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American Morning
Hurricane Ike Pounds Cuba and Threatens the U.S.; Obama Lead Shrinks, Will Meet with Bill Clinton; Fed Bails Out Fannie Mae and Freddie Mac; A Look at Sarah Palin's Faith
Aired September 08, 2008 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALINA CHO, CNN ANCHOR: And stick around. Coming up in our next hour, we're going to hear from John McCain about his plans to fight corruption in Washington. We'll also hear from Barack Obama about who he thinks will bring change to Washington.
KIRAN CHETRY, CNN ANCHOR: And it's 7:00 here in New York. A look at the top stories this morning.
A major hurricane threatening the United States. It's Ike, now a Category two storm with 105 miles-an-hour winds. It made landfall in Cuba as a 125 mile-an-hour Category three overnight. Key West could feel tropical storm force winds by tomorrow, but Ike is not likely to make landfall there.
The mayor says 15,000 tourists abided by the order to leave and got out over the weekend. It's unclear where Ike will head after Cuba. But right now, it looks like it will hit somewhere along the Texas or Louisiana coast west of New Orleans.
The Feds are running two major mortgage finance giants this morning. The government agreeing to pump billions of dollars into Fannie Mae and Freddie Mac and assume responsibility for trillions of dollars in debt. The bottom line for taxpayers may be tens of billions of dollars, but President Bush said that the move was necessary to avoid a deeper level of crises. Together, Freddie Mac and Fannie Mae own or guarantee about half of the nation's home loans.
Just eight weeks to go until Election Day, John McCain has all but closed the gap on Barack Obama. A new CNN poll of polls has Obama up by one percentage point. Some polls taken just before the Republican National Convention showed McCain down by as much as six points.
And now, back to our top story. Hurricane Ike threatening the U.S. right now. Florida and Louisiana are under a state of emergency this morning. Witnesses say 50 foot waves crashed into Cuba as that storm made landfall overnight. The Category three storm flooded Haiti, killed more than 70 people after several hours on land. It weakened to a Category two, but it is expected to strengthen once again as it hits the open warm waters.
CNN is your hurricane headquarters. We have Morgan Neill live in Havana, Cuba, exactly where Ike is expected to cross. Susan Candiotti live in Key West for us, and Rob Marciano on where the storm is headed and how powerful it will be. First, we head to Morgan Neill live for us in Havana. Good morning, Morgan.
MORGAN NEILL, CNN CORRESPONDENT: Good morning, Kiran. This hurricane is making its way slowly across the length of the island, already even before the eye hit. We saw some very dramatic images in the eastern city of Baracoa, saw huge waves crashing into the seawall, going over the top of a five-story building, at one point. It also brought tremendous flooding there. We saw people up to their waist very early in this storm's path across Cuba.
We've seen reports of more than a thousand houses partially or completely destroyed. We've seen trees down. Power lines down there as well in Baracoa. At this point, the last report we heard is close to the city of Las Tunas, getting into the center of the country. It's expected to make its way across the country eventually before making its way out through Havana. We expect to see that some time tomorrow.
People already preparing, stocking up on goods, making sure that they've got everything they need in case, as they expect and they lose power here for some time. Remember, it was just nine days ago, Cubans saw the tremendous damage brought by Hurricane Gustav when it ripped through the west of the island -- Kiran.
CHETRY: All right. Morgan Neill for us in Havana, Cuba, thank you.
CHO: Now, Ike has been downgraded to a Category two storm but it's expected to become a major hurricane again when it hits the warms waters of the Gulf of Mexico.
Rob Marciano tracking it all from the CNN weather center. So it's going to lash Cuba later today. Where is it headed next, Rob?
ROB MARCIANO, AMS METEOROLOGIST: Well, it's going to scoot across the southern coastline of Cuba. Here's -- we took this off the Internet.
This is from the Cuba Met office. There's the center of the eye. This is the radar site which is right over the island right now. Made landfall late last night along the northeastern coastline. It's a Category three, now a Category two. Will likely hold onto its hurricane status. Still very well defined here on the radar especially the northwestern corner of this.
Here's the satellite picture. There you see the eye slamming into the northern coastline. It may go offshore to the southern coastline briefly. If it does so, it will help kind of keep it together.
Either way, it's still over 350 miles from Havana. It is moving west at 15. So that puts it over Havana pretty much around this time tomorrow. So it's got quite a bit of islands to navigate here before it gets into the Gulf of Mexico. So how strong it gets or it is, still when it re-emerges in the gulf, that be will be one of the determining factors as to what happens next. Either way the Keys and the southern tip of Florida will get big waves. It will get a little bit of a surge with this, and though in some cases, feel tropical storm force winds at least when this thing re-emerge in the Gulf of Mexico.
Here's how the timing sets out. Cat one over Havana during the day early tomorrow. Then re-emerge into the Gulf of Mexico tomorrow night. Maybe regaining strength to a Category three or better across the northern gulf Thursday or Friday, and then potentially making landfall Friday or Saturday anywhere from the Florida panhandle to the Texas-Mexican border.
