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Another Possible Interest Rate Cut from the Fed; Lost Homes, Lost Tempers; Zimbabwe Election Results; Fed Cuts Key Interest Rate
Aired April 30, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: All right. The economy, anemic. The Fed, well, they're ready to act. In just about 15 minutes or so, another possible interest rate cut from the Fed, and it could be the last one for a while.
MELISSA LONG, CNN ANCHOR: Yes. and the "R" word, you heard it thrown around, but just what is a recession? And are we currently in a recession?
LEMON: From Washington to Wall Street to your wallet, the economy, of course, is ISSUE #1.
Hello, everyone. I'm Don Lemon, liver here at the CNN world headquarters in Atlanta.
LONG: And hello. I'm Melissa Long, in today for Kyra Phillips.
And you are in the CNN NEWSROOM.
LEMON: A weak read on the economy is boosting hopes for another interest rate cut. The Federal Reserve's interest rate decision just minutes away. Traders in Chicago, New York and beyond are anxiously awaiting word from Washington. We showed you live pictures there from Chicago just moments ago, so we've live in Chicago, we're live in New York, and that's where we want to take you right now, to Susan Lisovicz at the New York Stock Exchange with a preview.
Hi, Susan.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hi, Don.
Well, the Fed is walking a tightrope, hoping that its recent rate cuts will stimulate the economy enough to avoid recession. But at the same time, those cuts are blamed for stoking inflation.
The Fed, nonetheless, expected to cut its key rate by another quarter point. The current rate stands at 2.25 percent. The Fed has already cut the Fed Funds Rate by an aggressive three full points since September, a steep drop aimed at loosening the tight credit markets -- Don.
LEMON: OK. Of course, Susan, investors are always interested in what the Fed does and what the Fed says.
LISOVICZ: That's right, because there is a statement this accompanies every decision, Don, and that's where we should get some insight into the Fed's future plans.
Many expect the Fed to signal that it will change course with no future cuts in the works. That could help strengthen the dollar, which in turn could ease prices for oil and other commodities that have become so dear.
(STOCK MARKET REPORT)
LISOVICZ: And minutes from now we'll have a decision from the Fed, and Ali and I will bring it to you live -- Don.
LEMON: All right. The best coverage right here on CNN.
Susan, we'll see you in a bit. Thank you.
LONG: And a little less worry today about the U.S. oil supply. New government numbers are showing crude supplies are up and record oil prices are, in fact, edging down.
Meantime, oil companies are again posting record profits while gas prices post record highs. Oil industry chiefs are rejecting calls to tax the windfall, saying that won't ease the soaring fuel costs that we've all been accustomed to. They say the problem, it's production, it's not profits.
(BEGIN VIDEO CLIP)
JOHN HOFMEISTER, PRESIDENT, SHELL OIL COMPANY: I think the president brings up a good point in that we could, we have the available domestic supplies off the coast of Alaska, as well as ANWR. Shell has won $2 billion worth of high bids for the Chukchi Sea. That's a few years off before we can begin production.
But let's remember that there's more than 100 billion barrels of untouched oil and gas in this country that is subject to a 30-year moratorium. Now, there's only one body in this country that can set a 30-year moratorium, and that's the U.S. government.
(END VIDEO CLIP)
LONG: Now, critics point out that the oil supply in Alaska is not enough to justify the potential environmental damage. Instead, they say the U.S. should invest more in alternative fumes. Now, for the record, Shell posted a record $9.1 billion profit for the first quarter.
Well, losing their homes and losing their tempers as foreclosure filings are soaring, some ex-homeowners are taking out their anger on their homes.
CNN's Thelma Gutierrez experienced it firsthand.
(BEGIN VIDEOTAPE)
THELMA GUTIERREZ, CNN CORRESPONDENT (voice over): Las Vegas realtor Steve Howell assesses foreclosures. He says he's seen it all and documents it for the bank -- yards teeming with trash, plumbing that has been pilfered, floors covered with feces.
(on-camera): Have you ever seen such a thing before?
STEVE HOWELL, PRUDENTIAL, AMERICANA: In the nine years I've done it, no. And I've talked to people, agents that have done this for a lot longer than I have, and they haven't either.
JOE KRAEMER, CENTURY 21: Some pretty bad damage inside.
GUTIERREZ (voice-over): Agent Joe Kraemer says he's seen the same trend and never knows what he'll encounter when he walks into a foreclosure.
