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Issue Number One

Oil and Gas Hit New Records; Banker to the Poor; The Not-So- Friendly Skies; Here Come the Bills

Aired May 22, 2008 - 12:01   ET

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

GERRI WILLIS, CO-HOST: A big day for issue #1, the economy. Oil and gas hit new records yet again as oil executives face the heat on Capitol Hill.
The rough and tough economy takes a toll on the auto industry. A big announcement from a big U.S. automaker.

And wait until you hear what some are calling the true costs of airline delays.

ISSUE #1 is your economy. ISSUE #1 starts right now.

Welcome to ISSUE #1. I'm Gerri Willis. Ali Velshi will be along in just a moment.

Up first this hour, Ford Motor Company responding to high gas prices and depressed sales by slashing production of gas-guzzling vehicles. Today, Ford announced a rollback of its profitability expectations, sales projections and production, namely to its pickup truck and SUV models, sales of which have plummeted lately.

Ford says high gas prices have new car buyers going smaller for more fuel-efficient vehicles. Ford says their production cuts will be tiered starting at 15 percent next quarter, from 15 to 20 percent the following quarter, then anywhere from a 2 to 8 percent reduction in the fourth quarter. Ford had hoped to be back in the black by 2009, but those profitability expectations are now downgraded to hopes they can break even if and only if overseas sales stay afloat.

Overseas markets helped hike the price of oil to a new record overnight. After cresting $135 a barrel, light sweet crude future settled in just under that mark in Asian trading. The reason? Beyond the usual suspects of a weak dollar and declining inventories. Analysts suggest China's monstrous earthquake and the subsequent energy needs for diesel fuel are putting a greater demand on the oil market.

And a not so sweet 16. Gas prices have now risen for 16 straight days. The nationwide average for a gallon of regular unleaded rose to $3.83 up from $3.81 -- Ali.

ALI VELSHI, CO-HOST: All right, Gerri.

Those rising prices add more fuel to the fire for Congress. Yesterday, the Senate grilled big oil executives for America's pain at the pump. And today the House gets its turn. CNN's Kate Bolduan is live in Washington with more on that story.

Hi, Kate.

KATE BOLDUAN, CNN CORRESPONDENT: Hey there, Ali.

Well, it's round two here on Capitol Hill. This time, the five oil executives from BP, ConocoPhillips, Shell, Chevron, and of course ExxonMobil, all before the Congress again. But this time on the House side. And you can expect that they will be getting quite a grilling from the House committee.

We have live pictures of that committee hearing going on right now. And what they are going to be asked about, of course, you can guess it, the big picture, what consumers care so much about, gas prices. What the oil industry is doing about it, as well as what they haven't done about it.

And now, also, they are wondering what can Congress do to help with prices at the pump? And there are many differing opinions, even just among the committee members, on how to do that. Here is a little bit from this morning.

(BEGIN VIDEO CLIP)

REP. LAMAR SMITH (R), TEXAS: While it is true that these companies have strong profits, profits are necessary for companies to expand, produce, and create more jobs.

REP. SHEILA JACKSON LEE (D), TEXAS: This is an antitrust committee, and so we will be asking the hard questions -- what is impacting these prices, are there collusions and price fixing?

(END VIDEO CLIP)

BOLDUAN: Price fixing, that is going to be one key issue that this committee is going to be looking at. Is there fault on the part of the oil industry in just how high the prices are at the pump? You can expect that the oil executives will definitely be having to answer some tough questions when it comes to that, and we'll be keeping an eye on it.

But of course they're also going to be talking big picture, Ali. Really, we're here, the prices are high, what can we do about it?

VELSHI: Now Kate, I don't envy you and your job. We give you the toughest, most complicated issues to try and break down for our audience. And there's another one going on right now.

The president tried to veto the farm bill, which of course is one of those bills that does affect what we pay for food. There was a little clerical error. What happened there?

BOLDUAN: Yes. They are calling it a clerical area, but it's really being seen as a mess here on Capitol Hill. The House passed -- the Congress sent this farm bill, this massive farm bill, to the president. He vetoed it. But then shortly after that, they found out that there was a clerical error.

An entire section of the bill that had to do with international food aid did not make it to the president's desk. Thus, he didn't veto it.

So now, really what the House is having to do is they're just kind of having to fix the mistake. They are going about it in a couple of different ways to see really how they are going to do it. They can pass the section and its own entire -- own bill, or revote on the entire farm bill.

We'll see how that goes, but definitely a step backward in trying to move forward with this farm bill.

VELSHI: All right. Thanks, Kate. We'll talk to you again.

Kate Bolduan on Capitol Hill.

Now, one of the things Kate was talking about are these hearings where Congress is in part trying to figure out what the price of oil should be, what it costs companies to make oil, what level is oil profitable.

We've done some of our own research here at CNN. And here's at least here something we can give you to try and get you understanding a little bit about what oil costs.

If you're drilling for oil in fairly accessible land, and the oil isn't very deep and the drill can go straight down, you can probably make money on oil at about $19 or $20 a barrel. If you're drilling offshore in shallow water -- and that's under about 10,000 feet -- it could go up to about $60 a barrel for that.

In deep water, we've been talking a lot about the offshore finds off the coast of Brazil. Well, that's expensive. That's about $60 a barrel, over 10,000 feet deep.

