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Ben Bernanke's Second Day of Testimony; Israeli Authorities Free a Group of Lebanese Prisoners; Scooters and Vespas Gain Popularity in the States; Retireed U.S. Troops Become Teachers

Aired July 16, 2008 - 10:00   ET

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


HEIDI COLLINS, CNN ANCHOR: Worried on Wall Street last hour. The DOW industrial average opened below 11,000 for the first time in two years. Here is a live look now at the big board. As you can see, we are to the positive at least, about a half hour into the trading day, above the 11,000 mark. We will watch that for you throughout the day right here.
And a view of the economy from one of its biggest policy makers. Federal Reserve chairman Ben Bernanke opens his second day of testimony on Capitol Hill. Yesterday he conceded the economy faces "numerous difficulties."

And the politics of money, some top democrats are calling for another stimulus package. President Bush says it is too early to gauge the success of the last round of tax rebates.

Inside the economy. The view of a man who's shaping it. Federal Reserve chairman Ben Bernanke facing more lawmakers' questions today. Will he offer the same sobering assessments as yesterday?

CNN's Kate Bolduan is joining us from Washington now.

Kate, what are we going to learn from the Fed chairman today?

KATE BOLDUAN, CNN CORRESPONDENT: It seems we're going to hear a little bit of the same, Heidi. It's day two of the Federal Reserve chair's annual state of the economy report to Congress. Bernanke offered a gloomy forecast yesterday before a Senate committee and he's expected to do the same today in front of the House Financial Services Committee. Bernanke says hard times due to the struggling housing finance market and record energy costs will likely continue through the end of the year.

And also expected to be a key topic today, inflation. And as you mentioned, following troubling news this time from the labor department, consumer prices made the biggest jump since 1991. We also expect the government's proposal to bolster the mortgage giants' Fannie Mae and Freddie Mac to take center stage in the morning's hearing. Here's a little bit of the heated discussion from yesterday.

(BEGIN VIDEO CLIP)

SEN. JIM BUNNING (R), KENTUCKY: Treasury secretary is now asking for a blank check to buy as much Fanny and Freddie debt or equity as he wants. The Fed purchased a Bear Stearns assets, was amateur socialism compared to this. and for this unprecedented intervention in our free markets, what assurances do we get that it will not happen again? Absolutely none.

(END VIDEO CLIP)

BOLDUAN: That was directed at Treasury Secretary Henry Paulson, but we're told to expect some similar fireworks and some tough questioning directed at the Fed chairman today. Now, many democrats have signed on to this plan to restore confidence in Fannie Mae and Freddie Mac, but while many republicans agree that some action is needed to stabilize these mortgage lenders, conservative members are concerned over the cost to taxpayers, they are now calling for hearings on the plan before moving ahead. And Heidi, that, of course, as we know will likely delay action on this.

COLLINS: Yes, is it likely to happen, though, Kate?

BOLDUAN: That is the big question. And we can expect there will definitely be a division as I'm told between the committee, between republicans and democrats today as they start talking about it. Letters are being kind of pushed around Congress right now, saying we need to take some time to look at this. Other people are saying, we don't have time. So we'll see.

COLLINS: Another division between republicans and democrats, you say?

BOLDUAN: Yes.

COLLINS: CNN's Kate Bolduan joining us from Washington this morning. Thanks you, Kate.

BOLDUAN: Thanks, Heidi.

TONY HARRIS, CNN ANCHOR: Talking nukes with Iran. A big shift in White House policy. Washington undersecretary of state William Burns to Switzerland this weekend to sit in on a previously-scheduled meeting between the European Union and Iran's chief nuclear negotiator. Officials say burns will listen in and reiterate the U.S. position that Iran must suspend its nuclear enrichment before talks can proceed.

On the warfront in Afghanistan now, NATO-led troop pulls out of a remote outpost where militants killed non-American soldiers this week. Live to CNN Pentagon correspondent Barbara Starr. And Barbara, good morning to you. Do we know why NATO troops are on the move?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Tony, officials very familiar with the situation on the ground there are confirming to CNN now that both NATO troops and Afghan soldiers have abandoned that outpost where nine U.S. troops were killed over the weekend in a very nasty attack with insurgents. The post basically became indefensible, if you will. There are patrols in the area, but no U.S. troops at that outpost now, and the nearby village where the attack was apparently launched from said now to be in the control of insurgents. The situation in Afghanistan is quite serious at the moment, especially in this remote eastern region. Yesterday we talked to a top U.S. commander in the region. He was very blunt about what is needed.

(BEGIN VIDEOTAPE)

STARR (voice-over): Since 2003, Iraq has been the main military arena, but CNN has learned that top military officials are considering recommending Afghanistan become as high a military priority. In an exclusive interview with CNN, the U.S. military operations chief in Afghanistan says he needs more troops now.

