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Issue Number One
Corn Crops Damaged in Flooded Midwest; Wind Energy may Save Consumers Money; McCain Speaks on Energy; Midwest Floods & the Impact on Ethanol; Same-Sex Marriages now Performed in California
Aired June 17, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GERRI WILLIS, CO-HOST: Historic flooding in the Midwest takes a toll on farmers, and it could hit your wallet. Why you may soon pay more for everything, from corn, to milk, to cereal.
We're going to show you the technology some say will lower your energy bill forever.
And save money today. We have five ways to fly cheap.
Issue No. 1 one is your house, your job, your savings, your debt. ISSUE #1 starts right now.
Hello, and welcome to ISSUE #1. I'm Gerri Willis. Ali Velshi is on assignment.
From ISSUE #1 headquarters to the CNNMoney.com newsroom, we are all over the issue you say is most important, and that is the economy. And we start with something you haven't heard in a long time, good news.
Yes, that's right, good news about gas prices. They actually dropped two-tenths of a cent overnight. AAA says the national average is just over $4 a gallon.
And on the housing front, the news isn't so good. Builders are not using their hammers as much as they have in the past. Housing construction fell 3.3 percent in May.
And today is going to be a very busy day in California for same- sex newlyweds. The law banning guy marriage officially ended late yesterday, just after most county offices closed. So, today, same-sex couples are lining up for marriage licenses and to exchange vows.
The president is back in Washington after a weeklong farewell European tour and was quickly briefed this morning on the status of the floods in the Midwest.
CNN's Brianna Keilar is live right now at the White House with more.
Hi there, Brianna.
BRIANNA KEILAR, CNN CORRESPONDENT: Hi there, Gerri.
Yes, the president was briefed by Homeland Security Secretary Michael Chernoff, along with other administration officials. And many areas of the Bush administration represented here. Vice President Cheney was there, the Housing and Urban Development secretary was there, Defense Secretary Gates was there, Army Corps of Engineers, obviously to talk about some of the concerns of levees.
And the president obviously trying to assure people who have lost their homes, who have lost their businesses, that the federal government is here to help. He talked about recovery, and of course that will come with a massive price tag. He said that he is going to deploy his budget director, Jim Nussle, to head up to the Capitol Hill to discuss that with members of Congress.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've got what we call a Disaster Relief Fund. There's enough money in that fund to take care of this disaster. But what we're concerned about is future disasters this year.
And therefore, we're going to work with the Congress. Jim Nussle's going to go up to work with Congress to get enough money in the upcoming supplemental to make sure that fund has got enough money to deal with a potential disaster, another disaster this year.
(END VIDEO CLIP)
KEILAR: President Bush said that the federal government is constantly in contact with state and local officials there on the ground in the Midwest. And he said in addition to coming up with a recovery plan, they are still anticipating exactly where the floodwaters will continue to go in the coming days -- Gerri.
WILLIS: Brianna, lots of questions, obviously. But one big question that we've heard from so many reporters in the field, folks didn't have insurance coverage, they don't have flood insurance. Is there going to be any relief in sight? Did the president mention it today?
KEILAR: He sure did. And yes, I was in Cedar Rapids, Iowa, on Friday, and everyone who I spoke with said, "No, we don't have flood insurance." You didn't even have to ask the question after a little while, Gerri.
Well, President Bush highlighted a program that FEMA is already implementing. He said that Homeland Security Secretary Michael Chernoff, who was in Iowa last week, is spearheading a housing task force program. And already, according to FEMA, they have deployed some people to head up these task forces to coordinate with state and local officials and get these state-level task forces going so that they can deal with the problem.
WILLIS: Lots of questions, and hopefully answers coming soon. Brianna, thank you for that.
Cleaning your home when a flood is coming is tough. You usually have very little time to get out, which means very little time to take those many precious possessions with you. But coming home after the flood, well, that can be devastating.
CNN's Ed Lavandera is live right now in Cedar Rapids, Iowa.
Hi there, Ed.
ED LAVANDERA, CNN CORRESPONDENT: Hi, Gerri.
Well, you know, we're in a neighborhood just south of downtown Cedar Rapids, Iowa, that has just been opened up to residents this morning, so we're getting the first glimpse of people returning to their homes and getting a sense, their first chance to really assess the damage.
We're outside the home of Sharon Ernberger. She joins us now, along with her father, who is 92 years old, by the way, and looking very good.
But this is your first time back since all of this happened. How are you holding up? And what's it like in there?
SHARON ERNBERGER, HOMEOWNER: I have a lot of support, so it's OK. We'll do it.
I have a lot of help that I never expected. And I really want everybody to know in the country that we really are a united country, because these people are helping me and some of them don't even know me. They're just here and helping me, and I really appreciate it. There's a lot of work to be done here, and I am going to be helping those people also.
LAVANDERA: Clearly, an emotional mortgage. You've lived in this house 39 years?
ERNBERGER: Yes.
LAVANDERA: What's it like to stand here in your front yard and see all of this here?
ERNBERGER: It's really sad. It's a beautiful old house with big, thick oak woodwork and hard oak floors. You just can't buy houses like these houses they're building. And it's so sad that the floors will probably be all ruined. But we'll -- it's only a structure.
