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AMERICAN MORNING

More Analysis of Yesterday's Wall Street Crash; John McCain Weighs in About the Failed Bailout Plan; Donald Trump and His Opinion on the U.S. Economy

Aired September 30, 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: Coming up now to the top of the hour, and here's a check of our top stories this morning after a record stock market slide, signs point to a rebound on Wall Street today. Dow futures are up almost 200 points. Overseas European markets are mixed. Asian stocks, Japan's Nikkei index shed nearly 500 points and after an initial decline, Hong Kong's Hang Seng index closed up 135 points.
At just about 45 minutes from now, President Bush will make a statement from the White House on the bailout bill, the second straight day that the President will speak about the economic situation. Of course we'll bring that to you live here in the most news in the morning.

It's from land but the National Hurricane Center is keeping an eye on subtropical storm Laura now churning through the Atlantic. Laura is the 11th named storm of the season and has maximum sustained winds near 60 miles an hour.

People in the southeast are still starved for gasoline. Weeks after hurricanes Gustav and Ike shut down refineries along the Gulf Coast. The Atlanta area has been hard-hit along with Nashville and western North Carolina. Experts say the shortage could last until mid-October.

Well, back to our top story now. So much attention is focused on the Dow's record plunge. But even more alarming is the dollar figure on that drop. $1.2 trillion lost in the market yesterday. And here's how it all went down.

By 1:46, about 20 minutes after the House began voting, the Dow had drop more than 600 points, amid fears that the bailout package was going to fail. At 3:01, the market recovered slightly, kind of bounced around for a little while as Treasury Secretary Henry Paulson promised to use all his available tools to protect financial markets following the House vote. When the dust settled though, after the close bell and all trades came in that were pending, the Dow Jones average suffered its worst one day drop, down 777.68 points, its worst drop ever.

Ali Velshi watched it all this morning and he has a little less hair this morning than yesterday.

(CROSSTALK) ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Nobody's ever seen a number like that, 777. Now in perspective, let's think about this from percentage terms because you don't -- you know, numbers mean nothing. You're looking at your portfolio and you're seeing what the percentage drop was. About seven percent in only single day in the Dow. 9.1 percent on the NASDAQ, 8.8 percent in the S&P 500. That's pretty significant. That's your portfolio you're looking at. Remember, that $1.2 trillion we said was lost is only lost if you sold your stocks right now.

This market can come back. Markets do come back over time. I actually think that's not the biggest problem right now. I should let you know though, that you mentioned futures. Futures are a bet on how trading is going to open this morning and Dow futures are indicating a triple-digit increase, possibly as high as 200 points right at the top. Which is because everybody's been talking about the fact that they're going to get back to work on a deal.

Now, the problem here is there's a lot of conflict between what shouldn't be done to help out people who made bad decisions, versus what has to be done to solve this problem and the reality is the problem, which is a credit freeze worldwide, needs to be solved. That credit freeze is preventing people from getting mortgages, it's preventing people from selling their houses because the buyers can't get mortgages and it is affecting companies, small and large who are trying to get short term financing for day-to-day operations.

That's a common way of doing business in America. And the inability to get that money, could result in some companies ceasing some operations, perhaps not being able to pay salaries. In some cases, shutting plants down and ultimately maybe laying people off. So, whatever your reasons are for not liking this, they may be very valid. There was absolutely lax regulation, there was lots of things didn't go right. But there is no option about solving this problem. The cost to the economy of not doing so in terms of jobs lost is simply too great.

ROBERTS: All right. Ali Velshi for us. Ali, thanks so much.

Again, President Bush will be addressing the nation this morning from the White House, 8:45 `Eastern time. We'll bring that to you live right here on CNN and CNN.com.

CHETRY: And the House is going to be taking another crack at this $700 billion bailout when it reconvenes on Thursday. Republicans and Democrats finger pointing after this rebellion where members of both parties defy their leaders, rejecting the plan.

CNN's Kate Bolduan is live on Capitol Hill. Is all of this at a standstill then until Thursday? Or is there stuff going on behind the scenes, as well. Kate?

KATE BOLDUAN, CNN NATIONAL CORRESPONDENT: Oh, there's definitely stuff going on behind the scenes. Leaders were behind closed doors placing phone calls yesterday. And you can very much bet that is going to happen today. But, the opponents of this bill, they sent a very clear message yesterday, because some really thought this was a done deal and it turned out to be anything but that. In what turned out to be one of the most dramatic votes in years.

(BEGIN VIDEOTAPE)

BOLDUAN (voice-over): Lawmakers knew it would be a tough vote and house Republican leaders were begging for support until the last minute.

REP. JOHN BOEHNER (R), MINORITY LEADER: What's in the best interest of our country? Not what's in the best interest of our party. Not what's in the best interest of our own re-election. What's in the best interest of our country? Vote yes.

BOLDUAN: Then came the stunning count when the official clock expired, support wasn't there. Leaders held the vote open for more than 20 minutes twisting arms, but in the end fell short. In all, 95 Democrats and 133 Republicans voted no.

