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Issue Number One
Major Housing Bill Passes House of Representatives; Executive Pay; Summer Travel; Wasted Money
Aired May 09, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CO-HOST: And welcome to ISSUE #1.
I'm Ali Velshi. Gerri Willis has the day off.
Well, a major housing bill has finally passed the House of Representatives. That's the bill sponsored by Barney Frank that would provide $300 billion in new loans to people who are facing foreclosure. But President Bush is already saying he'll veto the bill.
CNN White House Correspondent Ed Henry joins us from Washington -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Ali, you know, clearly, this is something -- there's a lot of anticipation about this. This is the biggest housing reform bill that we've seen pass in the house since this crisis has developed. But it's really far from becoming a law.
The fact is, this may never get through the U.S. Senate. There are a lot of Republicans in the Senate who agree with the White House, that the price tag is a little high, and they also feel that it's not going to help that many average homeowners.
It's more likely to help lenders and also speculators who may not really deserve a lot of help. And even if it does get through the Senate, the president is vowing that veto, as you mentioned. And when you look at the vote tally yesterday in the House, even though Democrats got 39 House Republicans on board, they're still at least a couple dozen votes short of being able to override the president's veto.
So I think the bottom line is the bill that passed in the House yesterday is very, very unlikely to become law. The question really becomes whether there's a 2.0 version of this bill that moves closer to the White House position, and whether or not both sides are in a compromising mood -- Ali.
VELSHI: Ed, is there some effort by the administration or the White House to come up with that 2.0 version, as you say? Some kind of compromise or some kind of alternative?
HENRY: It's funny. I've been talking to both sides, and they're saying the right things. Both sides, Democrats on the Hill, Republicans here at the White House, say they want to compromise. When you look at the differences, they're really far apart. I mean, the White House philosophically thinks this price tag of $300 billion in government loan guarantees is just too high. They also are concerned that it's going to reward risky behavior.
I think where they agree is on some of the reform to the Federal Housing Administration. That could be the starting point of some real bipartisan negotiations. But the bottom line is that we're going to probably have to wait some more time, into later into the spring and the summer, to really see whether or not the housing crisis gets worse.
And as we get closer and closer to that election, if the housing crisis is getting worse, you're going to see both sides pushed magically closer and closer together if they're feeling political heat, if people across the country are saying do something. Right now I don't see both sides coming together -- Ali.
VELSHI: But Ed, what you have right now is the Democrats in the position of being able to say we're really trying to get something done here, and the administration is holding back on this. Is this -- I mean, that could be a little bit of election year politics.
HENRY: Absolutely, but what does that result in? That results in nothing actually getting passed, actually signed into law.
What you're pointing to is election year posturing on both sides, where the Democrats will say, look, the White House is blocking this. The White House will say the Democrats didn't do what we wanted to do.
A lot of finger-pointing, but at the end of the day they don't actually reform the situation. So I think it's going to take a lot more political pressure. And I also think you've seen FHA secure some of these administration plans where they've been trying to do it on their own, but they haven't helped quite as many people as the White House has wanted.
So it's really going to take a lot more pressure from outside Washington to really force them to the negotiating table to get this done. Right now there's a lot of back and forth, but there's really not a likelihood that this bill is going to become law -- Ali.
VELSHI: All right. This has been a very complicated snaking through Congress, and it's going to continue.
Ed Henry, thanks for being on top of it for us.
HENRY: Thank you.
VELSHI: Ed Henry in Washington.
One thing that Congress and the White House did agree upon, of course, is that economic stimulus package that resulted in those tax rebates. They're already hitting bank accounts, but are they actually going to help?
CNN Senior Political Analyst Bill Schneider joins us from West Virginia with some brand-new poll numbers -- Bill.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, here's the thanks of a grateful nation for those tax rebate checks that are already coming out.
Well, we asked people, "Do you think that they will do enough to stimulate the economy?" Eighty-two percent, 82 percent said they will not do enough. Only 13 percent say they will. There's the thanks of a grateful nation.
VELSHI: Bill, let's talk about what -- they're not thinking it's going to do enough for the economy, but one of the things we've been concentrating here on ISSUE #1 is what it does for your economy, what it does for your financial situation.
What are people going to use these checks for?
SCHNEIDER: Well, just about half say they're going to use the checks to pay off bills that they've already spent money on. Twenty- eight percent say they're going to save it or invest it. Only a quarter of the people getting these checks say they're going to spend the money.
That's not good, because in order to stimulate the economy, they're going to have to spend it. The government is encouraging people to go out and spend their rebate checks. Businesses, stores are trying to get those rebate checks. But only a quarter of the people say they're going to spend it. They're going to use most of it to pay off bills -- Ali.
VELSHI: Well, I'm glad in some ways that this poll reinforces something that we've seen in previous polls and that we continue to say, because we keep on hearing spin from the retail industry about how 40 percent of people are going to spend it. What I thought is interesting there, Bill, is that only seven percent are going to spend it on something they want. It's only going to be that prized purchase, maybe that flat screen TV, for seven percent.