LAVANDERA: And you were telling me earlier that you surprised that the water actually got...
ERNBERGER: Yes, very surprised that it got this high, but it surprised everybody. Nobody knew it was going to get this high.
LAVANDERA: And as we talk here, we're showing the picture. You can see the water line along the house. Got about halfway up the front door there.
So your basement is filled with water -- or was filled with water. ERNBERGER: Filled with water, and two and a half to three feet on the first floor, which essentially, except for high stuff, it just about, you know, wrecked sofas, computers, china closets. I mean, it's sitting in water -- refrigerators. I have a refrigerator in the basement that's floating.
LAVANDERA: Floating right now?
ERNBERGER: Yes. So...
LAVANDERA: Do you think you'll be able to salvage at least, you know, the personal mementos that clearly mean so much to you?
ERNBERGER: Fortunately, that's about all I took with me is photos, photos, photos. Photos and important things, yes. I didn't have many clothes or anything, but I filled the back end of my Jeep of all these things that everybody says you'll never be able to replace if it goes. So I got those.
LAVANDERA: Everyone around here talks about that flood in 1993, which didn't even come close to your house.
ERNBERGER: No, it did not even come close. I had no water at all. And I anticipated possibly the basement filling.
I did think that could be a possibility. But -- and I put stuff up in there, but not high enough, because it went way higher than anybody expected. And I don't know why, I don't know if it was the trussle (ph) plug in the water, that it spread it out all over. I don't know why it went so high, but it really got all of us.
LAVANDERA: And do you plan on rebuilding? Staying here? Cleaning up?
ERNBERGER: At this point, yes. I'd like to stay here. But I don't know. Somebody has to come in and tell me what it's going to cost to do what it has to be done. I don't know that. I don't know what it's going to cost.
LAVANDERA: And we've talked to so many people who don't have flood insurance.
ERNBERGER: Me. I don't have flood insurance. No, I don't.
All the possessions practically are gone. I mean, my clothes and that I can wash and stuff, but most of the furniture was wood, and it's pretty much trashed.
LAVANDERA: Have you talked to your neighbors?
ERNBERGER: I've been in close contact with my right next-door neighbor. And I don't see that she's there yet.
She was going to try to get here by noon. She didn't want to go in until her son was here. And I understand that, because it's very emotional. LAVANDERA: And we talked to people all over the city. There's a great deal of anxiousness, people who are still waiting to get back. What do you tell those people who haven't been able to get back yet?
ERNBERGER: I really feel for them, because it's -- you need to see. And, you know, even if somebody just walks you through and makes you get out again, you need to see because you have no idea.
I needed to see, and that's what I thought I was doing today, seeing. And then I found out everybody could come in and everybody could do whatever. So that's why I wasn't really expecting to be able to do this today.
But I got a lot of help. So it's a good thing. It's not raining. Everything can sit out here. We can go through what's got to go and what might be salvageable.
LAVANDERA: Well, Sharon Ernberger, I really appreciate you sharing those thoughts with us.
ERNBERGER: Thank you.
LAVANDERA: We wish you the best of luck.
ERNBERGER: Thank you. We'll do it.
LAVANDERA: And so, as we've seen these areas open up, you know, we've seen more and more people, Gerri, kind of start coming back. And there's been a lot of frustration here over the last couple of days, but officials around here have been saying that, you know, the damage in a lot of these homes is a lot worse than what they expected.
WILLIS: Ed, you know, what a heartbreaking story from that woman. We see that kind of thing all the time with the flooding. People don't have any insurance coverage. You know, it's possible that in addition to not having flood coverage, they may not have household coverage at all, because she's been in her house, what did you say, 36, 39 years?
LAVANDERA: Right. Right. Right.
WILLIS: She may have absolutely nothing.
LAVANDERA: Right. You know, you talk to a lot of people around here and they really get the sense that really what they're focussed on doing, or the realization they're coming to, is that a lot of the work that they're going to have to do to repair all of this and get back to normal is going to come out of their pocket, is going to have to be something that they're going to have to do on their own. You don't get the sense from a lot of people that they're counting on a lot of help coming their way to get through a lot of this.
WILLIS: Heartbreaking, Ed. Send along our best thoughts to Sharon. That is just a tough story. Thank you for bringing it.
And that brings us to today's "Quick Vote." Poppy Harlow is from Money.com, and she's here with today's question.
Hi there, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi, Gerri.
You know, people picking up the pieces, what we just heard from Sharon, it's a story across Iowa. Homes destroyed, cities practically abandoned. Millions of acres of farmland wiped out by all that flooding. The realities facing people across Iowa as these receding floodwaters show the true depths of the damage.
Here's our question today: Should the government offer financial assistance to Midwest flood victims?
Yes or no? What do you think? Tell us on CNNMoney.com. We'll bring you those results a little later -- Gerri.
WILLIS: And we'll look forward to getting those answers.
There is a link between the flooding in the Midwest and the price you pay for the food at the market. We're going to tell you all about it.
Plus, the technology some folks say can lower your energy bill for years to come.
And we're going to show you five ways to fly cheap when plane tickets are anything but cheap.