So lots to determine yet with this, Alina. We'll just have to wait and see. Either way folks living along the Gulf Coast and the Keys certainly a little bit antsy this morning to say the least.
CHO: We're all watching it and it will certainly be a busy week for you. Rob, thank you.
MARCIANO: OK.
CHO: Sixty seconds of terror as Tropical Storm Hanna spawned a tornado over the weekend, and it was all caught on tape. Take a look at this.
This is Allentown, Pennsylvania. The National Weather Service says the twister's winds hit almost 100 miles per hour. The city says it tore up a high school roof and blew out the windows there. Witnesses say they saw trees in the air but everyone was OK.
And a father and son survival story. This is really incredible. Listen to this.
Both were saved off the east coast of Florida eight miles off the shore after treading water for more than 12 hours. Ike's strong rip currents dragged the man and his 12-year-old autistic son out into the Atlantic Ocean. A fishing boat actually found the father eight miles out, then a Coast Guard chopper dropped a swimmer into the ocean and rescued the little boy with the bucket. And then, the father gave a shout-out to the crew.
(BEGIN VIDEO CLIP)
WALTER MARINO, SAVED AT SEA: The Coast Guard rocks! God bless the Coast Guard.
SR. CHIEF NEWMAN CANTRELL, U.S. COAST GUARD: Well, you know one thing that's really amazing is that, you know, for basically 15, 16 hours now, you've had a 40-year-old man and a 13-year-old boy treading water. And you know, I just got to say a lot to their willingness to survive and it's just a great day.
(END VIDEO CLIP)
CHO: The rocking Coast Guard says they found the boy about a mile away from his dad. Great story -- Kiran.
CHETRY: That's unbelievable for how long they were able to tread water.
Well, the "Most Politics Now in the Morning." As Barack Obama's lead shrinks to just a point now, he's heading out to key swing states this morning to try to stop John McCain's RNC bounce.
Suzanne Malveaux is joining us live from Chicago this morning with more on Obama's plan. Hey there, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kiran. Well, Barack Obama is here in Chicago. It's the first day of school for both of his daughters so he's here. But later, he's going to be heading to Flint, Michigan, and that is where he is stressing his message that he is the stronger candidate when it comes to the economy, financial matters. But he is also stressing this, Kiran. That John McCain, he believes, is trying to co-opt his message of change.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): Fighting to hold on to his message of change.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We need change. But let's be absolutely clear about what change is and is not.
MALVEAUX: Slamming John McCain for using his slogan.
OBAMA: He says I'm going to tell those lobbyists that their days of running Washington are over. Who's he going to tell? Is he going to tell his campaign chairman who's one of the biggest corporate lobbyists in Washington?
Who is it that he's going to tell that change is coming? I mean, come on. They must think you're stupid.
MALVEAUX: And to John McCain's running mate, he did not call Sarah Palin a liar but he did say her talk of change is misleading.
OBAMA: Words mean something. You can't just make stuff up.
MALVEAUX: The message this week, we're the only ones talking about what voters care about -- the economy, rising jobless rates and the mortgage crisis.
OBAMA: We have to protect taxpayers, not bail out the shareholders and management of Fannie Mae and Freddie Mac. This is a challenging situation that's been festering for a long time.
(END VIDEOTAPE)
MALVEAUX: Kiran, both of the candidates addressed that situation. Also this week, you should know that both of the candidates are going to suspend their campaigns just for a day and come together. The anniversary of the September 11th attacks. Both of them will appear together at Ground Zero on Thursday -- Kiran.
CHETRY: Suzanne Malveaux for us in Chicago, thanks.
CHO: The government bailout of mortgage giants Fannie Mae and Freddie Mac is the government's most dramatic move yet to protect the housing market. How you'll see the effect on your mortgage rates and the value of your home. Ali Velshi coming up live.
And inside the church where Sarah Palin grew up. We'll take a closer look at the vice presidential nominee's faith. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Rating the running mates.
(BEGIN VIDEO CLIP)
CONDOLEEZZA RICE, SECRETARY OF STATE: Sarah Palin gave a terrific speech.
(END VIDEO CLIP)
CHETRY: Zain Verjee with Condoleezza Rice. Is Palin ready to take on foreign policy?
(BEGIN VIDEO CLIP)
ZAIN VERJEE, STATE DEPARTMENT CORRESPONDENT: Does she have enough experience to handle the kinds of things that you need to handle.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHO: Welcome back. Twelve minutes after the hour. Dow futures soaring this morning, up over 250 points. Of course, that's on the news that the Treasury Department seized control of mortgage giants Fannie Mae and Freddie Mac over the weekend. So what will it mean for home prices and mortgage rates? Ali Velshi joins us now with more on that.
So, basically, you have a fixed rate mortgage doesn't affect you.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Correct.
CHO: But if you're looking to get a mortgage, this is good news.
VELSHI: Yes. In fact, some people we spoke to say that you could expect the rate on a fixed, 30-year fix mortgage. Right now, it's about 6-1/3 percent. It could come down as much as a third of a percentage point in the coming weeks. What they really say is that by saving Freddie and Fannie from becoming liquid, what it did is prevent rates from going up maybe by another percent.
