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Issue Number One

Historic Visit for Pope; Homeowners Lobby Congress; Starting a Small Biz; Recession & Wealth; Foreclosure Prevention Fairs

Aired April 16, 2008 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: Elaine Quijano had a perfect vantage point there on the south lawn of the White House. But watch the ceremony this morning as it unfolded, beginning with the pope actually on the north lawn, driving up and actually exiting the limousine that was going to take him to the south lawn of the White House for the ceremony, and greeting well-wishers there. That was a wonderful moment, something that we thought might happen yesterday.
FREDRICKA WHITFIELD, CNN ANCHOR: And so spontaneous.

HARRIS: And very spontaneous. That was terrific. And what is happening here.

WHITFIELD: Wow.

Well, you have the motorcade and you have Secret Service...

HARRIS: Yes. Yes.

WHITFIELD: ... that get out, kind of doing a sweep there. But, boy, when they get out like that, it almost makes you think that the pope is going to step out of his pope mobile.

HARRIS: Well, that's what I'm thinking, yes. And now we're moving again.

But again, just a wonderful ceremony, welcoming ceremony for this pope on his historic visit here to the United States.

I wonder if we'll get an opportunity here to listen to the crowds. I hear them in my ear piece. I want you to listen as well.

(CHEERING)

WHITFIELD: What an extraordinary time to be in Washington. Of course, if you live there -- but you know a lot of folks came from far and wide to be part of this historic moment of the pope making his way down Pennsylvania Avenue before embarking on an incredible agenda over the next few days, during his entire six-day visit to the U.S.

HARRIS: Yes. This is wonderful. And we're going to exit the stage, so to speak, for now and hand it over to our money team, our terrific team in New York.

And our coverage of the pope's visit to America continues now. Let's toss it to New York and Ali Velshi. ALI VELSHI, CO-HOST: Right. And Tony, thanks very much.

What a momentous occasion. And those cries of joy you are hearing on the streets of Washington as Pope Benedict XVI leaves on his way from the White House to the Vatican Embassy in Washington.

Crowds lining the street for this visit. The pope was at the White House for a meeting with the president. He is now leaving for a -- he is going to be at a 1:00 p.m. lunch at what is essentially the Vatican Embassy of the United States, lunch with the cardinals.

A very slow-moving procession with the pope mobile. You can see the pope very clearly reaching out, greeting well-wishers on either side. And for a moment we were listening to the crowds, the noises of the crowds, the music that was playing.

A very, very warm welcome on a very warm day in Washington. Just a perfect day for that sort of visit. And the crowd, the turnout has been magnificent.

Want to bring in our senior Vatican correspondent, John Allen, who has been following every part of this visit.

John, so far, with all of the indications of what we've seen, this visit has gone off without a hitch.

JOHN ALLEN, CNN SR. VATICAN CORRESPONDENT: Yes. I mean, so far, I would say that it has in many ways exceeded expectations both on the side of the Vatican, and also organizers, Catholic organizers here in the states. You know, precisely because Benedict XVI does not have that kind of towering charisma you associate with John Paul II. There is always the fear that maybe he won't have the same kind of, you know, public magic that we remember of John Paul II. But certainly so far, as you say, the crowds have been large and enthusiastic.

The media coverage has been pretty much bell-to-bell. And at least from the Vatican's point of view, largely positive. So, so far, so good, I think, from the pope's point of view.

VELSHI: John, what -- where are the complicating factors in the trip right now? It's all been good.

He's met with the president. He's going to this Vatican luncheon. And he's got major, major appearances at Washington, the stadium where the Nationals play, here in New York at Yankee Stadium. Where are the organizers concerned about complications?

ALLEN: Well, you know, there are always those X factors. I mean, you know, what happens if we have a downpour when he is at National Stadium or when he's at Yankee Stadium on Sunday? I mean, you know, what if something breaks down in security net, those sorts of things. But, you know, deeper than that, of course, there still are some potential flash points in this trip.

You know, the pope chose to weigh in on the sex abuse issue on the papal plane the other day. We expect him to come at it again this evening in his speech to the bishops.

It is possible that could produce some blowback, particularly from victims and their advocates who might argue that it's not enough just to talk a good game. We also need to see some more action.

It's possible as this trip unfolds, that the pope could inadvertently be drawn into the kind of sausage grinder of American politics in '08. So I think, you know, there are still -- the heart rate is still up for people who are managing this trip. But I think so far they feel that things have gone quite well.

GERRI WILLIS, CO-HOST: Hey, John, I think the heart rate is still up for people who are lining Massachusetts Avenue right now. Just hearing them, the audio from that, it just sends chills up your spine.

Why is it so important to American Catholics and what does it mean to them?

ALLEN: Well, you know, I think Catholics have a kind of unique relationship with the pope. I mean, you know, all the polls tell us that American Catholics are divided on a lot of issues. I mean, some of them would support a different teaching on birth control. Some of them wouldn't agree with the church on abortion. But I think the thing that sometimes gets lost in all of that is that fundamentally, Catholics don't go to church because of their positions on issues.

You know, they go to church because they believe they come into contact with God there, that they're spiritually nourished by it. And whether they agree on a political level with the pope on everything, he still does for most Catholics represent the kind of core of their faith and represent the kind of presence of St. Peter, the first pope, and the continuing presence of Christ on Earth. And so, there is a kind of magic relationship there, a deep, profound tie. And you are seeing that in the faces and in the cheers of those people who are lining the streets here today.