Shale mining in the western United States, there's shale that can be made into oil if the price is right. And that can go between $30 and $50 a barrel.

And the oil sands in Canada, dirt in the ground that yields oil, there's a lot of it. There's probably more there than there is in Saudi Arabia. But it's expensive, $50 to $60 a barrel. But that does mean that around $60 a barrel, everybody is making money on oil.

That might help you decide what the price of oil should be. It topped $135 last night -- Gerri.

WILLIS: If that would only bring the price of oil down.

VELSHI: Yes. WILLIS: All right. OK. And that brings us now to today's "Quick Vote." Poppy Harlow from cnnmoney.com is here with today's questions.

Hi there, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hi Gerri.

Talking about oil again today. Of course executives from Exxon, Chevron, ConocoPhillips, those big oil comes here in the U.S., facing some tough questions from lawmakers as oil tops $135 a barrel, a new high for gasoline.

We want to know who you think is to blame. Here is our question today. What is to blame for high oil prices? Big oil companies, OPEC, supply and demand, or no one, they are unavoidable?

Cast your vote on cnnmoney.com. We'll bring you the results later in the show.

I just spoke to an oil trader who said oil is going nowhere but up right now -- Gerri.

WILLIS: Oh, bad news. OK.

Coming up, wait until you hear how much all those delayed flights could be costing. We're talking billions.

Then, here comes the bride and the bills. We'll show you how to tie the knot without spending a fortune in this tough economy.

And ready, set, go. It's the great commuter race of 2008. Three of our own go head-to-head by car, on bike, on foot.

You do not want to miss this, next on ISSUE #1.

(COMMERCIAL BREAK)

WILLIS: Welcome back to ISSUE #1.

Now, while the Democrats sort out their nominees, Senator John McCain has been able to turn his focus to November's general election. And now the great speculation game begins over just who will be Senator McCain's vice presidential running mate.

CNN's Mary Snow is here with more.

OK, Mary. Tell us.

MARY SNOW, CNN CORRESPONDENT: Well, as you know, this weekend John McCain is having some friends over to his home in Arizona. And on that list are three people who are seen as potential running mates in November.

Now, the McCain camp has said this is purely a social function. There are 10 couples going. It's all about grilling. You know, how do you like your hamburger, what do you think about foreign policy?

(LAUGHTER)

WILLIS: This doesn't ring true, OK. But...

SNOW: But they're saying there's no formal process at all. But of course that hasn't stopped the speculation.

And three people really being focused on, Bobby Jindal, the Louisiana governor, 36 years old. Would really -- he's seen as a rising star in the Republican Party and would really make a big contrast against Senator John McCain, who's 71.

WILLIS: Yes, the age difference there amazing.

SNOW: Age difference.

And then Charlie Crist, who is the Florida governor. And if you remember during the Florida primary, Charlie Crist came out late in the game, endorsed John McCain. That was seen as pretty helpful. And he's a very popular governor also with Democrats and moderates. Florida, of course, a crucial state.

AND then there is Mitt Romney who ran for president himself. These two were bitter enemies though during the primary. But he has been campaigning for John McCain.

So these are the three names.

Governor Tim Pawlenty of Minnesota is going to a wedding. He's not going to be there. But he said he has already gone out to the ranch.

There's all kind of speculation, but it's very early in the game. And again, the McCain camp saying this is really just about a social event.

WILLIS: It's a social event. Just about the grilling. But is this something that might take away from the focus on the medical records that are going to be issued by McCain over the weekend?

SNOW: Well, one of the big stories tomorrow in Arizona, Senator McCain is going to have his medical records on display to be reviewed by news agencies. And this is kind of a big deal, because this is the first time we're going to be able to see his medical records since he ran for president in 2000.

And remember, after that, he had surgery for his melanoma. He has been really -- he had a bout of that.

And you know, there are questions about when he would release it. He is saying there are going to be no surprises here. But it's a pretty lengthy document process that we'll all be going through. We're going to be going out there tomorrow also with Sanjay Gupta, who will be reviewing it.

WILLIS: It's going to be a fascinating weekend. We look forward to your coverage.

Mary Snow, thank you for that.

SNOW: Sure.

VELSHI: All right. Well, if you think the color green in politics -- money might be the first thing that comes to mind. But when it comes to green issues in politics, energy, things like that, well, some say that too much green is spent, not enough green is accomplished.

Listen to this.

(BEGIN VIDEO CLIP)

REP. JOHN MICA (R), FLORIDA: What have the Democrats done so far as an energy plan? Well, let's just take a look at it.

This is a spoon from the House cafeteria. They bought this spoon at great expense to the taxpayers. And it is a green spoon. In fact, it melts in your coffee.

This is exhibit 1.

What have the Democrats done when gas is $4? Well, go down to the gift store and you'll see these "Green the Capitol" bags. So now we have a greater expense to the taxpayer, printed these little "Green the Capitol" bags.

Now, what's the centerpiece of their energy policy when you're going to pay $4 a gallon and more around the country for gasoline? They are going to change the light and green the light on the top of the Capitol. Just the study I'm told is going to be $800,000 and then millions of dollars -- and $4 gas.

(END VIDEO CLIP)

VELSHI: All right. Strong words from Representative John Mica.

