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Issue Number One

As Democrats Head to Denver; Obama Closes in on VP Pick; Fay Slams Florida for Third Time; Horses & the Economy; Car Clearance Sales

Aired August 21, 2008 - 12:00   ET

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


CHRISTINE ROMANS, CO-HOST: The Democrats are going to Denver as Barack Obama gets closer to naming a running mate.
Here we go again. Tropical Storm Fay slams Florida for the third time.

There's yet another perk being taken away from your next plane ride.

And why horses are getting a raw deal during these tough times.

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

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

Hello, everyone, and welcome to ISSUE #1. I'm Christine Romans. Ali Velshi is off today.

Tropical Storm Fay is the story and the storm that won't go away. High winds and torrential downpours beating down on the state of Florida. We'll get you to the CNN hurricane headquarters in just a few minutes.

But first, the big issues in this presidential election. We're going to break down the candidates and their views on Social Security.

And deal or no deal? How to tell if all those auto industry incentives you see out there today are actually good deals or just good advertising.

But our top story, Gerri Willis, the race for the White House.

GERRI WILLIS, CO-HOST: That's right, Christine. We are in full countdown to Denver mode. Just four days until the Democratic National Convention gets under way, and everyone is asking, who will Obama choose for his VP?

CNN's Jessica Yellin, part of the best political team in television, she is live in Chester, Virginia, right outside the state capitol of Richmond with the very latest -- Jessica.

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Hi.

Well, Barack Obama is speaking here right now, along with the governor of this state, Tim Kaine, who is on that short list we all believe to be possibly Obama's vice president.

Now, Obama has a lot of people puzzling this morning. He had a private meeting with the governor, Tim Kaine, and his staff for about an hour, we're told. This has everybody wondering, what did they discuss? They walked out without answering any questions, whether VP talk even came up.

We are staking out all the other candidates, the people believed to be on that list: Biden, Bayh, Richardson, Clinton. Maybe it's somebody we don't know. We're all expecting the decision to be announced possibly tomorrow, more likely on Saturday, but we're expecting -- it's all a guessing game. We're expecting we'll hear something tomorrow, with the formal announcement on Saturday.

Back to you.

WILLIS: Wow, Jessica. I can hear the candidate in my ear behind you. It's amazing, very exciting.

But you've got to tell us, Obama is attacking McCain for something he said yesterday, right? Tell us about that.

YELLIN: Right. This has to do with issue #1.

And John McCain was asked by Politico, the online newsletter, how many houses he owns. And John McCain says he doesn't know. He's going to have his staff get back to the reporter.

Well, the campaign -- the Obama campaign is using this to make the point that John McCain is out of touch with the real problems Americans are facing with this economy. Here's what Obama had to say about that on the stump today.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Somebody asked John McCain, "How many houses do you have?" And he said, "I'm not sure, I'll have to check with my staff." True quote. "I'm not sure, I'll have the to check with my staff."

So they asked his staff, and he said at least four. At least four.

Now, think about that. I guess if you think that being rich means you've got to make $5 million, and if you don't know how many houses you have, then it's not surprising that you might think the economy was fundamentally strong.

(END VIDEO CLIP)

YELLIN: And this is a message we're going to hear the Democrat continue to press as he sharpens his attacks leading into the Democratic convention.

Back to you. WILLIS: Well, Jessica, I can just imagine how well that's going over with some folks out there -- 1.5 million Americans have lost their homes to foreclosure. But, Jessica Yellin, thank you for that.

We're going to get McCain's side of the story now. How is his campaign responding to these attacks?

CNN's Ed Henry has been chasing this story in Washington -- Ed.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Gerri, they're taking the gloves off. The McCain camp realizes that in this shaky economy, he cannot afford to make it look like he's out of touch. So they're pushing back on the attacks from Barack Obama that you just heard.

In particular, they're invoking the name of Tony Rezko. You will remember him. He's the developer who helped Barack Obama buy his home in Chicago. Tony Rezko, of course, convicted on charges of fraud and bribery earlier this year.

So you can see, it's getting pretty ugly pretty fast. And in that interview, when he was asked about how many homes, you saw Senator McCain say, "I think I'll have my staff get to you." "It's condominiums where I'll have them get to you."

Now, the McCain camp is insisting he knows how many homes he has, but has become a political football. Exactly, you know, Democrats are saying he owns more than he really has and he just wanted to avoid it, let his staff handle it. And they put out this statement.

Brian Rodgers, his spokesman, saying, "Does a guy who made more than $4 million last year, just got back from vacation on a private beach in Hawaii, and bought his own $1 million mansion with the help of a convicted felon really want to get into a debate about houses? The reality is that Barack Obama's plans to raise taxes and opposition to producing more energy here at home as gas prices skyrocket show he's completely out of touch with the concerns of average Americans."

