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Issue Number One
U.S. Food Aid; President Bush on the Economy; Soccer Parents Feel the Pinch; Box Office Boom
Aired June 10, 2008 - 12:01 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GERRI WILLIS, CO-HOST: Two candidates for president, two very different plans for your money.
Gas prices hit another record, but there could be some relief in sight.
How military spouses could soon get a free college education.
And the latest on the great tomato scare.
ISSUE #1 is your economy. ISSUE #1 starts right now.
Hello, everyone, and welcome to ISSUE #1. I'm Gerri Willis. Ali Velshi will be here in just a bit.
One day after the national average price for gas hit the $4 mark, another new record today. AAA says the average now for a gallon of unleaded regular is $4.04. Now, that is up two cents from yesterday's record price.
Soaring oil prices helped shoot the nation's trade deficit to the highest level in 13 months in April. The Commerce Department says that the gap between what the nation imports and what it sells abroad rose by nearly 8 percent, to nearly $70 billion.
And President Bush is sounding bullish on a global warming agreement. Speaking at today's summit with the European Union leaders in Slovenia, Mr. Bush says he thinks it can happen before the end of his term in office. But he warns no agreement on global warming can be effective without China and India.
ALI VELSHI, CO-HOST: Hi, Gerri.
Well, President Bush is in Europe. And while he's there, the two men trying to -- vying to replace him in 2009 are busy talking about issue #1, the economy here at home. This morning, Senator John McCain spoke on the economy at a small business summit.
Dana Bash, part of CNN's best political team on television, joins me now with more on that.
Hi, Dana.
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Hi, Ali.
You know, you remember, John McCain actually laid out his economic plan back in April while the Democrats race was red hot. But now, of course, he knows who his opponent is. And McCain's speech this morning was his first shot at contrasting his ideas on the economy with Barack Obama's. And he did it really in old-style Republican versus Democratic terms, saying Obama will raise your taxes and regulate government, and what he called a wrong prescription for the ailing economy.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: 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 a question that will be asked.
(END VIDEO CLIP)
BASH: Now, McCain's audience this morning here in Washington was small business owners, and he accused Obama of advocating policies that are bad for business. He singled out Obama's support for renegotiating NAFTA and his proposal to increase the estate tax.
But the centerpiece of McCain's attack on Obama's economic policies is the Democratic candidate's pledge to end President Bush's tax cuts for the upper income workers. That's, of course, a piece of legislation, at least now a law that John McCain initially voted against. But you know, Ali, McCain has spent a lot of time painting himself as a different kind of Republican. But for the most part, and this speech today made really clear, he's now running on classic Republican ideals when it comes to the economy -- low regulation, free trade, low taxes -- Ali.
VELSHI: Yes, Dana. On those topics, both of the candidates do line up exactly in terms of classic Republicans and classic Democrats, which at least makes it easy for people who are thinking if they want to vote on tax lines...
BASH: Stark contrast.
VELSHI: ... their candidates, exactly, have that contrast.
Dana Bash, thanks so much.
BASH: Thank you.
WILLIS: Senator Barack Obama also took his economic message on the road today, on the second day of a two-week-long tour. Now, this morning he spoke in St. Louis, Missouri.
CNN's Jessica Yellin joins me now with the details -- Jessica.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi, Gerri. Well, Barack Obama would be thrilled if this election becomes a referendum on the economy, because he believes if Americans are so dissatisfied with this economy, they will vote for change which would work to his benefit.
Now, he is doing his utmost to tie John McCain to George Bush's economic policies. In his first policy speech on the economy yesterday, he mentioned George Bush 15 times and kept linking John McCain to any number of failures in the current economic policy system.
Now, today he took a closer look at the health care system, taking a tour with a nurse of a medical facility, visiting with patients. And also talking about John McCain's health care plan.
Now, Barack Obama is proposing the offer of universal voluntary health care. In other words, you can choose to sign up, but everyone has the opportunity to participate.
He said he would bring the average family's premiums down to about $2,500 a person, and that his policy offers more access to low- income Americans, Americans who can't right now afford insurance, than John McCain. And he hit McCain pretty hard on this, insisting that McCain's plan would only give access to the wealthy who already have health care and could actually make it harder for middle income Americans to have access to health care.
Now, this is, of course, a big theme throughout this campaign, health care reform. John McCain's campaign hitting back against Barack Obama, insisting Obama is just a tax-and-spend liberal. As Ali said, the lines in this one are very traditional, Democrat, liberal ones. The Republicans accusing Obama of wanting to spend too much money and Obama accusing McCain of not caring enough about the small guy, the little guy -- Gerri.
WILLIS: Interesting stuff. Well, the economy is issue #1.
Thank you for that, Jessica -- Ali.
VELSHI: All right, Gerri.
Now that we've heard from both candidates, we want to hear from you. And Poppy Harlow from CNNMoney.com is here with today's "Quick Vote" question -- Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey there, Ali.
Well, Senator Obama, Senator McCain, they're both talking money, your money. As we focus on issue #1, the economy, here at CNN, we want to know what specific economic issues you want the presumptive nominees to focus their energy and attention on.
