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Protestors Take Stand on College Education Opportunities; Some Employers Doing Credit Checks of Applicants; Pentagon Unhappy with Hollywood's Portrayal of War

Aired March 4, 2010 - 13:00   ET


TONY HARRIS, CNN ANCHOR: Let's take it to the next level. It is go time. CNN NEWSROOM continues right now with Ali Velshi.

ALI VELSHI, HOST: Tony, it's good to see you, as always. Thanks so much.

As Tony said, I'm Ali Velshi, and I'm going to be with you today for the next two hours and this two hours every weekday. I'm going to take every important topic that we cover, and I'm going to break it down for you. I'm going to try and give you a level of detail that will help you make important decisions about your voting, your spending, your safety, your security. Boy, it's about your spending today.

Here's what I've got on the run down. If you don't have a job, you might have bad credit. If you've got bad credit, you might not get a job. It is an awful catch-22. Your prospective employer can pry into your credit history and make a decision about you based on it. Now people across the nation are saying, "My credit is none of your business."

Also on the rundown, you thought the Tea Party folks were angry before; you haven't seen anything yet. They are boiling mad over President Obama's harder line on health care. And they're warming up for a cross-country road trip.

Plus, a 25-foot wave batters a cruise ship. What generated this monster, and why on earth would anyone steer right into it? Chad Myers investigates a killer on the high seas.

All right. The top story right now. Walkouts, rallies, and protests are in the works across the country. College students and professors on more than 100 campuses are taking a stand against what they're calling an erosion in the quality of education and a limited access to a college education.

Take a look at this map and see where these protests are, across the country. It shows dozens of states, those in blue, where demonstrations are planned for today. Most of these protests are focusing on cuts to state-funded colleges and universities, the ones that are supposed to be quality education but affordable.

Here's a breakdown of what the students and professors are protesting. First of all budget cuts, which students say have resulted in classes being canceled and class waiting lists doubling or tripping, not able to get to classes that you want.

Layoffs: that means fewer professors, fewer teaching assistants, fewer class options.

Tuition increases, making a college education out of reach to many, many students, particularly those whose parents don't have an income because of this tough economy.

This movement all started last fall, when California cut $1 billion -- a billion dollars -- from the state university's system, and that is a university system that is the pride of the nation. That resulted in -- get this -- 32 percent tuition increases there heading into the next school year.

Now states across the country, crippled by fiscal crises and budget shortfalls -- we've all talked about that -- well, they're following California's lead. And because states across the country are strapped for cash, it now appears that state-funded colleges and universities, and their students, and their professors, and their communities are paying the price.

Let's have this conversation with Kevin Carey. He's the policy director with Education Sector. It's a nonpartisan think tank that looks at education issues. He's joining me now.

Thanks for joining me. I appreciate your time.

You've worked in education. You've worked in state budgets. This is a really tough one, because these state colleges and tuitions are funded by their tuition and by -- and by state budgets. What is the answer to this solution [SIC]? It's spreading across the country. What can be done? What can these protests lead to?

KEVIN CAREY, POLICY DIRECTOR, EDUCATION SECTOR: Well, in a lot of states, and California is just the worst example, there -- there's been fiscal mismanagement for a long time. And now we're seeing the results. The people -- the politicians in California simply have not managed to balance budgets. Taxes are too low. Spending is too high. And really, students and parents are paying the price tag.

VELSHI: All right. So what -- that sounds like a much bigger problem than one that's just got to do with the universities and the colleges, and that's -- that's largely the case.


VELSHI: What can -- can something turn this ship around right now? Because what you've got is students who need an education, at a great time to get an education because the job market is not all that robust, having a hard time accessing that. What's the solution to this problem?

CAREY: Well, states are going to have to get their fiscal house in order. They've been relying on smoke-and-mirrors budget gimmicks for a long time in a number of states. They're simply unwilling to raise taxes. And in California the result has been letting what used to be, you know, the world's greatest public university system erode over time.

So I -- you know, this is not a new thing.

VELSHI: Right.

CAREY: This has been going on for many years. It's just particularly bad now. And I think what we're seeing today is parents and students and professors saying, enough is enough.

VELSHI: All right. We put -- we asked our followers on Facebook to give us a single solution. Obviously, there's no single solution to this, but something that can be done right now.

Kevin, stay right there. When we come back, we're going to continue this conversation, and we're going to talk about what can be done across the country to try and make college education more affordable. Stay with us. We're taking a break. We're coming back to cover today's day of action on education.


VELSHI: States across this country are strapped for cash, and now state-funded colleges and universities are paying the price, from budget cuts and layoffs, tuition hikes. Students are taking to the streets today, protesting these changes.

