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Issue Number One

President Bush on Iraq; Senator McCain on Housing; Passenger Bill of Rights; Crash Test Results; Answering Your Questions; Buyer's Market

Aired April 10, 2008 - 12:00   ET

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

CHAD MYERS, AMS METEOROLOGIST: Hi everyone. I'm Chad Myers.
It's going to be a severe weather day here all the way from the Carolinas tomorrow and eastward and westward and all the way even into St. Louis today and back down into Arkansas. We have a tornado warning south of Little Rock. Not including Little Rock, Arkansas yet but we'll keep watching it for you. It's a severe weather today. Rotation is already taking place in the heat of the day. That rotation could get stronger.

ALI VELSHI, CNN HOST: Iraq, the economy, presidential election. Three separate stories all tied together. American Airlines cancels even more flights. Don't get stuck at the airport. We'll show you which cars failed the crash test. ISSUE #1 starts right now. All right.

Welcome to ISSUE #1. I'm Ali Velshi. Gerri Willis will be next up on the economy.

We begin with Iraq. Some have questioned the war and affects on the U.S. economy. In the past hour, President Bush has spoken on the war. He's largely backed General David Petraeus' recommendations on what to do on the Iraq.

CNN White House correspondent Elaine Quijano live at the White House after this speech -- Elaine?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well Ali, as expected, President Bush did sign off on the recommendation of General David Petraeus, the top U.S. commander in Iraq, a 45-day pause the word Bush takes exception to and a drawdown period. Now, that means. That means some 140,000 U.S. troops will remain in Iraq.

Now, this morning, President Bush had breakfast with General Petraeus, along with the top diplomat in Iraq, Ambassador Ryan Crocker, this coming on the heels of the congressional testimony this week.

The president also announced this morning he's dispatching both of them to Saudi Arabia to help with the situation in Iraq. Now, the president as well announced his decision to reduce combat tours of duty in Iraq from 15 months to 12 months that for troops deploying to Iraq starting August 1st. The president addressing troops directly and the incredible strain acknowledging it on them and their families.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You performed with incredible skill under demanding circumstances. The turn around you've made possible in Iraq is a brilliant achievement in American history. While this war is difficult, it is not endless.

And we expect that as conditions on the ground continue to improve. They will permit us to continue the policy on the return on success. The day will come when Iraq is a capable partner of the United States. The day will come when Iraq's a stable democracy that helps fight our common enemies and promote our common interests in the Middle East.

(END VIDEO CLIP)

QUIJANO: And president there at a time when many Americans are concerned about the economy trying to make the case as well, that the war in Iraq is worth fighting and is worth the cost both in lives and sacrifices as well as money. Saying it pales in the cost to the U.S. people. Iraq remains a convergence point he calls it of two great threats of the 21 century al Qaeda and Iran.

VELSHI: Thanks very much. You're right the concerns are life and sacrifices and money. How does it tie into this year's elections?

Let's go to senior correspondent Bill Schneider live at the CNN election express in Philadelphia.

Bill, much of the opposition to the Iraq war really in the last week or so is being fought on a new front, the economy.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: That's exactly right. The president even made reference to that today in his speech, when he said something hasn't been talking about much before, the costs of the war. He said are the costs too high for this war? Not relative to other conflicts.

He said the Cold War, budget defense is 13 percent of the budget, during the Reagan era, was six percent, now just over four percent. He called that a modest fraction of our wealth. At the same time, the president was perfectly aware, two-thirds of Americans in a recent poll by the U.S. Times and CBS News, two-thirds of Americans said the war in Iraq contributed a lot to our economic problems here at home. The president seemed strongly ware of that.

VELSHI: Bill, one of the interesting things here, it's always tough for people responding to a poll question to try to make some comparison to the dangers in the war in Iraq and affect it has on our safety and troops versus what voters are concerned about the economy. How is the opposition to Iraq actually, Bill, hold that thought for a second.

Nancy Pelosi, House Speaker, and Senator Harry Reid are responding to President Bush's comments on the war.

Let's listen in to them on Capitol Hill. (JOINED IN PROGRESS)

SEN. HARRY REID (D), MAJORITY LEADER: Then we'll hear from Bobby Moore, president of veteran's for America, somebody who is involved in American politics since he got home from Vietnam.

This week's hearings gave the Bush administration a chance to answer two very important questions. Has the war made us any safer? Are our troops any closer to coming home? On both counts, after the hearings, the answer is no.

We're in the sixth year of this war. Our troops remain in this endless, endless, civil war. Our military is badly strained. And that's an understatement. We are unable to respond to threats around the world.