And you see the rhetoric going back and forth. For the record, the McCain camp insists that he and his wife Cindy only have four homes. Basically two in Arizona, a condo out in California, and a condo in Virginia near the Capitol, where the senator works most of the time, obviously.

Democrats are insisting it's more like seven homes. The discrepancy, according to the McCain camp, is that some of those homes they claim are in Cindy McCain's family, that they're investments, they're not really homes that the senator has. We're obviously going to have to eventually look at these deeds and find out who actually owns them.

I think the bottom line is this is one of those classic back-and- forth between the campaigns hurling charges at each other. But the reason why this one may have some resonance rather than your average sort of sandbox fight is that, given that shaky economy, given what you mentioned about all those foreclosures, this kind of issue and whether one side or the other looks out of touch can be very, very explosive in this political environment -- Gerri.

WILLIS: Boy, Ed, it really is getting ugly out there.

But as long as I've got you, I've got to ask you about the whole VP debate. Is there any news coming out of the campaign today about the vice presidential choice for John McCain?

HENRY: Nothing imminent from John McCain because he has an advantage. As you know, since his convention is second, after the Democrats, he's going to wait and see what the Democrats do very likely. Of course, he could surprise us, but it's very likely he's going to wait for the Democrats.

We're expecting possibly next Friday, after the Democrats wrap up their convention, that McCain will announce his pick as soon as that Friday. And basically, the bottom line is there are two roads here.

On one side, he could take the road where he could pick a more moderate person, someone like Tom Ridge, a moderate Republican; Joe Lieberman, an Independent Democrat. Both of them though support abortion rights. That's alarmed a lot of conservatives.

They would rather see someone like Mitt Romney, Tim Pawlenty, someone that would -- that they think would turn their base out. John McCain has a very difficult decision here to make.

And just like with Barack Obama, ultimately advisers on all sides can say what they want, but this is a gut call, a very personal decision for John McCain. And he's going to have to choose which road to take -- Gerri.

WILLIS: Well, Ed Henry, part of the best political team in television, thank you for that.

HENRY: Thank you.

ROMANS: Tropical Storm Fay, a rainmaker that's setting a high watermark for misery. The rainfall nothing short of staggering.

Some parts of central Florida reporting more than 23 inches. Areas in its path, from Daytona to Jacksonville, could see rainfall totals of 30 inches. Floodwaters have swallowed hundreds of homes.

CNN's Sean Callebs is in St. Augustine, awaiting Fay's third landfall in Florida -- Sean.

SEAN CALLEBS, CNN CORRESPONDENT: Yes, exactly.

Right now, Fay continues to turn away just offshore, Christine. It is moving extremely slowly.

What we're seeing right now, just some of these outer bands. We're being buffeted by winds I'd say are 40 miles an hour or so, not terribly strong. The rain has been intermittent. It has poured times during the day and then times like now, where it's virtually not raining at all. But look at this surf. This is normally a walkway that leads down to a beach where people can kind of unwind here.

No beach whatsoever right now. Just these rocks, this protective seawall that has been put up here in St. Augustine Beach for just this kind of occasion.

And look at those concrete pilings out there in the pier. They're just getting hammered.

The amazing thing, the number of people who are outside just ignoring any kind of warning. Look down this way. There's a number of people -- Rich, will you pan the camera over that way just a bit? -- just out taking a looking at this.

We've talked to locals. "Why are you out here?" They say, "Well, you know what? It's not that bad. We don't think that this tropical storm is going to be that dangerous."

But there is debris flying around. And as I mentioned, intermittent kind of punishing winds and rain.

You talked about the amount of rain. Staggering is the word to use. We know to the south of us, Cape Canaveral got 20 inches of rain yesterday, Melbourne 26 inches of rain, and that's where people had to use airboats to go in and rescue people who were simply stranded by this rapidly rising water.

And it's going to pour here. The question is, just how much rain is it going to get? Florida's governor calls it a catastrophic event. If indeed if the past is a yardstick, they could get as much as 30 inches of rain here in this area.

The low-lying areas already flooded somewhat. Certainly the Florida aquifer needed some water. But you know what, Christine? Not 30 inches, not in a 24-hour period.

ROMANS: We've been calling this Fickle Fay. And "fickle" almost understates, you know, just how dangerous all that rain really is, right?

CALLEBS: Oh, without question. I think that is the big thing about this storm.

This isn't a storm that carved its way violently across the state in a zigzag fashion. Remember, first it touched the Keys, then it made contact with southwestern Florida, then moved so, so, slowly. And it's just been churning away out there.

We know it's out there, we know these bands are going to move here, come across Jacksonville, Tallahassee, Gainesville, and then possibly get into the Gulf. And it gets into those warm waters in the Gulf, look out Alabama and Mississippi. It could come that way, as well.

Fickle Fay is just rambling wherever she wants to go. ROMANS: All right. Thanks so much, Sean Callebs.

