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American Morning

Economy in Danger; Pastors Plan to Endorse Candidates

Aired September 26, 2008 - 08:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Now crossing the top of the hour and here are some of the top stories that we are following this morning. We just heard from Congressman Barney Frank. He will be there when negotiations resume in just a few hours on the $700 billion Wall Street bailout. Lawmakers will try to breathe new life into a financial rescue plan that nearly fell apart when House Republicans rejected it.
The first presidential debate still in limbo this morning. It is scheduled to take place at Ole Miss in Oxford, Mississippi, 13 hours from now. Barack Obama says he'll be there but John McCain says he wants a bailout deal done before he agrees to attend. The bipartisan Commission on Presidential Debate says it is still going ahead with plans for tonight's showdown.

And officials say it's going to be business as usual today for Washington Mutual customers despite the bank going belly up. WaMu was seized by federal regulators who immediately sold its banking assets to JP Morgan Chase. It is the biggest bank failure in U.S. history.

Again, we are just hours away from a high stakes financial rescue mission in Washington. Call it a bailout, if you will. Lawmakers will try to save the government's $700 billion plan after a revolt by House Republicans all but derailed it yesterday. The setback left Democrats spinning at noon on Thursday.

Both parties appeared to agree on a deal that could be passed over the weekend. But by 4:00 p.m. as the presidential candidates joined congressional leaders at the White House, things fell apart. Talks broke off when Democrats say they were blindsided by a new plan from House Republicans. But the GOP lawmakers say they simply used the meeting to raise concerns about the unprecedented amount of taxpayer dollars that were being spent.

At 8:00 p.m., Treasury Secretary Henry Paulson convened an urgent meeting to bring House Republicans back into the fold, but Representative Spencer Bachus of Alabama was the only GOP lawmaker who showed. He eventually walked out.

(BEGIN VIDEO CLIP)

SEN. CHRISTOPHER DODD (D), CONNECTICUT: When House Republicans don't participate, the question I'm clearly going to get from my Senate Democrats is, why are we at the table talking but the President's party represented by the other body refuses to even show up, what are we doing?

(END VIDEO CLIP)

ROBERTS: CNN's Dana Bash is live on Capitol Hill for us this morning.

Dana, you heard from Barney Frank just a little while ago on where he thinks things stand, but what are you hearing from multiple sources here? Where are we at 2 minutes after 8:00 on this Friday morning?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: I think everybody agrees that nobody knows really where they are right now. And that is definitely part of the problem. The negotiators are going to try to get back and sit down at the table later this morning, but again it still is pretty unclear who those negotiators are.

As we've been reporting, the Democrats and the Republicans in the Senate did sit down last night to try to hammer out some things. But that was sort of based on the original agreement yesterday morning that House Republicans simply rejected.

I spoke with a representative from the House Republican leader's office this morning and it still seems unclear how they are going to sit down with the rest of the people who really need to agree on this, people in the Senate, people in the House and the administration, and work through the concerns that House Republicans have because they are absolutely steadfast in the idea that they do not think that this idea of the government simply buying bad debt without other alternatives is the right way to go.

ROBERTS: What about Senator McCain, Dana? Where does he stand on all of this? A couple of days ago, he seemed to support it. Now, nobody's sure where he stands.

BASH: You know, and he's not saying at all. He's being very careful not to say. He did meet with the House Republicans yesterday. Going into that meeting, he knew full well that they had concerns and that they were going to raise those concerns in the White House meeting. And Senator McCain actually says that he believes that they're legitimate. Listen to what he said last night.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Members have concerns about a bailout, frankly, of $700 billion or an expenditure -- let me put it this way, an expenditure of $700 billion of the taxpayers' money. This is the biggest thing of its kind, obviously, in history. They have legitimate concerns. Some of those have already been satisfied, such as accountability and an oversight board and CEO executive pay. Members are aware of the crisis situation that we're in.

(END VIDEO CLIP)

BASH: Now, McCain aides say he has not signed on to the House Republicans' idea, which is simply just to use the government to set up an insurance system instead of buying out that bad debt, but some of his close associates here are talking about working with the House Republicans, perhaps to set up some options for the government to put out there for people that maybe could bridge some of the gaps between the House Republicans and other people up here.

But one thing that we do not know is what's going to happen tonight, John. John McCain is going to come here this morning, come to work in the Senate and it's still unclear whether or not he's going to show up at the debate tonight. They hope he can, but it's unclear if he will.

ROBERTS: More twists and turns in this incredible political season. Dana Bash for us in Capitol Hill this morning. Dana, thanks.

BASH: Thank you.

KIRAN CHETRY, CNN ANCHOR: Organizers say the first presidential debate is scheduled to take place tonight and it will happen with or without John McCain. Our Suzanne Malveaux is live for us now from the debate site at Ole Miss.

