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John McCain Speaks at National Small Business Council; Midwest Swamped
Aired June 10, 2008 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Restaurants and stores pulling some types for salmonella concern, in the NEWSROOM.
The Midwest swamped. The East Coast sweltering. Another day of extreme weather. The east is bracing for more intense heat and the Midwest reeling from deadly and destructive flooding.
Meteorologist Rob Marciano tracking it all from the Weather Center. But first more on the floods from Jay Olstad from affiliate WTMJ. He's on the phone from Waukesha, Wisconsin.
So, Jay, tell us a little bit about what you are seeing around you this morning. Some of the video that we have been showing of those houses just collapsing into the rushing water are really incredible.
JAY OLSTAD, WTMJ REPORTER: Yes, it's really incredible video. Actually that video that you're seeing of the houses crashing down, that's near Lake Delton in Wisconsin. I'm actually in Waukesha County, which is, I would say, maybe two hours west, southeast.
And good news, I guess, we can tell you today is the sun is out. We haven't seen the sun, I would say, in two, three, four days but here in Waukesha County, the Fox River is about to crest, which is also good news, because, as you saw those pictures, it's just been wreaking havoc all over the area. Homes damaged, severely destroyed.
In fact, I'm looking at some spots that the river looks like it's about to go down so that's some good news, we finally can report.
COLLINS: Yes. Tell us about the people that you've been able to speak with. Boy, as we continue to look at these pictures, many people have lost homes, have lost cars. Some people even family members. How do people seem to be doing?
OLSTAD: Well, they're shocked, to be perfectly honest, and they're devastated. I mean we talked to one individual yesterday in Lake Delton who watched his home literally go in the river and destroyed right before his eyes.
COLLINS: Wow.
OLSTAD: He couldn't help but cry, obviously. Put a lot of work and money into that house, and now it's just gone. So a lot of people really are shocked and devastated and just really trying to figure out what to do next. COLLINS: What about help? What sort of help are the people able to get, whether we're talking about Red Cross or even, you know, federal money there or at least state money that may be coming in?
OLSTAD: Yes, the Red Cross is helping in certain areas, but also the governor mentioned yesterday that they're looking at trying to get some federal funding. Right now a lot of the counties are asking people to call in, not just to meet immediate help but also just to report their damage, so each county can kind of take a tally of where the houses are destroyed, how many houses are destroyed, so they can forward that information on to the federal government in hopes of getting some sort of help here.
COLLINS: Yes, and, Jay, real quickly before we let you go, in case people aren't familiar, Wisconsin Dells, such a huge tourist area, all kinds of activities that go on there. People come in from across the country to check this place out.
What's the condition there?
OLSTAD: Well, it's pretty tough there and we saw that amazing video of homes just being washed away, and the tough part is -- about is it's Lake Delton, which is a pretty big lake there and about 90 percent, if not all of it, is now drained out, and now -- so that's huge for the tourism area, and if that's not there, it's very devastating for the economy.
COLLINS: Yes, absolutely. Boy, we're showing that picture right now, it's just amazing. The house just split in half.
Jay Olstad, great job. Thanks so much for the most recent information coming to us from WTMJ. Thanks again, Jay.
HARRIS: Boy, it is just one of the risks you run, Rob, when you build your home so close to rivers and the oceanfront. It is one of the risks and you see that picture so often.
ROB MARCIANO, CNN METEOROLOGIST: Yes.
HARRIS: Pretty devastating.
MARCIANO: It is. You know when we -- we start messing with the landscape, we start moving dirt around to hold water back, at some point you get too much water in there and boom.
Oddly enough, I'm reading a discussion from one of the meteorologist professors out of the University of Wisconsin. He seems to think a lot of the rain came from the tropical storms that were developing on the eastern Pacific and western Caribbean last, last week. So that's an interesting note.
(WEATHER REPORT)
COLLINS: Yes, definitely. All right. We'll be watching that. Thanks so much, Rob. Appreciate it. Back to the resort town of Lake Delton, Wisconsin, hit very hard by the Midwest flooding and an embankment along a man-made lake gave way sweeping homes off their foundations. We've been showing you some of that video all morning long.
On the phone with us right now is Steve Zowin. He's the owner of Lake Delton Watersports Marina where he keeps a lot of boats and, obviously, a lot of activity on Lake Delton.
If you can, Steve, tell us a little bit about what's going on for someone like you who has a business there.
STEVE ZOWIN, OWNER, LAKE DELTON WATERSPORTS MARINA: Well, Heidi, I believe, is your name, I'm not able to operate my business very effectively right now for the lack of water, you know, on Saturday evening and Sunday morning, and most of the day Sunday.
