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Issue Number One
Biofuel Adventure; Investing Responsibly; Weight Off the Top; Answering Your Questions; Senator Stevens Indictment
Aired July 29, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CO-HOST: It is the great energy showdown on Capitol Hill. We're being told that a deal could be in the works, and we're going to be all over that, as you might imagine.
Also, housing prices fall at the sharpest level of all time.
And we're going to break down the deficit. It could be the record of all times. And what that means to you and to me and to all of us.
Also, how to invest your money in an economy like this one. And how to do it responsibly.
Issue #1 is your economy. ISSUE #1 starts right now.
From the ISSUE #1 headquarters to the CNNMoney.com news room, what we do is we cover the stories in this particular economy that matter to you right now.
Hello again, everybody. I'm Rick Sanchez, in for Ali Velshi.
The energy debate on Capitol Hill -- are we drilling yet? Are we not going to be drilling? Can we drop gas prices by $2 in a matter of months?
I'm going to tell you about a plan they're talking about.
Also, some car insurance companies say they're going to lower your rates, but there's something that you've got to give up. And you know what? You may not want to.
Also, we're back on the road for day two of Cody's Cross-Country Biofuel Adventure. What a movie that is.
Gerri, the big story today, the energy bill, right?
GERRI WILLIS, CNN ANCHOR: That's right. It's definitely the energy bill.
The energy debate is heating up, and there's actually talk of a compromise. It's been gridlock city for days on Capitol Hill, as the Democrats and Republicans battle over which amendments will be allowed in the measure.
Majority Leader Harry Reid surprised Republicans yesterday, offering them the chance to vote this week on four GOP-packed energy measures, including the lifting of the longstanding federal ban on offshore oil drilling. Minority Leader Mitch McConnell says he's very encouraged by Reid's proposal, but he's got to talk it over with the leadership team first before making an official response.
Now, this possible breakthrough comes days before Congress recesses for August. Now, one thing they don't want to do, return home to face constituents boiling mad over sky-high prices at the pump -- Rick.
SANCHEZ: You know what we're going to try and do, Gerri, is try and figure out for viewers exactly what it is. Because, you know, there's a lot of talk about this thing called by an energy bill. Well, what do they mean by an energy bill? Are we talking about something that is somewhat Carter-esqe, in something that's comprehensive and long range, or are we talking about a short-term fix to try and bring gas prices down in this country?
There's two theories on this. Two theories that we all need to understand.
One of them tends to be coming from the Republican side, with a little bit of help by the Democrats. And that is to just try to figure out a way to bring gas prices down by drilling more in places where, for the past, people have been saying we ought not to drill. The other plan is the Democratic plan, and the idea there is to try and get speculators at this point to try and stop using what their techniques are and actually bringing down the price of gas that way.
Let's do this right now. As I've explained those two plans -- again, the Democrats are going to try and stop oil speculators, the Republicans are saying, no, what we ought to do is drill. Can they come together with these two ideas and make them into one? That's what we're going to be watching throughout the course today.
Gerri, back to you.
WILLIS: Yes, we're going to go over to Kathleen Koch right now, live to talk about this very issue -- Kathleen.
KATHLEEN KOCH, CNN CORRESPONDENT: Gerri, right now, President Bush, this afternoon, is preparing to head to Euclid, Ohio, where he is going to be making a speech on energy. He'll be using a company that makes welding equipment as his backdrop.
And he is really basically none too pleased that Congress has not taken action yet on energy legislation, despite the sky-high prices of gasoline at the pump. So the president will be pushing Congress today to take a vote before they leave on their August recess.
And of course, the energy bill, as was just described a few minutes ago, that the president and most Republicans would like to see would, among other things, expand offshore drilling, it would allow for exploration in Alaska's Arctic National Wildlife Refuge. It would also allow for the development of oil shale resources in the Midwest. And then it would also streamline the process for (INAUDIBLE) of refineries. But again, most Democrats tend to oppose offshore drilling. And that's the real sticking point here.
So, what we're seeing is the energy bills in both houses. House and Senate are stalled right now. Press Secretary Dana Perino this morning accused congressional leaders of "undemocratically blocking votes" on the energy bill. Senate Democrats, on the other hand, they accuse Republicans of being the ones who are being unreasonable in trying to amend the energy bill to death.
And it's interesting, Gerri, to point out, though, that even as President Bush today is going to call for action from Congress, he himself admits, and just last week in the Rose Garden, that there is no magic wand that he or anyone else can wave to automatically bring down gas prices.
WILLIS: Well, I know all eyes are going to be on Congress to see if they pass any kind of energy legislation. But there's another bill that's critically important to consumers, and that is the housing bill.
The Congress signed it last weekend. When is it going to get to Bush? And when will he actually sign it?
KOCH: Well, when it's going to get here is anyone's guess right now. It hasn't arrived at the White House. Press Secretary Dana Perino this morning said, as soon as it arrives, the president will indeed sign it. And she didn't exactly accuse the Democratic leadership of purposefully trying to hold it up on the Hill, but she did say pretty soon it will be "irresponsible" if Congress doesn't send it to the president's desk.
WILLIS: Wow. OK. Interesting stuff. Thank you for that, Kathleen Koch.
KOCH: You bet.
SANCHEZ: I was explaining a little while ago how this energy bill is trying to come about. Look, there's no surety at this point that this thing's going to happen. The Democrats are pushing in one direction, the Republicans are pushing in another direction.
Let's talk to somebody now who is trying to bring both sides together. He's one of 10 legislators who's doing just this.