VELSHI: Now, tell me, though, in comparison -- you said he's not seen in the same way that John Paul was. What is the reaction that you are seeing and that you've seen on other visits from this pope to other places? Has he been greeted as one who is -- who's got the charisma of the previous pope?

ALLEN: Well, you know, I think what you see -- I mean, clearly people are warm and enthusiastic.

Now, you know, when John Paul would come places, you sometimes felt it was like the Beatles playing Shea Stadium. You know, you got this kind of emotional rapture from people. I don't think Benedict elicits quite that same sort of emotional response.

But what's interesting is that people are clearly listening to him. I mean, this is a pope where it's not enough just to turn the sound down and watch the pictures. I mean, you actually have to listen, because he speaks in these fully-formed paragraphs. I mean, you saw that on display in his remarks with the president this morning. And what I think is interesting is, so far, people do seem to be paying attention. And I think that's part of the response that you are seeing so far on this trip.

WILLIS: But John, paying attention to what, exactly? Obviously he's talking to Catholics, but also to the rest of the country. What is his big message here?

ALLEN: Well, you know, the official motto of the trip is "Christ our Hope." So, the bottom line of what the pope wants to say is that the church joins with all people of goodwill in wanting a better world, a world of more justice and peace, and so on. And that from the pope's own point of view, the key to all of that is the person in the message of Jesus Christ. And so that's his big picture pitch.

Now, within that there are a lot of specifics. You know, we saw this morning in his session with the president, for example, that he really wanted to affirm this American tradition of providing space for religion to play a vital role in public life.

I think we'll see today in his remarks to the bishops that he wants to see the Catholic Church continue to be of service to the broader American public. I think he may also say that he wants to encourage the church to continue to get its own act together, particularly with respect to this mess of the sex abuse crisis.

So, a lot of specific points. But the big picture is a message of hope rooted in the teaching of Christianity.

VELSHI: John, for our viewers, by the way, what you are looking at is our cameras in different positions, sort of anticipating where the pope is going to be. Now you're seeing obviously there are technical problems when you've got a moving shot of the pope.

So we are bringing it to you as we can get it. This is a shot which you'll see the vehicle coming into shortly. We'll keep covering that.

John, it's a very political time to be in the United States. We are not expecting the pope to in any way get drawn into any conversations about politics or the way things are in the United States, or who he thinks the best candidate will be. I guess that is all predetermined. There is not going to be an opportunity to ask the pope and the pope is not going to offer any comment on that?

ALLEN: Yes. As I've been trying to remind our viewers, you know, the pope is not a superdelegate. So he is not riding into Washington to issue an endorsement.

He is not meeting with any of the candidates. And I think, you know, figuratively he is going to move heaven and earth to stay above the political fray.

But, you know, the reality is that, in some sense, this isn't entirely up to the pope. I mean, there are lots of political operatives out there on the American scene who are very interested in courting that so-called Catholic vote. That is, almost 70 million Catholics out there representing one-quarter of the country's population.

And so I do think, you know, apart from what the pope says or does, you know, there will be Catholic operatives from the McCain campaign, Catholic operatives for both Obama and Hillary who are interested in picking up bits and pieces of the pope's message and trying to score political points with them. I think that's inevitable, the pope is aware of it. But, you know, you saw this morning, he didn't deliver a highly-charged piece of political rhetoric. I think he wants to make his stand at a much deeper level about the baseline moral values that ought to inform whatever political option people choose.

VELSHI: He has, however, made comments about -- about the war in Iraq and how he feels that that's gone on long enough. I mean, obviously part of the pope's message is a message of peace. How does he navigate that landscape?

ALLEN: Well, you know, I think the pope's position is that, first of all, everyone knows that the Vatican was opposed to the U.S.- led war in Iraq five years ago. I think he believes that most people are aware that the Vatican and the Catholic Church would have preferred for the United States to work through the United Nations rather than, in effect, to work apart from it. So I don't think he's planning to repeat that in any particular emphatic way.

I do think what he is going to come at a little bit more pointedly is a broader question, which is, how do you prosecute a global war on terror? I think to date, his analysis has been the United States has done this pretty much exclusively through military means.

I think he's going to try to argue that you also have to try to get at the roots of terrorism, which means that we have to try to understand why a significant percentage of the world's population feels kind of excluded from the benefits of globalization and this new kind of global free market economy -- we have to promote economic development for the poor, we have to have more compassionate immigration policies.

I think he would see all of that as part of the war on terror, as well. And that's probably where you'll see him come at this question of war and peace.

WILLIS: John, obviously President Bush and the pope have developed something of a relationship. They have some commonalities of view. And the president was very successful in getting Catholics out to vote.

Who is the heir to that relationship? Which of the candidates do you think might be simpatico with the pope?

ALLEN: You know, this is a really good point. I mean, Bush did do, from a tactical point of view, did a remarkable job of capturing the Catholic vote in '04. And as a matter of fact, you know, he did a few percentage points better the more frequently a Catholic went to mass. So, if you went to mass at least once a week, he got 56 percent, if you went daily, he got almost 60 percent.

You know, who is going to step into that and inherit that constituency this time? I think it's unclear.

You know, John McCain is pro-life. And that certainly appeals to many Catholics. But he is not a hero of the pro-life movement in the way that, say, President Reagan or President Bush has been. He does have a position on immigration that's pretty close to the official position of the Catholic Church.

