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Issue Number One
Waste Not; Dealing with Debt; Windy Future; Rising Energy Costs; State of the Economy
Aired June 09, 2008 - 12:02 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CO-HOST: ISSUE #1 is all about solutions today -- more than $4 for a gallon of gas; how to save money during the summer months; how to cut your energy bill; why you should get used to the word "retraining," and how it might work for you; and how anyone can deal with any size of debt.
ISSUE #1 is your economy. ISSUE #1 starts right now.
All right. We made you lots of promises right there. We're going to try and deliver on some of them.
Let's start with gas. Gasoline prices are now above $4 a gallon. You are feeling the pain. Some people though feeling it much more than others.
Poppy Harlow from CNNMoney.com has our "Energy Fix."
Hi, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi there, Ali.
Yes, well, it's tough out there for people living in rural America. Today, the average for gas, $4.02 a gallon, but the pain at pump is not shared equally across America.
Rural America has it worst due to the soaring gas prices, relatively low income, not to mention a glut of gas-guzzling pickups. Nationwide, 4 percent of our take home pay goes to fuel. That's according to Global Insight.
But the Oil Price Information Service says in one rural county in Alabama, 16 percent of their pay is going to gas. Other counties in Alabama, Kentucky, Mississippi and West Virginia are spending more than 13 percent of their take home pay on gas. Now, compare that to an affluent county right near here, right in New Jersey, where a relatively tame 2 percent of take home pay is spent on fuel.
Now, "The New York Times" reports today that farmers are going as far as lending money to their workers just to get them to come to work, and it's increasingly common to see vehicles stranded on the side of the road until the owner can scrape up enough cash to fill up the tank. So, with long commutes, no transportation options, there are really few alternatives.
Meanwhile, if you can afford gas, you better hope your tires hold up. Goodyear says it has raised prices 15 percent since February. Oil is in many of the products used to produce tires.
And oil prices today, they are a bit lower than what we saw on Friday, but still around $137 a barrel. That's more than double what we saw last year. By comparison, gas prices are up 30 percent from a year ago. In other words, to catch up to the surge we've seen in oil prices, gas prices still have a long way to go.
It's a concern for all Americans, Ali. On our Web site, CNNMoney.com, we're following it very closely, trying to help people out there, but it's painful.
VELSHI: One analyst from Standard & Poor's said that around $135 for oil, gas could be as high as $4.50 a gallon. So I think that's the issue, people are not expecting that trend to go backwards.
Poppy, we'll stay on top of this with our "Energy Fix." Thanks, Poppy.
Well, people in this country are worried that the price of gas will be going up. A new CNN/Opinion Research poll shows that 59 percent of Americans believe that gas is going to hit $5 a gallon this year, up 45 percent from the numbers that we reported just two months ago. Only 13 percent of you think we'll stay below the $5 benchmark this year.
The economy is issue #1, obviously. And the candidates for president continue to talk about it. Today, Senator Barack Obama. He's getting set to give the first in a series of speeches on the economy in Raleigh, North Carolina.
CNN Senior Political Correspondent Candy Crowley, part of the best political team in television, is right now in Washington, D.C., and she's watching this very closely.
Candy, Obama's launching, what is it, a two-week sort of cross- country economic tour starting today?
CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Absolutely. And this is aimed straight at the working class vote.
We've talked a lot about that during the primary, that Hillary Clinton did a lot better job in attracting those voters. So this is a tour to kind of lay out his economic plans which he says will help the working class people.
For instance, he has a tax plan that would get rid of all of the Bush tax cuts for anyone who makes over $250,000 a year. He wants to put another $50 billion into the economy as a stimulus plan. He said, you know, he was for the stimulus plan that was passed and is now coming back to people from the IRS, but he wants -- he says it's gotten much worse since then, so he wants to put another $150 billion into the economy to deal with things like those gas prices.
He has a mortgage foreclosure plan which would both insure and help pay for people whose mortgages now are greater than the value of their house. So he will be talking about all of these things, those home and hearth issues that really go to the heart of both rural America, as you were just talking about, and working class America and the suburbs, people that are really hurting from all of those issues.
VELSHI: And as Poppy was just talking about, we know that a lot of these issues that Americans are facing, particularly when it comes to inflation, food or gas prices, it affects people in the lower income areas more than it does. These are issues that play particularly well to Democrats and to a Democratic candidate. But at this point, we're now in an election with two presumptive nominees.
Do we think John McCain is going to step up his conversations about the economy in the coming months?
CROWLEY: Absolutely, because, in fact, John McCain does know that he comes a little bit behind the curve, because Democrats tend to be the default party when the economy's in trouble. People see them as more government activists in helping people.
So, John McCain, for instance, we're told by my colleague, Dana Bash, will step up his talk about that gas tax holiday that you know during the Indiana campaign in particular, that came up. Barack Obama is against the gas tax holiday. He says it's a gimmick.
So there clearly will be things from the McCain campaign, because they understand, as we see this, you know, constant spate of economic figures, that that's where America's attention is focused right now.
VELSHI: Candy, good to talk to you. Thank you so much.
Candy Crowley following the election, is part of the best political team on television.