You're watching ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: OK. We're all worried about rising oil and gas prices and how they'll impact our daily lives. So let's check back in with Poppy Harlow from CNNMoney.com with today's "Energy Fix."
HARLOW: First, a bit of good news out there, folks. Oil and gas prices have backeded up just a bit. The bad news, those moves are small and probably temporary.
Oil is falling less than $1 right now. The nationwide average for gas, you heard it earlier. That fell less than a penny, just two- tenths of a cent, to be exact. Still, it's a move in the right direction after 10 straight days of higher pump prices.
Over the past three months, gas prices have increased at a rate of almost a penny a day. And yesterday, we told you how Saudi Arabia is planning to boost oil production by 200,000 barrels a day next month.
Today, though, Iran, reportedly is not very happy with that plan. Iran's representative to OPEC calls it "wrong move" and says an increase in production really needs to be approved by the OPEC oil ministers. Now, Iran is OPEC's number two producer behind Saudi Arabia. The Saudis are preparing for talks between the world's major oil producers and consumers. That's coming up next week.
Iran says the recent surge in oil prices is not a production problem and that there is plenty of oil out there. The Saudis are reportedly concerned that as oil prices rise, consumers will find alternatives to oil, hurting their business in the long run.
We are following it from every angle on CNNMoney.com. Log on for the latest news -- Gerri.
WILLIS: We want to get back to the flooding in the Midwest. Some are saying 20 percent of the corn crop could be lost. And if that's true, you'll feel the impact of that on your wallet soon.
Chad Hart is an agricultural economist with Iowa State University in Ames, Iowa.
Chad, welcome. Good to see you.
CHAD HART, AGRICULTURAL ECONOMIST, IOWA STATE UNIV.: It's a pleasure to be here.
WILLIS: All right. So let's get down to brass tacks here. You know, what -- what is the extent of the damage likely to be for corn farmers?
HART: Well, looking in terms of Iowa, we're looking at about 10 percent of the acreage here in Iowa for corn that's been hit by flooding or delayed in planting, about 20 percent for soybeans.
WILLIS: All right. So obviously important. But what is going to be the price tag on this, particularly for farmers? Let's start there. How much do they typically produce? How much will they lose this year?
HART: Well, like I say, we're looking at about 10 percent acreage decline there for corn right now. And that's taking about 150 to 200 million bushels out of Iowa corn production. So it's a sizable hit.
WILLIS: Sizable hit. But you say Iowa farmers are already reeling.
HART: Well, they are. I mean, the idea is that we were already behind the eight ball in terms of getting this crop into the ground, we were delayed in planting, we were delayed in emergence of the crop. And then finally, flooding hit on top of that.
WILLIS: Why delayed? Why was there a slowdown when it came to getting the crops in the field?
HART: In this case, it was the rains before the flooding. We've had tremendous amounts of moisture coming over basically since March. And so we've had continual rains keeping farmers out of the fields. WILLIS: Well, you know, this just isn't just a disaster for corn farmers, obviously. Half of corn is used for animal feed. So, ultimately, this is going to impact me and everybody else at the grocery store.
What is that impact likely to be?
HART: Well, we've already seen some of it. Just within the month of June, we've seen corn prices rise from around $6.20 a bushel up to around $7.45. So we've seen already a dollar's worth of increase in our corn price. And that feeds directly into livestock feed prices. And eventually down the line, we're going too see lower meat production, and that's going to result in higher meat prices longer term.
WILLIS: All right. But when you say longer term, what do you mean? Am I going to be still paying for this at the end of this year, the beginning of next year? How long are we going to be suffering at the grocery store?
HART: It takes some time. Probably at least the next six to nine months, we'll be seeing the repercussions of these higher prices going through the meat sector.
WILLIS: Wow. That's impressive. I guess it's a long lead time.
Now, let's compare this event with some previous events that the farmers have had to deal with, starting with the flood in '93. How does it stack up?
HART: Well, it stacks up, you know, in relative magnitude for Ag, it could be just as worse as 1993 was. Also looking back to the droughts of '83 and '88, those were sizable production losses there. But we are possibly looking at those sorts of losses from the flooding we've had here in 2008.
WILLIS: How resilient are Iowa farmers? I mean, you know, are they able to recover from this? And, you know, individuals would expect the federal government to come in with FEMA money at some point and help them out. Will they also help the farmers?
HART: Well, what you'll see from the farmers, they're evaluating their options now. Can they get back in there and replant the corn or soybeans? Possibly go to another cover crop? Also, most Iowa farmers participate in the crop insurance program. So they do have some sort of insurance support behind them right now.
WILLIS: Well, that's good news. And very interesting information, as well.
Chad Hart, thanks for your help today.
HART: Thank you very much.
WILLIS: Coming up, saving on your energy bill. Some say the answer really is blowing in the wind. Could it be the answer for you? And why you soon could be paying more for your favorite cereal. How much more? That's next.
You're watching ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: With the price of a gallon of milk at the grocery store higher than a gallon of gas in some cities, well, shoppers might assume everyone all the way down to the farmer is charging more. They would be wrong.
Kathleen Koch has that story.
