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American Morning
Senate Passes Bailout Bill: Goes to the House; Biden and Palin Square Off Tonight; Dos and Don'ts of Short-Term Loans; Obama Leads in Battleground States
Aired October 02, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR (voice-over): The buck stops here. The Senate says yes.
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: This is not just a Wall Street crisis, it's an American crisis.
CHETRY: Now, it's the House's turn. Bailout bill take two.
Plus, he says --
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: We must act.
CHETRY: She says --
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: We're going to talk about those new ideas.
CHETRY: It's debate night in America. What's at stake as the VP contenders go face to face on this AMERICAN MORNING?
(END VIDEO CLIP)
CHETRY: And thanks for being with us on this Thursday, October 2nd. We get a bill that goes from a three-page proposal to 450 plus. Makes it through the Senate.
JOHN ROBERTS, CNN ANCHOR: And we've got an incredibly exciting day in politics today. This is just amazing. Glad you're up early with us.
We begin with breaking news in the nation's economic crisis this Thursday morning. The Senate approves that $700 billion financial rescue plan. The bill now goes to the House. Senators John McCain, Barack Obama and Joe Biden all voted in favor of the enhanced bailout bill. What it means for Main Street and Wall Street and your pocketbook, just ahead.
We're just 15 hours away from the vice presidential debate between Sarah Palin and Joe Biden in St. Louis, the one and only debate for the vice presidential candidates and the stakes are high for both of them. Tonight's format features 90 second answers followed by two minutes of discussions. And this morning, a ground search team will comb an area near Mammoth Lakes, California, out near the Mammoth Mountain ski area where a hiker found items belonging to missing adventurer Steve Fossett. An aerial search on Monday spotted what may be the wreckage of Fossett's plane. The millionaire vanished on a solo flight more than a year ago. The hiker found several ID cards with Fossett's name including a pilot's license and about a thousand dollars in cash.
CHETRY: As you said, we're counting down to one of the most eagerly anticipated vice presidential debates in recent times. Senator Joe Biden versus Governor Sarah Palin.
Now ahead of tonight's big showdown, both candidates sat down with CBS' Katie Couric. First, Senator Joe Biden on past Supreme Court ruling.
(BEGIN VIDEO CLIP, CBS "EVENING NEWS")
KATIE COURIC, CBS ANCHOR: Are there Supreme Court decisions you disagree with?
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: You know, I'm the guy that wrote the Violence Against Women Act. And I said that every woman in America if they are beaten and abused by a man, should be able to take that person to court, meaning you should be able to go to federal court and sue in federal court the man who abused you, if you can prove that abuse. But they said no, that a woman, there is no federal jurisdiction.
And I held -- they acknowledge. I held about a thousand hours of hearings proving that, that there's an effect in interstate commerce. Women who are abused and beaten are women who are not able to be in the workforce. And the Supreme Court said, well, there is an impact on commerce, but this is federalizing a private crime and we're not going to allow it. I think the Supreme Court is wrong about that decision.
(END VIDEO CLIP)
CHETRY: Governor Palin was asked the same question after explaining why she thinks Roe v. Wade was a mistake.
(BEGIN VIDEO CLIP, CBS "EVENING NEWS")
KATIE COURIC, CBS ANCHOR: What other Supreme Court decisions do you disagree with?
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Well, let's see. There's, of course, in the great history of America, there have been rulings that there's never going to be absolute consensus by every American, and there are those issues, again, like Roe v. Wade, where I believe are best held on a state level and addressed there. So, you know, going through the history of America, there would be others, but --
COURIC: Can you think of any? PALIN: Well, I would think of any, again, that could best be dealt with on a more local level. Maybe I would take issue with, but, you know, as a mayor and then as a governor and even as a vice president, if I'm so privileged to serve, would be in a position of changing those things, but in supporting the law of the land as it reads today.
(END VIDEO CLIP)
CHETRY: And we're going to have more of their responses coming up in a few minutes. Also, join the best political team on television for your front row seat to the VP debate. Joe Biden versus Sarah Palin, live tonight 9:00 p.m. Eastern right here on CNN.
ROBERTS: Back to our other big story this morning. The Senate taking the first step towards saving the economy, passing a revised $700 bailout plan sweetened with tax breaks and other incentives to entice House members who voted against the plan earlier this week. Lawmakers approved the measure by a wide margin. Final vote was 74- 25, brought by bipartisan support there. Senate leaders from both parties say decisive action was needed.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D), MAJORITY LEADER: The American people have a right to be frustrated with the economic crisis that they face, and we share that with them. But inaction is not an option which is why we worked expeditiously and in a bipartisan manner to stop a bad situation from getting even worse.
SEN. MITCH MCCONNELL (R), MINORITY LEADER: We clearly have demonstrated in the toughest possible situation, five weeks from an election, that we can come together and address a major crisis.
(END VIDEO CLIP)
ROBERTS: A showdown vote in the House is expected tomorrow. Our Kate Bolduan is live for us on Capitol Hill. And yesterday, I was talking with Steny Hoyer on "THE SITUATION ROOM," Kate, who said that if he felt he had bipartisan support, he would simply bring the Senate bill to the floor of the House. Does that look like that might happen?