And we were preparing for a flood and moving all our boats from the water and then, of course, yesterday with the breach in the lake, just the opposite happens, so instead of preparing for a flood now we have no water.
COLLINS: You know people may not really think about it when you talk about the flooding, what actually happens afterwards, this massive receding of water. What is the plan? Is there any plan, Steve? Have you been able to talk with people?
I imagine you have folks who buy slips from you and they keep their boats with you. You have about 35 boats?
ZOWIN: That's correct. Many of those are my own rental boats. Obviously, this is a devastating financial impact on my livelihood and my family. It's a family-owned business. As far as the plan to restore the lake, I know it will happen. It's a matter of timing. You know I could -- I don't anticipate it happening this season, just because of the size of the breach. It's going to be a major, major building project.
COLLINS: Yes, and, Steve, you have been in the marina business for several years. Have you ever seen anything remotely close to this before?
ZOWIN: Nope, I have not seen it. There has been -- you know, was an intentional draw-down of the lake maybe 25 years ago, you know, for a sewer project, and that was handled offseason, so I have seen the lake in this condition, and I've been in business 29 years at this location. Never anything quite like this during the height of the season.
COLLINS: Yes. And that certainly is part of it, especially as a business owner, this is certainly the height of the summer sporting season on Lake Delton.
Steve, we certainly wish you the best. I know it looks like a long road ahead. He's the owner of Lake Delton Watersports Marina. We appreciate you sharing your story, Steve. ZOWIN: Well, thank you. I see it as a temporary setback and we'll get through it and go on.
COLLINS: Well, we certainly hope so. Thanks so much, appreciate it.
HARRIS: You know we are getting an up close look at the waterlogged Midwest from our iReporters in the flood zone.
These pictures are from Gayla McCord in Middletown, Indiana. These shots were taken around her property. Take a look at this. She says one of her son's basement bedroom -- well, his bedroom flooded. McCord says walls in their basement are starting to crack and buckle.
This is a picture from Matt of a flooded golf course in Columbus, Indiana. You recall Susan Roesgen was in Columbus yesterday and I'm thinking about Ann, remember Ann from yesterday...
COLLINS: Yes.
HARRIS: ... who essentially lost her home to the floodwaters and so much of her property?
If you have pictures from the storms or breaking news, you can send them to ireport.com.
COLLINS: Your money, your concerns. We're keeping a close eye also on new developments that are squeezing "Your Wallet" this morning. Gas prices set yet another record. Can you believe it? The national average now more than $4.04 a gallon.
Record prices mean record profits for oil companies and some Democrats want a slice of that windfall. Later this morning the Senate will vote on a new tax against the nation's five largest oil companies. They will also consider rescinding $17 billion in tax breaks.
Less doom and gloom, though, from the top economic policy maker in the U.S. Federal Reserve chairman Ben Bernanke says the risk of a substantial downturn in the economy has faded but international investors remain nervous. Asian markets tanked overnight. China's Shanghai index lost 7.7 percent. Hong Kong's (INAUDIBLE) index lost more than 4 percent.
HARRIS: Record oil prices and a glimmer of hope. Saudi Arabia now says oil prices are unjustifiably high and is calling for a meeting to discuss increased production.
So what's it mean?
CNN's senior business correspondent Ali Velshi has the answers.
(BEGIN VIDEOTAPE)
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT (on camera): It was less than a month ago that President Bush arrived in Riyadh, cap in hand, to ask the Saudis to put more oil on the market to help bring prices down. Now back then he got mostly a no, and a comment from the Saudi oil minister that when it comes to oil, and this is a quote, "supply and demand are in balance."
Well, something has changed because on Monday, the Saudis came out and said that today's oil prices are unjustified and they now want to convene a meeting with what they call consumer nations -- I assume America is one of those --and they say that they are ready to meet any increase in demand.
And here's the interesting thing.
The Saudis say that the current price of oil is not justified by demand, which means something other than demand is causing the runup that we've seen in oil prices, something maybe like excessive speculation. And when we say speculation we're talking about investors, people who trade in oil, but don't use the end product. They just trade in it to make money.
Well, moments after the announcement by the Saudis, I spoke with Treasury Secretary Henry Paulson and I asked him whether speculators are driving this market.
Here's what he told me.
HENRY PAULSON, TREASURY SECRETARY: 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.
VELSHI: So, in effect, Paulson is saying that oil prices are high because of supply and demand. The Saudis are saying it's not supply and demand. So maybe they should all meet and work it all out.
(END VIDEOTAPE)
HARRIS: OK, so where will Wall Street be headed this morning? We will go live to the opening bell at the bottom of the hour. CNN's Susan Lisovicz with her finger on the pulse.