BRIG. GEN. MARK MILLEY, U.S. ARMY: Our estimate is that additional forces are needed during this fighting season.

STARR: An increase in the attacks against U.S. troops and the country's rampant lawlessness has the attention of the presidential candidates.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Senator Obama will tell you we can't win in Afghanistan without losing in Iraq. In fact, he has it exactly backwards. It is precisely the success of the surge in Iraq that shows us the way to succeed in Afghanistan.

STARR: Obama says Afghanistan must be the priority.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We're talking about controlled parts of Afghanistan. Al Qaeda has an expanding base in Pakistan that is probably no further from their old Afghan sanctuary than a train ride from Washington to Philadelphia.

STARR: Commanders say the threat is much deeper than just the increase in insurgents crossing from Pakistan. The Taliban once again have more money and better organization.

MILLEY: They are exhibiting a better level of training and leadership than they have in previous years.

STARR: The general also says he's fairly confident he knows which insurgent leader was behind the attack that killed nine U.S. troops on the weekend, and that local Afghans know more than they're telling.

MILLEY: There's no doubt in my mind that the local villagers had to know something was up. Exactly who and when and how many, et cetera, that kind of stuff is probably unknown.

(END VIDEOTAPE)

STARR: Now, here at the Pentagon top officials will tell you they have no official requests for anything. But on the front lines in Afghanistan, the commanders are making it very clear, Tony, they need more troops, they need more equipment, and they need it soon. General Milley's words were very clear - this fighting season is what he's looking at. And basically, that's between now and October when the winter snows start to fall in Afghanistan -- Tony.

HARRIS: OK. Barbara Starr at the Pentagon for us. Barbara, thank you.

COLLINS: An exchange between enemies. It's happening this morning along the Israeli-Lebanese border. Israel vowed two soldiers captured two years ago will come home. Today their coffins were delivered by Hezbollah through the Red Cross. The remains were positively identified a short time ago. Red Cross trucks also pulled into Lebanon with the bodies of several Lebanese and Palestinian fighters. No live prisoners have been exchanged. But Israel says it will hand over five imprisoned militants.

Looking for after African-American votes, John McCain speaks before the NAACP convention next hour. McCain plans to talk about education in his remarks to the civil rights organization. According to one poll, only four percent of blacks say they plan to vote for McCain. Aides say the speech is part of McCain's effort to reach across racial and ethnic lines.

HARRIS: And Barack Obama brings in foreign policy experts for a round table on national security today. He has been making a case for his position on Iraq. On CNN's "Larry King Live," he said the current Iraq strategy is hurting efforts in Afghanistan.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: The situation where the central front against terrorism should be taking place, in Afghanistan, the situation is deteriorated. And we had this brazen attack on a U.S. base where nine servicemen were killed, and we've got to recognize that perpetuating the strategy that we have in Iraq is costing us elsewhere.

(END VIDEO CLIP)

HARRIS: Obama also talked about the government's response to the turmoil that's surrounding mortgage giants Fannie Mae and Freddie Mac.

(BEGIN VIDEO CLIP)

OBAMA: I think some of the ideas that were offered with respect to Fannie Mae and Freddie Mac are good ones. I just want to make sure that we're not bailing out shareholders and CEOs but that we're focused on maintaining liquidity in the housing market.

(END VIDEO CLIP)

HARRIS: The Fed and the Treasury Department have proposed a financial lifeline for the companies. Here is a look at how the presidential race is shaping up. The latest CNN poll of polls shows Barack Obama leading John McCain 47 percent to 41 percent, 12 percent of respondents are undecided. The poll of polls is an average of five different surveys.

COLLINS: Let's get a check of the weather situation all across the country. Several things Rob Marciano is watching for us. Hey there, Rob. ROB MARCIANO, AMS METEOROLOGIST: Hey, Heidi. We are looking at Bertha, which is a storm that just doesn't want to go away. It's about 300 and change from Bermuda. And now it's slowed down, kind of drifting east, stretching out, turning into complicated wind patterns that are going to drip and bring it actually southeast. So, we'll continue to watch Bertha. But right now, it's spinning her wheels out there in the middle of the Atlantic. And there is your forecast track. Dipping down and then moving up towards the northeast and weakening eventually into the north Atlantic shipping lanes.

All right. This is our next item of concern that looks pretty impressive this morning, a good flare-up of thunderstorms overnight, a little bit of a twist in the cloud pattern here and the National Hurricane Center has taken an interest keenly. Recon aircraft is going to jump in there. The air force C-130s, hurricane hunter team is going to check it out and see if it's our next tropical depression of the season, might even be our next tropical storm. Chris will be the name there.