Well, you've probably noticed Gerri Willis isn't in studio. Gerri set out to fine solutions -- not just problems -- solution to all the problems that you are all facing every day. So all day, Gerri's at Consumer Reports headquarters in Yonkers, New York.
Hey, Gerri.
GERRI WILLIS, CO-HOST: Hey, Ali. Good to see you.
You know, we found out some really great advice for consumers today at the Consumer Reports facilities here in Yonkers. And I have to tell you, one of the most important tips, how to save money running your air conditioner. It's 95 degrees in the sun here, 88 in the shade, which is where I'm at.
We'll also talk to you a little later in the hour about how to save money driving your car. Important tips you'll want to know. And I'm going to tell you exactly how to save five miles per gallon like that without buying anything at all.
You'll want to stay and listen to that -- Ali.
VELSHI: All right. You got my attention. I like that, five miles a gallon just by doing something real easy. Gerri will be with us back in the show very shortly.
Still ahead, retraining workers. We're going to show you what Michigan is doing to revive its workforce. It's really hurting.
Then, dealing with debt and coming out ahead. We'll take you to one organization whose sole mission is to help you with your money.
That's coming up next on ISSUE #1. Stay with us.
(COMMERCIAL BREAK)
VELSHI: Well, as we've been reporting, a lot of folks in this country are losing their jobs. The unemployment rate up to 5.5 percent. And for some people, those jobs just simply aren't there anymore. Which brings us to retraining, a word you're going to hear a lot about in the coming months and years, especially in Michigan, where auto jobs are going away, and fast.
CNN's Deborah Feyerick is live in Livonia, Michigan, with more -- Deborah.
DEBORAH FEYERICK, CNN CORRESPONDENT: Well, Ali, I can tell you that that's the big question for so many different autoworkers, is what do you do next? They've been working at a job that's considered low skilled, but very high paid. Many of them are starting to consider college, or at least going back to school to reeducate themselves.
Bruce Sweet is associate dean here at Schoolcraft College in Livonia, Michigan.
The autoworkers that you're seeing, how do you teach them a whole new skill set?
BRUCE SWEET, ASSOCIATE DEAN FOR BUSINESS TECHNOLOGY: Well, they've really got to start by getting past their emotional crisis. That's the biggest thing. And then they start with math, they've got to start with math. And then after that, it has to do with getting a diverse skill set rather than going after a particular job skill.
FEYERICK: A lot of people, they're not coming to you as a first line of defense, they're coming to you because they have no options now, and time's running out.
SWEET: They're in crisis. You know, often what happens is someone gets laid off and there's the whole grieving process that takes place. And they come to us toward the end of that process.
FEYERICK: The people that you're seeing, are they going into nursing, manufacturing that requires higher skill? What are you seeing?
SWEET: We're seeing people coming back and looking for magical answers, quite often. But the people that are sharp and know what to do, they're going after deep technical competencies -- basic computer skills, math skills. And then from that, they're picking careers.
FEYERICK: It seems to me, though, that there's a real age component here, because you've got the younger generation, those who are in their 30s, those who can probably still change, and the older people who are so entrenched in the culture of the auto industry, it's going to be a lot more difficult for them.
Are you going to see them coming to school?
SWEET: We're starting to see them already. And you're right, it's a much tougher transition for them.
FEYERICK: So what do they do ultimately if they can't learn mathematics or the computers, or whatever they need to?
SWEET: Well, they can learn mathematics, but it's tough. And we have quite a few resources here to help them with that. But that's going to be the thing, is they've really got to stick to it and they've really got to commit to the learning.
FEYERICK: And also, you were telling me earlier that, right now, what he's seeing is college students who are enrolled 19, 20 years of age, that's going to increase, or that's going up so that in a couple of years 60 percent of students are going to be adults. So a very big shift. But autoworkers and other people who are being laid off, they're just reinventing themselves, trying to figure out what's next -- Ali.
VELSHI: All right. Deb Feyerick, thanks very much.
A great opportunity to reinvent yourself if you wanted a career that you didn't set out on. It's unfortunately -- well, I guess that's the silver lining in losing a job.
Now, whether you lose your job or not, almost all of you out there have told us that you've got some sort of debt. Some of you have a lot more than others. But no matter how much you've got, there are groups out there which can help you get back on your feet.
CNN's Rusty Dornin is live right now at the Consumer Credit Counseling Service in Duluth, Georgia.
Hi, Rusty.
RUSTY DORNIN, CNN CORRESPONDENT: Hi, Ali.
Well, are you in a financial mess, or is your house in danger of being foreclosed upon? We'll show you how to get some free advice quickly step by step to climb out of your financial mess, coming up.
VELSHI: All right, Rusty. Thanks very much. We're looking forward to that.
It's your turn to weigh in on today's "Quick Vote" question, and that means it's time to check back in with Poppy Harlow from CNNMoney.com. Hey, Poppy. What is it today?
HARLOW: Hey there, Ali.
Yes, well, with unemployment on the rise -- you just heard about it, folks, gas above $4 -- American families across the country, they're tightening their belts, trying to just afford the necessities like gas and groceries. So we want to know how you feel about your finances. Here's our CNNMoney.com question today.
This year my finances are better than ever, managing to get by, struggling to keep up, or in very bad shape. Let us know. Vote on CNNMoney.com. We'll bring you the results a little later -- Ali.