Now, if you are in a fixed rate it doesn't matter, but the fact that most people -- more people can now maybe get into a mortgage that kind of helps the housing market. You may see either a little bump in the housing market or you may at least see a backstop to further dropping in the housing market.
There are a couple of other implications to this whole thing. One is that, this is a bailout plan. It's a rescue. The government is going to put money into saving Freddie and Fannie. Some estimates are that it might be as little as $30 billion.
The treasury has said -- Henry Paulson said he's prepared to put up to $200 billion into it. That is a lot of money. Remember that Bear Stearns bailout was only $30 billion. The stimulus package was about $150 billion. So it could end up costing us somewhere else because obviously we didn't plan to spend that kind of money.
There's a third leg to this and that is investors. There are some people, you may not know this, but a lot of major mutual funds actually invest in Freddie Mac or Fannie Mae. And you may see some of your mutual funds take a hit because these stocks have really suffered. They dropped more than 80 percent in the last year.
Also, some community banks, some small regional banks were heavily invested in the stock of Fannie and Freddie. So while this is generally thought of as good news for banks because they'll have more access to money to give out more mortgages, you may see more banks struggle because they actually invested in the stock of Fannie and Freddie, and they may get into financial problems as a result of that.
So this is a very complex thing that has lots of effects to it. But the bottom line effect is that you might see the 30-year fixed rate go down a little bit because Freddie and Fannie will have an easier time borrowing money and hence, they can pass that money on to banks who can make mortgages to you.
CHO: Maybe below six percent.
VELSHI: Maybe below six percent.
CHO: Yes.
VELSHI: And historically, 6-1/3, which is where we are, it's highest it's been in a while. It's not a terrible rate.
CHO: No.
VELSHI: It's not a bad rate. We've been down as low as 5.25 for a 30-year fix. So not all --
CHO: You might get a lower rate.
VELSHI: But you might get a slightly lower rate.
CHO: All right. CHETRY: Ali, thanks.
VELSHI: All right. Thanks.
CHETRY: We have a look now at an all-celebrity edition of news across the nation. It just happened to be that way today.
In Las Vegas, jury selection in O.J. Simpson's armed robbery and kidnapping trial starts later today. Simpson and his co-defendant are accused of leading several armed men to a sports vendor's hotel room and stealing at gunpoint sports memorabilia that Simpson claimed belonged to him.
In Payson, Utah, former child star, Gary Coleman, known for his role in "Different Strokes," is under investigation after allegedly hitting a fan and another vehicle with his truck in a bowling alley parking lot. Coleman and his bodyguard say the fan was taking pictures and harassing the former actor. Coleman says hitting the fan was an accident.
And from last year's flop to back on top, pop princess Britney Spears took her crown back at last night's MTV Video Music Awards. She won three trophies including Video of the Year as well as Best Pop Video and Best Female Video, all for her tune "Piece of Me."
Spears shimmered in a silver gown. She kept her acceptance speeches short, a far cry from opening last year's VMAs, looking a little bit dazed. She also wore silver but unfortunately, she was certainly panned by critics and fans alike for not only her performance but her appearance.
Hey, what a difference a year makes.
CHO: That's right. I mean, she puts on a swimsuit, loses some weight, and she's been on all the weeklies. But, you know, she had a little bit of a slip-up. She said, I'm announcing the 25th anniversary of the VMAs. But you know, who can blame her? I think she's back.
CHETRY: That's knit picking compared to last year.
CHO: Yes. You know what? You're right, you're right, you're right. Point taken.
We're watching Ike this morning, by the way, guys. The hurricane tearing through Cuba right now. We're tracking the storm as it moves toward the U.S.
Palin's former parish.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: It was so cool growing up in this church and getting saved here.
(END VIDEO CLIP) CHO: Jessica Yellin on the church that talks about Alaska's role in the end of the world.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: God has a destiny for the state of Alaska.
(END VIDEO CLIP)
CHO: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most News in the Morning."
Vice presidential candidate Sarah Palin is energizing the evangelical base of the Republican Party. And now, we're learning more about her own personal faith.
Jessica Yellin joins me now from Anchorage, Alaska with a look at the church where Palin grew up.
Good morning, Jessica.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Kiran. A recent visit by Governor Palin to the church she grew up in has stirred a lot of interest on the Internet. Now, the McCain campaign isn't talking much about her faith. I just got off the phone with them. They say she was baptized Catholic and now attends a number of different churches. But they don't mention the church where she worshipped the most so we visited it to learn a little bit more.
(BEGIN VIDEOTAPE)
YELLIN (voice-over): In June, Sarah Palin spoke at Wasilla Assembly of God where she had worshiped for much of her adult life.
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: It was so cool growing up in this church and getting saved here.
YELLIN: She was addressing graduates of a youth ministry program that promotes itself with this video.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: God has a destiny for the state of Alaska.
UNIDENTIFIED MALE: Masters Commission is one of the keys in God's plan for Alaska, the United States and the entire world.
