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Issue Number One

Al Gore's Vision for the Future of America's Needs; Democrats Making a Big Push on Energy on Capital Hill; The Presidential Candidates on Energy

Aired July 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, CNN ANCHOR: On fumes and a prayer. One airline accused of pressuring its pilots to put less fuel in their planes.
A car that never stops for gas sounds great, so why aren't more being built?

And a new way of thinking when it comes to energy. Former Vice President and Nobel Prize winner Al Gore and his vision for the future of America's energy needs revealed live this hour.

Issue #1 is your economy. ISSUE #1 starts right now.

From the ISSUE #1 headquarters to the CNNMoney.com newsroom, we are all over the stories that matter to you.

Hello and welcome to ISSUE #1. I'm Gerri Willis.

Stocks are up, oil is down. Housing, well, the new numbers are a bit misleading. Why that big jump in new construction isn't exactly a sign of a turnaround.

From drilling for oil to Iranian speculators, Democrats are pushing energy today on Capitol Hill. But do their efforts have enough support to matter?

And where the candidates stand on energy. We'll break down their plans to fix the crisis this hour.

But we begin with more trouble in the airline industry -- Ali.

ALI VELSHI, CNN ANCHOR: Gerri, this story is tough to believe.

Fuel conservation amid record high prices, that's understandable. It's a big concern for airlines, obviously, as well as drivers. But is one airline carrier placing safety or savings ahead of safety?

Here's CNN's Deborah Feyerick.

DEBORAH FEYERICK, CNN CORRESPONDENT: Ali, US Airways will spend $2 billion more on fuel this year more than it did last year, and some pilots say those costs are forcing them to fly with less fuel than they feel comfortable with.

(BEGIN VIDEOTAPE) FEYERICK (voice over): The U.S. Airline Pilots Association took out a full page ad in "USA Today," accusing US Airway's management of pressuring captains to reduce fuel levels in order to save money.

Eight pilots filed complaints with the Federal Aviation Administration, as did the union. They accused the airline of trying to infringe on the captain's authority by making them fly with less fuel than they're comfortable with. Well, the Department of Transportation says fuel levels should always be up to the pilots.

MARY PETERS, TRANSPORTATION SECRETARY: The pilot is the last authority that determines how much fuel that plane takes. And pilots have that discretion and are routinely given that discretion. So, if a pilot doesn't feel that a plane has enough fuel in it for the trip that he or she is about to make, then they have the discretion of not flying that flight.

FEYERICK: Prior to filing the complaints, the eight pilots, all of them senior captains who normally fly international flights, were called in by US Airways to do fuel conservation training. The union says the pilots were carrying 10 to 15 minutes' worth of extra fuel and calls the training intimidation and harassment.

US Airways says the eight pilots were way above average in terms of the amount of fuel they had when the planes landed. A spokesman for the airline says, if you carry too much fuel, you burn too much fuel. And with the high price of oil, it's a balance between having enough to travel safely but also fly efficiently.

(END VIDEOTAPE)

FEYERICK: Ali, the eight captains say they're fearful their jobs are now in jeopardy. US Airways says that the one-day training is not punishment and that the captains' careers are safe. The FAA is investigating.

Meantime, one airline insider says this issue is less about safety and more about contract negotiations to pressure the company that it stems from a merger struggle between US Airways and pilots for America West Airlines to see who gets seniority -- Ali.

VELSHI: All right, Deb, thanks very much. I think we all think we want to save money on fuel. We just want to make sure there's enough fuel in those things to get us to where we have to go.

As you know, we like to break things down here on ISSUE #1, so we're wondering, how do you define exactly what minimum fuel is in a plane? Here's what we found.

According to the Federal Aviation Administration, it indicates that a aircraft's fuel supply has reached a state whereupon where reaching the destination, it can accept little or no delay. This is not an emergency situation, but merely indicates that an emergency situation is possible should any undue delay occur.

Well, that made it a lot clearer. (STOCK MARKET REPORT)

WILLIS: Well, Capitol Hill is all about oil today. Democrats are pushing their plans to lower your gas prices.

CNN's Kate Bolduan has been following this discussion in Washington.

Kate, what are you hearing?

KATE BOLDUAN, CNN CORRESPONDENT: Democrats on Capitol Hill are making a big push today on energy, specifically what they think needs to be done to reduce gas prices. In the House, it's a combination of measures which include forcing companies to use existing oil leases before they can get new ones.