VELSHI: All right, Poppy. Thank you.
Well, we've talked a lot on this program about how folks in the military and their families are struggling. It appears that the military is recognizing what's going on and now has an important tool to help military families deal with credit issues and mortgage problems.
CNN's Barbara Starr is live right now at the Pentagon with that.
Barbara, this is obviously issue #1, but for the troops, they are certainly not immune to the credit crisis. What is the military doing now?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, absolutely right, Ali. Just think of it this way -- you know, many of them thousands of miles away on the front lines in the war. And how do you manage family finances and $4 a gallon gasoline when you're so far way from your family?
The military is really stepping up with a Web site they've had going on for some time called militaryonesource.com. Now, really focusing that Web site on some of these critical issues for the young troops, and really for everybody.
It's designed so you can log on from Iraq, from Afghanistan, your families can log on from home. And you can go through this Web site and really look for tips on saving fuel, looking at finances, look at the mortgage market, and other consumer tips.
But we went further into this Web site and logged on to the special money page, and that allows troops and their families to put in their own financial family situation in and try and calculate what their finances are looking like. Are they overcommitted on their credit? Can they really afford to buy a new house? Can they afford a new car? What are the danger signs in their credit situations when they plug in their expenses, their monthly paychecks, all of that?
Probably a good lesson for all of us, but it's really aimed at the troops. You know, think about the military, Ali. It probably is the most heavily regulated employment market. Once you're in, you're in until your enlistment term is up. VELSHI: Right.
STARR: And when your expenses go up, what can you really do about it? So they're really trying to get a handle on it and to get these young troops to recognize where they can go for help -- militaryonesource.com is a place they can start -- Ali.
VELSHI: And probably having good information and those calculators that you were showing on air, that's helpful for most people as a starting point. Maybe it's half of the battle.
Are there any particular tools that the military's providing for them to actually then go to the next step and say, how do I reduce my debt or somehow deal with my financial crisis?
STARR: Right. The major thing, as we have discussed, is they want them to get help early. No one wants them to go to any of these predatory lenders and get themselves in even deeper problems.
But, you know, what we are beginning to hear is for the military, the housing and mortgage crisis is somewhat unique. Think about this -- military people generally move every three years. For these people, if they bought a house three years ago at top of the market, and now they have new orders to go to another military base, they're having trouble selling their houses. So some of them are running into problems that way.
And military people who might be renting houses may be finding themselves living in a property that's about to be foreclosed on.
VELSHI: Wow.
STARR: So, the basic idea here -- well, I'm hearing a lot about that kind of problem, by the way -- the basic idea is to put as much information out there, get help. And they are beginning to look at whether they might need to adjust pay scales or even moving allowances to help people get through this tough time -- Ali.
VELSHI: Barbara, yes, interesting. You don't think about the fact that they have a limited area in which they can live, where they can sell their home, and they can buy. So a unique look at the housing crisis.
Barbara, thank you very much for that.
STARR: Sure.
VELSHI: Well, coming up, the trickle-down effect, how high gas prices trouble not just at the pump, but for small businesses across the country.
And as gas prices rise, so does the price of food. So what it means for charities trying to feed those people who are in need.
That's next on ISSUE #1.
Stay with us. You're watching CNN.
(COMMERCIAL BREAK)
VELSHI: You're watching ISSUE #1 on CNN.
If you watch this program regularly, you hear us say it all the time, it's not just the price you pay for gas. It's the effect that it has on everything else. We're already seeing high gas prices affect the price of goods, and that's not good news for small business owners across America.
CNN's Allan Chernoff explains.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice over): Delicatessen owner John Killoran is reminded of soaring gas prices every time he looks at his refrigerator cases, because suppliers have been tacking on fuel surcharges.
JOHN KILLORAN, TUDOR VILLAGE DELICATESSEN: It's expensive. You know? I mean, you've got deliveries six, eight times a day, 10 times a day, $5 a piece.
CHERNOFF: At the same time, some customers feeling the gas pinch are buying fewer salads and sandwiches.
CHRISTINE MALAUSEENA, DELI CUSTOMER: Those are things that I always used to buy that I don't buy anymore. I can't afford to.
CHERNOFF (on camera): The deli held off on raising its prices, but when gas hit about $3.90 a gallon here, the owners say they had to raise sandwich prices, up by 25 cents.
(voice over): More than 40 percent of small businesses in the Northeast have raised prices in the past three months. And more than a third in other regions of the country, according to the National Federation of Independent Business.
WILLIAM DUNKELBERG, NATIONAL FEDERATION OF INDEPENDENT BUSINESS: Profits are hurt unless they can pass these costs on in the form of higher prices.
CHERNOFF: The deli suppliers who haven't raised delivery prices yet say they're hurting. Greg Barniki (ph) now often works alone on his truck, without the assistant he always had.
UNIDENTIFIED MALE: You're forced to cut back on help.
CHERNOFF: The Tudor Village Deli is still in the black, but if gas prices keep rising at this rate, John says he'll be put out of business.
(on camera): If this continues...
KILLORAN: Oh, man, if this continues, forget about it, you know? Lock up the doors.