Further, American taxpayers are paying $5,000 a second for this war, $5,000 a second, 24 hours a day, seven days a week, every, every week of the month. No holidays, no weekends. $5,000 a second, 12 billion dollar a month.

Today's announcement by the president can only be described as one step forward, and two back. After a year, the administration is finally heading the call of congressional Democrats.

Let's limit the time that our troops serve in Iraq, to the same time they serve at home. They've defeated us on this. We've offered amendments. The president and Republican economists have turned us down. If the president is genuine about providing the troops with rest, recuperation and training they need, then I call on him, his allies in congress, to allow us to codify this, make it the law of this country.

We're going to have a vote in the senate on time. It's important that people stand up, not for something vague and abstract, but something that is black and white. If you're in Iraq or Afghanistan for 12 months, then you have to be home at least 12 months.

The president still doesn't understand that America's limited resources cannot support this endless war that he's gotten us involved in. His announcement, while some look to as a great victory, is, I say, two steps backwards, and one step forward. After the troops in this time that Petraeus said will be called home, July it will end.

We will have more troops in Iraq than before the surge started. 8,000 to 10,000 more troops than before the surge started. This is not a so-called troop withdrawal pause, but today's announcement, the president signaled to the American people that he has no intention of bringing home any more troops.

Instead, he's leaving all of the tough decisions to the only person that is going to have to make those tough decisions, the next president of the United States. The president has a time line. January 20th of next year. Our troops also need a timeline.

Madam speaker? REP. NANCY PELOSI (D), HOUSE SPEAKER: Thank you very much, Mr. Leader.

I want to join the leader in welcoming our special guests today, our friends from the veteran's community, Bobby Muller, who we've all worked with over the years, whether eliminating land mines, speaking out for veterans, thank you Bobby for your leadership.

John Salts, who is courageous in his statements of the shining light on troops and what is happening in Iraq. We're also joined by Miguel Sapp and Brian McGive who are Iraq vets. I want to say to them how much we all appreciate their courage, patriotism and sacrifice they were willing to make for our country.

In the military there's a saying, when in batting, we don't leave any soldiers behind on the battlefield, we in congress have said to our veterans, and when you come home, you will not be forgotten. That's why I was very proud to join Leader Reid in joining the biggest increase in the 77 year history of the veteran's administration. That is how we honor our troops. That is how we support our troops.

The leader asked two questions. Are we safer and when are we going to bring the troops home? I would like to elaborate on them. When we know that the real war on terror is in Afghanistan, how can we have that real effort with a sustained effort in Iraq continuing?

And are we -- when are we going to bring the troops home? This is a question we have been asking the president over and over again. I posed it in a letter to him this week, when I said, Mr. President, in your speech, I want you to tell us, what are the conditions that would make the redeployment of our troops out of Iraq possible?

What is the impact of this war on the readiness of our military, which our military leaders have rated as unacceptable? We need better answers for the -- from the president. Certainly, he sent General Petraeus and Ambassador Crocker to the congress. We respect them for their service to our country. But we need answers from the commander in chief. We need real answers from the commander in chief, from the president of the United States.

Leader Harry Reid is correct, over and over again, from the president's desk, what is really the law, the guidelines from the department of defense, that the dwell time in deployment should not exceed the dwell time at home and that should not exceed 15 months, and that's a lot to begin with.

I know others will address that issue. But I think it should not be lost on anyone, that this suction the president is making now, is long overdue and something that Republicans in congress and president of the United States have rejected over and over again.

The cost of this war is huge, over 4,017 in the last few days of our troops lost. Tens of thousands of them injured, many of them, thousands of them permanently. Our reputation in the world has been severely damaged. The cost in taxpayer dollars has been astronomical. Another question we have for the president is when are the Iraqis going to use some of their budget surplus for their own reconstruction, instead of continuing not to take us deeper into debt to pay for that reconstruction. The president has taken us into a failed war, he's taken us deeply into debt, and he's taking that debt is taking us into recession.

We need some answers for the president. And that's why we want the president to manage this war better, and answer the questions to the American people, and again, I agree with Leader Reid. He is just dragging this out so he can put it at the doorstep of the new president of the United States.

And may I add, if he doesn't change his economic policy, he will be leaving a failed war policy and a failed economy at the doorstep of that new president. Today we've been joined from some of America's brave veterans. They agree the administration cannot wait for the next ...

VELSHI: All right. That's House Speaker Nancy Pelosi on Capitol Hill along with senate Majority Leader Harry Reid commenting about the discussion on the war today.