All right. This is a little closer to home but not nearly as organized. It will bring heavy rain to the western coast of Florida, and this has a chance of developing into something tropical, but it may very well run out of real estate as far as water is concerned. Plenty of real estate out here in the eastern Pacific with Elida, which has winds now of 85 miles an hour. It continues to barrel westward. So, not going to bother anybody, it looks like.

But this guy right here, that's our next tropical depression in the eastern Pacific. That could become the next tropical storm. And this one will likely take a path, well kind of parallels it to the western coastline of Mexico. So this one which is forecast, by the way, to turn into a hurricane might have more direct impact. If you got some plans in Puerto Vallarta, Acapulco, maybe even the Baja, the southern tip of the Baja there.

Monsoon rains across the desert southwest will be dry and seasonable out west. And thunderstorms will roll across parts of the upper Midwest. And Minneapolis has seen a few of them this morning. Got a live shot? There it is. Thanks, KARE. I know you KARE. There's mini. Heidi, want to chime in here?

COLLINS: Yes.

MARCIANO: I need some guidance here. What are we looking at?

COLLINS: Kind of dim, actually.

MARCIANO: Maybe a little iris issue there. Nonetheless, temps there will be in the upper 80s, lower 90s. We're getting into very typical some would say here in the weather department boring summer pattern.

HARRIS: You would never say such a thing.

MARCIANO: I would never say such a thing. I mean, look at this. Look at this pretty colors. How is that boring? A lot of red. You know, Tiger Woods would be proud there.

HARRIS: Sure.

MARCIANO: Should be in the upper 80s and lower 90s in many spots. July warmth, we'll try to keep these tropical things out to sea.

COLLINS: Please. Work on that, all right?

MARCIANO: Will do.

COLLINS: Thank you, Rob.

MARCIANO: See you, guys.

HARRIS: And talking nukes with Iran. Live to White House correspondent Elaine Quijano now. And Elaine, I understand you have some new information for us.

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Yes. Just out of the gag with Press Secretary Dana Perino here at the White House and the headline really President Bush approving this decision to send a top U.S. diplomat, undersecretary of state William Burns, to a meeting in Geneva, Switzerland, this weekend, a previously-scheduled meeting the White House says between Iran's top nuclear negotiator and the foreign policy chief of the European Union.

Now, this is coming at a time, of course, when the U.S. has been saying all along that it would not sit down for direct talks on nukes with Iran unless it's verifiably suspended its uranium enrichment program. Perino says that is still the case. But what this will be will be a chance for the Iranians to get the message that the U.S. is essentially serious about pursuing a diplomatic path and also to let them know that this is just a one-time deal, that Burns will be there to listen. He will present, again, the White House's position that Iran should suspend its uranium enrichment program.

They're insisting it is not a negotiation, but they see an opening here to try to get Iran to come around. Now, we are told on the timing of this, Perino says, that this really has to do with a package of economic incentives that was delivered by the Europeans back in May. There have been some mixed messages Perino says coming out of Iran. This will be an opportunity for a top U.S. official to hear for himself what the Iranian response to that incentives deal will be.

She also went on to say that there has been some indication, U.S. officials believe, that perhaps this is all sparked some sort of internal debate within Tehran and this might be a prime opportunity for the Iranians to act. So, again, the U.S. emphasizing that this is not a negotiation but, of course, officials are hoping to, in their words "clarify" the possibility of more sanctions and really get Iran to essentially pay attention.

HARRIS: There you go. All right. Elaine Quijano at the White House for us. Elaine, thank you. COLLINS: A major airline safety announcement 12 years after TWA flight 800 exploded off New York.

(COMMERCIAL BREAK)

HARRIS: How about this? CNN's Drew Griffin on the terror watch list and trying to figure out when his name might be removed?

(COMMERCIAL BREAK)

HARRIS: More turbulence for the airline industry. This morning we learn that Delta Airlines lost a billion dollars last quarter. Can you imagine? And in a sign of the troubled times, that essentially adds up to good news? Delta's operating income was much better than expected. It was special one-time charges that put all of the red ink on the bottom line there. American Airlines are slashing 200 pilots from its payroll. It's part of the carrier's plan to cut eight percent of its workforce. The plan includes incentives for senior pilots to leave voluntarily. American, like almost all U.S. Airlines, are struggling to survive amid soaring jet fuel costs.

COLLINS: And then there later this hour, federal officials are expected to announce new safety standards for airline fuel tanks. It comes almost 12 years after the explosion of TWA flight 800.

Our Deborah Feyerick is in New York now.

Deborah, what are the details on all this? I guess a lot of people wondering what they're going to cost.

DEBORAH FEYERCIK, CNN CORRESPONDENT: Well, absolutely. We'll tell you those two agencies that you mentioned, the Department of Transportation and National Transportation Safety Board coming together to announce this new rule today. It's likely going to affect those large passenger jets. Airlines are going to be required to install a device that basically pumps in nitrogen gas and neutralizes oxygen in the central fuel tank. And what this does is it lowers the risk that some kind of spark might ignite the fumes and trigger an explosion like TWA flight 800.

