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Obama Administration Softens on Public Option; Health Insurance Co-Ops; Gays Tortured, Killed in Iraq; Blue Dog Democrat Town Hall; Christian Health Care Co-op; Your Electric Bill; Tracking Three Storms Simultaneously; Health Care For All?

Aired August 17, 2009 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: The public option is not the only option in health care reform. That is the message coming from President Obama in this make-or-break month for reform. This represents really a significant shift in the health care debate. Details now from CNN's Jim Acosta. He's in Washington.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT: Tony, the president is only halfway through a brutal August of boisterous town hall meetings, but he may be willing to give some ground on one of the most contentious issues in the fight over health care reform: the public option. This week, the White House seems to be saying there may be other options.

(BEGIN VIDEOTAPE)

SEN. ARLEN SPECTER (D), PENNSYLVANIA: Now, wait a minute. Now, wait a minute.

ACOSTA (voice-over): After weeks of congressional town halls gone wild, the Obama administration is now keeping its options open on health care reform, specifically on the crucial question of whether Americans should have the option of joining a government-run plan, the so-called public option.

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: And I think what's important is choice and competition. And I'm convinced at the end of the day the plan will have both of those. But that is not the essential element.

ACOSTA: And there were no lines in the sand drawn by the president himself at his own town hall in Colorado.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a legitimate debate to have. All I'm -- all I'm saying is, though, that the public option whether we have it or we don't have it is not the entirety of health care reform. This is just one sliver of it.

ACOSTA: The White House is spending less time pushing the public option and more time talking about injecting competition into the health care marketplace, costs to drive down costs and give Americans more choices.

SEN. KENT CONRAD (D), NORTH DAKOTA: The fact of the matter is not enough votes in the United States Senate before the public option. There never have been. So to continue to chase that rabbit I think is just a wasted effort.

ACOSTA: North Dakota Democratic Senator Kent Conrad is offering one compromise that would establish nonprofit health care cooperatives, like the rural electric co-ops that have existed in the U.S. for decades.

CONRAD: Land O'Lakes is a cooperative. Ace Hardware is a cooperative. So, this is a model that works. It's not government-run and government-controlled. It's membership-run and membership- controlled.

ACOSTA: The president is stuck. Keeping the public option would anger Republicans and some Democrats in Congress who insist a government-run plan would drive private insurers out of business.

SEN. ORRIN HATCH (R), UTAH: I still think we should have a bipartisan solution, but what I can't tolerate is a government plan.

ACOSTA: Dumping it would disappoint liberals, who see a surrender on a public option as defeat.

(on camera): If he backs away from the public option, is that health care reform?

SARAH CHAISSON WARNER, HEALTH CARE FOR AMERICA NOW: It's absolutely not health care reform. No. We need the kind of reform that's going to improve the lives of families and communities everywhere.

(END VIDEOTAPE)

ACOSTA: But this isn't the last of the public option debate. Supporters and opponents of health care reform are spending tens of millions of dollars on commercials that are slated to air well into the fall. A campaign-style overdose of political advertising not seen since the election -- Tony.

TONY HARRIS, CNN ANCHOR: Jim, appreciate it. Thank you.

We can't do enough on this. I've got to tell you, with the Obama administration softening its position on the public insurance option, we're hearing more talk about insurance co-ops.

Senior Medical Correspondent Elizabeth Cohen is here with us.

Co-ops? What is a co-op?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Well, Senator Conrad talked a little bit about them in Jim's piece, but let's go into a little bit more detail.

The co-op, there are a couple of health co-ops out there in the country. Most notably, Seattle and Minneapolis. They are nonprofit organizations, which is very different from health insurance companies. The patients select the governing board. Again, very different from your basic Aetna, United, et cetera. And you need to have tenses of thousands of members at least to make it work, in order to get that purchasing power that you need. Some would say you need hundreds thousands of people to make it work.

HARRIS: Yes, but -- all right, tens of thousands, hundreds of thousands. But we're talking about 46 million people, by some estimates, who don't have insurance.

Does this idea of a co-op get those people covered?

COHEN: Right. That's a big problem, 46 million uninsured Americans. That's what reform is trying to help.

HARRIS: Yes.

COHEN: Will co-op solve that that? No. That is according to two folks who run co-ops, one in Seattle and one in Minneapolis, who I was on the phone with earlier.

