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Issue Number One
Foreclosures Skyrocket; Barack Obama and France's President Nicolas Sarkozy Hold a Joint Press Conference in Paris
Aired July 25, 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: The mortgage meltdown showing no signs of letting up. Foreclosures skyrocket.
The housing bill on Capitol Hill is about to become a reality.
Why you may be paying more than you should for home heating oil.
And how you can invest your money, even on a budget.
Issue #1 is your economy. ISSUE #1 starts right now.
From the ISSUE #1 headquarters to the CNNMoney.com news room, we are all over the stories that matter to you.
Hello, everyone. I'm Gerri Willis. Ali Velshi is off today.
Just when you thought foreclosures were easing up, slammed with new numbers today that show staggering amounts of homes in foreclosure. We have the info and details on how some are successfully fighting off foreclosure.
Home heating oil prices are through the roof. Gas prices are going down and might go down further. Are you getting ripped off? We'll check it out for you.
And have you ever wondered if a jilted fiancee has any recourse? We'll show you how one former bride sued her ex-fiance and won big time.
Miles, one of the biggest stories today, an historic housing bill about to be passed on Capitol Hill.
MILES O'BRIEN, CO-HOST: That is right, Gerri.
The housing bill has finally worked its way to the Senate. Now the only question is how soon can we expect it to pass and be signed into law by the president?
CNN's Kate Bolduan is right now at the White House with the very latest.
Kate, what do we know?
KATE BOLDUAN, CNN CORRESPONDENT: Hi there, Miles.
Well, it's moving along. The House passed the housing assistance bill earlier this week. Today, the Senate took one step closer to passing this legislation and sending it here to the president to sign. But it is not here quite yet.
Democrats in the Senate are frustrated because one senator, a senator -- Republican Senator Jim DeMint, he's forced a delay on this vote. It's a procedural delay, pushing the Senate into a rare Saturday session tomorrow in order to actually get to the final passage of this bill.
Here's a little bit from Democratic Senator Richard Durbin.
(BEGIN VIDEO CLIP)
SEN. RICHARD DURBIN (D), ILLINOIS: Why isn't this bill going to the president's desk today? One senator. One senator who objects. One senator who wants to slow it down and hold it back.
(END VIDEO CLIP)
BOLDUAN: Now, meanwhile, there is a lot of Republican support for this bill, but some Republicans -- well, I must say, of course it is expected to pass, but some Republicans in the Senate, they do still have some concerns that this legislation is misguided and that it is just too much of a bailout for lenders.
Here's a little bit from Senator Kit Bond.
(BEGIN VIDEO CLIP)
SEN. KIT BOND (R), MISSOURI: This is a huge gamble we're taking, and this compromise does not address that issue. It provides too little benefit to struggling homeowners, it provides too much benefit to the sub prime lenders such as those who hold Countrywide paper who contributed to the housing crisis. And it provides too much risk to the American taxpayer.
(END VIDEO CLIP)
BOLDUAN: Now, the debate does continue tomorrow, as we've mentioned. The Senate is expected, of course, to pass this legislation and send it to the president. White House spokesman Tony Frato tells me that the president will sign this legislation as soon as he gets it.
Now, Miles, it's just how quickly can it get over here?
O'BRIEN: All right. A lot of people need that help.
Kate Bolduan at the White House.
Thank you -- Gerri.
WILLIS: Well, Miles, so what does all of this mean to struggling homeowners?
Here to break it down for us is CNNMoney.com's Jeanne Sahadi. This is complicated stuff. Let's just walk through the elements of the bill, starting with what it does for Fannie Mae, Freddie Mac, those two important government-sponsored enterprises involved heavily in the mortgage market.
JEANNE SAHADI, SR. WRITER, CNNMONEY.COM: Right. They pretty much are the mortgage market these days.
WILLIS: Right.
SAHADI: Two big things for them. And one is a recent add-on.
The Treasury has asked Congress for the authority to help out Fannie and Freddie if they need help with their capital or their liquidity. So they've asked for an unlimited line of credit for 18 months, and also for the right to buy stock in those companies if the Treasury sees fit. Treasury Secretary Paulson keeps saying, I do not think we're going to need to do this, but I just want to have this sort of fail safe proposal in place.
WILLIS: Even so, they've said this could be as much as $25 billion.
SAHADI: That's right. That's one of the estimates.
WILLIS: And would ultimately be paid by us.
SAHADI: Presumably, yes. And it could be more than $25 billion. It's -- there are a lot of unknowns.
The second thing it does for Fannie and Freddie is provide a stronger regulator, which would possibly increase their capitalization requirements. I mean, the stocks have taken a big hit because investors are worried they're not well capitalized enough to handle the losses coming down the pike.
WILLIS: They don't have enough money, in other words.