He joins us now from Capitol Hill, along with Democratic Representative Earl Blumenhauer.

Gentlemen, thank you for being with us.

I'm going to start with you, Congressman Blumenhauer.

You heard what John Mica's criticism of the Democrats is in terms of dealing with energy. I think probably a lot of our viewers are out there thinking it's great that Congress is going green, that the building is going green. But when we think of green and energy, we probably need bigger steps.

What do you think of that?

REP. EARL BLUMENHAUER (D), OREGON: Well, I think John kind of forgot about the fact that the Republican majority stopped us from even studying increased cafe standards, mileage efficiency for vehicles. And that's one of the first things we've done. For the first time in 30 years, there are increased fuel efficiency standards.

I just left the secretary of energy, who had no answer as to why the Department of Energy missed 34 out of 34 efficiency standards for appliances. We've been bearing down, making those changes in terms of energy policy four times. We passed on the floor of the House alternative energy, and most recently this last -- just this week.

These are concrete steps. Yes, greening the Capitol is positive. The federal government should lead by example, whether it's Capitol Hill or the Department of Defense. But we've actually taken action that when John and his team were in charge for 12 years, they sat on their hands, they fought against it, and they simply ignored the realities.

VELSHI: Representative Mica, answer that charge. You have concentrated on the spoons and the light bulbs. What about fuel efficiency standards? What about everything else that wasn't done?

MICA: Well, I brought the spoon. And the spoon is not the answer. And what my fellow representative just cited is not the answer.

The answer is increasing the supply of fossil fuels in the short term. We only use 10 percent of our nation's gas supply, natural gas supply, clean source which we're using in Florida. We only use a small fraction of the oil. It's there. But the other side has blocked this every time.

President Bush, one of the first things he did before 9/11, he tried to get Congress to focus on an energy policy, and that was brushed aside. So you've got to increase the supply in the short term or we're going to see the embarrassment of the president going to Middle East asking Saudi princes to increase the supply.

VELSHI: Representative Blumenhauer, they have -- the Republicans have asked for an increase in the amount of land that they can drill on offshore and onshore.

BLUMENHAUER: The oil industry is not using a fraction of the leases that we've already given them. We've already given them. And they are not using it. But with only 2 percent of the world's proven energy oil and gas supplies, we're not going to drill and dig our way out of this.

We cannot continue to waste more energy than any country in the world. We need to go ahead and make sure that the oil companies take advantage of what they have been given to them. And we need to be investing in alternatives like solar and like wind.

These are things that are within our power. We have taken steps to be able to make them more affordable and efficient, and have the federal government lead by example. It's something that the Republicans simply drug their feet on for 12 years.

VELSHI: Let's ask Representative Mica to have the last word on this.

Do you we agree we need to find more alternative solutions?

MICA: Well, you just heard Earl's plans. You wait until the solar panels and the windmills kick in.

Folks, you've got to have supply now. And we have it in the United States. There's no reason why we can't go after it, whether it's off the shores of Florida, whether it's in some of the other areas like ANWR.

It's there. We can do it. We can lower the price and we're not held hostage. Right now we're importing over 60 percent of that fuel. This is shameful.

VELSHI: Gentleman, good discussion to have. Thank you for joining us.

Congressman Earl Blumenhauer, a Democrat from Oregon, and Congressman John Mica, Republican from Florida.

Thanks, Gentlemen.

WILLIS: Up next, why a form of lending usually reserved for borrowers in the third world might be making its way to the U.S. Find out it if it can help you.

And buckle up your seat belt or your bike helmet, or tie those shoe laces. It is the great -- and we mean great -- commuter race of 2008. Believe us when we say you're not going to want to miss this.

You're watching ISSUE #1.

(COMMERCIAL BREAK)

WILLIS: A nice surprise from the U.S. Labor Department, which says the number of Americans filing for unemployment benefits dropped last week to the lowest level in a month. Job applications totaled 365,000. That's down 9,000 from last week as economists were expecting a slight rise.

Now, despite last week's decline, experts say the number of claims suggest the sluggish economy is hurting the labor market -- Ali.

VELSHI: Thanks, Gerri.

Now, this the story we've been waiting for. I love this story.

Settle in and get ready for the great commuter race of 2008. CNN's Zain Verjee, Tom Foreman and Jamie McIntyre, one on a bike, one in a car, and one in a very reliable pair of sneakers.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN STATE DEPT. CORRESPONDENT: I'm going to beat these two boys by taking the metro to the bureau. A little bit of a walk and one straight shot.

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: I'm driving, and I fully expect to be thwarted by rush hour traffic.

TOM FOREMAN, CNN CORRESPONDENT: I'm going on the bicycle.

FOREMAN: Zain, you're going that way.

VERJEE: Bye, darling.

FOREMAN: Three blocks...

FOREMAN: Get off the road, buddy.

MCINTYRE: Eat my dust!

We're in Bethesda, Maryland. And we're way out ahead at the moment.

FOREMAN: First thing, take advantage of a little shortcut.

VERJEE: OK. We're at the Bethesda station. It is 8:46 in the morning. It's going to cost me $2.90.

MCINTYRE: Connecticut Avenue is moving well. We've got a show at this.

FOREMAN: Right now I'm cutting underneath some of the heaviest traffic that's above this tunnel that I'm in.