KRAEMER: They took the island, they took all the cabinets.
Let's shut the bathroom.
GUTIERREZ (on-camera): The toilet is gone.
KRAEMER: The toilet's gone. They took the top of the countertop.
GUTIERREZ (voice-over): Kraemer says it could be frustration, anger and hut that's taken out on the home.
KRAEMER: And it's the other ones that were vengeful. You know, the walls are bashed in, and there's so many different aspects that we're running into. It's kind of uncharted territory.
GUTIERREZ: If it's sold as is by the lender, the cost of cleaning, fixing and replacing is up to the buyer. The end result? The banks lose money because the home has to be discounted and the property is much harder to sell.
KRAEMER: These are one of the rare ones that you see.
GUTIERREZ: Just ask Albert and Fatinmatti Gando, who are looking to buy a foreclosure because they can save up to 50 percent. They've seen more than a dozen.
FATINMATTI GANDO, HOME BUYER: I went through the house and it was like, weird smell. I couldn't even look at it. I left. I don't want to see it. I don't want to take a house that smells.
GUTIERREZ: But the Gandos are interested in this foreclosure because it's near the strip, under $200,000, and hasn't been trashed.
UNIDENTIFIED MALE: Missing a dishwasher, missing a stove.
GUTIERREZ: In fact, some lenders are offering a so-called Cash for Keys program to people who are about to lose their homes.
HOWELL: If they can give us a property in that condition, just kind of take their stuff and go, there is an incentive, if you will, from the bank.
GUTIERREZ (on-camera): How much?
HOWELL: It varies. It could be as little as $100 to as much as $1,000 or more.
GUTIERREZ (voice-over): A small price to pay when you consider the cost of this...
UNIDENTIFIED MALE: There were columns here, Roman-type columns. Gone.
GUTIERREZ (on-camera): Someone actually took the columns?
UNIDENTIFIED MALE: They took them.
(END VIDEOTAPE)
GUTIERREZ: Now, the Cash for Keys program really isn't something the banks are eager to talk about, but several realtors who negotiate with the homeowners told us the majority of the people will take the money and leave, so it can be a win-win situation for both parties -- Melissa.
LONG: Yes, I've been in a few homes that have been foreclosed upon, and you do see that anger and that hurt. It's almost like a shell of a house. They do strip them.
So, for the police, do they ever go after the former homeowners? Is there any sort of prosecution that follows?
GUTIERREZ: Melissa, it's a really difficult situation. In fact, we talked to neighbors who said they actually watched a home being picked apart and taken apart. They called the police. The police show up.
But if the person is able to prove that that is their home, and their I.D. matches the address, there's nothing the police can do. After all, it is their property. So it is a difficult situation. And that's why the Cash for Keys program is so attractive for the banks and also the homeowners.
LONG: Thelma Gutierrez live from Los Angeles.
Thelma, thank you.
LEMON: Austrian authorities are trying to figure out how Josef Fritzl's secret family got by while he was away on vacation. A German tabloid has posted this video on its Web site. It shows Fritzl, who's at the center of an astonishing incest case, enjoying the sun in Thailand.
Well, the two sides of his twisted family tree are trying to make up for lost time there. Fritzl's wife and public family are staying in a clinic with his abused daughter and three of the children he had with her. Now, police say Fritzl confessed to imprisoning the daughter in a basement for 24 years, and that he repeatedly raped her.
(WEATHER REPORT)
LEMON: We've been telling you a lot about the elections and reporting here on CNN about the elections in Zimbabwe. We have gotten some results in, and it is what some people there expected. But one person may not be going without a fight.
We want to join our Nkepile Mabuse. She joins us now from Johannesburg with the very latest on this vote count.
What can you tell us, Nkepile?
NKEPILE MABUSE, CNN CORRESPONDENT: Well, Don, the result that we have is not an official result. The Zimbabwe electrical commission is still going to verify these votes.
What we've heard from a very senior member of Robert Mugabe's party is that Morgan Tsvangirai has 47 percent of the vote and that Robert Mugabe has 43 percent of the vote. This means that Robert Mugabe, the incumbent, has lost this election, but it also means that there's going to be a runoff election, because in order to win outright, a candidate in Zimbabwe, a presidential candidate, needs 50 percent of the vote, plus one.