SAHADI: Pretty much. Not enough money.
WILLIS: OK.
SAHADI: But Fannie and Freddie and lawmakers say that they're still in fine shape, they have adequate capitalization. It's a...
WILLIS: It's a big debate.
SAHADI: It's a big debate.
WILLIS: And it's been a debate for a while.
SAHADI: Yes.
WILLIS: They've been very controversial. And now having big, big problems. Hopefully this bill will help.
Of course, there are some things in this for consumers. Let's talk about that.
SAHADI: That's right. The biggest one is the new FHA program which would authorize that agency, the Federal Housing Agency, to create up to $300 billion in new 30-year fixed rate loans for homeowners at risk of losing their houses.
WILLIS: That sounds good.
SAHADI: They'd extinguish their old mortgages if their lenders allow them. The lenders write the mortgage values down to below appraised value, so it's affordable. They give the borrower some equity, and they pay fee to the FHA, both the lender and the borrower. The idea is, get them out of loans that they're not going to be able to handle.
WILLIS: And this is totally voluntary for the lenders, right?
SAHADI: Totally voluntary. And it's really not up to the borrower to say, I definitely want in, put me in. They can ask, but it's really up to the lender to decide.
WILLIS: All right. So it's up to the lender. And again, we're seeing a pretty big price tag here that taxpayers are probably going to pay here.
SAHADI: Well, it depends. The FHA could authorize up to $300 billion, the Congressional Budget Office says it's more likely they're going to back about $68 billion in mortgages.
WILLIS: Wow.
SAHADI: Which is a much smaller cost. And they think of that, about $680 million might be in default, $680 million worth of default.
WILLIS: And that's really the only time the taxpayer pays.
SAHADI: Right.
WILLIS: All right. Let's talk about what goes to communities, because there is an element of this that's really going to help cities and towns all over the country.
SAHADI: The White House doesn't think so, but what Democrats are saying is, we're going to give $4 billion to states to buy up foreclosed properties so that they can raise the properties to the ground, make them available to developers, because that's good for the whole community. Republicans are saying, yes, it's going to be a slush fund for activist groups, for low-income housing advocates.
WILLIS: Give me the timeline here. I expect there's going to be -- I've heard there's going to be action possibly this weekend.
SAHADI: This weekend, Saturday, around late morning, the Senate is expected to vote on this bill. It's still expected to pass.
There are some Republicans in the House who have sent a note to President Bush saying, please, please, please, reissue your veto threat. He had had a veto threat for a while, he dropped it this week. His party's not happy with him for doing that. But it's still expected to pass the Senate, likely.
WILLIS: Still controversial. Fascinating stuff.
Thank you so much, Jeanne.
SAHADI: Thank you.
O'BRIEN: From the housing crisis to America's fuel crisis. Gas prices dropped, believe it or not, a whole two cents overnight. Don't spend it all in one place now.
A sign of what's to come, though? Or is it just a little tease?
CNNMoney.com's Poppy Harlow joins us with more on this in our "Quick Vote."
Hello, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hi, Miles.
A welcome bit of news this Friday. Gas prices a bit lower, right at $4.01 a gallon right now across the nation. But is that going to stick with us here? Who's to say?
Well, weigh in on CNNMoney.com. Here's our question for you today.
"I believe gas prices will continue to drop, will fluctuate up and down, or will rise much higher."
Please let us know what you think on CNNMoney.com. We'll bring you the answers later on the show -- Miles.
O'BRIEN: All right. Thank you very much, Poppy. Appreciate that -- Gerri.
WILLIS: Well, Miles, we've got a great story coming up: getting paid for getting dumped. The story of one woman who sued her ex- fiance and won big time.
And leading by example, how one boss's weight loss is paying off big time in and out of the office.
(COMMERCIAL BREAK)
O'BRIEN: Well, another day, another big drop in the price for a gallon of gas. But could the bigger drop come next week?
CNNMoney.com's Poppy Harlow back with your "Energy Fix."
Poppy, more price cuts ahead? Let's hope.
HARLOW: Yes. I don't know. I think every American is hoping so.
Gas prices, folks, reversing in a major way. AAA says the current nationwide average now $4.01 a gallon. We're smiling about that, if you can believe it or not.
This is the eighth straight decline following a more than $20 drop in oil prices since the peak we saw two weeks ago. At that point, oil had more than doubled in less than a year. And even with the latest drop, there is still a long way to go before oil and gas prices reach the levels we saw this time just a year ago.
Right now, though, oil is down more than $2 a barrel on the day, right around $123 a barrel, Miles. I can't remember when I saw that number.
O'BRIEN: OK. So what do you see in your crystal ball? Is it going to fall further? Will gas prices as well go down?