You might remember that. That plane sat on the tarmac for about two hours as an air conditioning unit heated up those vapors in that tank. When the plane took off, shortly thereafter, what happened is that a spark possibly from wiring caused that whole center tank to explode. Now this is going to affect about 3,000 jets used by U.S. Airlines. The airlines were arguing it was going to be too expensive to retrofit all these planes. The price tag four years ago was estimated years ago between $300 to $700 million. Now, this is not going to happen overnight even though they're announcing the rule, it could take roughly ten years before every plan is outfitted with this device.

When you think about that, this two decades after TWA flight 800 that these planes are going to be brought into compliance with what certainly at the time and even now is considered a potential threat. Heidi. COLLINS: Yes, it certainly scary to think about, especially when we talk about who's going to bear the cost of all of this. But when we talk safety, you know, it's tough to argue with it. We know you'll be following it, Deborah Feyerick, thanks so much. Live from New York this morning.

HARRIS: One bank failed this past week. Dozens more are at risk. Are you looking for someplace else to stash your cash? Gerri Willis has some alternatives.

(COMMERCIAL BREAK)

COLLINS: Let's go ahead and take a look at the big board now. Dow Jones industrial average is down about - it's 2.36, you can see there. Back down below the 11,000 mark. Oh, now we're up 3. It's kind of all over the map but not by huge margins there. We will continue to watch those numbers. As you know, yesterday the Dow closed down about 93 points or so. So, we're watching it for you.

HARRIS: You may be nervous about your bank or you're just looking for somewhere else to stash your cash. Personal Finance Editor Gerri Willis is here with some dos and don'ts on the banking alternatives front.

Gerri, good morning to you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey there, Tony.

HARRIS: Good to see you. And I've got to ask you, what's a good alternative to a traditional bank? I was thinking about the Bank of Silly Posture-pedic but I thought I will run that by way.

WILLIS: No. Don't. That's the worst.

HARRIS: That's the worst.

WILLIS: That's the worst. I know people are really worried but don't do that. Look, you might think about credit unions. Because like banks, they're nonprofit. And for you, that translates into lower fees, better rates of interest. And that's because the profits tend to go back to members in the form of lower rates of fees rather than going to stockholders. Credit unions also don't pay taxes. So there's a lower cost of doing business.

Let's look at the some of those rate comparisons. So you can see what I'm talking about. For example, average money market account for a credit union yielding 1.64 percent, 1.13 at a bank. You know, it doesn't sound like much, but over time it is. One-year CD, you can see that the bank pales in comparison to the credit union. Credit cards, look at the APRs on the is 13% percent compared to almost 12% at the Credit union.

Now, a trade group estimates that a credit union member saves about $126 per person by using a credit union over a bank. But keep in mind this is no perfect world. OK, Tony. Credit unions have membership fees and so far there have been six credit unions this year that have failed. Now, we talked about banks that have failed. Credit unions have also failed.

HARRIS: All right. I'm intrigued enough to ask the next question -- how would I go about joining a credit union?

WILLIS: Well, it's usually based on where you live, who you work for, what do you for a living, what religious community you belong to, so to find out what you might be eligible for, go to credit union creditunion.coop. Click on how to join a credit union. And you should know not all credit unions are federally insured but many are. What you're looking for is this symbol, NCUA, stands for the National Credit Union Association. It operates just like the FDIC. Your deposits are insured up to $100,000 on an individual account and $250,000 on retirement accounts. Keep in mind, though, you know what? Tony, there's been a lot of consolidation in this industry. There's about 8,300 credit unions right now. Way back in the '70s there were 24,000. So, just like the banking industry, it's consolidated.

HARRIS: That's right. Hey, Gerri, what are some don'ts here when you're thinking about credit unions?

WILLIS: Well, OK. Let's say you don't want to do a credit union. You're looking for other options out there maybe. Don't do the payday loans. A payday loan is basically a cash advance, and it's expensive. Fees could be $15 to $30 for every $100 you borrow. So imagine you take in your paycheck to have it cashed. You're ultimately paying an interest rate on that money of 390 percent to 780 percent. And if you don't pay that loan off in full by your next check, you're stuck paying the fee again. This is an expensive way to do banking is to do this kind of payday lending.

There's also been a lot of press recently about something called about peer to peer lending sites. The industry hasn't existed very long, or certainly long enough to prove its mettle but the bottom line here, what you need to know is the industry doesn't even have the regulation that banking does. These peer to peer lending sites, when it comes to look for a loan, the details of how much they need and why. People with extra cash then can loan to those folks, they just simply match people up. But there's not a lot of guarantees out there. And in an uncertain world, I'm looking for the guarantees. I don't know about you.

