's not arguing with anybody right now at least. He did just return from the Mideast a congressional delegation there. Seems like he fell off the radar just a little bit. But it could be a good thing, yes?
HICKS: Well, I don't think it's necessarily a good thing. If folks don't see this guy a lot and know he's active and saying and doing things, and he's on the radar screen here, the guy is going to have some difficulty. I think his problem as Obama and Hillary sort of battle each other going into November, while it's a negative for them, his problem is to be seen and heard and people kind of remember who this guy is.
GOFF: I'm going to --
HICKS: I'm sorry?
GOFF: Sorry. I was just going to respectfully disagree. I didn't mean to interrupt, Joe.
HICKS: That's OK. Go ahead, Keli.
GOFF: I was just going to respectfully disagree, because I think -- there's a saying that all press is good press. But I think what we're seeing with Obama and Clinton that that's not necessarily true. I think that the best thing for John McCain right now for him to be right where he is, which is out of the spotlight watching his opponents sort of kill each other off while he can happily fund raise in private which is what he needs to be doing because he's still lagging behind Democrats in terms of money.
COLLINS: Joe, go ahead.
HICKS: Still, you've got to become a figure that people see consistently. So, I think he's doing some of the right things, he travels in the Middle East, he's looking presidential. But still, if all we hear, I think sometimes even though it's negative, if they're seeing you and they hear all this back and forth between Hillary and Obama, it maintains their presence in the minds of voters.
And I think John McCain's got to figure out a way to maintain that visibility, so clearly going into November he'll find a way to do that, I'm sure -- I hope
COLLINS: I think when you say looking presidential a lot of people at home are going to say well then we want to hear about the economy. And first person to be doing that, talking about the economy at least that we have seen is going to be Hillary Clinton, apparently any moment now talking about the economy today because McCain as we just said, Barack Obama has been talking about race.
So will she be seen as person who actually jumps out ahead on the economy, Keli?
GOFF: She could. That's a strong suit for her. We've seen across throughout the primaries that in states in which she's -- the economy is not doing well. It's like Ohio, she does very, very well because voters voting on issues like that tend to look sort of more tactically at which person they think will enact a policy.
They're less likely to think about over-reaching some of these sort of lofty ideas like inspiration and hope, and all this of short of things that -- and charisma that has helped Obama. I think that that does lend itself as a benefit to her. But again, just really quickly on McCain, he had a bad week in the Mideast last week. He made a couple of gaffes.
And yet, the reason no one noticed is because he was out of the spotlight. If he sort of been more prominent this could have really been a bit uglier for him.
COLLINS: All right, Joe. What does Hillary Rodham Clinton have to say about the economy today to really score some points, if you will?
HICKS: Well, she's maintained all along that she's going to be the best candidate on the economy. John McCain's got to make some points here. This is a guy who isn't particularly strong here. But, on the other hand, I think it's clear that Barack Obama is not going to be very far behind.
I think, if Barack Obama is smart, what he's going to do is take this report that just came out about what she was doing inside the White House, what appears to be doing a lot of very First Lady kinds of things, presiding over teas -- standing looking nice, going along with Bill and visiting with other first ladies in other countries.
If Barack Obama is smart he'll say, wait a minute, you were not on top of any kind of critical kinds of things here. You were simply doing the kind of duties that most First Ladies do. She may make her speech, I think Barack Obama will be right on this as well as she will be. So I don't think she gains much out of her speech today.
COLLINS: All right. Well, guys, that's all we have time for today. We appreciate your insights though as we move forward to the next contest, April 22 there in Pennsylvania.
Keli Goff and Joe Hicks, thanks again.
HARRIS: The Iraq War, the U.S. death toll reaches a grim milestone, 4,000 America forces have now died in the war. That threshold was reached when four U.S. soldiers died in a roadside bombing yesterday in Baghdad. You'll remember the war marked its fifth anniversary a few days ago.
Talking about troop withdrawals, important testimony on Iraq coming up. But one leading commander will be left off the witness list.
Here's CNN Pentagon Correspondent Barbara Starr.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Officially the Pentagon says it doesn't want the head of central command Admiral William Fallon testifying before Congress about troop reductions in Iraq, because Fallon will be retiring at the end of March, and will have been out of office for several days when Iraq hearings happen in early April.
GEOFF MORRELL, PENTAGON SPOKESMAN: Well, that's certainly one of the reasons. The other reason is that this system worked quite well last time.
STARR: The Pentagon system, have General David Petraeus, the most visible military symbol of success in Iraq be the only officer testifying as he did in September. Petraeus openly admits past tensions with Fallon who is his boss.