Buying things you need may not stimulate the economy the same way, so I think that's an interesting takeaway from that poll.
SCHNEIDER: That's right. And so the calculation that this is going to be a big boost to the economy does not seem to be expected. The voters don't think it will help that much.
VELSHI: Yes.
SCHNEIDER: And from their behavior, it doesn't look like it will make a lot of difference.
VELSHI: Bill, tell me -- you're in West Virginia. Hillary Clinton polling very strongly in West Virginia. Is that to do with the economy and issue #1?
SCHNEIDER: Well, these are what I call red Democrats, more conservative Democrats on social issues. The kind of older, poorer, white Democrats that she's been attracting in state after state.
I don't think it's principally the economy. The economy's not so bad here. I just spoke to a political analyst here in West Virginia who said coal is doing OK.
You know, the coal prices are holding up very well. So the economy here, while never particularly good, isn't suffering nearly as bad as you might think.
VELSHI: Well, you know, with the price of oil where it is, Bill, coal could be the next corn if we start using it for fuel.
Bill, good to see you. Thanks so much.
SCHNEIDER: Sure.
VELSHI: Bill Schneider, a member of the best political team on television.
Time to weigh in now on today's "Quick Vote" question, and that means it's time to check in with Poppy Harlow from CNNMoney.com.
Hello.
POPPY HARLOW, CNNMONEY.COM: Hey, Ali.
Well, Americans are feeling the pinch at the pump, at the grocery store. It seems like everything out there is getting more expensive.
Whether we're in a recession or not, that hasn't been officially determined. But that doesn't matter. What matters is what you think.
Here is our cnnmoney.com "Quick Vote" question today.
"When it comes to the economy, I feel the worst it over, it will be up and down, or it's going to get worse?"
Please weigh in on cnnmoney.com. We'll bring you the results later in the show.
We just want to get a poll of, are people pessimistic or are they optimistic?
VELSHI: Yes.
HARLOW: How do they feel?
VELSHI: All right, Poppy. We'll check in with you later.
Poppy Harlow from cnnmoney.com.
Coming up next, breaking up OPEC. Is it the answer to oil independence? One presidential candidate says yes.
Then, stop wasting money on the little things. We'll show you how. And it's time to get you answers. Send us your money questions. The address is issue1@cnn.com.
You're watching ISSUE #1 right here on CNN.
(COMMERCIAL BREAK)
VELSHI: Well, Hillary Clinton came out this week with a solution to high gas prices, or at least a partial solution -- breaking up OPEC, the Middle Eastern oil cartel. But is that really feasible?
CNN Pentagon Correspondent Barbara Starr takes a look.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice over): With gas prices edging towards $4 a gallon, OPEC is suddenly in Senator Hillary Clinton's line of fire on the campaign trail.
SEN. HILLARY CLINTON (D), PRESIDENTIAL CANDIDATE: I think it's time we go after OPEC. They are a monopoly cartel. That has nothing to do with a free market.
STARR: But can the U.S. really do anything to break the oil cartel? Most experts say good luck. Here's why. The U.S. would have to increase its own production and cut consumption to have any meaningful influence on OPEC's grip on the market.
ROBBIE DIAMOND, SECURING AMERICA'S FUTURE ENERGY: So that means that instead of talking about ways of breaking up a cartel that we're not really able to break up, it would be like the Red Sox wanting to break up the Yankees. It just can't happen.
STARR: Former Congressman Lee Hamilton says the U.S. really can't do much to influence OPEC to lower prices.
LEE HAMILTON, FMR. CHAIRMAN, HOUSE FOREIGN RELATIONS COMMITTEE: Our bargaining leverage here is just not all that great because of our need for their product.
STARR: Ironically, the U.S. military is spending billions protecting and keeping open OPEC's shipping links in the Persian Gulf.
HAMILTON: I think if we got too demanding of OPEC, they could very well say get your bases out of here. And that would mean we've had a much more difficult time, maybe an impossible time of keeping these supply lines secure.
STARR: Keeping access to air fields and ports in OPEC countries like Kuwait, Qatar and the United Arab Emirates is paramount to the United States military, now made more important giving growing concerns in the gulf about Iran's nuclear ambitions and its ability to shut down the Strait of Hormuz.
(END VIDEOTAPE) STARR: So, Ali, it's really no surprise at the end of the day. It might be a crowd pleaser on the campaign trail to talk about breaking up OPEC, but in the Middle East it's not an idea that's really going to fly anywhere anytime soon.
VELSHI: And Barbara, you talk about the Strait of Hormuz. Something like 25 percent of the world's oil has to pass through there. You were just talking to Lee Hamilton in your story, and he says, you know, we don't have a lot of leverage.
Why is it that the U.S. has so little leverage with OPEC countries?
STARR: Well, you know, it's a supply and demand issue at end of the day. They have something we want -- crude oil. And this country has made a policy commitment to spend billions of military dollars keeping those oil lanes open.