(WEATHER REPORT)

WILLIS: Well, oil prices are up. Why it's happening and if you should be worried about it.

Plus, is your computer on right now? Do you leave it on? Wait until you hear how much energy you're using.

We're all over issue #1 right here on CNN. Stay with us.

(COMMERCIAL BREAK)

(BUSINESS REPORT)

WILLIS: Well, do you leave your computer on when you're not using it? Who is guilty of that? I think everybody is.

Well, you could be wasting a whole lot of energy. And CNNMoney's Poppy Harlow is back with your "Energy Fix."

Poppy, it's not just the computer, it's firing up the BlackBerry, you name it. We've got everything on.

POPPY HARLOW, CNNMONEY.COM: And we leave them on at home and we leave them on at work. And if you install some software, maybe you could save quite a bit of money, actually, on your energy bill.

New software just released last week, it's called Edison. It could save you about $35 to $65 a year on your energy bill. What it does is it scales back the power your computer uses when you're not using it. The other goal of Edison is to help the environment.

(BEGIN VIDEO CLIP)

KEVIN KLUSTNER, PRESIDENT & CEO, VERDIEM: People don't really understand the size of the problem. PCs consume 40 percent of all energy that electronic devices consume in the world. There are a billion PCs in the world. Each PC consumes the equivalent of about 1,000 pounds of CO2 emissions a year. That's the equivalent of an average car's emissions for a year, which is pretty incredible when you think about it.

(END VIDEO CLIP)

HARLOW: Now, that is if you leave the computer on 24/7. But imagine if you have three PCs. A lot of homes do. You could save about $200 a year, Gerri.

WILLIS: Guilty as charged. Guilty as charged.

HARLOW: Yes, me too. Me too.

WILLIS: But, you know, this software, is it going to take my computer down when I'm at work and I need to use it? HARLOW: Yes, exactly. A lot of people say, how annoying is this going to be?

We asked the CEO that exact question. He said it's not going to be annoying. You'll have to test it out to see.

But Edison allows you to select a time when you want to scale back that power. It's designed to pop back the second, really, that you move the mouse on your computer. But we haven't tested it yet. You'll have to do that.

But this is neat. It also allows you to track right on your computer screen the energy and the money you're saving. And not just yours, but everyone else who is using the program.

(BEGIN VIDEO CLIP)

KLUSTNER: Consumers really want to do something about the climate crisis, and they're reaching out and looking for solutions to do that. And a product like Edison is very empowering, because it shows consumers how they individually can have an impact, as well as collectively have an impact, and tell a friend about it to join the community. And so there's a real grassroots movement here that can empower consumers to really do something about the problem.

(END VIDEO CLIP)

HARLOW: And did I mention the software is free? If you want to get it, you can log on to verdiem.com/edison.

If you're interested, Gerri, you can see my whole interview with the CEO on our Web site.

But I'm interested to hear some feedback, see how well it works.

WILLIS: Yes, absolutely. "Free" is the right price.

HARLOW: Free.

WILLIS: I love that, yes.

And you know what? You could always turn off the flat panel screen TV. That would work too.

HARLOW: That would work. Good fix.

WILLIS: Thanks, Poppy.

HARLOW: Sure.

ROMANS: All right. From reform to real solutions, a closer look at the candidates' view on Social Security.

Plus, health care and taxes, what their plans are on that front. We'll bring it to you in the candidates' own words.

And just when you thought the airlines had no more extras left to charge you for, they're doing it again. We have the scoop.

You're watching ISSUE #1.

(COMMERCIAL BREAK)

WILLIS: Welcome back to ISSUE #1.

You know, the nice thing about this show is you get to vote each and every day. You don't have to wait for November.

Time now for our "Quick Vote." CNNMoney.com's Poppy Harlow is back.

What is today's question?

HARLOW: Hey, Gerri.

Well, it's all focusing, of course, on the candidates and your money. Because if you're watching this show, you certainly know issue #1 is the economy.

You've told us the state of your economy plays a big role in who you vote for in the race for the White House. So here's our question today.

"The presidential candidate, I believe, will have the most positive influence on my pocketbook is McCain, Obama, or neither?"

Weigh in on CNNMoney.com. We'll bring you the results later.

WILLIS: You know...

HARLOW: It's not neither.

WILLIS: I can't imagine a politician having a good impact on my pocketbook, but maybe that's just me.

HARLOW: Cross our fingers.

WILLIS: All right.

ROMANS: All right. From the economy to health care to energy, the big issues in this presidential election all affect your bottom line. One issue that's going to affect us all sooner or later, Social Security.

Jeanne Sahadi is a senior writer with CNNMoney.com, and she examined the issue in her latest article.

How do these two gentlemen, these two senators, differ on their approaches to Social Security?