I said, "Is this going to help?" And they said, "No. We're not charities. You have to spend money, you have pay premiums to join our co-ops, and we don't take everyone. We do say no to some people with pre-existing conditions."

Now, one of them said, Our prices are middle of the road, we're the average price for -- you know, our premiums are about what other people's premiums are.

HARRIS: Well, then what's the point?

COHEN: OK. Well, according to these co-ops, the point is, is that co-ops create good competition. The co-ops manage to deliver high-quality health care at a lower price because they don't have to make these huge profits. They just put the money back into the company.

So, what one person told me was, "Look, we bring down the price of health care in general so more people can afford it." For example, in Seattle, where they have a pretty prominent co-op, health care is less expensive and more efficient than in other parts of the country, and some would say a big reason why is because they have that co-op there.

So, it changes the landscape, but it still doesn't insure all the uninsured. There are uninsured in Seattle, Washington. There are uninsured people in Minnesota. And those two places have co-ops.

HARRIS: My point. OK. So, how much does it cost to get a co-op system started? Because my understanding is from you that there are some pretty significant up-front costs.

COHEN: Right, there are. There are some pretty significant start-up costs. You've got to have money to get started, get your executives going, and get deals with doctors and that kind of thing. It's estimated that it would cost between $4 billion and $10 billion to get co-ops going in this country, and that's what some people are hoping will happen with health care reform, is that the government will provide that seed money.

HARRIS: Will it solve that problem of 46 million people who aren't insured? What was the answer again?

COHEN: The answer from two folks who run the co-op, no. That it will help, but it will not solve the problem, right.

HARRIS: It will help but not -- thank you.

COHEN: Thanks.

HARRIS: Got to tell you, there's more to cover here. Look, a government-run health insurance program or public option really seem to be the centerpiece of the president's overhaul.

Let's join senior White House correspondent Ed Henry now. He is on the road with the president in Phoenix.

And Ed, this idea of possibly, maybe not holding completely firm on a public option, is this president having to face up to some cold, hard Washington realities here?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: He is, because we've really known this for weeks now, that he was very unlikely to get 60 votes in the Senate to push it through, through sort of normal procedures, and get enough of his own Democrats on board, let alone Republicans, to call it bipartisan, if he had a public option on there. You've got a lot of conservative Democrats like Ben Nelson of Nebraska who would not support a public option.

This handwriting's been on the wall for weeks now. The White House is finally coming around and realizing they've got to try something different.

What's interesting is, right behind me here in Phoenix, in the last few weeks there hasn't been that much energy on the Democratic side. There's a big rally going on. Unfortunately, there's also light rail starting to come through my shot, so you're not going to see all those people, but you'll probably hear it, here in downtown Phoenix, the bullhorns and what not.

Supporters of the president estimate there are at least 700 people just across the street from me organized by Organizing for America, an arm of the Democratic National Committee, as well as labor unions. I point that out because at recent events that I've been following the president around the country, there hasn't been that much energy behind him on health care reform. Not huge crowds, not rallies, handfuls of people.

Instead, the energy has really been on the opposite side of the debate. People are shouting "Socialism!" and the like. Conservatives protesting outside some of his events. So, what's interesting to me is that today, as all of this is exploding back in Washington, out here on the road I'm seeing some energy in favor of the president, but we're sending some camera crews out here to ask some of the same supporters, are you going to be frustrated now, though, that it looks like the president may be abandoning the public option? It's kind of interesting that the Democrats are getting some energy just as it looks like the president may be making a move that's going to upset the base of his party.

HARRIS: Well, if you -- and Ed, there is a reason not specifically tied to health care reform. This is not a town hall meeting that the president is holding later today.

Talk to his about his agenda for today's meeting.

HENRY: Now, we're told that he's likely to mention health care at least briefly, because he's speaking to Veterans of Foreign Wars, a lot of senior citizens in that group. And I've spoken to some of these veterans over the last day or so, and they're telling me they want to make sure that Medicare is not harmed by any health care reform efforts. So, you may see the president reassure veterans on that. But the real focus today is going to be about the missions in Iraq, in Afghanistan, something that's very, very emotional for these veterans.