HARLOW: It's always hard to predict, but what happens here, like predicting stocks, hard to predict what happens in the commodities market with oil. But what we do know, gas prices tend to trail moves in oil prices by about two weeks. So we've already seen some relief at the pump. More could certainly be ahead.
Potentially good news for some cash-strapped consumers out there. But at the same time, gas prices, believe it or not, have not run up as much as oil prices have over the same period. So, unfortunately, they may have less room to fall, Miles. And these gas station owners are already working on pretty thin margins.
O'BRIEN: Yes. So what's been going on in the last couple of weeks that has been sending prices down?
HARLOW: Yes. A few factors are playing in here.
For one, the first major Gulf hurricane of the season, Hurricane Dolly, somehow missed most of the oil rigs in the Gulf of Mexico. Tensions with Iran easing just slightly. Also, there's a sense that the sluggish U.S. economy will slow demand for oil and gas.
As much as anything, though, what's changed has really psychology, Miles. And it all comes down to the mood, right? The mood affects the market as a whole, so that could be playing in here, as well.
But some good news to go into the weekend.
O'BRIEN: All right. We'll take it.
HARLOW: Yes.
O'BRIEN: We'll take it whenever we can get it.
Poppy Harlow with our "Energy Fix."
Thank you -- Gerri. WILLIS: Well, I do like that good news.
With oil prices -- well, they're not sky high anymore, but pretty darn high -- the price tag to heat your home this winter is likely to get more expensive. Are there any ways you can save money?
Our CNN Senior Correspondent Allan Chernoff is here with the scoop.
OK. I'm really interested in this because I use home heating oil.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: And I would say prices are still sky high...
WILLIS: For home heating oil.
CHERNOFF: ... down to $120 for a barrel of oil. That's still sky high. Let's see it fall a little more.
Typically, of course, this time of year, this is exactly when you want to be buying home heating oil because no one's really thinking about heating their homes right now. Demand is down, and prices usually are much lower over the summer. But, of course, as I said, with oil above $120 a barrel, there are no bargains this summer in heating oil. Even oil heat dealers say do not buy now.
(BEGIN VIDEO CLIP)
MARC SCHILDWACHTER, SCHILDWACHTER & SONS HEATING OIL: In the past you used to save 40 cents a gallon, in that ballpark. A year like this one, you might lose $1.50 a gallon by buying it now. Prices could fall a long way this winter.
(END VIDEO CLIP)
CHERNOFF: A little bit of good news. Oil prices have begun to drop in the past two weeks. But still, heating oil prices are very high.
Right now, Schildwachter is selling heating oil at $4.69 a gallon. Compare that to the summer time price a year ago of $2.79. It is scary to think how expensive heating your home could be next winter.
And Gerri, I know that includes your home.
WILLIS: Oh, no. I'm really worried now. So what's your advice for me?
CHERNOFF: Well, consumers really have to think about this. Typically, prices, you would think, could come down. I mean, this is just insane where prices are right now. But, of course, it is theoretically possible that prices will be even higher in the winter given the volatility and, frankly, the insanity of the oil markets right now. So work out a deal with your dealer. Schildwachter recommends buying a cap which he offers clients. It's a guarantee that your price will go no higher than a certain level.
(BEGIN VIDEO CLIP)
SCHILDWACHTER: Get a cap. Rather than locking in your price, a price cap will serve you no matter which way the market goes. If it continues higher, you have a cap, if it plummets, you have no floor underneath you. So you're not afraid of the market anymore.
(END VIDEO CLIP)
CHERNOFF: Schildwachter says buying that kind of insurance policy could cost you 15 to 25 cents a gallon. Now, a more traditional way to protect yourself is to lock in a price for heating oil, but this year that could be a costly mistake if oil prices drop.
WILLIS: Well, Allan Chernoff, thank you for that. You'll be back with us a little later in the hour. I'm going to call my home heating oil dealer right now.
CHERNOFF: Get a cap.
O'BRIEN: Got to hedge it, don't you?
When you think of folks going door to door, you probably think of Girl Scouts selling cookies, census takers, maybe, or those earnest folks from Watchtower. But there's a new breed of door -to-door salesmen, and they don't want you to buy anything. In fact, they want to pay you, with a catch, of course.
CNN's Carrie Lee explains.
(BEGIN VIDEOTAPE)
CARRIE LEE, CNN CORRESPONDENT (voice over): Demand for oil and natural gas is soaring. Prices have doubled in the past year. That's prompting companies like Chesapeake Energy to go door to door searching for untapped natural gas.
Kurt Santayana lives in northeast Pennsylvania.
KURT SANTAYANA, NORTHEAST PENNSYLVANIA RESIDENT: They gave us a lease agreement for $1,500 an acre for a five-year period to explore for gas.