Democrats are also pushing to speed up oil lease sales in an area called the National Petroleum Reserve in Alaska. It's near ANWR, but already open to oil exploration.

Now, Senate Democrats are taking on another area, speculation. A new proposal introduced by the majority leader, Harry Reid, calls for strengthening the Commodity Futures Trading Commission. This is the group that regulates energy futures trading.

In part, this bill would crack down on so-called speculators, people who buy and sell futures, but don't actually physically produce or acquire the commodity. He talked about it on the Senate floor.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Right now Wall Street traders are raising gas prices with nothing more than a click of a mouse. For nearly eight years, this Bush/Cheney administration, the most oil-friendly administration in the history of the country -- both have made their fortunes in oil -- has turned a blind eye to this excessive speculation.

(END VIDEO CLIP)

BOLDUAN: Well, it's going to be difficult for Democrats to succeed, because in general, Republicans aren't on board. They want to be able to add provisions that, among other things, would allow for opening up new areas for domestic drilling. And Democrats may not give them that chance.

VELSHI: All right. It's "Energy Fix" time. It's "Energy Fix" time every day.

Poppy Harlow is with us and she's been following -- it's an area you follow particularly closely within energy, and that is the effect that's having on airlines and the price we pay to fly.

POPPY HARLOW, CNNMONEY.COM: Yes. It's something we were talking about last night actually on "LARRY KING LIVE." You know, what is going on here? The airlines really suffering with these oil prices. And what it is, is they're calling on people to ask their congressmen and their congresswomen to stop what they're calling is excessive speculation in the oil market. But what's interesting here is that airlines also speculate about the price of oil. The airline industry says not all speculation is the same.

Take a listen to this sound bite.

(BEGIN VIDEO CLIP)

JIM MAY, PRESIDENT AND CEO, AIR TRANSPORT ASSOC.: The people who take possession of the physical commodity of oil are hedging, as they should, and there is absolutely nothing wrong with that. And there is no change in any of the proposed legislation to change that fact.

What we're going after are the index speculators because oil has become sort of the new gold. It's become a financial instrument. And it is those folks that are helping drive up the overall cost of oil.

(END VIDEO CLIP)

HARLOW: But here's what you have to know here. The fact is that hedge funds, pension funds, all speculate on oil prices, so do airlines. Here's what everyone agrees on -- oil prices are killing the airlines right now. No one's arguing with that. But ironically, many critics believe that the airlines should have speculated even more when oil prices were a lot lower than they are right now.

An example of that, Southwest Airlines, locking in 70 percent of their fuel costs when oil was around $51 a barrel. As a result, it is doing much better than a lot of its competitors.

But still, Ali, the question is, why are the airlines calling out other speculators when they're speculating?

VELSHI: Well, there's -- and there's an interesting distinction here, and that is, those people who, as that gentleman just said, buy oil they hedge, but they're taking delivery of it, versus those people who speculate on the price of oil just as an investment. But we've seen the positive side of speculation the last couple of days.

HARLOW: Yes, the last couple of days.

Folks, don't forget, speculation can drive the price of oil down, as well. Over the past two days, we've seen oil fall more than $10 a barrel. That's welcome news to consumers out there. So it's worth remembering speculation can push oil prices down, as well.

Actually, testifying on Capitol Hill this week, Fed chairman Ben Bernanke said, "Speculation under most circumstances is a positive thing." The reason, it allows companies like airlines to hedge against higher prices. It can also help predict future trends. For example, many people believe the oil market is warning us right now that increased demand in places like India and China will mean higher prices down the road, and some argue it's better to know that now. What we all know, what you know, Ali, what is not a good thing is manipulation. That's what the Commodity Futures Trading Commission -- they're trying to figure that out. But still, we hear such negative things about speculation, I think it's important that people understand, it can drive prices either way.

VELSHI: And we should probably take some time at some point to explain this, that it is the grease in the system. You need some degree of speculation, otherwise nobody's investment would never make money. You'd buy in house and it would never increase in value.

HARLOW: How our market works.

VELSHI: Or wine or anything else that people buy that appreciates in value -- or art. So we'll talk more about that.

Poppy, thanks very much -- Gerri.