Hey, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kiran. Well, Barack Obama is going to be leaving Washington later this morning. He'll be heading here to Mississippi to participate in this debate. Barack Obama said late last night, yes, absolutely getting that deal is priority number one for the American people, but also for the American people to learn about these candidates, their vision for the country, including how to handle this crisis. Now, we have talked to a lot of people here, many Republicans, many McCain supporters who agree with Obama.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: It was a shock. It was like getting kicked in the stomach to find out that McCain didn't want to have the debate.

MALVEAUX (voice-over): The consensus in the hometown of Ole Miss, sheer disbelief.

UNIDENTIFIED MALE: Actually, we were just horrified.

UNIDENTIFIED MALE: Immediately I said, he has already lost a lot of votes that were going to vote for him if he does not come.

MALVEAUX: At Oxford's Camp for Kids who are into politics, big pride in the debate for this third grader.

UNIDENTIFIED CHILD: Well, because it's in Oxford. It's like, where we live.

MALVEAUX: Then, disappointment.

UNIDENTIFIED CHILD: He's going to lose this city's votes. UNIDENTIFIED MALE: You think so?

UNIDENTIFIED CHILD: Half of them. Half of them.

UNIDENTIFIED MALE: You're pretty smart about politics. How'd you learn that?

UNIDENTIFIED CHILD: Comes to me naturally.

MALVEAUX: Luckily for McCain, little Ann Morgan's instincts are off. He's expected to win here easily. But at the debate site, hundreds of students, volunteers and faculty are in limbo.

VICE CHANCELLOR GLORIA KELLUM, UNIVERSITY OF MISSISSIPPI: Well, I was surprised and disappointed, but you immediately go into action.

MALVEAUX: Gloria Kellum, vice chancellor of university relations, operated as if it was a go.

KELLUM: The commission and the university are not talking about contingency plans. We have a strong belief that tomorrow night this debate will be right here.

MALVEAUX: But the question today to John McCain from the campus paper, will he show?

UNIDENTIFIED MALE: We expect to have the debate tomorrow night at 8:00.

MALVEAUX: That question dominated a news conference with the university chancellor and Mississippi governor, leaving them with very little to say.

UNIDENTIFIED MALE: I can't think of a bad day to be at Ole Miss.

MALVEAUX: A local editorial accused McCain of misplacing his Southern manners, where in these parts manners matter. But some voters are cutting him some slack.

UNIDENTIFIED MALE: We're in a crisis, man. This man is a leader. He's taking personal responsibility.

UNIDENTIFIED FEMALE: It did hurt my feelings yesterday. My feelings were hurt. But I'm still a McCain girl.

(END VIDEOTAPE)

MALVEAUX: So, there are some hurt feelings, Kiran, but you'd asked before for contingency plan, well, I spoke with the chancellor of the university, Robert Hike, and he has simply said that he believes that they would like for people to actually be able to ask those questions, pose those questions to Barack Obama through the moderator, hat that would be a possibility, but obviously, it is up to the debate commission. They make the final decision.

Kiran? CHETRY: Wow. All right. We're still standing here on tenter hooks trying to figure out what's going to happen. Suzanne Malveaux, thanks.

ROBERTS: Eight minutes after the hour now. Bickering over the bailout plan as the biggest bank failure in history unfolds. We'll ask a leading Republican senator if the $700 billion plan is in jeopardy and what's standing in the way of its passage.

And what now after Washington Mutual fails? What you need to know to protect your money. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Well, Ali Velshi joins us now, taking a look at what's been going on with this bailout.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, and by the way, the Web page is still up, CNN.com/am. Ask us questions. I'm thinking about actually doing wagers right now as to whether you think there's going to be a bailout today, a presidential debate; a bailout, no debate; a debate, no bailout; or neither.

CHETRY: We don't need to be gambling anymore money. Who knows how much we're going to owe.

VELSHI: But some people didn't ignore gambling, they wake up to find out that your bank is no longer the bank you thought you went to sleep with. Washington Mutual has been taken over by JP Morgan Chase. It was actually closed by the office of thrift supervision and it was assumed by JP Morgan Chase. But your money is safe, your deposits are safe. We're getting a lot of questions on that. I'm going to hit that in about half an hour.

But what I want to talk about is I got some information from one of the people, one of these sort of economists who's been briefing the Democratic side of this bailout. And I must say, this is remarkably complicated. A lot of questions we're getting. What is a 700 billion bucks? Where is it? How is it calculated? Where does it go?

And part of the reason this information isn't leaking out particularly well is because you couldn't leak it. It's not easy information. And these are massive calculations which assume --

CHETRY: How did they boil it down to three pages?

VELSHI: Well, you can't. I mean, the fact is the three pages of the legislation won't involve --

ROBERTS: The three pages were simple, though. They just said, let us handle it.