But on the other hand, you know, the church has also been very critical of the war in Iraq, and it's very hard to square that when McCain's language about staying in Iraq for 100 years, if that's necessary. So, you know, either Obama or Hillary could pick up the church's peace and justice message. But, on the other hand, both of them are, of course, pro-choice.

So, to be honest, you know, I think of which way the Catholic vote is going to go in '08 is very much wide open. And that's part of what I think lends political subtext to this visit, because it will be interesting to see how each of the candidates picks up on some element of the pope's message and what is likely to be a war for the microphone among the Catholic vote.

VELSHI: And there you see on the right side of your screen the motorcade turning a corner. The pope mobile will be right behind that.

This is another one of our cameras following the procession of the pope mobile. You should see it any moment there.

John, on a slightly lighter note, today is the pope's 81st birthday. Anything particular that happens on a pope's birthday?

ALLEN: Well, you know, it's interesting that when a pope is elected, the Vatican actually tends to emphasize more the date of his election, rather than his birthday. There is no official Vatican celebration for a pope's birthday.

What you celebrate is the anniversary of him becoming pope. On the grounds to that what really counts is not so much the man but the office.

So, actually the Vatican typically does not make a big public spectacle. The pope is actually getting a much bigger birthday bash by coming to the United States than he would have had he stayed home in Rome.

VELSHI: And the Vatican -- the anniversary of him becoming pope is the 19th of April, is it not?

ALLEN: That's exactly right. It's three days from now. So he is sort of, you know, getting a twin bill here in the states, celebrating both of these milestones. One, his own personal birthday, and the other the birthday of his papacy.

WILLIS: John, if you could, so many Americans familiar with John Paul II remember him vividly. Can this pope have the same kind of impact -- have the same kind of legacy as John Paul?

ALLEN: Well, no, I don't think so. And I don't think he is trying to.

I mean, I think Benedict XVI understood from the very beginning that John Paul was one of those uniquely charismatic, sort of towering figures that comes along every so often in history. And you don't just replicate that in an assembly line someplace.

So he is very much comfortable being his own person, which means he is a sort of quieter figure, a less spectacular figure, whereas John Paul was this great evangelist. You know, this man hit the highways and byways of the world and sort of took the world by storm.

Benedict XVI is much more a teaching pope, concentrating very much on his documents and his speeches and so on. His (INAUDIBLE) -- that is, his teaching of the faith. And so in that sense, it will be a less dramatic legacy in some ways.

I think he sees himself planting seeds rather than making waves. So it's going to be a different kind of track record, and one that may take a little bit more time for people to get their minds around. But perhaps in the long run of history, no less consequential.

WILLIS: Well, on a lighter note, we were just seeing the pope mobile. John Paul II was the first to use that after the attempt on his life. Now we see it all the time, including today.

Tell us a little about that. Why is it designed the way it is? And what does it do for people who are out watching the pope to be able to see him? Even if, you know, he is protected?

ALLEN: Right. You know, when popes used to drive around crowds like this, they used to simply stand in the back of an open-air jeep. And as you say, it was after the assassination attempt on John Paul on May 13, 1981 in St. Peter's Square where the pope mobile was introduced with this sort of bulletproof Plexiglas to allow the pope to still be accessible to people but to also be protected.

You know, it's very much unique to the papacy, because the pope, even though he is a global celebrity, even though he is head of state, fundamentally popes understand themselves to be pastors. That is, to be shepherds of souls. And they don't want to be insulated from the people who come to see them.

One little cute story about John Paul. I happen to remember when he came to Toronto in 2002 for World Youth Day, he did this sort of swing around this crowd of more than a million young people. And when they finally finished and brought him back to the place where he was going to enter on to the stage, there was this gap of 15 minutes.

Some of us were worried the pope was having health problems. As it turned out, the problem was he had to change clothes, because he had become soaked because there was a driving rain that day, yet he refused to let them roll up the windows in the pope mobile because that's how important it was for him to be close. He was worried the windows would be fogged and people couldn't see him.

VELSHI: All right. We are taking a look at a picture now. The pope is now descending from the pope mobile that John Allen has been talking about.

He has arrived at the Vatican Embassy, or what is what we are referring to as the Vatican Embassy in Washington, for a lunch with the cardinals. You can still hear -- listen to crowds. You can still hear a very, very active crowd there.

An uneventful trip from the White House to the Vatican Embassy, where you see now the pope has walked in. He will be having lunch with cardinals, and we of course will continue our coverage.

There is the pope mobile standing right outside there. We will continue our coverage of Pope Benedict's visit to the United States, his trip to Washington. He'll be in there for lunch for a little while.

And -- but we will continue to have live coverage throughout the day on wherever he ends up being after this.

WILLIS: We want to thank John Allen for helping us out. Great information from him, as well.

ISSUE #1 will be right back.

(COMMERCIAL BREAK)

VELSHI: And welcome back to ISSUE #1.

We are just hours away from a high-stakes debate in Philadelphia between Senators Hillary Clinton and Barack Obama. So what is going to be the winning strategy for Democratic candidates tonight?

Let's check in with our senior political analyst, Bill Schneider, who's in Washington, D.C.

Bill, there's been a lot of bickering between these candidates. Nothing better for bickering people than actually being on the same stage next to each other. We could be expecting fireworks tonight.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Oh, I think we will see some fireworks because Hillary Clinton has gone on the offensive on the bitterness issue. She saw an opening when the remarks that Obama made at a San Francisco fundraiser were revealed at the end of last week, and she -- this may be her last and best chance to really throw him on the defensive and seize the initiative in this campaign.

