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Issue Number One
Voters Heading to Polls in North Carolina and Indiana; Putting Candidates' Green Plans to the Test; What a Housing Bill Could Mean to You
Aired May 06, 2008 - 12:01 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CO-HOST: Right now voters are heading to the polls in North Carolina and Indiana. Could this be the big win for Senator Barack Obama, or will it be a needed shot in the arm for Senator Hillary Clinton?
Every candidate has a green plan. We'll put them to the test.
And what a housing bill on Capitol Hill could mean to you.
ISSUE #1 is your economy. ISSUE #1 starts right now.
Welcome to ISSUE #1. I'm Ali Velshi. Gerri Willis will join us in just a minute.
It's a tale of two states today -- North Carolina and Indiana. Voters head to the polls today to weigh in on the Democratic primary race between Senators Hillary Clinton and Barack Obama.
CNN's Dan Lothian is live right now in Indianapolis. This is a picture we are looking at of a polling station in Raleigh, North Carolina, the other state. And the turnout there looks good. But Dan is in Indianapolis with the CNN Election Express.
Dan, good afternoon.
DAN LOTHIAN, CNN CORRESPONDENT: Hello, Ali.
You're right, in North Carolina there, you're taking a look at that live picture there where there have been reports of long lines there in North Carolina. And people have been showing up to vote.
Very few details or stories of any problems, irregularities there. There was one issue of an official not showing up at a precinct on time, and so they've extended the end time in order to get all the voters into that precinct.
Here in Indiana, where I'm in, it is at a community center. They have two precincts right next to each other in the same building. This is one of the precincts, and through that door over there is the second precinct.
And of course this is kind of a light period of the day. Perhaps it will pick up. There are about five or six people showing up to vote. And voter turnout has been extremely high here. Across the state, the reports are strong voter turnout at all the precincts. At this particular precinct and the one right next to it, we are told that they've already exceeded the overall totals for the record for an entire day.
That means in just a few hours that they've been opened so far, they've already exceeded the all-time record at both of these precincts. So that gives you an idea of how folks have been energized by this Democratic battle and have wanted to come out to vote.
Now, as people have been coming in here, we've been talking to them about what are some of the issues that are important to them. And by and large, the main issue continues to be the economy, and also the war in Iraq.
Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: The war in Iraq, the economy. Just the feeling that the country is not going in the direction that it should be going.
UNIDENTIFIED MALE: It's the economy and the war. You know, the economy is really tough in Indiana right now. A lot of people don't have jobs. I feel lucky to have one, but who knows how long it's going to last?
(END VIDEO CLIP)
LOTHIAN: Both Senator Hillary Clinton and Senator Barack Obama spent some time on the ground here this morning doing some meet-and- greets. Senator Clinton will be staying here tonight as we find out the results of both North Carolina and Indiana. Senator Barack Obama will be spending the evening in North Carolina.
And again, the polls closing here in Indiana at 6:00 p.m. Of course there might be some extensions in certain precincts because of problems earlier in the day -- Ali.
VELSHI: Dan, thanks very much.
Dan Lothian and the rest of the CNN political team will be on this all day until that last vote is counted.
Dan, thanks very much -- Gerri.
GERRI WILLIS, CO-HOST: Well, the economy, as you know, will play a key factor in voting today in North Carolina and in Indiana.
John King, part of the best political team on television, is joining us.
So, John, how do you expect people's pocketbooks will really be affected -- affecting their votes? JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Gerri, it is the dominant issue in both of these states, Indiana and North Carolina. Last fall, the unemployment rate was in the mid 4s. It's above 5 percent now in both of these states. And you see it playing out in these states, not just in the candidates' speeches, but also in their TV ads.
Let's take a listen here. This is Senator Hillary Clinton. She has been saying, hey, guess what? I'll give you a gas tax holiday...
(BEGIN VIDEO CLIP)
NARRATOR: What's happened to Barack Obama?
UNIDENTIFIED FEMALE: Right now we're living paycheck to paycheck.
NARRATOR: He's attacking Hillary's plan to give you a break on gas prices because he doesn't have one.
(END VIDEO CLIP)
KING: So she's trying to say, I'll give you a break on gas taxes, trying to appeal to lower income working class families.
Barack Obama, right in the Evansville market, countered here, saying, you know what? I've got a real plan for the economy.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Folks know we desperately need change. Gas near $4, jobs leaving, health care you can't afford. But the truth...
(END VIDEO CLIP)
KING: So, Gerri, they're slugging it out over the economy, in a state that is diverse. And it makes the challenge different, because up here you have the former -- there is still some steel industry left, but not as strong as it used to be in the Chicago suburbs -- Gary, Hammond. Some steel industry up here, so more blue collar, more traditional labor union.
But also, of course, in much of the state you have a rural, farm economy as well. Trade is not a bad thing to many of the farmers in Indiana. Up here they might be me more suspicious of it.
So, the Democrats in this state of Indiana slugging it out. The economy, by far the most dominant issue you hear in the speeches and you see in the ads across the state.
WILLIS: Right. Let's get quickly to North Carolina, if we could here.
I think this is the tale of two states. I mean, take a look at this. You know, I'm from way over here -- Yancey County, Mitchell County, you name it. But this is the area that I think Hillary was talking to yesterday when she was dropping her Gs, but not all the state is like that.