Senator Ben Nelson is joining us now from Washington.
Senator, thanks so much for being with us.
Let's start with the -- what was the original idea, I suppose, proposed by the Democrats, which is essentially that there are some top business minds out there who are saying that if you could curtail or limit the oil speculators, that we could actually drop the price of gas, some say, within a matter of months.
Is that still the aim? And I guess people at home are saying, if you really could do that, why haven't you done it yet?
SEN. BEN NELSON (D), NEBRASKA: Well, I think maybe part of that's already been done. You've seen the drop in oil prices, the resulting drop in the gasoline prices at the pump. And so I think you can say that some of the speculation may be under control right now.
But it's more than that, we all understand it's more than that. And it's not simply about drilling, it's not simply about less use or more conservation, or even more alternatives. It's a combination. And I think we all understand that.
SANCHEZ: But let me interrupt you then. You say the speculation or the curtailing of the speculation is working already. Why would they curtail if you're not mandating them to curtail? Isn't that the whole idea, to pass a bill where you guys have some kind of authority over them?
NELSON: Well, I think there's some people anticipating that there probably will be some changes with the Commodity Futures Trading Board and the rules regulating it. And I think there's some people making adjustments to their investments right now accordingly.
There's a difference between people who have forward contracts because they buy the oil in the futures because they're going to need it, such as the airlines.
SANCHEZ: Yes.
NELSON: Others are hedging, are putting the contracts into pension funds and other speculative deals. So what we have to do is sort that out and not make a mistake, but get it right.
SANCHEZ: No, I think we get that. I know it's very complicated for our viewers to get it. I mean, they're called index speculators, and those are the ones that you guys are kind of gunning for and trying to say, look, guys, control yourselves, because you're really messing up the economy. I get that.
NELSON: And there will be -- there'll be a report out by the Commodity Futures Trading Board about the middle of next month, or middle of September. That's going to be a very important point for us to look at when we get back in September.
SANCHEZ: Let me ask you a question about the drilling, because Republicans seem to be pretty firm that they want drilling off our coasts. They say...
(CROSSTALK)
NELSON: Well, they're not alone. There are other Democrats who think that drilling is part of the answer, as well. But only part of the answer. It's being overblown by some others on the other side.
SANCHEZ: Well, is it really part of the answer? Or is that a short-fix solution? NELSON: Well, it's not short-fixed at all. But what it is an answer to is maybe more supply. But more importantly, perhaps, at the moment, it's less reliance on foreign sources of oil and more reliance on our own energy needs here at home based on our sources here at home. Drilling here will mean that we have less reliance on foreign sources such as Venezuela or the Middle East, and be more moving toward our own independence even where oil is involved.
SANCHEZ: You know, as I look at this thing, Senator, it doesn't seem to me, and maybe I'm wrong -- you please tell us -- that this is a comprehensive, long-range energy policy that you guys are working on. If I could rename this for you, I would call it the "Bring the Gas Prices Down Real Fast" policy.
Am I wrong?
NELSON: I don't think it is. Well, I think it's a combination.
It may not be the entire comprehensive approach. That's what I want to see us ultimately do. But there are some things we can do right now based on what we know right now. And that's what we should be doing.
Not all of it will be bringing the price of gas down to pump right now, but it's certainly going to help for that. You know, if we hadn't started on ethanol 18 years ago in Nebraska, we wouldn't be producing two billion gallons a year, and we wouldn't have ethanol in the mix of fuel for our automobiles today.
SANCHEZ: You guys going to get this done, Senator?
NELSON: I think so. I mean, I'm optimistic that there's enough interest in doing it that, if the leadership on both sides can't come to a deal, that the Gang of Ten, five of each, Democrats and Republicans, working together, have an opportunity to come out with a proposal that can be helpful, as well.
We have to do something. The American people are expecting it. And there are those of us who are going to work very hard to avoid continuing fights, but look for accommodation and middle ground so that we can get something accomplished before we go home.
SANCHEZ: We're going to put the heat on you, Senator.
NELSON: Oh, the heat's there.
SANCHEZ: We're going to be checking with you every single day to see how you guys are coming along on this thing.
NELSON: OK. Fair enough.
SANCHEZ: I think Americans want to see it done.
NELSON: They do.
SANCHEZ: Thank you, sir. We appreciate your time. NELSON: Thank you.
SANCHEZ: And certainly, we're going to be seeking the Republican side to get their perspective on this, as well. As you heard, the debate really does have two sides, with people from each side actually coming over to the other side now. At least that seems to be the trend within the last couple of days.
Well, we've been talking a lot about this record deficit. Here's a question for you: How will the next president of the United States end up being saddled by this record deficit?
Also, why your car insurance company might want to give you a big-time discount if you let them track you.
And forget about Batman at the box office. Did you hear about this movie, "The George Bush Story?" Action packed.
So is ISSUE #1. We'll be right back.
(COMMERCIAL BREAK)
WILLIS: This just in. CNN has learned the housing bill passed by Congress over the weekend will be sent to the White House tonight, where President Bush is expected to sign it.
Now, there had been an unexplained delay in the bill going to the White House. But we now know that he's not going to get that bill tonight.
If you remember, that bill includes some $300 billion to back new mortgages to folks who are having trouble paying their mortgages currently. And probably even more importantly, it's going to help out Fannie Mae and Freddie Mac, which stands at the heart of the mortgage meltdown.
So we'll cover that as it breaks. But I want to let you know, that bill coming due for the housing crisis and everything else, well, it's leading us to talk about a record deficit.