So it appears as if there will be a runoff election. But these are not official results, I have to stress. The MDC, the opposition in that country, is saying this election was rigged, their candidate, Morgan Tsvangirai, has won outright, and has won 50.3 percent of the vote. So no resolution in sight in that country.
LEMON: Nkepile Mabuse reporting from Johannesburg.
We appreciate your reporting. Thank you very much.
The interest you pay or your credit cards and bank loans, well, it might be changing again. Any moment now the Fed could be announcing another cut in interest rates. And we will have live reports on the big decision and what it means to you.
LONG: And have you ever played it? Have you ever seen it? It is violent, it is explicit. It is sweeping America. "Grand Theft Auto Part IV" now has hit the streets, and, well, we'll take it for a test drive.
(COMMERCIAL BREAK)
LEMON: All right. Just moments away from an announcement from the Fed. Will there be another interest rate cut?
We're live in Chicago, we're also live in New York with the very latest on this, and we want to take you now -- there's Ali Velshi and Susan Lisovicz. Both of them are in New York, but at the upper left of your screen, you're looking at the Chicago Board of Trade there. And many times they just kind of go wild when there is -- the reaction is, well, to put it lightly, Susan Lisovicz, right, when -- if there is a cut.
And we're watching the Big Board as well. You can see the Dow is up. And we're expecting this decision any moment now.
2.25 to two percent, right? And that's only six-tenths of a percent cut that we're expecting, Susan?
LISOVICZ: Well, yes. The Fed has been cutting rates to juice the economy. And the latest evidence of how -- how slow the economy is, is the GDP report that Ali and I have been talking about all day.
The world's greatest economy grew at just .6 percent in the first three months. That is why the Fed has been taking the moves that it has.
On the other -- and the Fed has just done for a seventh consecutive time cut interest rates, the Federal Funds Rate by a quarter of a point, bringing the Federal Fund Rates down to 2 percent, saying that overall economic activity remains weak -- Ali.
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes. And that was the bet, whether they were going to move or not, because one of the problems, Susan and Don, is when the Fed cuts rates -- by the way, keep looking at that Chicago Board of Trade. It's a bit of a delayed reaction sometimes.
They get instructions from the people who are telling them, buy, sell or trade, and you'll see their hands start to shoot all over the place. But what tends to happen here is that when the Fed cuts rates, it makes money cheaper to borrow. Business -- there we go. You see they're all getting their instructions and they're starting a little bit.
People have more money to spend, businesses have more money to spend, and the result is that it sometimes stokes demand. And demand is what causes inflation. And inflation is the big problem that we've been having, Don.
We're paying more for not only gas, but wheat, corn, soybeans, eggs, milk, cheese, and that's the thing that the Fed is grappling with, do they stimulate the economy by cutting rates, or do they stay still? And I think that's one of the things that they had to grapple with. So we may be done seeing interest rate cuts for a while.
You think so, Susan?
LISOVICZ: Yes. And you know what, Ali? One of the key phrases that is coming out in this statement is that inflation expectations have -- has risen. And that is one of the reasons why there has just been such a debate.
In the six weeks since the last time the Fed cut interest rates, yes, we had already seen oil prices at record highs, but we saw these alarming headlines about food riots all over the world because of a sharp rise in food that the IMF said could even destabilize some countries. We already know what it's been doing here.
And the Fed saying that it expects inflation to moderate over time. That would happen with a slowing economy, but noting that inflation concerns have risen.
LEMON: And Susan and Ali, we have been watching, as we said, the Chicago Board of Trade, and there they are to the right of me, right to the right of your screen as well. There they are now. You see the hand gestures going up and down.
What is this? Is this the fifth -- I read somewhere it was the fifth rate cut since there were fears of a slowdown in the economy, or the 7th.
LISOVICZ: Seventh rate cut.
LEMON: I saw seven somewhere and five somewhere. So this has been the seventh cut.
No more, you said in a long time. But, I mean, it's only, as we said, three-quarters of a percent. How much of a difference can this really make?
VELSHI: Well, you know, the Fed rate cuts take awhile to trickle down. Here's one thing that will make a difference. The Fed rate is now at 2 percent, which means the prime rate, which is always 3 percentage points higher, has now gone down to 5 percent.
So through the course of the afternoon, Don, we'll bring you information where the banks are confirming that they're lowering their prime rate. So if you have a loan that's tied to prime, you're going to -- you're going to see that benefit almost immediately. But it's very little.