(END VIDEOTAPE)
O'BRIEN: All right. We're going to break into that taped piece from Carrie Lee to take you to Paris, France. The presumptive Democratic nominee, Barack Obama, having just met with this man, French President Nicolas Sarkozy. They're having a joint news conference.
Let's listen in for a bit. (JOINED IN PROGRESS)
NICOLAS SARKOZY, FRENCH PRESIDENT (through translator): It is America, which it has a lot of debate (INAUDIBLE). We are independent friends, but we're friends. And so we must appreciate that here in Europe, and particularly here in France, with great interest what is happening. And also in Europe, Barack Obama, there are people who come from all walks of life who have different stories who are not traditional French people.
Not everyone here is called "Sarkozy." I'm full aware not everyone is called "Obama" in the United States.
And so the adventure of Barack Obama, it is a story which speaks to the heart of French people and speaks to the heart of Europeans. And it's not up to French people to choose the next U.S. president. Whoever he is, we shall work together with him.
And I'm pleased to have met the senator, which I met in 2006, with whom I spoke with so much passion about Darfur and what was going on. And we were two in the office. One became president, so it's up to the other person to do the same thing.
And I'd like to say to journalists that we spoke with Barack Obama with many things about Iran, the Middle East. I would like to say that there is great convergence of opinions.
It was fascinating, and (INAUDIBLE) also took part. A lot of convergence of opinion. And great impatience that the American democracy chooses its next president. And we take a lot of common initiative (ph) between the U.S. and Europe on climate change, on the reform of global institutions, peace in the world, moralizing behind capitalism.
There we are, Mr. Senator. It's for you to speak now.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Well, first of all, I want to thank President Sarkozy for hosting me and welcoming me to Paris. I can't imagine somebody who better captures the enthusiasm and the energy of France than your president.
And I also want to thank Foreign Minister Kouchner. We had a very productive discussion on a range of challenges and opportunities that France and the United States both share.
And I also want to say that I recall our meeting the first time.
I don't know whether people are aware that when President Sarkozy went to Washington, he wasn't yet elected as president. He met with only two United States senators. That was me and John McCain.
(LAUGHTER)
So I would suggest that for the reporters in the room, if you want to know something about elections, you should talk to the president of France. He seems to have a good nose for how things play out.
I obviously am very appreciative of President Sarkozy's longstanding commitment to strengthen the bilateral relationship between France and the United States, and enhance transatlantic relations as a whole. He has been a great leader on this, and the American people greatly appreciate President Sarkozy's approach to the relationship between our two countries.
When he came as president now to speak, he was treated like a rock star. Everybody loved him. And I think it was after that that everybody decided to call French fries "French fries" again in the cafeteria.
But I share his view that the United States and Europe can and will accomplish far more when we join in common cause. And today we reviewed some of the key goals that the United States and France can work together towards.
First, we discussed some of the common security challenges that we face, including peace between the Israelis and the Palestinians, which is obviously so important to all of us. We discussed Iraq, and I gave my impressions about the improved situation there.
We discussed Afghanistan, which is absolutely critical. And I thanked President Sarkozy and the people of France for the extraordinary commitment. While I was in Afghanistan, the NATO commanders, the U.S. commanders on the ground, all expressed great admiration and appreciation for the wonderful work that the French troops are doing in Afghanistan.
And we talked about Iraq, which we agree is an extraordinarily grave situation. President Sarkozy and I agree that the world must send a clear message to Iran to end its illicit nuclear program. A nuclear-armed Iran would pose a grave threat to both of our nations, it would endanger Israel and the rest of the region, and could embolden terrorists and spark a dangerous arms race in the Middle East.
So I applaud France's current role in the EU-3 plus 3 efforts to use strong diplomacy to end this threat. It's important as we move forward for the United States and our European allies to remain full partners in this effort.
And that's why I'm glad that the United States assigned Bill Burns, who is an outstanding diplomat, to participate in the current talks that are taking place. And my expectation is that we're going to present a clear choice to Iran: Change your behavior and you will be fully integrated into the international community with all of the benefits that go with that. Continue your illicit nuclear program, and the international community as a whole will ratchet up pressure, with stronger and increased sanctions.
And we should have no illusion that progress will come easily. But we should -- I do want to make this point. Iran should accept the proposals that President Sarkozy and the EU-3 plus 3 are presenting now. Don't wait for the next president, because the pressure, I think, is only going to build.
Now, this is part of the broader security agenda that we both care about. So we talked about Afghanistan.
And again, I think President Sarkozy's step to greater integration with NATO is going to enhance NATO's ability to combat 21st century challenges ranging from counterterrorism to peacekeeping. And I applauded him for that.
I think the United States should welcome a powerful defense in Europe. And I think the leadership that President Sarkozy is showing on this is important.
We also talked about Darfur and the need for the United States to join with the Europeans to prevent the continuing spread of instability and despair that affects not only Sudan, but also the broader region.