Here is our CNNMoney.com "Quick Vote" question today.
Which issue should McCain and Obama make their highest priority? The credit crisis, foreclosures, gas prices or health care? Please weigh in and let us know what you think right on CNNMoney.com. We'll bring you those results a little later.
VELSHI: All right, Poppy. Thanks very much -- Gerri.
WILLIS: Well, gas prices blow through another record. As a Saudi official says, the high price of oil is unjustified.
Is there any relief in sight? We're all over it.
This is ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: This is ISSUE #1.
A new CNN/Opinion Research poll shows the American public is taking the quick rise in gas prices very seriously. Twenty-four percent of those polled believe the cost of gas is a crisis; 59 percent of you believe it's a major crisis.
And some breaking news right now on the latest plan by Democratic lawmakers to address American consumer concerns over the rapidly- rising price of gas.
CNN's Kathleen Koch is live on Capitol Hill with the very latest -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Well, Ali, that plan that Democrats had been pushing is going nowhere. Republicans just defeated their efforts to begin debate on this energy bill.
Now, what -- some of the things that were included in the bill, it would have slapped a windfall profits tax on the major oil companies, it would have given the Justice Department the ability to go after OPEC countries for price fixing, and it also would have cracked down on speculation in the oil futures market. But in the end, Republicans and Democrats were just too much at odds on its merits.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MAJORITY LEADER: The American people deserve to know the truth, that the road ahead won't be easy. But this is a start. It will help lower prices, it will help working families make ends meet.
SEN. MITCH MCCONELL (R), MINORITY LEADER: Hitting the gas companies might make for good campaign literature, or evening news clips, but it won't address the problem. This bill isn't a serious response to high gas prices, it's just a gimmick.
(END VIDEO CLIP)
KOCH: The vote -- the final vote was 51-43. Again, killing any debate on the bill. And it's important to point out that even if the debate had gone forward, that the bill really had no chance of becoming law, because President Bush had said that he would sign no bill into law if it raised any taxes on the oil industry -- Ali.
VELSHI: So there seems to be this problem in that there are a lot of people calling for a lot of things to be done to reduce energy prices, but really not much has moved ahead. Are there any ideas in this bill that will continue, or is this all dead for now?
KOCH: Ali, senators heard some pretty dramatic testimony this week about the excess of speculation in the oil markets. Some experts testifying before them, saying that it may be responsible for as much as half as the surging price of crude oil. So there is talk right now among senators that perhaps that measure might be reintroduced in a standalone bill, and that it might indeed have some chance of success, trying to again crack down on that excessive speculation in the oil futures markets.
VELSHI: All right. Kathleen Koch, thanks very much.
Kathleen Koch for us at the Capitol.
He, Gerri, you know what I need?
WILLIS: What's that?
VELSHI: I need an "Energy Fix."
WILLIS: Well, you're going to get an "Energy Fix" right now.
Back with CNNMoney's Poppy Harlow.
Hi, Poppy. You have the "Energy Fix," right?
HARLOW: Hi there, Gerri. Yes, we have the "Energy Fix" for you every day. We want to help you out there, at least inform you.
This is what's going on. Oil prices are climbing again today. AAA says the national average for gas up again above $4.04 a gallon.
Many of you are looking for an immediate fix. Well, they are difficult to come by. But one plan is to keep a better eye on the oil market.
Kathleen just mentioned it. The CFTC, that's whose job it is to oversee these markets. Holding a hearing this afternoon, trying to figure out a way to better police the markets. And some lawmakers, they're calling for more funding for the commission so it can essentially put more cops on the beat.
Lower demand, that could also help. This is interesting.
A new report out late yesterday from the International Energy Agency forecast a slowing of global demand for oil. It says prices will fall a little bit if demand falls, particularly here in the United States this year. They say that will fall a little bit, our demand for it. But it also says there are few signs of slowing demand in developing countries like China and like India, which is perhaps a reason we continue to see oil prices surge even as Americans pull back.
Another factor that could affect the price of oil is the Federal Reserve, what the central bankers do. An increase in interest rates, that could boost the dollar, which could possibly lower oil prices. And Fed chief Ben Bernanke says he sees the danger of a "substantial economic downturn" subsiding just a little bit.
A lot of people read that as him saying the Fed will not cut interest rates a bit further, but we will have to see what happens. No relief in sight now. At least not right now.
We have a lot more of this on our Web site, CNNMoney.com -- Gerri.
WILLIS: Well, Poppy, no relief in sight. And we're still waiting for Congress to do something -- Ali.
VELSHI: I just feel like I got my "Energy Fix," so thank you for that.
All right. We first told you on ISSUE #1 yesterday of comments by a Saudi official that oil prices at these levels are unjustified. Now, that may have helped knock down oil by about four bucks a barrel. I'm sure all of you folks out there want to know what's going on and when are you going to get some relief?
Jeff Rubin is the chief economist for CIBC World Markets. He joins us now to talk about this.
Jeff, this -- you know, we are kind of in uncharted territory on oil. You have said that you think oil is going higher than it is right now. Possibly as high as $225 I guess a year or two out from now.