JEANNE SAHADI, SR. WRITER, CNNMONEY.COM: Well, even though they both acknowledge a bipartisan solution will be required, they take very opposite tax on their preferred fixes. Senator Obama would prefer to raise taxes on high-income taxpayers, Senator McCain would prefer to slow the growth in benefits for many future retirees.

ROMANS: You said that really magic phrase, "bipartisan solution."

SAHADI: Yes.

ROMANS: They're both going to have to do something they don't want to do to get something through, right?

SAHADI: That's about right. But they are being very strong about what they don't want to do. You know, Senator McCain would really prefer not to raise taxes. He's going to have to. Senator Obama really doesn't want to slow the growth in benefits. One way to do that is to raise the retirement age. He may well have to.

Actuaries, who are the sort of...

(CROSSTALK)

SAHADI: One of the big problems facing Social Security is not just that the baby boomers are retiring -- we know they take up a lot of space -- but it's the fact that longevity is increasing. So that's not going to stop. So actuaries say, you know, we really do have to put something into Social Security that constantly adjusts the retirement age at which you can collect full Social Security benefits.

ROMANS: And here's the bottom line. This is why Social Security is in trouble.

SAHADI: Well, that's it. It's baby boomers retiring, the fact that we have fewer workers coming into the workforce to support the retirees, and the fact that all retirees are starting to live longer. So they're going to be collecting more benefits.

ROMANS: What are all the possible options then on the table?

SAHADI: Well, the two general categories, raise taxes, reduce benefits, or adjust benefits. You can raise the retirement age. That means you effectively are paying into the system longer, so that reduces your effective benefit. You can change the way the growth in benefits are determined when you're working. You know the calculations for your benefits are based on the rise in wages, you could change that to cost of living.

For taxes, you could raise the amount of income that's subject to tax. Right now it's the first $102,000 that you're taxed on to pay into the system.

ROMANS: And Obama wants to do that, right, raise the income levels?

SAHADI: No, he wants to tax people who make more than $250,000. So he's going to create what's called the doughnut...

ROMANS: Right. SAHADI: ... and then tax the high-income folks and ask them to pay a little bit more. Right now the rate on the $102,000 is 12.4 percent, divided between worker and employer. Senator Obama wants to charge 2 to 4 percent on the amount over $250,000, again, divided between employee and employer.

ROMANS: Some really big minds have really struggled with these numbers to try to figure out how to fix it. And a lot of people have told me there has to be a combination maybe of both, of raising taxes and lowering your benefits.

SAHADI: Right. What you want to do is you want to act sooner rather than later, because the changes you make are going to become less painful. You can spread it out over more people.

If you wait until the majority of baby boomers retire, what's going to happen is, it's political suicide to change retirees' benefits. So the more baby boomers you've got -- we've got about 78 million -- the more of those folks who are retired, you're going to have to lean way more heavily on the younger folks.

ROMANS: I mean, the bottom line here is that we have made promises that, under current circumstances, we're not going to be able to keep.

SAHADI: Well, and part of the reason for that is that the surplus we have all been paying into the system for the last umpteen years has been borrowed by the Treasury. The Treasury has issued bonds to the system. They say, we're going to pay you back, no problem.

And, you know, the U.S. government is usually good for its debt. The problem is we have gotten into so much other debt that's going to expand in future years, that it's going to put a strain.

ROMANS: Which is why it is so political and why it's so important to come up with some sort of solution.

Jeanne Sahadi -- thank you so much, Jeanne.

SAHADI: Thank you.

WILLIS: What the candidates are saying about taxes and health care in their own words next.

Plus, more fees to fly. From pillows, to blankets, to soda, wait until you hear what airlines are charging you for now.

And why horses -- yes, horses -- are getting the stick and not the carrot in this economy. It's a heartbreaking story.

You're watching ISSUE #1.

(COMMERCIAL BREAK)

WILLIS: Every day we're bringing you what the candidates are saying on the campaign trail. John McCain worked a town hall meeting in New Mexico yesterday. One of the questions there was about healthcare. You'll want to hear how he responded.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: There is a healthcare crisis in America. We would be -- if it were not for the energy crisis -- we'd be talking a lot more about healthcare issues. And we have to reform healthcare in America. And we have to make insurance available and affordable for all Americans. I do not believe that that means a government-run healthcare system is the most efficient or what we need.

And we need to have policies that encourage home healthcare as opposed to institutionalized care. And we need to treat people on an outcome basis that don't pay for every test or every procedure, every visit to the doctor, but treat them for a period of time and then pay that provider. Give -- there's a program now for senior citizens that is not as wide as I'd like to see where it's called Cash and Counseling. And seniors are given money every month and then they're able to decide how they want to pay for their own healthcare. It's remarkable the savings that have been realized.

(END VIDEO CLIP)

ROMANS: Next, Senator Obama on healthcare in his own words.

But first, the CNN hurricane center is tracking Tropical Storm Fay. Reynolds Wolf has the latest -- Reynolds.