KING: Dropping her Gs. The former first lady of Arkansas, somehow the New York senator become southern on occasions when it suits her interest.
You're absolutely right. There is a congressional district right over here represented by a conservative Democrat -- white, rural, lower-income voters. That is critical to Senator Hillary Clinton.
There's another congressional district that runs like a snake up here. It's mostly African-Americans here.
There's a congressional district over here that is one of the most poorest in the country. the majority African-American, but also a significant number of older voters.
And you have the high-tech -- I want to blank this out so I can see. You know this area very well -- in Raleigh, Durham, and Orange County, Durham County. You have the research triangle. So you have people with Ph.D.s, people teaching at the colleges.
So you have another great, diverse mix in terms of the economy. Rural and agriculture, old tobacco, the old textile mills out here, education and high-tech in the middle. Both of these candidates have places to play to their past constituencies. It is an interesting demographic challenge.
WILLIS: And a pretty good economy to boot.
Thanks for that, John King.
KING: You're welcome.
VELSHI: All right, Gerri. I don't know, did you just touch that board?
WILLIS: I did.
VELSHI: Yes, that was cool. I've never actually...
WILLIS: It's awesome. You should see the technology over here. It's crazy.
VELSHI: I've always wanted to do that. You just reached in and did it.
All right, Gerri. Thank you very much.
WILLIS: You're welcome.
VELSHI: Listen, we're talking about the tale of two states, Indiana and North Carolina. But you get to vote even if you don't live in a primary state.
Poppy Harlow of money.com is here with today's "Quick Vote."
Hey, Poppy. Welcome back.
POPPY HARLOW, CNNMONEY.COM: Thank you very much.
How do you invest in this volatile market? It's a question we all have. Are we in a recession? Are we not?
Lots of big questions out there for people who want to know where to put their money. So we want you to weigh in. Here's your "Quick Vote" question today.
"I would most likely take financial advice from Warren Buffett, Donald Trump, Oprah Winfrey, or President Bush."
This is my favorite question to date.
VELSHI: That's a great question. I really like that.
HARLOW: I love this question.
We'll be back later in the show with your answers. Vote on cnnmoney.com.
VELSHI: I've got some sense that I think I know where that's going, but let's visit that later.
Poppy Harlow from cnnmoney.com.
Up next, we'll take you to one city where times are actually pretty good right now and see what others can learn from them.
And all sorts of possible new rules as it relates to your credit card. We'll head to Capitol Hill to check them out.
You're watching ISSUE #1 on CNN right now.
(COMMERCIAL BREAK)
WILLIS: Welcome back to ISSUE #1.
So many cities are having a rough time -- Detroit, Cleveland, Las Vegas, and the list goes on and on. But one city is doing quite well, thank you very much -- Charlotte.
Here's CNN's Rusty Dornin.
(BEGIN VIDEOTAPE)
RUSTY DORNIN, CNN CORRESPONDENT (voice over): For Mike Knight, the sound of a buzz saw is music -- the money-making kind.
MICHAEL KNIGHT, REAL ESTATE INVESTOR: Run into anything unexpected? UNIDENTIFIED MALE: No.
DORNIN: Knight is what some in the real estate business call a flipper. He buys up older houses...
KNIGHT: We came in here, stripped it down to the guts.
DORNIN: ... fixes them up and sells them for a higher price. In this market?
(on camera): But has your business slowed down a little bit?
KNIGHT: No. Our business has actually been just steamrolling ahead.
DORNIN (voice over): How? Knight lives in Charlotte, North Carolina, the only city out of 20 major urban areas where, according to a national home price index, annual home values grew. Not by much, 1.5 percent. But compare that to a more than 20 percent drop in home values in Las Vegas and Miami.
Charlotte realty association president Dot Munsen says prices here never went through the roof.
DOT MUNSEN, REALTOR: We didn't have the appreciation, the big number appreciation that most of the metropolitan markets had. So when things go up that fast, they come down pretty fast, too.
DORNIN: In 2006, the National Association of Realtors says 22 percent of all home sales were by people buying second homes as investments. In Charlotte, local housing analysts believe it's a lot less.
KNIGHT: Charlotte's been slow and steady, and that's what's helped us out.
DORNIN: Charlotte has emerged as major financial center in the South. Bank of America and Wachovia, among others, have relocated here, bringing thousands of young professionals. It's also helped people try to sell their homes. Nationwide, houses can sit unsold on the market for long periods. It happens in Charlotte, but it's not the norm.
MUNSEN: We are accustomed to less than 90 days.
DORNIN (on camera): Wow.
MUNSEN: That's in our...
DORNIN: Even now?
MUNSEN: No. We've been accustomed to less than 90 days. We're now up to 132.7 days.
DORNIN (voice over): Those numbers encouraged Mary Boylan and her husband to put up the "For Sale" sign. (on camera): Were you nervous when you first put your house on the market, whether it would sell or not?
MARY BOYLAN, RECENT HOME SELLER: You know, I think we were a little bit, but we had had a few homes on the street sell within the last six months, and, you know, one sold in two days, one sold in two weeks.
DORNIN (voice over): Theirs sold in six weeks. One of the very few places homeowners can appreciate at least a little appreciation.