What you are seeing on the Board of Trade when these guys are trading, they're trading bonds. And in many cases, that is where your mortgage is set. So you may see some sympathy move in a fixed rate mortgage.
(CROSSTALK)
LEMON: Well, talk more about that, because everybody is concerned about their mortgage, Ali.
VELSHI: Yes. Well, see, that's where you might see -- the fixed rate you might see moving down. If you have an adjustable rate mortgage, if it's not tied to prime, you know, that's sort of got a market on its own.
So, the point of this is, when the Fed cuts rates, it basically creates liquidity and more money for banks, for people who loan money out. But it generally takes a while for that to be felt in the system. The Fed started cutting rates, those seven rates that you just talked about, seven rate cuts, they started last September.
We still haven't felt the full effect of that. And if it's true that when the Fed cuts rate it's stokes inflation, and we've already got the inflation that we've got, that could be pretty serious.
LEMON: OK. I see Susan champing at the bit -- go ahead. LISOVICZ: Yes. You know -- well, I just wanted to echo that. One of the problems with this situation the Fed is in, is that, well, has it really helped me? Are my mortgage rates really much cheaper?
No, they have not come down as dramatically as the Fed with the Federal Funds Rate. And the problem is, is that we have this credit crunch.
So the banks and financial companies aren't as willing to lend. And so it really puts the Fed in a tough -- in a tight spot, because on the other hand, what we have seen very dramatically happen is that prices have gone up. Mortgage rates have gone down, but not nearly as dramatically as this Federal Funds Rate.
LEMON: OK.
Susan Liscovicz, Ali Velshi, both, thank you very much. Your expertise is always appreciated when we -- on days like this and events like this.
Again, the Fed cutting rates there, one-quarter of a percentage point.
Details to come right here in the CNN NEWSROOM -- Melissa.
LONG: Of course we're coving all the candidates for you. Last hour we brought you live pictures from Indiana with Barack Obama and Michelle Obama. Right now Hillary Clinton also campaigning in Indiana.
Both candidates have really been bouncing back and forth between Indiana and North Carolina, ahead of the primaries that are coming up on Tuesday.
Let's listen right now as Hillary Clinton is talking about minimum wage and the housing crisis.
(JOINED IN PROGRESS)
SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: And here's some of what I'm going to do.
I am the only candidate with a plan to fix NAFTA. And I'm going to make sure that we have core labor and environmental standards that are enforceable. It doesn't do any good to have standards if they're not enforced, does it?
So we're going to start by enforcing labor and environmental, health and safety regulations. That's not only good for our workers, it's good for our consumers. And it's also -- as Paul was pointing out, happens to be good for the people who live in the other countries as well.
And we're going to get tough on China. And what do I mean by that? Well, I have been traveling across Indiana with your great senator, Evan Bayh. (APPLAUSE)
And Senator Bayh has one of the strongest records of standing up against China, against the export of our jobs, against turning our manufacturing base into a ghost town. He has been there year in and year out, and he will finally have a partner in the White House, because I will be there with him fighting every step of the way.
Senator Bayh and I were traveling across Indiana a few weekends ago, and we were going to plants that are union plants that help produce the defense of our country -- the tanks, the humvees. They're on the ready every single day. That's the way it should be. When we're going to spend a half a trillion dollars on our defense budget, don't you think we ought to hire American workers to do that work?
(APPLAUSE)
But we're not competing against companies when we compete against China, we're competing against a country. A country that subsidizes the energy costs, subsidizes the cost of facilities, subsidizes all of the ingredients that go into manufacturing nearly anything. So it's kind of hard for an individual company, no matter how prepared and how well supported, to be able to compete.
It's the same with Japan. They invested a lot of money in creating these batteries, and now they're in all of these hybrids, and we're competing against what has been basically national research that paid off for the Japanese car companies.
There are so many examples of this. So we're going to go right at China.
LONG: Hillary Clinton campaigning in Portage, Indiana. If you would like to continue to listen to her address right now, go to our Web site, CNN.com/live, and click on the main page and you'll get that player right up on your desktop.
You're watching CNN, the NEWSROOM.
(COMMERCIAL BREAK)
LEMON: Hello, everyone. I'm Don Lemon live at the CNN World Headquarters in Atlanta.
LONG: And hello, I'm Melissa Long in today for Kyra Phillips.
You are in the CNN NEWSROOM.
And let's check out some of the stories that we're working on for you today in the CNN NEWSROOM. A new twist in the investigation into alleged sexual abuse at a Texas polygamous compound. Officials now say they're looking into the possibility that boys were abused.