UNIDENTIFIED FEMALE: The motion is not adopted.

BOLDUAN: The stock market then plunged more than 700 points, and the finger pointing began. House Republicans claiming Speaker Nancy Pelosi's blast against free market advocates poisoned key Republican support.

REP. NANCY PELOSI (D), HOUSE SPEAKER: But in this case in its unbridled form, as encourage supported by the Republicans, some in the Republican Party, not all. It has created not jobs, not capital. It has created chaos.

REP. ERIC CANTOR (R), VIRGINIA: Right here is the reason I believe why this vote failed. And this is Speaker Pelosi's speech that frankly struck the tone of partisanship, that frankly was inappropriate in this discussion.

BOLDUAN: Democrats called that absurd.

REP. BARNEY FRANK (D), FINANCIAL SERVICES CHAIR: Here's the story. There's a terrible crisis affecting the American economy. We have come together on a bill to alleviate the crisis. And because somebody hurt their feelings, they decide to punish the country.

BOLDUAN: And Speaker Pelosi insists this crisis requires a bipartisan solution.

PELOSI: What happened today cannot stand. We must move forward and I hope that the markets will take that message.

(END VIDEOTAPE)

BOLDUAN: And what that message is right now is unclear because leaders don't know where to go at this moment. One top House Republican Roy Blunt, tells CNN that the bill could first go to the Senate, be passed with some tweaks, then head back to the House, hopefully gaining support along the way. But a top Senate leadership aide says that's just very unlikely. So, clearly many conversations need to go on now, Kiran, of what the game plan is.

CHETRY: Absolutely. All right. Kate Bolduan for us this morning, Thanks so much.

Also, you don't want to miss John McCain, the senator. He's going to be joining us in just 10 minutes.

ROBERTS: And his name has become synonymous with American business. So you can bet that Donald Trump has got an opinion about this economic crisis. The Donald on the bailout just ahead on the Most News in the Morning.

(BEGIN VIDEO CLIP)

CHETRY (voice-over): Protecting your 401(k). Gerri Willis on what the financial crisis means if you're retiring soon. You're watching the Most News in the Morning.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST OF "LATE NIGHT WITH CONAN O'BRIEN": Now today I don't want to alarm you, when the stock market closed it was down 777 points, which is the biggest point drop in American history. Biggest, yes. As a result, President Bush was able to cross off the 10th and final item on his administration's bucket list.

(END VIDEO CLIP)

ROBERTS: Well, we are just about a half-hour away from President Bush's statement on the bailout plan which failed in the House yesterday. The defeat triggering a round of bipartisan finger pointing and the presidential candidates were not immune to all of that. In fact, they jumped in with both feet. CNN's Ed Henry is live in Washington for us.

Ed, there's just so much partisan bickering in all of this. How are the voters looking at all of this?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, it's interesting. And that's what we're going to be looking very closely at. Because the stakes were really raised by John McCain himself. And that's why particularly it's particularly dangerous for him, the failure of this bailout.

Because he decided last week on his own to suspend his campaign, go back to Washington, saying he was going to try to get past all the partisanship and get some sort of deal. That's a big defeat for him, obviously. And so he's trying to go on offense and say, no, at least I was in the middle of it. Barack Obama was on the sideline. Obama is firing back by saying, look, the real problem, the real cause of this crisis is President Bush's economic policies and he's trying to tie McCain to those policies.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It's time to fix the problem. I would hope that all our leaders, all of them, can put aside short-term political goals and do what's in the best interests of the American people.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I think he just doesn't get it. I think he doesn't get that this crisis on Wall Street hit Main Street a long time ago. I think he's out of touch with what's going on in people's day-to-day lives.

(END VIDEO CLIP)

HENRY: Now new this morning, Senator Obama has a proposal that he hopes will try to get this deal back on track. It basically deals with the FDIC, the banking insurance limits of $100,000 -- at least $100,000 in deposits that are protected. That limit was set 28 years ago. Obama is saying this morning, quote, "That's why today, I am proposing that we also raise the FDIC limit to $250,000 as part of the economic rescue package. A step that would boost small businesses, make our banking system more secure and help restore public confidence in our financial system."

So, we can see there, is Obama thinks this is the kind of thing that could win more votes, not just among Democrats, but maybe among Republicans but it's aimed more at Main Street than Wall Street -- John.

ROBERTS: You know, we talked with Republican Congresswoman Marsh Blackburn, from Tennessee this morning. She suggested exactly the same thing. So, a little common ground there already.

Ed Henry, for us in Washington. Ed, thanks very much.

HENRY: Thank you.

CHETRY: Well, both sides are blaming the other for the bailout going bust. And John McCain actually suspended his campaign to focus on fixing the turmoil. Why couldn't he close the deal? Well, we're going to ask him live.