So the last point I want to make, and then we can open it up for questions, is President Sarkozy emphasized that in his upcoming role as president of the EU, one of the biggest priorities is going to be the issue of climate change. And I've said to him that should I end up being the next president of the United States, this is also going to be one of my highest priorities. Not only because it impacts our environment in a profound way, but also because it has a direct impact on our national security and on our economic interests, as well.
If we do not have an energy policy that curbs our use of fossil fuels, then we are going to have a whole host of problems in the coming decades. And so I think that the American people are ready to take serious steps. Many of the countries of Europe have been in the lead on these issues. I'm looking forward to being a partner with the president on that process, as well.
So with that, what I would suggest is we open it up for questions.
How are we managing this? Do we decide?
President, why don't -- you'll call on a couple of French reporters and I'll call on a couple of U.S. reporters, is that right?
SARKOZY (through translator): I agree. If in America they agree -- journalists agree to be chosen, I fully support this way of proceeding and I say to French journalists that all I'm doing is following Barack Obama.
U.S. journalists first.
Can you give the journalist a microphone? Thank you.
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Sorry, gentlemen.
Mr. President Sarkozy, you know that in France, the presence of Barack Obama and what he's done in terms of breaking the barriers in the United States has sort of made a resurgent black consciousness movement here. The black people in France are very proud and very hopeful for their future.
They also live, many of them, in poor situations. And you know you've had your own riots here and protests and disturbances in the (INAUDIBLE).
At one point, when we were covering those riots, when you were interior ministry, you called the rioters "scum." And I'm wondering whether you feel today, when you stand next to somebody you clear admire so much, and who has broken so many barriers, that you regret that term or that wish you hadn't said it?
SARKOZY (through translator): I congratulate you, Madame, on your exceptional knowledge of French political life and your contribution to friendship between people. But precisely things changed because there were certain things that weren't right, and I'm very pleased, Madame, that you're speaking, Madame, in front of Barack Obama -- a situation that existed before I was president. And I believe that you were worried, Madame, in 2005 about what was happening in the United States.
And you, in the United States, you know what it's like. And you knew what happened.
The confrontations that I had to manage, I would like you to appreciate that not one single shot was fired by the police in France. The only injured person was a member of the police.
But since my election, there have been no riots because we have put into place a development plan which is considerable. And what we want to do is that the political adventure of Barack Obama is not just simply reserved for that great country, the United States.
It's been almost three decades -- for three decades, all your foreign ministers do not have -- Madame Rice, Colin Powell. That's why I like the United States, and that's why in the French government there is (INAUDIBLE), there is (INAUDIBLE), so that everyone is given a chance.
So, what the United States has done with regards to what I spoke about, and Barack Obama today, this is what we want to do.
And the last point, when I spoke about the positive discrimination, positive action, the way the United States -- the way it has a saying that at the top of country it must be the same as at the bottom, that's what I want to do. In fact, I don't know if it was to please me, but your question really pleased me.
Do come back. Thank you.
QUESTION (through translator): The president of the republic you saw on your arrival, it did not serve John Kerry in 2004. (INAUDIBLE) work against the facts whilst you spent much more time with our German friends? Has it not -- will it not work against you? OBAMA: The truth is that the speech that I gave in Germany was hopefully speaking to a broad European audience. And I hope that some of my friends in France were able to hear my desire for a strengthening relationship between the United States and Europe.
I think for too long there has been a caricature on both sides of the Atlantic. The Europeans, I think, have seen Americans just as unilateral and militaristic and have tended to forget the extraordinary sacrifices that U.S. military, but also U.S. taxpayers have made in helping to rebuild Europe, but also helping to provide security and development around the world.
On the other hand, in the United States there's been a tendency to think that, well, you know, the Europeans don't want to get their hands dirty on some of these difficult security issues. And they're always critical of America. And one of the wonderful things with President Sarkozy's presidency has been that he's broken -- he's shattered many of those stereotypes. And I think reminded Americans of the long tradition of friendship between America and France. One that dates back to the founding of our country.
As far as me spending time in Paris, I don't know anybody who doesn't want to spend more time in Paris. So it really just had to do with the fact that the way our schedule was structured, I've been gone a very long time. It's unusual for a presidential candidate to be out of the country for more than a week. And so I think we've just had to abbreviate these last meetings. But I assure you that I look forward to coming back and spending much time here.
And, finally, one aspect of your question that I think needs to be addressed. I think the average American has enormous fondness for the French people. And I think people in France and people throughout Europe should not underestimate how much interest there is in America in seeing the transatlantic relationship improving.
I think the American voter understands that problems like climate change or energy or terrorism cannot be solved by any one country alone. That it has to be a group effort. And that's why establishing and strengthening the kinds of partnerships that we've discussed is so important.