CHERNOFF (voice over): Allan Chernoff, CNN, Stony Brook, New York.
(END VIDEOTAPE)
VELSHI: Now, one of your biggest concerns this summer, saving money on gas, period, whether it's driving to work or getting the family away for the weekend.
Gerri Willis is looking for some solutions today. She's at Consumer Reports in Yonkers, New York.
Hey, Gerri.
WILLIS: Hey there, Ali.
Well, they've got me in the back of a car in Yonkers, like "Driving Miss Daisy" here, but we're really going to find some great tips on how to save money while you're driving.
This is Jon Linkov. He's the managing editor for autos at "Consumer Reports."
Hey, Jon, let's start with your tips on using GPS to help you map the best route to save gas.
JON LINKOV, MANAGING EDITOR, "CONSUMER REPORTS": Well, definitely, Gerri. What you want to do is plan out your route in advance so that you know where you're going, you don't have any sudden surprises while you're on your trip. And yes can also use ratings that we have on consumerreports.org to see which ones will show you gas stations along the way.
WILLIS: Oh, I love that.
OK. Slow down, you say. Don't drive like a maniac.
LINKOV: Definitely. Every time you 10 miles an hour faster than 55, so 55 to 65 and 65 to 75, you're wasting five miles per gallon overall.
WILLIS: So that's the easy way to save gas, is simply to slow down.
Let's talk about driving smoothly. You say no abrupt stops. You know, accelerate smoothly as well. Correct?
LINKOV: Definitely. You want to be easy on the throttle and easy on the gas. You use momentum, basically.
WILLIS: Yes.
LINKOV: So what you do is you're easy on the gas when you're starting up, don't have a jack rabbit start, and the same thing with the breaking. Don't slam on the brake at the end. WILLIS: All right. So you say if you're not actually running the car, shut off the engine.
LINKOV: Right. At 30 seconds or so, you're getting zero miles per gallon. So when you get to that 30-second threshold or so, particularly if it's a lot of construction, bumper-to-bumper traffic, a bridge opening, for example, turn the car off, let it just be off with windows open, because, again, you're getting zero miles per gallon when you're idling and stopped.
WILLIS: Now, you have some great ideas for outside the car as well, so let's show some folks what you do once you get outside the car. Now, there's savings back here as well, correct?
LINKOV: Definitely. First of all, you want to take stuff off of the roof. Get rid of that big pod, because that can hurt fuel economy between one to six miles per gallon, particularly on cars. So, you take that stuff off, bring it down, and put it in the vehicle. Also...
WILLIS: One to six miles per gallon?
LINKOV: One to six miles per gallon.
(CROSSTALK)
WILLIS: We're 10 miles a gallon.
LINKOV: Five here, 10 there. It's definitely savings. As well as take the bike rack off the car.
WILLIS: Right.
LINKOV: Even the little deflector, that doesn't help. Use a back rack that sort of like mounts on the hatch or on the trunk of a car, and that will take the bike off of the back, the vehicle's already blocking it. So you're not getting additional wind resistance.
WILLIS: So it's all about aerodynamics.
LINKOV: Very much so.
WILLIS: And making sure that you are completely wind-resistant.
All right. Anything else I can do with the exterior of the car here that's going to make me, you know, spend less money on gas?
LINKOV: Really what you want to do is take off as much of the un-aerodynamic (ph) features as possible. Take that stuff off the roof. For an SUV as well, you're putting so much stuff up high, it raises the center of gravity. So take it, put it inside the vehicle, load it as far forward as possible.
WILLIS: All right, Jon. Great tips. We appreciate your help today. So, Ali, you heard it, five miles per gallon just by slowing down 10 miles per hour. Easy to save money this summer. We want you to bring down that bill with no real pain.
VELSHI: Yes, that's really -- and actually, as I was driving on the weekend, I engaged my cruise control. I don't remember the last time I did that, but I'm a bit of a lead foot. But by locking it in at a lower -- you know, a lower speed, I was probably more consistent and driving a little slower.
It's a good idea. Five miles. You promised us five miles a gallon...
WILLIS: There you go.
VELSHI: ... for virtually nothing.
(CROSSTALK)
WILLIS: We actually gave you -- we gave you 15 all together.
VELSHI: Yes. Taking the bike rack off -- I don't know if you can tell, but I don't really look like much of a biker, so I don't have much to gain on the bike rack side. But the other stuff I can deal with. Gerri, we'll check back in with you.
WILLIS: All right.
VELSHI: Gerri's at Consumer Reports in Yonkers, New York.
Coming up next, you can deal with debt. You can actually deal with it. I know it seems tough. We're going to take you to some folks who can tell you just how to do it.
And Treasury Secretary Henry Paulson stops by for a live interview with me straight ahead on ISSUE #1. You won't want to miss that.
Stay with us.
(COMMERCIAL BREAK)
ALI VELSHI, CNN ANCHOR: Well, this just in to CNN. The Associated Press is reporting that Saudi Arabia is seeking a meeting of oil-producing and consuming countries to discuss rising energy prices. We don't have more on that right now, but we will check into it.
President Bush on his way to Slovenia for a meeting with the European Union. We'll see if we can get some response to that and find out exactly whom Saudi Arabia wants to meet with and when and what they want to discuss.