(BEGIN VIDEOTAPE)
KATHLEEN KOCH, CNN CORRESPONDENT (voice-over): Ty Long has been working his family's 170-acre Pennsylvania dairy farm since he was a boy. He runs it now and says everything this year is costing a lot more, especially diesel fuel. He's already spent $2,000 more this year than last.
And animal feed?
TY LONG, DAIRY FARMER: I've already paid out $9,500 more, and that's only the first three months.
KOCH: Ty's mother Eleanor is worried.
ELEANOR LONG, DAIRY FARMER: We used to always say that when we had anything to talk about, it was talked in the barn while we were milking.
KOCH: These days, the Longs' fourth generation farmers talk a lot about making ends meet, but not about raising prices, because they can't. Since the Depression, the wholesale price of milk has been regulated by the federal government. The idea was to keep the price of such a vital commodity affordable for consumers.
(on camera): And you can't just charge more for the milk?
E. LONG: No.
KOCH: You just can't recoup it.
E. LONG: No. You can't pass it on.
KOCH: So how much are dairy farmers losing? Here in Pennsylvania, the fifth largest dairy-producing state, the Farm Bureau says dairy farmers in 2006 lost 33 to 41 cents a gallon.
(voice-over): Then the problem was a low selling price. Now it's crippling production costs. A group that lobbies for dairy farmers says processors are reaping most of the profits and should pay farmers more. KATHY OZER, EXEC. DIR., NATIONAL FAMILY FARM COALITION: So, the processors themselves, the purchasers of milk in this case, should be paying a fair price that reflects a farmer's cost of production.
KOCH: But processors argue they don't set the price paid to farmers.
CONNIE TIPTON, PRESIDENT & CEO, INTERNATIONAL DAIRY FOODS ASSN.: It's not a perfect system, everybody's got these higher costs. Our plants are all squeezed on their costs this year just as the farmers are.
KOCH: That squeeze is partly why the number of dairy farms nationwide has dropped from more than 131,000 in 1992 to just over 59,000 today.
SEN. BOB CASEY (D), PENNSYLVANIA: In Pennsylvania, we have at least 250, and by some estimates as much as 350, dairy farms going out of existence every year.
KOCH: Senator Casey pushed for a subsidy in the farm bill to help dairy farmers cover the higher cost of feed. Another provision would set up a commission to find a fairer way to price milk.
Ty Long hopes that happens soon.
T. LONG: I like being out, I like the animals. But, you k now, the struggles that come along sometimes, you know, it makes you think.
KOCH: Kathleen Koch, CNN, Hershey, Pennsylvania.
(END VIDEOTAPE)
WILLIS: Tough times for troubled farmers. It's another sign of the troubled economy, though, that parents and kids may find hard to swallow.
Cereal prices are going up again. But you may not see it reflected in the sticker price on your favorite brands. Kellogg is shrinking the size of the cereal box by 2.4 ounces, so it's sort of an indirect way of raising prices. General Mills reduced the size of its boxes last year. Kellogg says it's to cut back to offset the soaring costs of grains and oil.
Could wind energy be the answer to lowering your high energy bills? We'll take a look.
And why the flooding in the Midwest could actually cause your gas prices to go even higher.
ISSUE #1, the only program on television to focus solely on your economy, rolls on next.
(COMMERCIAL BREAK)
WILLIS: Chances are you opened the mail in the past month and couldn't believe your energy bill. They're going up, fast. So many people are looking for ways to cut back to bring those bills down to a manageable level. And some say the answer is wind energy.
CNN's Kate Bolduan explains.
(BEGIN VIDEOTAPE)
PAUL ABEY, USES WIND ENERGY: We have to keep the crabs cooled off until the bar comes and picks them up.
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Paul Abey, a third-generation Maryland crabber, is an accidental environmentalist.
ABEY: It seems to be something that might be feasible for us, could help us some in our electric bill. And we just decided to try it. And it seems to be working out.
BOLDUAN: What is working out? Last year, because of ever-rising energy costs, Abey installed a 47-foot wind turbine on his property.
Wind energy advocates estimate giant wind farms like this one will generate just over 1 percent of the total U.S. electricity supply by the end of the year. Advocates also say more and more consumers like Abey are taking matters into their own hands, harnessing wind energy in their own back yards.
ANDY KRUSE, SOUTHWEST WIND POWER: We know that there is not a single silver bullet out there that's going to solve all the problems of tomorrow. So we're all looking to the resources that we have around us.
BOLDUAN: But skeptics say the small amount of energy generated by residential turbines isn't worth the big investment.
LISA LINOWES, INDUSTRIAL WIND ACTION GROUP: It could take 10, 15, 20 years for you to get payback on those units. You may want to think about other ways. For instance, insulating your home, new windows.
BOLDUAN (on camera): Well, Paul Abey says his initial investment was $17,000. And Maryland gives homeowners a $3,000 grant for these wind systems. Abey says his turbine cut his electric bill by a third. Now, add this all up, and if energy prices continue to rise, Abey thinks he'll recoup his investment in eight years.
(voice-over): No matter the cost, this fisherman, whose livelihood often depends on coastal winds, says he's content catching the swift Maryland breeze.
ABEY: I've cursed it a lot of times in my life, but now maybe I'll get something back out of it.