WILLIS: Grease in the system, that's a great metaphor.

Well, the two presidential candidates have two very different plans to fix our energy crisis. We're digging deeper and separating fact from fiction.

Plus, a car that never stops for gas. It might sound too good to be true, but it's a reality for one man in San Francisco. Could it be an option for the rest of us?

You're watching ISSUE #1.

(COMMERCIAL BREAK)

VELSHI: All right. Let's join Al Gore. He is speaking in Washington. He's got some ideas about energy. Let's listen in to what he's talking about.

(JOINED IN PROGRESS)

AL GORE (D), FMR. VICE PRESIDENT OF THE UNITED STATES: ... technology committee, and for your work on the Alliance for Climate Protection.

And thank you Cathy Zoi, the CEO of the Alliance for Climate Protection.

I'm so happy that all of you are here. I'm especially happy that my wife Tipper is here, and my daughter Karenna is here.

(APPLAUSE)

Thank you.

And there are several members of Congress, even though the committees are working and the Congress is meeting, but I want to acknowledge Senator Bernie Sanders, who is here; Congressman Jim Cooper; Congressman Jay Inslee; former Senator Jim Sasser and Mary Sasser.

I want to say a special word of thanks to my friend William, who came all the way from Los Angeles to be here.

Thank you so much.

(APPLAUSE)

And also, I want to make special mention of the presence of the Libertarian Party's presidential candidate, Bob Barr. We've had a number of conversations.

I'm grateful for your presence, Congressman Barr.

(APPLAUSE)

And thank you very much. Thank you very much, Bob.

We've had a number of very, very interesting conversations. I appreciate your open mind and your serious approach to this challenge our country is facing.

I have had many conversations, of course, with Senator Obama and with Senator McCain. And one of my objectives in approaching this climate crisis is to try to lift this as much as possible out of the partisan framework that sometimes is a serious impediment to solving serious problems in our country.

Incidentally, I did also want to make special mention of the fact that some of our mutual friends are in mourning today. And I want to extend my best wishes to the family of Tony Snow, whose memorial service just ended a short time ago. And we are keeping his family in our thoughts and prayers.

Ladies and Gentlemen, there are times in the history of our nation when our very way of life depends upon dispelling illusions and awakening to the challenge of a present danger. In such moments, we are called upon to move quickly and boldly and shake off complacency, throw aside old habits, and rise clear-eyed and alert to the necessity of making big changes.

Those who for whatever reason refuse to do their part in such times must either be persuaded to join the effort or asked to step aside. This is such a moment.

The survival of the United States of America as we know it is at risk. And even more, if more should be required, the future of human civilization is at stake.

I do not remember a time in our country when so many things seemed to be going so wrong simultaneously. Our economy is in terrible shape and getting worse.

(APPLAUSE)

People are hurting. Gasoline prices are increasing dramatically, and so are electricity rates. Jobs are being outsourced. Home mortgages are in trouble. Banks, automobile companies, other institutions we depend upon are under growing pressure.

Distinguished senior business leaders are telling us that this is just the beginning unless we find the courage to make some major changes quickly.

The climate crisis in particular is getting a lot worse much more quickly than predicted. Scientists with access to data from Navy submarines traversing underneath the North Polar Ice Cap have now warned us that there is a 75 percent chance that within only five years, the entire North Polar Ice Cap will completely disappear during the summer months.

This will further increase the melting pressure on Greenland. According to experts, one of the largest glaciers there, the Jakobshavn glacier, is moving at a faster rate than ever before, losing 20 million tons of ice every day. That's equivalent to the amount of water used in a year's time by the residents of our largest city, New York City.

Two major studies from militant intelligence experts have warned our leaders about the dangerous national security implications of the climate crisis, including the possibility of hundreds of millions of climate refugees destabilizing nations around the world. Just two days ago, 27 senior statesmen and retired military leaders warned of the national security threat from what they called an energy tsunami that would be triggered by a loss of our access to foreign oil. Meanwhile, the war in Iraq continues, and now the war in Afghanistan appears to be getting worse.

And by the way, our weather sure is getting strange, isn't it? There seem to be more tornadoes than in living memory, longer droughts, bigger downpours and record floods. Today, unprecedented fires are burning in California and elsewhere in the American West. Higher temperatures lead to drier vegetation that makes kindling for mega-fires of the kind that have been raging in Canada, Greece, Russia, China, South America, Australia and Africa.