We're talking this over with Kevin Carey. He's the policy director with Education Sector. It's a nonpartisan think tank that looks at education issues.

Kevin, we've asked our viewers to post comments on That's my Facebook page.

Rolando posts a comment that says, "I think there are too many kids in the public college system. Standards have been lowered, and it has put a strain on the system."

What do you think about that?

CAREY: Well, I disagree with that. I think more students need college today than ever before, and the tragedy about rising tuition is that the students who need a college education the most are the first-generation students, the low-income students, and those are the ones that are going to have the hardest time paying for it.

VELSHI: What's the -- is there another alternative here, and that is that making sure that everybody -- one of those first- generation students of anybody who needs an education, who can get into a state school -- can be funded adequately so that they can get it, despite of these tuition increases and cutbacks?

CAREY: Well, state governments need to do their part. They need to fund higher education adequately. But at the same time I think colleges need to do more to be more efficient.

I noticed that President Obama in the State of the Union just a couple of weeks ago made this point. Colleges have to lower their costs, as well. In a lot of colleges -- colleges we've seen big increases in administrative expenses. We have tenured professors who don't teach very many classes. I think there are colleges can do, too.

VELSHI: Let's take another one. Sarika. It's a little more general, Sarika's comment. "You can't" -- this is in response to my request for fixes for the education system, for the college and university problem. She said, "You can't just fix the whole education system. You have to look at the whole socioeconomic picture."

That's kind of the point you were making in the last segment when we spoke, that this is not just -- it's not a new problem. It's not just a state college and university problem.

CAREY: Yes, I mean, the budget cuts in higher education are also being felt in other parts of state government. There's a larger problem of fiscal mismanagement. And we certainly do need to tackle those socioeconomic problems of poverty and housing and so on.

But we're not going to solve those problems overnight. And these students, these low-income students, they need to go to college now. They have -- you know, colleges won't let them in if they don't -- if they're not able to pay the tuition bill. So, in the short term, we really have to get after this affordability problem right away.

VELSHI: All right. Kevin, great conversation. Thank you for being with us. Kevin Carey is the policy director at Education Sector.

CAREY: Thank you.

VELSHI: All right. When we come back, Christine Romans is going to join me, my co-host on "YOUR $$$$$." Can bad credit keep you from getting a job? It's not as if finding a job isn't tough enough. Some employers are doing credit checks on job seekers. You need to know your rights and which way this is going. Christine will be with us in a moment.


VELSHI: The fabulous Christine Romans is my co-anchor on a show that we anchor ever weekend here on CNN called "YOUR $$$$$." She also joins me every day.

It's a long day. This is the end of the day for her and -- no, it isn't actually. It typically isn't the end of the day for you. It should be, given how long it is. But I'm actually -- I always ask you to stick around because we have great conversations.


VELSHI: And one that we've had in the last couple ideas has been this -- this idea that there are states or efforts to try and curtail the use of your credit report, your credit history by employers to make a determination as to whether or not you should get a job. But it is a widespread practice.

ROMANS: It really is, and I think most people don't even understand this. Eighteen states -- 25 different bills in 18 states in this legislative calendar, Ali, are trying to limit what your prospective employer can see about you.

A job applicant goes and applies for the job. Human resources or the owner of that business can run a credit check as long as they tell you. Sixty percent of companies do this; 13 percent do everybody as a standard practice.


ROMANS: They just run a credit check on everybody. Forty-seven percent just do for selected candidates. Most likely, Ali, people who are going to be touching money, who are going to be running a budget.

VELSHI: Right.

ROMANS: Forty percent of companies just don't do this at all. They simply don't run a credit history. But it can be done, and it is legal.

VELSHI: You mentioned something. It's legal if they ask you and you consent. When you're in a job market that we're in now, most prospective employees, people looking for a job, don't think that they have the right or don't think it would be wise to say no.

ROMANS: Right. And look, if you're -- if you're going for a job in a money business, it's pretty standard. Also, if you're going for a job in some things that are licensed like day cares or in different states. There are different kinds of jobs you have to have a license, where they have to do a criminal and a credit check on you just to know who you are if you're dealing with the elderly or you're dealing with young people.

So, all of your information...


ROMANS: You should assume all of your information is available to the person who is thinking about hiring you.

VELSHI: You did some research into what you are most likely not to get hired for as a result of somebody checking your credit.