We're talking about adding $482 billion of debt next year. But what does it mean to you? And what does it mean to the next president?
CNNMoney.com senior writer, Jeanne Sahadi, is joining us now.
All right, Jeanne. I want you to take a look at a little graphic we have here. It shows just how much debt the federal government has added over the years. And this is really -- this is really a balance sheet for the federal government.
As you can see, most of the time, we're in the red. Only during the Clinton years you see one little up arrow there. That's it.
And I think people look at that and think, holy cow, this is a heck of a bill for our kids and our grandkids. You saw the deficit estimate for next year revised up to $482 billion.
Let's talk a little bit about why this debt is important.
JEANNE SAHADI, SR. WRITER, CNNMONEY.COM: It's important because the more debt we have, the more likely it is to constrain lawmakers in doing what they want to do. So for the next president who wants to come in -- and we know both John McCain and Barack Obama have big, expensive plans that they want to implement.
WILLIS: Right.
SAHADI: And they think those plans will help the American economy, but they may not get the chance to implement them because lawmakers are going to be like, OK, we owe a lot of money already, so we're going to have to be very careful.
WILLIS: Well, a lot of money, right?
SAHADI: Yes.
WILLIS: Why is this so big? And it's grown like top seed over the last six years.
SAHADI: Right. Since 2002 through the end of 2009, which is the end of the first year for the next president, the debt is expected to grow over $4 trillion. So, by the end of 2009, we're expected to owe about $10.4 trillion, long term. That includes the money we owe to Social Security.
So, what that means is that the next president is going to have to work with Congress and decide, how are we going to cut spending? Because analysts who have looked at their economic plans say neither one of them has come up with enough revenue to cover spending.
WILLIS: Let's get to that one by one, obviously. The next president, when he comes to office, he's really going to inherit $9.5 trillion worth of debt.
SAHADI: Right. And then it grows that first year.
WILLIS: From there...
SAHADI: Right, yes.
WILLIS: ... because interest is phenomenal.
SAHADI: Right. Right.
WILLIS: So let's talk about -- first let's talk about John McCain. What is John McCain going to do about this massive deficit?
SAHADI: Well, what he says is, he's all for keeping all the tax cuts and creating a few more. He doesn't think we have a tax problem, he thinks we have a spending problem. So one of the things he wants to do is freeze spending on government programs for a year when he gets into office, analyze whether those programs are meeting their mission, and make spending decisions based on that going forward. He also wants to cut earmark spending, which are those little pork projects...
WILLIS: Right.
SAHADI: ... that people slips into bills and nobody knows about them.
WILLIS: But he wants to cut taxes, too. So, how do you square those two things?
SAHADI: Well, analysts say you don't. They are not convinced that he is going to be able to cut spending the way he says, both because it's not that they're bad ideas, it's just they're hard to achieve because he's got to work with lawmakers. It's not just up to the president to make this decision. And as we know, you know, it's hard for presidents to cut spending, just in general.
WILLIS: Let's talk about Senator Barack Obama. What does he say about this issue?
SAHADI: The Obama campaign has promised not to increase the deficit going forward. They promise to provide pay-fors for all of their new programs. But their new programs are pretty expensive. And one of the things they seem to rely on is drawing down from the war in Iraq.
The McCain campaign also says, hey, we're going to save money eventually when we do withdraw. But analysts say, no, that's not true. What you're going to do -- we're charging the war in Iraq. A lot of our debt is coming from that.
WILLIS: What a credit card balance.
SAHADI: Right. It's a big credit card balance. So, if you count on money saved by drawing out, you're not really saving anything. All you're doing is not accruing more debt.
WILLIS: Right. OK.
So, let me get you to this, because, I mean, I look at all this, you look at the history of the numbers. Can anybody be effective at reducing this deficit?
SAHADI: Well, it requires a lot of difficult decisions. Social Security reform is one of the difficult decisions lawmakers are going to have to make.
Of that $10.4 trillion we're gong to owe at the end of '09, about half of it is money that the government has promised to pay back to Social Security. So that's why both candidates have said we want to reform long term how we're going to fund Social Security.
WILLIS: Wow.
SAHADI: President Obama (sic) wants to raise taxes on high- income folks, President McCain (sic) -- President McCain (sic) -- I'm already assuming. One of them's going to be president, and they're going to try to embark on reform, but they're going to do it in different ways.
WILLIS: All right.
SAHADI: So that's one way you can help curb the deficit going forward.
WILLIS: All right. Well, you know, you're going to keep an eye on this for us. We appreciate it.
Jeanne Sahadi, thank you so much.
SAHADI: Thank you.
SANCHEZ: That's going to bring us now to our "Quick Vote," where you get to weigh in.
CNNMoney.com's Poppy Harlow is here with today's big question.
Hi, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey there, Rick.
Can you believe the deficit projected by the White House?
It is massive, folks. It's $482 billion for the 2009 fiscal year. That doesn't even factor in an additional $80 billion cost related to the Iraq war.
So here's our question for you today. What do you think the government should do to cut the deficit? Raise taxes for everyone? Raise taxes for the wealthy? Cut spending on the military? Or cut spending on social programs?
It's a tough question. Please weigh in on CNNMoney.com. We'll bring you the answer later in the show -- Rick.
SANCHEZ: I'll look forward to it. Thanks, Poppy.
Is it possible? Are your gas prices still going down on this day?
We're going to be checking that out for you.
Also, what would you do to save money? How about this? Would you be willing to let your car insurance company track your driving, your speed, your attention to stop signs, your passing habits, for example?