COLLINS: The economy, "ISSUE #1" on the campaign trail. We're going to be hearing from John McCain coming up live in just a few minutes. The presumptive Republican presidential nominee laying out his proposal in a speech for the National Small Business Council. That is taking place in Washington.
As for Barack Obama, he is campaigning in Missouri, day two of his two-week economic tour. Yesterday in North Carolina, the presumptive Democratic nominee took direct aim at his opponent.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESUMPTIVE PRES. CANDIDATE: At a time when we're fighting two wars, when millions of Americans can't afford their medical bills or their tuition bills, when we're paying more than $4 a gallon for gas, the man who railed against government spending wants to spend $1.2 billion on a tax break for Exxon Mobil.
That isn't just irresponsible. It's outrageous.
(END VIDEO CLIP)
COLLINS: Obama repeatedly tied McCain to President Bush, mentioning his name 15 times.
HARRIS: The presidential hopefuls have different views on the economy. Let's tale a look at where they stand.
Senator Barack Obama wants to end the administration's tax cuts for upper income earners and grant a $1,000 tax cut to most families. He also calls for an end to the Iraq war and wants to invest that money in the United States.
Senator John McCain wants to extend the administration's tax cuts. He wants to make it harder to raise taxes and McCain proposes a variety of tax breaks for entrepreneurs and corporations. He says that will generate more jobs.
You can find out more about McCain's economic proposal -- he speaks at the National Small Business Summit in Washington, and you can watch that live, minutes ahead, 9:30 a.m. Eastern right here in the CNN NEWSROOM.
COLLINS: Raw tomatoes linked to a growing salmonella outbreak. What you need to know before lunch today. Let's find more about this -- right -- story, go to CNN.com/health.
(COMMERCIAL BREAK)
HARRIS: And welcome back, everyone, to the CNN NEWSROOM. I'm Tony Harris.
The race against time. Quake lakes near the breaking point. The Chinese government taking drastic steps as flooding threatens to sweep away a million people.
(COMMERCIAL BREAK)
COLLINS: A health alert this morning on that salmonella outbreak we've been telling you about. Seventeen states now affected. The CDC says 167 people have gotten sick after eating raw tomatoes. And now Texas health officials say an elderly cancer patient has died and salmonella is considered a contributing factor in the case.
Our medical correspondent Elizabeth Cohen is joining us now to talk more about this.
People really have been talking about this, at least, in the NEWSROOM. So what's the scoop? We've got some tomatoes in front of us.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: We do, and we're going to get in a minute. COLLINS: Go ahead.
COHEN: Because those are the kinds that are OK to eat.
COLLINS: Good.
COHEN: So first, I want to talk about what is not OK to eat, what you want to go to your refrigerator and throw away, because there are some that really are not good.
COLLINS: Yes.
COHEN: So let's take a look at the list of what people should not be eating -- Roma tomatoes, red plum tomatoes, and red round tomatoes. Those are tomatoes worthy of avoiding.
And if you go to CNN.com, there are links where you can see pictures of those.
COLLINS: OK.
COHEN: Because I know that not everyone knows their tomatoes, you know, I mean...
COLLINS: Call me crazy, but red, round -- a lot of them are...
COHEN: Yes, a lot of them. A lot of them are red and round. But there are certain kinds.
Now there's a footnote just to make life interesting. There is a footnote. If you find those tomatoes that are not good, but you can see where they're from, there are some states where it is OK to eat those but you have to go again to the Web site and get a list.
So you have to look at the tomatoes, see where they're from, go to the Web site -- you know, so there's a fair amount of work so if you really want to be safe and not confused, you can just not eat those kinds.
COLLINS: OK. Gotcha. What about the ones that are OK? I love that we have them because you could show people the shape, the size...
COHEN: Yes, exactly what they look like.
OK. Let's take a look. The ones that are OK to eat are right in front of me. They are tomatoes that are on the vine, which is this kind, and they are cherry tomatoes, which are these little round ones, and they are grape tomatoes which are these little sort of oval ones. And the Food and Drug Administration says that these are OK to eat.
COLLINS: OK, very good. And the Roma ones -- they look similar to this except they're...
COHEN: Except larger.
COLLINS: ... they're bigger. COHEN: Right. Exactly.
COLLINS: Yes. Yes. All right, because I was getting those confused. So thank you for that. How does a tomato get salmonella?
COHEN: You know...
COLLINS: We're talking about fertilizer? Are we talking about animals?
COHEN: No. No, probably -- well, who knows? They don't really know yet. They haven't decided. They haven't said how this happened and they probably don't know themselves. There are a variety of ways.