Well, this show is all about you, your money, your savings, your debt and how this economy has an impact on your life. We've got correspondents across the county standing by with stories of how people are dealing with this tough economy and reporting on solutions that could help you. And we're going to take you there next.
But first, let's get you up to speed on the latest headlines. Brianna Keilar is in the CNN "Newsroom."
Brianna.
BRIANNA KEILAR, CNN CORRESPONDENT: Thanks, Ali.
We've got more rain in the forecast today for parts of the Midwest, hit by heavy rain and flooding over the weekend. We've got some new video out of Wisconsin. You're looking at it here. This region hit with rain, tornadoes and damaging winds over the weekend. Now those storms triggered flash flooding and also some evacuations.
The National Guard was activated to help more than two dozen counties deal with this flooding. There have been no reports of deaths or serious injuries in the state. So some good news there. But we're still keeping our eye on the weather. Chad Myers in the Weather Center tracking that Midwest flooding.
Chad.
CHAD MYERS, CNN METEOROLOGIST: Brianna, the weather has moved a little bit to the east. We're out of Wisconsin today and we're out of Iowa, but we're into Illinois and Missouri and into Arkansas and Oklahoma as well. And some of these areas in the red -- you'll see this blow up here in red -- this is a 48-hour precip, kind of a thought process. What the computer's thinking for the next 48 hours. That's four inch right in that area there. That could make more flooding in places that aren't even flooding right now.
Part of a blocking system. It is cold in the west. Record cold temperatures out in the west. The Sierras still picking up snow. And then this front stalling here in the middle part of the country and just a persistent heat wave. In the eastern half of the country, temperatures over 100 again.
Brianna.
KEILAR: Yes, very hot. We'll be keeping an eye on the flooding, as well as the heat at the top of the hour.
Chad, thanks to much.
MYERS: You're welcome.
KEILAR: Want to tell you about another fee hike at American Airlines. It's now going to cost you $20 more to fly with that carrier. The airline says it's because of skyrocketing fuel prices. Just last month, American announced that it would start charging you for checked bags. Your very first checked bag, in fact.
I'm Brianna Keilar and I'll be back in the NEWSROOM at the top of the hour. But let's head back to Ali in New York.
Ali. VELSHI: All right, Brianna, we'll see you at the top of the hour.
In times like these, charities often take a hit. People have less cash in their bank account, so they actually donate less, and that can create problems for organizations trying to put food on the table for those people who don't have the ability to do so. But some businesses in southern California are stepping up and they're chipping in. CNN's Thelma Gutierrez has the story.
(BEGIN VIDEOTAPE)
THELMA GUTIERREZ, CNN CORRESPONDENT, (voice over): From the strawberry fields of Santa Maria, California, to a free farmer's market in Santa Barbara, from the excess of a Chinese lunch buffet.
UNIDENTIFIED MALE: Gosh, is it good.
GUTIERREZ: To the table of a homeless family. This is a story about a network of regular people you rarely hear about. People who have busy lives and jobs but donate their time, their goods and services, to help feed the poor.
NANCY CAPP (ph): I just don't think any food should be going to waste.
GUTIERREZ: For Nancy Capp, it started with a simple question when she and a friend went to lunch. What happens to all that food that isn't sold? They asked the owner, Mei Jung Lu, if they could have it.
CAPP: She said, yes, you know, we do have leftover. And if she can come pick it up every afternoon after the buffet, then she's welcome to have it.
MEI JUNG LU, MADAME LU'S RESTAURANT: You toss the food. It's very bad, you know. I always thinking, there are a lot of people out here that doesn't have anything to eat.
GUTIERREZ: Bins of fresh food that would end up in the trash. But for the last two months, Capp, who is an outreach counselor for the homeless, picks up extra food from Madame Lu's Restaurant and takes it to the homeless, like the Clements who live in a parking lot.
JENNIFER CLEMENTS, FOOD RECIPIENT: It's great because we don't get to eat out. It helps with our food bill, you know, adds to that. Everybody just enjoys it.
GUTIERREZ: On a much larger scale, California farmers are kicking in tons of produce that will end up at a free farmer's market for the poor and elderly. Surplus produce that might be cosmetically imperfect that would normally be plowed under. George Adams of A&A Farming says he donates about 70,000 pounds of lettuce each year. Patrick Sheehy, who grows for Driscoll (ph) Farms, says they donates more than 1.5 million pounds of berries a year. PATRICK SHEEHY, LOS PADRES BERRY FARMS: We pay for the harvesting cost and the packaging cost. So there is a direct cost to me. But it's, you know, better to put it on somebody's table than throw it in the dump.
GEORGE ADAMS, A&A FARMING: It's not all about the bottom line all the time. It, you know, come back in much greater ways.
GUTIERREZ: For 78-year-old Joseph McNulty, the free produce mean his doesn't have to make hard choices.
JOSEPH MCNULTY, FOOD RECIPIENT: They cut money and buy medicine.
GUTIERREZ: A reason why so many businesses are committed.
Times are tough on everyone, including business people like yourself.
LU: Oh, it is very, very tough time right now. Even my restaurant, we have about 20 percent drop in all the business. But still you can do it. This is little things that can help.