GEN. DAVID PETRAEUS, CMDR. U.S. FORCES IN IRAQ: There was friction in the beginning. He has different job than I have.
STARR: Petraeus will tell Congress he wants a pause in further troop withdrawals starting in July when the last of the surge troops come home. Fallon, whose command includes Middle East and central Asia is known to favor a faster withdrawal, so there are rested and ready troops for the future. Last month in Iraq, Fallon told CNN there needs to be more focus on Iraqi forces.
ADM. WILLIAM FALLON, U.S. CENTRAL COMMANDER: Figure out how we're going to continue the transition to the Iraqis, make sure they're capable, confident and ready to take this over.
STARR: Fallon resigned under a political cloud of innuendo that he was less willing to go to war against Iran than administration hard liners, a point Pentagon spokesman Geoff Morrell tried to avoid.
MORRELL: My answer is not going to change no matter how many times we ask this question. The system worked well last time. We're going to make sure it works just as well this time.
STARR: Why not let Admiral Fallon testify alongside General Petraeus? Well, it's a political headache and a level of candor the Pentagon may want to avoid. Still, Admiral Fallon may appear on Capitol Hill in the weeks ahead. Many in Congress are indicating they still want to hear from him. Barbara Starr, CNN, the Pentagon.
(END VIDEOTAPE)
COLLINS: Iraq, one of the issues that people are concerned about with the presidential election. The economy certainly another. As we see Senator Hillary Rodham Clinton's speech beginning, called Solutions for the American Economy.
Let's go ahead and listen for a moment here.
SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: Thank you. Thank you. It's great to be back here at Penn and in Philadelphia. I remember giving the commencement address here some years ago, and I always had that image of the beauty of this campus, and of course, its extraordinary reputation. And, I'm delighted to have a chance to be here with you to talk about an issue that is critical, not only to Pennsylvania, but to our country.
I want to thank Congresswoman Schwartz, she and I will be together later this afternoon, and I'm looking forward to that very much. Mayor Nutter, I have heard the governor say that you could be the second best mayor in Philadelphia history. I know you're aiming for first, so keep it up. You're doing a great job. And Governor Rendell, who has been so visionary and strategic in his leadership, first of Philadelphia, then of course, of Pennsylvania. And what he just said about how he and his administration responded to the first signs of trouble from the mortgage market is just typical of Ed Rendell. He really is someone who is always looking to solve problems and that's why he's been so successful and why I'm so grateful for his support.
You know I want to take a moment to note yesterday's heartbreaking news that five years after the start of the war there have now been 4,000 U.S. military deaths in Iraq. Tens of thousands of our brave men and women have also suffered serious wounds, both visible and invisible, to their bodies, their minds and their hearts. As president I intend to honor their extraordinary service and the sacrifice of them and their families by ending this war and bringing them home as quickly and responsibly as possible.
(APPLAUSE)
You know as the headlines of the past months have made clear, we are experiencing a crisis of confidence in our country. We have a crisis of confidence in our leadership, with respect to Iraq, and we have a crisis of confidence in our economy.
What started out as a subprime mortgage crisis has now become a national credit crisis, rippling out from banks and boardrooms to businesses and living rooms across America. We've had three straight months of private sector job losses. Consumer confidence is down and falling. The dollar has hit record lows and gas prices, record highs. And last week the Federal Reserve took unprecedented measures to rescue Wall Street, the likes of which we haven't seen since the Great Depression.
These are not just red we flags or warning signs; they are indisputable indicators that our economy is in serious trouble. And now we face an urgent question: How do we keep today's turmoil from spiraling into a long and painful recession?
This is no easy task. The 21st century American economy is more complex and more interconnected with the global economy than ever before. It is shaped each day by billions and billions of individual transactions and interactions on every continent, subject to crisis or even just speculation, in one country can move markets in dozens of others with the blink of an eye or the flick of a mouse.
In today's economy, trouble that starts on Wall Street often ends up on Main Street, sometimes within minutes, sometimes over the course of months or even years. When there's a run on mortgage-backed securities and the bottom falls out for investment banks, the bottom falls out for families who see the value of their homes, their greatest source of wealth, decline.
When our credit markets freeze up, that doesn't just cause panic on our trading floors, but in small businesses that can't get the capital they need to survive and on college campuses like this one, when the student loan for next semester falls through. When we continue to persist in brain dead energy policy as confidence in our currency erodes, that means gas prices so high you feel like it costs more to commute to work than you make when you get there.