(END VIDEOTAPE)
DORNIN: The interesting thing is one of the reasons why the homes in Charlotte are sitting on the market a little bit longer is that people relocating there are having trouble selling their homes back where they're coming from. That also means their rental market is very strong. So while the market is softening somewhat, it's certainly not as grim as it is in the rest of the country -- Gerri.
WILLIS: Well, Rusty, I guess slow and steady wins the race.
Thank you for that story.
VELSHI: Well, it's medium-sized cities like Charlotte and smaller towns that collectively can have a big impact in the presidential race come November.
We're joined now by CNN contributor Roland Martin and Mark Halperin from "TIME."
Gentlemen, thank you for joining us. And I know these are busy days for both of you. And we're going to be asking a lot of these kinds of questions. But what do these candidates have to do in this environment?
Indiana and North Carolina both have unemployment rates that are slightly higher than the national average. We've got the situation where, you know, homes are a struggle all over the country. We've got inflation.
Mark, let's start with you. What do they have to do to pull through here?
MARK HALPERIN, "TIME": Well, these states are typical in the sense they're rural, urban. You've got some people like we just saw there in Charlotte doing just fine, but overall they are like the rest of the country but a little bit worse.
And it's not so much I think the specifics of policy proposals, as giving people a sense that they understand that there is anxiety out there. I think part of the problem Senator Obama is still struggling with -- and he might struggle if he's the nominee in the general election -- is just giving people the sense that he's got an urgency about fixing economic problems. Not urgencies about fixing Washington and kind of that ethereal talk about change and process, but really getting his hands dirty and fixing the economy.
VELSHI: You know, Roland, when we started in this campaign, that talk about change was something that was very, very exciting. The economy seems to have derailed everybody's conversations, because now we have got $122 per barrel of oil, $3.61 for a gallon of gas.
What does Barack Obama do to meet that challenge?
ROLAND MARTIN, CNN CONTRIBUTOR: Well, I think what you do is you take that message of change and say, look, I want to change the economy, because, you know, it's been going downhill for the past several years. But it is speaking to people's core.
And that's why I think what he has to do is, sure, you talk about being a community organizer, things on those lines, but I think what he's able to say, look, Michelle and I just paid our student loans off three years ago. So I understand where you are with that.
VELSHI: Yes.
MARTIN: Taking those kind of issues that go beyond just foreclosures, go beyond your home and say, look, that this economy impacts you in a much different way as well. Where are you going to send your kids to school? How can you afford it?
Sally Mae is cutting back on student loans. We saw Fannie Mae announce a $2.2 billion loss.
So you have all these kinds of issues. He has to explain it in a way that people say, OK, as Mark said, he actually gets it, but he also can say, look, I've been where you are right now.
And keep in mind, without the book deal he signed, this guy wouldn't be in the same par financially. As Michelle Obama says, that's not a great financial plan. He has to convey that in a different way.
VELSHI: Why is that -- why is there any problem connecting on that? Why isn't he able to do that, if he hasn't so far?
HALPERIN: I think there's three reasons. One is he's new to running for president.
Most people who run for president spend a whole lifetime preparing for it, thinking about it, working on policies as a governor or a legislator. He's barely done that. He's never been a specialist on the economy.
Two is his style. As I said before, he just doesn't seem to have an urgency about it.
And then finally, the specs of his plans are just not that tangible. I ask people all the time who are following this race closely, what would Barack Obama do in his first two months in the White House to help the economy? There is not a lot of takeaway for people from the way he is being covered, at least right now. VELSHI: I think our viewers and Americans are fairly savvy about what -- how much the president can do if they were to wave their magic wand.
MARTIN: Right.
VELSHI: There are some things that are bigger problems. Hillary Clinton has come out with a number of highly specific proposals, some of which are just entirely untenable. But it does seem to have the effect of making people think there is an agenda and a list of items that are going to happen as soon as she can make them happen.
MARTIN: Well, also, it is personality. I mean, so he wants to convey a sort of in control, a very cool sort of persona, which a lot of people do appreciate, especially when you start talking about foreign policy. But, yes, we also do like people to have that sense of urgency when talking about issues of the day.
Look, the bottom line though is, you can have a sense of urgency, but the question is, can you actually get things passed? Again, what he has to do is expand what he talks about and speak to the voters in a way that says, look, yes, I've been there, done that.
Whenever he talks about living in a town home, him and his wife not buying a home until three or four years ago, all the stuff that comes with that, it's a whole different ball game. When you actually listen to Michelle Obama, when she talks about those bread and butter issues, you understand it. I think frankly what he should do is take her speeches and actually give those.
HALPERIN: You know, I don't know that that biographical stuff is going to do it. I think it's perfectly good and it gives people a sense that he is not a total elitist in terms of where he's come from, but I think it's really more about giving people that sense that he's got plans and ideas.
Bill Clinton famously said after he got elected, "I'm going to focus like a laser beam on the economy." If you listen to Barack Obama, look how he's presented in his ads and out on the campaign trail. You don't get the sense that he's got that urgency.
He has got a big agenda, but it's mostly thematic and it's not specific. People want someone not like them to be in the White House. They want someone better than them, who can take care of these problems.
(CROSSTALK)
VELSHI: Do you want somebody like you or do you want somebody who's not like you?
MARTIN: Right. But when I say "bio" though, that also negates I think the whole elitist deal. Because if he says, wait a minute, I'm not some guy who came from a bunch of money, we just bought our house a couple years ago, then you say, wait a minute, this isn't just some guy who went to Harvard. It's a whole different kind of person. He has to be able to take that and, again, speak to people at their core.