Where are we right now? And where do you really think oil is going?
JEFF RUBIN, CHIEF ECONOMIST, CIBC WORLD MARKETS: Well, I mean, I think these prices are justified. And they are justified for a very simple reason. Supply is not growing and demand is.
And the Saudi oil ministers certainly should know where demand is growing because it is growing in his country at almost double-digit rates. And so is it growing -- and so is it growing in Venezuela.
VELSHI: Just after that comment yesterday from the Saudi officials, we had Henry Paulson on the show, the treasury secretary, who said he thinks that this is absolutely supply and demand issue. Why then, Jeff -- and you study this very closely -- why have we seen such a spike in the price of oil? Why have we seen 100 percent increase in the price of oil in the last year? What's suddenly grown so quickly that we couldn't have seen growing five years ago?
RUBIN: Well, it's what's not growing. Saudi and Venezuelan oil consumption is growing, but their production is not. It is starting to decline. And that's why we are seeing a cannibalization of export capacity.
We are seeing these countries export less, not more, to the world oil markets. And we are expecting to see about three million barrels a day drop from these countries' exports over the next couple of years, which is one of the reasons why I expect we will soon be seeing $7 a gallon gasoline in the United States.
VELSHI: Why can Saudi Arabia or Canada or Mexico -- does nobody have enough oil to make up for this increase in demand from, whether it's China or India or the Middle East or Brazil?
RUBIN: That's right. And it's not just that we don't have enough to make up for the increase. You have got to run faster to stand still.
Every year we are losing almost four million barrels a day of cheap, easy-flowing oil, and having to replace it with very expensive, problematic oil like Canadian oil. So, in the next four years, we are going to have to find about 20 million barrels of oil a day just to replace what we are going to lose.
VELSHI: And at what point does oil have to trade to make it viable, to make it profitable for companies to explore in these more difficult places and to produce oil in more difficult circumstances?
RUBIN: I think that's happening right now. I think in the next couple of years you're going to see Mexico's oil exports to the U.S. collapse and the U.S. become more and more dependent on Canadian oil sands. And to fill up your tank from Canadian oil sands, that's a world of $200-a-barrel oil, or else the economics of that just don't work.
VELSHI: Explain to us the Canadian oil sands. They say that there is more oil there than under Saudi Arabia, and that 60 percent of Canada's oil comes from those oil sands. How is that relevant to the American consumer?
RUBIN: Well, I mean, but what you also have to understand is that you have to move two tons of sand to get a single barrel of oil and eat up and burn about 1,400 cubic feet of natural gas in the process. If the Canadian oil sands is the new source of global supply, we are in the ninth inning of the hydrocarbon age and this is no double-header.
VELSHI: What's the obvious solution now? We have political candidates out there saying we want to reduce America's dependence on foreign oil. Americans' dependence on foreign oil is three-quarters of the oil of this country burns every day. What is the logical solution to this?
RUBIN: There is only one solution: reduce consumption of oil. And since about 70 percent of all the oil consumed in the United States is in the form of gasoline and diesel fuel, the simplest and most effective way is to get off the road. VELSHI: When do we hit $150 for oil, Jeff, according to your numbers?
RUBIN: According to my numbers, 2010. According to the way things are going, perhaps next month.
VELSHI: Yes, I hear you. OK.
Jeff Rubin, chief economist for CIBC World Markets, joining us today.
Thanks, Jeff.
RUBIN: My pleasure, Ali.
WILLIS: Wow. Tough numbers there.
Well, some folks out there could soon be eligible for a free college education. It's a plan that's causing quite a bit of controversy. We'll check it out.
You're watching ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: Who says we're all bad news over here? I've got some refreshing news for you.
This weekend, a major fare hike by the major airlines failed. It's the first time in more than a half dozen price increases that won has not stuck.
American Airlines got the ball rolling with a $20 increase on Saturday, and the other major carriers followed. Well, the airlines won't say if plane ticket purchases went down over the weekend, but it is an indication that customers might be at the point where tickets are becoming so expensive that they simply won't fly. The major airlines all rolled it back over the course of the last couple of days -- Gerri.
WILLIS: Well, Ali, there is more good news -- a proposal in Congress for a new GI bill. Now, it would offer more help to military veterans who want to attend college. But not everybody thinks it's a good idea.
CNN's Barbara Starr is joining us now from the Pentagon -- Barbara.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Gerri, you know, the GI Bill was originally signed into law back in 1944 by President Roosevelt to offer education benefits to returning GIs for from World War II. But now, decades later, this has become one of the most expensive, yet cherished, programs for the U.S. military.
There are now a number of pending pieces of legislation on Capitol Hill modernizing the GI Bill, offering very significant additional benefits. But sort of in typical Washington fashion, nobody can really calculate how much it's going to cost, and if they could calculate, they can't tell you how the government is going to pay for it. So that's a big concern obviously to the economy and the growing budget deficit.