KATE BOLDUAN, CNN CORRESPONDENT: Yes. And that's the key right there. If he has bipartisan support, and that is the big question that everyone has. All eyes today again back on the House of Representatives just days after the first bailout bill failed there. It is now -- the bailout bill is now on its way back.
Senators leaving their vote last night said they think that their vote count send a very strong bipartisan message and also gives the bill some very strong momentum going into a vote, which as you mentioned, John, could be Friday. But, House Majority Leader Steny Hoyer insists it is not a done deal yet. Listen here.
(BEGIN VIDEO CLIP) REP. STENY HOYER (D), MAJORITY LEADER: But I think that, frankly, an awful lot of people are going to look at this bill, not be pleased with what the Senate has done in adding those provisions that make the debt worse, but believe very strongly that passing this bill to stabilize the economy, reinstate confidence in the markets is critically important for their constituents and their hometowns.
(END VIDEO CLIP)
BOLDUAN: Now the tweaks made to the bill, the version of the bill that was passed in the Senate were made in hopes of winning votes, specifically those House Republicans that so very clearly sent the message that they did not like that first bailout bill. So the House Republicans tell CNN now that this version is more likely to pass than the last. But at the same time, they say, don't count your votes yet and no one is going to guess the end result until it actually happens because it's very unclear the future of this bailout version heading into the House. It's very unclear still this morning, John.
ROBERTS: For us (ph) up bright and early this morning on Capitol Hill, Kate, thanks so much.
Senators Barack Obama and John McCain swept in from the campaign trail to vote for the bill. Both candidates tried to establish their leadership credentials. McCain discussed the bailout on the trail. Obama addressed the Senate shortly before the vote.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: But in the end of the day, there's no real separation between Wall Street and Main Street. There's only the road we're traveling on as Americans and we will rise or fall on that journey as one nation, and as one people.
(END VIDEO CLIP)
ROBERTS: And after the Senate approved the bailout, Barack Obama landed in Michigan. There he'll hold two rallies leading up to tonight's vice presidential debate. We should point out that Senator McCain declined to make a speech on the Senate floor, preparing that he was going to get trapped by Democrats, would have been bracketed by Democratic senators on either side, just designed to make him look bad is what he thought might happen there. So --
CHETRY: All right. Well, getting back to the bailout and whether or not it can actually head off economic disaster, CNN's senior business correspondent, Ali Velshi, joins us now. How did it go from three pages to 451?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes. This thing is getting thicker and thicker. They took parts of a bill --
ROBERTS: Unbelievable.
VELSHI: Yes. Well, this was what happened. They took parts of a bill that hadn't -- bills that hadn't been passed already and actually made the bailout bill into part of an amendment for another bill. So technically, a different bill.
The bailout part of it, the $700 billion part of it, is almost exactly the same. The only part that really, you know, relevantly changes is the increase in the FDIC deposit insurance from that $100,000 limit to $250,000. Everything else in that bill is new, different and stuff that was already being discussed.
About $110 billion to $150 billion depending on how you measure it in tax reductions, the extension of the AMT exclusion which was expected to happen. Some new tax credits, tax cuts for individuals and for businesses, many of them having to do with renewable energy. For instance, you can write off your solar panels if you want to do that.
It's not stuff that has anything to do with the bailout package and, by the way, will have no substantial effect on the bailout package as we reported now several times. This is -- these are sweeteners to try and bring a few more votes around in the House. It's exactly what the president and Henry Paulson had initially said they didn't want in the bill because once you start adding things on, no telling where that ends.
ROBERTS: Mystery (ph) effect.
VELSHI: It gets to be 400 and some odd pages. But the bottom line is markets have reacted in a way that suggests they do not know what's happening. We often tell you about the Dow futures. That's the bet on how things are going to go at the open of the market. They've been all over the map today. Up, down. Up by a lot, down by a lot. They want to know what's going on in the House and until we have a clear idea of that, I don't think you're going to know how that's going to affect you and your 401(k), and I don't think that's going to happen until Friday afternoon.
There's no point making bets on this thing until we know what's going to happen Friday. Monday taught us all a lesson about how you think something's going to happen and it may not. Bottom line though, is it's essentially the same bill with respect to the bailout that is going to the House.
ROBERTS: $700 billion bill is not because -- become the $850 billion bill?
VELSHI: Right.
ROBERTS: But some of those tax breaks are offset, right?
VELSHI: Some of them are offset that's why it's hard to add that money. You don't know what you're getting back from it. But it is a different -- it's got extra stuff in the bill -- sweeteners for -- it's confusing. This is getting -- for folks who are confused, it's getting more confusing.
I should tell you, with respect to the thing I've been harping on for a few days, the credit freeze, it has intensified again. Yesterday, we heard from AT&T, which said, it is unable to borrow money for more than an overnight duration. Only overnight money. This is the kind of thing that says not sure how much you're good for this money so you can have it overnight. Pay it back to me tomorrow. That's expensive money.
CHETRY: Well --
ROBERTS: So make those phone calls to them, right?