(END VIDEO CLIP)
YELLIN: The church teaches that Alaska will be a shelter at the end of the world.
UNIDENTIFIED MALE: I believe Alaska is one of the refuge states, come on, you guy, in the last days. And hundreds and thousands of people are going to come to the state to seek refuge.
YELLIN: Like many Pentecostal churches, the Wasilla Assembly of God practices speaking in tongues. Whether Palin shares these beliefs is unclear. During her two visit, she described the Iraq War and a natural gas pipeline she's trying to build as part of God's plan.
PALIN: So pray for that.
YELLIN: Since she hit the national stage, the governor has not spoken publicly about her faith. This parishioner believes the Wasilla Assembly of God shaped Palin's beliefs.
TERRY NELSEN, PARISHIONER: She has a better idea of what God is wanting her to do and guiding her and leading her, and that it's coming from him.
YELLIN: Since 2002, Palin has regularly attended a nondenominational church with more traditional practices. Her current pastor says --
LARRY KROON, PASTOR, WASILLA BIBLE CHURCH: She really cares about her God, and it doesn't get in the way of anything. I think it enhances her in terms of how she approaches everybody with respect.
(END VIDEOTAPE)
YELLIN: Now, we attended Sunday service there yesterday. There was a lot of singing, dancing, spontaneous personal prayer. And a sermon with the message that the way to salvation is only through Jesus.
The pastor did at the end pray for all the candidates, the presidential candidates and the vice presidential candidates. They did not want to talk to us on camera or let our cameras in. They say they feel they've been burned by the press attention they've gotten so far -- Kiran.
CHETRY: All right. Jessica Yellin for us in Anchorage, thanks.
State of emergency -- Floridians flee as deadly Ike tears through the Caribbean. The latest on the storm's track. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most Politics in the Morning." Bill Clinton and Barack Obama will do lunch on Thursday. That's according to the Clinton foundation.
A spokesman says the former president sent out the invite when he heard Obama would be in town for an appearance marking the seventh anniversary of the September 11th attacks. Hillary Clinton is campaigning in Florida for Barack Obama today.
And joining me now from Washington, Democratic strategist and CNN political contributor Hilary Rosen, as well as Amanda Carpenter, national political reporter for the conservative Web site, Townhall.com.
Welcome to both of you. Thanks for being with us.
HILARY ROSEN, DEMOCRATIC STRATEGIST: Hey.
CHETRY: First, let me ask you, Hilary, the significance of the meeting. If you were a fly on the wall, what do you think you'd be hearing between Barack Obama and former President Bill Clinton?
ROSEN: Well, I suspect I'd be hearing a lot of smart political advice. Many people have been saying that the fundamentals of this campaign are very much like what Bill Clinton faced in 1992. There was no incumbent president running. The economy was doing very badly, and people were really looking for a new way. And Bill Clinton is a master at campaigning with, you know, appealing to the middle class, letting people focus on the economy.
We all remember his phrase, "It's the economy, stupid." I imagine he's going to be updating that some for Barack Obama but encouraging him to stick pretty much to that message.
CHETRY: And I want to ask you about this, Amanda, because a lot of people have been talking, including Senator Biden, who suggested on the Sunday talk circuit, that the McCain campaign is hiding Governor Palin from the media. What do you think about this strategy that seems to be right now, limiting her access to reporters?
AMANDA CARPENTER, REPUBLICAN STRATEGIST: Well, she's only been announced vice presidential candidate for a little over a week and she's going to be doing a full sit-down interview on ABC this week. So I think it's just a matter of giving her a little bit of time to go through the motions.
I mean, she was announced -- she had to go right to the work of writing the most important speech of her life. But, you know, in the coming weeks, I do think she's going to have to talk about foreign policy, immigration, other issues that we don't know where exactly where she stands on. And I think she's beginning that process right now.
CHETRY: And, Hilary, how does -- if Hillary Clinton is out on the campaign campaigning for Barack Obama, how does she counter the star power of Sarah Palin without going after her, which is something that apparently, she said she's not going to do?
ROSEN: Well, you know, Hillary Clinton has said and I know she'll do this, this is about the issues and she's going to focus be on the issues.
Over the last couple of weeks, you've heard a completely new John McCain accompanied by Sarah Palin with every position imaginable. All of a sudden, he's going to create jobs and yet he's been against every job stimulus bill that's been out there. All of a sudden, he's going to find new renewable fuels and yet he has voted against every single renewable fuels legislation the Senate has proposed. So, you know, Sarah Palin is kind of a protegee of Phyllis Schlafly (ph) and the right wing, the government making decisions for women and their families. I think Hillary Clinton is just going to point out on the issues these candidates are outside of where the mainstream of America wants to be. It's not going to be a personality contest.
CHETRY: Amanda, last word.
CARPENTER: You know, Sarah Palin has a hard-nosed record as a reformer. She brings something to the race that nobody else on the ticket does, including John McCain. Look at what she did for the energy industry as Alaska's governor. She is singledhandedly --
(CROSSTALK)
CHETRY: But, Amanda, I do want to ask you.