But where it really all sorts out is the amount of benefits being given. One of the key provisions, let soldiers transfer their education benefits to their families. But as all of these new benefits might mount up, what the Pentagon worries about, it's all going to look so good, a lot of soldiers, a lot of troops may start to vote with their feet to get out of military service and go back to school.
Have a listen to what the Pentagon spokesman said about all this.
(BEGIN VIDEO CLIP)
GEOFF MORRELL, PENTAGON SPOKESMAN: It would invite too many well-trained, experienced soldiers, airmen, Marines, sailors, to leave before they have had a chance to make a career out of service to their country through the military.
(END VIDEO CLIP)
STARR: All of this now also landing smack dab in the middle of the presidential campaign. John McCain, of course, a very revered military veteran, very close to the military community. But he's actually against some of this legislation because it would be so expensive, because it might encourage people to get out of the military.
We are going to put up a couple of statements from each of the candidates and let you read most of it yourself. But basically, McCain says he's more in favor of something with a sliding scale that offers generous benefits to all veterans but still based on the length of service, so that a GI wouldn't get these benefits all at once after just a couple of years in the military, because after maybe just three years of service, that might encourage them to get out of the military.
Senator Obama, very much on the other side in the position of actually supporting the legislation, saying that if Senator McCain doesn't support it, then that might be a very major issue for debate in November -- Gerri.
WILLIS: Fascinating story. Barbara Starr, thank you for that.
VELSHI: All right. Fixing the global food cris. Why the president's proposed plan for U.S. aid has farmers up in arms.
And then, the most common mistakes that will keep you out of the corner office. We'll tell you what they are and how to avoid them so you can move up in your career.
That's coming up next on ISSUE #1.
Stay with us.
(COMMERCIAL BREAK)
WILLIS: Climbing the corporate ladder is all about hard work, dedication, long hours. But our next guest says a few common mistakes in the workplace could keep you out of the corner office.
Jason Seiden, author of "How to Self-Destruct: Making the Least of What's Left of Your Career," is joining us now.
Great title, Jason. I love that.
Now, you've got a lot of mistakes that people make out there. I'm going to read the mistake. You tell me what I should have done right. OK?
Let's start with the first one.
JASON SEIDEN, AUTHOR, "HOW TO SELF-DESTRUCT": Sure.
WILLIS: Make yourself indispensable. That sounds like really great advice. What's wrong with that?
SEIDEN: If you are indispensable, you cannot move or be moved from your current position. So you can't move up. And nobody is going to want to move you up because you are busy telling everybody you're good where you are. And by the way, if you're that indispensable to the organization in your current job, I'm probably going to invest in technology to do that job perfectly.
WILLIS: I have to give you a little pushback on this. OK, guess what? The economy is not doing that well. This might be a time where I want to make sure that my boss absolutely loves what I'm doing and he can't do without me, right?
SEIDEN: Yes. But I think we need to distinguish between indispensable to the organization and indispensable in your current role. If you are indispensable to the organization, you should actually be making yourself dispensable to your role.
If you can go to your boss, or your boss' boss in an economy like this, and say, hey, I just figured out a way to save my entire salary by automating my position, they are going to find another place for you. You're not the guy they are going to let walk out the door at that point.
WILLIS: All right. OK.
How about avoiding office politics? I think it's a good idea not to get involved in all that stuff. You say just the opposite.
SEIDEN: I do. Most of us are trained not to engage in politics, but here's the scene. You are one of nine vice presidents of the company. There is one president's position. I don't care how friendly you guys are with one another, you're not going to necessarily be so eager to follow one another because each of you is going to want to demonstrate your leadership skills and your ability to take the next level. Politics is the negotiation that goes on by which you all share that leadership mantle for a period of time. If you're not willing to engage, that next position is going to remain out of grasp.
GERRI WILLIS, CNN ANCHOR: You know, I love the way you say it in the book. You say something like, well, if there's more than two people in the room, there are politics. So you've got to play the game.
SIDEN: Exactly.
WILLIS: How about staying humble?
SIDEN: I think most people -- we have an issue with this one. We confuse humility with being a wallflower. There's been a lot of talk the last few years about how great leaders couple humility with a will to get things done. But if you look around, people don't generally hire humble leaders when good self-promoters are available. So somehow you've got to balance keeping the ego out of it with somehow getting a PR machine to work in your favor, whether it's you or others you work with.
WILLIS: Just don't be that all-PR machine person and nothing else, right?
And should you apply for open positions?
SIDEN: Maybe. You know a better idea would be, take the current position you're in, use that as a foundation for creating the job that you want. The odds of you just finding the perfect job of your dreams through a match -- through an online job board are slim. The odds of you actually reaching out and talking to people from your current position and saying, hey, how do we convert this into something that I can really learn to be passionate about and commit my career to, you have a much better chance of having the job of your dreams if you take that route.
WILLIS: And that's what we're all looking for, the job of our dreams. Jason Seiden, thank you so much for that information.
SEIDEN: Thank you.
ALI VELSHI, CNN ANCHOR: All right. We've got the latest information for you now on the nationwide tomato scare. That will be up in a second.
Plus, first, let's get you up to speed on the latest headlines. Don Lemon is in the CNN "Newsroom."