One month after Zimbabwe's presidential election, a senior official of President Robert Mugabe's party concedes that Mugabe's opponent, that's Morgan Tsvangirai, came in first. But the official still contends a runoff is needed because neither candidate actually won by a 50 percent majority.
And the Federal reserve has just cut interest rates again. It happened 17 minutes ago now. The federal funds rate will fall a quarter of a point, up to two percent. We should point out this is the seventh cut since August and it could be, could be, the last one for a while.
LEMON: Well, just six-and-a-half years after the 9/11 terror attacks, al Qaeda and its allies remain the single biggest threat to the United States, so says the State Department report on global terrorism. In another finding, Venezuela's Hugo Chavez is cooperating with terror sponsors around the world?
Well, for more on that report, let's go to our State Department correspondent, Zain Verjee with that.
He's cooperating with terror sponsors around the world? What's that all about, Zain?
ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, we'll give you the details.
But one of the he most staggering things about this report, really, Don, was the numbers. Take a look at this. According to the State Department report, you've got more than 22,000 people that were killed last year in terror attacks. And 60 percent of those fatalities were from Iraq, according to this report.
It goes on as well to say that al Qaeda and the groups linked to it are still the greatest terrorist threat to the U.S. It also says that al Qaeda really bounced back since 9/11 using the Internet to recruit and train. This is what one top State Department official had to say.
(BEGIN VIDEO CLIP)
DELL DAILEY, STATE DEPT. COUNTERTERRORISM COORD.: Core elements of al Qaeda are adaptable and resilient. And al Qaeda and its associate networks remain our greatest terrorist threat to the United States and its partners. By making use of local cells, terrorists have been able to side step many of our border and transportation security measures.
(END VIDEO CLIP)
VERJEE: The official went on to say that al Qaeda is moving pretty freely in the tribal boarder region between Pakistan and Afghanistan and that the key leader, Ayman al-Zawahiri, has emerged as the planner and chief and has really been able to put together the splintered elements of al Qaeda into a much more centralized and organized unit.
Now across the border if Afghanistan, the report goes on to say that the Taliban is regrouping and it's getting a lot of its funding from over the border in Pakistan, as well as from drugs and trafficking and kidnapping. And, the report indicated that Iran is provided them with a lot of weapons.
LEMON: OK, Zain.
So Venezuela, as you said, figured into this report. Tell us what they said about the Chavez government.
VERJEE: Well, the U.S. is increasingly worried about this. What they're saying is that there are more links between Venezuela and Hugo Chavez, as well as Iran. And the U.S. called it the most active state sponsor of terror. That's Iran.
What they cited in this report was new weekly flights, essentially, between the two countries, which the U.S. is saying is really a danger, because the passengers aren't screened properly and that could pose a real threat to the U.S. The report here also says that it's easy when you're in Venezuela to get citizenship to get citizenship, to get identity cards, and easy to get travel documents. So it's a place that really attracts terrorists.
Don, one more thing. The report also says that Venezuelan president, Hugo Chavez, is supporting Colombian rebels and arming them and allowing them to come over the border in Venezuela and give them a safe haven.
LEMON: All right. State Department correspondent, Zain Verjee.
Thank you, Zain.
LONG: Is it about being prudent or is it about being prepared? Nobody in the U.S. military says that an attack of any kind is in the works against Iran. But a plan? That may be a different story.
Let's go straight to the Pentagon and CNN's Barbara Starr.
OK. We'll go to Barbara a little bit later in the broadcast.
No, Barbara is with us.
Barbara joining us from the Pentagon -- Barbara.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Hi there, Melissa. Sorry about that.
It does seem it's almost like the political campaign seems every day, every week we hear about Iran and the possibility of an attack against that country by the United States. And sort of the latest twist in sort over the last couple of days we've been hearing about two aircraft carriers being inside the Persian Gulf, and was that a possible signal that the U.S. was saber-rattling towards Iran.
But of course already within a day or so, we're back down to one U.S. Navy aircraft carrier in the Gulf. It's just that kind of rhetoric and moving the chess pieces around that begin to raise tensions between both countries.
And what we are finding in talking to our sources is there might be a lot of talk, but very little behind it. The question is, as you said, is there a plan? Is there a near-term option on the table to attack Iran?