CARPENTER: Negotiate the construction of a $40 billion pipeline that's going to bring the United States up to five, you know, million cubic feet of natural gas.
CHETRY: But, Amanda, I want to ask you a quick question.
CARPENTER: She is an absolute reformer. She rooted out corruption, you know, among the Republican Party.
ROSEN: Is John McCain running or is it Sarah Palin running?
(CROSSTALK)
CHETRY: But I want to ask you about this --
CARPENTER: Well, he helps to bring that maverick --
CHETRY: Amanda, we've been hearing because I've been listening to them all weekend long talk about earmarks, earmarks, earmarks. Is that a dangerous road to go down talking about earmarks when she, as Alaska's governor and as the mayor of Wasilla, accepted earmarks and sought them?
CARPENTER: No, because when she was governor, she zeroed out 15 percent of the state budget that was used to fund earmarks. When she was governor and she had the ability to take those things out, she did. And I think that's something she's going to be talking about in the coming days.
CHETRY: All right. Well, we have to leave it there but I want to thank both of you for joining us. Eight weeks to go. It's the sprint now and it certainly is extremely exciting.
Hilary Rosen and Amanda Carpenter, thanks.
ROSEN: Thanks.
CHO: Just about 30 minutes after the hour. A check of our top stories right now.
A dramatic step to shore up the mortgage industry. The government takes over Fannie Mae and Freddie Mac, taking out the CEOs of those companies too. The government is now the country's biggest mortgage lender backing some $5 trillion in loans. Treasury Secretary Hank Paulson said the companies are simply too important to risk having them fail.
The price of gas falling again this morning. The new national average $3.65 a gallon according to AAA. That's down more than 11 percent from July when a gallon of regular peaked at $4.11.
Hurricane Ike slamming Cuba right now. It's a dangerous category 2 storm. Ike ripped roofs off homes, knocked down trees and slammed ashore with 50 foot waves. It's now headed toward Havana with winds in excess of 100 miles an hour. So where is Ike headed next? Let's bring in Rob Marciano who's tracking it all for us. So, we're looking at potentially a Saturday land fall in the U.S., Rob?
ROB MARCIANO, CNN METEOROLOGIST: It could be Saturday, could be Friday, it could be as early as Thursday night. These things -- day four and five, which is what we're talking about here, our confidence level both for track and timing is a little bit iffy. Let's get to Cuba first, boy it just hammered the lower Turks and Caicos, Grand Inagua, and then heading now over Camaguey and heading west at 15 miles an hour.
So Havana on the western tip of the island, still over 350 miles, but it's holding together quite well. A category 2 storm will likely remain a hurricane as it traverses the spine of Cuba. If it taps into the northern Caribbean it may very well strengthen or the Florida Straits that's a possibility as well.
But right now, winds of 105 miles an hour. It's moving as mentioned westerly at 15. So we need to get it through the western tip of Cuba and into the Gulf of Mexico before we start talking about how strong this is going to be and really what concrete direction it's going to be headed and timing.
So another 24 hours of waiting and see here, but the forecast track nonetheless from the National Hurricane Center takes it into the Gulf of Mexico with a category 2 status early Tuesday or Wednesday. A category 3 status in the northern Gulf. And then all bets are off as to where it may go from there. Again, Thursday, Friday, or Saturday potential land fall for the U.S., but as you know, Alina, once it gets into the Gulf it's pretty much surrounded by land and odds are it will strike somewhere in the U.S. Back to you.
CHO: Wow, and that's an area that certainly doesn't need it. 370,000 people still without power in Louisiana after Gustav. Rob, thank you. Kiran?
KIRAN CHETRY, CNN CORRESPONDENT: Well, authorities are evacuating the Florida Keys in case Ike moves north that could change later this morning. We have Susan Candiotti live in Key West, Florida for us this morning. So, not a direct hit, they are sill going to get some of the tropical storm force winds. What's going on there?
SUSAN CANDIOTTI, CNN CORRESPONDENT: Yes and that's nothing to play around with, of course, Keys residents are used to harsh conditions here. They remain under a hurricane watch but also that tropical storm warning, I'm at one of the many marinas that you see here in Key West. You can see the preparations now. Extra lines have been put on all of these boats here, in particular on the bow or front of the boat.
You see extra ties down in the middle of the boat, that's to take care of any expected storm surge here because at the minimum if there's a tropical storm here, there is going to be some minor flooding in areas where they normally get it, and these boats have to make sure that they're tied down well enough so that they are not severely damaged.
Now they've also been -- they closed down the airports, schools are closed today and tomorrow, protectively. And an evacuation order remains in effect for residents. 15,000 tourists cleared out over the weekend. Kiran?
CHETRY: Susan Candiotti for us in Key West, Florida. Thank you.
All right, let's head over to Ali Velshi right now. He is following the latest for us in the business world. Hey, Ali.