ROMANS: Yes. OK, so this is a -- this is from the Society for Human Resources Management. So, this is a human resources firm. Look, you're not going to get hired because of a current judgment against you, a lawsuit, an outstanding order against you in the court of law; debt collection, uncollected debt, you've got a lot of debt out there. Bankruptcy, 25 percent of the hiring managers would look you over because of a bankruptcy. High debt-to-income ratio, much less foreclosure, even less than that.

I was pleased to see education-related debt hardly even makes this list.


ROMANS: Just 2 percent were concerned about education-related. A lot of us have student loan debt, right? Medical debt, only about 1 percent.

On Facebook and on Twitter, a lot of people were saying, "Hey, wait. If you have a medically-induced bankruptcy, that's not fair to not be able to get a job." It doesn't look to me like hiring managers are not hiring because of that. That's ridiculous.

VELSHI: OK, well, that -- that's a little bit of good. Let me just bring you. You just mentioned Facebook. We asked people about this. Let's get a couple of comments here.

Lance says -- we were asking, "Is it fair?" Lance says, "I say yes, it is fair. It's indicative" -- it being your credit score, credit report -- "is indicative of the type of person you are. If someone can't manage their own financial affairs, then I wouldn't want to hire them to manage anything for me."

What do you think of that?

ROMANS: Well, I think there are a lot of people who -- I hope Lance has a 750 credit score and has never done anything wrong in his criminal or credit history.

VELSHI: Right.

ROMANS: Because if he's looking for a job, people are going to know about it, right?

VELSHI: Right.

ROMANS: Look, the bottom line here is that a lot of people have a situation -- I will tell you that most managers look back six or seven years.

VELSHI; Right.

ROMANS: And they're also -- especially a big human resources department, Ali, I think that they can look back and they see the patterns. They see a divorce. They can see a judgment that was against you. They can see uncollected child support. They can see these sorts of things. And I think that they can piece together sort of...

VELSHI: Right.

ROMANS: They probably see a lot of different kinds of backgrounds, too.

VELSHI: You make a good point, though.

ROMANS: So maybe they're not so judgmental. VELSHI: This isn't the credit score. This isn't the few months snapshot of your credit. We're talking about your credit report, your -- your history of debt, judgments, things like that.

Brook wrote on Facebook, "I think it depends on the job being applied for. A position in the financial industry, like -- like banking, might be important. In order to get my" -- sorry, we've got Allison's up there, but I'm actually talking about Brook's. "In order to get my license as a mortgage loan originator, it was mandated so my employer would need to know."

So she's making the point that there are some jobs where it does seem fairly obvious that you would need to have your credit checked.

ROMANS: Right. And there are -- and there are many people who have tweeted us and e-mailed us and said, "Look, you know, I'm in a hiring position, and I know for a fact that people who have very poor history with their own financial -- their own financial matters aren't good at running a budget. And if I'm hiring someone who needs to run a budget or I'm hiring somebody who's going to be literally a treasurer of a department, it's incredibly important that they have a personal life that their finances are in order, too."

I will say that you are more likely to have a credit background check run on you if you're going for the big-dog job...

VELSHI: Right.

ROMANS: ... if you're going for a job where you're running a department or you're -- where you're actually handling money.


ROMANS: It's much less -- much less the entry-level, rank-and- file jobs that they're doing this on.

VELSHI: OK, look, Christine's coming back to talk about this, so why don't you go to -- Christine, are you collecting these on your Facebook page?

ROMANS: I am. I am.

VELSHI: All right. So, go to Christine's Facebook page, Christine Romans's, or mine, AliVelshiCNN. We're going to check on this in another hour. The other thing I want to talk to you about when we come back, Christine, is the fact that so many times credit reports aren't accurate.


VELSHI: So if you're subject to this, at least check your credit report.


VELSHI: Log in on Facebook. You can always see Christine and me on weekends, Saturday at 1 p.m., Sunday at 3 p.m. Eastern, on "YOUR $$$$$."

All right. Let me give you a check of the top stories we're covering right now.

We call it recall redux. Federal safety officials say they've gotten ten -- ten complaints, I'm sorry, of sudden acceleration from Toyota drivers whose vehicles have already been repaired under the recent recall. Toyota says it's aware of the claims. The National Highway Traffic Safety Administration is reaching out to the people making the complaints.

A new chairman is taking over one of the most powerful committees in Congress. Democrat Sander Levin will be the acting chief of the House Ways and Means Committee. That's the committee in charge of crafting all tax legislation. New York's Charles Rangel stepped -- stepped aside as chairman yesterday because of an ethics investigation.

And a German court has convicted four men of plotting to attack U.S. targets and U.S. troops inside Germany. The two Germans and two Turks once trained in terror camps along the border between Pakistan and Afghanistan. They'd already begun making -- mixing explosive materials when they were arrested back in 2007.