VELSHI: Let us handle it. Right. Because when you look at the money, you begin to realize it's impossible to communicate. I mean, it is just really -- the assumptions are how much will property values continue to go down. How many more loans will go bad? What would be the return on these investments? And you put this all together, and it's how you come up with these amounts of money. But this is to say, that there are probably some people in these negotiations and in Congress who have an amount of familiarity with this -- with the economy, with the mathematics, with the statistics, with the analysis that's involved here. There are probably a lot who aren't. There are probably a lot of people in America who aren't familiar with it. Probably, a lot of people on Wall Street who aren't.

This is really, really complex. And even if you understood it, it's based on assumptions that we don't know to be true. So a lot of people are now going to banks. And you might get a --

ROBERTS: So who's running the shots?

VELSHI: Well, I think people have to trust their advisers and then create an analogy to what this is going to mean to you. Because what everybody is asking in America, what is this going to mean to me? Am I going to get a piece of this action, and it's unclear. So you have to take all of the stuff that's there and say, in the end, here's how it will benefit you.

And what I've been saying over the past few days is it benefits you because the companies that you need, that employ you, that give you your mortgages will be around if this bailout goes through. But read another way, you could say, the homeowner is getting very little out of this. The small business owner is getting nothing out of this. So, as a result, this is what's going on.

It's not a matter of apples and oranges, choose, and let's make a decision. It's a lot of assumptions and calculations and it's very, very complicated for us.

ROBERTS: Thanks for straightening that up for us.

VELSHI: Yes. Are you a little more puzzled than you were when I started?

ROBERTS: I think so.

CHETRY: That was your goal.

ROBERTS: Thanks, Ali.

VELSHI: Keep your questions coming in. And keep it simpler than that.

ROBERTS: Well, yes. So what to do if your bank is the next one to fail. Our personal finance editor Gerri Willis has got some tips that you're going to want to hear.

And the always outspoken, controversial director Spike Lee joins us. We're going to talk about his new movie and get him to weigh in on politics, usually never difficult. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: 15 minutes after the hour. Some live pictures there from over the English Channel. Swiss rocket man Yves Rossy hoping to make three times the charm here. Failed in two previous attempts to cross the English Channel. He was flying completely straight and level there just a little while ago. He jumped out of the helicopter about five minutes ago to make the 21-mile trip across the Channel over to France, and he is just about there. He'll be landing in the next couple of minutes. Wow. Keeping an eye on that for you.

America's financial crisis no laughing matter as Washington Mutual becomes the latest casualty setting a new record for the biggest bank failure in history. Our personal finance editor Gerri Willis joins us now to explain what happens when your savings bank fails.

So, what do people do?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: It's a very serious problem. Let's talk just for a second about Washington Mutual. It's going to be a seamless transition for those customers. That's what you need to know. You can get up this morning, and go to your bank, take money out. It's going to be like it was the day before that and the day before that. So that is the good news.

As a matter of fact, JP Morgan Chase is saying it's going to take about two years to convert those bank branches into Chase branches. It will take a little time, but eventually you'll start seeing the changes on your statement, and also at the bank branch itself.

ROBERTS: It took them about 30 seconds to change the Web site.

WILLIS: Yes. That's the easy part. But bricks and water, that takes money. That takes a little bit longer. You should know, though, if your bank goes out of business, there's a process. The FDIC has a process in place. They typically sell these institutions, the deposits. They do it over a weekend. Starting on a Friday night. By Monday morning, the transition is finished. And guess what? Everything continues to work as normal.

ROBERTS: But many times there are changes, because different banks have different policies. So what are some of the changes that people should know about?

WILLIS: Well, let's talk first about what you can expect if you're in a situation and your bank fails. What can you look at? First of all, your ATM works, checks clear, debit cards clear. You're money is protected up to the limits we've talked about so many times with the FDIC. So, up to $100,000 for individual accounts, $200,000 for joint accounts, $250,000 if you have a retirement account.

Now, you should know, though, you were just saying, some things do change. Let's look at that. Let's take a look at the things that could be different for people who have a bank that fails. Guess what, at the end of the day, if you have deposits, if you have CDs, the interest rates on those accounts can change. And my guess is that in the case of WaMu, they had free checking. They may lose that perk.

I know a lot of people were really concerned about that. Also, a line of credit, if you have that, they could cancel the line of credit. You get a disruption if you're getting a new loan. If you're in the middle of a new loan at the time the bank goes out of business. So there are changes, but the important stuff is there.

ROBERTS: All right. Gerri Willis for us. Gerri, thanks.

WILLIS: Thank you.

ROBERTS: We also want to go back live now to France where Yves Rossy, the Swiss rocket man has popped his parachute. He's over on the French side of the English Channel, as far as we can tell, about to descend upon French soil there. Again, he's tried this twice in the past and he hasn't made it. So, it looks like he has this time. At least those are the initial indications.

This is a guy -- he's basically wearing a flight suit. He's got a helmet. And he's got a pair of polymer wings strapped to his back there with four rocket engines, two under each wing. So, he just basically becomes an airplane. It's really an incredible, incredible feat that this guy has pulled off.