(BEGIN VIDEOTAPE)

HENRY (voice-over): Four American vets. Two voted for the president, two for John McCain, but they share a brotherhood and a feeling that many Americans do not appreciate the sacrifice of U.S. troops dying in two wars. A feeling so painful, it brings one of these men to tears.

ROLAND ROCHESTER, VETERAN: I know that they are tough. I know they're strong. I have a hard feeling for those that are over there. But I'm a Marine, and I will stand up for our chief of staff and our soldiers everywhere they go.

HENRY: All four said they want to hear more specifics from the president about the days ahead in Afghanistan in particular.

What's interesting is Gary Malone, an Obama voter from Arkansas, is deeply concerned the president is sending more troops into a quagmire.

GARY MALONE, VETERAN: We lost 58,000 -- over 58,000 in Vietnam, unless this would not turn into another Vietnam. It's turning in to another Vietnam.

HENRY: But a different view from Buck Cowley of Arkansas.

BUCK COWLEY, VETERAN: I was then in World War II, Korea. I served in Vietnam.

HENRY: Cowley is a McCain voter but gives Mr. Obama high marks for sending more troops to Afghanistan. COWLEY: We never got anybody anyone.

HENRY: The talk of another Vietnam stars Lewis Wood, a McCain voter from Arizona, who thinks Mr. Obama has been weak.

LEWIS WOOD, VETERAN: I also don't want to see it turn into a situation where they just head up and pull the troops out. We were winning in Vietnam when I left there. The politicians lost that war.

HENRY: But Wood says he will support the president now, and is inspired that for the first time ever, an African-American commander in chief will address the VFW (ph).

WOOD: I'm proud of the United States, you bet you.

HENRY: And so is Roland Rochester of North Carolina, whose heart aches for the men and women dying overseas. He voted for Mr. Obama and is confident he will handle both wars well.

ROCHESTER: He's my chief, commander-in-chief and I'm proud of them.

(END VIDEOTAPE)

HENRY: You can see the president will be talking about some very, very important national security issues today. Also, again, may mention health care.

You hear the rally just behind me. These supporters of the president saying they want health care reform now.

Interesting, my colleague, Erica Dimler (ph), CNN producer, just went into that crowd, sent me at least reaction from one person, Kelly Lam (ph) from Tempe, Arizona. And she asked what about the public option potentially being dropped?

This person said she would not be angry at the president if it was dropped, but she would be very sad. She said this is her cause right now. She wouldn't be upset if it goes away, but would be very disappointed in her fellow Americans, because she believes that is the way to reform health care.

Just one person. I pass it along because we're going to sample a lot more people and we'll pass them along as we get them. But obviously the White House is banking on the fact that if they do drop the public option, they'll get some of their supporters to say, look, it's better to get something than nothing, better to get half a loaf than no reform at all. It remains to be seen whether that will be a dominant position, but that's just some early reaction -- Tony.

HARRIS: Boy, Ed. We're looking at some of these pictures from your location. Boy, it is really happening today, and I think I can hear some of the chanting going on as well.

HENRY: You can, absolutely.

HARRIS: Our senior White House correspondent Ed Henry with the president in Phoenix, Arizona.

All right, Ed. Appreciate it. Thank you.

And President Obama speaks to the VFW convention in Phoenix at 1:30 Eastern. That's 10:30 on the West Coast, and you will see it live in the CNN NEWSROOM with Kyra Phillips.

And we are doing all we can here in the CNN NEWSROOM to cut through the rhetoric, the rumors, to address your real concerns about the future of your health care and where this debate is leading our country.

Do you fear a big government takeover? Does the prospect of doing nothing scare you even more? Most people agree something has to be done, but just what seems to be an open question right now.

Tell us what you think. Send your comments and questions to my blog at CNN.com/Tony, and we'll get you answers. We'll do that by pulling together the really smart, informed people in our shop from Elizabeth Cohen, to Dr. Sanjay Gupta, to the CNN Money team, our Capitol Hill and White House correspondents. We'll go beyond if we need to.

Our expectation is that most of your questions will take a little time to research, so we won't necessarily be able to get back to you right away. Once we are able to answer your specific concerns, we will air them in the CNN NEWSROOM. .

Chad Myers is tracking not one, not two, but three named storms in the Atlantic.