BOLDUAN: Kate Bolduan, CNN, Washington.
(END VIDEOTAPE)
WILLIS: Next, why the Midwest floods could translate into more pain at the pump for you.
But first, let's get you up to speed on the latest headlines. Don Lemon is in the CNN "Newsroom."
DON LEMON, CNN ANCHOR: And, Gerri, thank you very much.
We start with some developing news. This just in to the "CNN NEWSROOM." Check out these live pictures. It is a small plane that landed on Interstate 95. It's in Florida near Orman Beach. You can see the plane landed right there in the median of these two highways. But just as you can see, traffic is backed up there. It had to make an energy landing on that strip right there on the highway. And you can only imagine what it's doing to traffic.
Right now we believe no one is hurt. That's the initial reports in all of this. Again, happening at Ormond Beach. Traffic backed up. If it warrants developments, we will have it for you at the top of the hour right here in the "CNN NEWSROOM."
Let's talk about the big story that we've been following here, it seems like for weeks. The mighty Mississippi and the big danger that's now flowing downstream. The river is surging higher as it heads south. Tense days lie ahead in Iowa, Illinois, and in Missouri as the Mississippi climbs to its crest. The threat is dire and it's also widespread. The federal government says the river could wash over 27 levees. Armies of volunteers are stacking millions of sandbags to hold back the waters. Hundreds of homes are at risk, and not to mention the people there.
The Midwest floods commanding the attention of President Bush as well. This morning, he received a White House briefing on the worsening conditions and had this to say afterwards.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We understand people are upset when they lose their home. A person's home is their most valued possession. And we want to work with state and local folks to have a clear strategy. To help people get back into a place where they can live.
(END VIDEO CLIP)
LEMON: And President Bush plans to tour the flood zone on Thursday.
OK. Let's talk now about the wedding rush. In California it is on. Hundreds of guy and lesbian couples flocking to courthouses to legally wed. The state supreme court cleared the way for same sex marriages last month. They began last night, those marriages did. The first couple to get married, Dell Martin (ph) and Phylis Lyon (ph). They've been together for 55 years. California is the second state to allow same sex marriage. Massachusetts the first. But unlike Massachusetts, California does not require state residency.
We're also going to talk about this. Taliban battling back in Afghanistan. What's next for America's mission there. Ahead in the CNN "Newsroom," we'll talk with the general who has just finished up his command there and met with President Bush just this morning.
I'm back at the top of the hour. Now let's throw it back to Gerri in New York.
Gerri, take it away.
WILLIS: Don, thank you for that.
It's a long presidential campaign and somewhere along the way the candidates are bound to change up their policies just a little bit. And that is exactly what Senator John McCain is doing today with respect to energy. CNN's Paul Steinhauser, part of the best political team in television, is in Washington with more.
Paul, give us the details.
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, he's going -- John McCain is going to Houston, Texas, today, oil country, and he's going to talk about reversing the federal ban on offshore drilling. John McCain was against that ban. He was in favor of that ban for a long time, but now he says he's changing his mind and he wants to loosen that ban to allow some states to do some offshore drilling.
Why? To improve oil production in this country. With gas prices soaring, John McCain says the time is now. He gave us a little sneak peek yesterday and here's what he had to say.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRES. NOMINEE: I'll call for lifting the federal moratorium for states that choose to permit exploration. I think that this -- and perhaps providing additional incentives for states to permit exploration off their coasts would be very helpful in the short-term in resolving our energy crisis.
(END VIDEO CLIP)
STEINHAUSER: Part of this plan also, Gerri, calls for a new push for alternative fuels. And that's something John McCain is also near and dear to, environmental policies. Part of his plan, pushing for these alternative fuels. Also he's out with a new ad today where he saying in the ad, he fought the Bush administration when it came to global warming.
So he realizes he's going to get a little bit of a knock here from environmental groups calling for the loosening of the ban on offshore drilling, but I think he's willing to take that with gas prices soaring and people paying big money at the pumps.
WILLIS: Yes, big money at the pumps, Paul. But, you know, I'm wondering what Obama is saying about this very issue. Seeing here that McCain has flip-flopped, changed his mind, wiggle waggle. What does Obama say? STEINHAUSER: This is an issue, like many others, where these two candidates definitely don't see eye to eye. Barack Obama, he's in favor of keeping the moratorium on offshore drilling. And his campaign, today, put out a statement saying that this plan by John McCain would only benefit big oil -- Gerri.
WILLIS: Paul, thank you for that.
The Midwest floods are hitting hard in many areas, but the corn crop is getting slammed. Some reports indicate up to 20 percent of the corn crop destroyed. And that could have a big impact on the quickly growing ethanol business in this country. Jennifer Westhoven of "Morning Express" on Headline News is here with more.
Hey, Jen, good to see you.
JENNIFER WESTHOVEN, CNN CORRESPONDENT: Hey, thanks, Gerri.
You know, we've got these millions of acres possibly underwater here, or parts of it, just to soggy. So, so much of the corn crop has been destroyed. The estimates are about all of these acres of terrible news for the ethanol makers. The price of their main ingredient now surging to record highs. We're talking about corn futures. They jumped to more than $1 a bushel in the past two weeks. More than $7.50 yesterday. It went to a record nearly $8 a bushel. So that could force many, if not all, small and medium-sized ethanol producers to close in coming months. That is the scary forecast from a Citigroup analyst.