Remember years ago, and this is national geographic footage that we're watching here, by the way. I remember years ago, there was an incredible feat of the guy that piloted that gossamer albatross across the English Channel. It was this extremely lightweight airplane that was powered by a human with a bicycle. A set of bicycle pedals attached to a propeller and he propelled himself all the way across the English Channel. Well, now, another record has been broken. Your own personal rocket pack here as Yves Rossy comes down to earth.

CHETRY: Can you imagine the view from there?

ROBERTS: Yes. I mean, it's just pretty incredible. Kiran, can you imagine doing something like that?

CHETRY: I got to tell you, no. It's pretty amazing, though. You know, they say that he's basically tracing the route of the French Aviator 99 years ago, that was the first one to cross it in an airplane. But the other interesting thing and the most precarious part of this is going to be his landing. He's attempting to do this on this really thin strip of land that's right in front of the South Foreland Lighthouse. This is atop the cliffs. The white cliffs there in Dover. So that should be the most dicey of this entire trip after, you know, initially of course making it off the ground and over there.

ROBERTS: Look at that.

CHETRY: I guess we lost the picture for a second. There he is.

ROBERTS: Did he start in France and now he's landing in England, or?

CHETRY: Yes. ROBERTS: Oh, OK, I had that backwards. I thought he was starting in England and going to France.

CHETRY: No, it's Calais, France, and then he's going to be attempting to land in Dover, England, as we said, on this really small strip of land over this white cliffs. So, hopefully, we'll be able to go back to that picture. If not, we'll bring it to you on the other side of the break. But the landing of course is the part -- oh, he's already landed. All right.

ROBERTS: He's down.

CHETRY: We'll be back in a minute.

(COMMERCIAL BREAK)

CHETRY: Well, real quick. We just want to let you know that Yves Rossy successfully did cross the English Channel using that jet- powered wing. So, there he is. The first one to do it. Congratulations to him.

Well, with the focus on the economic disaster in the United States, important news from the United Nations' General Assembly seems to have taken a backseat. Our Zain Verjee, though, is here to touch on this and to highlight some of the things, including how much this financial crisis dominated talks at the U.N.

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Well, Kiran, it really did overshadow key talks by world leaders. It was really the focus of this year's United Nations' General Assembly. We spoke to some diplomats who said that even when they discuss things like health and education and anti-poverty and what to do, they said, look, the fact of the matter is we're not going to be able to deal with any of these issues because we're dealing with a global financial crisis. So, that was really front and center.

And they said, we can't make promises to people anymore around the world because we would just be lying to them. The other thing, Kiran, that I thought was particularly interesting was that in years past, you've had people like Chavez of Venezuela, or Morales of Bolivia, Ahmadinejad of Iran, who really grab the spotlight. But this time it was someone who never went into the U.N. main hall even once, and that was Sarah Palin.

CHETRY: That's right. And a lot was being made of her foreign policy credentials and what she was exactly saying in these meetings with leaders like Afghani leader. Any progress, though, on some of these issues that are very important to the U.S.?

VERJEE: Not a lot of progress. I mean, Iran has really taken center stage for the U.S. foreign policy. One of those issues -- it didn't really make a lot of progress. There was supposed to be a big meeting on how to deal with Iran, then the Russians pulled out because they have tensions with the U.S. and that really underscored how much the U.S. needs Russia on critical issues, and on issues like the Israeli-Palestinian crisis. Not really any progress because there's so much turmoil on both sides.

CHETRY: For the reporters, there's really is huge week at the United Nations. What would you say some of the highlights were -- the best and worst?

VERJEE: Well, I think, one of the most striking things was that the U.S. really has taken a big body blow over the financial crisis. So, it really has weakened its role on the world stage. And what many people are saying, you know what, they're just waiting for the next administration. So a lot of countries, a lot of world leaders here, Kiran, really have felt like they were in a holding pattern. So that was one of the most striking things. And I think the worst possible thing, too, was that I missed Bono.

CHETRY: You're still lamenting that.

VERJEE: Did he ask about me?

CHETRY: I think he did right before this. He said, tell Zain I love her.

VERJEE: Or I said.

CHETRY: You have the best shot, though, at meeting him next time at the United Nations.

VERJEE: Thank you.

CHETRY: All right, Zain, as always great to see you.

Spike Lee live. The controversial director talks about his new movie and weighs in on presidential politics. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Well, we're now less than 13 hours away from what is supposed to be the first presidential debate. We're not quite sure if it's going to happen or who's going to be there. Millions of dollars and lots of time and planning on the line.

Right now, the bipartisan commission on presidential debates is proceeding as planned. John McCain has said he will not attend the event if there's no deal reached on the economic bailout plan. But Barack Obama last night telling CNN, he's ready to debate while continuing to monitor the negotiations.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: By phone, I talked to Secretary Paulson at least once a day, sometimes twice. I have been in conversations with the congressional leadership constantly. And so, my sense is that we can do more than one thing at a time. I think that's part of what's required if you want to be president of the United States.