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(WEATHER REPORT)

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HARRIS: Well, a new law in Afghanistan apparently allows Shiite men to starve their wives and withhold money if they refuse sex. Activists accuse President Hamid Karzai of passing the law in order to garner conservative support for Thursday's election. The new law is based on one Karzai originally signed then suspended back in March after world leaders labeled it oppressive. Critics say the previous version essentially legalized marital rape.

Gays are being tortured and killed in Iraq. That's according to a new Human Rights Watch report that catalogues the systematic assault.

We get details from CNN's Arwa Damon.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (voice-over): When this video sprung up on YouTube back in January showing Iraqi gay men partying, it caused a terrorizing backlash. In this report released on Monday, Human Rights Watch warns of a "spreading campaign of torture and murder" against Iraq's gay community.

"They always used to hunt us. But after this video posted, it became much worse," this gay man tells us. He and his three friends, brave enough to speak out, but too frightened to have their identies revealed.

(on camera): What are some of the atrocities that are being committed against the gay community that you know of?

"Many of my friends were killed and many others wound or harmed," the eldest among them says. "Some were tortured. They shot glue up their anus. They have started a war against us."

"I was with my boyfriend driving around. I had my head on his shoulder," this man remembers. "Security forces stopped us and ordered us out of the car. They beat my boyfriend severely and put him in jail. He's been there for four months."

This list was posted in Baghdad's Shia slum of Sadr City. It lists names of individuals accused of being gay. Part of it warns: "If you do not end this shameful behavior, your fate will be death." Some gay Iraqis have even been killed by their own families, ashamed of the stigma surrounding homosexuality.

This widely-circulated cell phone video shows a transsexual being harassed by Iraqi police.

"He was a hairdresser," his friend tells us. "He was killed by the family after the Iraqi police threatened to kill him. I heard that they even wanted to burn him alive or stone him to death."

These young men tell us how they were captured by militias who hacked off their hair. One shows the scars left by acid doused on his leg. The other displays a slash on his wrist.

(on camera): Members of Iraq's gay community have to try to blend in when they are out on the streets or face the consequences. The Iraqi government says it condemns the murder or abuse of any of its citizens but has done little else to protect the country's homosexuals. Those who we spoke to say they are left to fend for themselves.

(voice-over): According to Human Rights Watch, it is difficult to place an exact number on homosexuals killed. Indications are that the number is in the hundreds.

Arwa Damon, CNN, Baghdad.

(END VIDEOTAPE)

HARRIS: Take a look at these pictures, live pictures now from Phoenix, Arizona, where the president will be speaking at the VFW convention later this afternoon, 1:30 p.m. Eastern Time, here in the CNN NEWSROOM. But what you're watching right now are live pictures of people demonstrating for and against health care reform. Not expected to be the central topic of conversation in the president's speech this afternoon.

But as you can see, wherever the president goes, the debate over health care goes with him. And this is the scene in Phoenix Arizona, right now.

We will continue to show you these live pictures. This is pretty robust in Phoenix right now. More of these pictures.

You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: So, as you know, the president is going to be speaking to the Veterans of Foreign Wars convention next hour, right here in CNN NEWSROOM, when you join Kyra Phillips at 1:00 p.m. Eastern Time.

Take a look at what's going on just outside the convention location in Phoenix, Arizona. Live pictures now. And bear with us as we just sort of get better shots here. We're working with our affiliate there in Phoenix.

This is a protest demonstration. We're talking about in favor of and against health care reform as it's being crafted right now. So we've got this back and forth with folks on both sides of the health care reform debate, on both sides of the street right now, separated by traffic and partitions and everything else.

Now, the president is essentially here to talk about -- o give the Veterans of Foreign Wars an update on the wars in Iraq and Afghanistan. But wherever the president goes, the debate on health care reform goes with him. The president to speak to the VFW convention again in Phoenix at 1:30 p.m. Eastern. That is 10:30 a.m. on the West Coast. And you will see it live here in the CNN NEWSROOM when you join Kyra Phillips.

So, obviously, the health care debate heats up again today. Now the Obama administration is softening is position on the public insurance option as a key part of reform. We are watching to see if this affects the tone of town hall meetings taking place today. Several are being held from Philadelphia earlier this morning, to Florida, Virginia, and Texas. And one of the lawmakers holding town hall meetings today, a member of the so-called blue dog coalition of conservative Democrats. National political correspondent Jessica Yellin has been following the first of several meetings by Congressman Allen Boyd of Florida.

