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State of the Union

Making It in America

Aired July 03, 2011 - 09:00   ET

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

CANDY CROWLEY, HOST: On a uniquely American holiday weekend, a look at the American dream: a steady job, a home of your own, a better life for your kids, a secure retirement for you. The reality of today's struggling economy threatens it all. Is the American dream fading?

Today, a State of the Union special. "Making it in America" with AOL co-founder Steve Case, housing secretary Shaun Donovan, educator Jeffrey Canada, and finance expert Suze Orman, and entrepreneur Russell Simmons. But first Senator John McCain spending the Fourth with the troops in Afghanistan.

I'm Candy Crowley. And this is State of the Union.

Minutes ago we were joined from Kabul by the ranking Republican on the Senate armed services committee, Senator John McCain.

(BEGIN VIDEOTAPE)

CROWLEY: Senator, McCain, I know that you have been fearful that the president's plans to withdraw 33,000 troops by September of next year is risky both to the troops and to the advances that have been made on the ground. Have you seen or heard anything during your visit there that causes you to rethink that?

MCCAIN: No, basically what I have seen and heard here, both from Afghans as well as a number of Americans is that it is an unnecessary risk, it's not recommended by any of the military. And I hope that it will work out, but it certainly deprives us of the necessary troops that we need for the second fighting season.

CROWLEY: Lieutenant General John Allen, as you know, is the nominee to be the U.S. commander in Afghanistan. He was testifying on Capitol Hill this week. And I wanted to play you part of what he said and basically his position is he supports the president's withdrawal plan. Here is a little bit of what he said.

LT. GEN. JOHN ALLEN, NOMINEE, COMMANDER U.S. FORCES AFGHANISTAN: This reality sends an important message of commitment to the Afghan people as well as a sense of urgency that Afghans must take more responsibility for their security.

CROWLEY: So you have said to follow the lead of the commanders on the ground this is the soon-to-be commander on the ground. Shouldn't that make you feel a little better. He thinks this can work?

MCCAIN: Candy, I hope that it will work. Most people would tell you that it's an unnecessary risk. I fully expect that General Allen and others will salute and carry out their mission the best that they can. But the fact is there is no recommendation by any military person to have this early withdrawal, and it's an unnecessary risk. Our allies are already following suit by announcing withdrawals.

But most important, we are told that in the villages that the Afghans are now wondering if we are leaving or not, and that can undermined the whole effort and sacrifice that has been made ever since this important surge began.

CROWLEY: Chairman Mike Rogers of the Intelligence Committee on the House side was quite blunt with me last week and he said he thought that the president did this particular troop withdrawal with the timing that it has for purely domestic political reasons. Do you agree with that?

MCCAIN: No, I cannot accuse the president of that, Candy. I do say that the president shouldn't have announced when he did in 2009 that we would be withdrawing troops in 2011. He didn't give them the full compliment they needed. It was about 10,000 short, which then necessitated a second fighting season.

But look, I question whether this was the right decision or not, but I can't question the president's patriotism.

CROWLEY: Let me ask you about, there was an explosion at a hotel in Kabul this week. The Haqqani Network has taken credit for it, if that's the word. They are associated with the Taliban, at the same time we know the U.S. is reaching out to the Taliban for possible peace talks in the future. Do you see any signs the Taliban is ready to talk peace?

MCCAIN: There has been no signs whatsoever. When the Taliban are ready to talk peace it will be when they are convinced that they can't achieve their goals on the battlefield. Now we have had enormous success over the past year and I should have mentioned that earlier in our conversation, and we have taken out a lot of the mid- level Taliban that are operating in Afghanistan.

One of our big problems is of course Pakistan and a lot of the leadership resides in Pakistan. And we are going to have to have a realistic assessment of the true assessment in Pakistan, because there's no doubt that there is connections between ISI and the Haqqani Network who are responsible not only for the hotel tragedy there, but also for the attacks on Americans and our allies. And that's not acceptable.

CROWLEY: And to Libya now. We have seen in the Middle East and elsewhere that often when there is the removal of a leader that chaos ensues. We certainly saw that in Iraq, to a certain extent we're still seeing it a little bit in Egypt. Do you think the U.S. and Northern African countries have any kind of plan on what would happen and what they would do about likely chaos is Moammar Gadhafi should leave?