From Barack Obama, he's talking about moving on. He doesn't think this issue has done much damage. And there is not a lot of evidence that it has. He is accusing her of engaging in negative attacks instead of talking about the issues. His strategy will be to move on to what he regards as real issues in this campaign.

VELSHI: And issue #1 would be the economy. It is in the country and it is in Pennsylvania. So I'm assuming we can expect both senators to try to expand on their economic plans during the debate, and I guess the work they're going to have to do is try and distinguish themselves from each other.

SCHNEIDER: And from John McCain. Remember, this week John McCain gave a major economic speech. They have been deriding McCain, both Democrats, as someone who once acknowledged that he doesn't know a great deal about the economy.

McCain laid down his marker this week. He talked about some new initiatives.

He wants to suspend the gas tax for the summer. This summer. He is not president yet, but he is in Congress and the Senate, and he wants to suspend it this summer.

He talked about bigger corporate tax cuts. He talked about a freeze on discretionary spending. All those are going to be very contentious issues. I'm sure the Democrats are going to bring them up.

And he also talked about free trade, which is a very big issue in Pennsylvania. Both Democrats have been critical of NAFTA, CAFTA, other trade deals with China and elsewhere. So you can be certain that they're going to draw big distinctions between their economic views and the ones that John McCain proposed.

VELSHI: And he talked in favor of a deal with Peru which Hillary Clinton had some flack over just recently.

All right. We'll be watching closely, and so will you, Bill.

Thanks very much.

Bill Schneider is our senior political analyst and a member of the best political team on television.

WILLIS: A big jump in the price of gas. AAA reports the national average for a price for a gallon of gas jumped more than a cent to just under $3.40. Oil right now is at $112.84.

But if you really want to understand what this means to Americans, you have to see what they are paying.

CNN senior photojournalist Greg Hint (ph), he took some time out of his vacation with his family and he sent us this picture from California -- $4.13 for regular unleaded, $4.37 for premium? Ouch.

VELSHI: Hey, oil has been going up a lot, actually. Oil hit $114.95, just shy of $115.

Coming up next, lessons from the wealthy. How to make money during a recession.

And we'll answer your questions. So send us an e-mail. This show is about you. We will answer your questions.

The address: issue1@cnn.com.

(COMMERCIAL BREAK)

WILLIS: Flying the friendly skies is getting more expensive these days. United Airlines is offsetting what it calls record- breaking fuel costs by adding another $10 to $20 fuel surcharge on round-trip domestic flights.

Now, the hike went into effect last night, with oil topping $114 a barrel. United predicts it will spend an extra $2 billion on fuel costs just this year. It's the second such fuel surcharge hike within a week by the airline.

And if you are a victim of the dreaded overbooked flight, you may fly for free even on an $800 ticket. The Transportation Department is doubling the available compensation to bumped passengers who arrive to their destination two hours later than originally scheduled. It will likely go into effect next month. The new ceiling goes up from a $400 maximum and is the first revision to the law since 1978 -- Ali.

VELSHI: Gerri, thanks.

Taxes are just a way of life, right? Well, you get your paycheck, you pay your taxes. You go shopping, you pay taxes. You sell your home, you pay taxes. You get the idea.

But when it comes to income tax that you just filed your return for, what is the government doing with your tax dollars?

Jim Kessler is the vice president for policy with Third Way. It's a nonpartisan progressive think tank based in Washington, D.C.

And Jim, you guys have gone through an excellent exercise of figuring out sort of what the average American pays in taxes and where that money goes. Tell me your math. How did you get around to figuring this out, first of all?

JIM KESSLER, VP OF POLICY, THIRD WAY: Well, you know, the federal government spends about $2.8 trillion each year, which is an incomprehensible amount of money for most people to understand. So we said, well, what does it mean for the average taxpayer, the family that earns about $65,000 a year, pays about $13,000 in taxes? And what we did is we just apportioned what they paid in taxes and just down to the dollars and cents what they paid for education, what they paid for health care, what they paid for the war in Iraq, just so that they would get a better idea of what their money is actually going toward.

VELSHI: And the number one expenditure when you divide that average of $13,000 per taxpayer into the system, the number one expenditure is servicing the national debt -- $1,000 of that $13,000 goes to that.

KESSLER: Yes. i mean, look,$1,000 for the typical tax-paying household basically gets flushed down the toilet servicing the interest on our national debt. And our national debt is really about fiscal mismanagement. So, I mean, I'm sure those taxpayers would like to have that money back rather than just going really for naught.

VELSHI: War in Iraq, $593, war in Afghanistan, $159, Medicare -- as people always tell us, a major, major expense. I think it's the biggest one on your list, right, $1,697.

KESSLER: One of the biggest ones on our list. Social Security is also big. National security, National defense, even outside of Iraq, is really big.

Look, we have an aging population. They worked all of their lives to get benefits and now, you know, they're at the age where they're getting them and it's expensive. I mean, for the typical taxpayer, you know, Social Security plus Medicare, you're talking about $4,000 out of the -- for the typical household contributing to just those two things alone.

VELSHI: Let's talk about education. $107 goes to aid to public schools. $46 to a lunch program. And a Pell College Grant, $62.55. It's interesting when you put it in this perspective, when you see -- it sort of gives you a sense of what our priorities are.