REYNOLDS WOLF, CNN METEOROLOGIST: That's right. Fay continues to spin right off the coastline, bringing some wind. But the big story is going to be the heavy rainfall this storm is going to produce. In fact, right now, as it continues to feed off the warm waters of the Atlantic, it is just holding stationary. Winds about 60 miles an hour, gusting to 70.

But the storm is forecast to pull its way to the west. Let's see, south of Gainesville, as we get into 2:00 a.m. Friday, then going just south of Tallahassee, early into Saturday. And if you look at the wide stretch of this storm, possibly could make another landfall, moving back on to the Gulf, maybe even a say fourth time, maybe even a fifth time. Possibly five landfalls in the state of Florida with this one storm system.

The biggest threat that we have with this storm is going to be the flooding. Take a look at some of these numbers behind me. Melbourne, Florida, over two feet over rainfall there. Cocoa Beach, close to that point. Over 20 inches in Cape Canaveral. Very close to 20 inches in Palm Shores. Even Moore Haven, they've had over 16 inches of rain and still the showers continue to fall.

And what we're going to be seeing as we make our way into the weekend is that rain really beginning to stack up in parts of north Florida, perhaps into Georgia, maybe even into parts of Alabama, you could see up to 30 inches of rainfall.

Now, in Oklahoma recently, we've had some flooding there. We had some video there that's just been amazing. Breathtaking, in fact, as many people say. You'll see some water rescues right here along parts of the Oklahoma City area complements of KOCO.

But one tremendous difference you have in this part of the world, compared to Florida, is you can actually argue that Florida actually can handle the water a little bit better. Now, obviously, the metropolitan areas where you have plenty of concrete, you're going to have real bad issues of in terms of runoff. But you've got plenty of swamps, especially in south Florida. You've got many river basins. The Suwannee River, of course. It can handle quite a bit of higher volume of rain.

But still the problem is, 30 inches of rain falling, I don't care what kind of ground you have, that is really going to stack up and you're going to have some flash flooding and it's going to be a tremendous issue. One that we're going to watch through the weekend.

ROMANS: All right, Reynolds Wolf. Thank you so much, Reynolds.

WOLF: Any time.

ROMANS: Earlier we showed you how John McCain responded to a voter's question about healthcare. Now let's listen in as Barack Obama talks to a crowd in Virginia yesterday. He's explaining how his tax plan would help the middle class.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: My tax plan says that the people who really need help are working families, middle class families. And so what I say is, instead of cutting taxes for corporations when 70 percent of them aren't even paying taxes, is to make sure that we are giving tax relief to you. $1,000 per family to offset rising gas prices and rising food prices. Help you balance the budget at the end of the month. Help you save a little bit for your child's college fund.

Independent analysts have said that my plan provides three times the amount of middle class tax relief compared to John McCain's. Three times the amount of middle class tax cuts. So when you see these ads going up and John McCain starts talking about, he wants to raise higher taxes and he would bring about an economic disaster. You have to remind yourself, that not only does Obama want to cut my taxes, but the economic disaster is already here. And that's why we need a change and that's why I'm running for president of the United States of America.

(END VIDEO CLIP)

WILLIS: Well, first they charge us for blankets and pillows. Remember there? Then soda and coffee. But, wait, there's more. You won't believe what some airlines are charging you for now. That's next.

Plus, even horses can't buck the tough economy. More and more are being sold because their owners can't afford to feed them. That heartbreaking story next.

You're watching ISSUE #1.

(COMMERCIAL BREAK)

ROMANS: Welcome back.

Remember Amtrak's old slogan, "America is getting into training"? It's more timely now than ever before as more motorists are parking their cars in favor of rail. Amtrak fears it may not have enough seats to meet future passengers. Already enjoying record high ridership, Amtrak expects it will need to double the size of its fleet to meet increasing demand. Last month, Amtrak had more than 2.75 million passengers. That's up 14 percent from last year and its highest monthly ridership in Amtrak history. As a company spokesman puts it, "it's a good problem to have."

WILLIS: Well, gas prices are just one factor putting a strain on household budgets. Some families are struggling so much that they have to say good-bye to their pets. One of those pets is Joey, a 12- year-old horse. Joey's paddock will soon be empty because his owner can no longer afford to feed him.

(BEGIN VIDEOTAPE)

BROOKE BALDWIN, CNN CORRESPONDENT, (voice over): Gerri Lindsay's (ph) love for her 12-year-old horse Joey is, in a word, unbridled.

GERRI LINDSAY, HORSEOWNER: Look at his eyes. Are they beautiful or what? And I fell in love with him the first time I saw him.

BALDWIN: That was when Joey was just six months old. Gerri remembers calling out to him.

LINDSAY: Joey. And his ears would go up and you could just -- you could hear the ground, just the patter.