Now if they do close, even temporarily, it's really a big blow. That ethanol boom meant many new jobs and fresh hope in some very depressed towns in the Midwest. There are right now about 150 biorefineries and 75 more still being built. So this has really been the one growth spot that could be in jeopardy because of these higher corn prices.
And, you know, beyond the Midwest, this really affects everybody who drives because if we've got less bio-fuel being blended into the gasoline, more gasoline demand. There's one estimate by Merrill Lynch that this could put 50 -- if you took all of the ethanol out, it could be 50 cents for every gallon of gas.
WILLIS: Oh, my goodness. That's amazing.
WESTHOVEN: Yes. Nobody thinks it will be all the ethanol.
WILLIS: Well and hopefully all these dire projections won't come true.
But, you know, you do have this choice of food or fuel. What do you have to say about that, Jen?
WESTHOVEN: Well, yes. So is this going to affect us at the grocery store? Because I think that's how really for so many Americans that's how we'll experience the flood if you're not there directly. You'll be seeing it at the grocery store or at the restaurant. Will this take the edge off the inflation that we're already seeing?
So one of the arguments is that, yes, it might do that. But let me tell you, Gerri, that is a huge and bitter fight between the ethanol industry. Because they say, oh, no, this doesn't affect food prices. And the food industry says, oh, it affects them a lot.
But, you know, we know, remember, we had that report where the U.N. was asking the United States, saying please stop putting all this food into fuel. We could use it to feed people, who could end up really, in the next few years, starving.
WILLIS: You know, I feel a battle of the lobbyists coming on.
Jennifer Westhoven, thanks so much for that report.
Overall satisfaction with the airline industry is at a three-year low. But here's the headline, it's not because of high fares and additional amenity charges. A new J.D. Power and Associates study points to deteriorating levels of customer service by airline staff as a reason for the low grade.
Now let's break it down. Traditional airlines scoring above average on the satisfaction scale includes Alaska, Continental, and Delta Airlines, as well as Air Canada. Only one low-cost carrier earned above average marks, that would be JetBlue.
Now we should note, they're also the highest rated airline overall and by a long shot. The study looked at customer satisfaction based on performance in seven areas -- cost and fees, flight crew, in- flight services, aircraft, boarding/deplaning/baggage, check-in and reservations. The whole kettle of fish. Satisfaction with airline staff declined dramatically and is the leading contributor to the overall decline in customer satisfaction with airlines in 2008. The decrease in satisfaction with airline staff is more than twice as large as the decline in satisfaction with ticket prices.
Coming up, new steps to ease the mortgage meltdown for hundreds of thousands of families going through foreclosure.
Plus, same sex marriage takes a big step in California. How it could impact the economy. We're live in west Hollywood next.
CNN is all over issue number one, your economy.
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WILLIS: We have some important news for homeowners worried about foreclosure. Hope Now, a mortgage industry alliance group, has developed a new set of guidelines that are supposed to speed up the process of getting homeowners at risk help. Those new guidelines are being released today. One of the major principles that lenders and mortgage servicers have agreed to bide by is to issue a decision within 45 days about whether to modify a delinquent loan. Now these new rules may quiet critics who complain that Hope Now moved too slow to aid troubled homeowners. Same sex marriages are now legal in California. And that's not only turning the state into the promise land for guy couples, it's also giving a much needed boost to the state's ailing economy. Thelma Gutierrez has the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Every time I think about it, I cry.
UNIDENTIFIED FEMALE: It means I get to marry the woman I love.
UNIDENTIFIED FEMALE: We're going to be able to have a marriage license. We're going to be able to be a wedded couple.
UNIDENTIFIED FEMALE: There's some legitimacy now.
THELMA GUTIERREZ, CNN CORRESPONDENT (voice-over): An historic moment in California for Tracey and Tiffany (ph), who are about to walk down the aisle together. And for Robin and Diane (ph), who fought for decades for the right of same sex couples to marry.
ROBIN TYLER, ENGAGED: It's not just about each other, it's that it's opened this entire possibility for every gay kid that's growing up today that they can grow up and they can have marriage and they can have families and they can have acceptance. I mean it's just incredibly important to us.
GUTIERREZ: A monumental occasion for the couples and an unexpected boom for California's economy.
BRAD SEARS, THE WILLIAMS INSTITUTE UCLA SCHOOL OF LAW: I would say the total spending that will be generated by same sex weddings is well over $1 billion in the next three years.
GUTIERREZ: $1 billion and 2,100 new jobs over the next three years, according to a study at The Williams Institute at the UCLA School of Law. Wedding planner Marcia Vadal (ph) says it couldn't have come at a better time.
Are you seeing economic hard times? Are things rather soft for people in your industry right now?
MARCIA VADAL, WEDDING PLANNER: Actually, it is. We are definitely seeing a slowdown. And we're also seeing a forecast of weddings being postponed even out to 2010 and 11.
GUTIERREZ: Tiffany and Tracey are learning weddings are big business.