KESSLER: Yes. I mean, one of the things I think to be worried about is, are we spending enough money on our kids? You know, like, $100 plus on, you know, on education for the entire year for a taxpayer, really that's going out to dinner twice during a year. That's the equivalent of that. And, you know, that's the next generation that is going to be the future taxpayers that are going to pay for me when I'm older. So, you know, are we investing enough in that generation? I think the answer is probably no.

VELSHI: A couple of little interesting ones that are on there. We talk about pork barrel politics a lot. $60.45 to pork barrel projects. Doesn't sound like as much when you look at some of those other numbers. Eighteen cents for presidential and White House staff. Twenty-nine cents for the Consumer Product Safety Commission. Given all the news we've seen from them in the last year, you would think that would be higher. Some of these interesting little ones tell you a bit about the government, too.

KESSLER: Yes. Look, about 29 cents, Consumer Product Safety Commission. And, you know, with, you know, trillions of dollars of products that they have onto inspect for safety, you can see why they're just absolutely, totally overwhelmed. You know, certain things, $75 for the space program. Some people might think that's too much. My brother, who still goes to "Star Trek" conventions, probably thinks it's not enough. But, you know, our purpose was really for this was to really try and make taxpayers -- to allow them to be more educated consumers. Let them feel like, well, this is actually how I do want to spend my money or I'd like to see some changes. VELSHI: Well, the federal budget is a very hard thing for the average person to look at. So your way of sort of breaking it down and budgeting it, you're absolutely right, someone might look at this and say that's exactly how much we should be spending on defense or public schools or stamps. But the bottom line is, at least it gives our viewer a tool to be able to understand that.

So thank you for doing that for us. Jim, good to talk to you.

KESSLER: Thank you very much. A pleasure to be on.

VELSHI: Jim Kessler is with the Third Way.

Gerri.

GERRI WILLIS, CNN ANCHOR: All right. Up next, making a small business work. We'll hear from one small business owner who started a dozen of them before most kids graduate college.

And a possible solution to the mortgage meltdown. Getting struggling homeowners and lenders in the same room. This story coming up on ISSUE NUMBER ONE.

(COMMERCIAL BREAK)

WILLIS: Well, the Senate passed a big housing stimulus bill last week and the goal, to help struggling homeowners facing foreclosures. But for many homeowners, hey, the stimulus bill just doesn't cut it. CNN's Lisa Sylvester reports.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT, (voice over): Rosa Garcia has a $230,000 mortgage on her Arizona home, but she says its value has dropped to only $180,000 and she can't keep up with the payments.

ROSA GARCIA, HOMEOWNER: It's a very stressful situation, you know. I think, what's going to happen tomorrow?

SYLVESTER: She is among the millions of Americans facing foreclosure this year. The Senate passed a bill that was supposed to give middle class borrowers some relief. But instead, the vast majority of the benefits, $25 billion, would be tax breaks for the housing industry that supporters say would stimulus housing and create jobs. Critics say it will go to big corporate homebuilders who went on a building frenzy and cashed in when the housing market was hot.

MICHAEL ETTLINGER, ECONOMIC POLICY INSTITUTE: Those who are going to benefit most from this provision are the companies who behaved very irresponsibly and got us into this mess.

SYLVESTER: A coalition of housing advocates is now turning to the House of Representatives to lobby for more homeowner aid and try to defeat the builder's tax breaks.

TERENCE O'SULLIVAN, LABORERS' INTL. UNION OF NORTH AMERICA: In the Senate they must be drinking corporate home builders Kool-Aid. And we need to make sure that in the House, if the votes aren't there, then we need to make sure that the votes aren't there for a bad bill.

SYLVESTER: A proposal in the House by Representative Barney Frank, the chair of the House Financial Services Committee, would allow families to refinance into loans backed by the federal government. But it stopped short of allowing bankruptcy judges to change the terms of mortgage loans, a proposal backed by housing advocates.

(END VIDEOTAPE)

WILLIS: That was CNN's Lisa Sylvester. You can catch Lisa every night on "Lou Dobbs Tonight," 7:00 p.m. Eastern right here on CNN.

Ali.

VELSHI: All right, Gerri, do you ever dream of just getting up and quitting your job? I don't. I like this one. But if you can start a small business where no one tells you what to do, you are the boss. Cameron Johnson might be a good person to talk to. Not only was Cameron a business owner before the age of 21, he had started 12 businesses before turning 21. He's the ripe old age of 23 right now, so he's sort of in semi retirement talking to us about this.

Cameron, good to talk to you.

I mean, I read through the book. It remains a mystery to me. You just started doing business pretty much as early as you can. I think you were nine years old when you first started your venture.

CAMERON JOHNSON, AUTHOR, "YOU CALL THE SHOTS": Yes.

VELSHI: What's going on? What got you into starting businesses?

JOHNSON: Well, I think I realized at an early age I wasn't going to be a professional athlete, I wasn't going to be a singer. Chances are I'm going into the business world. I'm either going to work for someone else, or maybe I can work for myself. And the Internet enabled me to do that at such an early age.

VELSHI: What was the first gig? What did you do first?

JOHNSON: The first gig was just a printing company. Printing greeting cards, stationary. Whatever I could do with a computer and a printer, I would print it and sell it.

VELSHI: Why did it occur to you not to be having fun at that age but actually be having fun and making money?

JOHNSON: Well, I was doing both. This was always a hobby. So it was a passion of mine. And I think, too, that's why it led me to be successful. But also, I played sports. I played soccer for 13 years. I really had a normal life, which may be hard to believe.