(END VIDEO CLIP)

CHETRY: The governor of Mississippi, Republican Hailey Barber says that as far as he's concerned, tonight's debate at Ole Miss will go on.

John?

ROBERTS: But even as President Bush was urging bipartisanship yesterday at the White House, the administration's bailout plan ran into explosive opposition. House Republican leaders abruptly leaving late-night talks and offering a bailout plan of their own. So what stands in the way now of getting the bill done? I'm joined now by Republican Senator Tom Coburn of Oklahoma on Capitol Hill.

Senator Coburn, good of you to be with us this morning.

SEN. TOM COBURN (R), OKLAHOMA: Good morning.

ROBERTS: The Democrats have been complaining, they're saying that the Republicans don't want what the Democrats have crafted, buy they're not floating an alternative plan of their own. It does seem, though, that you do have some ideas. What are those ideas?

COBURN: Well, I think you ought to put it in context. What's happened is, in the Senate, I think we can pass a balanced bill. You cannot pass that in the House, because it's all gone back to politics rather than statesmanship. We have to act. We need to act in a very timely fashion. There needs to be transparency and the American public has got to be protected in terms of their exposure with $700 billion worth of loans.

So I'm not key to the middle of those negotiations, but I can tell you, unless they meet some of the basic principles, we will not pass the package. And that has to take time for people come to the realization they're going to have to do that.

ROBERTS: But this plan, and Democrats suggested that they had a deal worked out yesterday, this plan that they had, was that acceptable or not acceptable to you?

COBURN: Well, first of all, we haven't seen the whole plan. You know, you're asking me to comment on things that they've been holding close to the chest. I think that was a false statement. You know, when Richard Shelby, the ranking member of the banking committee doesn't agree with it, I don't think you have a plan that they have a compromise on. I don't know the details of that, because I'm not privy to it. The fact is, it's time to quit thinking about politics and the election cycle and it's time to fix this problem.

ROBERTS: So what would be acceptable to you?

COBURN: Well, I think one is to make sure that we do some of the smart things so that we increase liquidity, besides just loaning money. Change the counting rules so that we increase the market -- mark to market, reinstitute the up tick rule. All those are things that are causative. Number three, we are going to have to do some financing, but we can consider loans as well as purchases. There ought to be capability to do either. Number three, there has to be tremendous oversight and evaluation and transparency so the American people can see what's going on.

And probably, finally, make sure that as we do this, we make sure we never get back here again. And let me just point out, we're here because the U.S. Congress, not because of the administration and not because of the banks. We're here because the U.S. Congress failed to do its job in terms of oversight, both in terms of deregulation and regulation. There's tons of regulation out there. We have failed.

JOHN ROBERTS, CNN ANCHOR: And do you fault yourself as part of that?

COBURN: Well, I have 49 oversight hearings. That's more than the rest of the senate in the 109th Congress.

ROBERTS: So it's not your fault, it's everybody else's fault?

COBURN: I'm just saying, what the American people should expect of us is oversight. I'm not on a banking committee or the finance committee.

UNIDENTIFIED MALE: Can I just ask you one question?

COBURN: Sure.

ROBERTS: When are people going to stop pointing fingers and get something done?

COBURN: Well, I can't answer that. And as soon as they realize that the American people are sick of this place and they're sick of the continuing behavior, that's why -- I think that's one of the reasons why Barack and John McCain have tried to influence this is because there is too much politics in it and it looks like that's degraded the politics.

ROBERTS: All right. Well, we wish you luck.

I know you've got a lot of negotiations ahead of you. Senator Tom Coburn from Oklahoma, good of you to drop by, thanks -- Kiran.

CHETRY: A group of pastors is planning to break the law this Sunday by preaching politics from the pulpit.

Jason Carroll joins me now with a look at this unique form of civil disobedience -- hey, Jason.

JASON CARROLL, CNN CORRESPONDENT: Some call it civil disobedience. This protest is called pulpit-free Sunday, whatever you want to call it.

A group of pastors will be taking on the IRS this weekend by publicly endorsing a candidate for president. (BEGIN VIDEOTAPE)

CARROLL: This Sunday's sermon at Bethlehem's First Baptist Church outside Atlanta, Georgia, will be unlike any before. Parishioners will get the traditional mix of moral guidance and an unusual dose of politics from their pastor.

PASTOR JODY HICE, BETHLEHEM FIRST BAPTIST CHURCH: I'll be endorsing McCain, but again strictly because of -- not his party -- but because of where he stands on biblical issues.

CARROLL: Pastor Jody Hice believes SENATOR John McCain is more in step with conservative Christian values than Senator Barack Obama. For example, Obama supports abortion rights, McCain generally does not.

But when he endorses McCain from the pulpit, he'll be breaking federal tax law, which prohibits churches and other tax exempt entities from participating in political campaigns on behalf of a candidate.