CHETRY: It's a big day for Ali Velshi. By the way, he's headed to the couch. Not the therapist couch but Oprah Winfrey's couch.
VELSHI: I will be --
CHETRY: Does she sew up couches or it's chairs?
VELSHI: I think I'll be in a chair.
ROBERTS: What's this all about?
VELSHI: I'm going to be in Oprah tomorrow. But it's the same. We're just getting this message out about why this matters to you and how this credit crisis affects you.
CHETRY: How did Oprah reach out to you? This is fascinating.
VELSHI: Well, I do a lot of Gayle King's radio, her friend Gayle King on Oprah on XM. I do that a lot, and I work a lot with Suze Orman. And Suze is on Oprah shows. So, you know, it all sort of comes together. We're -- help us a lot.
(CROSSTALK)
ROBERTS: Be interesting to see if this is a one-time only appearance or maybe an audition. Maybe you'll become the Dr. Oz of the financial world.
VELSHI: I'm honored to be asked. I'm quite thrilled about it.
ROBERTS: All right. Good stuff, Ali. There you go.
CHETRY: Good for you, Ali.
Well, still ahead, Joe Biden and Sarah Palin. We're counting on the hours until tonight's high stakes showdown at St. Louis. What can we expect? I think that it's safe to say we don't know what to expect. And what are the potential pitfalls for both vice presidential candidates? We're live in St. Louis.
Well, money is tight. You need cash now? We have important advice on what you should and should not do when trying to gain access to emergency funds. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK) CHETRY: The stage is set for tonight's debate at Washington University in St. Louis. The stakes are high for both Joe Biden and Sarah Palin. He has a reputation at times of being a loose cannon, and she's had a rough time in some of the interviews she's done lately.
CNN's Suzanne Malveaux is live in St. Louis with more on what each campaign is looking for their candidate to do tonight.
Hi, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kiran. There's an incredible amount of anticipation about this debate, a lot of excitement. Obviously, these two campaigns, their running mates preparing quite a bit for the debate.
From the Obama side, David Axelrod, a chief strategist, says, look, Biden is going to treat Palin with respect. You're not going to hear necessarily some big one-liners or zingers or anything like that. But he does have to be careful not to seem, because he has been accused of being, perhaps, sexist or offensive in some way. He's been briefed by Senator Clinton. He's also been having practice sessions with Michigan Governor Granholm. So, obviously, he's going to talk about the issues and what he's going to do is paint a picture of the similarities between Palin, Palin-McCain, McCain-President Bush.
On the Palin side, what they're talking about here is that she has to recover from some of those interviews that we saw over the last week. She has to prove that she has a sense of command when it comes to policy, national policy. Does not have to be too specific. But what you're going to hear, she's going to talk about the contrast between Palin/McCain as well as Obama and Biden talking about the sense that this is their record, it's a liberal record. They have a conservative one -- Kiran.
CHETRY: How is this different than the presidential debate, Suzanne?
MALVEAUX: Well, it's going to be less free wheeling, less free form. This is really much more structured. It's about 90 seconds for the first questions, two minutes for follow ups.
This is something that the Palin camp essentially wanted. They didn't want kind of this free for all back and forth. They felt like it would be something that would not actually be in her favor. So you're going to see any kind of questions. No topic is off the table but certainly more structure.
CHETRY: All right. No rest for the weary. We're all going to be up watching that tonight for sure.
Suzanne in St. Louis for us this morning, thanks.
MALVEAUX: Sure.
CHETRY: And Senator John McCain will be joining us live in the 8:00 hour. We're going to get his take on tonight's vice presidential debate. Also, about the bailout, can he rally House Republicans to support that measure?
ROBERTS: Strapped for cash, the dos and don'ts of short-term loans. Gerri Willis on the best way to get extra cash during a credit crisis.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, "THE TONIGHT SHOW WITH JAY LENO")
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": The government is talking about stimulus checks again. The bad news, we're the ones that are writing them. Yes!
You know, I don't want to panic people by saying the banks are doing badly. Kevin, I went to my bank today, but they stole my pen. I couldn't believe it.
(END VIDEO CLIP)
ROBERTS: How much is he going to channel Rodney Nager (ph) for that?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I know.
ROBERTS: I mean, he's becoming Rodney Dangerfield.
WILLIS: Exactly.
ROBERTS: Yes.
The Senate approves the financial bailout bill that even if the House follows suit tomorrow, it could still be weeks before the credit market loosens up. So what if you need the cash and you need it now?
CNN personal finance editor Gerri Willis has got some dos and don'ts for consumers. Let's start with the don'ts first.
WILLIS: Yes, let's start with the don'ts. Payday loans. You probably heard for these. Maybe you've seen the store fronts in your neighborhood, on the street where you live. These are horrific loans for consumers. They imply like 400 percent interest rates.
What you do is you get a cash advance on your paycheck. Don't do it. Cash advances on your credit card, you get these offers in your mailbox all the time. Also bad. The interest rate on those are about 25 to 30 percent and if you're late, well, don't even ask.