That is a top U.S. military priority. So right now both sides are pretty much stuck with each other unless something fundamentally changed, and that, by all accounts, would have to be some fundamental change in the American economy's use of crude oil -- Ali.
VELSHI: And that just doesn't -- even if we wanted to do that, it doesn't happen quickly.
Barbara, thanks very much for that story.
At the Pentagon, Barbara Starr.
Well, the U.S. might not be able to break up OPEC, but at least we don't have the world's most expensive gas.
Steve Hargreaves from CNNMoney.com has been looking at gas prices around the world. And, you know, I think we think that this is a worldwide phenomenon, gas prices going up, but are we somewhere in the middle, maybe? There's a lot of cheaper and more expensive gas that we pay in the United States.
STEVE HARGREAVES, STAFF WRITER, CNNMONEY.COM: Yes. We are actually towards the bottom. The U.S. is the bottom third of countries in terms of who pays the most for gasoline.
VELSHI: You bet. Now, what are some of the cheapest gasoline countries in the world, and why are they so cheap?
HARGREAVES: You know, a lot of the oil-producing countries, Venezuela, Iran, places like that, the governments there subsidize the price of gasoline for their citizens. It keeps people happy over there, it also helps with economic development.
VELSHI: We often talk about European countries. Some of them have the most expensive oil -- gasoline in the world. We're upwards of $8 in some countries.
HARGREAVES: Yes, $8, $9. The reason is, you know, those governments, they tax that. They put a big tax on gasoline. They use the tax for various social programs. And it's also specifically designed to cut down on gasoline use.
VELSHI: And it has worked. It's had some results in terms of -- you know, on cnnmoney.com the other day I saw this great feature on the eight smallest cars in the world, or something. Virtually none of them are available in the United States. It's just not -- as Barbara said, it's not part of our culture to change to that kind of driving.
But the bottom line is, even if America does change to more -- to conserving more energy, more oil, the demand in the rest of the world, they're still going to keep a lot of these prices high.
HARGREAVES: Yes, this is true. I mean, the Chinese using a lot. The Indians are using a lot. These subsidies that these oil-producing countries are giving their citizens, that's resulting in a lot of use over there, as well.
VELSHI: So, the price of oil as a percentage of what we pay for gasoline is very high. And the price of oil at the moment doesn't look like it's going anywhere lower. I mean, we've got some estimates that it might go down to $100 by the end of the year. That's a best- case scenario for a lot of people. Most people are saying it could go higher.
HARGREAVES: Yes. I mean, Goldman Sachs came out the other day with a $200 estimate. So...
VELSHI: All right. Well, we'll keep on this story.
Steve Hargreaves, thanks very much.
HARGREAVES: Thanks.
VELSHI: Steve Hargreaves from cnnmoney.com.
Well, coming up, as foreclosures flood the market, can you get a good deal on buying one?
And then how the price of gas which we've just been talking about might affect your summer travel.
Send us your e-mail questions. The address is issue1@cnn.com. We'll try and get to them from the help desk a little later in the show.
(COMMERCIAL BREAK)
VELSHI: Well, we know that foreclosures are way up across the country. That means more inventory for all those foreclosure sales and auctions. But buyer beware. A foreclosed home might be less expensive, but it might not be a great deal for you.
Pat Lashinsky is the CEO of Zip Realty.
Pat, good to see you. Thank you for being with us. You know, for some people, this looks like a fantastic opportunity. It's terrible for the people being foreclosed upon. But there are ads on TV and in newspapers about "buy these foreclosure homes cheap."
What's to look out for? What are the red flags?
PAT LASHINSKY, CEO, ZIPREALTY.COM: Well, I think that there are a number of things. And you have to worry about there being a little bit of fool's gold out there. And you have to watch out.
If there is a home that's available that doesn't have -- allow you to do inspections, or if they don't want to work with real estate agents, you have to watch out for those, because you never know how the seller who has been foreclosed on is going to take it. I'll give you an example.
We were representing a buyer, and we suggested to them they not buy a house. The people who ended up getting that foreclosed home, the people who left poured concrete down all the drains and toilets in the house.
VELSHI: Oh.
LASHINSKY: And the people who bought it had to re-plumb the entire house.
VELSHI: Right. And we've heard stories about this sort of thing.
Generally speaking, when you are buying a foreclosed house, it's gone through the foreclosure period. So you are not dealing with somebody living in that house, but like any house you buy, I suppose you recommend, you've got to be able to see it, and generally speaking, have a professional look at it and judge whether it's a suitable house.
LASHINSKY: That's exactly right. And foreclosures are not like a traditional house, because you don't know the exact condition. And you are buying them as-is. And so you do need to use a professional.
And part of the reason -- at Zip Realty, our agents will do everything they can to get you as much visibility in those homes so you can find out the condition and what you're really getting yourself into, because once you buy a foreclosed house, there is no one to go back against. It's your home.
VELSHI: It's yours.