PASTOR HICE: Ultimately, I've got to trust God with that. But my role is to teach the bible and hopefully to be able to do so without the IRS breathing down my neck.

CARROLL: This Sunday, 30 other pastors in 22 states will follow in Pastor Hice's footsteps. The effort organized by a conservative organization called Alliance Defense Fund, ADF. Its ultimate goal, repeal the IRS's 54-year ban on political endorsements by tax exempt houses of worship.

DAVID BRODY, CHRISTIAN BROADCAST NETWORK: There is a split within the Evangelical law community, if you will, about exactly how to go about changing this law. There is concern about some of these pastors going ahead, and in essence, breaking the law.

CARROLL: A group called Americans United for Separation of Church and State opposes what the ADF and some pastors are doing.

ROB BOSTON, AMERICANS UNITED FOR SEPARATION OF CHURCH AND STATE: A pastor's job really is to bring his congregation together, not to divide them along partisan lines, or to say that you voted for candidate "X," so you're a better Christian than the fellow next to you who voted for candidate "y."

CARROLL: Pastor Jody Hice says he'll risk losing his church's tax exempt status for the higher good.

PASTOR HICE: It's not a matter of whether or not a pastor endorses a candidate. The issue comes down to who is going to regulate what a pastor can say.

(END VIDEOTAPE)

CARROLL: Well, the Internal Revenue Service released a statement saying, quote, we are aware of recent press reports and will monitor the situation and take action as appropriate.

And if the IRS does take punitive action, the ADF will likely challenge in court, but similar cases have been tested in the courts before in the early '90s and again in 2000. Both times the court sided with the IRS.

CHETRY: Very interesting.

CARROLL: Yes.

CHETRY: Jason, good to see you this morning. Thanks.

CARROLL: All right.

CHETRY: Spike Lee live. The controversial director talks about his new movie and weighs in on presidential politics.

You're watching the most news in the morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Listen, you was dead, okay. But I brung you back. Now, you ain't dying until I get my money. You owe me $1,400.

Look here. Go check out that haystack.

What in the world?

(END VIDEO CLIP)

CHETRY: Well, that was a clip from director Spike Lee's new movie, "Miracle at St. Ana." It follows the men of the all-black 92nd Infantry Division known as the Buffalo Soldiers who fought in Italy during the last two years of World War II.

The always outspoken, often controversial Spike Lee joins me now from Chicago this morning. Thanks for being with us.

SPIKE LEE, DIRECTOR: Good morning.

CHETRY: We'll get to your movie because I do want to ask you a little bit about it. The trailers look great.

But first let's talk presidential politics. You are a Barack Obama supporter. Of course, as you know, the race is heating up.

LEE: Yes, I am.

CHETRY: And a lot of people, hopefully this debate will go forward. It's still up in the air whether John McCain is going to attend, but either way we are going to hear from the candidates.

As we as a nation face the prospect of this $700 billion bailout, what are you looking to hear from the candidates tonight? LEE: Well, I would hope that McCain would show some guts. I know that might be a little strong, but that's the way I feel. I think that from Brooklyn, New York, we call that a punk move; the bailout at the last minute.

I think that he knew what would happen if he went face to face with Barack. I think this whole thing is maneuvering, trying to get a better position, all of a sudden think that he can save the day, only John McCain can save the day with this economic crisis that we face.

I agree with Barack, a president can and should be able to do more than one thing at a time. And if McCain doesn't show up, let's put up a cardboard cutout of him, stick it in the chair, and continue. But I think I'll be watching tonight regardless.

CHETRY: Spike, McCain's campaign says he's offered to do ten different town halls. The Barack Obama campaign says it's not a matter of not wanting to debate him. He believes that there's more important work to be done in Washington. Do you agree with that?

LEE: Look. This is politics. People are going to spin it any way they want to. This thing was scheduled. I've been reading that people in Washington feel that Barack and McCain might meddle things up, so I think, hopefully, McCain -- I want to see both people -- I think America wants to see both candidates tonight in Oxford, Mississippi.

CHETRY: I want to ask you about this recent AP/Yahoo! Poll. It showed that there was a significant number -- enough to possibly mean the difference of the election -- of people who said that they could not vote for Barack Obama because of his race. Are you concerned when you hear polls like that?

LEE: No, I'm not.

Number one, I think that these polls have still not polled the vast amount of young, white voters who are for Barack, who provided a lot of energy for this campaign.

I don't think these polls have gotten -- have polled the coalition that Barack has garnered. And I think that Barack Obama would not be in this position as he is now on the cusp of being the 44th President of the United States of America if only black people voted for him.

It's going to be close, but I think that America has moved, as far as race -- excuse me, as far as race and prejudice goes, and we're not -- that overnight has not been changed, but enough people see through that and we'll be victorious November 4th.

CHETRY: I want to ask you about your latest project, "Miracle at St. Anna," your new film that's out. There was some controversy a few months ago. You criticized Clint Eastwood's "Flags of Our Fathers" for saying there were no African-Americans soldiers portrayed, even though they were there fighting in World War II.