MCINTYRE: So we're back here stuck at a light again.

VERJEE: It is 9:05. Not too crowded. I wonder how Foreman is.

FOREMAN: This is where you love it. Everybody is caught in traffic and you just go smoking right past them.

MCINTYRE: We are really in the homestretch now. If this car would just go.

Go, buddy, go. Come on. We're in a race here, for crying out loud.

VERJEE: I think we're in good shape.

MCINTYRE: We are two blocks away now. We're in really good shape.

VERJEE: Here we are, Union Station, and it's 9:15.

MCINTYRE: Here is CNN.

You haven't seen Tom Foreman or Zain Verjee, have you?

All right.

I'm not sure where we're supposed to go, so we'll just go to the main desk.

VERJEE: 9:21.

FOREMAN: We're just getting killed on time here.

(APPLAUSE)

MCINTYRE: Thank you. Thank you.

Once again, fossil fuels win out.

VERJEE: Whoa! I won!

MCINTYRE: No, I was here first.

VERJEE: Were you really?

MCINTYRE: Yes.

No he was not. He was not here first.

MCINTYRE: I have my coffee. I was getting my coffee.

(LAUGHTER)

FOREMAN: I fear we have lost.

When did you guys get here? Like five minutes ago? Because I'm thinking...

VERJEE: He beat me by eight minutes.

FOREMAN: Really? How did you beat her?

MCINTYRE: Took the back way.

FOREMAN: We had a lot of technical challenges that you don't have in a car and you don't have on a train.

VERJEE: Like?

FOREMAN: Well, like having a second bicycle and a camera, and stopping and starting, and gears that you had to stop and reload. So it was a little more complex in that way. So we probably had -- in soccer terms, we probably had at least 30 minutes of stoppage time.

MCINTYRE: All right. So we should subtract that from your time.

FOREMAN: At least 30, maybe 40.

MCINTYRE: And you still lose.

FOREMAN: How much did we spend on our commute today? I'm going to start -- let me start the bidding at zero, nothing.

VERJEE: $2.90. MCINTYRE: It only took me about $4, maybe a gallon of gas to get here.

FOREMAN: Know what the best thing is? Options.

(END VIDEOTAPE)

VELSHI: I have folks there with us, Tom and Zain and Jamie.

I was surprised. Jamie, I completely thought you'd be the loser in that race.

And Tom, yours is green zero emission, zero money. I thought that was going to win.

Who of you -- did you all think you were going to win?

FOREMAN: Yes.

VERJEE: I thought I was definitely going to win.

VELSHI: You did?

VERJEE: I did.

MCINTYRE: I definitely thought I was going to lose. I thought I was going to lose, but our assignment editors gave me a great back route to take.

But, you know, the race was a little unfair, because this wasn't a real commute. It really depends on where you live. And I actually live an hour and a half away. I had to commute this morning.

I actually left my house at 7:30, got here just before 9:00. And that was the real commute for me.

FOREMAN: Yes.

Zain, you got a break because you were so close to the metro, which most people can't live that close, huh?

VERJEE: Yes. And I just want to tell you guys that I have been reviewing the tapes. And I think there was some technical issues here, too.

I do feel as though I actually did win, at least in the popular vote, and I won definitely on cost. I won on relative cost. And environment, too. So I challenge you boys to do that again.

FOREMAN: Well, I'd like a rematch, because I'll tell you something, on the bicycle, I know -- I've done it many times -- I can make the same run in about 30 to 45 minutes.

VERJEE: Right.

FOREMAN: We had a lot of camera issues. It would be a very tight race if we did it again that way.

MCINTYRE: Well, here's the thing. I'm an American, so I'm in love with my car. You're going to have to pry this convertible out of my hands from my cold, dead body, or, unless gas actually gets to $5 a gallon, I may have to reconsider.

VELSHI: Well, you know, here's the thing. Jamie, you are -- this is the horse and buggy. I mean, the American car, at these prices, are really on their way out. So I think the two of them have the edge on you in terms of it being 2008 and being forward-thinking.

But unbelievable that you got there first. We'll have to have a rematch again with all the technical stuff working.

FOREMAN: Right now. I'm up for it. Here we go. Let's go.

MCINTYRE: Tom, wait a minute.

FOREMAN: See you in Georgetown, buddy. Let's go.

(LAUGHTER)

VERJEE: Ali, a lot of people that I talked to on the metro said it saved them hundreds of dollars in parking and in gas as well. So, you know, it really is important and significant for a lot of people. And the diplomatic community, too, says, you know, engaging in six- party talks and all of that opted this race. They are saying we should try it again, maybe in a different location, and see what happens.

MCINTYRE: Ali, there's one more way to get to work for free that we didn't look at here, and it's popular in the Washington area.

FOREMAN: Excuse me. Passing by. Sorry, buddy.

MCINTYRE: Excuse me. It's called slugging. And that's where these commuters who can get into the HOV lanes, they can pick up an extra passenger. They do each other a favor.

And a lot of people do that here in the Washington area. They just hang out...

(CROSSTALK)

MCINTYRE: An SUV comes by and picks you up. And that way you get to work for free. And that could become more popular as gas becomes more and more expensive.

VELSHI: You guys, this was a lot of fun. When do you a rematch, let us know. You have got a space here on ISSUE #1. Our viewers will continue to follow it.