(BEGIN VIDEO CLIP)

CHETRY (voice-over): Live with the Donald Trump on the financial crisis, the markets and how we can fix it before it gets worse. You're watching the Most News in the Morning. (COMMERCIAL BREAK)

ROBERTS: It's 15 minutes after the hour. Well, if you're an investor and you got a 401(k), you took a look at what was going on yesterday, on the Dow, as they plunged -- the markets plunged 777 points. And you woke up this morning saying, where am I, will I be able to retire? Everyone is wondering how it is going to affect their money. That's why we're turning to personal finance editor Gerri Willis this morning.

So, what about 401(k)s?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, let's talk 401(k)s. I know you're worried about there, you've seen what's going on, you're afraid you're losing money.

I want show you a 401(k) statement. Let's look at the account summary first. That's where you're going to find all the numbers that you want. How much you're down, that's the most important thing. And that's going to come out right here. OK. You can see that I have $79,000. If this was my 401(k), I've lost a bit of money here, some $5,000. I know what you're focused on, though. You are looking at how much money you've lost. 6.2 percent down. That is not the place to focus your efforts today.

Instead, I want to you look at something different and that's your asset allocation. We want to look at the asset allocation. This is a critical information about how safe you are with your investing. And here's the main thing to look at. Here you want to see stocks, bonds. What is the split between investments? Stocks typically -- this is really low, I have to tell you. This is a young person who has more money in bonds than she does in stocks.

This is incredibly conservative. It's not the right way to go. I see this in a lot of young people's portfolios. But you want to have something that's not 100 percent stocks, not 100 percent bonds. You want a split that makes sense with your age. 60/40 is the typical thing for people in the middle of life. But I got to tell you, I know folks are worried out there. This is the one thing that asset allocation, that will tell you how safe you are.

ROBERTS: All right. Gerri Willis. Good tips for us this morning. Gerri, thanks so much.

17 minutes after the hour. Senator John McCain coming up next on the Most News in the Morning.

(COMMERCIAL BREAK)

ROBERTS: This morning the $700 billion bailout is in tatters and its failure could have huge implications on the presidential race.

Joining me from Des Moines, Iowa, is Republican presidential candidate Senator John McCain.

Senator, it's great to see you this morning. Thanks for being with us.

SEN. JOHN MCCAIN (D), PRESIDENTIAL CANDIDATE: Good morning, John.

ROBERTS: On the campaign trail yesterday, you really highlighted your role in crafting the deal that led to the bill that failed yesterday. But 133 members of your own party voted against it, including the entire Arizona delegation.

Why couldn't you close the deal with your own members?

MCCAIN: Well, I think it was because we haven't convinced people that this is a rescue effort, not just for Wall Street, but for Main Street America. For working families, for small businesses, for the heartland of America, all over America, where people are going to lose credit, they're going to lose their ability to make purchases of automobiles, of other necessities of life and we didn't do a good enough job.

We'll go at it. I'm glad to stay at it. That's what my job is, I believe, as an American, not as a candidate for president. But if I think I can do some good, I'll do it. I may fail a first time, or the second time, or third time but we have to get this job done for America and I have a plan to restore our economy.

ROBERTS: So, what do you plan to do to try to convince Republicans who voted against this bill? Last week you suspended your campaign, you went back to Washington, you said you were going to stay there until there is a deal.

Will you do that again?

MCCAIN: I will do whatever is necessary, John. I spoke to the president this morning and I recommended Treasuries Exchange Stability Fund, which has $250 billion which can shore up our institutions.

The FDIC insurance should be increased to $250,000, from $100,000. And also, the Treasury has the ability to buy up $1 trillion worth of mortgages. We should move forward on that, as we are crafting this rescue bill. And by the way, the first thing I'd do is say, let's not call it a bailout, let's call it a rescue because it is a rescue. It's a rescue of Main Street America.

ROBERTS: Well, there are a lot of --

MCCAIN: And then we've got to cut spending, cut taxes and move forward.

ROBERTS: I'll let you put that back in your ear there, Senator. Don't want to --

MCCAIN: Go ahead, John.

ROBERTS: Let me just make a point on what you were saying there. Republican Congressman Mike Pence says, not only is this a bailout, not a rescue plan, it is the biggest corporate bailout in American history. There's a real mindset among Republicans, among conservatives that this is in fact, a bailout and the federal government should not be doing it.

MCCAIN: Well, we're not going to get a unanimous vote but I'm convinced that yesterday's events and reaction of $1.2 trillion being wiped out -- and that's 401(k)s, that's IRA's, that's investments, that's retirements. Americans are frightened right now.

We've got to give them a short-term plan which I just mentioned to you. At least those three things I mentioned to you. The Exchange Stability Fund, FDIC, moving that up from $100,000 to $250,000. And also start buying mortgages which the Treasury has the ability to do it. And then a long-term plan, cutting spending, making sure we balance our budget, give people the ability to stay in their homes and keep their jobs and alternate energy. All of those things I have a plan for, John.

ROBERTS: All right. I noticed that your earpiece popped out there again, Senator.

MCCAIN: That's all right, I still hear you.

ROBERTS: You can still hear me? All right.

MCCAIN: I still hear you.

ROBERTS: Great. Over the weekend --

MCCAIN: You're a very loud guy.