I want to bring our senior political analyst Bill Schneider back in. He's in Philadelphia at the CNN Express in Washington.

Bill, very interesting comments, Nancy Pelosi saying this administration led us into a failed war, deeply into debt. He said he'll be leaving a failed war policy and failed economy at the feet of the next president. Senator Reid saying America's limited resources can't sustain this war. A real attack that was reflected that the opposition to the Iraq war has been trying to tie the voter's concerns about the economy into the war, Bill.

SCHNEIDER: That's exactly right. The speaker's comments just now, she accused the president specifically of not coming up with an end game, not talking about when we'll get out of Iraq, because he's going to leave all of the tough decisions for the next president, that he's running away from those tough decisions, a very serious accusation against this president.

VELSHI: Obviously, Bill, these two are trying to come together. Senator John McCain trying to bring them together talking about the economy, and Iraq. But if you noticed that those two are converging now. People are tying the two together. They're not afraid to keep them as separate issues.

SCHNEIDER: No, they're not separate issues. People are comfortably aware that the United States is in recession, that there are record high budget deficits that this war has cost the United States $600 billion, billion, over the last five years. And every American who drives a car is facing record gas prices. They're also reading and hearing stories about the budget surpluses in Iraq, about the gas prices adding to their revenues which they are not spending on their own reconstruction. Americans are getting very upset and angry about this, wondering when is Iraq going to pay for its own reconstruction, instead of leaving the burden to the United States which most Americans feel despite the claim otherwise, most Americans feel is a very heavy tax on our resources.

VELSHI: And as Bill says, the gas average reaching $3.36 that's a national average and that's a record. Bill, our senior political analyst, thanks so much -- Gerri.

GERRI WILLIS, CNN HOST: Senator John McCain attacks ISSUE #1. We'll tell you what he says before he says it.

Plus as nearly another thousand flights are canceled, what are your rights as a passenger? Answers to your questions are coming right up.

(COMMERCIAL BREAK)

WILLIS: Welcome back to ISSUE #1.

We have some breaking weather news for you. For that we're going to Chad Myers in the Weather Center -- Chad?

MYERS: All right, Gerri. This is for Little Rock Proper, a new tornado warning for you. The bulk, the mass of rotation will be south and east of Little Rock. It could turn left and could turn right at any time. What you're looking at now is video out of KWTV. Logan County, Oklahoma, from what happened last night. Rivers out of their banks in Oklahoma, especially in southeastern, Oklahoma, around McAllister and the like, which is not far from this map right here.

It goes right through Little Rock, kind of through Lonoke, Wrightsville and Jacksonville. You are hearing the tornado sirens. There it is right there. The tornado impact at about a three, which means the storm could be on the ground. If you like to see a 5 or 6 before you know it's on the ground. Just so you know, there's enough rotation in this storm to put a tornado down at any time especially south and east of Little Rock.

We'll keep you advised.

VELSHI: We have more breaking news. The Senate just passed a major housing bill that we've been telling you about by a vote of 84 to 12. The housing stimulus bill includes grants for refurbishing foreclosed homes and tax breaks for home builders and individuals who buy foreclosed homes.

Despite the overwhelming majority vote, 84 to 12, the bill faces tough opposition in the house. Leaders say it helps businesses more than people losing their homes. The White House also says it opposes the plans. There are other plans in the work.

WILLIS: Senator Jim Bunning of Kentucky voted against the bill, good to see you.

SEN. JIM BUNNING (R), KENTUCKY: Good to see you.

WILLIS: I want you to describe why you are opposed to this bill?

BUNNING: It does nothing for the homeowner. It bails out the home builders. It bails out the banks. It doesn't encourages foreclosures. It doesn't do the things that it is set out to do. You know, we are spending $22 billion, and we never get to the people that we're supposed to get to. If we take care of home builders, realtors, mortgage brokers, everybody except the people in the foreclosed houses.

WILLIS: All right. Well, Senator, whose obligation is it to step in and clean up this mess? Does the government have a role? Does it have no role?

BUNNING: Absolutely has a role.

WILLIS: What is it?

BUNNING: We didn't do our homework. We didn't -- by that, I mean, we didn't do the oversight to prevent us from getting in this housing bubble. The Fed didn't do their job watching the banks and watching the mortgage brokers. And then they didn't do their job watching also the collateralization of these loans, into packages. And the selling of those loans, on the stock exchange as triple A rated credit.

WILLIS: But Senator, if I could, the horse is out of the barn. What do we do now?