Thank you to all of you.

MCINTYRE: Wait. Here comes Tom again.

VELSHI: Zain Verjee, Tom -- I'm looking up because I'm looking at that monitor. Very, very funny.

Thanks to all of you.

Gerri, that was instructive.

WILLIS: Informative. And I think maybe Zain should run for office.

VELSHI: Absolutely -- for using public transit.

WILLIS: I love it. I love it.

Up next, have you heard of micro-lending? Here why this overseas phenomenon might help folks right here at home.

And we'll tell you of actual costs of endless flight delays around the country. Here is a hint -- it's high.

And don't forget about the help desk. E-mail us your questions, issue1@cnn.com.

ISSUE #1 rolls on next.

(COMMERCIAL BREAK)

GERRI WILLIS, CNN ANCHOR: We're talking microlending in a few minutes and how it could help out someone you know. But first, we want to get you caught up on latest headlines from the CNN "NEWSROOM."

Don Lemon, take it away.

DON LEMON, CNN CORRESPONDENT: Hey, Gerri, how are you?

A story we've been following for several hours. Strong winds are fanning a fast moving wildfire in Santa Cruz, in the mountains there, in northern California. Fire officials say the blaze has now spread to about 1,000 acres. Multiple homes are threatened there. Mandatory evacuations are underway.

And the strong winds are making firefighting difficult. You're looking at live pictures now from our affiliate in Santa Clara County in California. That's KTVU. That blaze broke out before dawn this morning in the mountain range about 10 miles west of Gilroy. We'll continue to follow this developing story and bring you updates as it happen also in the "NEWSROOM" at the top of the hour.

Staggering numbers in China. The death toll from last week's earthquake jumped by nearly 10,000 in a single day. Here's what we know right now. The government now says 51,151 people are confirmed dead. Almost 30,000 others are missing. The government is pleading for tents. Millions are homeless or their homes are unstable and unsafe.

One sign of things getting back to normal, the Olympic torch relay resumed in China. It was on hold during three days of official morning. The run is still being delayed in the Sichuan province where that quake hit.

American Airlines is charging a fee to check a piece of luggage. Many airlines are increasing fees as well. All kinds of things. What do you think about this latest increase, latest fare? Are the extra fees justified or are they a ripoff? E-mail us your thoughts at cnnnewsroom@cnn.com and we'll have some of your e-mails starting in the 1:00 p.m. Eastern hour of the CNN "NEWSROOM."

In the mean time, I'm Don Lemon. Now back to Ali Velshi in New York.

And, Ali, have a great . . .

ALI VELSHI, CNN ANCHOR: What's that e-mail address again, cnnnewsroom@cnn.com. So I'm going to write you about what I think about those ridiculous charges to take one piece of luggage.

LEMON: Do you really think they're ridiculous?

VELSHI: Absolutely.

LEMON: Why?

VELSHI: Because you know what's going to happen? Everybody's going to pack all their stuff in their clothes. Everybody's going to have this much clothing and they're going to walk on the plane like this and it's going to take you an hour and a half to get through security because people are not going to want to check the bag because they're going to want to save the $15. The government should come in and stamp this out now.

LEMON: But, Ali, the people are going to say -- some of the airline people are going to say, you know what, that's the price of the ticket right now because jet fuel is so high and we cannot continue to run without making a profit.

VELSHI: I hear you.

LEMON: We're losing money. You've got to pay for it.

VELSHI: You know, the best day in the airline industry was when the Wright brothers got that thing to fly and they should have given up on it right around then.

Don, good to see you.

LEMON: Hey, Ali, have a great Memorial Day weekend. Doing anything fun?

VELSHI: I'm going to not work for a couple of days.

LEMON: All right, good. Good for you. Same here.

VELSHI: That will (INAUDIBLE), although I love the job.

Don, good to see you. You have a fantastic weekend, too. LEMON: All right, good to see you.

VELSHI: All right, I'm off the airline rant. I'll send an e- mail later.

We've talked about microlending on ISSUE NUMBER ONE. Now usually it's where folks lend money to those in need, typically in third world countries. Well, it's now time to turn the tables and see how microlending might help struggling people right here in the United States. CNN's own Richard Roth has the story.

(BEGIN VIDEOTAPE)

RICHARD ROTH, CNN CORRESPONDENT, (voice over): Economist and Nobel Peace Prize Winner Muhammad Yunus is cutting through red tape to loan money to America's poor. His bank, Grameen, has been lending money in Bangladesh for 30 years. Small amounts of cash that go a long way to help millions start a business. It perhaps isn't something you'd expect to find in the United States, but with the recent mortgage meltdown and new, tougher standards by lenders, Grameen is helping to bail out some lower income workers.

MUHAMMAD YUNUS, NOBEL LAUREATE: People say this can work any place, any city in the United States if it works right here in New York City.

ROTH: It certainly helped Elizabeth Tordoria (ph), a Bolivian immigrant, who opened a store this past year and needed $3,000 additional dollars to increase her inventory. Because of her weak credit score and poor English skills, she'd had trouble getting a traditional bank loan.

RITU CHATTREE, GRAMEEN AMERICA: Our customers are really people who are the unbanked in the United States. There are about 25 million people in the U.S. with no relationship with a conventional bank. And so they -- the only access they can get to credit are predatory loans at rates of 300 percent to 400 percent a year.