ROBERTS: I just try to break through all the clutter, that's all.

MCCAIN: No problem.

ROBERTS: Senator, over the weekend, you are running mate appeared to contradict you on the subject of Pakistan, when she told a voter that the U.S. should go into Pakistan after terrorists. You called the reporting of that in an interview with CBS yesterday, quote, "gotcha journalism." But at the same time you have gone after Senator Biden for a comment that he made under similar circumstances about clean coal technology. Your campaign even released a video of part of his comments.

Was that gotcha politics?

MCCAIN: Well, I think the circumstances were very different. But the point is that --

ROBERTS: How so?

MCCAIN: -- Sound byte politics -- well, I believe it was at a town hall meeting that he said it. This was -- hers was in an encounter in a pizza parlor where the question was framed so that of course we're going to go after terrorists. We're going to go after terrorists wherever they are in the world. I don't disagree with that. Question is, is whether you broadcast it or not. It's whether you warrant -- whether you announce that you're going to strike a sovereign nation. There's a big difference there, John.

But look, let's have more town hall meetings. This would have -- this one I'm going to have next week with Senator Obama could have been our 11th, or our 15th. And then that way we can respond to the American people an we don't have all that. But, response in a pizza parlor to the kind of question that it was, Sarah Palin has made her position very clear. We don't announce that we're going to attack other nations. Senator Obama said that in debates.

ROBERTS: Well, she did appear to say that when she was waiting in line I guess for a Philly cheesesteak. But --

MCCAIN: What she said was that she was going to respond to terrorist attacks. And I'm saying we're going to pond to terrorist attacks. I'm not going to announce that I'm going to attack Pakistan. I think you got it.

ROBERTS: All right, yes, OK. I got that.

She was also asked that in a recent interview how governing Alaska, with its proximity to Russia, bolsters her foreign policy experience.

Here's what she said in that same interview with CBS.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: As Putin rears his head and comes into the airspace of the United States of America, where do they go? It's Alaska. It's just right over the border. It is from Alaska that we send those out to make sure that an eye is being kept on this very powerful nation, Russia.

(END VIDEO CLIP)

ROBERTS: I can ask you, Senator, what did you think of that answer?

MCCAIN: I think that Sarah Palin -- I'm not going to parse every answer that she gives to every question. The fact is she knows the issues, she shares my world view, she has the right positions on the issues and she has had the right positions for a long time. And she's the most popular governor in America. She understands energy, which is one of our major challenges. And --

ROBERTS: Because some conservative commentators --

MCCAIN: In all due respect, I'm not going to answer -- and because I didn't see the overall interview or the comments, I have great confidence and so do the American people. And you're going to see that Thursday night against one of the great debaters of the Senate. She's going to be just fine.

ROBERTS: Senator John McCain, it's good to talk to you. Thanks for taking the time today. Appreciate it.

MCCAIN: Thanks, John. It's good to be with you.

ROBERTS: All right. We hope to see you again.

By the way, we do want to mention that that's the second time in the past two weeks that we've talk with Senator McCain . The last time that we talked with Senator Obama was back on the 5th of May.

And a reminder to join the best political team on television for your front row seat to the vice presidential debate. Joe Biden versus Sarah Palin, live Thursday night, 9:00 p.m. Eastern, right here on CNN.

CHETRY: Well, a failed bailout bill and Wall Street takes a $1.2 trillion one day beating. Investors are still licking their wounds this morning.

And joining me on the phone with his thoughts, is business mogul Donald Trump, who's also a supporter of Republican presidential candidate John McCain.

Thanks for joining us this morning, Donald.

DONALD TRUMP, BUSINESS MOGUL: Good morning.

CHETRY: Mr. Trump, I should say.

TRUMP: No, you can call me Donald.

CHETRY: I want to ask, you did endorse John McCain for president. You think he's the guy to handle this. Whoever gets into office next has a huge mountain to climb to tackle this crisis that we're in right now.

Why do you think McCain's the best man for the job?

TRUMP: Well, I think that if you look at experience and if you look at lots of other factors. But I also happen to know him, he's a brilliant guy, he's a tough guy, he's a strong guy, and we need that. In particular, we need that with respect to OPEC.

We need somebody to go over to OPEC and explain -- and they don't even have to go over, frankly -- and explain exactly what's going on. You know, if you have a store and I have a store and we set prices and we fix prices, I will tell you that we all get put in jail. With OPEC you have these oil producing nations that sit around a round table, have a lot of fun at our expense and they set the price of oil and destroy the economy, not only of this country but of lots of other nations. So somebody has to do something with OPEC. Otherwise the bailout doesn't mean anything.

CHETRY: I want to ask you about that. Because in some prior interviews you said there could be a silver lining if this bailout fails, as it relates to oil. Explain.

TRUMP: Well, I think so. I think the one really great silver lining, you saw it yesterday. As soon as the word was out that the bailout was looking like it wasn't going to happen, oil dropped more than $10 a barrel which was the highest in the history of oil recording.