VELSHI: All right. Good discussion, guys. Thanks very much.
Roland Martin, CNN contributor; Mark Halperin of "TIME."
Appreciate hearing from both of you. And of course we will on this story all the way through until the end -- Gerri.
WILLIS: Fascinating conversation.
There is a major housing bill about to go up for a vote. We'll talk about what it can mean for you.
And all sorts of new credit card proposals. We'll take you straight to Capitol Hill to hash it all out.
You're watching ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: Welcome back to ISSUE #1 here on CNN.
We told you about a bill working its way through Congress that could help homeowners who are facing foreclosure. That bill sponsored by Representative Barney Frank will hit the floor of the House tomorrow.
CNN's Kate Bolduan found one woman who really hopes it will pass.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice over): She's lived in her home for almost 20 years. A comfortable middle class neighborhood in suburban Maryland.
UNIDENTIFIED FEMALE: This is where we thought we'd live and die.
BOLDUAN: She says she's never missed a mortgage payment, but now she is facing foreclosure and she doesn't want her face shown because she doesn't want friends and neighbors to know.
UNIDENTIFIED FEMALE: I don't know what will happen in August. You know, I mean, it will be pay your house payment and have nothing. So what would that be?
BOLDUAN (on camera): That's really -- that's an impossible decision.
UNIDENTIFIED FEMALE: Right.
BOLDUAN (voice over): Two years ago she refinanced to lower her monthly payment. She admits she didn't read the fine print, and now her payments are about to nearly double to more than $3,000 a month.
UNIDENTIFIED FEMALE: It's just a difficult situation to get yourself in. BOLDUAN: But it's a situation millions of homeowners are in.
Congressman Barney Frank says despite their mistakes, helping them is key to solving the housing crisis.
REP. BARNEY FRANK (D), CHAIRMAN, FINANCE COMMITTEE: There were some people who were wrong to take the loans out, some people were wrong to make the loans. If nothing happens and all those loans go into foreclosure, the economy suffers.
BOLDUAN: Frank's plan calls for the government to guarantee $300 billion in new loans, but only pay for those that default. He says probably no more than $6 billion.
Homeowners having trouble paying mortgages they took out before January could get the new, more affordable loans. Borrowers would have to prove they need financial help, that at least 35 percent of their income goes to making mortgage payments.
Lenders could unload existing risky loans, but they'd have to take a loss. They'd have to agree to sell the mortgage to another lender for no more than 85 percent of the home's current value regardless of how much they're owed.
STEVE O'CONNOR, MORTGAGE BANKERS ASSOC.: It's going to be better than a foreclosure. There will be a greater loss to a lender if a home goes to foreclosure.
BOLDUAN: Frank thinks his plan could help up to 1.5 million homeowners.
FRANK: Let's get this to a point where you can pay, because something is better than nothing.
BOLDUAN: But opponents say it's a massive bailout.
REP. JEB HENSARLING (R), TEXAS: To finance people who couldn't really afford to be in these homes in the first place I don't believe helps them. I don't think it helps the taxpayer. I don't think it helps the economy.
BOLDUAN: The Bush administration calls Frank's bill too risky, but this homeowner says it could be her last chance.
UNIDENTIFIED FEMALE: What makes this so hard is because we always had an answer. Some way or another there was an answer.
BOLDUAN (on camera): And this time not so much?
UNIDENTIFIED FEMALE: Not so much.
BOLDUAN (voice over): Kate Bolduan, CNN, Clinton, Maryland.
(END VIDEOTAPE)
WILLIS: Well, the mortgage meltdown, an avalanche of foreclosures, ruthless mortgage lenders -- we've been bringing you the latest on all these topics for weeks. Now the Senate Judiciary Committee is getting into the act, holding hearings in about two hours on how to clean up the mess, and especially how best to help those families in trouble.
We're on top of it, and we'll bring you the latest on the Senate hearing as it happens.
Another issue becoming a hot topic in Washington is the push for credit card reform. Last week, the Federal Reserve released proposals for reform that seemed eerily similar to a credit card bill of rights proposed by Representative Carolyn Maloney, one we've told you about before.
Representative Maloney joins us now right now from Washington.
Good to see you.
REP. CAROLYN MALONEY (D), NEW YORK: Good to see you, Gerri. And thank you for noting how similar they are.
WILLIS: Well, let's talk about that, because there are huge similarities. This proposal out from the Federal Reserve, from the regulators of (INAUDIBLE), actually, you know, all financial institutions, you know, it looks like maybe we don't need your bill so much anymore.
MALONEY: Well, I tell you, I'm very pleased, Gerri, with the Fed's action. They identified the same abusive practices in their proposed rule change that is in my legislation. But a regulation is just that, a regulation.
WILLIS: Right.
MALONEY: Earlier, the Fed came out with regulations on the subprime crisis, the mortgage crisis. They have still not enacted those regulations. And as you noted earlier...
WILLIS: Well, this is a rule-making body.
MALONEY: It is a rule-making body.
WILLIS: It takes a while for these rules to work their way through the system.
MALONEY: But my point, Gerri, is they came out with those regulations for housing a year and a half ago. They still have not passed them.