What do you think? Think about it during the break. We'll let you know.
(COMMERCIAL BREAK) SANCHEZ: All right. Here we go. Are you a good driver or are you a bad driver? Like anybody's going to actually admit to being a bad driver, right?
Here's a better question, maybe. Would you be willing to bet with your insurance company that you really are a good driver?
Let's bring in our CNN business correspondent, Jennifer Westhoven, also known as "Hazel the Maid" in the cool search engine.
Have you seen this? You've seen this.
JENNIFER WESTHOVEN, CNN BUSINESS CORRESPONDENT: That's not the maid...
SANCHEZ: Everybody's talking about this in -- put this up, guys. Can we see this before we go to Jennifer? I think this is really interesting.
There you are.
WESTHOVEN: And look, that's my picture.
SANCHEZ: That's you all the way up there.
WESTHOVEN: I'm like a granny in lace up to my ears.
SANCHEZ: Who is that? And what did they do with Jennifer Westhoven?
WESTHOVEN: I don't know. She's grim-looking, too, man.
(LAUGHTER)
SANCHEZ: You could talk like her though, can't you? How would she talk if she were to talk?
WESTHOVEN: Be quiet in your pew, young man.
(LAUGHTER)
WESTHOVEN: I don't know.
SANCHEZ: So good.
WESTHOVEN: All right.
SANCHEZ: All right, what did you find out? What are the insurance companies saying?
WESTHOVEN: Well, you know, what do you think? Would you be willing to let your insurance company track your every move?
So, you know, I did an informal poll in the "NEWSROOM," and everybody said, no way. But, you know, what if it meant lower insurance payments and what if you thought it could be good for the environment?
So the idea here is, pay as you drive. You basically pay the same rate if you drive a lot or a little.
So Progressive Insurance Company is starting something new. The program is called My Rate (ph). It's a small gadget that's installed into your car.
This is their video that they're showing. And all cars since 1996 had the ports, but it tracks how far you drive, what time you're on the road, and how aggressively you drive.
And that's the key, because that's what they want to do. They want to sniff out the people who are tailgating, people who hit the brakes a lot. And if you do drive aggressively, you could get hit with a surcharge.
Now, they're just starting this program. It's in four states. And on August 8th, they're going to roll it out in New Jersey, right? And that's a big deal, because it's the most densely-populated state, highest insurance rates in the country.
GMAC has a similar program where they'll track you through your OnStar system, too.
SANCHEZ: Really?
WESTHOVEN: And they'll track your -- if you want.
You know, but the big picture is there are some people who think that if we were all paying for insurance by the mile, we would all pay less and we would all drive less. Eight percent less, says the Brookings Institution. They say that would save $50 billion to $60 billion in accidents, it would carbon dioxide emissions, so pollution,. It would cut our oil consumption, our addiction to foreign oil, by four percent.
And they said if everybody did this for every car, each household would save about $270 a year. That's pretty good.
SANCHEZ: So it's like a tiny little person who is hiding in your car telling them what you're doing at all moments.
WESTHOVEN: At all moments. And then, you know, what about the privacy issue?
SANCHEZ: Exactly. I was thinking, you know, is this the kind of thing we really want to head to? Because isn't this a slippery slope? And once you start there, what is going to be next?
WESTHOVEN: Well, so Progressive says, we don't put GPS in the system. So we don't know where you're going to be, we're not tracking that, because so many people called them up and said, you know -- because you could imagine how this could look in divorce court.
SANCHEZ: Well, yes. Homeowners insurance, and then they're going to want to put a camera in your house to see how you live and what you do.
WESTHOVEN: Can they sell that information? It's a mess.
SANCHEZ: We'll continue to follow it.
Mrs. Westhoven, thank you so much.
Gerri, back over to you.
WILLIS: CNNMoney.com's Poppy Harlow is with us now to talk about those high gas prices -- Poppy.
HARLOW: Yes. Gas prices, oil prices all high across the board. You know, big oil companies reporting this week -- ExxonMobil reporting on Thursday expecting a record profit there.
If you think all your money is going to the oil companies, here's an "Energy Fix" for you. If you can't beat them, join them. That's right, get a job working for an energy company.
"Fortune" magazine's most recent list of the top 100 fastest- growing companies. Of that list, 37 are energy companies.
And consulting firm Challenger Gray & Christmas says the combination of baby boomers retiring and a new emphasis on exploration and research and development for oil makes the energy sector a great place to look for a high-paying job, even in this weak economy. Now, the opportunities could be even greater if Congress does open up more land for drilling. Or, Gerri, if it invests more money in alternative energy.
WILLIS: And that, of course, brings to mind how much education you might have to have. What are we talking about? Are we talking about a Ph.D.? Are we talking about high school?
HARLOW: A Ph.D. can't hurt, but for most of us out there, that's not a reality. If you're young enough to get a higher degree, sure, go for it. It's probably a good bet in securing a job.
But there are many other opportunities out there for people with just traditional energy companies. There are expected to be about 40 million new green-collar jobs by the year 2030, or over a million a year for the next 12 years. That's a big sum.
And while some are direct jobs, like engineering and architects, where you'll need a higher degree, the industry's also expected to create demand for plenty of indirect jobs like accountants and truck drivers. And that consulting firm I mentioned earlier says that non- energy companies even have some energy-related jobs now.
That's right. Wal-Mart, the biggest retailer in the world, for instance, has an initiative going on right now. It's a green initiative. They recently posted some job openings for a sustainability director, an energy compliance officer.