Scientists in the Department of Geophysics and Planetary Science at Tel Aviv University tell us that for every one degree increase in temperature, lightning strikes will go up another 10 percent. And it is lightning, after all, that is principally responsible for igniting the conflagration in California today.

Like a lot of people, it seems to me that all these problems are bigger than any of the solutions that have thus far been proposed for them. And that's been worrying me.

I'm convinced that one reason we have seemed be paralyzed in the face of these crises is the tendency to offer old solutions to each crisis separately without taking the others into account. And these outdated proposals have not only been ineffective, they almost always make the other crises worse.

Yet, when we look at all three of these seemingly intractable challenges at the same time, we can see the common thread running through them, deeply ironic in its simplicity. Our dangerous over- reliance on carbon-based fuels is at the core of all three of these challenges: the economic, environmental and national security crises.

We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet. Every bit of that has to change.

(APPLAUSE)

But if we grab hold of that common thread and pull it hard, all of these complex problems begin to unravel. And we find that we're holding the answer to all of them right in our hand. The answer is to end our reliance on carbon-based fuels.

(APPLAUSE)

In my search for genuinely effective answers to the climate crisis, I've held a long series of so-called solution summits with engineers, scientists and CEOs. And in those discussions, one thing has become abundantly clear. When you connect the dots, it turns out that the real solutions to the climate crisis are the very same measures that are needed to renew our economy and escape the trap of ever-rising energy prices. Moreover, they are also the very same solutions that we need to guarantee our national security without having to go to war in the Persian Gulf.

What if we could use fuels that aren't expensive, don't cause pollution, and are abundantly available right here at home? We have such fuels.

Scientists have confirmed that enough solar energy falls on the surface of the Earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest Corridor every day to also meet 100 percent of U.S. electricity demand.

Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. The quickest, cheapest, most efficient, and best way to start using all of this renewable energy is in the production of electricity. In fact, we can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses.

But to make this exciting potential a reality and truly solve our nation's problems, we need a new start. That is why I'm proposing today a strategic initiative designed to free us from the crises that are holding us down and to regain control of our own destiny. It's not the only thing we need to do, but this strategic challenge is the lynch pin of a bold, new strategy need to repower America.

So today, I challenge our nation to commit to producing 100 percent of our electricity from renewable energy and truly clean carbon-free resources within 10 years. (APPLAUSE)

This goal -- this goal is achievable, affordable and transformative. It represents a challenge to all Americans and every walk of life, to our political leaders, entrepreneurs, innovators, engineers, and to every citizen.

A few short years ago, it would not have been possible to issue such a challenge. But here's what's changed. The sharp cost reductions now beginning to take place in solar, wind and geothermal power, coupled with the recent dramatic price increases for oil and coal, have radically changed the economics of energy.

When I first went to the Congress 32 years ago, I listened to experts testify that if oil ever got to $35 a barrel, then renewable sources of energy would become competitive. Well, today the price of oil is over $135 a barrel. And sure enough, billions of dollars of new investment are flowing into to the development of concentrated solar thermal, (INAUDIBLE), windmills, geothermal plants, and a variety of ingenious new ways to improve our efficiency and conserve presently wasted energy. And as the demand for renewable energy grows, the cost will continue to fall.

Let me give you one...

VELSHI: All right. We've been listening to Al Gore in Washington talking about alternative energy. If you want to continue listening to that, you can go to CNN.com/live, where we will continue to cover that.

We've also got our eyes on John McCain. You can see him there on the right side of your screen. He is in Kansas City getting ready for a speech. We will be with that in just a moment.

We'll take quick break. ISSUE #1 continues on the other side with full coverage of today's politics.

(COMMERCIAL BREAK)

WILLIS: You're looking at live pictures of Senator John McCain, who is speaking at a town hall meeting in Kansas City. Let's listen in.

(JOINED IN PROGRESS)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: ... what we're having to address here, my dear friends. And the question is, what kind of change are we going to have in Washington? What kind of change are we going to have that is the right change and not the wrong change and not rhetoric? So I have a plan to grow the economy, and it starts with getting a handle on the cost of gasoline.

Just yesterday in Omaha, I visited a trucking company. They told me that if we could give them a gas tax holiday for a year, they could save $40 million, which they would invest in fuel-efficiency trucks.