Now, tell me about -- if you are buying a foreclosed house that's sort of a one-off (ph). Somebody got into an unusual situation. You may be getting a discount on that house versus everything else in the neighborhood. But you are saying that you should be careful if you are buying a foreclosed house on maybe a street that's got a lot of foreclosures, or in a neighborhood that has a lot of foreclosures. LASHINSKY: That's exactly right. If you're on a street and you see that there are a lot of foreclosures, one, it means that there were probably a lot of people that were stretching to get into those homes in the first place. Second of all, there's going to be a downward pressure that's going to make it hard for anyone to be able to sell. And it's going to be a depressed zone, and it's going to be distressed properties, which is what all the lenders are talking about right now.
So, you have to be very, very careful if you get into a home and you see lots of other homes are foreclosed. If you see that the condition of that house isn't very good, the screens are ripped out, the front door doesn't seem to shut right, those are all signs that you really should be more careful on that home.
VELSHI: You mentioned something about, if a house is selling for less than 50 percent of what its value would have been, that that is a red flag. Doesn't that sound like a great deal?
LASHINSKY: That's part of the reason why it's a red flag. There are professional investors who spend their time going after these foreclosure homes. And if is there a home that's well below what the market value is, they've probably looked at this home and identified that either the cost to get it up to what it needs to be, or there is something else wrong with it. And the reason why it's still sitting out there is because there is something wrong with it that you may not be able to know as just an everyday purchaser of a home.
VELSHI: The idea of buying a foreclosed home is riskier than buying a home that isn't. But do you have to go to an auction to get them? Because I think that is an extra element of danger for some people.
LASHINSKY: No. You don't have to go to an auction.
There is one part of the process that does include the auction. And that is really for professional investors to get into the auction environment.
You can come to sites like Zip Realty, and we allow our agents to see not only the foreclosure homes, but all the REO homes, which is when homes have gone through foreclosure and now actually are controlled back by the bank.
VELSHI: REO?
LASHINSKY: Which stands for Real Estate Owned, which is bank- owned properties. And so that is the next step after it's gone through the foreclosure process. The banks take back possession, they lower the value of the property to move it off the books. And consumers can get access to that without going through an auction.
VELSHI: Let's talk of the same places now -- despite all the warnings and the red flags, there is some value in some places. There are probably parts of the country where it might be useful to look at if you are in the market to buy a home and you're looking at a foreclosed home.
LASHINSKY: Right. There are lots of places.
If in you're in a good area -- and just like everything, location really matters. If you can find a good home that is near water, for example -- everyone talks about how bad the Florida market is, but there is always demand for people to be able to see coastal property.
VELSHI: Right.
LASHINSKY: If you are looking in Houston, for example, it's been a good market. If you can get outside the outskirts where the traffic isn't as bad, that's another area where you can see really good gains overall.
In Boston, we're seeing -- the people who had condos that are downtown that have had foreclosure, it's a very popular area. If you can get into one of those and you're not willing to live for just 12 months, you're willing to live for three to five years, it's probably a very good opportunity.
VELSHI: All right. That's good advice.
Thank you for being with us.
Pat Lashinsky is the CEO of ziprealty.com.
Thank you for being with us.
Coming up, what if you could have a say in how much your boss gets paid? It's actually happening at one major U.S. company.
Then, you might be wasting money without even knowing it. We'll show you where.
And send us your e-mails. We'll try and answer those questions. The e-mail address is issue1@cnn.com.
You're watching ISSUE #1, right here on CNN.
(COMMERCIAL BREAK)
VELSHI: Welcome back to ISSUE #1.
We are following a number of stories here, including what you can do if shareholders -- how shareholders are now able to have a say in their CEO -- the salary of the CEO of their company.
Now, should they get a say in how much they get paid? We'll talk about that in just a moment.
But first, let's check in with Don Lemon in the "CNN NEWSROOM" for your latest headlines.
(NEWSBREAK) VELSHI: What if you could help set the pay for the CEO of a company that you own stock in? And that's what I was having trouble saying earlier. It may seem farfetched, but it's the case at one well-known U.S. company. I sat down with Dan Amos. He's the chairman and CEO of ALFAC.
(BEGIN VIDEOTAPE)
VELSHI: Big changes for you and for AFLAC. The company has decided that shareholders will have input into how you are paid. Explain this to me.
DAN AMOS, CEO, AFLAC: OK. Well, about two years ago we got a proposal that the shareholders wanted to have an opportunity to vote on it. And so I took it to our board and we discussed the matter. And then I went out and talked to shareholders, large institutions, and they thought it was a good idea.
So we did that. And on Monday, we had the vote. And what they did was, they voted yes or no on our total compensation of the top five people.
VELSHI: All right, so it's up or down. It's not a matter of, I think you should get a little bit less or a little bit more?
AMOS: Right. Right. No. Exactly.
VELSHI: What they think about your pay package? You've make a lot of money. You're making about $15 million a year.
AMOS: That's about right. That's right.
VELSHI: All right, on a company that's bringing in more than $4 billion in profit. What was the general thought about how much you're getting paid?