So there's really plenty of opportunities out there for you to get into the business of creating energy fixes. Isn't that neat, Gerri?
WILLIS: Yes, I love it.
HARLOW: Yes.
WILLIS: Great idea.
SANCHEZ: I think I'll take it from you. Thanks.
We're also pulling our hair out over high gas prices. But there's a guy in California who let his imagination get carried away, so to speak.
First, he somehow got through the locked gates at an airport in east San Jose just the other night. He started filling up his car at the self-serve pump like we all do. You can probably guess that the problem is in how he's doing this.
One, he didn't have permission to use the pump, but the real no- no? He was filling up his car with aviation fuel.
The police officers arrived, they busted him on suspicion of DUI and attempted theft. We're still trying to figure out if his car ever got off the ground.
Oh, Cody, where are you now? Remember yesterday we were talking to Cody? It's day two of his Cross-County Biofuel Adventure to show you how biofuel cars work. He's actually going all over the country using grease and other assorted sundry things to put into his engine.
And then, in a market where cash is king, how do you cash in? Opportunities in a down market.
You're watching ISSUE #1, the economy, right here on CNN.
(COMMERCIAL BREAK)
WILLIS: Road tripping is down and that's obviously hurting traditional summer travel destinations, such as our national parks. As part of his big biofuel adventure road trip, CNN.com's Cody McCloy joins us live from Yosemite National Park in California with a closer look at how the parks are doing.
I love Yosemite. It's a great place. But, Cody, start by telling us what kind of mileage are you getting on this thing?
CODY MCCLOY, CNN.COM: Well, so far in the Scout we're getting about 22 miles a gallon, which considering some of the twisty, uphill roads that we went through yesterday, that's pretty good. We drove about 200 miles from San Francisco yesterday to get here to the park. And as we arrived around sun set, we got to see the smoke-filled valley and it really made the sunset very pretty, but it is causing a few problems here at the park. Mainly they don't have power.
WILLIS: They don't have power? MCCLOY: The other things I wanted to talk about it, you know, we're trying to do this trip -- no, no, they don't have power here at the park.
WILLIS: OK. Well, that makes it tough.
MCCLOY: They're apparently running everything on generators.
WILLIS: Wow, wow, wow. But you had a good time getting in, obviously. And you weren't contributing to that smoke-filled haze.
MCCLOY: Right.
WILLIS: Why don't you talk a little bit to us -- I know that you were driving a long way to get there. Did you have trouble finding a biofuel station out there? I mean, for goodness sakes, I don't even know where I would go to find biofuel.
MCCLOY: Yes. Right. We had some stations mapped out. We used -- there's biodiesel.org has a great map on there. And we had one mapped out, but we did have trouble finding it and we were a little later than we expected to be, so we couldn't get a hold of them. But we have, through help here at the Yosemite National Park, got in touch with the guy because he uses their grease to make his biodiesel. So we're going to go see him later today.
WILLIS: Awesome. OK. That sounds great.
MCCLOY: But joining me now is Kari Cobb, who's a spokeswoman for Yosemite National Park. And she can tell us a little bit about the traffic coming in and out of the park today.
So, Kari, gas prices are really high. We've got a low slump in the economy. How is that affecting traffic here at the park?
KARI COBB, NATIONAL PARK SERVICE: Well, it's actually adding to our foreign visitors. It's not so much affecting them since our dollar is so weak. And what we pay for gas prices here is the same what they pay overseas, they're coming here and getting more bang for their buck and just coming to see Yosemite and California.
It is causing more visitors to stay more local than in past years. But other than that, with the increase in foreign visitors, visitation and traffic has stayed pretty much about the same. We actually had over 490,000 visitors this month, which is the highest it's been since 1996.
MCCLOY: Wow. So now we also have this fire, which I think you told me was about six miles away from the park?
COBB: Well, it's about six miles away from Alpartel (ph). It's about 20 to 25 miles away from Yosemite Valley itself.
MCCLOY: OK. Great.
Well, we just want to say that the park is open. All activities are still going on. They are encouraging people with respiratory problems to take it easy.
Thank you.
And back to you.
WILLIS: All right, guys.
Cody, thank you for that. Great information. Of course, we love Yosemite.
And you can log on to CNN.com/roadtrips to tell us where you're headed this summer. You can also vote on where Cody should go next. And, of course, you can join us back here tomorrow at ISSUE NUMBER ONE to see just where he ends up.
Investing your money responsibly. We'll show you where and how to get the best return. That's coming up next.
But first, let's get you up to speed on the latest headlines. Don Lemon is in the CNN "NEWSROOM."
Hi there, Don.
DON LEMON, CNN ANCHOR: Hi. Think we can get Cody to come to Atlanta and help us out down here? What do you think?
WILLIS: I bet you could.
LEMON: OK. Good. We'll talk about . . .
WILLIS: It'll take him a while, you know, he's driving. It's not fast.
LEMON: It's doable.
All right, thank you very much, Gerri.
A disgraced NBA referee sentenced to prison in a gambling scandal that rattled pro sports. Just about half an hour ago, a judge in New York sentenced Tim Donaghy to 15 months in prison. Prosecutors say he sold inside information to a professional gambler. Donaghy was also sentenced to three years of supervised release.
A fast-moving wildfire in northern California has exploded into an out of control monster today. About 3,000 firefighters are battling flames near Yosemite National Park. High temps and rough terrain aren't helping. Twenty-five homes have been destroyed since the fire started Friday. Four thousand houses are in danger to date. Both of those numbers have doubled since yesterday. Doubled since yesterday.