And, Jessica, what's been happening so far today? Good to see you.

JESSICA YELLIN, CNN CORRESPONDENT: Hi, Tony. Good to see you.

Representative Boyd, as you might expect, has been taking some serious heat from constituent who are concerned and concerned about the health care bills that they've heard about in Congress. Now, Boyd, you mentioned, is one of those blue dog Democrats. He started his town hall by holding up that one bill we've heard so much about from the House and saying, I can't support this. I'm not supporting it. So let's start off with that as the groundwork. And he still took a lot of heat from his constituents. Let's listen to one person who was angry at the blue dog Democrats in general.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I can't say this without calling names. If we let Pelosi and people like that direct us, we are doomed. One more thing. I thought -- I thought for a long time that the blue dogs -- and I still want to believe in you -- that the blue dogs was up there guarding the hen house. But, Allen, that ain't been the case this year. Wait, wait. Let's give him a chance. We don't -- we want Allen to go back up there and do a good job for us like he used to do, but you can't do that with that bunch of scoundrels.

(END VIDEO CLIP)

YELLIN: Now, the representative gave a very calm response and was able to explain where he stands, which is, he wants a different version of a health care bill. Tony, folks in the audience were concerned that illegal aliens will end up getting coverage. They're concerned that abortions will be paid for in this bill, and they're also concerned. On the other side there were a few people who said, look, my insurance premiums are to high. How are you going to bring it down? It's a rock and a hard place.

HARRIS: Yes. Well, talk about a rock and a hard place. I'm a little confused here. Maybe you can help me, Jessica, for just a moment here. Mike Ross is essentially the leader of the blue dogs, correct?

YELLIN: Yes.

HARRIS: OK. Mike Ross' support of the legislation that the congressman is holding up was essential to get that piece of legislation.

YELLIN: Yes.

HARRIS: So Congressman Boyd is saying, I am not even in the favor of the compromise that was put forth by the leader of the blue dogs, correct?

YELLIN: Yes.

HARRIS: OK. Great. I just wanted to clear up that. All right. So now let me move on to my next one. So clearly then the representative is under a lot of pressure. Is there any version of health care reform that he will support?

YELLIN: He did say afterwards in an interview with CNN that he believes that the co-op is a better option to the public option. So that's maybe something he could lead toward. He made it very clear in the meeting that he believes health care reform is important to help bring down costs and to cover the uninsured. So he wants a bills, he just doesn't want those bills. HARRIS: Gotcha. All right. Jessica Yellin for us. It gets confusing sometimes, Jessica. Appreciate it. Thank you.

YELLIN: You bet.

HARRIS: Pennsylvania Senator Arlen Specter stepped back into the fray over health reform today. The senator held a town hall meeting earlier in Philadelphia. Specter says the anger he's seen at some of the meetings is directed at partisan bickering and he's not a part of that. After the meeting, Specter weighed in on the public insurance option. He supports it but says it's not the only option.

(BEGIN VIDEO CLIP)

SEN. ARLEN SPECTER, (D) PENNSYLVANIA: I have favored a public option. I believe that the president has to make the evaluation as a matter of leadership as to what the administration wants to do. But there is an alternative to the so-called public option by having co- ops. And I think these matters are subject to exploration. But I would not make a determination that the success of health care reform legislation turns on any one item.

(END VIDEO CLIP)

HARRIS: Co-ops. You heard the senator mention co-ops. Health insurance co-ops. We keep hearing them mentioned as a possible alternative to a public insurance option, but how do they work? CNN's Kate Bolduan explains how a Christian health care co-op is meeting one group's insurance needs.

(BEGIN VIDEOTAPE)

KATE BOLDUAN, CNN CORRESPONDENT: As the health care debate rages on in Washington, we decided to get outside the beltway. We're heading to Philadelphia to take a look at one alternative people are turning to.

BOLDUAN (voice-over): It's called bill sharing. In this case, a large group of Christians pool their money to cover each other's medical costs. It's not conventional insurance and it's not regulated. Christian activist Shane Claiborne is a member of one, Ohio-based Christian Healthcare Ministries.