VELSHI: Where did it first start to be about real money? JOHNSON: When I was 12 years old, I make $50,000 that year selling Beanie Babies over the Internet. And then when I was 15, my company was doing $15,000 a day in sales and we were in online advertising back then.

VELSHI: All right. So when -- at some point you realized that it's a hobby and it's fun, but this is actually going to become lucrative to you. What then happens? At what point do you go from being -- making it a hobby onto learning the lessons and making it a business?

JOHNSON: Well, that's really my teenage years. When I was 15, it was real money. You know, we're getting checks in six figures every month. And that's kind of when that led to more Internet businesses and then ultimately it led to the book "You Call the Shots." And, you know, here I am today.

VELSHI: All right. So we've got people out here. We're in a recession. One of the tough things about a recession is, people do lose jobs. One of the bright sides of a recession is people reevaluate their lives. And many people -- I mean I think so many Americans want to be small business owners. It really is part of the American dream. Out there to the viewers out there, what is the advice? What happens? If you want to start your own business, what should you think about?

JOHNSON: The first thing is to do, is to put yourself out there. You have to be willing to take the first step. And sometimes job loss almost forces you into that. So once you're in that position, then you can actually follow your dreams because 80 percent of people would love to own their own business. The only difference is, only a small fraction of that number actually start a business.

VELSHI: You didn't get into debt to start business. How did that work out? Why is that the case?

JOHNSON: I started with $50 when I was nine. And, you know, I didn't have any education. So people always look for excuses. Now is not the right time. I don't have enough money. I don't have enough connections. I don't have enough education. I didn't have any of those things and I was still able to make a million dollars before I graduated high school.

VELSHI: Let's talk about networking. It's surprising how much successful people will help people get started, but for being asked.

JOHNSON: Exactly. I wrote a letter to Donald Trump when I was eight years old and he responded with an amazing present. On my first trip to New York City, he put me up in the suite where "Home Alone 2" was taped. He did so many great things. And I've always been one to network and I've always been one to look up to those people as my mentors.

VELSHI: Now tell me what you can tell people when they do lose jobs or the economy's tough, it really gives you a confidence hit. You are about as confident a person as I've ever met. You talk about, when you have a business, you've really got to be confident about it.

JOHNSON: Especially. And one thing too I think is really important is to start small and to not take on debt. So many people think you have to take on $50,000 in debt to be successful. But let me remind you, Microsoft and Dell, they both started in dorm rooms.

VELSHI: Cameron, congratulation on your success. We will try and keep up with the speed with which you run business.

JOHNSON: Thank you.

VELSHI: Cameron Johnson is the author of "You Call the Shots."

Gerri.

WILLIS: Hard to keep up with Cameron.

OK. Ahead on ISSUE NUMBER ONE, foreclosure prevention fairs. It sounds strange, but they're actually doing a lot of good. We'll check it out. And we'll open up the help desk. You have e-mails. We have answers. The address, issue1@cnn.com. ISSUE NUMBER ONE will be right back.

(COMMERCIAL BREAK)

WILLIS: Ladies and gentlemen, start your engines! Always wanted to stay that. The help desk is up and running with us to answer your e-mail questions. With me today, Donna Rosato. She's a senior writer with "Money" magazine. Lynnette Khalfani-Cox is a best selling author and personal finance expert. And, of course, CNN's very own Allan Chernoff.

Thanks to all you guys for being here. Let's just get right down to it.

OK. We have an e-mail from a viewer who asks, "because of the higher costs of food and energy, I cannot pay my mortgage. What should I do?"

This is plaguing lots of people out there.

Lynnette.

LYNNETTE KHALFANI-COX, AUTHOR, "YOUR FIRST HOME": First off, call your lender if you're going to have a problem making that mortgage payment. I know it's a scary prospect and people think, oh, they're going to come and take my home.

WILLIS: Most people don't.

KHALFANI-COX: Yes, 50 percent of people who wind up in foreclosure never talk to their lender. So that's a big mistake. You know, they may be able to work with you and work out a forbearance, if necessary. Maybe give you a deferment option to be able to pay that a little bit later. Tack on the payment to the end of your mortgage. But don't just, you know, say nothing or do nothing about it. WILLIS: Allan, do you think it's a good idea to get somebody who maybe does this a lot, you know, is consulting with folks all the time, some real help from one of these 800 lines?

ALLAN CHERNOFF, SENIOR CORRESPONDENT: You also want to make sure that you're dealing with a third party. An outside, third party. Somebody who maybe isn't connected to the mortgage broker. The mortgage broker often will say, you know, you need somebody. So you really need to be very careful.

WILLIS: Not a mortgage broker necessarily though, but, you know, maybe somebody in one of these counselors that you can get through HUD, hud.gov. Don't you think that's a great idea really to help folks out.

Denise says, "I would like to 'opt out' from pre-screened credit offers that come to my home daily. Can you tell me how?"

Donna.

DONNA ROSATO, SENIOR WRITER, "MONEY" MAGAZINE: There's lots of ways you can get out of those things. There's an opt out -- prescreenoptout.com. It's a simple way to stop it. And it's good if you stop it, because then you will not be tempted to get those offers. So you can just . . .

WILLIS: Less spending. Everything's under control.

ROSATO: Just do a quick Google, opt out. That's right.

WILLIS: That's right. I love that idea.