GUTIERREZ: Mei Jung and the others who come up with this food solution say what they're doing isn't new, but it is critical as more Americans end up in food lines.
(END VIDEOTAPE)
GUTIERREZ: What you're looking at now are preparations for the free farmers market. The doors will open here in a couple of hours. Now all of this produce comes from local farms, but it's a big process to get it here. You have to have refrigerated trucks. You have to have people to load and unload it.
Now all of these folks are volunteers. And this entire effort is coordinated through the food bank of Santa Barbara County.
Ali.
VELSHI: Now, Thelma, we're talking about food and you mentioned refrigeration. When we talked about the food that comes from that restaurant. Any way to make sure that this food is good to eat, it's OK to eat, it's not spoiled or bad, you know, sort of second quality?
GUTIERREZ: Yes, absolutely. The food that comes from the restaurant is fresh and it's immediately taken out to the families. But if you take a look at some of the produce here at the free food bank, some of it is just cosmetically irregular, it's imperfect, and so that's why it's here.
And then there's other produce that maybe the expiration date is coming up a little bit too close. It wouldn't make it out to the market on the East Coast, for example, and so it's given away here. But, you know, if you take a look at this lettuce, it's perfectly good. And, you know, anybody would put it on their table.
Ali.
VELSHI: All right. Good story. Thelma, thank you very much. Thelma Gutierrez on that story.
Well, Americans, as we know, have a debt problem, to the tune of about $8.9 billion. That's how much Americans owe according to the latest report released by the Federal Reserve on Friday. But there are steps that you can take to bring your portion of that debt down. Let's head back to CNN's Rusty Dornin. She's live at the Consumer Credit Counseling Service in Duluth, Georgia.
Hi, Rusty.
RUSTY DORNIN, CNN CORRESPONDENT: Well, Ali, you know, the number one question the 80 counselors here get is regarding their home. A lot of people that are in danger of getting their home foreclosed upon. But we put it out to viewers and got some e-mails back. And a lot of people are concerned about their credit.
Now we're here with Michelle Glass (ph) and we're going to read you one of the e-mails that we got. "What steps do I need to take to rebuild my credit, from start to finish? Basically my credit stinks and I want to turn the page. I've looked at those 'free' credit report sites, but they seem to want you to join and pay a fee. Please help!" Dave.
What advice would you give him, Michelle?
MICHELLE GLASS: Well, I would tell him first, don't go to those free sites unless they read the fine print. One of the sites that they can go to, to get a free copy of their credit report is annualcreditreport.com.
DORNIN: But how do you clean it up? How do you clean up your credit?
GLASS: Well to clean it up, the first thing you want to do is go and pay down your debts. Pay down your debts and you want to also build up your credit score by paying your bills on time each month. If you pay your bills on time each month, you won't get those little dings that the credit card companies can put on if you're 30 days late or 60 days late or 90 days late.
DORNIN: That's the biggest thing that impacts your credit, right?
GLASS: Right. Thirty-five percent of your score is based on your payment history. So paying your bills on time each month is the great way to get a score up.
DORNIN: Sounds like just common sense, but that's what people need to do first and then get that credit report and see if it's accurate, right?
GLASS: That's right. Make sure that it is accurate.
DORNIN: OK, great. Thank you very much, Michelle Glass.
Now we've got coming over to Doug Erickson (ph), who also is an expert -- well really on bankruptcy. And we've got a question from a viewer saying, "I am earning $229 a week. I have cut back to the bare minimums in life, but have been unable to pay anything toward my $7,000 credit card balance since January of this year. I have talked to the bank and told them that I have every intention of repaying my debt. I was able to get a deferment of my car payment and my student loans but they are steadfast in their desire for their money right now. It's ruining my credit. Is there any solution besides bankruptcy out there?"
What do you say?
DOUG ERICKSON: Absolutely. If you got a deferment on your car payment, you got a deferment on your student loans, it means you talked to the right person at both of those companies. What you need to do is get someone at the credit card company who will talk to you about a temporary hardship repayment plan, which is a reduced payment, reduced interest for a certain period of time until you can get on your feet. If they absolutely refuse to do that, Consumer Credit Counseling offers debt management plans that accomplish the same thing, your interest rate is automatically reduced, it's designed to get you out of debt, to eliminate the fees, et cetera.
DORNIN: How about having one credit card as opposed to having several? That whole thing.
ERICKSON: Well, backing up a bit, the first thing everyone should do, as Michelle suggested, is not only get a copy of your credit report, but go through it with someone who knows how to read a credit report. They're not easy to read. There are things on the credit report that you have to pay attention to that the average person wouldn't know. Like dates of last activity and things like that. So that's important.
And then getting to the right person at the credit card company and working out a repayment plan. Filing bankruptcy when you have one credit card would be like . . .
DORNIN: And only $7,000 in debt.
ERICKSON: And only $7,000. That is recoverable. Bankruptcy seems like a severe response to that situation.
DORNIN: OK, great. Thank you very much, Doug Erickson.
And just one of the many people here, and across the country for the Consumer Credit Counseling Service, that can help you take real steps and help you, connect you really, to the people at the mortgage companies, to the banks, to the credit card companies, to help you solve your financial problems. And it's all for free.