TRACEY SIMPSON, ENGAGED: You discover that, yes, you know, you want to have it at a place and you want to have someone officiating for you. And, oh, and we have to have it catered. Oh, and by the way, don't we want flowers?
GUTIERREZ: They're budget? About $40,000. SIMPSON: We're doing $40,000 just ourselves. And then you count probably 80 guests coming in from out of the state, staying for at least three nights in hotels, car rentals, eating out, tourist attractions.
TYLER: We don't want to be like two brides or two grooms.
GUTIERREZ: Baker Tom Rosa (ph) says his business has already tripled thanks to customers like Diane and Robin.
TYLER: I think price for most gays and lesbians will not be an object because it's something they never expected, never expected in all of their life. And so the California gold rush is on.
UNIDENTIFIED FEMALE: I know pronounce you spouses for life.
GUTIERREZ: Diane and Robin became the first same-sex couple to officially tie the knot in southern California. And now among the first to say they've help the state along the way.
(END VIDEOTAPE)
GUTIERREZ: Talk about the money that's generated for the state. Now each of the couples that you see here in line are paying $70 for that marriage license. And for an additional $25, they can have a civil service right behind this building in a cabana.
Joining me now is Tim Ky and Larry Riesenbach and their very handsome son, five-and-a-half-year-old Aaron (ph).
Aaron, let's start with you. What does this day mean to you?
AARON, SON OF GAY COUPLE GETTING MARRIED: I am happy that my dads can marry today in the state of California.
GUTIERREZ: Well spoken. And what does this mean to you? You've been together for 11 years. You've waited a long time for this day.
LARRY RIESENBACH, GETTING MARRIED: Yes, we're just -- we're thrilled. And, you know, we're very happy that we are California citizens. And, you know, honored to be here today. We came because it's a history-making day.
GUTIERREZ: And you say that you wanted to get married because of Aaron.
RIESENBACH: Yes, because of Aaron, because we are his parents. You know, Aaron deserves to have legally married parents like all children do.
GUTIERREZ: Now you bought rings about nine years ago, but these rings have a very special significance today.
TIM KY, GETTING MARRIED: Yes. When we first decided to get these rings, our plan was to wear these on our right hand. And on the day where we could legally marry, we would switch to our left hand. And obviously today is the perfect day to do this.
And to answer your question about what's so important? You know, prior to today, we have domestic partnership. And sometimes it's not very clear to some people what that means. But to be able to tell people and introduce Larry as my husband, it makes total sense to people. People know exactly what I mean when I say that.
GUTIERREZ: Congratulations to all three of you.
And again, couple hundred couples here waiting for the doors to open so that they can begin to get married. Back to you.
WILLIS: Thelma, thank you for that story.
Five ways to fly cheap in a time when it's not cheap to fly at all. Grab a pen and paper. We'll tell you about it.
Plus, we're going to open up the Help Desk. Answers to your e- mail questions. The address, issue1@cnn.com.
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WILLIS: It's time to get you answers. The Help Desk is here to find solutions to all your money questions. Let's get right down to it. Jennifer Westhoven is with "Morning Express" on Headline News, Hilary Kramer is a AOL money coach, and Steve Hargreaves is a writer for CNNMoney.com.
And the first e-mail is from Anna. She writes: "I just received my quarterly 403(b) statement and I lost tons of money. Should I leave my funds where they are and just wait out this downturn, or should I move them to a less-risky choice of funds? I am 52 and putting in the maximum allowable into this account."
Hilary, everybody feels this pain, right? And is the answer just to move your money out?
HILARY KRAMER, AOL MONEY COACH: The answer is not to move your money out because we don't want to chase performance. Chasing performance begets worse performance. The key is to leave it there because there will be a recovery. And any new money this woman might want to consider areas of growth. Like, for example, alternative energy, exchange traded funds, like the PBW, the power shares, Wilder Hill (ph), something like that where she can get a little more octane going forward.
WILLIS: I'm telling you, if you sell now, you're going to buy later at a higher price. It just makes no sense.
KRAMER: That's right. Peak to trough, we're still 10 percent off or more on the S&P. There's a lot of upside left.
WILLIS: All right, guys. Let's see here, Chuck's e-mail: "I am planning to travel in the fall to Europe, U.K. and Ireland. Because of the dropping dollar, should I change some currency now in order to get a favorable exchange rate rather than waiting and exchanging on location?"
Jennifer, this is a good question and I'd like the answer to this one.
WESTHOVEN: It is. Yes, and I love this question because I was just facing this when we were making some honeymoon plans no so long ago. So if you think that the dollar is going to drop, that's a bet that you're taking, then, sure, go right on ahead. You know, Chuck can go out there and get all the euros and the pounds that he wants for his trip. But, you know, he could also lose that way if the dollar gets stronger.
I think one of the best things to do is, you know, you can always use your -- most of the time your debit card has a pretty good deal. You want to check the fine print on that one. And the other thing you can do is you can call the hotels. There are a lot of hotels that will let you lock a the rate where the dollar stays the same, so he won't have to worry about that.
WILLIS: That's a great idea. Those debit cards, too, as long as you're with a major bank, obviously, right?
WESTHOVEN: Exactly. Yes.