ROTH: Grameen charges people, like Elizabeth, about 15 percent a year. But she and other borrowers don't just mail in their payments, instead they commit to group meetings every week where they repay some of the money.

YUNUS: We do the same way as we do it in Bangladesh, five member group, weekly meetings. It's mutual support with each other. Help each other to stay afloat. Work on the problems that you face together.

ROTH: The loans range from $500 to $3,000. So far this year, Grameen says it's lent out more than $400,000 to New York's poor. Money that comes in handy during tough, economic times.

(END VIDEOTAPE)

ROTH: And it's interesting to note, Grameen doesn't ask for collateral for these loans. They rely on their screening process and a whole lot of trust. They say they have firsthand evidence that the working poor always pay back.

VELSHI: All right. Now a very interesting story. I think Muhammad Yunus and Grameen bank are fascinating stories. What is the benefit of people meeting in that group setting and paying back a few dollars? Why the group?

ROTH: Well, it seems like with trying to lose weight or stop smoking, the group peer pressure does helps getting people to pay back loans. And they're also expected to tell their peers ways to save money, better borrowing practices. So it all feeds into it.

VELSHI: Yes, fantastic story. Richard, thank you so much.

Now, Gerri.

WILLIS: Getting on a plane soon, Ali.

VELSHI: I'm still amped about that whole airplane thing.

WILLIS: I don't blame you. Frankly, it's outrageous. But, listen, if you're getting on a plane soon, if you're booking air travel any time in the near future, you'll really want to stick around. Find out how much all those airline delays are costing you. This is ISSUE NUMBER ONE.

(COMMERCIAL BREAK)

WILLIS: Welcome back to ISSUE NUMBER ONE.

Talk about the perfect storm that sent spiraling gas prices even higher -- hurricanes. Today's forecast for the upcoming hurricane season takes on added meaning for cash strapped consumers. According to NOAA, that's the National Oceanic and Atmospheric Administration, expect to see between six and nine Atlantic hurricanes. And they estimate two to five of those storms will be major hurricanes.

Ali.

VELSHI: Gerri, Andy Bush from the Bank of Montreal said one major hurricane that takes out any oil installations could send oil to $175 a barrel. It hit $135 a barrel for the first time today.

Well, there are a lot of folks out there wondering just what the airline industry is up to, other than charging you $15 on American Airlines for your first checked bag. But don't get me started. Fuel surcharges are higher than some tickets now. And now there's word of the cost, the obscene costs, that are associated with delayed air travel in the United States. Jennifer Westhoven has been looking at this very closely and she's here with more.

Jennifer.

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Obscene is a great word. I mean, not only are airline delays, they're so frustrating. When you're stuck in the middle of one, you've got some place to go. Now we're finding out they 're costing the economy. A new report out this morning estimates, all told, it costs the economy more than $40 billion. That is based on more than 10 million flight records from the Department of Transportation. Now this is a report by Democrats on the Joint Economic Committee. Here's Chuck Schumer at an earlier news conference.

(BEGIN VIDEO CLIP)

SEN. CHARLES SCHUMER, (D) NEW YORK: It's been apparent for far too long that to millions of Americans who fly, our domestic airport system is broken. Today's JEC report puts a dollar amount on just how bad it is. And it is really bad. In 2007 alone, airlines, businesses, people felt a $41 billion punch in the gut from flight delays.

(END VIDEO CLIP)

WESTHOVEN: All right. So $40 billion. Let's break that down for you.

First is higher operating cost, $19 billion. That's crew members overtime, yes, maintenance, jet fuel. Then there's the time that you lose sitting on that plane instead of working. Business comes to a halt. That's $12 billion there.

You miss a connection. You may have to cancel hotel rooms, rental cars. Industries took a $10 billion hit due to all those delays, public transportation, restaurants, retail, everything that gets lost.

VELSHI: All right. You mentioned in that $19 billion, was that the jet fuel cost that's wasted by sitting around because you figure that plane's running. It's burning some fuel.

WESTHOVEN: Yes. And, I mean, all these airlines say, hey, we're strapped by jet fuel costs that they're wasting millions of gallons of fuel while they're idling on the tarmac, circling in the sky, 740 million gallons. That's more than a billion and a half dollars.

You know, I think there's no question that sometimes a delay is appropriate, right, for maintenance. If there's bad weather, you certainly don't want the plane flying. But 20 percent of all our travel time is spent delayed. It's a huge waste of money.

Here's what I think is the interesting, political footnote here. So, you know, we called the ranking Republican to find out what they thought, because this is Democrats coming out. And they said they had no knowledge -- this is a press representative for Congressman Jim Saxon of New Jersey -- Republicans had no knowledge of or participation in this report and our phone call was the first that they had heard of it.

I wouldn't have thought you'd bicker about that.

VELSHI: Yes, I think they should get down to it and figure out what the problems are.

Jennifer, thank you so much.

Gerri.

WILLIS: Airlines are coming up with more and more ways to save as the cost of oil rises. And that often means you, the consumer, have to pay more. American Airlines now charges $15 for your first checked bag. But there are other ways airlines pinch pennies as well.