You should also think about absolutely not liquidating your 401(k). Look, if you lose your job, you may think, hey, I'm just going to take that money out of my 401(k). Bad idea. You'll pay a 10 percent penalty plus taxes on the money you've made on that money. Not a good idea. ROBERTS: And then, how long will it take to replenish it?
WILLIS: Oh, well, depending on how old you are, right? It could take decades. Absolutely.
Well, you might want to know what you should be doing if you want some short term money.
ROBERTS: Yes. Sure.
(CROSSTALK)
WILLIS: All right. So if friends and family aren't giving you any dough and maybe you don't have emergency cash, let's think about a few other things you might do.
For example, a 401(k) loan instead of liquidating your 401(k). OK. It's not my favorite thing to do, but you can take out a loan with some employers. You do pay some fees. You have to pay it back in five years. The rate of interest is typically pretty low, though.
ROBERTS: But you use your 401(k) as collateral on that loan or --
WILLIS: You're just borrowing money from your 401(k) and replacing it. You're typically paying, you know, one percent on plus prime. So it's not that expensive.
You know, so tap into your investments. If you have a CD, this is money you already have. You know, break the CD. All you do is sacrifice anything from three months to two years worth of interest. That's your money if you absolutely have to have it. It's a good place to go.
And consider reverse mortgages if you're 62 years or older. You get the cash from something you already own which is your home. And so, it's definitely a good way to go.
ROBERTS: Call up Robert Wagner and he'll tell you how to do it.
WILLIS: That's exactly right. That's exactly right.
But you know, there are people who will be making choices in this economy which will have big ramifications for their financial life for years to come. You're going to make the right choices now.
ROBERTS: All right. Gerri Willis, thanks for that. Some good advice this morning.
WILLIS: My pleasure.
ROBERTS: Kiran?
CHETRY: Well, there's some new battleground state polls out this morning, and they're showing some real changes including one candidate opening up a big lead. Also, new questions about how safe and effective over-the-counter cold medicines are for young children. There's a group of pediatricians now demanding the government do something about it.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to the "Most Politics in the Morning." There are just 33 days now until the election and there are some new polls showing Barack Obama opening up a lead in several battleground states including Florida, Minnesota and Virginia. So why the shift?
Well, joining me now, John Avlon, a registered independent and contributor to Politico, and also from Washington, Patricia Murphy, editor of Citizenjanepolitics.com.
Thanks to both of you for being with us this morning.
PATRICIA MUPRHY, EDITOR, CITIZENJANEPOLITICS.COM: Good morning.
CHETRY: If we could take a quick look, this is CNN's new poll that's out right now. It shows in Minnesota, especially, you see a big lead opening up, almost 11 points right now for Barack Obama. Take a look at Florida right now. That seems to be trending toward Barack Obama, as well as Nevada and Virginia. Another big one there. What's going on in your opinion, John?
JOHN AVLON, CONTRIBUTOR, POLITICO.COM: Well, you're starting to see the race break for Barack Obama based on the economic anxiety that's really taking moderates and the middle class and making them anxious and wanting a change from the Bush administration. And in the case of states like Nevada and Florida, where you've seen a 300 percent increase in independent voters over the last 20 years, that's the decisive voting bloc that's moving towards the Democrat.
CHETRY: And, Patricia, you know, we've also seen in some of the polling and erosion of support with the over 50, which is a group, a demographic that seem to be solidly behind John McCain. Did he make a mistake by suspending his campaign and trying to get to the front of the economic crisis in Washington?
MURPHY: You know, I'm not sure that that's exactly the mistake that he made, but he certainly, as soon as this crisis began, that is exactly when you started to see Barack Obama break away from John McCain. And a lot of these polls if you go through state by state by state, he begins to fly, John McCain does, on September 16th, the day that we saw AIG get bought up by the government.
The very day before, he had said that the fundamentals of the economy are strong. Barack Obama jumped on that and every single time that Barack Obama talks about the economy, he says this is George Bush's fault. Most Americans believe that this is George Bush's fault, and they are really punishing John McCain for that.
CHETRY: You know, John, there is also, apparently, some growing jitters in the Republican Party, some unsolicited advice to John McCain showing that maybe he should attack Obama's ties to his former pastor, Reverend Jeremiah Wright, bring back the culture wars. Is that going to work among independent voters?
AVLON: No. You know, whenever the culture wars get drummed up, whenever the hyper partisanship steps in the room, it alienates and angers independent voters and they'll punish the candidate that tries to perpetuate those politics and personal distraction.
CHETRY: Patricia, what do you think about the fact that there's some jitters about whether or not if it continues to be about the economy, it's going to be tough for McCain to pull out a win.
MURPHY: I actually I really do agree with that. If you kind of go, again, into this internal polling, particularly if you look at women, 94 percent of women say that they think the economy is in crisis or that it has serious problems.
CHETRY: Right.
MURPHY: Those same people give Barack Obama a significant lead in terms of who's better to handle the economy. For John McCain, again, it looks like he needs some sort of another game changer. I don't know what that's going to be because he's done so little to distance himself from George Bush in this economy. It's really it's a tough lift for him. I think the McCain people are pretty worried.