Don.
DON LEMON, CNN CORRESPONDENT: Hello to you, Mr. Ali Velshi, and thank you very much.
Record profits for oil companies. Just a short time ago, Senate Republicans managed to block a move to tax that windfall. Democrats wanted the new tax against the nation's five largest oil companies. Supporters said consumers needed relief and the new tax could help provide it. Republicans argued the opposite, that higher taxes would merely be passed along with higher gas prices. Kathleen Koch reported on this story a short time ago and she'll join me at the top of the hour, right here in the "Newsroom," with more reaction on that.
And take a look at these amazing pictures. It is a water spout forming in the Atlantic Ocean off the coast of Fort Lauderdale. It happened today. It's one of several that was spotted in the area. Water spouts are whirlwinds occurring over water. But if it comes on land, of course, it becomes a tornado. That didn't happen in this case. And the Coast Guard warned voters to stay away. CNN's Chad Myers joins us now from the Severe Weather Center.
Chad, very interesting video. It happens all the time, though, every day.
CHAD MYERS, CNN METEOROLOGIST: Oh, it does. Probably -- almost every day. Although we don't get it on video every day. But it's still, though, -- those still winds -- probably still had winds of 80 to 100 miles per hour. So if you're a boater, you don't want to be anywhere near that thing. And when it does come on shore, like you said, it is attached to a cloud and so, therefore, it would be considered a tornado. Not just like a dust devil like you'd see sometimes out in the middle of the desert.
Here you go, damaging winds, isolated tornadoes, parts of the Northeast today. They are already occurring in parts of up state New York. We'll kind of zoom in, fly you around a little bit, but this is the Catskills, Adirondack area. Well up state. Not down state at all. But these boxes, severe thunderstorm warnings on most of the cells here because they have some gusty winds and also some hail. Some of these hail storms are actually pretty big. This one right here, I just checked that one a little bit ago. It was about an 1.5 hail in the middle of the storm. Look at that, 2.5 inch hail up in the storm now. Now that doesn't mean it's flowing out of the cell just yet, but certainly there is that potential. There in Boonville, all the way down there to Forestport, could see some of that hail as the storm moves that way.
It's going to be a busy day for us again today but probably not that many tornadoes. There is a tornado watch, though, for New York state. We'll keep you advised.
LEMON: All right. No tornadoes but waterspout.
MYERS: Yes, you're probably right. The same thing.
LEMON: Those daily occurring waterspouts. All right.
Thank you very much, Chad.
I'm Don Lemon. I'll throw it back now to Gerri Willis in New York. I'll see you in the "Newsroom" at the top of the hour.
Take it away, Gerri.
WILLIS: Alright. You've probably heard that food prices are rising and that means the cost of sending food around the world is going up as well. The topic is expected to be a main focus at next month's G-8 Summit. But President Bush has a plan right now. One that could take a good chunk of the U.S. food aid budget and send it elsewhere. CNN's Zain Verjee has that story.
(BEGIN VIDEOTAPE)
ZAIN VERJEE, CNN CORRESPONDENT, (voice over): Chip Bowling and his family have farmed the fields of Maryland for over 60 years.
CHIP BOWLING, MARYLAND FARMER: We're putting about 180,000 seeds per acre.
VERJEE: He grows corn, wheat and soy. Crops that have skyrocketed in price 47 percent on world markets, crushing 800 million people already hungry. Instead of shipping all U.S. food aid, President Bush wants to spend 25 percent of U.S. aid dollars to buy food produced overseas, closer to where it's needed.
UNIDENTIFIED MALE: I think that no matter where the food comes from, they have to have it as quickly as possible.
VERJEE: The whole process takes four months for food from a U.S. port to reach a drought victim in Africa. For example, Ethiopia. If bought in the region, it takes about three weeks.
GAWAIN KRIPKE, POLICY DIRECTOR, OXFAM AMERICA: It costs probably 50 percent more to buy food here and ship it, rather than buying it in Africa or closer to where the food is needed.
VERJEE: Some farmers could take a hit.
BOWLING: Guys in the Midwest that rely on the export market, it may hurt them a little more than us.
VERJEE: Chip's not worried. He sells most of his grain in Maryland and says world demand is high. But food companies think the Bush plan is a bad idea because it's untested, not because they stand to lose money.
PAUL GREEN, FOOD COMPANY SPOKESMAN: The food aid program is such a minuscule part of the market of most food companies and most grain trading companies. This is less than 1 percent of their sales.
VERJEE: Plus, American shipping companies could get squeezed.
MORI DIANE, INTERNATIONAL SHIPPING BROKER: This is business that normally, you know, our industry would have handle (ph). Shipping is not going to necessarily stop. Possibly decrease, yes.
VERJEE: For Chip it's not about the money.
BOWLING: People need to eat. People need to survive. And we're all the same.
VERJEE: Zain Verjee, CNN, Newburg, Maryland.
(END VIDEOTAPE)
VELSHI: Well, President Bush arrived in Berlin less than an hour ago after attending his last European Union/United States Summit. The president touched on everything from global warming, to Iran, to issue number one, the U.S. economy. CNN's Frederik Pleitgen is live right now in Berlin with the latest.