By all accounts, no. Defense Secretary Robert Gates, the chairman of the Joint Chiefs, have both said that they don't want to see another war break out in the Middle East.
But, you know, the intelligence community and others looking at this very carefully, what would a target list actually look like? And what we are seeing is, over the last couple of days, the Iranians making their own moves, putting out a number of photographers in recent days when Iranian president, Ahmadinejad, took a highly- publicized visit earlier this month to the centrifuge uranium enrichment plant at Natanz.
The Iranians put out a bunch of photographs. Maybe they're doing a little saber-rattling, showing their nuclear facilities and showing Mr. Ahmadinejad with some top Iranian defense and intelligence officials.
So, what you seeing are both sides maneuvering towards each other. But at the moment, the word from the Pentagon is they don't want all this rhetoric to get out of hand, for there to be any miscalculation between both countries -- Melissa.
LONG: Got it. Maneuvering perhaps on both sides, but no near- term plan, according to the Pentagon. But I'm sure a lot of people continue to speculate and talk about this one.
Barbara Starr at the Pentagon.
Barbara, thank you.
LEMON: All right. If we have the answer to this question, then we'd be all millionaires, how to lower prices at the pump. A gas tax holiday, is one idea. Will it work? We'll take a closer look.
(COMMERCIAL BREAK)
LONG: Let's find out what's happening in politics on this Wednesday afternoon. We're looking of course to the primaries in North Carolina and Indiana, six short days before the Democratic primaries there.
Barack Obama is touring a factory today in Indianapolis. Pictures from earlier. Also, holding a rally in Bloomington. You can follow him live right now at CNN.com/live.
Hillary Clinton schedule today -- a meeting with factory workers in South Bend, a town hall meeting in Portis (ph), we brought that to you earlier in the hour, live. Plus, some events going on in Lafayette and Coppenhaul.
And, the latest CNN Poll of Polls is showing Indiana voters are essentially split right down the middle. Again, the primary is coming up on Tuesday. Republican presumptive nominee, John McCain, is in a week-long tour. He is pushing health care. Right now talking about technology related to health care. Here's an opportunity to hear from the Republican presidential hopeful.
(JOINED IN PROGRESS)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: .. Could you just -- I'm sorry to take up the time, but tell us about how important it was for you to get the briefings and updates.
UNIDENTIFIED FEMALE: It was very important, because one minute they said they had to cut her arms, the next minute they had to do something else. And when they said they may do a heart transplant on her, it was -- you know, it was crazy.
MCCAIN: And you were kept up to date --
UNIDENTIFIED FEMALE: Abreast, yes.
MCCAIN: -- literally hour by hour?
UNIDENTIFIED FEMALE: I used to talk to Dr. Cambridge (ph), called him doc in a box.
(LAUGHTER)
MCCAIN: Do you approve of your son-in-law?
UNIDENTIFIED FEMALE: Oh, yes.
MCCAIN: Thank you. Thank you, ma'am.
UNIDENTIFIED MALE: Thanks, Pat, Martha (ph), Kathy (ph).
Speaking of lobbies, there is -- there is no additional reimbursement for this technology that we use. It's value-added because it's the right thing to do for patients.
MCCAIN: But the initial investment must have been --
UNIDENTIFIED MALE: It was several millions.
Terry (ph), do you know the answer to that?
UNIDENTIFIED MALE: It was about $4.5 million.
MCCAIN: And where did the funds come from?
UNIDENTIFIED MALE: You know, we -- we are like most hospitals in America, a community-owned, not-for-profit institution. That doesn't mean, though, that we can avoid generating a surplus every year. We do that. And the reason we do that is to invest in projects like this, that in fact provide better care for our patients.
I don't think Martha would be with us if we didn't have the doc in the box, as corny as it sounds.
MCCAIN: Could I ask both of you again to comment on the cost issues as to savings? You've both been in the business for a long time. And the reason why I keep coming back to this, in all respect, and I think the vital part is saving lives, which you've done so magnificently, but it's also getting our costs under control and reducing health care costs so it can be available and affordable.
What has been the overall impact of this on your overall costs of doing business?
UNIDENTIFIED MALE: Well, I think if we talk about our overall costs of doing business in the ICU, we've seen that compared to what it would have been, this is clearly less.
Let me give you one specific example.
LONG: Talking about health care costs in Allentown, Pennsylvania. Some health care professionals right there having the opportunity to have a conversation with the Republican presidential hopeful, John McCain.