CHETRY: And, John, I want to ask you about this one. Sarah Palin recently calling herself Joe six-pack. She stepped, you know, into the mantra of Joe Biden, if you will, saying, you know, I'm the average -- I'm the average person. Maybe it's time that a vice presidential candidate is someone that just comes from every day folks. This coupled with some of the gaffes in the three interviews that she's given since becoming the VP pick. Should they be worried about tonight's debate, John?
AVLON: Well, tonight, is the American people get to judge whether or not Sarah Palin is ready for prime time. And it is a high stakes debate for Sarah Palin, the Republicans. No question about it.
This is not your typical VP debate where the first rule is do no harm. Sarah Palin really needs to show that she can clear the commander in chief test. But her (INAUDIBLE) one redeeming thing, it's almost impossible at this point for Sarah Palin not to exceed expectations.
CHETRY: And, Patricia, do you think that the criticism has been tough? Do you think it's been fair on how she's answered some of these questions, or not given specifics on some of them like the Supreme Court decisions she doesn't agree with?
MURPHY: You know, I actually think that the criticism has been pretty fair. She is not performing in a way that you would expect a governor to perform. She's not performing the way you would expect a president or vice president to perform. If you look at video of her previous interviews and debate, she had two dozen debates for the Alaska governorship. She was so much better. It seems like she's being overmanaged, that she's trying to remember instead of trying to think, and it's just not going well for her. She really needs to step away from that and just be herself tonight. It's really her only hope going forward.
CHETRY: Patricia Murphy and John Avlon, always great to have both of you with us. Thanks.
MURPHY: Thanks so much.
CHETRY: We have a programming note now. Senator John McCain is going to be joining us live 8:35 Eastern time. Can he rally House Republicans and support the bailout?
AVLON: Thank you.
CHETRY: Thanks guys.
We're also going to get his take on tonight's vice presidential debate.
ROBERTS: It's almost half past the hour now, and a check on our top stories this Thursday morning.
The Senate says yes to a financial rescue approving the $700 billion package and sending it back to the House. The Senate bill includes tax breaks and other sweeteners designed to attract House Republican voters. The sweeteners are worth about $150 billion on top of the already $700 billion cost. House lawmakers are expected to vote on the measure tomorrow.
Pediatricians want the Food and Drug Administration to demand a recall of over-the-counter cough and cold medications for children under the age of 6. The doctors claim the drugs have no benefit for children that young and are concerned about the potential health risks. Americans spent nearly $300 million last year on cough and cold remedies for kids. The FDA holds a public hearing on the issue today.
And closing arguments are expected today in the armed robbery and kidnapping trial of O.J. Simpson. His defense wrapped up their case yesterday. Simpson was never called to the stand. He and five others are accused of breaking in to a Las Vegas hotel room last September to take back memorabilia that Simpson claims was stolen from him. If convicted, he could face life in prison.
Well, now that the Senate has approved it, the stage is set for a second showdown in the House over the government's bailout plan. Our next guest says all of the economic turmoil is causing people to make big money mistakes that could damage their financial health. Robert Frick is a senior editor at Kiplingers Personal Finance. He joins us now live from Washington.
Good morning to you. Thanks for being with us. ROBERT FRICK, SR. EDITOR, KIPLINGERS PERSONAL FINANCE: Good morning.
ROBERTS: So this has past the Senate now. It's looking a little bit better in the House. Is it time for people to exhale?
FRICK: Well, hopefully it is. Hopefully, people are going to stop making the kinds of mistakes that I think they have been making over the last week because panic causes people to do crazy things especially with their money.
ROBERTS: So, what kind of -- some of the mistakes that people have been making, Robert?
FRICK: Well, one of the big problems is that when people are under stress they start thinking short term and so they think how in the world am I going to make back all that money that I lost on Monday. So, they have a tendency to take on excessive risk to try and just get back to square one. So you'll see people maybe moving their money around the stock market, taking chances with investments that they don't really understand.
ROBERTS: What about people who just consider doing things like as Gerry Willis was talking about a few minutes ago, cashing out their 401(k), stuffing the money into that new "first bank of mattress incorporated" and trying to wait it out.
FRICK: Well, I have to agree that that's a big mistake. Keep your money in your 401(k). One of the things that people should do is they should take some kind of action because when you're in this kind of fight or flight situation, you should do something because it's going to make you feel better and there are some positive things that you can do.
For example, if you have a lot of debt on your credit card or a big home equity line of credit, pay that down. Maybe temporarily, you suspend making contributions to your 401(k). Tighten your belt. Pay down your credit. Going to make you feel better and actually will put you in a better position as far as your finances.
ROBERTS: And if that doesn't work, you know, breathe very calmly into a paper bag to stop hyperventilation.
FRICK: I'm afraid some people are going to that guns, ammo and freeze dried foods scenario right now because you see that sales of safes are going up.
ROBERTS: Right.
FRICK: I mean, that's scary stuff.