AMOS: Well, only two and a half percent voted against it. Ninety-three percent voted in favor of it. And I think one of the reasons is, since I've been CEO, which I'm going on my nineteenth year, the stock has gone from $1.80 a share to $67.00.
VELSHI: So the general trend in companies where the CEO's pay is either approved by shareholders or tied to performance, is that if the stock and the company perform well, shareholders don't tend to have a problem with the CEO getting paid more?
AMOS: That's the way I see it, is pay for performance. Now what you have to make sure of is, is if you don't do well, then you've got to make sure that the CEO doesn't do well. And under our system, that's the way it would work.
VELSHI: I imagine you hang out with other CEO's. You see them somewhere. You're on boards, perhaps. Do they sort of tell you on the side, why you messing with this, Dan? What are you doing this? What do they say? AMOS: Well, what I tell everybody that I talk to concerning this is, just listen to the shareholders. If they think it's a good idea, then do it. And if they don't, don't do it. And leave it just to that. Because it really doesn't matter what everybody thinks. It only matters what the people that own the company and that's the shareholders.
VELSHI: Pete, pass me these ducks, will you. All right. This -- I can't help but, you know, laugh at this. There's like a business duck here on the left and then there's the AFLAC sports duck. I'm just going to play that for everyone. Tell me about these little ducks. This is the mascot.
AMOS: Well, in -- our name recognition was less than 10 percent prior to 2000. On millennium day, in fact on CNN, we ran the first AFLAC duck commercial and we ran for an hour for the entire time you all were on. And we got more hits the first week that we had the AFLAC duck than we did the entire year before. And today our name recognition is over 92 percent.
VELSHI: And you -- you do sell these to people. And what do you do with the money you get?
AMOS: Well, we sell these on our web site. And we donate 100 percent of the proceeds to the AFLAC Cancer Center at Children's Health Care of Atlanta, which is one of the top five cancer centers for children in America.
(END VIDEOTAPE)
VELSHI: Now it seems to be a good idea what they're doing over at AFLAC, but does it really make a difference to you as a shareholder? You own shares in these companies in your 401(k) or your IRA. Is it realistic and does it make a difference? Well earlier I sat down with our former CNN colleague Myron Kandel to talk about it. Myron's also the president of the Initiative for Corporate Responsibility and Investor Protection.
(BEGIN VIDEOTAPE)
VELSHI: Myron, you have covered everything to do with corporate America and business in America for a long time and now you follow this very closely in your second life. Tell me if this makes any difference. To our viewers out there who hold mutual funds or buy the stock of companies, does what Dan Amos at AFLAC, what he did, does that make any difference at all?
MYRON KANDEL, INITIATIVE FOR CORP RESPONSIBILITY & INVESTOR PROTECTION: It's a good step in the right direction, Ali, but it's only one step. And, you know, someone has to start somewhere. And I think he's a good CEO. He's running a good company with good performance. So he's not worried about letting his shareholders vote on the compensation of their top executives.
Let's see if a company that hasn't done very well would do the same thing. I doubt it. Or at least not any time soon. So, right, it's a good step in the right direction. It's a matter of transparency. We're all in favor of transparency. And it calls attention to the shareholders to the fact that they have some rights.
VELSHI: One of the biggest examples of this in the last couple of years was Home Depot, where the shareholders were really fairly dissatisfied about the way the company had performed versus the compensation of the CEO, then CEO Bob Nardelli. And they went to the meeting and they tried to vote their concerns and they weren't allowed to. So it sort of empowers the shareholders in some way.
AMOS: Right. Because it's right there on a proxy statement and they can vote, as they did at AFLAC. They voted overwhelmingly in favor of the compensation package.
But, you know, there's been a widening gap between what top executives get paid and rank and file workers. It's really reached obscene proportions. And I'm not in favor of government control of what companies pay their people, but I am in favor of having shareholders have a bigger say in picking the board, voting up or down, which they now can do, and also approving the pay packages. So, sure, you'll get a 90 percent plus vote in this case and maybe other companies that follow suit will pay more attention to how those compensation packages appear to the public and to their own share holders.
VELSHI: Myron, good to see you again. Myron Kandel, thanks for joining us.
(END VIDEOTAPE)
VELSHI: Well coming up next, we'll give you the latest on those high gas prices we keep telling you about. Another record today. Plus, how the price of gas might affect your summer travel.
And listen to this one. You might be wasting money right now. But not to worry. Jennifer Westhoven is on the case. The details just ahead. You're watching ISSUE NUMBER ONE on CNN.
(COMMERCIAL BREAK)
VELSHI: All right. Let's take a look at today's gas gauge. Get ready to dig deeper into your pocket. A new record high at the pump. AAA says the average price nationwide for a gallon of regular unleaded is now $3.67 a gallon. That's partially driven by the rocketing price of crude oil, which crossed $126 a barrel. And that, too, is a record.
Well, we talk so much about high gas prices and high airline ticket prices. It makes you wonder how U.S. tourism is being affected and if there are ways that you can travel this summer without breaking the bank. Earlier Gerri Willis spoke with Mark Orwoll, the senior consulting editor for "Travel and Leisure."