And coming up in the CNN "Newsroom," we'll talk with a Yosemite Park ranger whose family may have to leave the park today due to the fires.
We're going to talk now about those fires, but also about some water. Lots of water in the Midwest. We're talking Ruidoso, right?
CHAD MYERS, CNN METEOROLOGIST: Right here. Right here along this little spine of a mountain range. And, in fact, if you look at Ruidoso, this is Ruidoso Downs and Ruidoso up the hill. And here's what happens when you rain up a hill and it runs down the hill. Here's the first picture. And this is going to be of the downs itself right here at the racetrack. And, boy, it's just an ugly thing here. Mirandy Wood took all of these shots for us.
One of our bosses used to work over here at this racetrack actually as a bartender like 50 years ago. Oh, I can't say that because he's not that old. But it's close.
There is the downs right there. There is the racetrack. And that's where the horses would be running. Not today and probably not for a while. It's going to be a mess there for a while.
We'll also talk a little bit about the smoke in California, as well.
Don.
LEMON: Certainly a lot of it.
OK, Chad Myers, we'll see you back here in the "Newsroom" at the top of the hour.
I'm Don Lemon. See you at the top of the hour as well.
Now let's throw it back to New York and Mr. Rick Sanchez.
Good to see you, sir, even by satellite.
SANCHEZ: Likewise, you big Cody fan, you. Thank you so much.
This is not a good economy, right? Right. But does that mean that you can't invest during times like these? And, if so, if you were to invest, where? With what? Let's dig into that, shall we? Gene Marcial wrote the "7 Commandments of Stock Investing" and Hilary Kramer is an AOL Money coach who wrote "Ahead of the Curve."
Always good to be ahead of the curve, Hilary, right?
HILARY KRAMER, AUTHOR, "AHEAD OF THE CURVE": Well, that's right, Rick.
SANCHEZ: You know, people say, yes, look, times are tough right now and a lot of people are bailing. And you would say, no, don't bail? Stick in there?
KRAMER: Absolutely not. The great wealth today has been made in the past by buying when there's blood on the street. That's when you want to get in there and buy in the stock market and make your investment.
SANCHEZ: That's graphic. Blood on the streets. Gene, you say, look for losers and fallen angels.
GENE MARCIAL, AUTHOR, "7 COMMANDMENTS OF STOCK INVESTING": Correct.
SANCHEZ: What do you mean by that?
MARCIAL: Absolutely that's true because the only time you get bargains is when there's good, big stocks, big stars in the market tumble, like Apple, for example.
SANCHEZ: But what's a fallen angel? I don't know. What's that term mean?
MARCIAL: Well, that is the one, a big cap stock usually or a very prominent company, brand name, and a good star.
SANCHEZ: So you want to get them just as they start to go down because eventually you know they're big enough that they'll be back up?
MARCIAL: Yes, when they are down. And they should have a history of that.
KRAMER: That's right. Gene is hitting on a very important point, which is the market leaders. What he's saying is, the best of breed that come down. So if you look at the financials, there's some you never want to touch. Rick, they're going to go out of business. But there are others that are stars that have come down. Companies like Goldman Sachs, which should be back eventually over $200 a share. Goldman Sachs will probably be picking up some of the ashes in the street and they will emerge even a better investment bank than they are today. GS is the symbol.
SANCHEZ: But even the ones that are being taken over by the government, or being assigned to somebody else, like Mutual of Omaha taking a back to these banks in Nevada, for example? Do you move into stuff like that? Or is that angel done gone?
MARCIAL: Not necessarily. And they're not necessarily angels, really. If you look at them, they're not really that sturdy, have not performed well. You should look for companies that have performed very well fundamentally and their stocks too.
SANCHEZ: But they're dipping right now.
All right. Let me bring something else in, because we always hear diversify, diversify, diversify. Even in this economy, do you still diversify or do you change your diversification plan?
KRAMER: Well, I love the idea of you going two ways. One is, diversification through an S&P 500 index, or an ETF, the Nasdaq, because it's so beaten down, these indices, and then you're getting this well diversified range of stocks. But then, I like the idea of two or three stocks also as part of your portfolio that you know, you like, you believe in, because whether you use the products, whether it be an Apple or you use that bank or it might be something in the consumer area.
SANCHEZ: But there's people who are watching us right now who are saying, you know, things aren't so good for me right now. As a matter of fact, I really don't have a lot of money. I've only got a couple hundred bucks. Can they get started with that? What would you say to them, both of you?
MARCIAL: Certainly. That's a time -- this is a time to buy the stock -- buy stocks right now because of the market going down. And then, also, any time you have idle money, you should put it in stocks or mutual funds.
SANCHEZ: Hilary, close us out.
KRAMER: That's right. Over the long-term, you will perform best buying into the stock market. It is unbelievable the kind of money you can make if you just make the investment.
SANCHEZ: Hilary Kramer, Gene Marcial, my thanks to both of you. Good conversation. I really enjoyed it.
KRAMER: Thank you, Rick.
MARCIAL: Thank you.
WILLIS: I'll be putting down some nots now.
Gerri, back over to you.
WILLIS: All right, stretching for success. A boss is putting wellness first when it comes to his employees and it's paying off big time in and out of the office.
And it's time to get you some answers. Send us your money questions. The address you see right here, issue1@cnn.com. Real solutions to your questions right here on CNN. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back to ISSUE NUMBER ONE. I'm Rick Sanchez.