ROBERTS: Nobody in the south can find enough gasoline to stock up on that, though. Taxpayers are up in arms over this. They don't want to spend the $700 billion. Is it really such a bad deal for taxpayers? FRICK: No, I don't think it is a bad deal. And after a certain point, you know, the critics of this are saying, well, they've been scared into this because they're saying the sky is falling. Well, I got news, the sky is falling. People who can't get auto loans, people making runs on their money market funds which would become like bank savings account for so many people. $800 billion individual investors have money market accounts. Then, your throw in, banks crashing, the sky is falling. Maybe a chunk of it hasn't laid it on you yet, but it's going to sooner or later.
ROBERTS: So, how long before this plan kicks in and stops the sky from completely falling?
FRICK: Oh, I think you're going to see immediate relief in the stock market and I think that the credit market is going to free up over the next few weeks. But, conversely, if nothing happens or if this thing keeps bouncing around Congress and, you know, every time it goes to Congress, the number of pages in the bill doubles and more pork is added on, I think it loses more and more of its effectiveness. So, we really have to do something quick.
ROBERTS: You know, I have a favorite saying that everything tastes better wrapped in bacon including bacon, but I think wrapping this thing in bacon might not be a great idea. Robert Frick of Kiplingers Personal Finance, thanks for being with us this morning. Good to see you.
FRICK: You bet.
ROBERTS: All right.
CHETRY: Hey, it's worth a try. As the House gets ready to take another look at the government bailout plan, a lot of you are wondering what it would mean for your money. And who better to ask than our own Ali Velshi. He's taking your questions next and there's still time to send one. Head to CNN.com/am.
(BEGIN VIDEOTAPE)
REYNOLDS WOLF, CNN METEOROLOGIST (voice-over): The old-fashioned ice box is reborn. It's keeping truck drivers cool while they sleep without the noise and pollution of engine idling.
JOHN THOMAS, WEBASTO: This old technology is new. Actually, some people call it hi-tech ice.
WOLF: The ice forms inside this black box made by the trucking equipment company, Webasto.
THOMAS: We have a graphite matrix inside of a unit and water. And what happens is we run refrigerant through that. As the trucks are going down the road, the refrigerants run through that, freezing the ice box.
WOLF: When the truck is stopped for the night, ice-cooled air is blown into the cab. The tiny bit of power needed comes from the truck's battery. No need to idle.
THOMAS: It's estimated that five billion gallons of fuel every year are used for idling trucks.
WOLF: Webasto says that every gallon of fuel burned saves 19 pounds of carbon dioxide up the exhaust pipe, not to mention chemicals that cause smog. Webasto recently took its technology called BlueCool to truck stops across the country and predictably high fuel prices sparked a lot of interest.
MO NDOW, SMALL FLEET OWNER: Typically, it could cost you up to $1,000 a year for a truck just idling.
WOLF: Now he and a lot of other truckers are considering putting their comfort on ice.
Reynolds Wolf, CNN.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
CHETRY: Ali Velshi joins us now. He's got your questions on issue number one, the economy. They're still rolling in.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, they are.
ROBERTS: And tell him why you got him because he's going to Oprah tomorrow.
VELSHI: The blogs are great because everybody is sort of adapting their questions to what is happening currently. So, a lot of them are about the Senate bill that is passed.
Henry in New York says, "Increasing the FDIC coverage on deposits from $100,000 to $250,000 is good, but it primarily benefits small business. What about the retirement accounts that are on CD's, which in most instances exceed $250,000, are these going up too? I have not heard comments in this regard."
No, Henry, they are not going up under this bill. But if you do have a retirement account, that's covered up to $250,000 in a depository institution, and if it's more than $250,000 or it's likely to grow to that, do yourself a favor. Split it up between banks. That's still insured. It's not that you're only insured in one bank. Put it in another bank and do that. So, there's a real way to protect yourself whether it's $100,000 limit or the new $250,000 limit if they pass.
Kim in Canton, Ohio says, "My mother is nearly 67 years old and retired. She plays all of her money barely $10,000 in a 401(k). She is determined to take it out. I tried to calm her fears to no avail. Where should she put it since she won't listen?"
OK. You need her to listen to this. First of all, at her age there's going to be a certain amount she's going to have to withdraw anyway. But the rest of it can stay in. Taking your money out of stocks is not the same as taking your money out of your 401(k). If you take money out of your 401(k), you will pay a penalty on that. That's not a good idea. You can keep your money in the 401(k) but take it out of stocks if that's what you want to do and keep it in cash or a money market account. That's the way to do this. Don't withdraw money -- and this goes for everybody -- don't withdraw money from your 401(k). If you don't want to be in the market and at some point you should, at some point you shouldn't, don't take it all out of your 401(k). You'll pay tax on that. That's a bad idea.
Lance in Maryland says, "The main U.S. lenders are the United Kingdom, Japan and China. But since they, as well as just about every other major world economy are experiencing market meltdown for various reasons, what happens if they can't or won't loan us the money to bail us out of our current financial crisis?"
Well, what happens is, the money that is printed by the government is guaranteed by the U.S. government. Typically speaking, the U.S. government can get loans but the interest rate goes up and that affects the interest rate we pay on mortgages and all sorts of other things.