HARRIS: I like it. Gerri, we're going to run. We've got a little bit of breaking news. We'll see you "Issue number one," noon Eastern time.

WILLIS: OK. Thank you.

COLLINS: This just in to CNN now - a group of Lebanese prisoners were just freed by Israeli authorities and are crossing the border into Lebanon.

Anthony Mills is joining us now live from that Israeli-Lebanon border. Anthony, tell us what you know.

ANTHONY MILLS, CNN CORRESPONDENT: Heidi, I'm just down the road from where those prisoners crossed over. Within the last five or 10 minutes, the crowd here, the people geared here, that has fellow supporters here. A ripple of excitement is gone through them. There are militants lining the road behind me and military uniforms, helicopters, hovering close by. And really a sense that they may arrive here at any moment.

I understand that the prisoners are not supposed to come down here for some sort of an official reception. The Hezbollah supporters, a ripple of excitement has gone through them. Militants are ling the road, helicopters hovering close by. Really a sense that they may arrive here at any moment. I understand that the prisoners are supposed to come down here for some sort of an official reception. There are political officials on the other side of the road behind me on a stand. Just to put you in the mood of the kind of atmosphere here, above that stand, Heidi, a banner proclaims, joy in Lebanon and pain in Israel.

COLLINS: Wow. Anthony, I know you're a little bit further down the border from exactly where those prisoners are, but is there any indication at this point? We're talking about a group of them, as to how many there might be?

MILLS: Yes, Heidi. We understand that there are five prisoners. Among them, the most high-profile prisoner, () who had been imprisoned in Israel for over 20 years for a murder that he was convicted of over 20 years ago. So he's the most high-profile prisoner to be released. But in addition to him, there are also another four Lebanese prisoners. And so for the Hezbollah supporters gathered here around me and in the stands, they see this as further evidence of Hassan Nasrallah, the Hezbollah leader of his ability to deliver on his promises. He had promised after the 2006 summer war two years ago that he would see freed all Lebanese prisoners in Israel's prisons, and that, in fact, is what has transpired. So the supporters of Hezbollah were gathered here in a celebratory mood, see this as another victory -- Heidi.

COLLINS: All right. Anthony Mills in the middle of all of it for us. If they do get closer, Anthony, let us know. And we'll come back to get the very latest picture there along that border, Israel and Lebanon.

Thank so much. Anthony Mills.

HARRIS: We are standing by waiting for a press conference from the National Transportation Safety Board. A live picture as the room is prepared for the news conference where the NTSB will announce new safety standards for airline fuel tanks. It comes almost 12 years after the explosion of TWA flight 800.

We will follow that for you here in the NEWSROOM.

Also - no one wants to be on this particular list, but about a million people already are. So how do you get off the federal terror watch list?

Our Drew Griffin is keeping them honest. (COMMERCIAL BREAK)

(BUSINESS REPORT)

COLLINS: If you see a few more bandannas around the office today, here's why. It's ride your scooter or motorcycle to work day. And if you're thinking of joining the scooter craze, get this. The industry is planning a vehicle that gets 140 miles per gallon.

CNN money.com's Poppy Harlow -- hey there, Poppy -- is joining us now from New York. So, I'm hoping it's not just bandanas but helmets, right?

POPPY HARLOW, CNNMONEY.COM: All helmets. I rode on one this morning. And we'll show you that on "ISSUE #1" at noon Eastern. But, you know what, Heidi? In Europe it's common travel, scooters are all over the place. That's because gas prices in many European cities approach $10 a gallon. We complain about $4. We're lucky we're not over there. But scooters -- they get about 60 to 70 miles per gallon depending on the model. And scooter maker Piaggio thinks that the U.S. is ready for a renaissance of its own.

(BEGIN VIDEO CLIP)

PAOLO TIMONI, PRES. AND CEO, PIAGGIO GROUP AMERICAS: Here in the United States, this is not yet the case. For the market's been in infancy, it's growing very rapidly and it's been booming since gas prices hit $4 a gallon.

(END VIDEO CLIP)

HARLOW: How much is it booming? Sales were up 146 percent in June, for it's Piaggio and it's Vespa brands here in the U.S. Pretty impressive numbers especially Heidi, when Americans aren't spending as much money.

COLLINS: You know, I don't want to argue. But I'm just trying to picture some of the interstates around here with scooters. They're going to have to build scooter lanes or something, if people really sort of pick up on this, right? Right now it just wouldn't be safe here.

HARLOW: Yes. You know what? A lot of people drive them in New York City, but they have a hard time finding somewhere to park them.