All right. Hollywood goes to war. You've seen it in many movies over the last year, and the Pentagon is not happy about it. We'll tell you why when we come back.


VELSHI: All right. Every day, every week toward the beginning of week I just, in a chummy fashion, tell Chad what my plans are for the coming weekend, which always involve travel, and somehow the weather always seems to be headed to where I'm going.

CHAD MYERS, CNN CORRESPONDENT: I don't -- yes, I don't understand that.


MYERS: You're like Pigpen with that cloud.

VELSHI: Totally right. That's exactly right. I told you I'm going to Florida.


VELSHI: I'm not going northeast this week. I'm going Florida.

MYERS: And there are people in West Palm Beach that have signs on the beach that say, "Go away, Ali."


MYERS: Right. Because this...

VELSHI: Because I'm bringing it.

MYERS: It's going to be 32 degrees down there tonight. Freeze warning in effect. Now, that doesn't mean everywhere is going to get below 32, and certainly in the afternoon, it gets back up to 70.

But the air is drying up. The air won't move around very much. There will be frost, and there will be freezing. If you have tomatoes that are already growing, if you have plants that aren't going to do very well at 31 degrees, get them inside.

But you're not going out to the west...

VELSHI: Right.

MYERS: ... which is now clearing up.


MYERS: The snow is gone.

VELSHI: Good snow in the mountains, though. Yes.

MYERS: It is there. It is there for skiing.


MYERS: So at least the driving-through-snow is gone.


MYERS: So that's great news. The snow does get into Summit County and into Salt Lake City and all the other places on The Benches, too. So great skiing in the west.

And it will be OK on Saturday and Sunday for you. It will be about 75.

VELSHI; I'll be inside. Thank you very much. I'm not telling you where I'm going.

All right. Chad Myers.

We're not going to talk to Chad about movies, because he's always too busy to go to the movies. But listen, if you've seen a couple of big blockbusters this year, "Avatar" or "The Hurt Locker," a lot of them portray military or military types. The Pentagon is not happy about this.

Barbara Starr has the story.


BARBARA STARR, CNN CORRESPONDENT (voice-over): Back in 1927, "Wings" won the first Oscar for best picture. It was the first time the military went to hand to the film industry. It's been in Hollywood ever since. LT. COL. GREGORY BISHOP, U.S. ARMY PUBLIC AFFAIRS: We're the only ones that have Apache helicopters. We're the only ones with tanks and trucks and all the stuff that we can bring.

UNIDENTIFIED MALE: Recon Jareen (ph) in the avatar body.

STARR: This year's best picture contenders "Avatar"...


STARR: ... and "The Hurt Locker" have military themes, but the Pentagon didn't assist in either production. In fact, this year, it's more like "Irreconcilable Differences."

Defense Secretary Robert Gates told aides he loved "The Hurt Locker," but Oscar-nominated screenwriter, Mark Boal, says the Pentagon didn't like some of the portrayal of the gritty reality of an Army bomb-disposal team in Iraq.

MARK BOAL, SCREENWRITER: They suggest. They say, "Hey, you know, what about this?"

And I basically said, you know, "I'd like to make the movie I want to make, and you guys are entitled to your point of view. But I'm going to go ahead and make it how I see it."

JAMES CAMERON, DIRECTOR: Crane and action.

STARR: "Avatar's" director, James Cameron, didn't ask the Pentagon for help with his fantasy about a Marine veteran's involvement in a conflict on a distant planet. Still, the movie came under criticism by some in the military.

In a published letter, the Marine's top spokesman criticized "Avatar" as a "sophomoric portrayal of military culture."

WOODY HARRELSON, ACTOR: So much notification. Definitely, positively, do not ask for freaking directions.

STARR: Another Oscar-nominated film did get Pentagon help. In "The Messenger," Woody Harrelson plays a soldier who notifies families when loved ones are killed. The Pentagon set up meetings with military personnel who performed those duties.

(on camera) It's another nondescript hallway here in the Pentagon. But walk with me. Open this door, and you begin to see where movie magic gets the once-over.

(voice-over) Phil Strub review scripts, deciding if a script has the glimmer of realism or fun he's looking for. He said yes to "Transformers: Revenge of the Fallen."

PHILIP STRUB, ENTERTAINMENT MEDIA DIRECTOR, DEFENSE DEPARTMENT: They filmed at a number of bases. They filmed on an aircraft carrier. They filmed on a destroyer. They filmed with Marines landing on a beach with a landing craft air cushion. They filmed with various types of aircraft, fighter aircraft, transport aircraft.