Of course while he is talking about health care costs and medical technology, Karl Rove has some advice for the Republican nominee to be. That's President Bush's longtime political mastermind, says John McCain is too private.
Writing in "The Wall Street Journal," Rove says that if McCain wants to win the White House, he has to open up.
LEMON: Well, who could be against a tax holiday? You may have talked and heard a lot about temporary break from the federal gas tax as a way to push prices away from four bucks a gallon. But have you thought of what that money is for?
CNN's Carol Costello did.
(BEGIN VIDEOTAPE)
CAROL COSTELLO, CNN CORRESPONDENT: For cash strapped consumers, any reduction in gas prices would be like, well, like Santa coming into town early, or so it seemed on the stump.
SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I would immediately lower gas prices by temporarily suspending the gas tax for consumers and businesses.
COSTELLO: Actually, it was John McCain who first proposed a suspension of federal taxes on gas for the summer travel season, from Memorial Day to Labor Day.
MCCAIN: Wouldn't it be nice if the next time that you went to fill up your gas tank that 18 cents a gallon less you'd pay at the gas pump?
COSTELLO: That sounds nice. But Santa aside, there's no such thing as a free lunch.
Those federal highway taxes pay for things like road construction and bridge repair, something that was really important just last year, when the I-35 bridge collapsed in Minneapolis, killing 13 people. Politicians were singing a different tune then.
CLINTON: I want to make modernizing our nation's infrastructure as a back bone of our prosperity.
COSTELLO: Clinton now suggests taxing oil companies to make up for the money lost to her proposed holiday gas tax. But would that make up the shortfall?
According to the House Committee on Transportation and Infrastructure, both Clinton and McCain's idea would drain the federal highway fund by $3 billion per month, creating a $12 billion shortfall. Not only that, but it would put at risk, 310,750 highway construction jobs.
Many experts think -- all just politics.
STEVE BUCKSTEIN, CASCADE POLICY INSTITUTE: In this case, it's, I think, unfortunately more of a political gimmick. It won't really lower the cost to drivers significantly. It will increase the deficit in the highway trust fund and just lead to more politicizing of highway funding.
COSTELLO: Buckstein agrees with the only presidential candidate not in favor of a gas tax holiday, Barack Obama.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: It's an idea that some economists think might actually raise gas prices because folks will start using more gas and demand will go up.
COSTELLO: One more thing, to institute the holiday, a bill would have to pass through both House and Senate at lightning speed, something not likely to happen by Memorial Day.
(on-camera): And experts say there are a number of ways to save money on gas. An example? Change the traffic patterns to ease congestion. But that's not as sexy as a holiday gas tax.
Carol Costello, CNN, Washington.
(END VIDEOTAPE)
LONG: The energy landscape is changing, but the oil companies just aren't changing with it. That's the message from the Rockefellers, who are pushing for big changes within Exxon Mobil, calling themselves Exxon's longest continuous shareholders.
The Rockefellers -- the family the Rockefellers -- now accusing the company of pocketing short term gains from the high prices and not exploring alternative energy for the long-term.
(BEGIN VIDEO CLIP) NEVA ROCKEFELLER GOODWIN, EXXON MOBIL SHAREHOLDER: I want to stress that all of the resolutions from Rockefeller family members reinforce different aspects of the same concern -- the need for Exxon to identify related opportunities and strengths and to complement its strengths and skills in an industry that will soon look very different than it did when many of Exxon's managers started their careers.
(END VIDEO CLIP)
LONG: Now, you probably know that Exxon Mobil is descended from John D. Rockefeller's Standard Oil Trust.
Now, Exxon says it does not comment on its meetings with shareholders.
LEMON: So close you can almost feel the flame. New video from a deadly explosion at a Georgia sugar plant.
(COMMERCIAL BREAK)
LEMON: Well, first responders had never seen anything like the sugar factory near Savannah, Georgia. Back in February, workers were trapped, the building was coming down, and a deputy fire chief recorded it all on his helmet cam. We get the remarkable images from reporter Melanie Roberti (ph) of CNN affiliate, WCOT.
(BEGIN VIDEOTAPE)
MELANIE ROBERTI, WCOT REPORTER: The inferno can be seen for miles away. Imperial sugar exploding in a ball of flame.
UNIDENTIFIED MALE: (INAUDIBLE) ... 45, 44.