(BEGIN VIDEOTAPE) GERRI WILLIS, CNN ANCHOR: So, Mark, high gas prices, probably a recession, job losses. What does this mean for the travel industry?
MARK ORWOLL, SR CONSULTING EDITOR, "TRAVEL & LEISURE": Well, you know, one of the most recent set of figures that I've seen is from AAA. They just came out and said that international travel from Americans is going to be up this summer by about 2.6 percent, which surprised me a little bit. On the domestic side, I think it's a little less clear.
We had a very strong spring break travel season. Disney theme parks just came out with its most recent quarterly report saying that their theme parks saw a 7 percent increase in attendance, 3 percent increase in spending. And yet another survey says that 16 percent of Americans are going to travel a little bit less this summer than last year. So, as I said, it's still in flux.
WILLIS: It's a mix. Yes, it's still in flux. But do you believe that Americans are going to spend more or is there going to be some cost-cutting?
ORWOLL: No, that is -- that's a very good question because I think that is exactly what Americans will do. See, Americans think of vacations not just as a right, but almost as an obligation. So they are going to travel. But I think they're going to be saving money by driving instead of flying, by maybe staying fewer days, driving closer to home than they might have otherwise. They're going to look for cost-saving measures.
WILLIS: All right. OK. Now the airlines are really going to take it on the chin here I think, especially with high gas prices.
ORWOLL: Yes.
WILLIS: I keep hearing how tough this is for the airline industry. What does this mean to consumers, do you think?
ORWOLL: Well, you know, because we've seen about four or five airlines, small airlines, go out of business in the last month and Frontier filed for bankruptcy, there are mergers in the works. What that means is fewer choices for consumers when it comes to air travel. Fewer choices generally translates into higher prices. So I don't think that anybody's going to expect that airfares are going to be coming down any time soon. But people, as I said before, are going to be looking for ways of saving money so they can still get out there on the road, whether it's driving or flying.
WILLIS: You know, I think of my vacation as a right, not a privilege, I have to tell you.
OK. Let's talk a little bit about specifically U.S. destinations that are also hard hit by the foreclosure crisis. Here I'm thinking of California. I'm thinking of Florida. I'm thinking of Arizona. What do you see there? Tell me where I can find some price cutting? Is there some price cutting going on there that I can take advantage of or are you not seeing that? ORWOLL: I do think that you are going to see convention of visitors bureaus around the country offering discounts, promotional rates. Things like family transit passes for visitors, discounts for member hotels and restaurants to make people not only come to those destinations, but stay longer and spend more money.
But in terms of places like California, Las Vegas, Florida, places that have been hard hit by so many economic factors, those are still going to be the top destinations for the summer. Travelocity, the online booking agent, just came out and said that those places in particular are among the most top-booked destinations for this coming summer.
Also remember that we have a lot of European people coming in with their euros to spend. It's very attractive to come to the United States from overseas. So if there is some decline in domestic travel by Americans, we may even see compensation by those Europeans traveling here.
WILLIS: Well, Mark, just quickly, if you had one piece of advice to give to Americans booking vacations, what would it be?
ORWOLL: I would say, do your research. Go online. Check the best prices that you can find online. Read the Sunday travel supplements. Read the travel magazines. Listen to the TV shows. Be informed. That way you're going to get the best price and you're going to get the best vacation for your money.
WILLIS: Educated consumer gets the best price.
ORWOLL: That's right.
WILLIS: Mark, thank you for that.
ORWOLL: You're welcome. See you.
(END VIDEOTAPE)
VELSHI: I do that all the time. I read all those travel features. I read all the travel magazines trying to get the best deal on a summer vacation. In September I'll be studying my summer vacation still.
We can all use a little extra cash. We can all find ways to save. But it's absolutely amazing how easy it is for us, and me in particular, to waste money. Jennifer Westhoven, who I think is more frugal than I am, decided to track down different ways that you might be wasting money so that you can save some money.
What have you got for us?
JENNIFER WESTHOVEN, CNN CORRESPONDENT: Well, I mean, I think there's all these ways. And I do it, too. I've got to admit, when I started to think about this, I found ways that I could be saving money, too. So how can you do that without taking on a second job here? You know, there's a lot of ways that a lot of us have started leaking money, but because it's become a habit, it's off the radar screen. But there's a lot you can do.
One is, start looking at your bills. So cable bill. I'm going to start with Ali. Let's just see between the two of us how much money can we save. You know, how many extra services do you have? Do you actually watch any movies on Stars or whatever?
VELSHI: I could totally live with three channels. I mean, seriously, I have this little bundle package. But it's worth looking at to see, am I even, with the bundle, with the deal, would I save more if I didn't have it?
WESTHOVEN: Yes, if you can cut out one of those extra pay channels, that could be $10 a month. It's the same with your cell phone bill too. Are you using all of those minutes? Are things that you could look for in there, call forwarding. Do you necessarily need that service in there?