I think -- I think that you need a little break from the gas tax. I think Americans need a little bit of a break.

(APPLAUSE)

Is it a big deal? Is it a big deal? Is it the answer to our economic woes? No. But I met a guy who owns two trucks, and he said he thought he could stay in business if he didn't have to pay 25 cents a gallon tax extra on diesel fuel.

That's what Americans are talking about today. Not the wealthiest.

And who's hurt most? Who's hurt most by the cost -- the rising cost of gasoline?

We all know that, the lowest income Americans on fixed income that drive the oldest automobiles. They're the ones that are paying the heaviest price, not those that ride around in chauffeured limousines. So we need to have a brief gas tax holiday.

But also, my friends, Congress today, which doing nothing for you, nothing, should say today -- should say today we're going to lift the ban on offshore oil drilling and exploration, and we're going to find that oil deposits and we're going to reduce and eliminate our dependence on foreign oil. And we should get it done immediately.

And in a very short period of time, we could identify and start exploiting natural gas and oil reserves off of our own coast. And if the states don't want to do it, I understand that. I'm happy to say that the people in the state of Florida seem want -- like that they want to do that. And I believe that we can and should.

But let me just mention to you again on energy, and there's a lot of issues we want to discuss today. But on energy, my friends, let's have no doubt that it's an environmental issue, it's an economic issue and it's a national security issue that we're facing a challenge. That's what this is.

Now, we just discussed to a large degree why it's an economic issue. Now, let me also point out national security. We are transferring somewhere around $700 billion of American money to countries that don't like us very much. Some of that money ends up in the hands of terrorist organizations. We cannot afford that from a national security standpoint. We have to reduce our -- and eliminate our dependency on foreign oil.

So what are the answers? There's no one answer. Obviously, exploration and exploitation of our own reserves to reduce our dependence. But we've got to have hybrid fuels. We've got to have electric driven car, battery driven car. We've got to have solar. We've got to have wind. We've got to use tides. We have to use all the technology that is going to be developed by the most innovative nation in the world.

And I just want to talk about one aspect of it with you very quickly and that's nuclear power. My friends, nuclear power is safe. We should adopt it tomorrow. We should be building 45 new nuclear plants. We developed 45 new nuclear plants, we'll create 700,000 new jobs, 700,000 new jobs. And friends, it is safe. We've had navy ships sail around the world for 60 years with nuclear power plants on them and we've never had a problem.

And so the question is, what do you do with the spent nuclear fuel? Well, you store it and you reprocess it. OK. And you can do both.

Senator Obama opposes offshore drilling. Senator Obama opposes nuclear power. He has a presidential seal I saw that says, "yes, we can." I think we should change it, "no, we can't" or "no, we won't."

So we'll become energy independent. My friends, we've got to keep your taxes low. And let me just look you in the eye and tell you right now. If you want a president who will raise your taxes, I'm not your candidate, Senator Obama is. He wants to raise your taxes. I want to keep them low. So that will help people with the decision making process.

We need to talk about health care. We need to talk about education. We need to talk abut all of those issues that are important to you. But I'd like to end up by just talking to you for a moment because it's popped up even more in the last few days. And that, obviously, is the war in Iraq and Afghanistan.

Now let me just remind you, my friends, that about around 18 months ago, most experts and political pundits and others and Harry Reid, the majority leader of the Senate, and Senator Obama all said the war was lost. The war was lost. Just a few years after 9/11, America was on the brink of a devastating defeat at the hands of radical Islamic extremists and we were about to lose a conflict and lose a war.

Now, I don't know if you remember or not, but I'd remind you that at that time I wanted to be -- secure the nomination of the Republican Party for the president of the United States. And I knew what had to be done. And I said that for a long time that the strategy employed was failing and wouldn't succeed. And I said we need 3,000 more troops and we needed a new strategy.

And at that time, you might recall many political pundits said my political ambitions were at an end. And I understood that. But I also want to remind you that I said at the time, I would much rather lose a political campaign than lose a war. And I was willing to do whatever was necessary to do that.

Thank you.

So we adopted this new strategy. And we were blessed. This nation is blessed with so many wonderful and brave young men and women who have made such enormous sacrifice and their great leader, General Petraeus, one of the great leaders in American history. And he said that he had a strategy that could win. And this strategy, I'm happy to stand in front of you to tell you that this strategy has succeeded. It has succeeded. It has succeeded.