For example, let's say a tomato farm is next door to a farm that has cows. And water runs off from the cow farm to the tomato farm. If any of those cows are infected, their poop would be infected and you get runoff to the tomatoes.
COLLINS: Lovely.
COHEN: Lovely. Sorry, you know, we just have to be very clear, I don't mince words.
COLLINS: That's fine.
COHEN: I say it like it is. So that's one way that it could be infected, but there's a whole bunch of different ways, maybe in the handling and processing process.
COLLINS: Sure. Right.
COHEN: Who knows?
COLLINS: I mean this isn't the first time we've heard about this type of contamination.
COHEN: Right. And another important thing to remember is that you can't necessarily wash this stuff off.
COLLINS: No.
COHEN: I mean if the salmonella...
COLLINS: I'm thinking back to the lettuce.
COHEN: Right. Exactly, good memory, the spinach as well. If it's on the surface you could wash it off but sometimes it gets in there, and you can't wash that off. If there's salmonella inside you can't get rid of that.
COLLINS: I'm thinking a different fruit.
COHEN: Fruit.
COLLINS: Because they're not a vegetable. COHEN: Right. Right.
COLLINS: All right. We're on top of it here.
COHEN: Round, red and a fruit, right?
COLLINS: Very good. All right, Elizabeth Cohen, appreciate it.
COHEN: Thanks.
HARRIS: Nature unleashed. Homes and a highway torn apart when floodwaters burst through an embankment. What's next for Wisconsin?
(COMMERCIAL BREAK)
HARRIS: On the edge of disaster. One of the largest of those so-called quake lakes in China near the breaking point. The Chinese government pulling out all the stops to control the flow.
CNN's Emily Chang has more.
(BEGIN VIDEOTAPE)
EMILY CHANG, CNN CORRESPONDENT (voice over): Water cascades rapidly out of the swollen quake lake. It rushes through Beichuan, a town already devastated by the earthquake and shut down weeks ago, and passes the Mianyang City further downstream.
The city is nearly empty -- 250,000 people evacuated. Even emergency workers are now being pulled out.
For the past few days, Chinese soldiers have been digging channels in a race to drain the lake. Helicopters shuttling in more manpower and explosives to blast debris in the water's path.
For the first time in days, the water level has dropped but this race isn't all about speed. If the water flows out too fast it could erode the diversion channels too quickly, causing the dam to collapse. But if it drains too slowly, it will increase pressure on the already unstable dam.
The Tangjiashan Lake was formed when part of a mountainside crashed into a river during the giant earthquake. It's the largest and most threatening of about 30 such lakes now scattered across Sichuan province.
The dam is essentially a wall of mud and rock. If it bursts, it will release a giant wave that could flood more than a million people. Even as water spills out with all of its calculated engineering, more flows in with new rainfall and fresh landslides.
Hundreds of aftershocks shake the area every day. One recently measuring magnitude 5.0 sent more rocks and debris tumbling into the lake.
And every time the earth moves, it sends a shiver through those who fled to higher ground, now living in makeshift tents, suffering from heat, deprived of water.
(On camera): In the meantime, 15 government officials in Sichuan province have been fired for slow responses and wrongdoing following the quake. The Chinese government continues to bear the burden of managing a massive relief effort with tens of thousands dead and hundreds of thousands injured.
The remains of a rescue chopper were just found, adding another 19 people to the death toll.
Emily Chang, CNN, Beijing.
(END VIDEOTAPE)
HARRIS: You know we want to give you a way to help. At CNN.com we have a special page on the devastation in China and the aftermath of the cyclone in Myanmar. Plus links to aid agencies that are organizing help for the region. It is a chance for to you to "Impact Your World."
COLLINS: So where is Wall Street headed this morning? We're going to go live to the opening bell in just a couple of minutes.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Tony Harris and Heidi Collins.
COLLINS: Good morning once again, everybody. It's 9:30. I'm Heidi Collins.
HARRIS: And I'm Tony Harris. Welcome back to the CNN NEWSROOM.
The opening bell in minutes. Let's walk everyone up to the bell here with Susan Lisovicz at the New York Stock Exchange.
Good morning, Susan.
SUSAN LISOVICZ CNN CORRESPONDENT: Good morning, Tony.
HARRIS: You know I -- we were in triple-digit territory for a good portion of the morning yesterday and then, I guess, we faded a bit. So we picked up, what, 70 points on the day yesterday?
As you look ahead to the NASDAQ, the Dow, the S&P futures, where are we headed this morning?
LISOVICZ: Could be a rough open, Tony. You know, as you mentioned, the bulls managed to put together a 70-point gain for the blue chips but it could all be wiped out early on in trading.