We are going to the floor, as you noted, today, or tomorrow, on the reform of the housing bill that Mr. Frank has put forward. Likewise, if they do enact this rule change, which I hope they do, it is just that, a rule. It can be changed.
WILLIS: All right. Well... MALONEY: So it's important to legislate. What I think is very important is that for the first time, they've come out and said these are unfair an deceptive practices, and for the good of the economy.
WILLIS: Right, exactly. I think that's an important point.
MALONEY: The good of the...
(CROSSTALK)
WILLIS: Carolyn, let's get to some of these proposals so folks understand exactly what we are talking about here.
You've been against arbitrarily raising interest rates, which a lot of consumers complain a lot about. The Fed has that also. I think that's critical. But you also talk about the billing cycle as well.
Let's go through these point by point. Arbitrary interest rates, what do you think should happen? Is the Fed's proposal any different?
MALONEY: The Fed's proposal is the same as mine, that you should give notice and allow a consumer to say no, I do not accept this increased rate. And it really bans the practice that they have now of any time, any reason, increasing interest rates.
Gerri, I'd like to note that a lot of banks have voluntarily come out and said they will no longer practice universal defaults, which is one of the main rules.
WILLIS: Right.
MALONEY: And they should be congratulated for this action, but I'd like to note that we need an even playing field for them. Everyone should have that standard, and those banks that are playing fairly should not be getting lesser revenues because they're being fair to consumers.
WILLIS: Let's talk about double cycle billing. This is another thing that you've suggested that the Fed is also suggesting. What do you mean by that?
MALONEY: Well, double cycle billing simply bans them charging interest rates -- interest on a balance you've already paid off. As some people have said, there are so many tricks and gimmicks now in the billing process that consumers don't even know what's coming at them. Even the Fed has said that this is totally unfair to charge interest rates to consumers on a balance they've already paid off.
WILLIS: All right. Well, Carolyn Maloney, thank you for your help today. We want to come back to you on this very important topic to consumers, and we look forward to talking to you again.
MALONEY: Well, thank you for your interest. I believe you're helping the economy, and the Fed is saying so, too, with their support of the basic principles that are in my bill. WILLIS: Well, we're doing what we can. But I doubt that our little TV show can do a whole lot for the economy.
But thank you, Carolyn. Appreciate it.
MALONEY: It's certainly informing people. And that's very important. Thank you.
VELSHI: And that's what we can try to do.
Coming up next, the candidates have their plans to go green, but how feasible are those plans, and at what cost? We're going to do a fact check for you.
And we're going to show you how to save money on high gas prices by converting your car to run on vegetable oil.
I'm going to be paying close attention to that.
ISSUE #1 rolls on next. Stay with us.
(COMMERCIAL BREAK)
ALI VELSHI, CNN CORRESPONDENT: Hi. Welcome back to issue number one. Oil prices have soared to another record high today. I'm going to show you this on my barrel. You may have seen this. Let's bring that barrel in and take a look guys. This is my crude oil barrel and there is a number missing from here, $120 -something 49 cents, not $120, not $21, $122.49 is what barrel of oil hit just a few moments ago. It is surging back to that point. This was fueled by concerns about supply, a weakening U.S. dollar. Now easing the pain somewhat, but not much, gas prices didn't hit another record high. AAA reports the national average for a gallon of regular gas is just a paltry $3.61. Gerri.
GERRI WILLIS, CNN CORRESPONDENT: Ouch. We're going to talk a little bit about the candidates and their green ideas but first, we want to get you the rest of the day's news. For that we turn to Don Lemon in the CNN NEWSROOM. Hi there Don.
DON LEMON, CNN ANCHOR, NEWSROOM: Hello, Gerri. Can you tell Ali he needs to clean up that barrel. It is all rusty on the bottom.
WILLIS: That's the point!
LEMON: OK. That's the point. We'll talk to him about that a little bit.
We have some serious news to tell everyone about, Gerri. The death toll is on the rise and the situation is getting more desperate after that cyclone in Myanmar. State radio now reports more than 22,000 people have died. Bodies are being dumped into the river in the town of Bogalay and survivors are scoraging (sic) for food and medicine there. President Bush is urging the country's military junta to let the U.S. do more to help in that situation. Here's some incredible pictures to show you. You're looking at the latest video of a volcano blowing its top in Chile. Check out the massive cloud of ash that you see right there, 4,000 people left the area in the last five days and officials just explained -- has expanded, I should say, that evacuation. Look at that large cloud of ash. We'll update you on that at the top of the hour.
Also coming up at the top of the hour, complete election coverage as voters head to the polls in Indiana and North Carolina. I'm Don Lemon in the CNN NEWSROOM. See you at the top of the hour. Now back to Gerri Willis and issue number one.
WILLIS: Thank you, Don. We don't know yet if we're in a recession. Some say we are; some say we're not. But a good chunk of you out there feels as if you're in a recession right now. CNN's senior political analyst Bill Schneider, part of the best political team in television, is here with more. Hi there Bill.