It means rising food prices that strain household budgets. It means having less left over for savings or ever dipping into savings to make ends meet. It means more challenges for the mayor, because property tax revenues drop, businesses don't have the same ability to make that profit that benefits the city. It means more problems for the governor who has to look across a complex state economy trying to figure out how to keep what has been a remarkable string of real budget balances and surpluses.
It causes problems for our country. Ultimately, the true currency of today's American economy is confidence. When people lose confidence in the economy and our president's ability to manage it, problems become crises and crises lead to more crises.
So we need a president who can restore our confidence, a president who is ready to confront complex economic problems with comprehensive solutions, a president who will act at the first signs of trouble. Working with experts to identify the problem, with agencies to adapt regulations, with Congress to pass necessary legislation, working to prevent crises rather than just reacting too little too late. We need a president who is ready on day one to be commander-in-chief of our economy.
If you give me the chance, I will be that president. I will start by facing our economic situation as it is, not as we wish it would be. That means acknowledging that our economic crisis is, at its core, a housing crisis, a crisis caused in part by unscrupulous mortgage lenders and brokers and unregulated transactions in mortgage- backed securities, in part by speculators who were buying multiple houses to sell for a quick buck and other buyers who didn't act responsibly and in part by a president and administration who failed to anticipate and continue to downplay the problems we face.
Unlike what happened here in Pennsylvania, when Governor Rendell started seeing problems -- and I remember those articles we had in the newspaper, governor, where the housing supply was being, you know, expanded and people were putting zero money down and they were trying to once again get the American dream; they were commuting sometimes two hours to be able to afford that house. Well, those warning signals went unheeded in Washington. But thankfully, not in Harrisburg.
And what we have to do now is to look at our housing crisis in greater detail. And I'd like to outline my plans to address it -- 2.2 million foreclosure notices went out last year, up 75 percent from 2006. Communities of color have been especially hard hit. Subprime loans are five times more common in predominantly African-American neighborhoods than predominantly white ones. And 41 percent of loans to Hispanics are subprime, compared to only 22 percent to whites.
But this crisis isn't just about the more than two million households at risk of losing their homes and, of course, 2.2 million foreclosure notices means many more people than that, because obviously you have homes where anywhere from two to ten people live. It's about the tens of millions of families who have lost value in their homes.
When I talk about the home foreclosure crisis, sometimes people, I can tell, look at me a little skeptically because they -- I can tell they're thinking to themselves, I didn't buy one of those mortgages, I don't have an A.R.M., I'm not at risk. But, in fact, that is just not the case.
Home prices dropped almost nine percent last quarter. Home prices for everyone. If you have paid off your home, if you have a fixed rate mortgage with a manageable interest rate, you have suffered the steepest decline on record. That means families have lost at least $1.9 trillion in housing wealth so far, nearly two-thirds of the size of the entire United States government budget.
And today, nearly nine million families are struggling with mortgages that are under water. They actually owe more for their mortgages than their homes are worth. So what was once their biggest financial asset is now a financial liability.
The housing crisis is also a crisis for our cities, our towns and our neighborhoods. At least 41 million homes will lose value because of foreclosures in their neighborhoods, including 1.7 million homes right here in Pennsylvania. Abandoned homes and boarded up neighborhoods mean higher crime rates, lower property values and plummeting tax receipts for cities and towns across America.
Now a year ago in March 2007, I called for immediate action to address abuses in the subprime market, and I laid out detailed, concrete proposals for how to do so. I warned this administration that the problems in subprime mortgages would soon spill over into regular mortgages. The response from our president -- well his treasury secretary told Congress that the problem was, "contained." And the president himself assured us there would be a, "soft landing" for the housing market. The housing crisis soon spread from subprime to traditional mortgages.
And in August of last year, I warned the administration that the housing mortgage crisis would soon ripple out throughout the entire economy. Again, I called for immediate action and laid out concrete proposals to prevent foreclosures and help states hard hit by this crisis.
I also called for tighter regulation of the housing market, starting with unscrupulous mortgage brokers who were taking advantage of our families. I would require mortgage brokers to disclose right up front that they've paid -- they're paid based on the size of the mortgage they sell, to put buyers on notice. I would work with states to develop strong, meaningful broker licensing standards to screen brokers and govern their conduct and I would require all brokers to register with the federal government so that home buyers can do their own background checks to ensure they're dealing with someone who will deal fairly with them.
I also called for greater regulation of mortgage lenders. I would eliminate the prepayment penalties that lead to such high rates of default. I would require lenders to take into account the borrower's ability to pay property taxes and insurance fees when deciding whether to make a loan in the first place. Too many lenders haven't made that part of the calculation and too many families don't know that they need to budget for these expenses.