And I am confident that even though this success is fragile and could be easily reversed if we

(AUDIO GAP)

Articulated and announced his policies and approached Iraq before he went. Not after. Remarkable. I've been on a lot of trips around the world, usually at your expense, but I usually issue my policy statements when I get back.

So the points is that he is going to Iraq. I hope he'll sit down with General Petraeus and General Odierno, who's taking General Petraeus' place very soon, that -- and that he will understand what's at stake here.

And what happens in Iraq affects what happens in Afghanistan. Yes, we need more troops in Afghanistan. But if we'd have failed in Iraq, my friends, if consequences would have spread throughout the region because the United States would have lost and then left in retreat and the people in the neighborhood would have accommodated to that situation. And that's a reality. And so I am happy to tell you we have succeeded in Iraq and we -- and unless we reverse the strategy that's succeeding, we will win this war. But is fragile and it must be dictated by -- the strategy must be dictated by the situation on the ground, not some artificially, politically inspired schedule for withdrawal as Senator Obama wants to do.

My friends, I'd like to end up by saying that everyone (INAUDIBLE) haven't experienced everything in the right perspective for you. That happened to me last August in Wolfboro, New Hampshire. A woman stood up and said, Senator McCain, would you do me the honor of wearing a bracelet with my son's name on it, Matthew Stanley.

Matthew was 22 years old. He was killed in combat outside of Baghdad just before Christmas last year. I said I would be honored to wear this bracelet with your son's name on it.

And then she said, but Senator McCain, I want you to promise me one thing. I want you to promise me that you'll do everything in your power to make sure that my son's death was not in vain. And I made that commitment to her and the more than 4,000 other brave families who have made such a huge sacrifice in the cause of freedom.

And so, my friends, I want to be president of the United States because I want to honor that commitment. But also because I believe I can inspire a generation of Americans to serve a cause greater than their self-interest. I don't believe there's anything more noble. And I believe that America's greatest days are ahead of us. These are difficult and challenging times. And I have a record of always putting my country first.

As some of you may know, many years ago I was in a prison camp in north Vietnam. And the Vietnamese came to me and said, we'll allow you to go home early because my father happened to be a high ranking admiral. Our code of conduct said that only those go home early in order of capture. It was a brave young Mexican-American by the name of Averet Alvarez (ph) who had been in prison a couple years longer than I had. So I knew I had to refuse. But I had a choice to make and I put my country first.

And I have, throughout my life, put my country first. Americans are sick and tired of the gridlock. They want us all to join together and fix these problems and secure America and restore our prosperity, which we can do.

And I want to promise you -- and I want to promise you this. I've always put my country first. And we may disagree from time to time on a specific issue, and that's healthy because we Americans need to debate and discuss and come up with the best ways to address the challenges of the future. But as I have all my life, I will always always put my country first and I won't let you down.

Thank you very much. I need your support. And I thank you. And I'm ready to answer any questions or comments that you might have. Thank you. Thank you.

Now I'm ready for questions and I see you first, sir.

QUESTION: Thank you, sir. Welcome to Missouri.

My question has to do with a domestic issue. A domestic threat. American families, some parents, are constantly bombarded with highly sexualized culture. And that the first job of government is to protect.

We have an internal threat in this nation that is destroying the character and the fabric as we no longer, as you and I were children, we could play safely in our communities without the fear of a pedophile, an abduction, a rape, and we see sexual trafficking and we see the sexualized culture. Would it be good public policy if we had a polluted water source and those in charge said, why don't you put a filter on your faucet?

Public safety -- our child can type in on the Internet the White House or Snow White and there's no telling what will pop up with these highly graphic sexual images. We need some help. We need some protection because parents can't keep up with the inundation and the technology. Your opponent has a record of preferring (ph) pornographers in the sex industry in his decisions on zoning issues that he's done. What would you do to help the American people with this onslaught of a sexualized culture?

MCCAIN: Let me say thank you. I do not believe that that's the case in Senator Obama's record. I have no evidence of that. And I give him the benefit of the doubt.

But I agree with you. Because new technology, my friends, has increased and enabled some of the most evil people on earth, and not just here in the United States of America. The Internet is global, as we know.