SHANE CLAIBORNE, CHRISTIAN CO-OP MEMBER: One of the things I like about it is it's relational and I can see exactly where my money's going.

BOLDUAN: Last time we saw Claiborne, he was touring the country promoting his book, "Jesus for President." He moved in to this rough Philadelphia neighborhood to help clean it up, like this former drug den he took us to.

CLAIBORNE: We talk a lot about practicing resurrection. So, for us, this is a part of it. We bring abandoned spaces to life and try to make thing beautiful. BOLDUAN: It is rough work. Claiborne was jumped a few years ago, landed in the hospital with a concussion and broken jaw. That's when his health care stepped in.

CLAIBORNE: You get this bill for $10,000 or $12,000 and then we ended up paying like $6,000 of it. And because I had, you know, thousands and thousands of people carrying that bill with me, I was able to just write -- you know, we just wrote a check for it.

BOLDUAN: The ministry negotiated directly with his doctors to lower the bill. Executive Director Howard Russell says the core of their success is the 20,000 member who have met conditions that include not smoking and being a practicing Christian.

HOWARD RUSSELL, EXECUTIVE DIRECTOR, CHRISTIAN HEALTHCARE MINISTRIES: If everybody in America had the provisions that our members have, there wouldn't be a health care crisis.

BOLDUAN (on camera): It's like a health care cooperative. A community-based, non-profit organization owned by its members. A group that uses its strength in numbers to negotiate competitive rates with health care providers. And that's an idea gaining traction on Capitol Hill.

BOLDUAN (voice-over): Robert Burns, a professor of health care management at the University of Pennsylvania, says the key to co-ops is size, 20,000 to 50,000 enrollees minimum need.

ROBERT BURNS, UNIVERSITY OF PENNSYLVANIA: If they're not big enough, then they won't be able to do either of those two things, hold down their administrative costs internally or negotiate good rates with the providers externally.

BOLDUAN: And even then it may not be enough.

BOLDUAN (on camera): Do you see health care co-ops as the silver bullet to this debate?

BURNS: No. As I told my class last night, it's part of the silver buck shot.

BOLDUAN: So, one of many that needs to be done for reform.

BURNS: One of many. That's right.

BOLDUAN (voice-over): Claiborne agrees. His co-op may not suit everyone's health care needs, but he's hoping it at least forces Americans to thing outside the box.

Kate Bolduan, CNN, Philadelphia.

(END VIDEOTAPE)

HARRIS: Well, you electric bill could be headed lower. Find out why next.

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HARRIS: The latest financial news and analysis. We tell you about this site every day because the work being done there is terrific. Our CNN Money team is just flat out awesome. I'm not getting paid for that. Well, maybe -- not. But again, if you want the best from the best financial team anywhere on television right now, just go to CNNmoney.com for the latest financial news and analysis.

Let's take you to the New York Stock Exchange now. Better than three hours into the trading day. As you can see, the Dow is down 163 points. Well, at least we are off of session lows for the day. And the Nasdaq, at last check, was down 47 points -- 48 points now. All right. We're following these numbers throughout the day with Susan Lisovicz right here in the CNN NEWSROOM.

Japan, the world's second largest economy, says it has shaken off the recession. Japan's economy grew 0.9 percent in the second quarter in annual terms. That's almost a 4 percent growth rate. Yes, that works out. Germany and France announced last week they were out of recession.

You know, it seems like we're always telling you about prices going up, but electric bills may actually be falling. At least for some people. Stephanie Elam has our "Energy Fix" from New York.

Walk us through this, Miss Stephanie. Good to see you.

STEPHANIE ELAM, CNN CORRESPONDENT: It's good to see you too, Tony.

Yes, the recession is pushing industrial demand for electricity way down, leading to a drop in prices at the wholesale level. Now, for the first half of the year, demand is down 4.4 percent in the country's largest wholesale power market. That serves 13 (ph) states east of the Rockies. That sent wholesale prices down 40 percent in that area. In fact, 2009 is on track to post the sharpest drop in electricity demand in more than 50 year.

Tony.

HARRIS: Well, that's the wholesale level that you're talking about.

ELAM: How true.

HARRIS: When will we, the consumers here, see our electric bills start to come down.