BUNNING: Now we have to do something with the Federal Housing Administration. And work out those people that can actually work and live in that house, and eventually pay for it. Mark down the house to what the value is. Don't penalize the attendant for being in the house because of its lowered value, and then see if we can re- capitalize or re-mortgage at a lower rate, and allow the people to stay in. Otherwise, let them stay in for a certain amount of time and rent the property.

WILLIS: Right. You know, let me ask you this. Under that scenario, which sounds a lot like sort of both what the administration and Representative Barney Frank have been talking about, who takes the hair cut? Is it the lending industry that has to say, OK. This house isn't worth x, it's worth less than that. Who takes the haircut?

BUNNING: The housing industry is going to have to get it, they get it now and will continue to get it. But remember the banks are really partially responsible for this. And particularly those who misled people into borrowing over 100 percent of the equity that then was in the house.

WILLIS: All right. You know, you've been very critical of Alan Greenspan. If he had done something different as Federal Reserve chairman, what could he have done to have kept us out of this position today? BUNNING: Well, he wouldn't have been recommending ARMs and sophisticated mortgages to people who had no business being in them. And he would not have encouraged us to do that. And he did encourage us.

WILLIS: Right, right. Senator Jim Bunning, thanks for your hope today. We appreciate it.

BUNNING: I appreciate being on.

VELSHI: Tornado warning sirens are going off in Little Rock, Arkansas.

CNN's Cal Perry is in Little Rock where he's hearing those warnings. He's with us on the phone.

Cal, what do you know is happening there?

VOICE OF CAL PERRY, CNN CORRESPONDENT: We've been told from announcement systems here, not only loud speakers, but sirens. It's raining incredibly hard. We knew there was a dangerous cell heading for the metropolis. That's happening. They're taking people to hotels and putting them in the basement. As you said, warning signs going on across the city as people are trying to take cover.

VELSHI: Is there some organization of this, Cal? Are people being able to relocate? What is the scene like? People directed effectively into areas of safety?

PERRY: You know what, I've seen very little organization on the streets. I still see people driving around. They obviously hear the sirens but haven't gotten word that this is a very dangerous situation. Very little police presence. I haven't seen a single police officer this morning. We're walking around the downtown area.

The crew and I are taking cover now sort of under an overhang. It's raining incredibly hard. The hotels seem to be organized getting people down to the basement but there's very little organization on the streets itself.

VELSHI: You said there are sirens in the background. When you say public address systems, is that over loud speaker, on TV, on radio?

PERRY: We've seen it on local television. Obviously, on CNN, you can hear the lightning and sirens. It seems as though people getting their information through local public announcements. Through hotels or restaurants or whatever people want to be. We understand they're keeping people inside, telling them to stay in these restaurants and hotels and not go outside.

VELSHI: We're getting breaking news about sirens, tornado warnings in Little Rock, Arkansas. Let's bring in our severe weather expert, Chad Myers.

Chad, what do we have going on in Little Rock and that area? MYERS: Little Rock it's raining and maybe small hail. But I tell you what, south and southeast that's where the storm is really. There's a spinner right there. That spinner right there is the meso cyclone itself. That's the small low on the back side of the storm. There you go, raise it up a little bit. It's hard to see. This storm will go through Wrightsville and into Scott.

Little Rock is way up here. You're getting the hail core or the rain core here. There could be some small hail in it. The spin is offset from that hail core. So it will travel from the south to southeast of Little Rock. Right here, across the interstate and back to the north. Not that there's not going to be more for Little Rock later on today. But for now I think the city proper is in the clear. It's the southeastern suburbs that need to take cover immediately with this storm.

VELSHI: Something that I heard you say that's important that Cal has been mentioning in the past. Some of us are under the impression tornadoes avoid urban cities outside of tornado allies. That's not necessarily true.

MYERS: That's not true at all. Go to Google Maps. Look at the aerial map of Oklahoma or Texas. There's a lot more land to miss cities than cities to get hit. There's probably a thousand more square miles of country than there is a thousand more square miles of city. You have to under if there's a thousand tornadoes, most of them, 999 will hit the rural areas.

One will hit. There's no guarantee. It's just a lottery. There's no such thing as global city bubble or something like that we call it. We talk about that in Dallas. People for a while, the myth thought there was a bubble over the city. There absolutely is not.

VELSHI: Severe weather expert Chad Myers, he's on this story. Cal Perry is in Little Rock. We'll continue to cover the story. Thanks to both of you.

WILLIS: Senator John McCain tackles ISSUE #1 on the economy. We'll tell you what he says before he says it.