BILL SCHNEIDER, CNN CORRESPONDENT: Hi there. I come before you today like Savonarola, the prophet of gloom and he did not come to a bad end, a good end. He came to a very bad end. The debate is over. Not among economists, they're still wondering is it really a recession, what's the definition of recession. As far as the American people are concerned, this debate is over. Seventy nine percent of Americans say, yes, the economy's in recession. Fewer than 20 percent say it is not. End of debate, end of discussion. This is a recession year as far as the voters are concerned and that 79 percent number has been increasing quite rapidly for the last six months. If you look at the history of the number of people who say the country's in recession, it's gone from fewer than half in October to two-thirds in February, three-quarters in March and now almost 80 percent agree that the country's in recession. Debate over.
WILLIS: And the people again ahead of the government in declaring a recession. What does it look like compared to previous recessions though?
SCHNEIDER: We took a look at how this number looked in the past. Now 79 percent say the country's in recession. What did it look like in the fall of 1992 when it was the economy stupid, that helped Bill Clinton get elected? That was the key issue. The answer is -- 79 percent said the country was in a recession in September of 1992. One big difference. Then had you a very unpopular President Bush who was running for re-election and eventually lost. Now we have an unpopular President Bush who is not running for re-election. He can't. And his vice president isn't running to succeed him so the big difference between then and now is, there is an unpopular incumbent but he can't run.
WILLIS: Well, Bill Schneider, part of the best political team on television, I know you'll be here all afternoon, all night covering this important story. Thank you.
VELSHI: Bill, like me, has spent a lot of time on the CNN election express. When you spend time on the bus, you really see folks suffering against the rising price of gas. I've spent a good time on the bus. Election express producer Josh Rubin, well he never leaves the bus except of course to talk to folks wherever the bus is about what they're going through in this election year.
(BEGIN VIDEOTAPE)
JOSH RUBIN, PRODUCER, ELECTION EXPRESS (voice-over): As the election express makes its way around Indiana, it is pretty obvious what's on everybody's mind.
MILTON BOOTH, APPRAISER: People are constantly complaining about the price of gas.
UNIDENTIFIED MALE: I spent $15 a day to drive to work and back.
UNIDENTIFIED MALE: Right now gas prices are really killing me.
COLLEEN SCHEU, SOCIAL WORKER: It's pretty frightening. I definitely have not been encouraged there's going to be any decrease soon.
RUBIN: Gas around Indianapolis is over $3.70 a gallon. That's having a dramatic impact on people's lives.
JEFFREY WHITE, MIDDLE SCHOOL PRINCIPAL: As a family man we've now had to do things that we should have been doing 10 years ago. So I decided to stop smoking. I can get a gallon of gas for what it costs me to buy a pack of cigarettes.
SCHEU: I know we've gone to some more used clothing stores for our kids.
REGINALD HOLT, NURSES'S ASSISTANT: I got health insurance for my family but we're going to have to let it go. I mean you got to eat and you need gas to get to work.
RUBIN: Quitting smoking to save money is admirable. Buying used clothing is frugal. But having to give up your health insurance because gas prices are too high, that's downright scary. I'm hearing more and more stories like this every day.
WHITE: We got to promote some type of change in doing things differently. One thing is using our mass transit systems, smaller vehicles, looking at alternative fuels. In my case we make out a list of where we're going and what we're going to do to make one big trip in lieu of six or seven small trips.
HOLT: It is us, the people, also who have to get involved. There's things that we have to do. We can't depend on the government to do it all but we as the people need to get involved.
RUBIN: America is changing and we're on the road to find out how those changes affect you. Josh Rubin from CNN's election express, Indianapolis.
(END VIDEOTAPE) VELSHI: All the candidates have some sort of green plan, but it is one thing to talk about it. It is another thing for it to become a reality. We'll fact check the candidates and we'll break down the election with the CNN money team when this election edition of issue number one comes right back.
(COMMERCIAL BREAK)
WILLIS: Welcome back to issue number one. The presidential candidates all have their green plans but are those plans right for America and, hey, are they really feasible? Howard Gould an eco entrepreneur joins us now. Howard, great to see you.
HOWARD GOULD, ECO-ENTREPRENEUR: Thanks for having me here.
WILLIS: All right. Let's do the heavy lifting. Let's just walk through those candidates one by one starting with Hillary. What are her green proposals?
GOULD: As certainly all three candidates are proposing a cap in trade system which is a huge benefit. It's something that we really haven't had in this country before and something that's going on in Europe.
WILLIS: Let's talk cap in trade. What the heck does that mean?
GOULD: Essentially what it is is that basically, companies emit into the atmosphere, emitting CO2 in the atmosphere and so that's damaging. So what happens, the government is going to say to these companies, this is how much CO2 you are allowed to emit in the atmosphere. If you release over, you must pay for it. If you release under, you can sell that.
WILLIS: So (INAUDIBLE)
GOULD: Exactly. It is creating a market and those that are abiding by the rules are going to have excess revenue. Those that are not are going to be taxed.
WILLIS: Hillary likes that idea. What else is on her short list of what to do?
GOULD: She's very big on global deforestation. This is a huge, huge issue. I was just down in Washington, D.C. at a conference for this just yesterday. It accounts for 20 percent of greenhouse gas emissions.
WILLIS: It is the big kahuna, isn't it?
GOULD: It is the deal. It's bigger than all the cars, planes, trains, automobiles, worldwide. It is just trees coming down.
WILLIS: She's into this move towards energy independence as I think all the candidates are. Everybody likes that. Developing a new treaty to replace the Kyoto agreement which is all about greenhouse emissions? Do I have that right? GOULD: Well, this is what it is all about. The Kyoto protocol was something that the United States did not sign on for and it's something that we are now looking at. What are we going to do? What is going to be our place in the world for this? Because right now we are kind of running last place because we didn't sign it and everybody else did.