There is a lot of money out there. They typically are able to lend the United States. But your long term question is a good one. At some point, even the U.S. government is going to have trouble raising money if they just keep printing money. So, excellent question. Thanks for them. Keep them coming at CNN.com/am.
ROBERTS: Ali, thanks so much for that. 40 minutes after the hour. You're watching the "Most News in the Morning."
CHETRY: Pulling away, major changes in the CNN Electoral Map. What the latest polls mean in the fight for the White House? You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: All right. So, we've got some new polling in that we want to tell you about. CNN time Opinion Research Corporation Polling that is changing the landscape of the election here which is 33 days until we all go to the polls. And here's what we got for you today.
In the State of Florida, a pretty dramatic change throughout. We have Barack Obama now leading John McCain by 51 to 47. That is plus four points for Barack Obama. Why is that significant? Because the State of Florida had been even up until then. Now Barack Obama beginning to edge ahead.
Let's look at another state here. This is a crucial swing state, one that usually isn't but it is in 2008 election, the State of Virginia. This is my home state. This is also where John McCain has got his headquarters. Barack Obama in our latest poll is leading John McCain, take a look at this, 53 percent to 44 percent. Nine points ahead. That is very significant because John McCain had been up by four points in the State of Virginia. So this one not only in play but beginning to lean towards the Democratic side. The State of Minnesota, this had been leaning Democratic, then it went into the toss up category, our latest poll has got Barack Obama now leading John McCain 54 percent to 43 percent . So, he's up 11 points there. That's going to affect which way this state is looking in the overall electoral map, which I'm going to get to in just a second. That's also -- take a look at the State of Missouri here. This has been solidly Republican for the last few elections. This is a real bell weather state. It has chosen every president since 1956. And if you take a look at the numbers now, Barack Obama has moved into a very slight lead, 49 percent to 48 percent over John McCain.
So why is this significant? Let's take it out to the Electoral College Map, and we'll show you why this is significant because it starts to change things around. The State of Minnesota which had been lean Democrat which was light blue went yellow, toss up, we're now going to move that back in to lean Democrat. And as you can see it starts to change the Electoral College numbers here. That would give Barack Obama 250 electoral votes to John McCain 200.
The other significant aspect of the polls that we came out with, the State of Missouri now, it used to be in John McCain's favor, it's now one point ahead for Barack Obama. So we are going to take that from the light pink which is lean Republican and put that into the toss up category which changes things for John McCain. It now takes him down to 189. So, if the election were held today, Barack Obama would be leading, 250 electoral votes to 189 for John McCain with still one, two, three, four, five, six, seven, eight states in play.
One of these states for either candidate could really make a big difference. But take a look at this, Florida with its 27 electoral votes if that were to go -- and for some reason this is not moving here -- I know why -- if that were to go for Barack Obama, that would give him -- and we take that, we put it in the lean toss up category, 267 to 189. So he would be very, very close to winning the election.
The Electoral College calculation at this point, a little difficult to get a complete handle on. We do need though to put that story into the lean Democratic in there. He actually gets over. That's the figure I was looking for. We're given 277 to 189. 270 to win the election. So, things really changing up here on the Electoral College Map based on these latest polls. Very, very interesting election.
CHETRY: Palin parody.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: He's an old man. He doesn't know I'm going to debate him into the ground.
(END VIDEO CLIP)
CHETRY: A most unusual debate. Jeanne Moos looks at the fill in, the funny and the flashbacks.
(BEGIN VIDEO CLIP) GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: Laugh as you will but that is my answer.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Well, it is the most highly-anticipated vice presidential debate in history. Setting the stage for tonight's face off between Sarah Palin and Joe Biden with impostors, impersonators all squarely focused on Governor Palin. CNN's Jeanne Moos covers the pre-show.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): Do not expect to hear this question at the vice presidential debate.
UNIDENTIFIED FEMALE: Soda or pop, and why?
MOOS: They are just stand ins for the candidates so technicians can check camera angles and lighting.
UNIDENTIFIED MALE, JOE BIDEN STAND-IN: Without a doubt, it's soda.
MADELINE THOMAN, SARAH PALIN STAND-IN: I would disagree.
MOOS: Sarah Palin stand in looks the part. The debate has become a television event, a pop culture phenomenon.
UNIDENTIFIED FEMALE: I'm just a hockey mom.
MOOS: With the candidates' cartoons as potato heads.
UNIDENTIFIED PUPPET AS SARAH PALIN: We must come together not as red potatoes or Yukon gold.
MOOS: And the ever present impersonators.
UNIDENTIFIED IMPERSONATOR AS SARAH PALIN: I feel bad. He's an old man. He doesn't know I'm going to debate him into ground.
UNIDENTIFIED FEMALE: I don't know if he's familiar with your debate history.
MOOS: Most people aren't.
PALIN: Laugh if you will, but that is my answer. Yes.
MOOS: Palin was an effective debater when she ran for governor of Alaska. Sure she's had her problems with national media, to the point of being mocked alongside Miss Teen South Carolina.
UNIDENTIFIED REPORTER: Do you agree with the Bush doctrine?