In 1987, American Airlines says it saved $40,000 a year by eliminating one olive from each salad served in first class. And Southwest says by taking out just three peanuts in each bag it saves $300,000 each year. And Northwest says it saved $2 million a year when it dumped it's half ounce bag of pretzels. Only 18 pretzels in those bags.

Ready for the dream wedding? Get ready for the bills. We'll show you how to have a great party in a down economy.

And we'll open up the Help Desk. The address, issue1@cnn.com. You're watching ISSUE NUMBER ONE.

(COMMERCIAL BREAK)

WILLIS: Welcome back.

Let's get right down to it and open the Help Desk for business. Answers to all of your e-mail questions. Gary Schatsky is the president of objectiveadvice.com. John Ulzheimer is the author of "You're Nothing but a Number." I love the name of that book. And Allan Chernoff is a CNN senior business correspondent.

Welcome, all. Let's get right down to the e-mails.

Dave asks, "I have several credit cards but the interest is only 5 percent. Should I pay on them or concentrate on paying my home off so it is free and clear?"

Gary, what do you think?

GARY SCHATSKY, PRESIDENT, OBJECTIVEADVICE.COM: You probably want to pay on the credit cards. The 5 percent is not tax deductible and the home mortgage interest is. And you really have to take a look at what the after tax cost is. Get rid of the credit card first.

WILLIS: And, you know, it can get more expensive if you miss a payment. You never know what you're going to end up paying.

SCHATSKY: Absolutely.

WILLIS: Another question. "I was shocked to find out that a credit card was issued after running my credit without my authorization. When I reached customer service to ask who authorized it, she told me there is no such information she can find. I am outraged. What should I do?

John. JOHN ULZHEIMER, AUTHOR, "YOU'RE NOTHING BUT A NUMBER": And he should be outraged. That sounds like true name fraud to me. The first thing that he needs to do is he needs to check his credit reports to make sure that that's the only incident. And if it's not the only incident, then he may have a bigger problem than he thinks. Step number two, contact the credit card company and tell them, close it. I didn't open it. Don't extend any credit.

WILLIS: And so what's the potential downside here?

ULZHEIMER: Well, the potential downside -- the liability for the charges is very, very little, if any at all. The downside is the hassle and then any potential damage to the credit reports and then the source. That's always the downside.

WILLIS: And then somebody could end up stealing your identity, it seems to me, if they have all that information.

ULZHEIMER: It may have already happened.

WILLIS: Right.

Wayne in Tennessee asks, "what do college graduates do if they want to lock in their current interest rate to keep it from rising?

Allan.

ALLAN CHERNOFF, CNN SENIOR BUSINESS CORRESPONDENT: Sallie Mae doesn't do this any more, to consolidate them and then lock in. But the federal government still does it. So the federal direct loan program is the way to go here. You might want to wait a little bit longer because the rates are likely to decline in July. And after then, go ahead.

WILLIS: All right. Let's see what Paula has to say. "Should you always participate in a 401(k) plan with a match even if the plan itself is truly awful, with only a small group of portfolio optimization funds to choose from through a third party broker? If not, what are the best options?"

Lots of people don't like their 401(k)s. Have you noticed this? They're disappointed in the offerings. They don't like it.

CHERNOFF: But you're getting the match.

SCHATSKY: You know, first of all, the plans are generically bad. There are some good ones. But when you're getting a match, your investments can underperform mightily and you'll still be ahead of the game if they're chipping in 50 cents on the dollar.

WILLIS: Because you're getting free money at the end of the day.

SCHATSKY: Absolutely. Let's say you earned a percent less each year. If someone's giving you 50 percent more up front, that's a heck of a lot of years of underperformance before you think you made a mistake. CHERNOFF: Gerri, what I would do in this sort of plan, if you don't really like the options, I'd take the most conservative of the options there. Maybe there's even a money market fund. Fine, whatever, all right, you're making a little bit and then take some other investment money and be more aggressive with that.

WILLIS: You can always save outside the plan, too. There's always that.

Up next, the results of today's quick vote. It's not too late to weigh in. So head on over to cnnmoney.com to cast your votes. And here come the bills. And I have no idea how many. How to have a lavish wedding in a sluggish economy. This is ISSUE NUMBER ONE.

(COMMERCIAL BREAK)

VELSHI: We were talking a little bit about the Iraq funding bill. The U.S. Senate has just passed that with a vote of 76-20. The Senate Republicans broke ranks with the president in order to get this funding bill passed. We'll see what happens to it next. But the Senate has passed the Iraq funding bill.

Gerri.

WILLIS: The results of today's Quick Vote. Nearly 80,000 of you weighed in. For how you voted, let's check back in with Poppy Harlow from cnnmoney.com.

Poppy.

POPPY HARLOW, CNNMONEY.COM: Gerri, that's a record number for us in terms of votes. So people really are passionate about this issue. Forty percent, the majority there, said big oil companies are to blame for record high oil prices, followed by 30 percent say it's supply and demand. Twenty-three percent say OPEC is to blame. Only 8 percent of people say they're unavoidable. So people want answers, Gerri.

WILLIS: Want answers. Interesting, they say big oil companies. Not too surprising.

HARLOW: Yes.

WILLIS: Thank you, Poppy.

HARLOW: Sure.

VELSHI: Rebecca Dolgin is executive editor of "The Knot" and she joins us here.