WILLIS: We are not a part of that
GOULD: No, we are certainly not, but this is the next -- the president that's coming in right now is going to have the most important decisions possibly made by any president in the world.
WILLIS: Let's move on to Barack Obama. He's very similar to Hillary. How is he different?
GOULD: He's a bit different on his low carbon fuel standards. This is something that he's actually pushing heavily. It has to do with actually creating more of a better marketplace for bio-fuels and renewable energy fuels. This is something that he's standing out a little bit differently than Hillary but not so much.
WILLIS: Not so much right? All right, let's talk about John McCain. You know, we're still sort of waiting to hear, right? Do we know all the details of his green plan?
GOULD: Unfortunately, we don't. That's the problem. He reached across the aisle in 2003 and certainly at no political gain to himself made the effort to put these issues on the forefront. But since then he hasn't really said anything. In 2007 he actually didn't vote on any environmental issues which is a problem because we don't know where he stands right now. We think that he's most likely going to come out more green than not but it is our -
WILLIS: ...waiting to see. There are lots of questions still to be answered in this race. Thank you for that, Howard Gould.
High gas prices make it expensive to drive, but what if you can get a restaurant to pay you to cart away their used vegetable oil and what if that it oil could then be used as an alternative fuel for your car?
(BEGIN VIDEOTAPE)
WILLIS (voice-over): Forget the gas pump, vegetable oil, new or used, in the tank of your diesel vehicle.
NORWOOD CHEEK, LOVECRAFT CUSTOMER: I have been looking for kind of an alternative energy car for a while, and it seemed like veggie oil was the way to go. These folks are doing this right here in my neighborhood. I need to find a diesel car to convert.
WILLIS: So Norwood Cheek did.
UNIDENTIFIED MALE: All of the components are in the engine compartment. WILLIS: In just about three hours, the folks at Lovecraft in Los Angeles outfitted his engine to run on vegetable oil.
TACEE WEBB, OWNER, LOVECRAFT BIOFUELS: People have been doing vegetable oil conversions for many years. But most of the systems have been two-tank systems. Our system is the one-tank system where you can put biodiesel, diesel or vegetable oil or waste vegetable oil all in one tank in any proportion.
WILLIS: But you don't have to pay a professional. For a few hundred dollars, depending on the make and model of your car, you can buy a DIY kit.
WEBB: Straight vegetable oil is just clean vegetable oil can you get at any grocery store and straight vegetable oil could be soy oil, peanut oil, canola oil.
WILLIS: One benefit -- the oddly familiar smell of French fries.
WEBB: People love it. They get so excited about doing something that's not supporting foreign oil and also it's better for the environment.
CHEEK: The maiden voyage of this car. It is running pretty smooth. I'm excited. I just got to go to the grocery store and get some gas.
(END VIDEOTAPE)
WILLIS: If you are thinking of doing this, you should know, most diesel drivers wait to switch to veggie oil until their car's warranty has expired. That's because making alterations to the engine could likely render that warrantee null and void. Ali.
VELSHI: Thanks Gerri. I actually know somebody who's done this. It seemed like a wacky idea when she did it, but seems kind of interesting. We've got some news on that by the way. If you're considering that, as we've been speaking, the price of oil now moving closer toward $123 a barrel. We're going to talk about that.
Look, if you take two parts best political team in television and two parts CNN money team, then you have you all the answers to America votes 2008. That's coming up next. You're watching a special election issue of issue number one. Stay with us.
(COMMERCIAL BREAK)
VELSHI: You're watching issue number one here on CNN. We've got the best political team in television. We also have quite the money team, thank you very much. So on this primary day on North Carolina and Indiana, we decided to bring together the best political team in television and the best money team. I just made that up! We're joined by CNN's senior political analyst Bill Schneider, political analyst Gloria Borger, CNN senior correspondent Allan Chernoff and business correspondent Stephanie Elam. I'm going to start with this news that since we've started the show, the price of oil has gone up further. Now we're getting into $123 almost. We're at $122.73 and quite a pace. You just showed us a poll that says 79 percent of Americans think we are in a recession. Bill, how does it translate to the way that people vote today in Indiana and North Carolina?
SCHNEIDER: It is the biggest issue by far, but here's what's interesting. On the economic issue, Democrats don't see a huge difference between Obama and Clinton. She has a slight advantage on the economy in the previous primaries, but she has now been running for the last two weeks as the working class hero, someone who's going to cut the gas tax or eliminate it for at least temporarily. She's going to deliver some results. We want to see tonight whether that is paying off for her and giving her a sizable advantage that she has not had in the past on the economic issue.
VELSHI: Allan, one of the things we've also heard the candidates talk about but we don't know what the answers are are jobs. One of the biggest things if we are in a recession or in a downturn is the loss of jobs. Where do the candidates stand? Who is going to win that?