It's your turn.
OK. A question.
UNIDENTIFIED MALE (through translator): Another question?
OBAMA: Oh, they have plenty of questions, I promise you.
QUESTION: Senator Obama, in your speech last night you called on our European allies to aid more in the effort in Afghanistan. How specifically would you like -- how many specific troops would you like to see France, Germany, Britain recommit to that effort? Would you like them to send the additional two to three brigades that your calling for U.S. troops? OBAMA: Well, I think the United States needs to send two additional brigades, at least. Obviously the greater the commitment from our NATO allies and the more those committed troops are not restrained in terms of their rules of engagement, the more it frees up the United States from having to send even more troops. That's why I'm so grateful for the French troop presence that already exists and for President Sarkozy's willingness to send additional troops.
And I should point out that, I understand the difficult politics of this in France. And I understand the difficult politics throughout Europe. And that's why, I think, President Sarkozy's stand is so courageous. The war is never easy, as I said in my speech last night.
But Afghanistan is a war that we have to win. We do not have an option. We can't have a situation in which al Qaeda and the Taliban have created safe havens that are potentially disruptive, not only in the region, but end up being the focal points around which terrorist attacks are planned that could affect Paris or New York.
So we don't have a choice. We've got to finish the job. And that involves not just the military, it also involves economic developments. And, again, that's an area where the Europeans and NATO can, obviously, be extraordinarily helpful and have already been extraordinarily helpful.
Mr. President, do you want to comment on that at all?
SARKOZY (through translator): I support the opinion of Barack Obama. In Afghanistan, we have not the right to lose. We do not have -- we must not allow the Taliban to return. We're not allowed to allow them to cut the hand of the woman because she puts polish on her nails. A woman who allegedly is an adulteress. I mean this is what the values of man are all about. And the decision we take is all of us to send additional men so that middle ages does not return to Afghanistan. It is a strategic decision. We are on the side of our allies.
So, of course, there are lots of matters. I share the concerns expressed by Mr. Obama on Pakistan. But in Afghanistan, we are there to triumph the rights of man. We're not against the Afghans, we are against the Taliban, against terrorism and against the extremists. That is the fight we have on our hands.
Can you imagine if we left? If we gave up? Imagine if we did not support President Karzai in spite of all the difficulties and the remarkable confidence (ph) of the donors (ph). Of course it's natural to generate discussions in a democracy. And we see we have to support -- believe in our ideals. One must be able to see a little bit further because it's the role of the head of state to see a head, not to always, in the short-term, just for tomorrow's headlines. It's something I've discussed, I've thought about.
It's difficult -- a difficult decision. We've explained it to the French people and our allies must appreciate that it's a commitment on our side. And over there, an extremely important issue is at stake. What Mr. Obama said about the future, that the Americans wish to put forward. It's good news they want to increase their troops in Afghanistan. It's good news.
QUESTION (through translator): Mr. Obama, you have said that you wanted a new partnership between Europe and the United States. Faced with a challenge that we all face in the future, how would you be different from George Bush? And Mr. French President, you wish to mock a break with regards to the diplomacy of your predecessor Jacques Chirac. Barack Obama is also a break. Do you wish to see this diplomatic break changed.
OBAMA: First of all, just remind everybody that I'm not the president. I am a United States senator. I am a candidate for president.
But there's a wonderful traditional in the United States that's not always observed, but I think is a good one. Which is that you don't spend time criticizing a sitting president when you're overseas. Because I think that we have one president at a time. And it's very important that our foreign policy is presented in one voice.
What I can say affirmatively is that an effective U.S. foreign policy will be based on our ability, not only to project power, but also to listen and to build consensus. And the goal of an Obama administration in foreign policy would be, obviously, to act on behalf of the interests and the security of the United States. But also to listen carefully enough to our allies that we understand their interests as well and we try to find ways that we can work together to meet common goals.
The United States is a very powerful country. But as I said before, an issue like climate change is not one we can solve by ourselves. It's going to require an international effort. Not only are we going to have to look at what countries like France and Germany are already doing and making some very difficult choices to deal with their carbon emissions and to make energy more efficient, but we're also going to have to talk to countries like China and India that are less developed right now and have greater poverty.
And it's going to be very hard for us to ask them to take seriously these issues if they see that wealthy nations are (INAUDIBLE). And that's an example of where we have to present a common front and a common agenda in order to get all the countries in the nation -- all the countries in the world involved in what is going to be an enormous undertaking.
So my goal is just to make sure that whether it's our European allies, whether it's Muslim countries, whether it's our friends in Asia, that people feel as if the United States is taking their interests, their concerns into account and that we are interested in the prosperity and peace of ordinary people. And not just seeing our foreign policy only through the lens of our own security.