No surprise, perhaps, a private research group says that consumers across the country remain gloomy about this economy despite a little bit of a slight rise in conditions. Main reasons, high gas and high food prices and the slumping, as Gerri would say, housing market.
Gerri, over to you.
WILLIS: All right. You've probably heard the term investing in your employee. One CEO has found a way to invest in his employees in a way that will have a big payoff in and out of the office. CNN chief medical correspondent Dr. Sanjay Gupta has the story.
(BEGIN VIDEOTAPE) SANJAY GUPTA, CNN CORRESPONDENT, (voice over): Lincoln Industries looks like an old-fashioned blue collar plant making motorcycle and truck parts. But at this Nebraska company, you're also going to find massages and stretching before every shift.
UNIDENTIFIED MALE: And shoulder rolls back.
GUPTA: All 565 employees also undergo mandatory quarterly medical check-ups. That's right, mandatory.
UNIDENTIFIED MALE: Hamstring stretch.
GUPTA: Employees are tested for flexibility, blood pressure, weight, body fat, and they're given annual blood tests. Workers receive ranks, like platinum and gold, down to non-metal. They also set goals for themselves.
Seven years ago, shift leader Howard Tegtmeier was in the non- medal category. The 49-year-old smoked, he drank, he was overweight, he took 12 pills a day to treat high blood pressure, high cholesterol, and diabetes.
HOWARD TEGTMEIER, SHIFT LEADER, LINCOLN INDUSTRIES: And I just made the decision that it was time for me to change my life and the wellness program showed me the ways to do that.
UNIDENTIFIED MALE: Wrist curl upward.
GUPTA: Tegtmeier says he no longer smokes or drinks, his weight is down from 230 to 180, thanks to diet and exercise. His cholesterol and blood pressure are also down. And he no longer needs any medication.
TONYA VYHLIDAL, WELLNESS DIRECTOR, LINCOLN INDUSTRIES: There's a way to engage everybody. Even those that are really resistant.
GUPTA: The company spends $400,000 a year on the wellness programs and says it saves more than five times that much.
HANK ORME, PRESIDENT, LINCOLN INDUSTRIES: We'd like to have a return on investment like this in anything that we did because the return is extraordinary.
GUPTA: Health care costs here are under $4,000 per employee. That's about half the regional average.
So what's the payoff for workers?
UNIDENTIFIED MALE: All right, gang, great job.
GUPTA: Well, if you're in the fittest platinum category, you get a company-paid trip to climb a 14,000 foot peak in Colorado.
TEGTMEIER: It's just a beautiful view up here. It's a great feeling to make it to summit and especially with the entire team.
UNIDENTIFIED MALE: Peace. We made it.
GUPTA: To qualify for the climb, you have to be a non-smoker. Maybe one reason the percentage of smokers at the company has been cut by more than half.
Dr. Sanjay Gupta, CNN reporting.
(END VIDEOTAPE)
SANCHEZ: You know, we're constantly in touch with some of our crews in the field. And we have just gotten information that a sitting U.S. senator may soon be indicted. We're working to put the details back together on this story for you. We'll have it for you as soon as we possibly can.
By the way, we've got the Help Desk ready for you, as well. You see it back there. They're standing there to answer your questions. Send us your e-mails. The address, issue1@cnn.com. Your questions, real solutions next.
You're watching ISSUE NUMBER ONE. Stay with us. We'll be right back.
(COMMERCIAL BREAK)
WILLIS: The CNN Money team is here and they are ready to rock. Time now to crack open your e-mails and answer your money questions. Hilary Kramer is the AOL Money coach, Peter Valdez-Dapena is with CNNMoney.com, and Gene Marcial is with "Business Week."
Welcome all. Great to see you guys.
And let's get to that first e-mail from David. He says, "I just graduated from college and I still have about $8,000 in tuition left over, which I can't pay right now. What can I do?"
Hilary.
KRAMER: People don't realize, you can negotiate today. There's negotiation with money you owe and that's the best way, especially with an amount like . . .
WILLIS: Even with a college?
KRAMER: Yes, especially at $8,000 like that. Figure out a way to plan with the school.
WILLIS: $8,000 because it's high or low?
KRAMER: Because it's lower. I mean people come out of school today with $100,000 to $200,000 loans. With $8,000, a school's willing to work with you on a plan usually for a year to two years.
WILLIS: Forgiveness of debt. That's an awesome thing.
KRAMER: That's the new era. WILLIS: All right. Let's go to Veronica's question. She's from New York. She says, "my husband and I paid for our home in cash and just bought a car, paid for mostly in cash." We love them. "We are a young couple and were wondering if we should start a mutual fund right now in the economic downturn?"
Gene, you know, people think, if the economy's slow, the market doesn't do well. What do you say?
MARCIAL: Well, I think that's the time to buy. But as to the question, any time is a good time to get into the market. I'd buy mutual funds or individual stocks. It's never too late, never too early. In fact, I have a stepdaughter, eight-year-old Erica (ph), she opened a mutual fund account because it's never too early to get money for your education.
WILLIS: I like that. That's good stuff. That's good stuff.
KRAMER: And the stock market is a forward indicator. So while the economy's bad, housing is terrible, the stock market's going to turn around and start to go up.
WILLIS: I saw some great figures recently. The average return during a recession, you'd think it'd be negative, it's positive 3 percent.
All right, let's go to John's question in Illinois. "I'm thinking about buying an electric car or hybrid. What is the cost per mile of using electricity?"
Peter, this is a great question.