The number two one here is membership.
VELSHI: The gym.
WESTHOVEN: And I think -- you know, I walked around our newsroom and sort of took a poll. A lot of people said, you know, I have this gym membership. I pay for it every month. I'm not necessarily going. People sign up in January. They don't go. The gyms are counting on that.
So can you cancel it? Are you really locked in? If you call and you talk to them a little bit, can you get out of it? Or, you know, write it down. Make sure you cancel it next year. Don't fall into the same trap again.
VELSHI: I fall onto that all the time. I have probably paid single-handedly for the reconstruction of several gyms just by not ever going. My best excuse, by the way, is I just go up to them, I don't even call, I just go up and say, look at me, do I look like I really use your facility? Do I look like I'm going to get any benefit from this? Why don't you save us a lot of trouble and cancel it.
Go ahead. Sorry to interrupt.
WESTHOVEN: You can run around the block, you know.
VELSHI: Yes, exactly.
WESTHOVEN: The third one though is automatic subscriptions. And this can be anything from -- somebody said to me, are you using Netflix? And I thought, I'm not using my Netflix but I'm paying for it.
Other times you can sign up for these music services, digital musical service, e-Music, Rhapsody. If you forget about it, it is still draining your credit card. So it's just another one of these places that you can look.
Also, magazine subscriptions. Sometimes they're piling up around your apartment. You're not reading them. You know, maybe that's the one you decide not to renew. Just buy it on the news stand or something.
VELSHI: The few times that you actually end up using it.
WESTHOVEN: Yes, the few times you use it.
Now here's one of my favorites. Costco. I love going there.
VELSHI: We both live in Manhattan. How do you go to Costco? You've got to buy 48 rolls of toilet paper.
WESTHOVEN: Yes, but the point is, at least you use those. What about all of those avocados or those cold cuts that go bad? It's not saving if you don't use it all.
VELSHI: Right. That's a good point.
WESTHOVEN: There are so many more ways too.
VELSHI: Well, very good advice. Thank you. I feel guilty already. I'm going to do a little check of everything that I do that wastes money.
Jennifer Westhoven, thanks a lot.
Up next, more answers to your question because it's the Help Desk. That's right, for one day only, I am taking over the Help Desk. Don't make me look bad. Send your e-mail questions in. Keep them coming. The address, issue1@cnn.com. Look at them, they're waiting for your questions.
(COMMERCIAL BREAK)
VELSHI: You're watching ISSUE NUMBER ONE. You're also watching Senator Barack Obama speaking on the economy right now to a group of technology workers in Beaverton, Oregon. Let's listen in.
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: And a point of personal privilege here, you guys have an outstanding new coach at Oregon State basketball who happens to be my brother-in-law. And so he's here. So I want everybody to say hello to Craig Robinson. You know, even if you guys are Oregon fans, I want you to still be nice to the Oregon State people, all right? So he's going to be bringing them back to their old glory.
What I'd like to do -- this is a very informal setting and so I want to make sure that it's an informal conversation in the back and forth. But I'm going to start off with just a couple of remarks about this campaign, in particular what it means to the economy because, you know, it is just wonderful to be back in Oregon.
And over the last 15 months, we've traveled to every corner of the United States. I've now been in 57 states, I think. One left to go. One left to go. Alaska and Hawaii, I was not allowed to go to, even though I really wanted to visit, but my staff would not justify it.
And now I know that if you listen to Washington or pay attention to the pundits, you hear a lot about how divided we are as a people. But that's not what I found as I traveled across this country. Everywhere I go, I've been impressed by the values and the hopes that we share, whether in big towns, small towns, among men, women, young, old, black, white, Hispanic, Asian, gay, straight.
People really share a faith in simple dreams. A job with wages that can support a family. Health care that we can count on that we can afford. A retirement of security and dignity. Education and opportunity for our kids. You know, common hopes, American dreams.
And that's why this election is too important because for far too many Americans, that dream feels like it's slipping away. We just came through the first period since World War II in which the economy expanded but family incomes actually went down by an average of $1,000. So people are working harder for less. At the same time, you are paying more for gas, food, medical care and millions of families are facing foreclosure and we've already lost 260,000 jobs so far this year.
To be sure, some of these problems are the result of a globalizing economy and no single person has control over that. But instead of helping, Washington's policies have actually made things worse. Instead of expanding opportunity for working people, we've tried to grow our economy from the top down and eventually the pain trickled up. Instead of making sure the people can live their dreams on main street, we tilted the scales for special interests and Wall Street. Instead of saying we're all in this together, Washington has consistently sent a message to the American people that says you're on your own.
John McCain has served this country with honor and I respect that service. But when I heard him say that he had surveyed the Bush economic record over the last seven and a half years and concluded that we had made great progress, I was curious about who it was that he was talking to because I think he's dead wrong. Is there anyone outside Washington, D.C. who truly believes that we have made great progress over the last several years?
Senator McCain is running for president to double down on George Bush's failed economic policies. I'm running to change them. And that's what will be a fundamental difference in this election when I am the Democratic nominee for president.