So, all of a sudden it drops. Now, as soon as something happens that's on the positive, you'll see oil prices go up again. They just watch it. If anything bad happens, if anything bad at all happens, you see the price fluctuate and you see it fluctuate very greatly. So, if the bailout should happen, oil will go up. And it takes the blood, it takes the lifeblood out of the bailout.

You know, oil is more important than interest rates as far as I'm concerned for the economy. Because interest rates will come down, frankly, if oil goes down. Oil is the lifeblood. And frankly, I don't blame OPEC. If they can get away with it, because of weak leadership or whatever, you know, I guess I'd do it, too. I guess you'd do it also. But there's nobody over there to go out and say, hey, this is the way it's going to be. And I think John McCain is the man that can do that.

CHETRY: Do you think -- John McCain -- do you think that this bailout plan needs to pass in some way, shape or form for things to stabilize?

TRUMP: Well, I think it would be better if it passed. I'm not sure that it's going to work. A lot of people are not -- you know, it is trial and error. This is very complicated. This is more complicated than sending rockets to the moon.

Nobody really knows what impact it's going to have. Maybe it works and maybe it doesn't. But certainly it is worth a shot. I don't love the idea that the government's buying back all the bad loans. How about some of the good loans? You know? I don't like the idea that the government, frankly, is going to be negotiating with people to sell those loans, because maybe we'd be better off having the best bankers in the world do that.

But I think overall, it's a probable positive other than you have to control the price of oil. Because if you don't, whatever happens with the bailout, if you want to call it the bailout, whatever happens with the bailout, is will have no impact, no positive impact.

CHETRY: Donald Trump, always great to get your point of view. Thanks so much for joining us this morning.

TRUMP: Thank you very much.

ROBERTS: 30 minutes past the hour and here are this morning's top stories.

The U.S. Military beefing up its presence in the waters off Somalia, after pirates hijacked a ship carrying Soviet-made tanks and other weapons, last week. The pirates are demanding $20 million ransom. A military spokesman said the ships will remain there while negotiations with the pirates continue.

We're getting our first look at how Wall Street will open this morning after the Dow suffered its largest point drop in history. Dow futures in strong positive territory. Most European markets are up in Asia, Japan and Australia were down more than four percent.

Congress set to reconvene in a last-ditch effort to revive the bailout and Treasury Secretary Henry Paulson says he will be there to work with lawmakers.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: I will continue to work with congressional leaders to find a way forward to pass a comprehensive plan to stabilize our financial system and protect the American people by limiting the prospects of further deterioration in our economy. We've got much work to do and this is much too important to simply let fail.

(END VIDEO CLIP)

ROBERTS: And today's edition of the "New York Sun" is the last. The six-year-old newspaper which began as a conservative alternative to the "New York Times" was never able to turn a profit. Last month the paper warned readers it needed "tens of millions of dollars" to cover losses.

CHETRY: Well, it's time now to check in with the truth squad to find the campaigns honest by taking what they're saying and then sorting fact from fiction. Our Alina Cho has been looking into candidates' claims. And today it's about government regulation and spending.

Hi, Alina.

ALINA CHO, CNN, CORRESPONDENT: Hey there, Kiran and good morning. This hour we are taking on the issue of spending. Like taxes when you start talking about billions and trillions of dollars, it'd be pretty easy to get confused. So let's take a listen to the charge. From John McCain yesterday in Columbus, Ohio.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: It shouldn't be surprising that Senator Obama isn't interested in protecting your tax dollars. Senator Obama has proposed more than $860 billion in new spending.

(END VIDEO CLIP)

CHO: Nearly $1 trillion in new spending? That's a lot of money. Is it true? Well, you really have to break down the statement. Let's take a look at a key word in McCain's statement. He said Obama proposed more than $860 billion in new spending. The key word being "new" not "spending with cuts in other areas," but new spending. The McCain campaign simply added up the cost of programs that Obama has talked about.

But the Obama campaign told us that some of those programs will be paid for with cuts in other areas. They called the McCain figure "totally ludicrous." Now we also checked with the committee for a responsible federal budget, and that nonpartisan group, they agreed saying McCain's statement was misleading and taken out of context.

And listen to this. The group actually found that in the end the candidates would have about the same impact on the federal budget. The projection by the year 2013, Obama would be adding $2866 billion to the deficit, McCain, $211 billion. So back to the original charge and the question - is McCain right in saying that Obama would propose $860 billion in new spending? Well, the truth squad says - no. They call the statement misleading. The figure is simply a tally of proposed programs and does not take into account savings or cuts in other areas.

And as always, we are taking a close look at the candidates' statements each and every day, we're watching them very closely checking up on them. And of course, we'll render a verdict true, false and the always-popular, mixed or misleading which we seem to see a lot of these days. Kiran, back to you.

CHETRY: All right. Alina, thanks.

CHO: You bet.

(BEGIN VIDEOTAPE)

ROBERTS (voice-over): Bill Maher unleashed.

BILL MAHER, COMEDIAN: I don't mind fake piety. I'm sure this is what these gentlemen are talking about.