Plus, as nearly a thousand flights are canceled, learn your rights. Send us an e-mail at issue1@CNN.com. Answers to your questions coming up.

(COMMERCIAL BREAK)

VELSHI: All right. Welcome back to ISSUE #1.

Senator John McCain has put his main focus on foreign policy lately. Not the issue that many Americans believe is most important -- the economy. But that could be changing starting today. CNN's Dana Bash, part of the best political team in television, is here with more.

A number of developments. We are expecting to hear from John McCain probably within the next 15 minutes or so and there's been this bill passed in the Senate overwhelmingly, this housing stimulus bill.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: That's right. And let's start with what he's doing here. I'm in New York. He's in New York because he's on the campaign trail. And what he's trying to do today is really try, in the words of one of his senior economic advisers today, put more meat on the bones. They understand, inside the McCain campaign, that in a way they gave the Democrats an opening to really pounce on him, saying that he doesn't have a real proposal for dealing with the housing crisis because he, a couple of weeks ago, just outlined his broad principles.

So today he is going to give at least one proposal for dealing with housing. And he calls it a very targeted effort. And the way he describes it in the speech he'll give is, it's to trade a burdensome mortgage for a manageable loan.

And I'll read you an excerpt from the speech that he's going to give right now. He's going to say, "there is nothing more important than keeping alive the American dream to own your home, and priority number one is to keep well meaning, deserving home owner who are facing foreclosure in their homes."

So, in general terms, what this proposal is, is he's going to say, if people who are out there, they need help, they can come in and apply for assistance and actually to get a new mortgage that is affordable. And there are two criteria that he's going to lay out. One is that the home has to be their primary residence and also that this has to be something that these borrowers actually can afford. And he's going to say it must be a 30-year mortgage and that people will have actually equity stake in their home. And then the new lender ...

VELSHI: That's a big thing. Part of his principles.

BASH: Absolutely.

VELSHI: He doesn't think -- feel that speculators should be rewarded for bad behavior and he doesn't feel that people should be able to buy houses without putting any equity down. Without putting anything down.

Now interesting is this bill that just passed, 84-12. That means 96 people voted. That means four senators didn't vote. Three of them were on the campaign trail.

BASH: Three of them were Hillary Clinton, Barack Obama and John McCain. Obviously, this massive piece of legislation that all members of Congress, not just saying (ph) the Senate, but they were working very hard on, none of these presidential candidates, obviously for whom this issue is huge for them in terms of their prospects, they weren't there to vote on it in their day job.

Now many of them, actually, are actually talking about the economy on the stump today. Including, obviously, as I was talking about John McCain. For McCain, I just actually talked to his press office. They said that they didn't -- he has not said whether or not he would vote for this particular bill. He has supported some of the general principles, but he hasn't even said whether he would vote for this.

But it is interesting, Ali, beyond the legislation in the Senate, what Senator McCain is trying to do today is to try to have kind of a message "I care" moment. And he's trying to -- really try to squash this idea that he doesn't connect and doesn't relate to these ...

VELSHI: The economy.

BASH: The economy and these voters, in particular, who are hurting. There's one line that really caught me from this speech he'll give. "I have a plan of action to get the American economy back on track." That is the key that he is trying to get across here.

VELSHI: We are eager to hear the plan of action. Thank you for telling us about it. Dana will be able to sort of interpreting some of that for us -- Gerri.

WILLIS: Coming up, did you have a flight canceled? Well, you can do something about it. You have rights. We'll tell you what they are next.

And learn which cars passed the test and, well, which ones got beat up in the latest crash results. ISSUE #1 rolls on after we check out your latest headlines.

(COMMERCIAL BREAK)

VELSHI: Well, you've told us that the economy is ISSUE #1. Inflation is a big problem. America's retailers have told us the same thing. In March, they've told us that you spent less. You didn't do the same thing that you did a year ago.

Let's take a look at the winners and losers in the same store sales. Sales at stores of America's retailers that have been open for more than a year. Look at the losses.

At Gap, 18 percent lower than a year ago. Kohl's, 15.5 percent. JCPenney saw 12 percent lower sales than a year ago. Even Nordstrom, the high-end is getting hit, 9 percent lower. Target taking a hit too. Saks, 2.9 percent.

Who's gaining? Well, America's retailers are telling us that people are sticking to the basics, the essentials. They're not buying the things that they don't need. Take a look. That makes sense. Look at Costco, a 3 percent gain. B.J.'s, a wholesaler, 2.6 percent. Even Wal-Mart, less than a percent, but it was up a little bit because people are looking for the bargains. It's a touch economy out there and America's retailers are telling us exactly what you are.