And one of the great threats that I'd like to talk to you about is Internet child pornography. There are no constitutional protections for people who engage in Internet child pornography. Every parent should know where their child is on the Internet. And what happened with this Internet child pornography is that pedophiles who used to feel isolated and separated now get into these chat rooms and legitimize and enable each other. And I will do everything in my power, in the strictest way, including internationally, including international agreements that would say that we will act together to combat human trafficking, which is on the increasing -- on the increase in the world as well as Internet child pornography.

So, I can tell you it comes back, a lot of it. I'll give every assistant and every tool to every family in America that they can have. But it also comes back to the family, as you know, and good parents. And I will do everything in my power to have task forces to address this terrible issue of these predators that are preying on our children.

I also would like to say one other thing very quickly to you. And that is, I am proud of my record of protecting and advocating the rights of the unborn. And I believe that this is also an important issue. I believe the nobelist words ever written are those that said all of us are created equal and endowed with certain inalienable rights. Among these are life, liberty, and the pursuit of happiness. And that life means the rights of the born and the unborn.

So there's a great difference. There's a great difference between myself and Senator Obama. When he was in the Illinois state legislature and he voted on the judiciary committee of that legislature, he voted against a ban on partial birth abortions. My friends, that's a hideous procedure. It should never been allowed any place on earth.

So that's a great difference. That's a great difference between the two of us. And you can count on my active advocacy for the rights of the unborn.

Yes, ma'am?

QUESTION: OK. Sorry. Having lost my nephew in the war in Iraq, I want to thank you for your position in wanting to win this war. I don't want his sacrifice to be in vain.

First, I wanted to give you this. It's a picture of him.

And my question to you is, how will you, as president, be able to get from a Democratic Congress all the resources you will need in order to achieve our goals of winning in Iraq?

MCCAIN: Thank you. I thank you for the sacrifice of your nephew. I notice from what you gave me, he was killed in Fallujah. That will rank as one of the greatest battles in America's military history. And I believe that the fact that we now have control in Fallujah, which was a key element and turning point in this whole conflict, we are there because of this great sacrifice. And I'll never forget it.

I can, I believe, convince my Democratic colleagues by the facts on the ground. The facts on the ground in Iraq are very clear.

Now there are many political pundits. There are some editorial writers that state some of their reputation on saying this war was lost, along with Harry Reid and a lot of the other Democrat politicians. But I think the majority of the American people are smart. And they know that we are succeeding in Iraq. And that we have succeeded in Iraq. And that we will -- and I'm confident we will win this war when we keep on with the present strategy and not do what Senator Obama wants to do, and that's set specific dates for withdrawal.

And again, I'd like to point out, the same people that are saying that we have to set dates for withdrawal are the same people that said we would fail in Iraq. They were wrong then and they're wrong now.

WILLIS: You've been listening to Senator John McCain speaking to a town hall event in Kansas City, Missouri. He spoke about the energy crisis in this country, about the war in Iraq, also taking questions from the audience there.

And, of course, we'll bring you every breaking political story as it happens. But coming up, the two presidential candidates have two very different plans to fix our energy crisis. We're digging deeper and deeper and separating fact from fiction.

Stay with us. You're watching ISSUE NUMBER ONE.

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WILLIS: Welcome back to ISSUE NUMBER ONE. Time now for a quick check of the headlines.

With more woes in America's beleaguered housing sector, construction of single family homes ebb to the lowest levels since the early 1990s. But housing starts for multi-family units are up 40 percent last month, spurred much in part by a wave of apartment construction in New York City.

More Americans are out of a job and looking for work. Today's jobless claims report from the Labor Department says 18,000 unemployed Americans filed for first time benefits just last week. This time last year, 2.6 million Americans were drawing unemployment. This year it's up to 3.1 million.

Much of the current financial melee is blamed on the skyrocketing price of oil. And while prices have slid some way by the barrel, AAA reports the price remains unchanged at $4.11 a gallon.

VELSHI: Well, where do the candidates come down on energy? What's their plan to fix this crisis? We just heard John McCain talking about it. We heard Al Gore talking about it. We've obviously heard Barack Obama talking about it. Well, it's time to separate fact from fiction. Bill Adair is from politifact.com. He joins me live from Tampa, Florida. He's got the truth-o-meter.