STARR (on camera): When the producers of "The Hurt Locker" decided to go their own way, they went to Jordan, where the royal family provided armored vehicles and locations that looked like Baghdad. Think of it as Hollywood in the Middle East.

Barbara Starr, CNN, the Pentagon.


VELSHI: And while we're talking about the Middle East, voting, at least early voting, is under way in Iraq's parliamentary elections. We've got an exclusive conversation with the Iraqi prime minister, Nuri al Maliki, and an update on some violence there. Stay with us. (COMMERCIAL BREAK)

VELSHI: Early voting in Iraq is under way. Let me just tell you what's at stake in the elections in Iraq right now.

Three hundred and twenty-five seats in the Iraqi parliament are up for grabs. More than 6,000 candidates are running for these seats. These candidates don't have their names next to where they're running. They're actually numbered.

There are 86 political entities. We say that because some of them are not actually parties. Eighty-six political entities competing. Eighteen point nine million registered voters. And 10,000, approximately 10,000 polling centers are open for voting.

Now early voting, the people who can vote today are Iraqi army and security personnel, detainees, hospital staff, and patients.

Now, Arwa Damon is in Baghdad for us. She's covering this very carefully. She's had a conversation with the prime minister. Also, we've had a lot of violence leading up to these elections.

Arwa, good to see you. Tell us what the situation is now and a bit about your conversation with the prime minister.


It was really a very difficult day here in Baghdad, as the Iraqi security forces headed out to cast their votes. There were three attacks against them.

The first was a roadside bomb that struck a few hundred feet away from one of the polling centers. That ended up killing five civilians that live in the area.

The other two attacks, perhaps even more disturbing, because this is exactly what the Iraqi security forces have been trying to prevent, and that is suicide bombers. In two of these cases, separate incidences, suicide bombers walked into groups of Iraqi security forces, gathering, assembling, to try to cast their votes, killing a total of seven of them. And these attacks have really resonated throughout the capital, in fact, throughout the entire country, because if the Iraqi security forces cannot keep themselves safe, then how are they expected to keep the population safe at such a critical time, Ali?

VELSHI: Now, you have had a conversation with the prime minister. You've got some of that you can -- that you can tell us about. First of all, tell us what you were talking to him about. And then let's listen to some of that.

DAMON: That's right. There were a number of issues that we did bring up with prime minister Nouri al-Maliki. Of course, at the forefront of all of that is violence. Because there aren't just concerns about pre-election violence, but about post-election violence as well and how that all plays out.

That, of course, has a direct impact as to whether or not the U.S. can meet its deadline to draw down its own forces here in Iraq. So, we asked the prime minister, under what circumstances would he consider asking the U.S. to extend any of its deadlines.


NURI AL-MALIKI, IRAQI PRIME MINISTER (through translator): It depends on the future on whether the established Iraqi army and police would be enough or not. So, this issue is depending on the development of the circumstances and regulated by the strategic framework agreement between the United States and Iraq.

DAMON: So, just to clarify, if the situation dictated it, you would be willing to have U.S. forces extend their stay in Iraq?

AL-MALIKI (through translator): Absolutely.


DAMON: Now, Ali, this is something of a departure from the rhetoric that we have in the past been hearing from the prime minister, whereby which he had been insisting that the Iraqi security forces would be ready to take on the roll to the full capacity of that role to try to secure this country. And, again, we cannot emphasize just how critical this post-election period is going to be, because by all means, the political bloc that ends up gaining the majority of the votes, it is going to be up to them to try to determine who is going to govern Iraq in the future.

We are expecting all sorts of infighting after that. The threat by some insurgent groups who are saying if the government that if the government that emerges in their perspective is as sectarian as they view this one to be, well, they say there are going to be more attacks.

VELSHI: All right, Arwa, you'll stay on top of it for us and we'll check in with you. Arwa Damon in Baghdad.

All right. We were talking at the top of the show about cuts at the top of the show, state cuts to education. Well, there are a lot of state cuts to health care, too, and a large population of Americans who you might not thinks of uninsured because they are covered by government programs, by state government programs. Well, they're losing their insurance as states cut back. We've got a story of one of them when we come back.


VELSHI: All right. Top stories that we're following right now. In Chile, the aftershocks keep coming after the massive earthquake there. New tremors hit this morning in regions that are already devastated. Chile's president also toured some of the damaged areas. The death toll from Saturday's earthquake now stands at 802 people.