One of our business anchors for "HEADLINE NEWS" AND "LOU DOBBS," Kerry Lee, I was just out with her this morning. She said, I love it, I ride it to work. But it's hard to find a place to park it. But, Piaggio thinks that is all changing. Because they say that we've never seen gas prices this high. They don't see a return to cheap gas. Piaggio is also citing a trend of more people moving out of the suburbs, into urban areas where it's easier to use a Vespa or a scooter.

One of the concerns though, about scooters, is the safety factor. Piaggio suggests taking some safety classes before attempting to drive their vehicles. It's going to introduce -- this is kind of neat -- a three-wheel version. Hopes that will be popular with older people. Maybe we'll see our grandparents scooting down the road, I don't know. Pretty neat thought there. But, apparently -- this is really interesting -- they're not satisfied with just 70 miles per gallon, they want more.

Take a listen.

(BEGIN VIDEO CLIP)

TIMONI: So at the end next year, we'll have the same version of this vehicle with the hybrid technology. That means it will have a thermal engine and an electric engine. By combining the use of the dual engines, you get more efficiency and you get up to 140 miles per gallon.

(END VIDEO CLIP)

You heard him right? 140 miles a gallon. Meaning a hybrid scooter could be your energy fix. I'm thinking about getting one. I don't know, I don't know how good a driver I am. But, it is an energy fix there, Heidi.

I want to mention to you breaking news we have right now. Oil is down about $5 right now. You saw that change in just about the last two minutes. So, we'll follow that for you closely on "ISSUE #1" here. This is all about the oil inventory report, the government's weekly report, likely saying stockpiles greater than what we expected. Driving prices down. But still around $133 a barrel -- Heidi.

COLLINS: Yes. Two days in a row though. Those prices down.

HARLOW: Yes. It's great news.

COLLINS: All right, Poppy. Thanks so much.

HARLOW: Sure.

HARRIS: Republicans from the top down, talking about plans to help the economy. But Democrats may have an advantage with voters on "ISSUE #1."

CNN's Tom Foreman takes a look.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): Faced with job cuts in Detroit, fear about banks and continuing pain at the pump, Republicans are scrambling. President Bush talking about expanding oil production, shoring up financial institutions, easing consumer worries.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the system basically is sound. I truly do.

FOREMAN: But with the White House up for grabs this fall and a chance to take even more seats in Congress, Democrats are hitting back.

REP. STENY HOYER (D), MAJORITY LEADER: It's crystal clear this administration's economic policies are demonstrably, evidently, not working. And have not worked for average working men and women.

BILL CLINTON (D), FORMER PRESIDENT OF THE UNITED STATES: I, William Jefferson Clinton, do solemnly swear...

FORMER: Democrats are reminding voters of the prosperity under the last Democratic president. And pointing out that some Republican- backed solutions, like protecting the solvency of mortgage giants Fannie Mae and Freddie Mac, are just temporary measures.

Christian Weller is with the Liberal Think Tank, the Center for American Progress.

CHRISTIAN WELLER, CENTER FOR AMERICAN PROGRESS: Largely, Democrats have been making the argument that things have been going off the wrong track for quite some time. That we need change in economic policy. And not just the short-term crisis but also the long-term problems. The debt build up, the lack of labor market growth, the failing manufacturing sector and so on, and so forth.

REP. ADAM PUTNAM (R), FLORIDA: There are no excuses and scape goats left.

FOREMAN: Some Republicans, of course, say Democrats are to blame, for cynically failing to report Republican economic reforms. And if the Dems get more power, they say, watch out.

UNIDENTIFIED FEMALE: The house will come to order!

EAMON JAMES, POLITICO: Right. Republicans say that the Democrats will be dangerous for the economy because they would increase taxes, which would provide a drag to the economy. But, generally speaking, a bad economy is bad for the people in power because voters blame it on the guy in the White House no matter what the rhetoric is.

FOREMAN (on camera): The nation's economy is so enormous and so deeply tied to global markets now, neither party can change its course very fast, no matter what they try.

(voice-over): But polls suggest most voters believe Democrat Barack Obama will at least point the ship in the right direction.

Tom Foreman, CNN, Washington.

(END VIDEOTAPE)

HARRIS: CNN's Drew Griffin on the Terror Watch List. Think about that for a second. Wondering when his name might be removed.

(COMMERCIAL BREAK)

HARRIS: You know, it's a list that no one wants to be on. But, about a million people already are. The Federal Terror Watch List is what I'm talking about here. And if you are on it, good luck getting off.

Just ask CNN' special investigations unit correspondent, Drew Griffin.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT (voice-over): Washington attorney Jim Robinson is a former assistant attorney general. He's a former U.S. attorney from Michigan. He holds a high-level government security clearance - and he's a former law school dean, a husband, a grand dad, and an American. And he gets delayed if not stopped every time he gets on a plane. Why? Because Robinson is also one of the estimated one million names now on the terror watch list.