ALI VELSHI, CNN CORRESPONDENT: Hey, Kiran. I saw a poll that said that some 13 percent of Americans don't know who they're voting for for President. Well, would knowing how much you're going to pay in income taxes under Barack Obama or John McCain help? If so, stay with me. I'm going to break in down by your income level when we come back on AMERICAN MORNING.
(COMMERCIAL BREAK)
CHETRY: Issue No. 1, it's the economy. It will be front and center on the minds of voters this election. And so, we want to help you make an informed choice when you cast your vote for president. So all this week, we're turning to Ali Velshi for a look at where the candidates stand on pocketbook issues. We're kicking things off talking about taxes and the candidates' plans, plus the impact they could have on your wallet depending on where you fall in your income range.
Ali Velshi joins us with more on this. You broke it down very fascinating.
VELSHI: Well, I'm really glad we're not talking about oil and gas price all the time because that had people going, but the fact is you need to concentrate on other issue, long-term energy policies, health care and of course, taxes. This one really gets people interested. We've broken it down for you. The Tax Policy Center has actually broken it down for you. And, it breaks it down by income level.
This is where it becomes interesting. Let's start out with people at the lowest taxable income level between $38,000 and $66,000 a year. Under John McCain your average tax bill will go down by $325. Under Barack Obama it will go down by $1,118. Kick it up to those earning between $66,000 and $112,000 a year. Under John McCain, it will go down by almost $1,000. Under Barack Obama, down by $1,200.
Now, once you get above $112,000, that's where it starts to change. At $112,000 to $161,000 in taxable income every year, your taxes under John McCain will go down further. They'll go down by $2,500 under Obama, a little more than $2,000. For those of you waiting to go to your $2.9 million a year job but you wanted to hear this first, sadly, you will pay a lot more taxes under Barack Obama than you will under John McCain.
Under John McCain you'll probably see a drop in your taxes of almost $300,000, under Barack Obama up by $540,000. However those of you in the $2.9 million tax bracket are probably consulting smarter people than me on your taxes. There are things you can do at higher income levels to defer taxes and to do things about it. At lower levels, it's just straight income tax, you pay what the code says you pay. Your deductions are smaller than they otherwise could be.
So, as you can see, under $112,000, you continue to benefit under Barack Obama, above that, you start to benefit under John McCain on taxes in particular, personal income taxes at a federal level.
CHETRY: OK. Very interesting. You also noted that it also makes a difference depending on who's in Congress. We have a Democratic Congress right now, so how does that relate?
VELSHI: The Tax Policy Center calculated the policies that they have suggested they want to have in place -- the two candidates and how it would work. If the President has Congress on its side, it's more likely that that President is more likely to get their policies through. So if it's a Democratic President and Republican Congress, or vice versa, this whole scenario may change. This is assuming these presidents can get their policies in place.
CHETRY: Very interesting, Ali. Thanks.
Tomorrow on the series, we're going to talk about the energy crisis and two different plans to get us off dependency on foreign oil. We're going to tell you whose plan lines up with what you think the U.S. should do to power the country.
CHO: Battle of the running mates.
(BEGIN VIDEO CLIP)
JOE BIDEN, (D) DELAWARE SENATOR: It was deafening.
(END VIDEO CLIP)
CHO: As Biden gets drowned out, will Clinton come in to save the day?
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Hillary CLINTON, (D) NEW YORK SENATOR: No McCain. No Palin.
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CHO: Jim Acosta on the Palin problem. You're watching the most news in the morning.
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JIM ACOSTA, CNN CORRESPONDENT: Does Governor Palin's place on the GOP ticket change the Obama game plan? And, how will she fare against her Democratic counterpart this fall?
GOV. SARAH PALIN, (R) VICE PRESIDENTIAL CANDIDATE: I love those hockey moms. You know they say the difference between a hockey mom and a pit bull -- lipstick.
ACOSTA: A new CNN poll of polls with a change from last night. Does this one show a Sarah Palin bounce?
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CHO: Welcome back to the most politics in the morning. Well, you just saw it there when it comes to vice presidential picks, lately Sarah Palin is grabbing all the headlines and in so doing stealing the spotlight. So what about her Democratic rival Joe Biden? CNN's Jim Acosta has been looking into this. So, what about Joe?
ACOSTA: Nobody is talking about a Joe Biden bounce, Alina. He's got a compelling biography and serious foreign policy experience, but he's no hockey mom. Some Democrats may be scratching their heads and wondering what about Joe?
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ACOSTA: She may be a political newcomer, but Sarah Palin is already elbowing Joe Biden out of the vice presidential spotlight, drawing big crowds for John McCain and solely gracing the covers of magazines across the country. Biden does have Palin beat on one score, the Sunday talk shows making his 42nd appearance on "Meet The Press" . The sometimes tough-talking Biden tempered his criticism of the Alaskan governor.
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: Eventually she's going to have to answer questions and not be sequestered. Eventually she's going have to answer questions about her record.
ACOSTA: Steering clear of a dogfight with a self-described pit bull in lipstick, Biden is instead tearing into John McCain, here unloading on the Republican Convention.
BIDEN: It was deafening on jobs, on health care, on environment, on all the things that matter to the people in the neighborhoods I grew up in. Deafening.