PETER VALDEZ-DAPENA, WRITER, CNNMONEY.COM: It is a good question. But, first of all, you have to understand, when you buy a hybrid car, you don't plug those in. OK. So you're not working off electricity from power (INAUDIBLE) using it more efficiently. And right now there really aren't a lot of really good options in electric cars right now. There are no mass market cars. You're either going to get something very expensive for the type of car you're getting, so it doesn't make financial sense, or you're going to get something that's lacking in safety features or performance, won't have airbags.
If you do get an electric car, like a neighborhood electric car, they can go up to 25 miles an hour, it costs about 2 to 3 cents a mile to drive that, which is compare it to like 12 cents or 16 cents for even a fuel-efficient car. And if you wait a couple of years, companies like Nissan, GM and BMW have all recently announced that they're going to have real, meaningful electric cars on the market by 2010 or 2011 (ph).
WILLIS: Right. You know, we keep seeing protypes keep coming and we keep seeing those. But, as you say, nothing real yet.
Lorcan of Florida asks, "I am saving 15 percent into a 401(k) savings plan. Should I continue to make 15 percent contributions or should I reduce them to 1 percent and put the additional 14 percent towards a Roth IRA?"
Hilary, what do you say?
KRAMER: At this point, it really doesn't matter. They 're both going to be about equal. And when you start to switch things around, that's when you can start losing money. So I would just stick with your 15 percent contributions of that 401(k) over a long plan.
WILLIS: But keep doing it, no matter what the economy is doing.
KRAMER: Exactly.
WILLIS: It always makes sense to invest, as you say.
Gene Marcial, thanks to you. Hilary, thanks. Peter, thanks for your time today. Great answers to tough questions.
SANCHEZ: A lot of stories that we're going to be following for you, including this one. Could be a problematic situation for a very well known politician. We're working to break that for you. Stay right there. Hopefully we'll have it when we come back.
(COMMERCIAL BREAK)
SANCHEZ: We've been telling you about this story that we've been working on about a sitting U.S. senator. A sitting senator that may be very close to being indicted. An announcement expected perhaps sometime this afternoon. Kelli Arena has been working on this story for us. We're trying to get her miced up right now. She has some of the information on this decision that apparently has been made by a federal grand jury. I think Kelli Arena's ready to go now from our justice.
Kelli, are you there? What have you got?
KELLI ARENA, CNN CORRESPONDENT: I'm here, Rick.
Yes, CNN has learned that the Alaskan Republican senator, Ted Stevens, will be indicted today by a federal grand jury. Now we don't know what the charges against him are at this point. Stevens is among one of several lawmakers that's been under scrutiny for alleged ties to lobbyists, defense contractors, other corporate interests.
Back in July, we know that the FBI and the IRS raided his home in Alaska. Investigators were looking closely at the senator's ties to an Alaskan energy services company. It's called Veco. Its chief executive pleaded guilty to a bribery scheme involving state lawmakers. Back in 2000, Veco executives oversaw a very expensive remodeling of the senator's home. There have been some questions about that.
You know, Rick, this is a very powerful man that we're talking about. Stevens joined the Senate back in 1968. He's one of the most powerful members of Congress. For six years, he was chairman of the Senate Appropriations Committee. Held the reigns over federal spending. So this is a very big deal today, Rick. Very big. SANCHEZ: And he's been problematic of late. You remember the famous bridge to nowhere? Argumentative, many would argue, with folks on the other side of the aisle. But this is a bigger problem for us. I mean, this would be considered a significant criminal matter, right?
ARENA: Absolutely. I mean if you're indicted by a federal grand jury, you know, you are facing criminal charges. So this isn't -- these aren't allegations. You know, this is something that will have serious ramifications going forward.
SANCHEZ: And what -- so this afternoon, break this down for us again. At what time do we expect them to hold a news conference and actually announce what the charges are?
ARENA: Well, we expect some sort of an announcement later on. I'm not sure if we're dealing with something that's going to be under seal for a while. As you know, sometimes indictments are kept under seal until the authorities are ready to make their announcements. So we're not exactly sure what we're dealing with here right now, Rick. But the minute we get these charges, which, of course, is the most -- you know, that's the meat of the matter here. You know, let's get a handle on what those charges are. We'll bring it to you.
SANCHEZ: Obviously. And you're breaking this information to us now, that there is an indictment of Ted Stevens of Alaska. I imagine -- just let me ask you -- that there hasn't been any reaction yet from his office. Or has there?
ARENA: You know what? Actually, Rick, I just got into my -- there were seven counts of making false statements to investigators. That just -- I'm not sure what the source of that information is.
SANCHEZ: You want to nail that down? Go ahead, ask your producer.
ARENA: OK. Yes, my producer's in my ear, and he's saying we just did get a peek at the indictment. So seven counts of making false statements to investigators.
We do know, Rick, that he has been under investigation for some time. One would -- one would have to imagine that he'd been interviewed several times. And so, the charge is that whatever he did tell those investigators was not accurate.
SANCHEZ: Ted Stevens of Alaska, indictment, about to be -- more information on that as we get it. Kelli Arena, great job, hustling to get us that information so we can put it on air. Obviously, it's a story that we're going to be following all day long here on CNN.
ARENA: Absolutely.
SANCHEZ: As we get more information, we'll be bringing it to you. Gerri, back to you.
ARENA: You got it.
WILLIS: Much more on the Senator Stevens story and the rest of your day's news.
"CNN NEWSROOM" with Don Lemon and Betty Nguyen starts right now.