(INAUDIBLE)
ROBERTI: Dispatchers worked frantically to get as many first responders to the scene as they can. Garden City Fire Department deputy chief, Roy Howard, is one of them. He's getting his first look at what used to be the refinery.
DEP. CHIEF ROY HOWARD, GARDEN CITY, G.A., FIRE DEPT.: You could see a glow in the building behind the silo area -- or in the silo area of the building. We'd seen a large glow, so we knew there was fire, we knew it was going to be pretty bad when we got there.
ROBERTI: It was close to being catastrophic. Balls of fire exploding out of the sides of the refinery, flames so bright they'd light up the night sky.
Chief Howard has never seen anything like it.
HOWARD: Not to this level of fire. That's the silo building there. That was above us.
UNIDENTIFIED MALE: (INAUDIBLE) .. this ain't good.
ROBERTI: A hellish inferno met him inside.
UNIDENTIFIED MALE: Watch out for powerlines...
ROBERTI: Destruction so massive, fire burned through what walls were left standing and engulfed the second and third floors of the packaging facility. Part of the building has collapsed. The ceilings caved in, making it hard for Chief Howard and his partner, firefighter, Ashley Hazard (ph), to find their way.
UNIDENTIFIED MALE: Look out (INAUDIBLE) ... keep a visual.
ROBERTI: And the fire wasn't the only concern.
HOWARD: There were explosions going on everywhere. Propane tanks, fuel tanks, settling tanks from welding construction and everything like that.
ROBERTI: Falling debris, burning embers and steel rain down on Chief Howard. The roof is gone, the structure, unstable. Even so, Chief Howard pushes forward.
HOWARD: That was our primary goal. The building could burn down -- but as long as we could get the people out --
ROBERTI: Firefighters had to work fast, because beyond those flames, workers remained trapped, unable to find their way out.
UNIDENTIFIED MALE: We'll get you out in just a second all right? All right, buddy? anybody else up there? Stay with me buddy.
ROBERTI: Minutes after he got there, Chief Howard finds his first victim. Images here we're not going to show, out of respect for the families.
One by one, Chief Howard and other first responders ran back into the burning buildings looking for more survivors.
UNIDENTIFIED MALE: Get as many as you can.
ROBERTI: They reached the outside of the break room, where more victims are trapped, but Chief Howard has to pull back.
HOWARD: It was completely collapsed and on fire. So it was immediate when that happened. You can see the floor is blown up and over and there is a lot of fire involvement in the room.
ROBERTI: Chief Howard pulled two victims out of the fire that night. Sadly, neither one of them survived.
HOWARD: It was very bad. Some of the worst burn injuries I've ever seen.
ROBERTI: He continued his search for five hours or more, until the structure was just too unstable. For him, other emergency personnel, and survivors, it's a night they'll never forget.
(END VIDEOTAPE)
LEMON: That was Melanie Roberti of CNN affiliate, WTOC. Thirteen workers died in the blaze. One of Georgia's worst industrial accidents. Investigators say something ignited the combustible sugar dust, but they're still not sure what.
LONG: How do you defend the indefensible? CNN's Alessio Vinci gets some insight from the lawyer for accused incest father, Josef Fritzl.
(COMMERCIAL BREAK)
LONG: We are coming up on the top of the hour. Let's check some of the stories peaking your interest on our Web site today, CNN.com, in the video category.
A lot of you are checking this out. What is it? It's a carcass of a giant squid. It's being examined right there in New Zealand. Scientists say it has eyes the size of soccer balls. That puts it in perspective how enormous it is.
LEMON: Goodness, yes.
LONG: Well, not fit for a man, beast and certainly not a baby. Florida authorities found a one-year-old boy living in a filthy home with feces, mold, used condoms and more. Yes, his 19-year-old mother has been arrested.
And is Paula Abdul having a little bit of trouble staying on track on "American Idol" last night? She apparently critiqued a contestant on two songs, but he only performed one of them.
These stories and much more on our Web site, CNN.com.
And the next hour of the NEWSROOM starts right now.
LEMON: Action from the Fed, reaction from the markets, a key interest rate, now down a quarter of a point. And it might be the last cut we'll see for a while.
LONG: And what does it mean now, and where will it take us down the road? It is the economy and of course it is issue No. 1 today.
Hello, I'm Melissa Long in the CNN Center in Atlanta today in for Kyra Phillips.
LEMON: And I'm Don Lemon. You're in the CNN NEWSROOM.