The man has chemical weapons. He has ground to air missiles. All of those, as you know, could fall into the wrong hands. What is the U.S. plan here? MCCAIN: I think the U.S. plan there is to provide assistance and do the things that, in fact, I would have recognized the transition national council a long time ago as a legitimate voice of the Libyan people.

But it's a larger impact on the European allies. And I would give a lot of responsibility to them, the Italians and French and others.

But, Candy, this notion that we should fear who comes after or what comes after Gadhafi ignores that if Gadhafi stays in power, it is then a direct threat to our national security. He promised that. We kept the people from Benghazi from suffering a slaughter, and this -- this guy has the blood of Americans on his hands. He's committed acts of terror, and he certainly is committed to committing more of those if he is able to remain in power.

This thing could have been over a long time ago if we acted decisively with the use of American air power, and tragically, hundreds if not thousands of young people have been wounded and killed because this conflict has lasted so long because we failed to use American air assets.

CROWLEY: let me bring you back home to the domestic problem that is hanging up congress at this point, and that is increasing the debt ceiling and the comparable part to this puzzle, which is lowering the U.S. trade -- the U.S. deficit, sorry.

Would you in the spirit of compromise, would you, Senator John McCain, not speaking for the Republican Party, could you see your way clear to voting for some sort of tax increase, whether it's closing a loophole of oil companies or charging those who have private jets? What would be so wrong with that?

MCCAIN: Well, I think that if we did those small things you're talking about, they would have very small impact. But the principle of not raising taxes is something that we campaigned on last November, and the results of the election was that the American people didn't want their taxes raised and they wanted us to cut spending.

CROWLEY: But what about compromise?

MCCAIN: I would argue that if we do otherwise -- well, you know, the American people, as the president describes it, administered a shellacking. They don't want compromise. They want us to balance the budget. They want us to stop mortgaging our children and our grandchildren's futures. And they don't think they need their taxes raised, and I don't either.

And I think that this catastrophe or short-term meltdown that we're facing is not nearly as bad as the meltdown we're facing unless we get our deficit under control. CROWLEY: No way no how would Senator John McCain vote for anything, a closing of a loophole or tax hike of any sort? MCCAIN: Candy, Jon Kyl was in negotiations as you know with the vice president. And he said there were certain revenue raisers in other areas that perhaps we could work on. But to somehow say that we're raise American's taxes, anybody's taxes I think is something that a principle that we promised the American people last year November and that we have to stick to.

CROWLEY: Could you share what sort of revenue raisers might be OK with you?

MCCAIN: No.

CROWLEY: You're no fun. Thank you very much, Senator John McCain, we appreciate your taking the time this morning.

MCCAIN: Thanks for having me on, Candy.

(END VIDEOTAPE)

CROWLEY: Up next, "Making it in America," our all-star line up on the American dream and how to save it.

(COMMERCIAL BREAK)

CROWLEY: We turn now to our special on the American dream, the opportunity to live well and prosper. No matter who you are or the specifics of your dream, it likely begins with a job. Where have all the good ones gone? Joining me, the co-founder of AOL and the chair of the Startup America Partnership, Steve Case.

Thank you so much for being here.

CASE: Great to be here.

CROWLEY: Let me just sort of give the overview I think of what people know about the job market. Private businesses are not creating enough jobs to make a major dent in unemployment, and there are not enough start-up companies going on-line to create enough jobs. And the main reason seems to be people aren't buying things. Is that pretty much where we are?

CASE: Overall that's true. Unemployment obviously at 9 percent. The number of new start-ups is down about 20 percent. People's optimism about creating companies is down as well. So that's something we need really to work on. The reason it's important is, if you look at the statistics, all the net jobs have been created by start-ups in the last 30 years. A Kauffman Foundation report says that 40 million jobs were created by these young, high-growth companies.

So we have the engine of entrepreneurship working. And we can create jobs and create tax revenue and make sure we're competitive in an increasingly competitive global world. And there are signs of that, and pockets are obviously examples of great companies that have been built over the last five or 10 years, but it's not spread as broadly throughout the nation, both in terms of sectors as well as regions. And that's the focus of the Startup America Partnership effort.