WILLIS: OK. We have another question from Larry in Ohio. He asks: "Why are oil companies charging more for gasoline in the gas station's underground tanks when it's already been delivered and paid for by the station's owner? When the tank is filled, the owner pays the contracted amount due and sells the product for a given price. Why the increases on existing stocks of gasoline?"
This is such a technical question and I don't even know if it's true. Is it true, Steve?
STEVE HARGREAVES, WRITER, CNNMONEY.COM: Well, yes, that can happen. And there's a number of things that go into the price of gasoline. You know, what the person down the street is charging. But they're going to base their price off not only what they paid for to buy that gas, but what they think they have to pay to replace that gas. So there'll be a difference there.
But the important thing to remember here is, you know, these higher oil and gas prices, it's not really the service station owners that are making a lot of money off of this, it's the people that produce oil and gas.
WILLIS: Exactly. Yes, I think people want to blame the gas station owner. They're not the folks to blame.
Michael asks, from California: "I cannot feed my children and have to send them to my mother for six months while I take an extra job to avoid eviction. Can I still take them as deduction even though someone else will be responsible for more than half of their support?"
This is really a sad situation. What do you say, Hilary? KRAMER: The IRS allows only one person to take a deduction. So in this case, as long as the mother isn't taking the deduction, this person will be able to do that. But it also creates a bigger question which is, how severe and problematic the eviction crisis, the housing crisis in this country and foreclosures are coming to be. And so, in a way, the IRS and being taxed is the least of the problems here that one should be thinking about.
WILLIS: All right. And there's a long list of a very sad case.
I want to thank the panel for joining us today. Hillary, Steve, Jennifer, thanks so much for being here.
Coming up, airfares keep going up, but there are still deals out there. We'll show you how to find them next.
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WILLIS: Should the government offer financial assistance to Midwest flood victims? Now that was today's "Quick Vote" question. Eighty-one percent of you say, yes, the government should offer financial assistance to Midwest flood victims, 19 percent say, no.
It's harder than ever to find cheap airfare. Airlines are feeling the pinch from soaring oil costs and are raising ticket prices, adding fees as a result. In this tough economy, many people are looking for bargains. Earlier I spoke to Aaron Smith from CNNMoney.com.
(BEGIN VIDEOTAPE)
WILLIS: OK. Before we even talk about this, can you please tell me about your shirt? What's up with that?
AARON SMITH, CNNMONEY.COM: I'm going on vacation right after the show. So I just want to be ready.
WILLIS: Well, you look ready to go.
So let's get the benefit of some of your advice. What are the best days to fly?
SMITH: It's supposed to be Tuesday and Wednesday are actually the slowest days for business travelers. So what you want to do is the opposite of what the business traveler is going to do. They want to fly out on Monday morning. They want to fly out on Friday night. So if you're flying out in the middle of the week, there's going to be less demand and you're going to find a cheaper fare.
WILLIS: That's a really great idea. Now but you can also sort of apply this idea to the seasons that you travel in as well, right?
SMITH: Yes, you can.
WILLIS: How do you do that? SMITH: You would want to fly during the fall, specifically between Labor Day and Thanksgiving. You've got the post summer, pre- holiday thing and not that many people are flying at that time, so that means a better fare for you.
WILLIS: I've done that before. You do save money doing that, particularly to Europe.
Let's talk about time of day. Now do most folks travel after work, in the morning?
SMITH: Most of the business travelers fly in the morning. You have to think of it in terms of a Monday through Friday 9:00 to 5:00 kind of schedule. So you want to fly at a time that would be most inconvenient to someone who has to adhere to that schedule. That would be around lunchtime.
WILLIS: OK. Well, that's making a lot of sense.
All right. So I've gotten a lot of great ideas on when to fly, what time to do it. But you have something really strange you say about travel packages.
SMITH: Yes.
WILLIS: You like to buy those even if you're not going to use the hotel or the car?
SMITH: Yes. Well, if you buy the travel package, you might actually save money on a flight, even if you're not going to use the rental car or the hotel.
WILLIS: Wow, you mean it's less even if you include those two things?
SMITH: Sometimes. The airline are just trying to unload those packages and it's generally a last-minute flight kind of thing.
WILLIS: OK. Great ideas.
All right. So when I'm out there, I'm searching for the right flight. Tell me what else you do to get the very best deal? If there was one thing you could tell people today, this is what's going to get you the best fare, what would it be?
SMITH: You want to go against the flow. You want to do something like what I'm doing, going to Florida in June, which not everyone wants to do, so that's why I get a cheap flight. Another thing that you can do is go to a Colorado ski mountain during the summer. And there just isn't so much competition for the fare. So you're able to get a better deal.
WILLIS: Aaron, you're going to have me going to Alaska in the heart of winter. But, great ideas, great advice.
Hey, have a great vacation too, OK. SMITH: Thank you. I will.
WILLIS: Thank you.
(END VIDEOTAPE)
WILLIS: The economy is issue No. 1 and we here at CNN are committed to covering it for you. ISSUE #1 will be back here tomorrow, same time, 12:00 p.m. Eastern, right here on CNN.
The "CNN NEWSROOM" with Don Lemon and Kyra Phillips starts right now.