We have a difference on taxes. John McCain wants to continue George Bush's tax cuts for the wealthiest Americans. I want to give tax cuts to working people. I admired Senator McCain several years ago when he said he could not, in good conscience, support the Bush tax cuts, but now, as the Republican nominee, he's fully embraced them. He wants to give a permanent tax cut to the wealthiest Americans who don't need them and weren't even asking for them, while working people are struggling.
And for all his talk about fiscal responsibility, his proposed $400 billion in tax cuts have no way of being paid for. He has not said a word about how they will be paid for. And as a consequence, I believe it's the kind of attitude that has shifted the burden on the middle class and mortgaged our children's future on a mountain of debt.
I think it's time to restore fairness and responsibility to our tax code. So we need to reward work and not just wealth. We need to stop giving tax breaks to companies that ship jobs overseas and give tax breaks to companies that are investing here in the United States.
That's why I proposed a making work pay tax credit of up to $500 per worker and up to $1,000 for a working family. This will cut taxes for 150 million Americans. It will help you deal with rising costs and give our economy a boost by easing the burdens on main street.
So that's one difference between myself and John McCain. A second difference. We have a difference on health care.
John McCain wants to continue a George Bush approach that only takes care of the healthy and the wealthy. That allows insurance companies to discriminate and deny coverage to those Americans who need it most.
This is exactly the kind of approach that has left out tens of millions of Americans. And that's why you're struggling with rising costs. That's why we failed to solve our health care problem year after year after year after year.
I think it's time to finally make health care affordable and accessible to every American. And we need to stand up to the insurance companies and the drug companies. We need to bring the American people together and pass a plan that lowers every family's premiums and gives every uninsured American the same kind of health insurance that I enjoy as a member of Congress.
That's the second difference. Third difference. We have a difference on gas prices.
John McCain has embraced a gas tax holiday gimmick that, when it is said and done, in best-case scenario will save you approximately $30 this summer. That's best case. Thirty cents a day for a grand total actually of $28 if you're the average driver.
In the meantime, it stands to potentially take money out of the highway trust fund that rebuilds our roads and our bridges. It is a classic Washington fix that's more about getting John McCain through an election than solving your problems.
Most economists think that it will end up putting more money in the pockets of the oil companies. It's bad for our environment. And it won't bring down gas prices over the long term. Most economists actually think that it will send those prices up. I believe that we owe the American people the truth. That's why my plan to lower gas prices raises fuel efficiency standards on cars, invests in alternative energy to end our addiction to oil and creates millions of new green jobs while saving our planet in the bargain. I think that's the kind of change we need in Washington.
So we have a fundamental difference on our priorities for president. John McCain wants to continue George Bush's war in Iraq, losing thousands of lives and spending hundreds of billions of dollars to fight a war that isn't making us safe. I went to end this war. I want to invest that money in America and our roads and our bridges and our ports and our schools. I want to invest in millions of green jobs so that we finally develop renewable energy and our addiction to foreign oil and bring those gas prices down and save our planet in the bargain.
So there's going to be a real difference on the ballot in November and that's what this election should be all about. John McCain will stand with Washington's tried and I believe failed approaches to the past. And I intend to stand with the American people on behalf of a new direction because I believe it's time for America to, once again, be a place where you can make it if you try.
I believe it's time for Washington to work, not for us, but for you. For your hopes and for your dreams. That's the choice I intend to offer in this campaign. And that's what I intend to do every single day when I'm president of the United States of America.
So with that, what I want to do is just open it up and we're just going to have questions and comments. We've got some microphones in the audience. Don't be bashful.
VELSHI: All right. That is Senator Barack Obama in Beaverton, Oregon, who is -- just addressing a group of technology workers. And he has just delivered a bit of a speech on the economy. He's now opening it up to questions from them about the economy or concerns that they might have.
Let's get cnnmoney.com's Poppy Harlow back in here for results of today's Quick Vote. More than 31,000 of you weigh in. For how you voted, Poppy, what does it look like?
POPPY HARLOW, CNN CORRESPONDENT: Yes, we asked people, when it comes to the economy, how do they feel? An overwhelming majority said they think it's going to get worse. So they're pessimistic, not optimistic. It doesn't look like things are turning around. Check out those numbers, 63 percent of you voted. That's how you feel.
Ali.
VELSHI: All right, Poppy, thanks very much.
Our apologies to our fantastic Help Desk. And I'd really been working that whole thing because I so rarely get to do the Help Desk. Well, the fates were against me. So we will have you all back again and we will get to those questions. We love hearing from you. It really helps the way we decide how we're covering issue number one for you because it is your main concern.
It's time now, though, to get you up to speed on other stories making headlines. And for that, let's head to the CNN "NEWSROOM" with Don Lemon and Brianna Keilar.
LEMON: Well, you name it. Cyclone survivors in Myanmar need it. They probably don't care where it comes from or who delivers it, but Myanmar's rulers do. We're live with the latest on the desperate standoff.