Is this movie a response to that?

LEE: No. No. When I said those comments in Cannes which was in May, the film had been done already. This whole thing with Clint Eastwood was blown out of proportion. We both respect each other's work and we're cool. So it's a non-issue.

CHETRY: What are people going to see when they go and check out "Miracle at St. Anna."

LEE: It opens nationwide today. And I'm really hesitant to tell people what to think. I respect their intelligence. I hope they go see it and enjoy the film. We worked hard on it and it's a part of American history that's not been told. Not just black history, but American people.

CHETRY: Spike Lee, always great to have you with us. Thanks for joining us this morning.

LEE: Thank you for having me.

ROBERTS: 42 minutes after the hour. Questions about the fate of the bailout has all of us wondering how our money could be effected. So we're trying to help you out.

Ali Velshi is logged on, he's answering your questions. And we'll have those answers for you coming up next.

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the most news in the morning. If you were with us in our 7:00 hour, you saw our big exclusive. U2's Bono live in our studio. He talked with us about his views on the presidential race and his efforts to raise awareness for global poverty.

CHETRY: He's coming back in.

ROBERTS: He's sneaking up behind us here now.

Big, big week at the United Nations; he got all kinds of commitments to AID and the causes that he is so involved and so passionate about. If you missed the interview, don't worry about it. We'll be putting up the full interview on our web site CNN.com/am.

CHETRY: We're all still basking in the afterglow.

ROBERTS: Just got the photos back.

CHETRY: He really is one man who can deliver that message.

ROBERTS: One of the things that we talked with Bono was the $700 billion bailout. Everybody's got questions about it. Ali's here to answer some of those.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I'm no Bono, but I can answer some of your questions. CHETRY: Fine, Ali.

VELSHI: That was an opportunity for you to say, no, Ali, you're our Bono, you're our superstar. Feel free to jump in at any point.

ROBERTS: That's kind of spoke for itself.

VELSHI: We have a lot of questions at cnn.com/am.

Stephanie in Chicago sent this one in, should I be reshuffling my 401(k) or leaving it as is for the time being?

Great question. You should actually be looking at it and making sure it's balanced. In other words, there's an asset allocation. You should have so much in fixed income or bonds, you should have so much in stocks, and within that, different types of stocks.

Most financial web sites including CNNMoney.com have ways to determine your asset allocation. Because markets have been going up and down as much as they have, it's a good time for you to go in there and see whether you're in balance.

That means selling some stocks that have done well or some mutual funds that have done well and possibly buying into sectors that have not done well.

Don't do that blindly, because there's probably still trouble to come in the financial sector, but the bottom line is you should make sure you're in balance. Don't let the things going on in the markets affect your asset allocation.

Jane in Indiana says, I have a Washington Mutual checking account. It's a free checking with free online bill pay. I know my money is safe, but does JP Morgan Chase now have the right to charge me for my checking accounts.

I left Chase a few years ago because they charge huge fees for checking accounts. I want to avoid that again.

Well, they are in charge of your checking account. JP Morgan's the boss. You do have an agreement with the bank and if they want to change that agreement, they have to send you information to say that they're changing their fees.

They send you a notice basically. The way you disagree with that is to close your account if you want to. So if you think you don't want those fees, start looking for a bank that doesn't charge and there are still banks around that don't charge.

Please send your questions in. Just one that I want to tell you I'm getting a lot of, in an FDIC bank, if it shuts down, your money is safe. It's available to you usually the next day.

ROBERTS: Thank you for that.

Bono could only hope to aspire to what you are. VELSHI: John, you are too kind to me.

CHETRY: I disagree. Just kidding! You show up every day, you're the work horse. Bono parachuted in and he's gone like a rock star.

CHETRY: Still ahead, there are more gay characters in primetime television. Now some are saying Hollywood has an agenda.

(COMMERCIAL BREAK)

ROBERTS: 52 and a half minutes after the hour. If it seems like every hit show on television suddenly has a prominent gay character, that's not a coincidence and not everyone is happy about it.

Our Lola Ogunnaike tells us about Hollywood's new drive to get the numbers up.

(BEGIN VIDEOTAPE)

LOLA OGUNNAIKE, CNN CORRESPONDENT: Ellen Degeneres's character came out on the late '90s show, "Ellen." She was one of the lone gay voices on television.

ELLEN DEGENERES: I'm gay.

OGUNNAIKE: Now more than a decade later, there are more than 16 gay or bisexual characters on network primetime shows this fall, more than double the number from 2007 according to the Gay and Lesbian Alliance against Defamation.

Hit shows like "Ugly Betty," "Brothers and Sisters," "The Office", and "Grey's Anatomy" all have gay or bisexual characters. And this Fall, five new gay characters will hit the airwaves.

NEIL GIULIANO, GAY & LESBIAN ALLIANCE AGAINST DEFAMATION: It simply reflects society in the fact that we are more visible than ever. It makes television not only good television but it makes their portrayals more honest and real.