Why is that? Well, Ben Bernanke, who's the nation's top economists, sent the clearest message yet that the Federal Reserve is done lowering interest rates. Despite that huge jump in the unemployment rate on Friday, the Fed chief said last night that the risk of a substantial downturn in the economy actually receded in the past month. What's worrying him is inflation.
HARRIS: Yes.
LISOVICZ: And we're seeing it yet again in oil prices. Crude dropped four bucks yesterday despite the fact that the dollar is gaining against the euro and yen. Today, crude is back up to $2.50, and electronic trading, $136.50 a barrel.
And all that expensive foreign oil has pushed the trade deficit to the highest level in 13 months.
The Dow has lost now about 1,000 points this year. The blue chips, the NASDAQ, the S&P 500, all down about 7 percent year-to-date.
And it looks like we could have some selling. There's some applause there.
HARRIS: Yes.
LISOVICZ: That's a -- that is an affiliate or subsidiary of a Mexican telecom company that is ringing the opening bell there.
HARRIS: Well, let's see if -- OK, I guess I should pause because there's the bell.
LISOVICZ: And they're off.
HARRIS: They were off to the races.
Hey, but I have to ask you, Susan. Given that guidance from the Fed chief, does that suggest that we might be seeing interest rates creep up here soon?
LISOVICZ: Oh, yes. You know, there's no question about it. And I think that there were lot of critics saying for some time now that the fall of the dollar, because of the weakening economy and those aggressive interest rate cuts was helping to really send oil sharply higher.
That is one of the culprits with oil prices. And the fed basically, Bernanke, for the first time really addressed the weakening dollar in the last two weeks. And last night, again, giving a clear sign that inflation is a problem, and how do we -- you and I -- and most people in America -- are we at inflation? It's every time we go to the pump.
HARRIS: Absolutely.
LISOVICZ: It's every time we turn on the air conditioner or the lights. It's energy.
HARRIS: And that means money is more expensive and if you're trying to get a loan, ultimately the trickle-down hits consumer loans and that means everything gets to be more expensive, borrowing becomes more expensive and so on and so on. LISOVICZ: And that's a lot of reasons why investors like the fact that, you know, it's been a tug-of-war frankly. I mean, you know, for a slowing economy you want to give it some juice. So you want to loosen the reins on lending.
HARRIS: Absolutely.
LISOVICZ: But on the other hand, when you're seeing oil -- and that's one of the contributors -- that weak dollar, because of weakening economy, you know, it's a very careful balance. And yes -- and if money is tighter, that's problematic as well.
HARRIS: Got you.
LISOVICZ: And that's why the Fed is tiptoeing. He's got a careful balancing act. But right now, the Dow is basically erased what it gained yesterday.
HARRIS: Yes. And that's what we were walking up to, everyone. We were trying to get that first number to see how it (INAUDIBLE). There we go.
Susan, good to see you. See you a little later this morning.
LISOVICZ: You got it.
HARRIS: Thank you.
HEIDI COLLINS, CNN ANCHOR: Gas prices up, jobs down. You're feeling the pain. And we're standing by for John McCain to lay out his plan for making things better. A live shot for you there. He's speaking at a small business conference in the nation's capitol. That speech getting under way any minute now. We're going to bring it to you live when it happens.
HARRIS: And taking his economic message on the road, Barack Obama talking money and John McCain.
CNN's Jessica Yellin has more.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Barack Obama's economic message could not be any simpler.
SEN. BARACK OBAMA (D), PRESUMPTIVE PRESIDENTIAL NOMINEE: It is time to try something new. It is time for a change.
YELLIN: In his first policy speech of the general election, Obama attempted to bind his opponent to George Bush. He mentioned the president 15 times.
OBAMA: Senator McCain wants to turn Bush's policy of too little too late into a policy of even less even later.
The centerpiece of John McCain's economic plan amounts to a full- throated endorsement of George Bush's policies.
We can't afford four more years of skewed priorities that give us nothing but record debt.
YELLIN: McCain's campaign is striking back, hitting where Democrats have hurt before.
CARLY FIORINA, VICTORY CHAIR, REPUBLICAN NATIONAL COMMITTEE: Barack Obama's plan, basically, is to raise virtually every tax out there. Raising taxes when economies are hurting is the wrong formula.
YELLIN: Or, as McCain puts it --
SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: I will leave it to my opponent to propose returning to the failed big government mandates of the '60s and '70s.
YELLIN: The latest CNN poll shows, 78 percent of Americans believe the economy is in poor shape. So, Obama is seizing on that economic anxiety, proposing short-term solutions, including another round of rebate checks, part of a $50 billion stimulus package.
OBAMA: If the government can bail out investment banks on Wall Street, we can extend a hand to folks who are struggling here on Main Street.