ROBERTS: The comedian lets loose with a politically incorrect look at the candidates and religion.

MAHER: Sarah Palin really believes it.

ROBERTS: You're watching the most news in the morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MAHER: My calling in life. And it's a good calling. It's a nice living. People adore you everywhere you go, they treat you like Christ, like you're the messiah.

UNIDENTIFIED MALE: You know, if I discover that I was Satan in person, I would do a good job, too.

MAHER: As Satan?

UNIDENTIFIED MALE: Because I would be faithful to my calling.

MAHER: It's how you do your work, isn't it? You know, at the end of the day, whether you're the messiah or you're Satan, it's loving what you do and giving it 100 percent.

(END VIDEO CLIP)

CHETRY: That's a scene from Bill Maher's new documentary film, "Religulous." The comedian and talk show host travels around to interview people about their faith. He talks to Christians, Jews, Muslims and as you just saw that man who claims to be the second coming of Christ and Bill Maher joins me now.

Thanks for being with us.

MAHER: Hey, thanks for having me.

CHETRY: People who maybe don't know that much about your history, your mom is Jewish and your father is Catholic. And when you were younger you actually were raised in part in the Catholic Church. Is this movie sort of an examination of the things that you questioned as a child?

MAHER: Well, I don't question that much as a child. When you're a child, you don't question. That's part of the problem. Is that they stuff it into your head before you're old enough to fight back. I always compare it to the fact that when I was a kid they also drilled mercury into my teeth into the cavities which we know now is a horrible thing to put in your body. And when I was older I had the mercury drilled out. And you can you do the same thing with Catholicism.

CHETRY: Do you think it's possible to be highly intelligent and deeply religious?

MAHER: Yes. Because people wall off parts of their mind. There are highly intelligent people who do that. But then what they do is they wind up twisting themselves into sort of you know intellectual pretzel to come out and defend something that part of their mind must know cannot possibly exist. Yes. But you can actually be intelligent and be religious.

CHETRY: You spent a lot of time on Christianity in your film. I feel like maybe 70 percent?

MAHER: No, I don't think so. I think it's probably pretty even. We're talking about religion in general. We are certainly not going after any one religion. It's the whole idea of people who think magically and in terms of stuff that's just not rational. And that, I think, as far as you've seen in politics, led us into a terrible situation, because we've had eight years of a faith-based presidency, and you saw how well that turned out.

CHETRY: So what do you think? Because both Barack Obama and John McCain talk about their religion and talk about how important Christianity is in their lives. MAHER: Yes. But they're lying. That's OK. I don't mind fake piety. And I'm sure this is what these gentlemen are talking about. What really worries me is when somebody really believes it. Sarah Palin really believes it. She believes in the old testament and the new testament literally. She's one of those people who thinks that Jesus went on pony rides with dinosaurs. This is dangerous. George Bush, same way. They believe in end times. They believe the world is going to come to an end probably in their lifetime. This makes me a little nervous.

CHETRY: All right. Let me ask you this. Because we go back to when you said that it doesn't bother you about John McCain and Barack Obama because they're lying. But if they are lying, it's because people want religious leaders. They want their president to be religious.

MAHER: Exactly. Yes, that's the problem! 60 percent of this country believes the Noah's Ark story is literally true. You see why America is in such bad shape? I mean when people think this childishly - and of course, we're like the last of the western democracies to be thinking this way, to be this religious. It's very hard to get anything done. It's very hard for this country to advance, to progress. This is a skin I truly believe that we need to shed if mankind is going to go forward.

CHETRY: Yes, you give people a lot to think about and you do it with some laughs as well. So your new film, "Religulous." Bill Maher, thanks for being with us this morning.

MAHER: Thank you, Kiran. I appreciate it.

ROBERTS: It's now 40 minutes after the hour. Coming up, President Bush addresses the nation after the markets were devastated yesterday. We will bring you his remarks live from the White House coming up next.

You're watching the most news in the morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Right here is the reason I believe why this vote failed. And this is Speaker Pelosi's speech that, frankly, struck the tone of partisanship that, frankly, was inappropriate in this discussion.

REP. BARNEY FRANK (D), FINANCIAL SERVICES CHAIR: Here's the story. There's a terrible crisis affecting the American economy. We have come together on a bill to alleviate the crisis. And because somebody hurt their feelings, they decide to punish the country.

(END VIDEO CLIP)

ROBERTS: The partisan finger pointing on Capitol Hill yesterday as the massive financial bailout went down in defeat 206-228 votes. In just about a minute or so, President Bush will be coming on to make another appeal to Congress to get back to work and get this thing passed because he says the financial crisis is still upon us.

CHETRY: It was so unique because it really happened in realtime yesterday. Wall Street able to watch the House voting. House voting able to watch Wall Street plunge -

ALI VELSHI, CNN, SENIOR BUSINESS CORRESPONDENT: And I think everybody was a little surprise. The traders on the floor, Susan Lisovicz was saying we're thinking, oh, my god, this isn't going to pass. They're looking at it on the screen. And the folks in the House were looking at markets saying this can't possibly be happening. And I think yesterday it came together there is really a connection and this is really important. Now what Barney Frank said was interesting. There is a bit of a disconnect in Washington understanding how angry some people are about this.