SEN. HILLARY CLINTON (D), NEW YORK: No way, no how, no McCain, no Palin.
ACOSTA: Still, it's not Biden, but Hillary Clinton who is seen by some Democrats as Obama's best bet to counter Palin-mania. She campaigns for Obama in Florida this week.
CLINTON: Senator Obama and Senator Biden offered the new ideas and positive change agenda that America needs and deserves after eight years of failed Republican leadership. Senator McCain and Governor Palin did not.
ACOSTA: As for Biden who's making the case, as Senator Clinton once did that he's a kid from Scranton, Pennsylvania, not just a creature of Washington. Part of Palin's appeal lies in those well known, small town roots.
WILLIAM SCHNEIDER, SENIOR POLITICAL ANALYST: They've got a celebrity on the Democratic ticket. His name is Barack Obama. They didn't need a celebrity running mate. John McCain did.
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ACOSTA: And the old political adage is that people don't vote for the bottom of the ticket. Still Biden versus Palin at this year's vice presidential debate will be one of the hottest political events of the year. Mark your calendar, October 2nd.
CHO: Well, it's just the shock value from it when it was announced. But, as we saw in the piece, Hillary Clinton of course sort of side stepping questions about Palin. But Joe Biden as we discussed not exactly a political shrinking violet, so why hasn't he come out strongly against Palin yet?
ACOSTA: It may surprise a lot of Democrats, but some Democrats think he may come across as condescending, the older statesman lecturing the hockey mom. They don't want to go there. Interesting, Barack Obama did that over the weekend. He went after Sarah Palin said -- she goes out there saying she's against earmarks, they're pointing out she has been in favor of earmarks up in Alaska.
And, we're going to hear Barack Obama talking about this this week, and perhaps Hillary Clinton as well. Watch Hillary Clinton this week, she will go after Sarah Palin, despite what they're saying. She's their ace in the hole this week.
CHO: And Palin and Biden debate on October 2nd. Boy, I look forward to that. Jim Acosta, thanks. Kiran?
CHETRY: Alina, thanks. Well, here's what we're working on for you this morning. 57 days and counting until the election. A crucial race is on to sway independent voters. Who are they and what issues s issue is most important to them?
Also, Congress gets back to work after a nice long summer vacation. We're looking at what they need to do before they take another break in three weeks. You're watching the most news in the morning. (COMMERCIAL BREAK)
CHETRY: Metallica is back and topping the most popular videos right now on CNN.com. CNN followed James, Lars and the boys to the dessert as they shot their new music video. Metallic new album Death Magnetic, their ninth CD is out September 12th.
Waves crashing over a five-story building. You got to check this out. This is on Cuba's coast. Water filled the street as hurricane Ike made land fall.
And Sarah Palin's style, whether her looks are fair game or just plain sexist. Here's a look right now at the most popular videos on CNN.com.
CHO: All right, the push to get out the vote to America's youth is now going high-tech. The newest initiative is aimed at getting video gamers off the couch and into the voting booth.
CNN's Brooke Anderson has that story.
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BROOKE ANDERSON, CNN CORRESPONDENT: This election could be decided by a few votes, so no one is going overlooked.
MARC WHITTEN, GENERAL MANAGER, XBOX LIVE: I think, our youth are more plugged in than ever before. Both in terms it of what's going on in the world, as well as into technology.
ANDERSON: Microsoft's Xbox has partnered with youth voter advocacy group Rocks The Vote to tap into the millions who play video games with hopes of getting them into the voting booth in November.
WHITTEN: It is simple as it could be. You'll turn on your Xbox and have the opportunity to go right there, express who you're interested in, whether that's Obama or McCain and that will be automatically logged by the service, and from that it will just send you an e-mail with a quick link so that you can register and get all information you need.
ANDERSON: Gamers can register to vote, to voice opinions and participate in polls through Xbox LIVE, a gamer special networking site with 12 million members. In 2004, nearly half of registered voters under age 30 turned out for the presidential election, accounting for more than 20 million votes. This year, Rock The Vote aims to build on that number. Countless groups and celebrities participated in get out the vote efforts. This time around, the gaming community feels it can really make an impact.
ADAM SESSLER, HOST/MANAGING EDITOR G4: I think it's great, because obviously anybody registering to vote that can't be a bad thing. I think that one could say that it's such a passive, and relaxing experience doing it there on your couch. Will that stimulate the person to actually make it to the polls in November? I hope they all realize you can not vote through Xbox LIVE. ANDERSON: If video game enthusiasts do end up flocking to voting booths, the phrase game on could acquire a whole new meaning. Brooke Anderson, CNN, Hollywood.
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CHETRY: Deadly floods. Tree snapping winds. Hurricane Ike gets compared to Katrina. The Gulf coast gets a head start.
And, kids, cold cuts and cancer.
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UNIDENTIFIED MALE: If you care about the health of your child you don't want your child to be eating processed meats.
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CHETRY: The war over mystery meat in the school lunchroom.