ELAM: Yes, that part could actually take some time. A lot of customers pay based on long term contract. So changes at the wholesale level, they're not going to show up immediately. But bills are already falling in some places. Here in New York City, utility company Con Ed says electric bills this month are down 30 percent from a year ago. A lot depends on where you live. Prices for electricity are really regional. Here in the Northeast, there's lots of natural gas and those prices have fallen more sharply than sources of electricity more prevalent in other parts of the country. So you have to kind of take a look at your area to know that one.

Tony.

HARRIS: Well, explain this to me. How come some people are actually seeing their bills get more expensive?

ELAM: Yes. For those people -- it really does depend on your utility. A lot of power companies generate their own electricity, so they aren't buying it wholesale. We talked to Duke Energy and it's asking for rate increases of 7 percent in South Carolina and 12 percent in North Carolina.

Now, what's the reason behind this? Well, Duke says it needs to replace and upgrade power plants. It's also spending money on environmental equipment and new smart grid technology. So, in the end, whether your electric bill falls will also depend on the overall economy because wholesale prices could spike if factories pick up the pace and demand comes roaring back, Tony. So there's a lot that you have to factor in to look at your prices. But, you know, the biz (ph) updates team, I know you love CNN Money and they are great, but your biz updates team will be looking at it too.

HARRIS: You know, I keep raving about this CNN Money team. You're a member of that Money team in fine standing. Stephanie Elam.

ELAM: Yes. Thank you very much.

HARRIS: Thank you, Stephanie.

And Texas Senator Kay Bailey Hutchison says she can do a better job than Governor Rick Perry. Hutchison, a U.S. senator since 1993, announced today she will challenge the incumbent. Both are Republicans. And that makes this race pretty interesting. The primary, March of next year. Perry is the state's longest serving governor. In office since 2000. Hutchison says that is to long.

Afghans heading to the polls. What's at stake? We're live in Kabul. That's next.

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HARRIS: Let go, let go, let go. You know it's been a while since we have had three named storms churning at the same time. Meteorologist Chad Myers tracking all of this activity in the hurricane headquarters for you.

And, you know what, it -- while Bill could absolutely be a monster, Chad, and you're telling us to keep an eye on Ana.

CHAD MYERS, AMS METEOROLOGIST: Correct. I believe Ana is probably the most underrated storm. We're getting some convection today. And I'm not worried about where it is now. It's kind of like buying the stock. You don't really care where it is now, you care where it's going to be five days from now or five years, whenever you're going to retire.

This thing, Ana, is going to travel across some very high mountains in Haiti and the DR, and also back even into Cuba. That will tear it up a little bit. But after that, it gets into the Gulf of Mexico, which just happened to Claudette. This tiny little thing that made all this rainfall just in the past couple of days across parts of Florida.

And so, yes, here is Bill. It is the big bad boy. It is literally a much more serious storm. And I do believe it's probably going to be that category three major hurricane event here as we go from one -- that's the category one, to two, three, four -- maybe even four. We'll see.

But there's Bermuda. That's the target area here. Now, these things obviously can turn left or right, but there's not one model doing this. Not one. They're all turning it up and around and around and then eventually back out to sea. You know how quickly they can change their minds, these models, they're fickle sometimes. We will see whether that's what's actually going to happen or not.

I think one more thing I want to take you to is the rainfall across parts of Georgia, Mississippi, Alabama, northern Florida. We need this rainfall. We'll take it in many spots. Just need to keep this thing moving at 10 to 15 miles per hour. Then you don't get that flood threat.

There's flooding going on in Kansas City. We're trying to get some pictures of that city as well. Some very heavy rainfall in the overnight hours and some streets are under water. We're getting that picture for you if we can.

HARRIS: All right, Chad, appreciate it. Thank you, sir.

MYERS: Sure.

HARRIS: Let's talk about the California wildfires and the firefighters there working overtime, to be sure, battling almost a dozen wildfires in both ends of the state. They're making some progress around the fire around the Santa Cruz community of Bonny Dune. It is now 65 percent contained. Officials are allowing hundreds of people to return to their homes. Good news there.

But the danger is still very real. The Euma (ph) County fire, north of Sacramento, was ignited by a bird hitting a power line. And in southern California, Santa Barbara county officials say a camp fire started by Mexico marijuana growers sparked a massive 84,000 acre fire. It is now about 64 percent contained.