Frederik.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Hi, Ali.
Yes, the president is currently meeting with German Chancellor Angela Merkel. He and the first lady are going to be having supper with Merkel and with Merkel's husband. And you mentioned before that at the E.U./U.S. Summit in Slovenia, they did touch on a lot of issues. It was a very short summit but it did touch on a lot of points. And the most important one by far, of course, was Iran. The U.S. and the European Union, really for the first time, finding some very, very strong, common language for the Iranians, threatening tougher sanctions if the Iranians don't come clean on their nuclear ambitions and on their nuclear program.
And let me tell you, I've been covering these issues here for a very, very long time in Europe and the Bush administration has made a lot of headway, especially with countries like Germany, the one that we're in right now, getting them to take the Iran issue very seriously. Let's listen in to what the president had to say today.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Iran, with a nuclear weapon, would be incredibly dangerous for world peace. And so we've got to continue to work together to make it clear, abundantly clear to them, that it's their choice to make. They can either face isolation or they can have better relations with all of us if they verifiably suspend their enrichment program.
(END VIDEO CLIP)
PLEITGEN: And, Ali, you mentioned that issue number one, of course an issue here as well. And it's an issue that the whole world cares about. George Bush saying today at a press conference after the E.U./U.S. Summit, that there will be no U.S. government intervention to prop up the sliding dollar.
Ali.
VELSHI: Interesting. All right. Because that's something that we're all interested in, in the United States. The low dollar has had an effect on the food prices and the oil prices that we have.
Frederik, thank you very much. Frederik Pleitgen in Germany. Well, coming up, seeing red at the gas pump. Soccer moms and dads are now sitting on the sidelines.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We've had to think about what we do with our own expenses to be able to accommodate paying the fees for the sports as well as the gas.
(END VIDEO CLIP)
VELSHI: Struggling to keep family life going with gas at $4 a gallon. That's coming up next on ISSUE NUMBER ONE.
(COMMERCIAL BREAK)
WILLIS: Welcome back to ISSUE NUMBER ONE.
There is still no luck in tracking down the source of a 17-state salmonella outbreak linked to three types of raw tomatoes. Now the tomatoes you want to avoid, red plum, red roma, round red tomatoes unless they were grown in certain states and countries, which you can find on the FDA web site. Cherry and grape tomatoes, as well as those with vines still attached, are not likely to be the source of the outbreak. That according, again, to the FDA. Now among the supermarkets and restaurants yanking tomatoes as a precaution, McDonald's, Wal-Mart, Burger King, Kroger Winn-Dixie, Taco Bell and The Outback Steakhouse.
Are you hungry yet, Ali?
VELSHI: Yes, I guess tomatoes are just not that much a part of my diet that I've been missing them, but it's good to know to watch out for it.
Well, first you've got the registration fees. Then they hit you up for the jerseys and the equipment and then it's your day to bring the snacks. Sounds a lot like the life of a soccer mom. And now with those minivans across the country, the sky high gas prices are taking a toll on them as well. Here's CNN's Rusty Dornin.
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UNIDENTIFIED MALE: All right. I could use somebody else's suitcase.
RUSTY DORNIN, CNN CORRESPONDENT, (voice over): For Dana Scott, this is the final trip of a very long, gas-guzzling soccer season. He's carpooling with his daughter's team 100 miles sort of Atlanta for the Georgia State Cup Tournament. For Scott and other parents, the final whistle has come none too soon for their wallets.
UNIDENTIFIED FEMALE: Have a great time, girls.
DORNIN: Any idea how much you spent on gas this year?
LISA ARKIN, SOCCER MOM: Oh, gosh, for soccer? Oh, I would say probably, on a weekend, $100, $120.
DORNIN: And how many weekends have you been doing that?
ARKIN: Oh, gosh. Every other weekend.
DORNIN: So we went along for the ride with Scott while he filled up for the trip.
DANA SCOTT, SOCCER DAD: Run up to about $70 or $75.
DORNIN: Is this going to mean that some parents aren't going to be able to have their kids in sports?
SCOTT: Oh, definitely. You know, we've had to think about what we do with our own expenses to be able to accommodate paying the fees for the sports, as well as the gas.
DORNIN: For parents like Marie Bledsoe, there was no turning back despite the gas pains.
MARIE BLEDSOE, SOCCER MOM: We're already fully committed in sports and it would be hard to back out because of that. Does it put a dent in your pocket? Absolutely. Is it crazy? Yes. Should we all be carpool more? Yes.
DORNIN: So what's a parent to do to help trim their losses?
MARY LUTZENKIRCHEN, SOCCER MOM: Not all of us go to the games now. I mean we chaperone and sometimes parents don't come extra. And like my family. I'll go this weekend, but nobody else will.
SHANNON MOORE, SOCCER MOM: I think because, you know, our kids are a priority for us, we'll make it work somehow. But it is a concern.
DORNIN: For some players, state tournaments like this can be a spring board to more prestigious teams and the possibility of college scholarships. So whatever the penalty, it's the goal that makes every penny spent on gas a smart investment.