LAUREN CAITLIN, MISS TEEN SOUTH CAROLINA: I personally believe.
MOOS: You'll find version after version just opposing the two on YouTube.
PALIN: Alaska has a very narrow maritime border between a foreign country Russia --
CAITLIN: And I believe that our education like such as in South Africa --
MOOS: But those expecting Palin to fall apart haven't seen her smooth debate performances for 2006.
PALIN: I'm glad I'm sitting here in between them to make sure it doesn't get out of hand.
MOOS: For now, it's just the stand ins.
GWEN IFILL, DEBATE MODERATOR: I'm Gwen Ifill, and I am proud to introduce Governor Sarah Palin and Senator Joe Biden.
MOOS: Washington University students waving to an empty auditorium.
(on camera): Now the actual debate moderator Gwen Ifill fell down some steps Monday while carrying research materials for the debate and broke her ankle.
(voice-over): Her stand in reports debate organizers have a pillow for her ankle under the desk.
DANIELLE PORTER, GWEN IFILL STAND-IN: And there's also a little stool that she can put the pillow on top of, and it's really cute.
MOOS: Forget Iran or Pakistan.
IFILL: Sugary cereal or should we just all eat granola?
THOMAN, PALIN STAND-IN: I'm a huge proponent of sugary cereal. One of my favorite cereals is Lucky Charms. Like really just the marshmallowy goodness.
UNIDENTIFIED MALE, JOE BIDEN STAND-IN: Me and Tony the Tiger go way back.
UNIDENTIFIED IMPERSONATOR AS SARAH PALIN: I will reach you up. Should I sing in the middle of the debate?
MOOS: Nah, stick to what she did in the talent competition from Miss Alaska. Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: Where the bailout bill really stands now. (BEGIN VIDEO CLIP)
OBAMA: We are all in this together.
(END VIDEO CLIP)
CHETRY: We're live from Capitol Hill. And controversy over the moderator at the great V.P. debate.
(BEGIN VIDEO CLIP)
MCCAIN: I'm sure that Gwen Ifill is a professional journalist.
(END VIDEO CLIP)
CHETRY: The debate before the debate. Is there a conflict of interest?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: A tempest in the teapot. It's just ridiculous.
(END VIDEO CLIP)
CHETRY: You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Tonight's vice presidential debate maybe Joe Biden's coming out party. Sarah Palin has been getting all the attention when she was named the Republican V.P. nominee. But many are expecting the more experience Joe Biden to shine during this debate. Thus our Tom Foreman reports Biden is trying to keep a lid on expectations.
(BEGIN VIDEOTAPE)
TOM FOREMAN, CNN CORRESPONDENT (voice-over): He thoroughly knows international affairs. She doesn't. He spent decades learning the ways of Washington. She hasn't. Yet Joe Biden is furiously lowering expectations for his debate with Sarah Palin.
SEN. JOE BIDEN (D), VICE PRESIDENTIAL CANDIDATE: I have great respect for the -- when I hear and watch some of the debating skills of Governor Palin. I think it's going to be a really tough debate. But I think this is all about where we are.
FOREMAN: Biden has reason to be cautious. His running mate, Barack Obama beat Hillary Clinton by making her Washington experience a weakness, and Palin is calling Biden an insider every chance she gets.
PALIN: I'm looking forward to meeting him, too. I've never met him before. But I've been hearing about his Senate speeches since I was in, like, second grade. FOREMAN: What's more, Biden is notoriously known for speaking his mind and sometimes putting his foot in his mouth, like recently when he said his helicopter was forced down during a visit to Afghanistan earlier this year. It was, but by the weather, not by enemy attacks. He attacked his own campaign for a recent ad criticizing McCain's computer skills.
BIDEN: I thought that was terrible, by the way.
KATIE COURIC, CBS HOST: Why did you do it then?
BIDEN: I didn't know we did but if I had known anything about it, we wouldn't have done it.
FOREMAN: That tendency could make him go for the jugular against Palin. And since previous attacks on her have brought accusations of sexism. Ken Vogel with politico.com says watch out.
KEN VOGEL, THE POLITICO: If I'm Joe Biden's people, I am telling him don't go after her too aggressively. Make sure you're respectful call her Governor Palin, not Sarah. And don't point out if she makes a major gaff. The media will do that for you after the fact.
FOREMAN (on-camera): Joe Biden was already in the Senate 20 years ago. So he knows personally about the last vice presidential debate to shape up this way. That's when the first George Bush picked a young senator as his running mate.
(voice-over): When Dan Quayle invoked the spirit of John Kennedy while debating Lloyd Bentsen, the more experienced senator steam rolled him.
LLOYD BENTSEN (D), FMR. U.S. SENATOR: I knew Jack Kennedy. Jack Kennedy was a friend of mine. Senator, you're no Jack Kennedy.
FOREMAN: But Joe Biden also knows the punch line that followed. Although the Democrats won the debate.
GEORGE H.W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: I, George Herbert Walker Bush do solemnly swear --
FOREMAN: The Republicans won the White House.
Tom Foreman, CNN, Washington.
(END VIDEOTAPE)