ALLAN CHERNOFF, CNN CORRESPONDENT: They are all talking about I want to create jobs. They've got programs to create green jobs. Right, research and development, refit homes, alternative energy, all of that stuff. Hillary Clinton says I'll create five million jobs. The fact is, nobody knows how many jobs they can really create. The truth is -- this is very similar between jobs and oil -- is that the president doesn't really have that much control. The markets are really moving oil, a lot of speculators, investors just jumping in. Everybody betting the price is going higher. That's what's going on there, why it's gone up in the past few minutes. With the jobs, it is all a matter of confidence. It's a matter of getting this economy out of its slump, reviving growth and that is how you get jobs.
VELSHI: The candidates may, Gloria, have started two years ago with an idea about where these campaigns would go. It's been completely up-ended by the economy. For a while it was John McCain sort of saying he didn't really want to get too deep into it. Now everybody's deeply into it and Hillary Clinton's is coming out with a lot of specifics.
GLORIA BORGER, SENIOR POLITICAL ANALYST: Sure. We started talking out about Iraq. Hillary Clinton started by running as the candidate with the experience to be commander in chief on day one. And now she's the populist candidate who says I've that got a plan for jobs, jobs, jobs, as you were talking about and particularly in the two states we are looking at tonight, we really haven't heard a lot about anything else other than the controversy over gas taxes and so really, the other issues have been sort of pushed aside for now.
VELSHI: Boy, we have heard a lot about that gas tax, Stephanie, 18 cents of Federal tax on a gallon of $3.60 some odd cent gasoline. My math says that's got limited impact. But how's that playing out and how are voters --
STEPHANIE ELAM, CNN CORRESPONDENT: I was curious about this myself. So I did a fair amount of research to figure out exactly how that's going to affect. If you take that 18 cent tax, you take it away from Memorial Day to Labor Day, here's the thing, pricing is based on supply and demand. It is kind of a mathematical thing that they put together, figure out what it is. During the summer, gas use is always higher. So because of that, you're going to have more demand go up if the tax is taken out. So then what you would have gotten because of that repealing that tax you won't really see. So a lot of economists are saying it will be like 12 cents or less that you may see a gallon that you'll be saving. Interestingly enough, Senator Obama did this in Illinois, voted for it and realized that it didn't really work so well in his state. So now he's changing his tone on that, whereas Hillary Clinton is saying that this is something that will help out.
BORGER You're saying there is politics going on?
ELAM: A lot of it.
VELSHI: What of that, Gloria? What of the fact that these campaigns have really started to target each other? It's gotten personal. There are a lot of attacks. We thought in Texas that would be sort of the end. Then in Pennsylvania it would be sort of the end. I think everybody is clear now we don't know where the end is.
BORGER: We don't know where the end of this is. I think today if you look at the polls, the conventional wisdom says it is going to be a split decision. If it is a split decision and she wins one state, he wins another, then I think you're going to go on until June 3rd and I think they're going to play this out and then force those super delegates to kind of decide.
CHERNOFF: Didn't we used to pick a president at a convention?
VELSHI: Well, there you go.
ELAM?: I wouldn't mind doing that at all.
SCHNEIDER: To keep this open until they decide what to do with Michigan and Florida. That's her game plan.
VELSHI: Thank you to all of you. Members of the best political team on television and CNN's money team. Stay with the best political team in television. CNN is the place to be if you want the absolute best coverage of Indiana and North Carolina primary results. Wolf Blitzer, Campbell Brown, Lou Dobbs and the rest of the team will have it all for you starting tonight at 7:00 p.m. Eastern. Gerri.
WILLIS: Up next, one way you can pay $2.99 max for a gallon of gas for the next three years. We'll tell you all about. You're watching issue number one.
(COMMERCIAL BREAK)
WILLIS: Time now to get the results of today's quick vote. More than 87,000 of you weighed in. That's a new record for how you voted. Let's check in with Poppy Harlow from cnnmoney.com. Hi Poppy. OK, lots of people voting. That's so exciting.
POPPY HARLOW, CNN CORRESPONDENT: It was my favorite question. We asked you who you would most likely take financial advice from. Eighty three percent of you said Warren Buffett followed by 7 percent to Donald Trump. Oprah and President Bush tied at 5 percent. That doesn't generally happen. But, yeah, they tied. Warren Buffett, the Oracle of Omaha, arguably one of the richest men on the planet.
WILLIS: I would have bet money that Oprah would have won that contest. What can you say. Poppy, thank you for that.
VELSHI: Drivers are looking for relief from rising gas prices. One auto maker hopes it can boost sales by offering a solution. Starting tomorrow Chrysler will actually cap its customers' gas prices at $2.99 per gallon for the next three years depending on what vehicle you buy or the next 36,000 miles. Drivers who purchase or lease similar -- some Chrysler, Jeep or Dodge vehicles before June 2nd will receive a gas card that can be used anywhere in the United States at the pump. The card holders will pay only $2.99 a gallon. Chrysler will actually pick up the difference. Interesting idea, $2.99 a gallon.
WILLIS: Do you think that's going to work? Will people really be interested in that?
VELSHI: I think it'll work so far as gas prices aren't coming down to $2.99 a gallon. But it gets limited. The average is about 700 miles a year that you'll get. So this is not something for some...
WILLIS: Well, sounds good to me.
The economy is issue number one. We here at CNN, we are committed to covering it for you. Issue number one will be back here tomorrow, same time, 12:00 p.m. Eastern right here on CNN.
VELSHI: Time now to get you up to speed with other stories making headlines. CNN NEWSROOM with Don Lemon and Brianna Keilar starts right now.