Rusty Dornin, CNN, Atlanta.
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WILLIS: All right. Coming up, we're turning the show over to you. Advice on your money. Send us your e-mail questions, issue1@cnn.com. It's the Help Desk next.
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VELSHI: Apple's new iPhone is on the way. It will be $200 cheaper than the original. But here's the down side, monthly service charges are likely to erase most of those savings. As expected, Apple's CEO, Steve Jobs, unveiled the new iPhone yesterday. It will support satellite navigation and faster Internet access. An 8GB version will go on sale for $199 when it hits the stores on July 11th. The 16-gig model will set you back $299. The down side, though, is that monthly service charges, as we said, are likely to erase most of those savings. AT&T is raising the monthly data fees by $10 per month.
Gerri.
WILLIS: People love those iPhones.
But it is now that time, time to open up the Help Desk, as we do every day here on ISSUE NUMBER ONE, and give you solutions to your money problems. Let's get right down to it. Amanda Gengler is a writer for "Money" magazine, Jack Otter is with "Best Life" magazine, and our very own Stephanie Elam is a CNN business correspondent.
Welcome to you all.
Let's get started with the first e-mail from J. Brown in Arizona who asks, "my SUV is paid for. If I listen to the reports now, I should trade it in for something better on gas. The only problem is, if I trade in my truck, not only will I have to pay for gas, but I'll have a new car payment. I already have a lot of expenses each month. What is your advice?"
Jack, this is not as easy as it seems, right?
JACK OTTER, DEPUTY EDITOR, "BEST LIFE": Well, I think it is kind of easy if you get out a pencil and paper. It's a math problem. You know, how much are you paying right now for gas, for insurance and for maintenance on that truck? Then you look at what the new payments would be on the Prius or the mini or whatever, you know, gas sipper you want. So the gas, the payments. Your insurance might be around the same. A car is less but it's brand-new but you won't have any maintenance costs. So that's an issue. And then just do the math. The more you drive, the closer you're going to get with that new car. I mean if you have a Durango getting 15 miles to the gallon, you buy a Prius, it's 60.
WILLIS: Who has a Durango?
OTTER: My brother.
WILLIS: Oh, I'm sorry. OK. I'm sorry to the people who make Durangos.
But my point is this. Look, you know, if you're going to buy a new car, OK, and you may be under water in the car you have currently, ultimately you're going to be spending a lot of money admittedly to save on gas but the trade-off just may not be worth it.
OTTER: You're absolutely right. Yes.
AMANDA GENGLER, WRITER, "MONEY": I think that if you have an SUV that's only a couple years old, you probably will get enough money when you make that trade-in to buy a new compact car with no car payments. It's the older SUVs that are taking the bigger hit. At edmunds.com, the car web site has a great calculator where you can run your personal situation.
WILLIS: Run the math.
Yes, all right. Let's get to the next question. Vasco asks, "I am looking for some guidance in cleaning up and improving my credit. I recently ran into very tough times and experienced a drastic reduction in income. I lost my home to foreclosure and incurred several late payments on other obligation which are reflected in my credit report. What would be the best course of action for me to permanently fix this?"
Amanda, let's talk about this. A lot of people are feeling this pain.
GENGLER: Foreclosure will drastically affect your credit score. It's what's known as a major item where something like the 30-day late payment is only sort of a minor infraction. And it's going to be on that credit report for up to seven years. The best thing that you can do is as that moves further down into history on your credit report, you want to replace that with good items. So you want to be paying all of your bills on time. You want to pay down those high balance credit cards. You never should be using more than about 30 percent of the available credit on each credit card. And that's the best thing that you can do.
WILLIS: Cut your credit card addiction. I love that.
OK. Phoebe asks, "are companies allowed to check a job applicant's credit rating and then decide not to hire that person if they don't like what they find? Isn't this discrimination?"
Stephanie.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Oh, yes, they're totally allowed to that. They can do it and they do do it. But, you know, you do have some rights in the situation. First of all, so many people lie on their resumes that part of the reason why they do this is so that they can find out that you're telling the truth.
WILLIS: Are you siding with the company, Stephanie? I mean, come on, this is an outrage that they 're applying your credit rating to your job . . .
ELAM: But you do have rights.
WILLIS: I mean I disagree. I think it's not acceptable.
ELAM: Well, I mean, but it is something that is possible and they can do it right now and . . .
WILLIS: And they do do it.
ELAM: And they do do it. So under these parameters, you do have some protections though. Like if they say that they are not hiring you because of something that's on your credit report, they have to let you know, they have to give you a copy of the report and then you can actually go against and fight against them if you feel that's necessary. So you do have some rights in the situation, but, yes, it can happen.
WILLIS: But, you say you do have rights. But, boy, if you try to fight back, I don't know if you can actually get the job. That might -- would it make it harder?
ELAM: It probably would make it harder. But, you know, think about if you're working at a bank. If they want to see that you're not good with your own money, then they probably don't want you managing the money at the bank.
WILLIS: Good point.