JIM ROBINSON, FMR. ASSISTANT U.S. ATTORNEY GENERAL: So it seems, for years now, despite my best efforts to get off.

GRIFFIN: This week Robinson joined the ACLU in Washington to march what the group calls a ridiculous milestone - a million names the government believes match known terrorists. And according to the ACLU, 20,000 new names, like Robinson's, are added every month.

ROBINSON: That means there must be about 950,000 to 75,000 people who don't belong on this list who are somehow caught in the mire of doing this.

GRIFFIN: What does it mean? It means because of his name, he can't check in to flights electronically. He can't check bags at the curb, can't check in at one of the new speedy airport kiosks. Every time he travels, he and a million others need to wait in line.

ROBINSON: And see somebody who then has to make a call and determine that apparently I am not the James Kenneth Robinson who is the cause of my being on the watch list.

I'm going to Chicago this morning.

GRIFFIN: Don't think it can happen to you? It's happening to me.

UNIDENTIFIED FEMALE: You're on a watch list.

GRIFFIN: A watch list?

(on-camera): So how did I get on this list? Well, the TSA is adamant it's not even me, even though it is me getting stopped at the airports. The TSA says it's the airlines' fault. The airlines say they're just following the list provided to them by - the TSA. And coincidentally, this all began in May, shortly after I began a series of investigative reports critical of the TSA. 11 flights now since May 19th.

UNIDENTIFIED MALE: You're on the watch list. GRIFFIN (voice-over): On different airlines my name pops up forcing me to go to the counter, show my identification, sometimes the agent has to make a call before I get my ticket.

ROBINSON: It's a hassle.

GRIFFIN: What does the TSA say? Nothing. At least nothing on camera. Over the phone a public affairs worker told me again I'm not on the watch list and don't even think that someone in the TSA or anyone else is trying to get even.

VOICE OF CHRISTOPHER WHITE, TSA PUBLIC AFFAIRS: If there's any thoughts or shadow of a thought that TSA somehow put you on a watch list because you're reporting, it is absolutely fabricated.

GRIFFIN: Jim Robinson who serves two democratic presidents says he's trying not to think politics is involved either.

ROBINSON: I don't feel safer because I have to go through this hassle, I can tell you that.

GRIFFIN: The ACLU's technology chief Barry Steinhardt says the list is so secretive and yet so shoddily put together it's hard to tell how it is being used or abused.

BARRY STEINHARDT, ACLU: Truth is we really don't know how much is bureaucratic ineptness and how much is, you know, how much is bureaucratic - and how much is political retaliation. Even more frustrating than being on it is trying to get off. According to the TSA, you fill out a form on-line which I did on May 28th. You then copy personal documents, fill out another form and send them to Homeland Security, which I also did on May 28th. And then apparently you wait. Robinson has been waiting now for years.

ROBINSON: On May 2nd, 2005, I fill out all their forms, made a copy of my passport, my driver's license, my voter's registration card, put it in a package and sent it off to TSA. I never heard back. And it certainly doesn't seem to have done me any good at all.

GRIFFIN: My wait has apparently just begun. Drew Griffin, CNN, Atlanta.

(END VIDEOTAPE)

COLLINS: They served on the front lines. Now they're lining kids up for recess.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I could have worked for a defense contractor, probably making three times the salary I'm making now. But I wouldn't be a third as happy.

(END VIDEO CLIP)

COLLINS: Soldiers' new mission in the classroom. (COMMERCIAL BREAK)

HARRIS: OK. I believe at this point you already know to catch us weekday mornings from 9:00 until noon Eastern, right here in the CNN NEWSROOM.

But, did you know you could take us with you anywhere on your iPod? That fancy new invention. Oh, it's been around a while, now? OK. What you do, is you go to CNN.com and you download the CNN NEWSROOM podcast. It is available to you 24/7, right there once again, on your iPod.

COLLINS: From the front lines to the classrooms. An education program turns retired U.S. troops into the world's best teachers.

WFAZ affiliate reporter Amanda Bering (ph), has the story.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Have you been across the world a lot of times?

UNIDENTIFIED MALE: Yes. I've been...

AMANDA BERING, WFAZ REPORTER (voice-over): Kids.

UNIDENTIFIED FEMALE: How many wars have you been to?

UNIDENTIFIED MALE: Me? I've been -- I've just basically this one of the last wars

BERING: Are curious.

UNIDENTIFIED FEMALE: Do you have any memories from all the places you've been?

UNIDENTIFIED MALE: Oh, yes. I've got a lot of memories from different places. I think the two best places I've been was Panama and Germany. I loved Germany. Germany looks just like West Virginia except there's castles , probably about every two or three miles, large stone castles. And we got time off to go explore a few.