ROBERTS: Here's the president. Let's listen to what he says here as he again makes an appeal to Congress to get this bill passed.

PRES. GEORGE W. BUSH, UNITED STATES OF AMERICA: Yesterday the House of Representatives voted on a financial rescue plan that had been negotiated by congressional leaders of both parties and my administration. Unfortunately, the measure was defeated by a narrow margin. I'm disappointed by the outcome. But I assure our citizens and citizens around the world that this is not the end of the legislative process.

Producing legislation is complicated, and it can be contentious. It matters little what path a bill takes to become law. What matters is that we get a law. We're at a critical moment for our economy. And we need legislation that decisively addresses the troubled assets now clogging the financial system, helps lenders resume the flow of credit to consumers and businesses, and allows the American economy to get moving again.

I recognize this is a difficult vote for members of Congress. Many of them don't like the fact that our economy has reached this point. And I understand that. But the reality is that we're in an urgent situation and the consequences will grow worse each day if we do not act. Dramatic drop in the stock market that we saw yesterday will have a direct impact on the retirement accounts, pension funds and personal savings of millions of our citizens. And if our nation continues on this course, the economic damage will be painful and lasting.

I know many Americans are especially worried about the cost of the legislation. The bill the House considered yesterday commits up to $700 billion taxpayer to purchase troubled assets from banks and other financial institutions. That, no question, is a large amount of money. We're also dealing with a large problem. But to put that in perspective, the drop in the stock market yesterday represented more than $1 trillion in losses.

Furthermore, both the nonpartisan Congressional Budget Office and the Office of Management and Budget expect that the legislation considered would ultimately cost the taxpayer far less than the $700 billion. Because the government would be purchasing troubled assets and selling them once the market recovers. It is likely that many of the assets would go up in value over time. Ultimately we expect that much, if not all, of the tax dollars we invest will be paid back.

As much as we might wish the situation were different, our country is not facing a choice between government action and the smooth functioning of the free market. We're facing a choice between action and the real prospect of economic hardship for millions of Americans. For the financial security of every American, Congress must act.

My administration will continue to work closely with leaders of both parties on Capitol Hill. I appreciate their determined efforts. While Congress is out today for the Jewish holiday, my administration will be talking to congressional leaders today about how we can move legislation forward when members begin returning to the Capitol tomorrow.

Our economy is depending on decisive action from the government. The sooner we address the problem, the sooner we can get back on the path of growth and job creation. This is what elected leaders owe the American people and I'm confident we'll deliver. Thank you.

CHETRY: That was President Bush for the second day in a row coming out and addressing the nation regarding this bailout package, a $700 billion. He once again implored Congress to move on this saying the consequences of doing nothing are far greater. Acknowledging though that this $700 billion of taxpayer money is something that's hard for people to swallow.

ROBERTS: Yes but at the same time trying to put it in perspective by saying that what happened yesterday in the stock market, Ali, was double the cost of that. And insisting that the cost of this is going to come back.

VELSHI: And one point, I want to make, I've been reminding people that this could end up costing jobs if this credit freeze continues. We've lost 605,000 jobs this year. On Friday we're going to get the unemployment numbers for September. We are expecting another 105,000 jobs lost. 710,000 jobs this year. We could push ourselves into a big problem if we continue to lose jobs. This is really important.

ROBERTS: Yes, the President saying that the economic damage of this if we don't do anything could be painful and lasting, imploring members of Congress for the financial security of every American to act on this. But there's a huge difference of opinion on Capitol Hill. We're watching this closely for you all day long here. It's 49 minutes after the hour.

(BEGIN VIDEOTAPE)

CHETRY (voice-over): Death of the American dream.

UNIDENTIFIED FEMALE: Oh, Danny, it's going to be perfect. CHETRY: Forget the picket fence. Carol Costello looks at how changing times are changing the dream.

UNIDENTIFIED MALE: It's getting worse and worse.

CHETRY: You're watching the most news in the morning.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the most news in the morning. As the economic crisis remains a huge issue in Washington, average Americans are already feeling the pinch. The U.S. housing slump and subprime mortgage meltdown helped get us here. So what could really be at stake? The American dream itself in fact. Carol Costello is live in Washington with more for us this morning. Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: Hi, Kiran. You know, we just heard from the President, he just urged Congress to vote for that bailout plan but I don't know if anything of what he said solved the anger problem. Part of the reason that bailout failed is because voters are just plain mad and they're anxious because for the first time they believe their children will be unable to realize the American dream.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): The American dream, 1950 style.

UNIDENTIFIED FEMALE: Oh, Dan, it's going to be just perfect.

COSTELLO: The dream was simple back then. A nice home with a white picket fence. A life better than what your parents had. It seemed so attainable then. Today not so much.

JOHN MORTON, PEW CHARITABLE TRUSTS: The perception is clearly negative. Americans are clearly very anxious about their economic prospects and the prospects for their children. At levels that we haven't seen in 50 years.