Ali.
VELSHI: Rusty, great piece of advice. Yes, hardship repayment plan. The idea to call and see if you can get the right person.
Rusty, thanks very much.
Coming up next, one town that's embracing wind energy full force.
And our live conversation with Treasury Secretary Henry Paulson on what the government is planning to do to help you.
You're watching ISSUE NUMBER ONE right here on CNN. Stay with us.
(COMMERCIAL BREAK)
VELSHI: Wind energy is hot. So hot that oil man T. Boone Pickens recently announced a several billion commitment to develop the world's biggest wind farm in Texas. That project is going to take some years to ramp up, but some folks want wind energy right now and they're making it happen. Here's CNN's Dan Lothian.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN CORRESPONDENT, (voice over): It's the fuel that powers part of this Massachusetts town, wind.
HARRY CHISHOLM, HULL RESIDENT: Look at the wind we have here. It's a shame not to take advantage of it.
UNIDENTIFIED MALE: As far as the wind mills, I think they're advantageous to the residents of the town.
UNIDENTIFIED MALE: The wind conditions off the ocean make it a very favorable setting.
LOTHIAN: With energy prices soaring, the coastal town of Hall is harnessing the wind with two turbines, generating almost 11 percent of the electricity that's used by its more than 11,000 residents.
DICK MILLER, HULL LIGHT OPERATIONS MANAGER: For the last seven years we haven't had a rate hike.
LOTHIAN: But town leaders say they aren't satisfied with just two turbines.
UNIDENTIFIED MALE: We have a grant to study putting four offshore turbines out on Hardings Ledger (ph), so approximate a mile and a half off of Nantasket (ph) Beach.
PHILLIP LEMNIOS, HULL TOWN MANAGER: It would be right about here. With the two turbines we currently have and those four turbines, you know, about 80 to, in some cases, some days, 100 percent of our power will be generated sustainable.
LOTHIAN: Many people here in town seem to be on board.
UNIDENTIFIED MALE: I'm for them 100 percent.
LOTHIAN: But not everyone.
UNIDENTIFIED MALE: I know there a lot of people (INAUDIBLE), I suppose, who don't like them.
LOTHIAN: Some people don't like looking at them. They think they're an eyesore. And local lobstermen are concerned that building a wind farm offshore could disrupt their fishing grounds.
That's why town officials say, as they try to get more power from the wind, they'll be paying close attention to the environmental impact.
LEMNIOS: We know we're going to have to take a very hard look as to how these turbines would affect marine life in the area of the turbines.
LOTHIAN: One town taking advantage of its location to keep more of its residents off the grid.
Dan Lothian, CNN, Hull, Massachusetts.
(END VIDEOTAPE)
VELSHI: Bet that's the kind of thing you're going to be seeing more of over the next coming years. Now maybe you don't want to install a wind turbine or you're not in a town that has one, but you can still trim your energy bill this summer. Let's go back out to Gerri Willis. She's at "Consumer Reports " in Yonkers, New York.
Hi, Gerri.
GERRI WILLIS, CNN CORRESPONDENT: Hey, Ali. Good to see you.
Listen, we were so hot outside in that 95-degree temperature, we decided to come inside to "Consumer Reports" air-conditioning testing facility. It's nice and cool in here. And I have Celia Cooper (ph) showing LERMA (ph) with me. She is deputy home editor for "Consumer Reports."
Show us your facility here.
CELIA COOPER: Sure. This is where we test air conditioners. We have been testing air conditioners for more than 20 years.
WILLIS: This is pretty impress stuff.
COOPER: Yes, it is.
WILLIS: All right. Let's get to some advice over here.
COOPER: Sure.
WILLIS: Just talking a little bit about how to maintain these air conditioners. You say you want to put the units in a shady spot, right? COOPER: Sure. You want to be sure that the units are in a shady spot, that way they don't have to work as hard. Also if you have a central unit, you want to be sure that that's also in a shaded spot because, the same thing, they're not generating as much energy if they don't have to work as hard.
WILLIS: You were saying something really interesting earlier about how you don't want to crank up your AC to high when you first walk into the house. Why?
COOPER: Well, it just uses a lot more energy. It actually doesn't cool the room off any faster. Another thing, on humid days, you want to be sure that the fan is set on low, because that draws the air slowly through the unit and that pulls more humidity out.
WILLIS: All right. So, also, buy the right size. Critical piece of information if you're actually buying a unit.
COOPER: Yes. It's always a critical piece because if it's too small, it's not going to keep you cool. And if it's too big, it's going to turn off before it pulls the humidity out. So all you'll have is a cold, clammy room.
WILLIS: Oh, yuck. OK. Let's talk about keeping these air conditioners working well. And we wanted to show folks one of these fillers. They come out just like that. Now tell me what I'm going to do with this once I pull it out.
COOPER: You want to be sure that you can vacuum it. You also want to wash it with soapy water, dry it, and then put it back in. You'll probably need to do that about once a month. But if you also -- again . . .
WILLIS: Once a month?
COOPER: Yes. If you've got an outdoor unit instead of a portable unit, you want to be sure that there aren't a lot of debris and leaves by those units.