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UNIDENTIFIED MALE: The science is not certain on this issue.
UNIDENTIFIED MALE: This is just plain baloney.
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CHETRY: You're watching the most news in the morning.
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SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: She's a tough, smart politician, and so I think she's going to be very formidable, but, you know, eventually she's going to have to sit in front of you like I'm doing and have done. Eventually she's going to have to answer questions and not be sequestered. Eventually she's going to have answer questions about her record.
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CHO: That, of course, was Joe Biden on "Meet The Press" Sunday. He also said he's debated quote "An awful lot of tough, smart women throughout his career. In next month's vice presidential debate, Sarah Palin will be no exception. Well, John McCain and his running mate Sarah Palin are branding themselves as the ticket of mavericks. So, have they stolen the mantel of change from the Democrats? Our next guest says, yes, and that it means big trouble for Barack Obama.
He's former San Francisco Mayor, Willie Brown and he joins me now live from San Francisco. Mr. Mayor, thank you for waking up early for us. You say in the op-ed piece, in The San Francisco Chronicle over the weekend, Palin floats like a butterfly, stings like a bee. I want to quote from that op-ed piece, "The Democrats are in trouble. Sarah Palin has totally changed the dynamics of this campaign, period. Palin's speech to the GOP National Convention on Wednesday, has set it up so that the Republicans are now on offense and Democrats are on defense and we don't do well on defense." Now, you're a lifelong Democrat. Why come out with words like this?
WILLIE BROWN, FORMER SAN FRANCISCO MAYOR: Well, because it happens to be true. It is clear that Ms. Palin has, in fact, set the stage so that it appears as if we are defending the status quo, not the other side.
CHO: But, Mr. Mayor, what are you hoping to accomplish? You want to rally the troops?
BROWN: Well, I think that it's important, frankly, in this debate, that everybody understands that each of respective candidates should have to present a program. Ms. Palin doesn't present a program at all. She simply entertains. And for voters, entertainment is sometimes more important than substance.
CHO: Now you write that McCain and Palin are suddenly the mavericks in this campaign and that Obama and Biden the status quo and they've been campaigning on change. Now, if you take this to be true what do Democrats have to do to turn things around?
BROWN: Well, hopefully Ms. Palin will be exposed on her own. It is almost impossible, frankly, to do anything about defining someone if they are totally a mystery and if the press becomes so fascinated, the press doesn't do their job of exposing them.
Hopefully, at some point, the press will expose Palin, and when that happens, Joe Biden and Barack Obama will step in. Until then, the focus must be by Democrats on the candidate, John McCain. McCain is like Bush light, or Bush heavy, or Bush whichever way you want to call it, and that's what has to be emphasized.
CHO: Now, I want to point out that you didn't just send a warning to Democrats in this op-ed piece which is fascinating to read, by the way, and everybody should read it. You actually praised Palin on her acceptance speech, you said she'd be very effective on the campaign trail. And really that she -- you likened her to Obama. That she's really the rock star and she only needs to be the rock star for a couple more months until the election.
Why go that far in complimenting her? What's the point there?
BROWN: That's an accurate assessment. When do you a column, as I do for The San Francisco Chronicle every Sunday, the value of that column is that it is a candid assessment by someone who's had some exposure and some experience, and to state otherwise would absolutely be a misrepresentation. She did a tremendous job. She put herself in a position where as newcomer she attracted just as much attention, if not more, than Barack Obama did in his speech.
CHO: Mr. Mayor, I want to get in one more question, because we're running out of time. Governor Palin, as you know, is sitting down with Charlie Gibson of ABC at the end of the week. What do you hope to hear from her? And what does she have to say to convince voters that the McCain/Palin ticket is the one to go for?
BROWN: I think, the more exposure she gets the less attractive she is going to be. Her exposure constitutes a removal of the mystery. You're far more interesting when there's some mystery surrounding you than when we know everything about you.
CHO: All right. Former San Francisco Mayor, Willie Brown. Thank you so much for joining us.
BROWN: Thank you.
CHO: Kiran.
CHETRY: We're crossing the top of the hour and it is a dead heat this morning, according to a new CNN poll of polls, Barack Obama's lead over John McCain has shrunk now to just one percentage point, 44 percent to 43 and erases the three-point lead he had on Saturday. 13 percent of voters, according to the poll of polls, still undecided.
DOW futures soaring at this hour. More than 250 points higher. Investors are eager for the market to open after this weekend's government takeover of mortgage giant Fannie Mae and Freddie Mac.
And we are tracking Hurricane Ike now downgraded to a category 2 storm as it barrels through the island of Cuba. There's a shot now of what it looks like from the NASA cameras. Nearly three quarters of a million Cubans evacuated. The storm will strengthen when it hits the Gulf of Mexico. But, forecasters say it is still too early to tell where along the Gulf Coast it could hit.
Rob Marciano is tracking the storm from the Weather Center in Atlanta. We also have Susan Candiotti standing by in Key West Florida where a tropical storm warning is in effect, and Morgan Neill live in Havana. CNN the only network with a bureau in Cuba. And, we start there.