KHALFANI-COX: If you don't log on, as well, you can call the number as well. It's a toll-free number 888-5-OPTOUT. Get your name off of the telemarketing lists that are sold by the big three credit bureaus, Transunion Equifax and Experion and then you won't, as Donna said, have all that temptation to take on more credit than you might be able to pay off.

WILLIS: Yes, there's lots of things I don't want to know about.

OK, let's go to the next one. "I would like to improve my credit score. What is the best way to go about doing that?"

Everybody pile on. How do you build your credit score?

ROSATO: Pay off your bills. I mean, if you pay off your credit card bills, that's going to be really one of the fastest ways to beater credit score.

KHALFANI-COX: Thirty-five percent of your credit score is based on simply your payment track record. So that's rule number one. And keep the debt levels low as well because 30 percent of your score is based on how much debt you've racked up, especially credit card debt.

CHERNOFF: A lot of people think that if, oh, you keep a big balance on the cards and you keep paying that off that you'll do better with your credit score. That's not the way to go. You want to be responsible. Pay your bills. Pay them on time. Your credit score will be fine.

WILLIS: Small proportion of debt.

KHALFANI-COX: A rule of thumb is use only 25 percent max of your available credit. So if you've got a $10,000 credit card, don't charge any more than $2,500, for instance. If you can knock that out to zero, even better.

WILLIS: A quarter. OK.

ROSATO: And, once again, don't close down any of your card accounts, as well. So you want to keep the available credit there. Pay it down, but don't close your account. You want to keep your available credit open.

WILLIS: Great advice.

OK. Let's see. We've got another question. "Is it a good idea to get a reverse mortgage for extra cash?"

OK, these products, they used to be terrible. But I think they're a little better now. What do you guys think about -- do you like the reverse mortgage?

ROSATO: You have to shop around. There can be high fees with a reverse mortgage. So if you're going to do it, you want to shop around. So you have to be careful with it. It can make sense for some people though. If you have a lot of equity in your home and you don't really want to leave anything for your kids, that could be a great way to tap what is, for most people, their biggest asset.

WILLIS: All right. I think that's a great idea.

Greg in New Jersey asks, "other than my home, I have no debt and am already maximizing my 401(k). I'd like to know if it is worth my paying an additional mortgage payment every year or should I look to put that money someplace else?"

Allan.

CHERNOFF: That all depends what his mortgage rate is. If his mortgage rate is pretty high, better you get rid of it, the better. But I'd say if it's under say 7 percent or so, you know, you can be investing the money. You might do much better. So your mortgage might be just fine.

WILLIS: Great ideas.

Listen, panel, great advice today. Thank you so much for piling on. I loved it. Donna Rosato, Lynnette Khalfani-Cox, Allan Chernoff, thank you so much.

Ali. VELSHI: Thanks, Gerri.

So many folks go through foreclosure and they don't know how to deal with it. So coming up, some struggling homeowners and lenders are coming together under one roof in the name of saving their home. Stay with us and we'll tell you about it. You're watching ISSUE NUMBER ONE on CNN.

(COMMERCIAL BREAK)

VELSHI: OK. A lot of people are not all that happy about the economy right now and they don't really want to hear about the problems of the wealthy. But economic issues faced by the wealthy actually have a domino effect. Robert Frank got one of the best gigs around. He's the best-selling author of "Richistan." He writes "Wealth Report" for "The Wall Street Journal" and basically he took a bit of time off and hung out with the super wealthy. I don't know if they're watching us right now. But for the rest of us, there are some lessons that can probably be learned about the way they organize money and how they're going through things that we can take from them. Is this economy, this tough economy, having an effect on the wealthy?

ROBERT FRANK, "THE WALL STREET JOURNAL": It is. You know, most of us just assume, well, the wealthy have all this money, so they don't have anything to worry about. They're not worried about filling their gas tank. But they are becoming a lot more conservative.

We saw in March that luxury car sales were down about 18 percent. Bentley sales, which is really the wealthy, they were down about 42 percent. Maybe the pope and Mercedes will generate some interest in pope mobiles.

But anyway, you know, yacht prices are coming down. Mansion prices are coming down. So we're really seeing that the wealthy, even though they have the money, they're being a lot more conservative about spending right now.

VELSHI: Is there a lesson I take from that or do I care? Like, does it have any effect on my life?

FRANK: Well, the effect on your life is two-fold. Number one, the top 10 percent of the wealthiest Americans, the top 10 percent, they account for more than half of all consumer spending in American. So what they do matters to you and I because that's the consumer economy.

The second thing is that the wealthy are really not yet taking advantage of all the opportunities out there. They're not really buying up speculative real estate. They're sort of looking at financial markets to good investments. But they're saying, you know what, we're not seeing a bottom yet. So I think average investors, average home buyers should take from that, you know what, there may be more pain to come.

VELSHI: Because they've got access theoretically, to a little more advice we do. One of the things that came out in your book, and it's come out in other books, is that often the very wealthy are careful about how they spend. They're value people. They do look for value either in a tough economy or anywhere, even when things are going well.

FRANK: That's right. Yes, and the wealthy, you know, we like to say, oh they're just buying the most expensive thing they can find. They do a lot of research into what they're going to buy. And what we're seeing now, particularly is that, especially in the high-end, they're looking for value right now. They're looking for, where are the good bargains, whether it's properties or cars or boats, and there will be opportunities for them in this market.

VELSHI: What do the people you talk to say in terms of opportunities to make money in a recession?