(CHEERING AND APPLAUSE)
YELLIN: He promises to shut down corporate tax loopholes, and accuses McCain of supporting massive tax giveaways to an oil conglomerate.
OBAMA: When we're paying more than $4 a gallon for gas, the man who rails against government spending wants to spend $1.2 billion on a tax break for ExxonMobil. That isn't just irresponsible. It is outrageous.
YELLIN: And he's vowing to enact a middle-class tax cut that would help Americans who earn up to $150,000 a year.
The policy details were few. Shaping a message was Obama's goal, as he seeks to define himself as McCain's opposite.
OBAMA: This is a choice you will face in November. You can vote for John McCain and see a continuation, see a continuation of Bush economic policies. But I don't think that's the future we want.
YELLIN (on camera): McCain says he believes the fundamentals of our economy are strong. Well, you can expect Obama to use that against McCain as much as possible. In fact, team Obama believes, if this election is a referendum on our economy, then Obama wins.
Jessica Yellin, CNN, Washington.
(END VIDEOTAPE) HARRIS: And John McCain gets to fire back in just a couple of minutes. The presumptive Republican presidential nominee laying out his proposals in a speech to the National Small Business Council, that's in Washington, and in just moments, right here in the CNN NEWSROOM.
COLLINS: Deadly and devastating floods in the Midwest. Stifling heat along the East Cost. Extreme weather taking its toll again today.
Rivers and lakes across the Midwest overflowing their banks, swamping towns and washing away homes. At least eight deaths are blamed on the storms that swept across the region.
People along the East Coast looking for ways to beat the heat. More sweltering weather in the forecast today after record-breaking temperatures yesterday. Heat advisories in effect from North Carolina to Massachusetts.
HARRIS: And that's hot. Let's check in once again. Rob Marciano in the severe -- Rob, good morning.
(WEATHER REPORT)
HARRIS: Speaking of which, the extreme weather -- OK, so the east sizzling right now. And as Rob mentioned, snow is falling in Washington State. We've got the pictures to prove it.
The weather surface says the storm could dump five to ten inches of new snow in higher elevations of the Cascade Mountains. Gusty winds knocked out power to thousands of homes and businesses.
COLLINS: All right. Quickly, we want to take you to John McCain. We told you this event would be coming up. Let's listen in for just a moment to the Senator Republican presumptive presidential nominee in Washington, D.C., speaking on the economy today.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESUMPTIVE PRESIDENTIAL NOMINEE: Appreciate the great work of the National Federation of Independent Business, the spokesperson, the spokesperson for small businesses and entrepreneurs all over America. And I'm honored -- I'm honored to be in the company of so many men and women who represent the best of American enterprise.
You know, I have never run a small, struggling enterprise -- unless you count my presidential campaign last year.
(LAUGHTER)
But I do know that more than anything else, small businesses are what make the American economy run. You're the ones who take the risks, often with little start-up money and nothing to fall back on. You are the ones who do most of the innovating in this country, and most of the hiring, too. For women, for immigrants and for people of every background, small businesses are the path to success and to the American dream. And I congratulate you for it. And congratulate yourselves, please.
(APPLAUSE)
You know one of the things that Americans are tired of -- one of the things they're tired of is people yelling at each other in America. Have you notice that?
(LAUGHTER AND APPLAUSE)
They want us to respect each other's opinions. They want to share our views and our hopes and dream and our aspirations and our fears right now. I don't have to tell you that right now. Americans want a dialogue. They want a dialogue and that's what I've had the great honor of working with FNIB and with you for so many years.
My friends, in this very tough time for our economy and for workers and families across our country, job creation among small businesses is crucial. The African-American, the Hispanic-American, small business communities are one of the fastest growing segments of our economy. And that is a credit, credit to the entrepreneurs of America. And America's prosperity depends on your success.
Job creation is just one reason why the government should never take the hard work, sacrifices, and earnings of small businesses for granted. Never. As president, my goal will to get our economy running at full strength again. And that starts by supporting small businesses across this nation -- the United States of America.
(APPLAUSE)
Now that I know who I will be -- you know, in the words of a --
(BOOS)
Do you remember -- you know, one of my political memories was when Ronald Reagan said there you go again. There you go again.
Now that we know who I'll be facing in the general election --
(LAUGHTER)
He can't make it up.
(LAUGHTER)
In the general election, the real debate over economic policy can begin. And as you know it's began in earnest. As you may have heard, Senator Obama and I might and I hope will be meeting soon in a series of town hall discussions.