In Washington, the head of Citigroup tells taxpayers, thanks for the bailout. CEO Vikram Pandit testified before the Congressional Oversight Panel, and he said Citigroup is much healthier and fundamentally different than when it was bailed out. The company took more than $45 billion in aid and has now repaid $20 billion.

And across the nation today, protests over education and budget cuts and tuition hikes at state colleges and universities. A blog called Student Activism lists more than 120 event going on in 33 states. Much of this is over cuts to state-funded colleges and universities. Most protests are happening on campuses. Some, though, are at state capitals.

All right, we've been talking about health care cuts. One of the things we want to discuss is how this is affecting people who are on the margins, so most Americans are -- are insured, or many Americans are insured, but many people -- let's just show you this.

Of the population of people who are not elderly -- the reason we saw nonelderly, is because as you know, elderly people fall into other government-sponsored insurance areas. But of that nonelderly population, in 2008, 60 percent were employed -- were insured by their employers, were insured by some sort of employer-sponsored health care program. Another five percent were insured by private, nongroup -- what they call nongroup insurance, you know, private insurance, small businesses, things like that. Seventeen percent of the nonelderly population is uninsured.

But about 18 percent -- so about the same number, are insured by public insurance. Medicaid or other state programs that insure them. Now, the danger is that as states fall under these -- these budget pressures that they're under -- fewer people paying taxes, fewer businesses in place, property values going down -- a lot of those people under government-sponsored programs, are slipping into the -- into the ranks of the uninsured entirely. Well, one of our all- platform journalists, Chris Welsh, took a look at this situation in St. Paul.


PETER JANKAUSKAS, LOSING GOVERNMENT INSURANCE: I don't know what else to do, I mean, there's nowhere you can go. I don't have any family or anything, so I don't know where else to go.

CHRIS WELSH, CNN ALL-PLATFORM JOURNALIST: That is Peter Jankauskas. He lost a job and his home. He lives with diabetes, but on April 1st, he'll also be without health care. That's because Minnesota governor Tim Pawlenty has cut the state's insurance program for the poorest individuals.

I sat down with Peter and a man named Arnold Hemmins here at this homeless resource center. Both men used the state's general assistance medical care or GMAC. Arnold has trouble walking. It's the reason he's jobless.

ARNOLD HEMMONS, ON STATE HEALTH CARE: All these faces out here, which are not important to the world, but they're important people. And they'll be disappearing fast if they don't have some kind of medical help.

LARRY JACOBS, UNIVERSITY OF MINNESOTA: The folks on GMAC are the folks living on the streets. They're the folks with severe mental illness, they cannot take care of themselves.

WELSH: They are caught in the middle of a political gridlock where ideology seems to trump solutions.

Let's walk through this. Each month, GMAC serves about 35,000 people, and all of them make less than $8,000 a year. Supporters say if this program ends, these people will have nowhere to go, except for right here, to pricey emergency rooms like this one, for even the most basic of care. Minnesota's hospitals say they'd end up absorbing those costs, and that would lead to a reduction in hospital services.

But this is where the decisions are being made. The governor's office says given the state's budget deficit, they had no choice.

BRIAN MCLUNG, GOVERNOR'S OFFICE: We're just simply not able to afford a health care program that's growing at 36 percent from one budget cycle to the next, people's incomes are not going up 36 percent.

WELSH: The governor says most people who were on GMAC will be enrolled in a different state insurance program. However, that's one that includes monthly premiums and some co-pays.

JANKAUSKAS: It would be, like, $3 a prescription, to most people they would say, oh, that's not that much, but, yes, if you don't have much, that's -- you know, it's a lot.

WELSH: Democrats have taken the lead on creating a temporary replacement program, one that would cut its costs but ultimately keep the program intact until a more permanent solution can be crafted. The bill made it through the legislature with substantial bipartisan support, but the Governor Tim Pawlenty, a Republican, vetoed. Now those Republicans who supported the bill say they won't vote for it again if it means overriding their governor.

JACOBS: It's not good. This is not the way things should work. WELSH: In St. Paul, Minnesota, Chris Welsh, CNN.


VELSHI: All right. A great story on how the health care coverage situation is playing out in different parts of the country. One of the things you'll be concerned about is the cost. Yesterday we heard President Pbama talk about the fact that premiums will go down for a lot of people and that this program that he wants to pass will, in the end, save money.

Let's take a look at this as we get into the homestretch with health care reform,'s Jean Sahadi, the expert on this is standing by. She'll make sense of it for us when we come back on the other side of the break. Stay with us.