Affordable health care is -- well, is it for everyone? Is it possible? One city in California found a way.

(COMMERCIAL BREAK) HARRIS: In Birmingham, Alabama, last hour, a blanket pardon for civil rights protesters arrested in the city during the movement's heyday. Among those pardoned by Birmingham's mayor, the late civil rights leader Reverend Ralph David Abernathy. His son accepted on his father's behalf.

Abernathy, pastor at Montgomery's historic First Baptist Church, was arrested too many times to count. The pardon was possible under a recent Alabama law designed for civil rights protesters. It's called the Rosa Parks Act. Our CNN colleague T.J. Holmes spoke with Birmingham Mayor Larry Langford, as well as a civil rights era protester who said, no thanks, she doesn't want a pardon.

(BEGIN VIDEO CLIP)

T.J. HOLMES, CNN CORRESPONDENT: Do you want a pardon?

GWENDOLYN WEBB-HAPPLING, CIVIL RIGHTS ACTIVIST: Why, that's exactly why I, for one, and several others that I've had an opportunity to speak with and especially a 92-year-old man who said, no, we do not want a pardon. I don't want one. To say, give me a pardon or for me to take a pardon, it would say that we, as children, and others, that we had done something wrong. We did no wrong. Now, the pardon should go to those who wronged us, but everything that we did was right, fighting for freedom and going to jail to be able to participate and go to places like others of where we could go.

HOLMES: Now, Mr. Mayor, on that point she just made, and pardon me there, Ms. Webb-Happling, but, Mr. Mayor, on the point she just made there, again, you're offering people a pardon is saying to them, you did something wrong and we're going to forgive you for it, versus just saying, I'm sorry. Versus the city just making a proclamation or something and saying I'm sorry. Do you see the difference there?

MAYOR FRANK LANGFORD, BIRMINGHAM, ALABAMA: No. I saw the difference when we started, let's be very clear about this. The pardon is more for the city than it is for the people who participated.

HOLMES: Now what does that mean?

LANGFORD: You know, sometimes words are a very powerful things. Sometimes you have to say I'm sorry for the injured party to know that what they did was not wrong and for the party who did the injuring to say, listen, I was wrong to have done it.

(END VIDEO CLIP)

HARRIS: Just to remind you, Mayor Langford is facing modern-day legal troubles. He goes on trail August 31st. The mayor is named in a 101-count corruption indictment. Among the laundry list of charges, conspiracy, bribery, fraud, money laundering and filing false tax returns.

So, San Francisco is the first U.S. city to have a health care program that everyone can afford because the cost is based on how much you make. Photo journalist Jeff King (ph) and Jim Castle (ph) show us how it works.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: Right in here.

DONNA BOWLING, HEALTHY SAN FRANCISCO PARTICIPANT: I had micro valve prolapse. I was diagnosed with that about nine years ago. After I lost my insurance, I would have to pay out of pocket for everything, 100 percent. It would have been really costly. More costly than I could have afforded. Possibly eventually I would have died. It was scary.

I thought it was really unfair and just not right, basically, that you should allow anybody to die because they cannot get coverage. They can't get help even though they're trying to do the right thing. That's why I sought out the clinics that are here in San Francisco.

DR. MITCH KATZ, SAN FRANCISCO HEALTH DEPARTMENT: Healthy San Francisco is a coverage model that provided medical care, hospital care, emergency care, pharmaceuticals, laboratory, radiology for people within San Francisco. Any adult who is uninsured in San Francisco can qualify. How much people are required to pay depends upon what their income is.

BOWLING: In my opinion, much better and more thorough care than I had when I was insured.

KATZ: We had required only a very minimal amount of city general fund for start up, $750,000. The rest of the money comes from one of three sources. We receive the state federal grants, we are receiving money through the employer spending requirement that requires businesses that have more than 20 employees to spend money on health care and then finally participate fees pay. We have figured out how to decrease the cost of care and use that money to cover a broader set of people. What we're able to do is to supplement all of the money that had been existent to enable people to care for a group of people that they were by and large already caring for.

BOWLING: I wish that everybody had access to the kind of medical treatment that I get because it's just fantastic.

(END VIDEOTAPE)

HARRIS: And we are pushing forward now with the next hour of CNN NEWSROOM with Kyra Phillips in New York City.