WILLIS: Bad news there.

No one wants to deal with it, but sometimes, you know, you don't have a choice. Canceled flights. American Airlines alone canceled more than a thousand flights just yesterday. It can be so frustrating. But you do have rights as a passenger. CNN's Jennifer Westhoven is here. She's going to tell us what they are.

Is it a long list or a short list?

JENNIFER WESTHOVEN, CNN CORRESPONDENT: It's a short list. I mean what we almost wanted to do was rights, I don't know, but here's what you can do, you know? One thing is, I think when you get to the airport, because I have a feeling there are probably a lot of people stuck at the airport right now, go to the ticket counter and ask about something called Rule 240. It sounds obscure, burn it in your brain if you can.

It's an old rule that actually lapsed with the regulations. So it's from the 1970s. It only works, though, if the airline caused a problem. So you can't use it if there's weather. But in cases like this, like American Airlines that we're seeing, it requires that you get the next open seat that's on another airline. Now it lapsed, so it's not a right, but some carriers put it in their contract. Some wording about it. So it's kind of a promise out there. It certainly never hurts you to ask.

Now what you can do before you get to the airport. One thing is consider trip insurance. I sometimes hate to say that because it's . . .

WILLIS: It's more money.

WESTHOVEN: Yes, it's an extra charge. Who wants that. But if you're taking your family to Disneyland, maybe you booked hotels and tickets, you want to salvage as must of this as you possibly can. And, you know, you've probably seen the pictures of people stuck in Hawaii.

If you don't want to risk that, there are airlines you may want to steer clear of if you're someone who's nervous about things like this. Frontier, Express Jet, Sun Country, even Alitalia. There have been reports that maybe you want to be a little bit cautious about these. And, of course, you'll want to double check if you're flying on an MD-80.

WILLIS: All right, well, Jen, it sounds like you're saying, hey, there are no rights really.

WESTHOVEN: I think that's the big concern here. Now this morning some Democrats said they want to revive the Passenger Bill of Rights because the bottom line seams like, you don't have any rights. You have a promise that the airline will make a reasonable effort. Reasonable as defined by the airline.

You know, you used to be able to get home if an airline went under. Others airlines were legally bound to honor those tickets of a failed airline, but Congress, two years ago, Republican lead, they trusted the airlines. They let that lapse and now we have these stories of people paying $900 or more to get out of Hawaii.

WILLIS: Wow. WESTHOVEN: Yes, when ATA and Aloha went under last week. So the new philosophy, clearly, since it's not legal anymore, is that it's not their loss, it's yours. It's your responsibility.

WILLIS: It's always on the consumer's shoulders.

WESTHOVEN: It's a lot harder.

WILLIS: Thank you for that report, Jennifer Westhoven.

VELSHI: Well, the new crash ratings are out. We'll let you know if you have a car that failed the test or you have one that passed it. That's up next.

And make sure you send us an e-mail if you've got a question. The issue is -- the address, I'm sorry, is issue1@cnn.com. That's because the name of the show is ISSUE #1. The help desk is coming up. Stay with us.

(COMMERCIAL BREAK)

VELSHI: Everyone wants to be safe on the road, but you never know when there could be a crash and sometimes it's not in your control. What you can control is taking steps to learn about which cars fare better or worse in crash tests. Russ Rader is with the Insurance Institute of Highway Safety, out with some new results about crash tests.

And I think the lesson here is that there have been some improvements, particularly in safety of crashes when you're hit from the side. Is that right, Russ?

RUSS RADER, INSURANCE INSTITUTE FOR HIGHWAY SAFETY: That's right. And, you know, with a lot of people thinking maybe it's time to trade in the SUV for something with better fuel economy, the good news is, we have a whole crop of mid-sized cars that are performing much better in that side impact test, which simulates what happens when an SUV or a pickup hits you in the side.

VELSHI: At about what speed?

RADER: This is a test that's done at just over 30 miles per hour.

VELSHI: OK. Let's -- tell me what fared well? What are the cars that fared really well in those impact tests?

RADER: Well, we tested six moderately priced mid-sized cars and one luxury car, the Infinity G-35. All of them did well in the frontal offset crash test. And all but one of them earned the top rating of good in the side impact test. And to show you how well, how much vehicles have improved, the vehicle that didn't earn a good rating in the side impact test, the Kia Optima, was still acceptable. We didn't have any marginal or poors in this group.