OTTER: What's interesting, they can't deny you the job because of a previous bankruptcy, which is funny.
ELAM: Right. Right.
WILLIS: That makes no sense.
OTTER: Yes, exactly. It's crazy, but it's true.
WILLIS: All right. Guys, great job today. Really appreciate your help today.
Amanda Gengler, Jack Otter, Stephanie Elam, thank you so much.
Ali.
VELSHI: Thanks, Gerri.
It is down to two candidates. So who do you think or what do you think should be their issue number one? Cast your vote at cnnmoney.com. The results are coming up next. Those are your choices.
And then, martini and a movie anyone? The new costlier trend that's reeling in consumers in spite of a tough economy. That's next on ISSUE NUMBER ONE right here on CNN.
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WILLIS: Welcome back to ISSUE NUMBER ONE. Which issue should McCain and Obama make their top priority? That's today's Quick Vote question. For the results, we're checking back in with Poppy Harlow.
Hi, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi, Gerri.
Well, actually, more than 26,000 people voted. Sixty percent of those who voted said it is gas prices. The presumptive nominees need to focus on helping Americans at the pump. Twenty-two percent said health care is the primary concern. Twelve percent said the credit crisis. Only 7 percent said foreclosures is what the nominees should focus on.
Gerri.
WILLIS: Well, it's gas prices getting to everybody.
Ali.
VELSHI: All right, Gerri, first there was the drive-in movie, then the 3-D, then the IMAX. Now the movie theater buzz word is luxury. Believe it or not even as the economy softens. CNN business correspondent Stephanie Elam explains.
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ELAM, (voice over): Forget dinner and a movie and start thinking dinner at the movies. But not just popcorn and soda. How about grilled skirt steak and a glass of wine?
CHARLEY RALSTON, OPERATIONS SUPERVISOR, : We want to give our patrons a reason to come to the theater more than ever before.
ELAM: It's not just the food going upscale. The reclining seats are more plush. The screens are wider and, in some cases, the movie is digital. Then there's the service.
RALSTON: Deluxe level service is a step up. You have your own cashier. You're escorted to the auditorium. But before you go in to the auditorium, where your movie's playing, there's a special waiting area for you in a living room type atmosphere.
ELAM: We all know what happens if you get to the movie theater way too late. But at these luxury theaters, you can choose any seat you want. You can pick it online. You can do it when you get to the theater. You can even order food from right in your seat.
But why now? The economy is slowing and theater attendance has been flat for several years.
PATRICK CORCORAN, DIRECTOR OF MEDIA & RESEARCH: What has happened traditionally in the last 40 years, there have been seven recession years. And in five of them, movie theater attendance and box office went up. People still need entertainment and they need to get out of the house and the theater is the least expensive form of out-of-home entertainment.
ELAM: Of course the perks do come at a price. Anywhere from $3 more a ticket up to $35 a pop. Food and drink are still extra. So would folks be willing to drop that kind of cash?
UNIDENTIFIED MALE: I believe that currently prices for movies are pretty expensive.
UNIDENTIFIED MALE: For certain movies I would pay $35 for a luxury box.
ELAM: But in the end, the film is still the feature. UNIDENTIFIED FEMALE: If it's a movie that makes a difference, like if it has a lot of special effects and it's something I don't want to wait for, I'll come and see it in the theater.
(END VIDEOTAPE)
ELAM: All right. Now, as we mentioned, movie theater attendance traditionally goes up during tough economic times. And this may be because people, you know, they're trying to economize. They cancel those vacations. They hold off on purchasing those big-ticket items. But they still need that escape from reality every now and then.
VELSHI: But that tradition of movie theater attendance going up during past economic times, the tough economic times, doesn't take into account, I think, the last two or three years of all of these big TVs and, you know, hi-fi systems being put into people's homes. I mean, at this point, I'd rather watch something at home except that I can't because it's new and it's out in theaters and I have to go there. So I wonder if that trend continues.
ELAM: You know, and that's one of the thing we looked into. And that's actually true. But when it comes down to it, there's a lot to be said for people who like that whole feeling of going to the theater. That still stands. And if you take a look at the admission costs for tickets, according to the National Association of Theater Owners, the average ticket price in the U.S. was $6.88 last year. Definitely not in Manhattan. That's not what we pay.
VELSHI: People (INAUDIBLE) the average ticket price is that. I mean seriously.
ELAM: Seriously. But in 1977, the price was actually $2.23. Adjusted for inflation, that would work out to $7.63. So, in fact, a night out at the movies is indeed cheaper than it was two decades ago.
VELSHI: I paid $11 on the weekend. So somebody's paying $2 for their movies if there's an average of $6 going on.
WILLIS: I would not want to have anybody next to me eating popcorn.
ELAM: Yes, seriously. And maybe it's more than that. Maybe it's salmon or something else and they're chomping away.
VELSHI: All right. Well the economy is issue number one and clearly we're committed to covering it for you. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 p.m. Eastern right here on CNN.
WILLIS: Time now to get you up to speed on other stories making headlines. CNN "NEWSROOM" with Don Lemon and Brianna Keilar starts right now.