OGUNNAIKE: And it's not just television. In many segments of pop culture, it's in to be out. Just this week "American Idol" runner-up Clay Aiken announced he was gay on "People" magazine, the same place where America got a look of wedding photos of Ellen Degeneres and Portia de Rossi.

One of the biggest songs of the year, "I Kissed a Girl," is about a smooch and earlier this week, Lindsay Lohan confirmed she's dating a woman.

ELLEN DEGENERES: I don't know if it's pressure, but I would like to represent every gay couple out there.

OGUNNAIKE: But if it's in to be gay, not everyone's happy.

PETER SPRIGG, FAMILY RESEARCH COUNCIL: These characters are being placed on television shows for propaganda purposes in order to persuade the America public to be more accepting of homosexual conduct itself. And in that sense, I feel like the result for society is likely to be negative.

OGUNNAIKE: And Hollywood's embrace of gay culture has not necessarily translated to public policy.

In 30 states, it's still legal to fire or refuse to hire someone because of sexual orientation, according to the ACLU. And this November, three more states will consider constitutional amendments banning same-sex marriage.

GIULIANO: It's important that the visibility lead to conversations and that those conversations can lead to having influence on our public policy so that gays and lesbians can be treated equally and fairly, fully within our society.

(END VIDEOTAPE)

ROBERTS: So, Lola, it would appear pretty obvious here that there is a split between culture and reality?

OGUNNAIKE: Yes, on the one hand, you have all these characters and they're very visible, but 55 percent of Americans still oppose gay marriage. And you have all of these things that gays, lesbians, bisexuals and transgenders are fighting for. They want equal protection under the law and public policy has not caught up with Hollywood just yet.

ROBERTS: No question, though, things are changing.

OGUNNAIKE: They're changing in the right direction.

ROBERTS: Lola, thanks so much.

55 minutes now after the hour.

(COMMERCIAL BREAK)

CHETRY: Call it financial crisis, economic disaster, a market catastrophe. We've heard the pundits and politicians use all of these words to describe the current economic situation, but there is one word that everyone seems to be avoiding, until now.

Here's Jeanne Moos.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: We know we're in it, even if we don't know what to call it.

UNIDENTIFIED MALE: A downward spiral.

UNIDENTIFIED MALE: Financial peril.

UNIDENTIFIED MALE: The current dire circumstances.

UNIDENTIFIED MALE: Off the cliff.

MOOS: To avoid causing a stampede off the cliff, most politicians are biting their tongues.

The word most frequently used to describe the financial crisis has been --

SEN. JOHN MCCAIN, (R) PRESUMPTIVE PRESIDENTIAL NOMINEE: A crisis, a crisis of our own. We know this is a crisis.

SEN. BARACK OBAMA, (D) PRESUMPTIVE PRESIDENTIAL NOMINEE: Our economy is in crisis.

UNIDENTIFIED MALE: And now we have a financial crisis.

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL NOMINEE: We are getting into crisis mode.

MOOS: And what comes after a crisis?

MCCAIN: Could turn crisis into a far-reaching disaster.

MOOS: Just think, only a week earlier Jon Stewart was mocking President Bush for downplaying the situation.

JON STEWART, COMEDIAN: How bad can it really be?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Americans are concerned about the adjustments that are taking place in our financial markets.

MOOS: Who's scared of an adjustment?

STEWART: Something you get at your chiropractor.

MOOS: It prompted Bill Maher to declare a new rule.

BILL MAHER, HOST, "REAL TIME With BILL MAHER": Stop calling what's happening to the financial markets an adjustment. An adjustment is something you do in your sweat pants when your [bleep] falls out of your underwear.

MOOS: These guys aren't laughing. The higher up the totem pole, the more circumspect. The Treasury Secretary and head of the fed say things like --

BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: Such dire straights.

SEC. HENRY PAULSON, DEPARTMENT OF TREASURY: This difficult period.

MOOS: These guys know the market is hanging on their every word. Every escalation in word choice is noticed.

BERNANKE: The grave threats to financial stability.

MOOS: doesn't quite have the same ring as --

UNIDENTIFIED FEMALE: A financial Pearl Harbor.

MOOS: but there is one word practically everybody goes out of their way not to say publicly -- the "p" word. And who should finally say it, but the president who started out referring adjustment.

BUSH: America could fall into a financial panic.

MOOS: He uttered the "p" word. So far, no panic ensued

Maybe this mock "Situation Room" best sums up the financial situation.

UNIDENTIFIED MALE: How is the economy?

MOOS: Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

ROBERTS: A lot of people are feeling that way.

That's going to do it for us. Thanks so much for joining us on this "American Morning." We will see you back here again -- not tomorrow as the script says. We're going to take two days off and we'll see you on Monday.

CHETRY: Thanks so much for being with us again. Here's CNN "NEWSROOM" with Heidi Collins.