VELSHI: All right. Let's talk about cars that didn't do well in tests. Like, was the Kia the lowest in the rating or is that just lowest in these -- sort of this top group that you've got?

RADER: Well, the Kia was the lowest in the side impact test, but it was still rated acceptable. The one area where these mid-sized cars need to improve in is in rear impact protection. We do a test that simulates what happens if you're hit from behind. And we look at how well the seats and head restraints protect you from whiplash or neck injury. And what we're finding in this group is that only the Kia Optima earned the top rating of good in that test. And we had a lot of marginal or poors. But the good news is, in the high-speed tests, all the vehicles -- a lot of mid-sized cars are performing very well.

VELSHI: All right. We've got a lot of, obviously, air bags, anti-lock breaks. Those kind of things are almost standard, almost universal. Electronic stability control sounds like an option that most people wouldn't need. Describe that from a safety perspective. Why is that important?

RADER: Well, electronic stability control is the most important safety feature a lot of people have probably never heard of. Electronic stability control it's a feature that is -- can help keep your vehicle under control if you are in a skid situation, you're going around a curve too fast. Electronic stability control can help keep you out of a crash all together. And it's available on all but one of these mid-sized cars. It's still optional. So if you're looking for a new car with all of the top safety features, it's important to look at that options list.

And stability control comes from -- it has a bunch of different names. So you need to make sure you're getting this feature because, you know, like seatbelts and air bags help protect you if you're in a crash, stability control can help keep you out of that crash all together.

VELSHI: Generally speaking, it's an option, though, on most cars. I guess on higher-end cars it can be standard?

RADER: Yes, it's standard on a lot of luxury vehicles, but becoming more available on the less expensive cars.

VELSHI: Russ, thank you very much for this. Good research for people to get into. The Insurance Institute of Highway Safety, Russ Rader, thank you for joining us.

RADER: Thank you very much.

WILLIS: Coming up, it's your turn to sound off. The help desk is standing by to answer your questions. And, you know, it's not too late to weigh in. Send us your e-mails. The address is issue1@cnn.com.

(COMMERCIAL BREAK)

WILLIS: Welcome back to ISSUE ONE. It's time now to get some answers to your questions. You know every day we ask you to send us e-mails and every day we get a great response. So let's get right to it.

On the help desk today, financial adviser Gary Schatzky and Janice Revell. She is from "Money" magazine.

Welcome to both of you and thank you for being here.

Let's get right to work. E-mail number one from Gayle in Georgia. She asks, and this is a great question, "how can we baby- boomers save for retirement when: 1) We don't make enough money to risk it in the stock market? 2) Bernanke continues to lower the interest rates and the money we have in our savings accounts and CD's continue to dwindle? 3) The money that we should be putting into our retirement now has to go for the rising prices of gasoline and groceries?"

This is like a laundry list of all the pressures on the baby boomer budget. Janice, what do you make of that? And what can you tell people who are really struggling now with these higher prices?

JANICE REVELL, SENIOR WRITER, "MONEY" MAGAZINE: Well, Gerri, you've got to be sympathetic. I mean, for the longest time now we've had such a robust economy. We've had a bull market in stocks. We've had a bull market in bonds. We've had low inflation. I mean, everything's been going so well for so long. And I think it's really difficult to get used to this new world that we're in now.

I think one of the things that comes to mind when I look at viewer's e-mail is that she makes the point, it's too risky to be in stocks right now.

WILLIS: Yes, that's a problem, isn't it?

REVELL: It's a problem. And this is an incredible fearful time to be investing in stocks. But that's actually -- if you have a decent time horizon -- that's when you want to be investing in stocks. You want to be buying when other people aren't buying. You're buying low.

WILLIS: Yes, exactly. And one of the few advantages that small investors have is, they don't have a million people knocking on their door saying, take my money out of the market. You actually can stay put for a while and reap the advantages.

Let's go to the next e-mail. Jenny in Pennsylvania asks, "should I transfer my home equity balance to a 0 percent credit card?"

Gary, what do you think?

GARY SCHATZKY, FINANCIAL ADVISOR: You know, it might make sense. Here's the key issue. You've got to, first of all, make sure that when you're doing the transfer, you're not paying a transfer fee. A lot of the credit card companies will . . .

WILLIS: Right. They can be high.

SCHATZKY: They can be 3 percent right up front. Second, you've got to make sure you still have the home equity line of credit in place so when the zero percent disappears, you can move it back to the home equity line of credit. You've just got to be careful. But if you check it out, it could be a great opportunity.

WILLIS: Yes, you need to know how long that period, that initial zero percent balance lasts for, because the devils in the details with that.