These numbers are staggering. I know everybody who's discusses weddings or is about to have one or has just had one knows this, but the average wedding costs half as much as the average person earns in America.

REBECCA DOLGIN, EXECUTIVE EDITOR, "THE KNOT": Yes, according to a recent survey on theknot.com, the average wedding today is $28,000. So it's a lot of money. We're talking big expense.

VELSHI: All right. So if one gets that figure and says, oh this is ridiculous, what can I do? Where's the first place you look to try and cut?

DOLGIN: The very first thing is determine your budget right off the top. And one big cut is the guest list. You know, you're charged by the head on the guest list. So really the more heads you cut, the less it's going to be.

VELSHI: Do we know what the average guest list size is?

DOLGIN: Well, they really vary. It can be about 100 people. It can be up to 250 people. It's not uncommon. You know, it depends on how many friends and family you want there. But, honestly, you know those guests that are like the college roommate that you haven't spoken to in six years, make the cut.

VELSHI: E-mail them.

DOLGIN: Yes, exactly.

VELSHI: Talk to them on FaceBook.

All right. Let's talk about peak days or not peak days. What do you mean by that?

DOLGIN: Right. Well, one way to save right off the bat too is to go off key. Basically, you know, it really depends on the location. For example, January in Maine might be off peak, but in Colorado it could be peak. So you have to check with your vendor to find out what peak is. But, really, by going off peak, you can save about 20 percent to 50 percent.

VELSHI: Is there any space to negotiate in the catering?

DOLGIN: In the catering, yes, there are things you can do. Not so much negotiations, but you can make different choices. For example, you can go with ethnic foods, you can go with a big blowout cocktail hour rather than have a meal. Or you could do a buffet instead of a sit down dinner.

VELSHI: All right, flowers, cake. Your piece of advice is maybe think about a fake cake.

DOLGIN: Yes, definitely, fake the cake. No one will know. What you do is you have your cake baker put together a cake for you that's made of Styrofoam and in the back she makes the sheet cake and you serve the sheet cake. The guests will never be the wiser.

VELSHI: All right. Now let's think about how we use the Internet, how we can use the Internet to save some of this money. What are your best tips?

DOLGIN: Well, there are actually a couple ways to do it. You can make your own wedding web page. And that helps give people the updates, things like that, so you don't have to spend money on stationary, send things out. And you can even RSVP right on this wedding web page. So it's really convenient. There's a weddingwebtracker.com where it has all the bells and whistles. And people can RSVP and even link to registries, buy you a gift at the same time.

VELSHI: So one of the things we've been tracking here is people's travel habits this summer, particularly with the high fuel prices, whether it's driving or flying overseas. How can you cut back or how can you save some money on the honeymoon.

DOLGIN: Well, definitely going non-Europe, so non-euro places. Heading to South America. That will save a lot. And some people are even postponing their honeymoon and waiting a little bit to see if prices come down.

VELSHI: Are people actually postponing the wedding because of all this money?

DOLGIN: No. You know, it's really interesting, 75 percent of people say they're definitely concerned about the economy now but it's not affecting their wedding choices.

VELSHI: All right. Well, great to talk to you. Thanks for the great tips.

Rebecca Dolgin is the executive editor of "The Knot."

WILLIS: Time now for some wedding bells blues. The top five most outrageous accounts of weddings and money gone awry as compiled by our CNN Money columnist. Number five, why were you really invited? A wedding guest realizes that it was his hotel booking that qualified the bride and groom for free accommodation at a posh Hawaiian resort hotel.

Number four, a recently married relative who requested the betrothed's bride if she'd encourage her shower guests to bring an extra gift for her since she didn't have a shower for her Las Vegas chapel wedding.

Number three, chew on this, the bride's father settles up the reception tab only to find meals specially ordered by the groom's family. Not for religious or health reasons but simply because they didn't want the wedding entree.

Number two, a wedding gets canceled but the would-be-bride refuses to return the expense money given to her by her folks saying she's holding out hope and the money in case her man changes his mind.

VELSHI: That's good. I like that one.

WILLIS: And number one, a lavish wedding reception ends with a request from the father of the bride to his new in-laws asking them for a $25,000 loan for a, "financial emergency."

VELSHI: Well, I mean, I kind of fell backwards when I heard the numbers that we were talking about. I didn't know how much the average wedding cost. And, of course, I've been telling everybody how fascinated I was by it. And they're all looking at me like what didn't you know?

WILLIS: What are you saving up for, a new suit? A new vest?

VELSHI: $30,000 will get you a lot of ties.

WILLIS: Yes. Boy, you're going to have a very unhappy bride, I'm here to tell you.

VELSHI: All right. Fair enough.

All right. Well, time now to get you up to speed on other stories making headlines. CNN "NEWSROOM" with Don Lemon and Brianna Keilar starts right now.

DON LEMON, CNN ANCHOR: Lots of wind, lots of trees and a spark becomes 1,000 acre wildfire. Homes are threatened and homeowners are on the run in the Santa Cruz mountains of California.

BRIANNA KEILAR, CNN ANCHOR: The winds picking up in the southern planes as well, but fire is not the problem. Once again, folks there are bracing for a line of violent storms.

LEMON: And weather. Well, it is not your only consideration. Before you hit the roads or the skies for the holiday weekend, oil and gas are hitting new record highs.