BALDWIN: But soon the paddock will be empty. Gerri, like many Americans, found herself squeezed. Because of cutbacks in the mortgage industry, she was recently laid off. And faced with the high cost of gas and a drought, which drove up the price of hay, she can no longer afford to feed Joey.

LINDSAY: If it meant me going to the grocery store and buying steak or vegetables, I'd eat vegetables, but they'd have hay.

BALDWIN: Sheryl Flanigan (ph) sees this type of thing happening a lot.

SHERYL FLANIGAN, HORSE RESCUER: The people had to move out. They were having financial problems.

BALDWIN: Flanigan is what we'll call a horse rescuer. She saves them. Either keeping the horses here at her non-profit north Georgia farm, or matching them with other owners.

FLANIGAN: I feel like match.com. This is matchhorse.com. Maybe we'll start a new Web site.

BALDWIN: Sheryl has 100 different horses on about four different farms. This here is Roy. Roy is one of 50 horses Sheryl has taken in because their owners simply cannot afford them.

Sheryl says the problem is taking a toll on lots of families around here.

FLANIGAN: The budget for the horses has to be cut out. I mean you have to stop somewhere. You know, you have to feed your family.

BALDWIN: Gerri had to make an excruciating decision.

LINDSAY: I can't take care of the horses or -- can't do it anymore.

BALDWIN: Brooke Baldwin, CNN, Atlanta.

(END VIDEOTAPE)

ROMANS: United we charge. That seems to be the motto of the airline industry these days. We'll tell you the latest service you could be paying for.

Plus, the money panel is standing by to look at all the news and what it means for you and your money. From housing, to energy, we're all over issue #1 right here on CNN.

(COMMERCIAL BREAK)

WILLIS: Welcome back.

United Airlines' latest cost-saving move may leave you hungry. That is, unless you're willing to pay. A recent company memo spells out how United will discontinue complementary meals for coach passengers on select overseas flights starting October 1st. You can still eat but it will cost you $6 for a snack box and $9 for either sandwiches or salads. First class fliers will still eat for free. American, Continental, Delta and U.S. Airways say they'll continue providing complementary meals on their overseas flights.

And the number of Americans applying for unemployment benefits dropped last week for the second week in a row. In all, the number dropped to about 432,000 people. Better than was expected. Employers have cut jobs in every month this year, meaning that more than 460,000 Americans have lost their jobs this year -- Chris.

ROMANS: Ouch.

Well, from the energy crisis, to the banking and housing sector, there's an awful lot to talk about. Let's get right down to it. Robert Shemin is a personal finance expert, Jeanne Sahadi and Poppy Harlow cover this stuff every day for CNNMoney.com.

Robert, you write a book called "How Come That Idiot's Rich and I'm Not?" And my first question to you is, we all want to know, how come that idiot's rich and I'm not?

ROBERT SHEMIN, PERSONAL FINANCE EXPERT: Well, the first thing that idiot's doing is not what the government's doing, and that is you've got to spend less than you take in.

ROMANS: Oh, come on. That's un-American.

SHEMIN: It is, but that's where you've got to start. It's basic common sense. No one's talking about it. No one's teaching it. No one's doing it. Not even our government. That's where you got to start. And then you've got to take responsibility and own some assets and not speculate. That's what's gotten us all in trouble, the banks, the government. And it's got to stop.

ROMANS: There's this new movie out called "I.O.U.S.A."and I keep talking about it. It's a pretty good movie. And there's -- Alan Greenspan is in it and he gives this advice. He says, there's no civilization on earth. People cannot survive if they don't put provisions away for the future. And we're not putting provisions away for the future. And it's really kind of scary stuff.

But it's something to really think about. And in a political season, I think it's really interesting to talk about some of these big picture issues about living beyond our means. The country is, we are. And now we've got these little things hitting us, little things, like gas prices and, you know, Amtrak says its ridership is up because people, you know, want to park the car. We hear from the government that it's going to cost more. The average dinner is going to cost more. Food prices are going up.

Today, energy price is up again.

HARLOW: Energy price is up again because people are worried about economy. People are scared and they jump back into commodities. Oil, like you said in the show, up about $6 today, around $122. That's a scary thought for a lot of people. And a 35th straight day of gas prices declining. People say, oh, oil's up. What does that mean for me at the pump next? So, yes, oil and energy prices up today and we'll see how far it goes.

ROMANS: I think it's interesting that gas prices have come down some 40 cents from their all-time high. And they've come down more on their own, the market, or just diminished demand, then a lot of the different programs that people are talking about for how to fix it.

HARLOW: Well, that's true, but then again, we got that government report that we get every week. We got that yesterday. And that says that gas supply fell more than 6 million barrels last week. So maybe demand is a little higher than we're all saying it is.

ROMANS: And that's why the price of oil is up today?

HARLOW: Yes, it's one big reason.