CROWLEY: And so what breaks this cycle, which it seems a bit of a chicken and an egg? And that is that people aren't going to hire until they see that what they have is going to sell. And people aren't going to buy until they know they've got a job that is secure?

CASE: Yes, sure. But ultimately it comes down to entrepreneurs with great ideas, the new products or services that will resonate. And there are clearly examples. Just down the street here, a company I'm involved with called LivingSocial hired 2,000 people in the last two years. They're in the social commerce space.

So there are examples of these companies that are growing rapidly, but they are more of the exceptions, not the rule. And there is a role of big business, there is a role small business, but the most important segment to focus on are these high-growth entrepreneurial companies.

CROWLEY: And what is the role of the government? Because I also read and hear a lot from businesses that we talk to, both existing and people thinking about it, is that they also worry about taxes that are too high and regulation that is too much. Is that a valid complaint?

CASE: It is a valid complaint. And I think one of the things that the government is looking at through this Jobs Council the president put in place is what do you do about regulation? Even the Small Business Administration in the last few months, the eight regional roundtables called to "Reducing Barriers," so what can be done to make sure that regulations don't slow the development of new companies and help them as they scale.

So there is work to be done on that front. And you do need to make sure you have got the right tax incentives to drive investment, whether it be early-stage investment or later-stage investment. There are also things the government needs to do regarding education and talent.

How do we make sure that our schools really are developing people with the right science and engineering backgrounds? And how particularly in the meantime that we be -- continue to be a magnet for high-skilled immigrants who want to start companies here? Immigration policy is very complicated. I know very sensitive for some, very emotional.

But the reality is these high-skilled immigrants are job-makers, not job-takers. In Silicon Valley, look at the technology companies, 25 percent of successful ones have been started by immigrants.

So we really need to make sure that we get the best and brightest, not just in our schools here and give them Ph.D.s, but when they graduate, we get them to stay here and start companies here, not start companies other places. CROWLEY: It's kind of a tough sell in the current environment, as you know. And while it may make perfect sense to you, if you are in a country where the unemployment rate is so high, people are saying, why are we allowing people who are -- immigrants who are not American citizens at this point to stay in and have all the opportunities? Why isn't the American workforce ready to do the sorts of things you're talking about?

CASE: Well, it's two parts to that. The first part, statistics show they are job creators, that 40 percent of the Fortune 500 were started either by immigrants or children of immigrants. So they are creating great companies. And we want them to create those companies here. If we send them off to other countries, they will create the companies there and that's where we're going to see the jobs and the economic growth. So that's a key part of it, making sure that you really are a magnet.

Meanwhile, we do need to do a better job of educating a workforce that's ready for this next generation of the economy.

CROWLEY: Where do you see in the long run -- is there a particular sector and is the answer just always high-tech? Is there a particular sector where the jobs are going to be?

CASE: Well, technology obviously is going to be important. But it's not just technology companies as standalone companies, a lot of the excitement is how you take the technology, and certainly us part of that. Take the Internet and apply it to more traditional industries to disrupt those industries and create new kinds of opportunities.

In the automobile industry, for example, our country has struggled for a couple of decades because of the rise of global competitors, but it's the leader in some businesses, one business I'm involved in called Zipcar in the car-sharing business. That's essentially using technology and the ubiquity of the Internet to transform how people use cars in cities.

So it's taking -- it's almost the second Internet revolution. The first Internet revolution was building the basic platform and getting people connected and getting them to understand why it's important. The second Internet revolution is applying...

CROWLEY: Using it.

CASE: ... that to other sectors, whether it be transportation or health care or energy or what have you, and there are a lot of exciting things happening.

CROWLEY: And finally, the president had a reputation for a while as being sort of an anti-business president, that business sort of saw him hostile particularly to big business. You are on at least two committees that I know, two councils that I know of at the White House. Can you tell me how you -- what you think the state of that relationship is? CASE: I think it's improving. And I would characterize myself as pretty independent. So I don't think of myself as a Democratic or a Republican, I just think of myself as an entrepreneurial American that's to contribute in a way.