SARKOZY (through translator): A French president must work with the president of the United States, whoever he is. The French respect the choice of the Americans, so we work with the administration of Mr. Bush, like one works with the government of a friendly country. But the idea of an America which -- it's my idea which can only satisfy the idea that a candidate of this campaign we mustn't fear a European defense. What we need to Europeanize NATO is rather good news. A candidate who says that, if I'm elected, I want to work as a team.
If you remember at the Mediterranean Summit, Syria asked us (ph) to have two supporters, if one day they discussed with Israel. The United States and Europe, and particularly France, but that's good news. It doesn't mean criticizing the president by saying that. And so much the better that the political debate internally in the United States.
The United States one of the great candidates I want to work together in a team with our allies. I prefer that rather than ignoring Europe, ignoring France they can work on their own. The candidate says, we've understood the world through just one single part that could decide on its own, but we can work hand in hand. It's good news. It's not that for that (INAUDIBLE) that I wish to criticize others. It's good news, the will to work together.
In fact, two years ago we imagined a journey of travel - a trip we could do together to Darfur. The fact the United States wishes to assume its responsibilities in such a way is good news.
Perhaps two further questions. One French one and one American one.
QUESTION: Thank you.
Senator Obama, it's been a busy week. Eight days, nine days. We lose track after a while. You have been to war zones. You've met one-on-one with 20, 25 leaders, including President Sarkozy here.
In all that you've heard in those discussions, is there anything that has caused you to rethink or perhaps refine anything, any of your policies, anything that you thought you believed coming into this trip?
And President Sarkozy, your opening statement sounded a great deal like an endorsement. Was it that? And, if so, have you conferred with your good friend, President Bush, about this?
OBAMA: OK. Well, the -- first of all I'm going to warn my dear friend, President Sarkozy, to be very careful about that second question.
In terms of what I've learned, you know, I think on a trip like this, what typically happens is not blinding insight, but rather a deepening of some -- a set of concerns that you already had. And so I didn't see a -- there was nothing that I saw that caused me to change my basic strategic assessment of our security situation moving forward and some of our top foreign policy priorities.
Going to Afghanistan confirmed for me that the situation is worsening there, that we're going to have to put more troops in, that we've got to deal with issues of the narcotics trade. We've got to do more for ordinary Afghans. And we've got to deal with Pakistan and the situation in that border if we're going to secure it.
My trip to Iraq confirmed that the security situation has greatly improved, that our troops have performed an extraordinary service, and that the Iraqi government is ready to take more responsibility. And that that will free up our capacity then to begin withdrawing our troops at a steady, prudent pace. And that we still have work to do on the political side in resolving issues like how oil revenues are going to be allocated. And that there are still suspicions between the Sunni and the Shiite in the country that are under the surface and sometimes above the surface. And that that political reconciliation, that work has to be our top priority, as well as making sure that the Iraqi government is capable enough to deliver for its people.
My impressions in the Middle East confirmed that the talks that emerged out of Annapolis are very useful and productive. But it is going to be important for the United States to engage in a significant way in moving those issues forward.
President Sarkozy did mention one area that hadn't received much attention state side, but I think does present an opportunity. I was interested in seeing that people in Israel were very interested in pursuing -- very interested in what a shift in Syrian foreign policy might bring. That if, in fact, outside as serious about dealing with their support of Hamas or their support of Hezbollah. That that could be a game changer. But with understandably they were skeptical about how quickly that might move, but I think that's an area worth exploring and having leaders like President Sarkozy, helping to move that along, I think, has enormous potential.
And in terms of my visit to Europe, it confirmed for me that you have some extraordinary, new leaders, like Chancellor Merkel, like President Sarkozy, who are oriented towards working effectively with America. And that some of the tensions and differences that we've had in the past are precisely that. They're in the past. And that Europe is ready to move forward and I think we have to have an American administration that is also ready to move forward. And I think that's starting to happen.
One last point I guess I would make is that there is uniform concern about Iran. That was the other thing that I think was helpful. I always considered it one of our utmost threats. I knew that Israel considered it their top security priority.
It was gratifying to see that there's no leader I spoke with that was not concerned about the possibility of Iran getting a nuclear weapon. Understanding not only that it would pose an existential threat to Israel, but that it would help to potentially unravel any work that we might hope to do on non-proliferation issues and that it would change the strategic balance in the region in a way that could be very dangerous in all sorts of ways. And so I think there's an opportunity to really create a unified, international effort on this front. And President Sarkozy will be and has been and will continue to be one of the most important leaders on this issue. SARKOZY (through translator): It's the Americans who will choose their president, not me. The Americans. You're adult enough to realize that means I did not wait for the president election to hear that France wanted to work hand in hand with the United States. I've been accused of that many times. But one can be interested by a candidate who looks forward, who looks ahead, and not in the past, because policy concerns me.