ROMANS: We can't expect gas prices to keep going down forever, right? I mean they're looking for them to turn back down.

HARLOW: I mean, yes, not even really a lot of people say to year ago levels.

ROMANS: Not to -- well, year ago levels is relatively cheap compared to this. And the heating oil season is coming up too. And I'm sure that, as a personal finance expert, you have some advice on the home -- we know the government says your heating costs are going to go up, on average, 20 percent this year.

SHEMIN: That's a big problem because everyone's already squeezed at the pump, squeezed losing jobs and that's a big problem. But what I want to know, like everybody, is I want to know the truth. No one's talking about the truth as how much oil and gas is out there, what's demand, what are the supplies we don't know about? I haven't heard anyone tell us the real numbers. And I think people are just tired of all this bad news and without any, A, a real plan and, of course, B, someone being honest and telling us what's out there, what's the future like, what's the long-term plan going to be?

ROMANS: Well it depends on what those supplies are. If they're in shale or if they're, you know, underneath some place that's protected by law that you can't drill or -- I mean there's a lot of different truths about how much oil and gas is out there and that kind of makes it even more squishy.

I want to talk about the banking sector quickly, because this has been a summer of turmoil for the banking sector. And IndyMac is kind of the pictures that we see about the traditional run on the bank. And it really sparked some concerns. What have we found out now about IndyMac?

SAHADI: Well, this week, the FDIC, which did take over IndyMac in mid July, announced a plan to help modify the loans of IndyMac borrowers. IndyMac was primarily a mortgage lender. It was also a depositor institution, but it was primarily known as a lender of mortgages that are known as Alt-A, which are mortgages for people with good credit but who don't document their income.

So Sheila Bair, who's the chairman of the FDIC, and who's been a vocal, vocal advocate for loan servicers to systematically modify mortgages across the board for troubled borrowers to keep them in their home, came out this week with her own plan to do that. And the purpose of it isn't just to keep people in their homes for the long run. But she says, you know, it makes good business sense because the FDIC would like to sell IndyMac either as a whole or in pieces. So to maximize the value of the assets, she wants to get non-performing loans to become performing loans. So she wants to adjust the loans that it's affordable for folks who are having trouble. So that's good for them.

Reportedly, it's a tough market. She kept saying in the conference call yesterday, I don't know what things are going to sell for in this mortgage market. But it is always better to sell a portfolio of performing loans than non-performing loans. So the more people she can get on board to do that, the better. And that's good for the depositors at IndyMac who did -- who had some deposits that were uninsured, over the $100,000, or in this case $150,000 mark I think . . .

ROMANS: In terms of the health of the banks, she has said, for much of this year, she has said, yes, we're going to see some bank failures, but nowhere near what we saw during the last recession. That seems to still be the guidance from the government that, yes -- I mean we went several years without any banks failing in this country.

SAHADI: Right. It was like at historic lows. And, yes, there will be more. And I believe next week they're coming out with their revised list of troubled banks. Banks that they're keeping an eye on.

HARLOW: But they never tell us what the banks are. They give us the number there but they don't always tell.

ROMANS: Well, yes, that's true.

SAHADI: Well, you know, it is true that a lot of troubled banks get off the troubled list because the FDIC does takes measures.

ROMANS: And you hope that your deposits are insured by the FDIC up to what? Up to what?

SAHADI: They are, well, up to $100,000. But I think in the case in IndyMac, they were able to provide something more than $100,000 for depositor depositors.

ROMANS: Robert, you're the personal finance expert here. You tell us, what is the piece of advice we need to take away from here going for ourselves, for our own economy, no matter what's happening in Minneapolis and Denver, no matter what's happening with different banks and fed bailouts. What do we need to do?

SHEMIN: Well, you know, America is all about taking responsibility. And I think every family, every household, every person has to take responsibility and figure out, where can we save some money, cut some costs and live within our means? And then how are we going to generate wealth? How are we going to create wealth for our families and get in good financial shape so we can withstand these up and down markets, these up and down costs. And that's what this country's been built on and that's what's going to happen. And I think our leaders also need to take that approach in say, let's be honest with everybody. What is the problem with the banks, the housing. Let's get the facts out and get past it so we can move on, on to better and better times.

ROMANS: I don't know if we've all learned how to save. We've never really had a rainy day. A whole generation has never had a rainy day and the rainy day is here. And now we're finding out what happens when you don't prepare for it.

Poppy Harlow, Robert Shemin and Jeanne Sahadi. Thank you, everybody -- Gerri.

WILLIS: Live within your means? That's crazy talk, Robert Shemin. I'm kidding.

All right. One big automaker is offering big discounts in hopes of big sales. We'll tell you if it's a deal or no deal.

Plus, it is not to late to weigh in on our Quick Vote. Which presidential candidate do you believe will have the most positive influence on your pocketbooks? Log on to CNNMoney.com and cast your vote. The results are next.