In October I proposed legislation, the Foreclosure Rescue Fraud Act, that imposed new criminal penalties on lenders who were taking advantage of people, offering foreclosure rescue schemes that lure families in, take their money and do nothing to help them. I've also proposed that we amend the bankruptcy code to give judges the discretion to write down the value of struggling families homes.
Believe it or not, bankruptcy judges can write down the value of many other things to help families pay off their debt, but not their homes. They can write off the value or write down the value of second homes, which seems kind of ironic to me. Making this amendment to the code will help families in bankruptcy pay off their mortgages and stay in their homes.
Now, the response to all of this from the administration -- well, they continued their wait and don't see approach, largely ignoring the mounting problems. By December of last year the mortgage crisis had become a national credit crisis.
So I went to New York City and I told Wall Street they needed to do their part to address this crisis. I put forward an aggressive plan for a 90-day moratorium on all subprime foreclosures and a voluntary five-year freeze on interest rates for all subprime mortgages. The response from this administration -- a plan that let banks off the hook and left homeowners to fend for themselves. And the words of one expert, the president's plan was, the bank lobby's dream.
This administration's top economic priority, it seems, has been to lavish roughly $400 billion in tax cut on the wealthiest one percent of Americans while families have lost nearly five times that in the value of their homes. Last week when it became clear Wall Street was on the brink of a financial melt down, the Fed and the administration sprang into action.
The Fed extended a $30 billion lifeline to prevent Bear Stearns from imploding and took unprecedented action to provide tens of billions of dollars in credit for other struggling investment banks as well. Homeowners, on the other hand, have received next to no assistance.
Well, let's be clear. When families are losing their homes, that's also a financial --
COLLINS: Senator Hillary Rodham Clinton in Philadelphia, Pennsylvania, this morning. She's calling it "solutions for the American economy," talking mostly about the subprime mortgage crisis and many other issues surrounding the -- what do we call it, crazy economy right now? A lot of people calling it that anyway. We'll be hearing a lot more about the economy, specifically right here on CNN because our money team has you covered, whether it's jobs, debt, housing, or savings. You can join us for a special report. We did it last week, very successful. Want to do it again this week, called "ISSUE #1: THE ECONOMY," all this week coming your way noon Eastern, only on CNN.
HARRIS: Now let's get to Susan Lisovicz now on the floor of the New York Stock Exchange.
And Susan, I know you were paying attention to the speech there from Hillary Clinton. And I'm wondering if you heard anything in what the Senator either was saying in that speech, or has said in the past, that might provide some real relief for people particularly going through this -- the foreclosure crisis in the country right now?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know, Tony, obviously to make some changes in the mortgage market is a popular refrain right now. Let's face it.
HARRIS: Sure. Sure.
LISOVICZ: But I'm not sure that anything that she just outlined would help all of those people that are struggling right now to hang on to their homes. I mean, she talked about tighter regulations for the mortgage market, screening brokers, having background checks, taking into account the borrower's ability to pay property taxes, things like that. She did also call for amending the bankruptcy code and giving judges more latitude to writedown the amount that the borrowers have to repay.
HARRIS: Yes.
LISOVICZ: But I'm not sure that there's anything that would offer immediate relief, and that is a shame. But I will say that what the Senator was talking about, the economic crisis that at its core is a housing crisis, we have some fresh new numbers to consider, and in some ways they're startling.
We got existing home sales, Tony, at the top of the hour. That is the broadest part of the housing market. And existing home sales jumped nearly three percent in February. I'm going to repeat that.
HARRIS: Whoa!
LISOVICZ: Existing home sales, which were expected to decline, actually rose nearly three percent.
HARRIS: I didn't even know how to take that good news. I'm so used to being on my heels with this.
LISOVICZ: It is startling -- from January to February. Now, of course, you know, nobody is saying that the worst is over.
HARRIS: Right. LISOVICZ: When you compare February to the previous February, sales are down 24 percent. And housing prices, which is something that the Senator was talking about, are down eight percent. What the National Association of Realtors says is, everybody's expecting relief in the second half of the year. This is a good sign. We need to see more consistent signs for people to really start doing cartwheels on the trading floor.
HARRIS: Well there she is, Susan Lisovicz on the floor. Hey, great to have you back and with great news to get us started. All right, Susan, see you next hour.
LISOVICZ: Thank you, Tony.
COLLINS: The U.S. death toll in Iraq reaches a grim milestone. And Washington gravels with tough decisions ahead. The very latest from Baghdad in the NEWSROOM.
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