BERING: Now, troops are being encouraged to explore something else. Answering these questions in the classroom.

STEFAN SMOLSKI, TEACHER: I could have worked for a defense contractor, probably making three times the salary I'm making now. But I wouldn't be a third as happy.

BERING: That's because Stefan Smolski has 100 percent passion for his ninth grade students.

SMOLSKI: I got the to do a lot of things that they're going to read about in the history books.

BERING: For nearly 20 years, Stefan flew planes for the Navy. Today his mission is helping children soar to new heights.

SMOLSKI: It's the leadership skills that you learn in the military.

BERING: That, coupled with the knowledge of math, science and engineering, provide a real-world lesson plan.

UNIDENTIFIED MALE: They have so much experience that we've never had and it would be so nice to learn about it.

UNIDENTIFIED MALE: I love to learn and history is like, the best thing of all.

BERING: A love of country, taught with a deep sense of responsibility. By leaders only the military could create.

Amanda Bering, WFAZ, news channel 3.

(END VIDEOTAPE)

COLLINS: Love that. The Troops to Teachers Program targets low- income schools.

Singing the Belgium Bud blues, in Times Square.

(COMMERCIAL BREAK)

HARRIS: So consider it a beer run at the corporate level. The joint venture between Miller Brewing and Molson Coors will be run out of a new city. Company officials say, the Miller/Coors headquarters will be in Chicago, a neutral side for the two brewers. They say staying in the corporate basis of Milwaukee, or Golden, Colorado, might wrongly suggest that one partner had more power than the other.

COLLINS: We wouldn't want that.

HARRIS: No, no.

COLLINS: Singing the Belgium Bed blues.

As the iconic American beer goes international, CNN's Jeanne Moos, reports.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: Even if you don't actually drink Bud, it's impossible to nip all those slogans in the bud. Budweiser.

UNIDENTIFIED MALE: When you say bud you've said it all.

MOOS: From "This Bud's for you" to "Budweiser Beer, the king is second to none." The king of beer is the nectar of presidential candidates trying to connect with the average Joe six-pack but prepare to drown your sorrows in a bath of bud. You know who's buying Budweiser? A Belgian company. UNIDENTIFIED MALE: A Belgian company out of Germany, right?

MOOS: Well, out of Belgium. Noontime customers at Rudy's Bar near Times Square weren't exactly crying in their beer but others were with boycott Budweiser t-shirts and a YouTube video. Stephen Colbert went on a binge of false outrage against Belgium.

STEPHEN COLBERT, "THE COLBERT REPORT": As soon as I heard I started drinking nonstop before those waffle humpers change the formula!

MOOS: Actually, the formula isn't changing. It's plants in the U.S. will still manufacture Bud. That hasn't stopped the reminiscing.

UNIDENTIFIED MALE: When I watched every Bud bowl.

UNIDENTIFIED MALE: He takes it on the pen and laterals across the field.

UNIDENTIFIED MALE: I take Budweiser beer's to the Clydesdale horses.

UNIDENTIFIED FEMALE: Budweiser beer is the one that's leading the rest --

UNIDENTIFIED MALE: The proud --

UNIDENTIFIED MALE: Buddies, I got some bad news.

MOOS: It was bad news to the songwriter Phil McCleary, who wrote "Kiss our Glass." And directed it at the Belgian company, InBev.

PHIL MCLEARY: Kiss your red, white and blue glass.

MOOS: But back at Rudy's Bar, only one guy seemed wistful.

UNIDENTIFIED MALE: To me, you know, Budweiser is like Ford Motor Company.

UNIDENTIFIED MALE: I'll drink Belgian Bud and I'll drink American bud. It doesn't make a (beep) difference to me. What matters to me is the price when I get to this stand right here. This is the pig stand. This is the hog trough.

MOOS: And one e-mailer treated Bud like hogwash saying, the Belgians can only improve the stuff. It can't get any worser than it already is. "Worser"?

COLBERT: This is America's beer.

MOOS: How everyone kept writing headlines, joking about the European Union.

UNIDENTIFIED MALE: This Bud's for you.

MOOS: Or, as they say in Belgium...

(On camera): This Bud's for you in Flemish.

UNIDENTIFIED MALE: This Bud's is for you.

MOOS (voice over): Ooh, if only a presidential candidate could cast a veto.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I will veto every single beer -- bill.

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

HARRIS: And good morning again, everyone. You're informed with CNN, I'm Tony Harris.

COLLINS: Good morning, everybody. I'm Heidi Collins.

Developments keep coming into the CNN NEWSROOM on this Wednesday, July 16th. Here's what's on the run down.

John McCain making his case this hour. The candidate engages the NAACP on education.

HARRIS: Having a hard time keeping up with this economy? New numbers just in, what they mean for your bottom line.