VELSHI: All right. I'm going to move that we strike the phrase "simple majority" from any other further discussion on health care reform, because there's nothing simple about the prospect of lining up Democratic votes to, a, pass the Senate health care bill in the house and then, b, it goes from the Senate to the House, and then, b, pass President Obama's changes to the bill in both the House and the Senate. And, by the way, he wants it done by Easter.

The president has filled his afternoon with meetings in the White House with Democratic House members representing all manner of caucuses and constituencies. Why? Because they need votes to pass this in the house. News cameras are not the allowed in, but I guarantee you they are talking mostly about costs. The bottom line. What the president didn't talk that much about in his presentation yesterday.

But I know somebody who knows all about the costs of health care. Jeanne Sahadi, senior writer at, has been breaking down the numbers for about as long -- Jeanne Sahadi's been working on health care costs sings I had hair, so she knows more about it than anyone I know.

Jeanne, welcome. I want to just play you some of what President Obama said yesterday, because I want to talk about this. Let's listen to that quote.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is absolutely true that all of this will cost some money. About $100 billion per year. But most of this comes from the nearly $2 trillion a year that America already spends on health care, but a lot of it is not spent wisely. A lot of that money is being wasted or spent badly.

So, within this plan, we're going to make sure that the dollars we spend go towards making insurance more affordable and more secure.

(END VIDEO CLIP) VELSHI: Jeanne, you and I have e-mailed about this extensively, about whether or not the president's proposal, and the thing he talked about yesterday, is going to be more expensive or cheaper than doing nothing or more expensive or cheaper than other proposals. Just tell me what you know, because I don't even know enough to know what question to ask you, you're so immersed in this.

JEANNE SAHADI, CNNMONEY.COM: Right. Well, the White House says the president's proposal would cost about $950 billion or a trillion dollars a year and it would reduce the deficit by $10 billion and by a trillion over 20. That's good. Hopefully, it will. We don't know, because the CBO hasn't actually scored the president's proposal.

VELSHI: The CBO is the Congressional Budget Office, they are said to be the nonpartisan group that looks at these bills and gives us cost estimates.

SAHADI: They're the arbiters, yes. And the president's proposal is based on the Senate bill which the CBO did score, and the president's numbers are in the ballpark of the Senate's numbers.

However, because the -- the president has proposed changes, we don't really know what the interactive effects are going to be with the Senate bill and what he would like to change about it, and that can make a difference in costs. Maybe it's a big difference. Maybe it's a small difference. We don't know yet. Presumably, those changes will be in the reconciliation bill, which we also don't know fully what will be in it yet, and it hasn't gone to the CBO yet.

VELSHI: When you tell me you don't know, I know that we don't really know, because you study this so closely. There are a couple of issues. We don't know what the bill will cost. We don't know whether the savings are -- the president talks about how it comes out of the $2 trillion that America spends on health care, but we don't know where it comes from and how much will be paid for by increased or decreased insurance premiums.

SAHADI: I think he's saying it will come from the $2 trillion. There are about a half a billion dollars that is coming from various cuts and efficiencies that the bill is preparing for Medicare and other sort of federal spending on health care.

There is a lot of waste, fraud, and abuse that could be cut down. Both parties agree on that, and on top of that they want it to accomplish the lowering of health costs over time and they've got a lot of experimental programs in there that would basically be delivery system reforms and other efficiencies in the system. So, hopefully those will all work out.

However, this is where the cost estimates are very conditional. Even if the -- the CBO comes out and gives the exact same numbers that they gave for the Senate bill, we still don't know if that's true. Not because the CBO is necessarily wrong, but because the realizing of those numbers will depend a lot on political will. Will the lawmakers actually stick to the laws that they are writing. Some people are saying some of the proposals are not very politically viable, especially when you're pushing some of these change out a number of years, you don't know if the Congress in a few years will actually have the will to enact what's there. Because some of them are tough choices.

VELSHI: And the cost of insurance still remains something that's hard to know. The president keeps maintaining that we can't offer -- we can't tell insurance companies not to cover people with pre- existing conditions unless they have enough clients to make that worthwhile, so we don't really know how the -- how the math on that's going to work, either.

SAHADI: Right. We have some sense of how the averages might work out, but I should say, you know, when the CBO says on average person X's premium will go down, that mean person Y's premium might go up a little bit or it certainly won't go down as much as person X's. To me, that is still a big question. The CBO's report on premiums, which came out around the same time as the Senate bill, is very, very, very conditional.


SAHADI: So, I do think the people that benefit the most from the bill, though, are people that are buying insurance on their own or who are not because they can't afford it and who would qualify for subsidies under this. For them this is a really great deal, absolutely. And there's a social good that's accomplished by insuring people. And presumably there's also a cost benefit, because it is costly not to have 45 million or in that ballpark.