It wasn't such a long time ago that I was a candidate for the presidential election. I remember it and I like to talk about it with someone, you know, we could say it's working strange and that's interesting and that's why in the reform of the French constitution in France, I wanted to limit the amount of the constitutional mandate to restrict them to offer new leaders to a country, with a new story, new strength. And that is the strength of a democracy, to allow a democracy to breathe, not always the same people all the time.
You may say to me, I can say that because I'm at the beginning of my mandate. Perhaps it will be worse at the end of my mandate. And good luck to Barack Obama. France will be very happy if it's someone else. France will be a friend to the United States, just as he, when there will be elections in France or someone else. You wouldn't say it's up to the Americans to choose. Well, it's true, it's a conversations we've been having for some time and it's of interest.
And one can agree it doesn't mean that we disagree with the others, it just simply means that we talk. And we find that we have points in common. After all the years you've seen with us is rather good news if that was your question. It's also my answer.
A last question.
QUESTION (through translator): Mr. Senator, we noticed that you have lots of points in common with President Sarkozy. You're all -- both of you are sons of foreigners. You were both lawyers. You were both one in electoral competition. I'd like to know what of the characteristics of the journey of Mr. Sarkozy, which could inspire you, apart from victory, of course?
OBAMA: Well, I do think that President Sarkozy's election here in France indicates the degree to which the west generally is at its best when it's opening up opportunity to all people. When it's a meritocracy and people rise from all walks of life.
That's something that America has always taken great pride in. It is the essence of what we call the American dream. That anybody, even if they were born into poverty, their families have no name or no fame or no fortune, that they can still rise and be successful. And I think to see that same spirit in France is a powerful thing.
The other thing that inspires me is the president's energy. So I want -- I'm asking him what he eats so that I can find out how I can always have as much energy as this man beside me. He's on the move all the time and that's what you need if you're going to bring about change. So I'm grateful to him for our friendship. I'm grateful to the people of France for their hospitality. And I'm looking forward to coming back and being able to spend more time enjoying the wonders of France.
Thank you very much, everybody.
O'BRIEN: All right. Senator Barack Obama, the presumptive Democratic nominee for president, there with President Nicolas Sarkozy at a news conference lasting nearly an hour. Barack Obama now headed to London this evening and he'll overnight there. He'll have meetings tomorrow, Saturday, in London, then make his way back to the United States after a very lengthy trip to the Middle East and Europe. Very lengthy for a presidential candidate.
Should be worth noting that Senator McCain met with Nicolas Sarkozy on March 21st in Paris, as well.
Coming up at 1:30, about a half an hour from now, in the "Newsroom" program, Senator McCain will be holding an event in Denver, Colorado. We'll bring you live coverage of that. A little later in the day, he'll travel to Aspen, where he will meet with the Dalai Lama. We'll bring you coverage of that, as well.
A couple of other things to note. A couple of exclusive interviews coming up in CNN. In "The Situation Room," 4:00 p.m. Eastern Time, Wolf Blitzer is sitting down -- speaking, I believe right at this moment -- with Senator McCain. He'll give you exerts of an exclusive interview in Senator McCain in the 4:00 p.m. hour of "Situation Room." The full interview will occur on Sunday on Wolf Blitzer's program there, "Late Edition."
And, finally, Candy Crowley also has an exclusive interview today. Her's with Barack Obama, taped in France. That will also air at 4:00 p.m. Eastern Time in "The Situation Room" right here on CNN.
CNN, obviously, the best political team on television, no doubt about that.
Last but not least, a really bad breakup. A bitter ex takes her former fiance to the bank. You won't believe how much cash he had to withdrawal.
You're watching ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: Gas prices, as we've been telling you, dropped a whole two cents overnight. Will they continue to fall or is this only temporary? Here are the results from our poll. Twenty-six percent, continue to drop. Forty-nine percent of you out there think they'll fluctuate up and down. And 24 percent, rise much higher. That's the results of our poll.
O'BRIEN: Twenty-six percent wishful thinkers, I guess. All right. A Georgia woman got $150,000 for getting dumped. Rosemary Shell (ph) sued her ex claiming their engagement was a binding contract. She says he owed her because she left a high-paying job to be with him. The jury agreed. Shell's ex said he had left a breakup note in their bathroom -- he should be sued just for that -- when he found out how much debts she had. The least he could have done was told her in person.
WILLIS: I know.
O'BRIEN: Anyway.
WILLIS: You know, style points there to begin with. And I think she's absolutely right.
O'BRIEN: A contract is a contract.
WILLIS: Any time you can get money like that, do you agree?
O'BRIEN: Yes. That's the American way.
WILLIS: All right. Time now to get you up to speed on other headlines making news. CNN "NEWSROOM" with Kyra Phillips starts right now.