Bill, good to talk to you. You know, all of the candidates, both of the candidates really, have said that they think we should invest more in energy and thinking about new ways to put energy forward. So I want to ask you -- present you with some of what they said and you tell us whether it's true or false. Let's get some music and dim the lights. Give this a little drama.

Bill, Senator Obama, on his campaign's energy plan, says "the U.S. government spends less on energy innovation than the pet food industry invests in its own products." True or false?

BILL ADAIR, EDITOR, POLITIFACT.COM: We gave that a false on our truth-o-meter on politifact.com. It's a very powerful sounding claim. You can almost imagine the TV ad. You know, Purina spends more on kibble than the government spends on energy. But when we checked it out, we found it's just not true. There's no way that the pet food industry could spend that much money, $3 billion. So we gave that one a false.

VELSHI: All right. Let's listen to some of what John McCain has been saying in a couple of ads. These next two questions are about John McCain. He has this web ad where he has this 007 Dr. No music playing and he talks about his opponent's energy plan. He says Obama opposes offshore drilling and a gas tax holiday. True or false, Bill?

ADAIR: We gave that one a true on the truth-o-meter. He's correct. Obama does oppose the expansion of offshore drilling and Obama has opposed McCain's proposal to give a gas tax holiday. So that one earned a true.

VELSHI: He was just talking about that, the 18 cents a gallon gas tax holiday that he wants to have removed for the summer.

Same ad. McCain says Obama opposes innovation, the electric car and clean, safe nuclear energy. John McCain just talking a few minutes ago again about nuclear energy. True or false?

ADAIR: That one was so false we gave it a pants on fire on our truth-o-meter. He's just way off on this one. In terms of saying that Obama opposes the electric car. If you read his speeches, if you read his energy plan, he has spoken often about having more electric cars.

The claim that he opposes innovation. Obama has $150 billion energy plan that he proposes over 10 years. So Obama very much has a comprehensive plan that would include a lot of things that could be considered innovative.

And as for nuclear power, his plan mentions that nuclear power would be part of that. So that was so wrong we gave it a pants on fire.

VELSHI: Pants on fire for those. All right. So we've got some trues, some false and some pants on fire.

Bill, it's always a pleasure to talk to you. Thanks very much for being with us.

Bill Adair is the Washington bureau chief at the "St. Petersburg Times" and the editor of politifact.com.

We're going to take a quick break. We're going to be back with more ISSUE NUMBER ONE right on the other side. Stay with us. You're watching CNN.

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VELSHI: Gerri, it's been -- I mean we did so much in this one show and we've done so much this week, there's just been so much news going on. It's kind of hard to keep track of it, but that market is still up. So somebody thinks things are OK.

WILLIS: Yes, I don't know if they're a majority and if this will keep on keeping on.

VELSHI: Right. As Susan said, two days isn't a trend.

WILLIS: But, you know, the gas prices. The oil prices per barrel still so high really effects the economy.

VELSHI: But the big -- $11 drop in two days and we're still above $135 a barrel.

WILLIS: Crazy.

VELSHI: The bottom line is, those of you out there are still spending it. You've still got to pay it. And that -- until that changes, until you feel a little wealthier, it's not necessarily going to turn this economy around.

WILLIS: Lots of innovation, though. We keep seeing innovation. And I think that's what's so exciting out there. Lots of people having ideas about how we solve the problem, new tools, new inventions, that's fantastic.

VELSHI: And it's all sort of we're hearing about from the candidates these days, particularly on their energy policies. Things that we have to do to actually get further, get beyond this problem. So we're here to try and help you with it as much as possible. And thank you for the e-mails that you send us and ideas that you've got about things we want to cover.

WILLIS: And we will continue covering it. For more ideas, strategies and tips to save you money and protect your house, watch "Open House" Saturdays at 9:30 a.m. Eastern right here on CNN.

VELSHI: And for more on how the news of the week affects your bottom line, tune in to "Your Money" Saturday's at 1:00 p.m. Eastern and Sunday's at 3:00 right here on CNN.

WILLIS: The economy is issue number one and we here at CNN, we are committed to covering it for you. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 p.m. Eastern, right here on CNN. VELSHI: Time now to get you up to speed with other stories making headlines. CNN "Newsroom" with Don Lemon and Kyra Phillips starts right now.