VELSHI: Right. Because they use the emergency rooms and things like that for health care.

SAHADI: Right.

VELSHI: OK. Jeanne Sahadi, thank you. Great to talk to you, as always. Jeanne Sahadi is a senior writer at If there's anything you need to know about the cost of health care, look up her stuff on

All right, continuing on this topic. TEA party activists are turning up the heat on Capitol Hill during this final push on health care. We're going to talk to Mark ScoTEA, there he is. He's the founder of the Memphis TEA party. We're going to get his take on President Obama's warning, or threat, depending how you want to look at it, that he is getting health care through with or without anybody's help.


VELSHI: All right. I don't think I really need to tell you about the TEA party, but let's take this opportunity to take you inside of the TEA party movement for a moment. Nearly 1,200 or maybe 1,200 TEA party chapters nationwide, but not nationwide, but it is TEA party chapters nationwide and that is incredible.

Let's look at what the TEA party is opposed to, which is the clearer part of the development of this movement. They are opposed to deficit spending. The government spending more money than it brings in. They are opposed to raising that money through higher taxes. They are opposed to government-run health care.

So, with that in mind, let's talk about what has happened with the president. Now, on March the 29th -- 27th, the TEA party has been doing these cross-country bus trips. I have been actually at some of the stops they have gone to. On March 27th, they are starting in Searchlight, Nevada which is the hometown of Senate majority leader Harry Reid for I think two weeks. And they are going to ride around the country hosting rallies and talking to people, ending up in D.C. And that is two weeks. It will end up on Tax Day in D.C., April 15th, and they're going to be talking to people about health care and about all of those things.

But the problem is that the president wants this health care thing done before that. Let's talk to Mark SKODA. I last talked to him at the TEA party convention and he is the founder and chairman of the Memphis TEA party. Mark, it's good to have you on the show.

MARK SKODA, PRESIDENT/CHAIRMAN, MEMPHIS TEA PARTY: It's great to be back. Thanks so very much.

VELSHI: I hope I didn't misrepresent anything. Was that a generally accurate overview?

SKODA: Yes, I think so. We talk about first principals of fiscal responsibility, lower taxes, less government, state's rights and national security.

VELSHI: OK. We got the gist of it?

SKODA: You bet.

VELSHI: And the president in the speech yesterday was very clear, and he tried to involve some Republican principles in his health care proposal, but he says that that the time has come to vote on this thing. He will use reconciliation if he has to and getting it through with or without TEA party support. I have since seen press releases by various participants in the TEA party movement saying that you are ready to dig in and take a stand against this.

SKODA: Yes, indeed. As we all know, first of all, he wants to use the reconciliation to pass this one-sixth takeover of the health care in our economy, and tonight, we have a nationwide conference call formed And we're going to begin initiating beginning next Tuesday for the two-week period following next Tuesday, people from various districts all around the country speak to their legislators who are currently wavering in the House. We believe we can beat this legislation.

VELSHI: Tell me specifically what that means? Are you getting people to phone their Congressman, going out to rallies -- what does that mean?

SKODA: Well, just as the Web site says, take the town hall to Washington. We're literally going to have people go to Washington and meet with the legislators and tell them why it is a bad bill. Certainly, they're not listening to us. I mean, in your own CNN/Opinion poll, 73 percent of the people are opposed to this legislation, 48 percent say do nothing, and 25 percent say to start from the beginning. So, we understand that the president is strictly not listening to us. He did not listen to us when we came down a million and a half people in September, and he is not listening now.

VELSHI: Let me ask you about that poll. When you say to start again to those who support the legislation, you actually beat those who are opposed to it. So, that means half of the country may want health care reform legislation?

SKODA: Well, in the poll as you know, there is a breakdown, those folks who embraced to do something, in other words -- we agree with health care reform. I mean, we agree with tort reform and across state bidding and we agree for insurance companies to sell anywhere they want. We agree with the whole idea of pre-existing conditions. There not an issue of disagreement there.

It's how you do that. And you don't need secondary bureaucracies to be created a trillion-dollar budget. These can be done incrementally, legislatively we can begin to assess the effects. The president himself has said there is half a trillion of waste and fraud. Go find it. Show us that you can do that, and then let's evaluate these other actions as well.

VELSHI: All right, Mark, well, if the country has learned anything, it's to pay a little bit attention to you guys. So stay right where you are. When we come back from the break, we can talk about what you are planning to do to get some of the changes made, and how you are going to get them done. Mark SKODA is the chairman and founding member of the Memphis TEA party. We're going to come right back after this break.