COSTELLO: Why? Since 1999 median family income has decline slightly even though we're working longer hours to keep up. More startling, between 1974 and 2004 the median income for a guy in his 30s fell by 12 percent. Still, Americans continue to believe in the dream. Many bought homes they couldn't afford. Some sold to them by unscrupulous lenders. Many believed until the housing boom went bust. And the country woke up to a dream that seems to be dying.

UNIDENTIFIED MALE: It's getting worse and worse.

UNIDENTIFIED FEMALE: Housing was better then than now.

UNIDENTIFIED MALE: A lot of the American dream is gone.

COSTELLO: Americans are also angry at Wall Street, the wage gap between rich and poor is bigger than ever. And many in the middle class no longer feel that if you work hard enough you can have it all. UNIDENTIFIED MALE: The perception begins to be quite negative. And if the reality begins to turn in that direction we enter a new form of people trying to figure out how they fit into that American dream.

COSTELLO: And if part of the country can no longer figure out how they fit into that dream, America will lose the one belief that unites us.

UNIDENTIFIED FEMALE: And we'll have the living room right in here.

COSTELLO: A dream that anything is possible, even if it means that we now own a small piece of that house with the white picket fence.

(END VIDEOTAPE)

COSTELLO: Now it is important to keep in mind how resilient Americans are. We made it through the Great Depression, the '87 stock market crash and we made it through 9/11. If history is any indication, we will make it through this too. But it will take strong leadership, something many Americans are looking for and simply not finding. Kiran.

CHETRY: All right. Carol Costello for us this morning, thanks.

(BEGIN VIDEOTAPE)

CHETRY (voice-over): Reading the candidates.

UNIDENTIFIED MALE: What is a second-level notch of anger, indignation.

CHETRY: Jeanne Moos takes a most unusual look at the debate.

UNIDENTIFIED MALE: He's got talking points but he doesn't have feeling points.

CHETRY: A facial coding expert decodes the men who could be president.

UNIDENTIFIED MALE: Probably one of the most introverted people we've ever had as president.

CHETRY: We're watching the most news in the morning.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROBERTS: How does that old chess going, it's not what you but how you say it. And maybe especially true in a debate where a candidate's body often does a lot of the talking. Our Jeanne Moos takes a closer look.

(BEGIN VIDEOTAPE)

JEANNE MOOS (voice-over): Debate note to Sarah Palin. You not only have to watch what you say, you have to watch what people watching how you say it. Take that Alaska's proximity to Russia counts as foreign policy experience answer. It's been imitated on comedy shows.

GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: You've got Alaska here, and this right here's water, and then that up there's Russia.

MOOS: It's been ridiculed.

MAHER: That was the sentence to nowhere.

MOOS: And now we've asked someone called a facial coding expert to analyze it.

DAN HILL, FACIAL CODING EXPERT: Her mouth tightened in what is a second-level notch of anger or indignation.

MOOS: But that's nothing compared to the body language bonanza during the first presidential debate.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: While he's spewing his nonsense -

MOOS: There was disdain for McCain.

HILL: A really smirking smile from the corner of the mouth.

MOOS: A lack of passion from Obama.

HILL: He's got talking points, but he doesn't have feeling points.

MOOS: Who needs political pundits when Dan Hill can dissect a smile.

JIM LEHRER, MODERATOR: Now having resolved Iraq, we'll move to Afghanistan.

HILL: You can see Obama's true smile is about twice as large as McCain's. McCain when he smiles it is always really more of a grimace smile. There is a tension that permeates McCain's personality.

MOOS: And maybe not enough tension permeating Obama's.

HILL: What strikes me at how much Obama would look down when he's talking. He's quite an introvert. He'll probably be one of the most introverted people we've ever had as president.

MOOS: But then here's the main takeaway from the debate what he calls McCain's lack of respect for Obama.

OBAMA: It would strip away tax breaks that have gone to oil companies.

HILL: All right. McCain was trying to make it look softer there by smiling but in fact his eyes were very narrow, snake eyes expression of anger and there was contempt on his face.

MOOS: But contempt is in the snake eye of the beholder. It didn't take a body language expert to notice that McCain didn't seem to look at Obama. But when asked about it on ABC -

MCCAIN: That's just foolishness.

MOOS: McCain said he was focused on the moderator and viewers. Despite the exchange of good job when the debate ended, McCain's look didn't linger. Our expert found a link to his own cufflinks.

HILL: McCain really specializes in his indignation. He is not afraid of being the frowning face.

MOOS: An analysis that might make McCain smile, or raise an eyebrow.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

CHETRY: Hey, he smiled for you today when you talked to him.

ROBERTS: He did.

CHETRY: He even cracked a joke.

ROBERTS: It's sort of that smile that someone gives you just before they kill you.

CHETRY: Well, thanks so much for joining us on this AMERICAN MORNING. Hope to see you back here tomorrow.

ROBERTS: Right now, here's CNN "NEWSROOM" with Heidi Collins.

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