Just the two of us in direct conversation with the voters. No need to turn it into a big media-run production with process questions from reporters, a spin room, and all the rest of it. Just to keep things friendly, I also suggested that my opponent and I travel to these town hall meetings together in the same plane. I promise not to try to fly it.
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So we need the town hall meeting. You just saw the example. Let's stop yelling at each other. Let's stop having sound bytes, send process questions and those things.
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The American people want to respectful and civilized discussion. And who knows better -- who knows better? How to ask those questions and express their hopes and dreams and aspirations, but citizen of this country particularly those in small business.
Our disagreements in these town hall meetings as I said will be civil and friendly, but their differences will be clear for all to see. On tax policy, health-care reform, trade, government spending, a long list of other issues. We offer very different choices to the American people. And those choices will have very different consequences for American workers and small business owners.
No matter which of us wins in November, there will be change in Washington. The question is what kind of change? Will we go back to the policies of the 60s and 70s that failed? Or will we go forward?
Will we enact the largest single tax increase since the Second World War as my opponent proposes, or will we keep taxes low, low for families and employers? That's the question that will be asks. This election offers Americans a very distinct choice --
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I'm running out of funny lines.
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My friends, this election offer Americans a very distinct choice about what kind of change we will have. We'll have change but a very distinct choice about what kind of change that will be.
This is especially true for the small business community. Let me speak to you about the change I will seek.
As president, I intend to act quickly and decisively to promote growth and opportunity. I intend to keep the current low income investment tax rates. I intend to keep them, not repeal them.
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I will pursue tax reform that supports the wage-earners and job creators who make this economy run, and help them to succeed in a global economy. Serious reform is needed to help American companies compete in international markets. I have proposed a reduction in the corporate tax rate from the second highest in the world to one on par with our trading partners. To keep businesses and jobs in this country, in this country. If you give them --
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If you give American corporations the highest tax rates or the second highest tax rates in the world, they're going to go some place where they're lower. We need to lower that tax rate. We need to imitate our friends, the Irish, as a matter of fact. Might not be a bad beginning.
One of the most crucial economic issues in this campaign is the ability of American workers to benefit from exports to other nations, and how government policy can help them to do so. And here, too, I welcome the debate with the Democratic nominee.
I want to break down foreign trade barriers, break them down so that America's small businesses can compete abroad. Not build them up. When new trading partners can sell in our market, and American companies can sell in theirs, the gains are great and lasting.
The strength of the American economy offers a better life to every society we trade with. And the good comes back to us in many ways -- in better jobs, higher wages, and lower prices. Free trade can also give once troubled and impoverished nations a stake in the world economy, and in their relations with the United States of America.
At the same time, we must, we must help displaced workers at every turn on a tough road, so that they are not just spectators on the opportunities of others. And I have made that commitment. I have made that commitment with reforms to expand and improve federal aid to American workers in need. We must do it.
We need to help millions of workers who have lost a job that won't come back and find a new one that won't go away. And you're the ones who will do that.
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Unfortunately, Senator Obama has a habit of talking down the value of our exports and trade agreements. He even proposed, he even proposed a unilateral, a unilateral renegotiation of NAFTA -- our agreement with Canada and Mexico that accounts for 33 percent of American exports.
But we have a sharp disagreement here that I look forward to debating. If I am elected president, this country will honor its international agreements, including NAFTA, and we will expect the same of others. And in a time of uncertainty for American workers, we will not undo the gains of years in trade agreements now awaiting final approval including that one with Columbia.
And as we expand markets for Americans products, we must do more tax reform here at home. I will reform taxes in America, my friends. And I will propose and sign into law a reform to permit the first-year expensing of new equipment and technology. You must have that now.
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We're also going to keep the low rate on capital gains, so that businesses like yours can expand and create jobs instead of just sending more of your earnings to the government.
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I don't want to send anymore of your earnings to the government, my friends. And so parents can spend and save more for their own children. I will propose to double the size of the child tax exemption. Double it.
I will also propose as well a middle-class tax cut -- a phase-out of the Alternative Minimum Tax to save more than 25 million middle- class Americans --
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Save more than 25 middle-class families as much as $2,000 in a single year. Another of my disagreements with Senator Obama concerns the estate tax, better know to you as the death tax. He proposes to increase to a top rate of 55 percent. The estate tax is one of the most unfair tax laws on the books, and the first step to reform is to keep it predictable and keep it low.
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After a lifetime building up a business, and paying taxes on every dollar that business earns, that asset should not be subjected to a confiscatory tax. You know that better than I do.
It is not enough, however, to make little fixes here and there in the tax code -- especially if you're a small business owner filing under the individual tax. What we need is a simpler, fairer, and flatter tax code. As president, I will propose an alternative tax system. When this reform is enacted, all who wish to file under the current system could still do so. And everyone else could choose a vastly less complicated system with two tax rates and a generous standard deduction.