WILLIS: That's great. OK. We also want to talk about ceiling fans. These need to be used as well. And it's an easy way to lower your cooling costs even more.
COOPER: That's correct. And not just ceiling fans. Even portable fans. Both of those work by making you feel about seven degrees cooler. So sometimes you can use them instead of the air conditioner or you can use them with the air conditioner.
WILLIS: All right. CFLs. We didn't have a lot of time to talk about these. But, Ali, I want to tell you, you can save as much as $5 per bulb. Most homes have about 45 lights. That's $225 each and every year just by using these little CFL bulbs. Isn't that great?
VELSHI: I love it. I think that's a great idea. That's one of those things that everybody can do, it saves you money and it's good for the environment. WILLIS: You bet. Thanks, Ali.
VELSHI: All right, Gerri, thanks very much. Gerri Willis. Going to be there all day, by the way, at "Consumer Reports" with tips on how to make your difference and save some money.
Coming up next, what is it going to take to turn this economy around? We're going to be talking live with Treasury Secretary Henry Paulson. We're going to get some answers from him coming up next on ISSUE NUMBER ONE. Stay with us. You're watching CNN and we'll be right back in a minute.
(COMMERCIAL BREAK)
VELSHI: When we go through tough times like this, folks often look to their leaders in Washington for solutions. And one of those in charge of trying to help fix this economy is Treasury Secretary Henry Paulson. Secretary Paulson joins us now from Washington, D.C..
Mr. Secretary, thank you for being with us.
We are working on confirming some news right now that we've been getting reports in from the Associated Press that Saudi Arabia is asking for a meeting of oil-producing and consumering countries to discuss oil prices and that the information and culture minister has said that Saudi Arabia will work to control unwarranted and unnatural price hikes. He says the current price of oil is unjustified.
I want to ask you about that. Do you think the current price of oil, at over $135 a barrel, is unjustified?
HENRY PAULSON, TREASURY SECRETARY: Well, Ali, I think it's unwelcome and it's a real burden on American consumers. But I believe that the reason for the current price of oil has a lot to do with supply and demand factors. We have not seen production capacity for oil grow appreciably over the last 10 years and demand has increased significantly. So we need to really increase the invest in production capacity of oil and investment in alternative fuel sources.
VELSHI: And while I don't think anybody disagrees with you, that we do have that issue, you probably have better security than I do because when I walk through this newsroom and tell people that it's supply and demand, I'm worried that I'm going to get tarred and feathered. Americans are looking for a face to put on, somebody to hold responsible, and the term excessive speculation or speculation comes up a lot. Explain this to us. What's your position on that?
PAULSON: Yes. My position, and I've looked at this very carefully, as I don't believe financial investors are responsible for to any significant degree to this price movement. This is supply/demand. Financial investors are on both sides of the market. They're long and they're short. They don't set trends, they follow the trends.
And as you look at the price of other commodities, iron, iron ore, steel, that are up at least as much as oil in some instances, financial investors don't participate in those markets. So again, this is not a situation that avails itself of short-term fixes, although I very much believe it would be good to have this summit that the Saudis are calling for. But just like you, I've just read the quick news reports.
VELSHI: Let's talk about inflation. It's not just coming from oil, but we are seeing it in food. The average inflation in food, according to the U.S. Department of Agriculture, was 4 percent last year. It will be 5 percent this year, maybe high and going forward. That is hitting working Americans very hard. What's the solution to that problem?
PAULSON: Well, again, there's not a short-term solution to that problem. There's a longer term solution, which has to do with productivity. It has to do with trade policies here and around the world. And let me step back and say that unlike some other parts of the world, we have a situation in our country where core inflation seems to be largely under control. But as you've pointed out, the huge impact on working Americans are energy prices and food.
VELSHI: And, of course, the jobs that we've lost, 324,000 of them this year alone. The education secretary said the other day, the president said the other day, that it's because there are a lot of teenagers entering the workforce and among other things. The bottom line is, and I don't know what figures you like to use, but a lot of economists tell us, you need to create more than 100,000 jobs a month in the United States in order to keep up with the increase in the work age population. We've lost 324,000 jobs since the beginning of this year.
PAULSON: Yes. We're, Ali, we're going through a tough period right now. No doubt about it. We've increased jobs for six years. We're now going through a tough period and we're focusing on it. You know, these stimulus checks that have gone out, half -- you know, we had $50 billion of payments in May, another $50 billion in June. This will make a positive difference. This will add jobs that we wouldn't have had without the stimulus payment.
So that is something we're going to deal with this, help deal with it. And we're also very focused on housing and we need legislation from the Congress that will provide better oversight of Fannie Mae and Freddie Mac, which are providing 80 percent of the mortgages in this country and that will add confidence to that market.
VELSHI: All right, Mr. Secretary, we'll have to continue this conversation again. Thanks very much. Treasury Secretary Henry Paulson joining us from Washington.
You're watching ISSUE NUMBER ONE on CNN. We'll be right back.
(COMMERCIAL BREAK)
VELSHI: What shape are your family finances? That's today's Quick Vote question. Here are the results. Thirty-nine percent of you are managing to get by. Thirty-one percent of you are struggling to keep up. Sixteen percent say better than ever. And 14 percent in very bad shape.