You're watching ISSUE #1.

(COMMERCIAL BREAK)

ROMANS: So which presidential candidate do you believe will have the most positive influence on your pocketbooks? That's today's Quick Vote question. CNNMoney.com's Poppy Harlow is here with the results -- Poppy.

HARLOW: Hey, Christine.

It's a big question for voters out there. And McCain won on this one. Forty-seven thousand of you voted. That's right. Forty-one percent of those votes went to McCain, 35 percent to Obama. Twenty- four percent of you said neither. That's a little scary because it's issue #1, the economy. So we'll see. But McCain winning on this one.

ROMANS: All right. OK. Poppy Harlow.

Thanks, Poppy.

WILLIS: Interesting stuff.

Well, General Motors says it's offering its employee discount to everybody. That's a big price drop on nearly all its 2008 models and some 2009. Now when it offered this deal back in 2005, GM made out big time. But can you make out big time this time around? CNNMoney.com's Peter Valdes-Dapena is here.

Peter, great to see you, as always. All right. So tell me what this big discount is. I mean I see it advertised on TV but I still couldn't explain to you if it's worth it or not.

PETER VALDES-DAPENA, SENIOR WRITER, CNNMONEY.COM: Well, if you're a General Motors employee, if you worked in one of their factories, you could go to a GM dealership and basically buy your car for a little bit less than dealer invoice.

WILLIS: How much of that little bit?

VALDES-DAPENA: Ten percent.

WILLIS: Wow. That's a lot of money.

VALDES-DAPENA: It can be a lot of money. It depends on how expensive the car is. Sometimes it's a couple of thousand. Some cars it's like $5,000. It can be a lot.

WILLIS: Now would you buy a GM car because of this particular discount? I mean you're -- look, you are the auto expert. You know about all the cars. Would you take it?

VALDES-DAPENA: Yes. There are GM cars that I would buy and I recommended some on our Web site. And these are GM cars that I would buy without the discount. I mean the first thing you have to consider is the car itself. Never buy a car just for the deal. You buy a car for the car.

There are GM cars that I would buy. And if I had the opportunity, if I were thinking about it, this would be a great time to go do it.

WILLIS: All right. OK. Let's talk a little bit about this from GM's point of view. We're talking about it from the consumer's point of view. But from GM's point of view, this, boy, it seems like a hail Mary pass. All these American auto makers, they're doing horribly, life is terrible, they're laying off white-collar workers, they're laying off production people. Is this really desperation?

VALDES-DAPENA: Well, to some extent, you could say that it is. I mean if you look at Toyota, for example, and Honda, they're offering year-end clearance sales too. They're offering, you know, relatively mild, low-cost financing, not dealer pricing. So it could seem like it.

What's interesting about what GM is doing, though, when I read they were doing this on all their 2008 models. OK, we're trying to clear out the 2008s. We understand that. They're also doing it on selected 2009 models.

WILLIS: Hey, that includes the Cadillac, I hear.

VALDES-DAPENA: That includes the Cadillac.

WILLIS: Very, very exciting. You like this car, right?

VALDES-DAPENA: I like that car. And what (INAUDIBLE) right, because they're not just doing it on the slow-selling stuff you'd expect. They're doing it for some of their better cars that are already selling really well. So clearly they're also trying to make up some serious market share here. And as they told me when I asked them about this, they said we're also trying to get people -- we want to get these cars out there on the streets so people can see them and jump start some sales.

WILLIS: Is this a gamble that can work, though?

VALDES-DAPENA: It's a gamble that could work. The risk for GM is, in the past, GM had a problem with basically, I think, being addicted to incentives, where GM customers had learned, if I like a GM car, if I wait around long enough, they're going to have a big sale and I'll just wait and buy it then. What they don't want to do is, you don't want to get customers into a mind set where, hey, I like the Cadillac CTS and, man, if I wait long enough, they're going to have a big sale like this and I can save a lot of money. You don't want to do this all the time where customers are waiting for it and expecting it.

WILLIS: All right. But that Cadillac is now Motor Car Trend of the Year from last year.

VALDES-DAPENA: It was Motor Trend Car of the Year last year. I really like it. It's the Cadillac CTS. You can get it for like $5,000 off. Again, this is a car I would buy any time. I mean it's just a really good car and this is a good time to go pick one up.

WILLIS: Great to talk to you, Peter. Great expertise. We love to hear from you. Thank you.

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

WILLIS: And for more ideas, strategies, and tips to save you money and protect your house, watch "Open House" Saturday at 9:30 a.m. Eastern right here on CNN.

ROMANS: The economy is issue #1. We are committed to bringing it for you. ISSUE #1 will be back here tomorrow, same time, 12 noon, right here on CNN.

WILLIS: Time now to get you up to speed on the other stories making headlines.

"CNN NEWSROOM" with Kyra Phillips starts right now.