Americans do not resent paying their fair share of taxes. What they do resent, and especially if they're trying to run a business, is being subjected to thousands of pages of needless and often irrational rules and demands from the IRS.
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Sadly, we know from experience that no serious reform of the current tax code will come out of Congress. So now it is time to turn the decision over to the American people. We are going to create a new and simpler tax system. Give the American people a choice. Senator Obama's plans would add to the difficulties of small business in other ways, too. Currently, there are the 21.6 million sole proprietorships filing under the individual income tax. When Senator Obama talks about raising income tax rates on those making over 250,000 dollars -- that includes these businesses as well.
He also proposes increases in dividend and capital gains taxes. Under Senator Obama's tax plan, Americans of every background would see their taxes rise -- seniors, parents, small business owners, and just about everyone who has even a modest investment in the market.
He proposes to eliminate -- or drastically increase the Social Security earnings cap. Small business people in this room are very familiar with. And that would dramatically increases the taxes on you and employers.
He proposes to eliminate the secret ballot for union votes, and to raise the minimum wage and then index it, which is a sure way to add to your costs and to slow the creation of new jobs. You work hard in small businesses to grow and to create new jobs and opportunities for others, and the federal government shouldn't make your work any harder.
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I'll talk to you for a minute about health care. As for health care policy, I believe the best way to help small businesses and employers afford health care is not to increase government control of health care but to bring the rising cost of care under control and give people the option of having personal, portable health insurance.
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We have the highest quality health care in the world, in the United States of America. It's the affordability and portability not the quality. And certainly the federal government cannot run the health care system in America in my view with efficiency.
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As it is, the traditional tax-subsidy that supports private insurance is concentrated on a subset of American workers and a portion of our businesses. My health care reform would end that unfair bias in the law, while helping to make health insurance more affordable for every single American.
We're going to offer every individual and family in America a large tax credit, refundable tax credit to buy their health care. So that their health insurance is theirs to keep even when they move or change jobs.
My plan would allow those who want to stick with employer provided health insurance to do so. But I want to give individuals greater choice, rather than give small business no choice at all.
(APPLAUSE) For too long, government has been the voice of big business, not small business. To make matters worse, even when very large businesses violate their trust, they seem to be held to a different standard -- getting away with conduct that would leave any small business owner broke. We need rules that assure fairness and punish wrongdoing in the market, and hold every business person in America to the same fair standards.
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In times of hardship and distress, we should be more vigilant than ever in holding corporate abuses to account, as in the case of the housing market. Americans are right to be offended when the extravagant salaries and severance deals of CEO's -- in some cases, the very same CEO's who helped to bring on these market troubles. Bear no relation to the success of the company or the wishes of the stock holders.
Something is seriously wrong when the American people are left to bear the consequences of reckless corporate conduct, while the offenders themselves are packed off with another forty or fifty million for the road.
If I am elected president, I intend to see that wrongdoing of this kind is called to account by federal prosecutors. And under my reforms, all aspects of the CEO's pay, including any severance arrangements, must be approved by the shareholders -- should be approved by the shareholders.
In so many ways, we need to make a clean break from the worst excesses of both political parties. And for Republicans, it starts with reclaiming our good name as the party of spending restraint. We got to reclaim that good name as Republicans.
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Somewhere along the way, too many Republicans in Congress became indistinguishable from the big-spending Democrats that they used to oppose. The only power of government that could stop them was the power of the veto and it was rarely used. If that authority is entrusted to me, I will use the veto as needed.
I will veto every single bill with earmarks and every single bill that we have come across my desk, I will make them famous. I will veto them. You will know their names. I will seek a constitutionally valid line-item veto to end pork-barrel spending once and for all.
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Every bill.
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And I will lead broad reforms that remove the many corporate tax loopholes that are costly, unfair to smaller business competitors, and inconsistent with a free-market economy. The recent 300 billion-dollar farm bill was a case in point. Family farmers are America's original small business owners, and many are struggling to survive. But nowadays, small farmers have been forgotten, and instead the Congress sends a steady supply of subsidies to agribusiness.
It would be hard to find any single bill that better sums up why so many Americans in both parties are so disappointed in the conduct of their government, and at times so disgusted by it.
Even as American families struggle to buy food, because of rising prices, Congress refuses to place real limits on farm subsidies or end tariffs on imports that drive grocery bills higher.
When both parties carry on like this, there is only one proper response -- a presidential veto of every bill that has this pork barrel projects on. That's exactly what I will do as president with any bill that serves only the special interests and corporate welfare. You have my commitment to it.