FRANK: Well, I was talking to a Wall Street banker the other day who, during his lunch breaks, he's buying foreclosed properties. So we see the pain that that can cause. But for the wealthy, you know, he was on his lunch break buying several properties per day. And who knows whether those pan out or not, but he really is seeing some bargains out there in the housing market. Now, even if you're not looking at that market, there may be, you know, cars, all in the consumer market are going to weaken. And so, you know, look for those opportunities.

VELSHI: So there may be deals to be had.

FRANK: That's right.

VELSHI: All right. Robert, good to talk to you again. Robert Frank is with the "Wealth Report," "The Wall Street Journal" and the author of "Richistan."

Gerri.

WILLIS: OK, we're going to have to go yacht shopping this weekend, Ali.

Imagine a group of people, some homeowners, some lenders, all coming together in the name of preventing foreclosures. It's actually happening and could be working. CNN's Deb Feyerick has the story.

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT, (voice over): Sixty-nine- year-old George Mascia was desperate. While fighting cancer, he refinanced his home with a subprime loan, cashing out equity to help pay his mounting medical bills. Only after signing did he fully read the contract.

GEORGE MASCIA, HOMEOWNER: I realized the predicament that I got myself into. That there's a good possibility that I could lose my home because of this loan.

FEYERICK: In the 40 years he'd owned his Bronx house, Mascia says he'd always paid his mortgage on time. But the new terms, an adjustable rate that jumped to 9 percent, were crushing the Vietnam vet. When he asked the bank to modify the loan to make it easier to pay, Mascia was told it wasn't in the best interest of investors.

MASCIA: I felt like, at that time, a piece of meat. A piece of garbage is what I felt like.

FEYERICK: Just outside New York City, Davidsa and Marselo (ph) Rodriguez also struggled to pay their mortgage. Three months after buying their home, both lost their jobs. But when Mrs. Rodriguez contacted the lender to work out a payment plan, she says no one could give her the information she need.

DAVIDSA RODRIGUEZ, HOMEOWNER: I remember once they told me you, you know what, just -- you're going to lose your house. And I'm saying, that's it? And they say, yes, what else you can do. And have a nice day, ma'am.

FEYERICK: Neither the Rodriguezs, nor George Mascia, ever met their lender face-to-face. In fact, the majority of struggling borrowers don't.

JEFF KLEIN, NEW YORK STATE SENATE: In 2007, 57 percent of the people whose homes ended up in foreclosure had no contact with their lending institutions.

FEYERICK: New York State Senator Jeff Klein has been trying to reverse that trend. Along with others in New York, he's been holding foreclosure prevention fairs to bring lending institutions together with people like Davidsa Rodriguezs.

RODRIGUEZ: Finally I can speak with the same person, that she's going to follow my case.

FEYERICK: George Mascia also finally met his lender in the flesh.

MASCIA: I said, can you help me? He says, I think we might be able to help you.

FEYERICK: George worked out a deal. His mortgage now modified to a fixed rate, lowered from 9 percent to 5.5 percent. Davidsa is still working out her details but remain optimistic.

(END VIDEOTAPE)

WILLIS: Deb Feyerick joins me now.

Deb, you know, I'm stunned, from 9 percent to 5.5 percent. And shocked still that, you know, 57 percent of folks in trouble, they don't bother to pick up the telephone. How do people find out about these fair? They're obviously a great thing.

FEYERICK: Well, that's what's so interesting. A lot of -- for example, in George and Davidsa's case, they got this kind of a letter from their state senators. So that's really the starting point. Contact your local politicians. They are organizing these things. Also, get in touch with the local consumer advocate or a housing advocate.

Now, not everybody's going to go to this fair and walk out with some sort of a deal or get back on track. But for many it's a way to just get off the phone and get in the face of somebody who can finally give them some answers.

WILLIS: Well, great information, Deb. I'm sure folks will be following up on that. Thank you.

Ali.

VELSHI: All right, Gerri, on our radar today, more bang for your buck by stretching your tax rebate checks. Sears, KMart and Lands End are offering a 10 percent bonus on each stimulus check redeemed for a gift card of the same value. So that $600 check converts to $660 on a gift card and that's usable for anything in the store. That promotion goes from May 14th to July 19th.

I don't know how I feel about that. I don't know if it's great that people are giving you a way to stretch your rebate check.

WILLIS: No, it's terrible. And let me tell you why. You need to save that money and pay off your debt. That's the absolute best thing to do. And I know people aren't excited about it, but, you know, there's a recession. You could lose your job.

VELSHI: I sort of thinking the same thing, but she was really thinking it. So I'm glad you said that. I'm glad people have a way to stretch it, but this is, you know, if you're in debt, may be the best thing to do for you is not the best thing to do for the economy.

WILLIS: That's right. It doesn't matter. You've got to protect your family.

VELSHI: Well, for more ideas, for strategies and tips to save you money and protect your house, watch "Open House" Saturday at 9:30 a.m. Eastern right here on CNN. And for more on how the news of the week effects your wallet, tune in to "Your Money" Saturday's at 1:00 p.m. Eastern and Sundays at 3:00 right here on CNN.

WILLIS: The economy is issue number one, and we here at CNN are committed to covering it for you. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 p.m. Eastern, with a special guest. You'll want to tune in for Suze Orman. She stops by to answer all your money questions right here on ISSUE NUMBER ONE, 12:00 p.m. Eastern.

VELSHI: Now for the latest headlines, let's go to CNN "Newsroom" starting right now.

UNIDENTIFIED FEMALE: How will America receive him?