Wendy asks, "if a mortgage on a house is $200,000 and the house sells for $150,000, is there a tax consequence for the homeowner?

Janice, I always get asked this question. Actually what people want to know is, can I deduct my loss?

REVELL: Right. Yes. And the problem is, no. I mean there's a double whammy here. Assuming that Wendy actually paid $200,000 for the house and selling it for $150,000, she's losing money and she can't deduct it. That's a double whammy.

Now there's another issue going on here with the $50,000 in extra debt that she owes. It depends on whether the bank is actually going to forgive that debt or not. If the bank is going to forgives the $50,000, it used to be that that would automatically be treated as taxable income.

WILLIS: Not anymore.

REVELL: Last year there was new legislation passed that exempts most people. There are some conditions where you can't get the exemption for that. But she should check into that. She probably will be off the hook in terms of that extra $50,000 being treated as taxable income. So a little bit of good luck.

WILLIS: Right.

SCHATZKY: But you've got to make sure they're not going to chase her for the extra money because clearly there is this thing called deficiency judgment.

WILLIS: That would be terrible.

REVELL: Absolutely.

WILLIS: You know, another thing to think about too is, sometimes people can convert it to a rental property and you can find a little room to get a break on your taxes.

All right, guys, thanks for helping me out today. Gary, Janice, thanks so much.

REVELL: Thank you.

VELSHI: All right. Coming up next, selling your home in any market. We're going to show you how. You're watching ISSUE #1. Stay with us. We're coming right back.

(COMMERCIAL BREAK)

WILLIS: If you're in the market to sell your home right now, chances are you're having a tough time. But my next guest says there are ways to make money in any market. Jim Remley joins me now from Portland, Oregon. He is the author of "Sell Your Home in Any Market."

OK, Jim, this is probably the worst market in 10 years. What do you say to sellers out there who are trying desperately to unload their houses? What do they do?

JIM REMLEY, AUTHOR, "SELL YOUR HOME IN ANY MARKET": Well, the key for most sellers is to understand that selling your home involves three key things. And I call them the three "ps." And that's price, product and promotion. And the first one -- and they're in order of importance. Price being number one. When you're pricing your home, you've got to make sure that you're not looking at just the fantasy prices. And what we call fantasy prices are what people are asking for in your neighborhood but may never get.

WILLIS: All right. Let me ask you a question about that. Because, in some cases, it's not just fantasy prices. In fact, prices are falling and falling dramatically in some markets. It's like trying to catch a falling knife. What do you do with your price if that's the case in your market?

REMLEY: Well, you want to get ahead of the curve and not behind it. The key is to look at what things are selling for, not what people are asking. And so here's the challenge. If you overprice your home at all, what's going to happen is, if you're in a declining market, it's going to get worse, not better. So you're more overpriced tomorrow and it's worse the next week and it's worse the next month. So you get ahead of the market, if anything, maybe go a little bit under the market if you're in a declining area.

WILLIS: OK. Well, you know, I know a lot of people out there that got used to negotiating prices with their realtor. You know, they've try to, you know, make them bid lower. I'll pay you 4 percent. I'll pay you 5 percent. Less than 6 percent, certainly. Is this the time to do that now?

REMLEY: Well, you want to base who you hire, not on who's going to give you the lowest commission rate. In fact, I would argue that sometimes people that give up their commission are probably going to have to give up services in terms of exposing your home to the market. So you've got to make sure that you're hiring somebody that has the ability to get your home in front of as many buyers as possible. So exposure is absolutely critical.

WILLIS: All right. OK. We have some breaking news right now we're interrupting for. Senator John McCain is speaking at a small business round table in Brooklyn, New York.

Let's listen in.

(JOINED IN PROGRESS) SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Thank you for joining me, mayor, and thank you for your outstanding service to this great, great city. One of the great cities in the world in maintaining its prosperity, its growth, and the entrepreneurship and good government that is an example to the rest of the country, not only in fiscal matters, but also education and others.

And I know you have to go, but I also want to thank you for spending the time with me today. And I look forward to our next visit where we'll be discussing the issue of education, which is obviously one of the transcendent issues of the 21st century. I thank you again, mayor, for being here. Appreciate it. Thank you.

I thank all of you for joining me here today. And as I said, it's a pleasure to be participating in this round table with so many accomplished entrepreneurs and small business owners. You represent the engine of economic growth in America. And I'd also like very much to thank, not only the mayor, but also Carly Fiorina, who is with me, who is one of our great economic advisors and great Americans.

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