But I do think early on the president was not engaged enough with the business community. And in the last year, it has gotten better.

CROWLEY: Just quickly, wave your magic wand, if there is one thing you could get the administration, Congress, to do that you think would improve the business climate, what would that be? CASE: I don't think there is one thing. We are going to come up in the fall with a road map we are going to present to the president in September, probably seven or eight things that are all important. I don't think there -- it would be nice if you could say, if you just do this one it's going to be kind of the easy fix, but it's going to take a mix of things related to tax incentives, fixing things around immigration, you know, reducing some of the regulation.

There is also a role for the president and Congress and others to celebrate the role that entrepreneurs play. They built this nation and they're going to move us forward, and we need to recognize that and celebrate that, not just in terms of putting policies in place to reduce barriers or to unleash more excitement and possibility, but also to thank them for the contribution they are making.

CROWLEY: Steve Case, thank you so much for joining us.

CASE: Thank you.

CROWLEY: We appreciate it.

For many Americans, owning their own home is the quintessential idea of the American dream. Up next, Housing Secretary Shaun Donovan.

(COMMERCIAL BREAK)

CROWLEY: You cannot talk about the American dream without talking housing. In a New York Times/CBS poll released just this week, 89 percent of Americans said owning a home is an important part of the American dream. But can they afford it?

Joining me now to discuss the state the of homeownership, Housing and Urban Development Secretary Shaun Donovan. Secretary Donovan, thank you so much for being here.

DONOVAN: Great to be with you, Candy.

CROWLEY: By the numbers, when you came into office with the president, when he nominated you, 844,000 homes roughly were in foreclosure. 1.3 million right now are in foreclosure, and it's down a bit. Only 36 percent of people at this point, according to polls, approve of the way this administration has handled the housing crisis. Is there something more you can do?

DONOVAN: Well first of all, Candy, we have to recognize, this is the most serious crisis we've had in housing since the depression. Housing prices have been dropping for 30 straight months when the president walked into the Oval Office, and they have stabilized, they've been about flat since the president came in.

So we've made a real difference. There are 5 million people who had their mortgages modified. As you said, foreclosures are coming down. They're down about down 40 percent since last year. So we are making progress. But, rightly, the American people recognize we are not where we need to be. We still have a ways to go.

And, in particular, beyond all the steps that we've taken, we now have tens of thousands of people getting modifications every month. We know that the services have to do a better job in helping people. That all the programs in the world aren't going to make a difference if banks aren't following through on delivering them.

CROWLEY: But don't you -- surely you can understand the banks going OK, we are going to have really strict criteria for who we are going to give a mortgage to. And now there is inside and outside the banking business, a push toward the 20 percent down payment, sort of the old-fashioned what your father told you, you know, 20 percent down payment. If you look at the average median price of a house, $22,000. That's $44,000 to buy a house, which says to me that part of the American dream, which is to own your own home, is out of reach to a whole lot of people.

DONOVAN: Well, look, we have to recognize first of all that we shouldn't go back to where we were that got us into the crisis. We had people using their houses like ATMs, we had no down payment mortgages, we had mortgages where the amount you owed went up, not down over time, those...

CROWLEY: 20 percent down payment, what do you think of that?

DONOVAN: Well, but we have to recognize and balance -- and this is, I think, your point is a good one. We can't over correct. We can't go so far in the other direction that we cut off home ownership for people who really can be successful homeowners. If you have a credit score that is good, if we know you can be a successful home owner i think we have to have ways to get people access to home ownership that are less than 20 percent down.

We can get back to the place where it's a good investment. And we will be able to make money over time.

CROWLEY: Because home ownership now is down 66 percent, I think of Americans own their own home, which has sort of gone down steadily since about 2005.

Do you think it is a departing of the American dream at this point, because a, you have sort of this horrible perfect storm going on, people don't believe that housing prices have actually bottomed out, the banks are getting stricter about what the qualifications are for it, and it no longer looks like a good investment?

DONOVAN: So, I think the key here is that whether you ask people -- you talked about the recent poll that showed that close to 90 percent of Americans still think it's part of the American dream. If you look at the evidence on what home ownership can mean, you know, people know that when you buy a home, you're not just buying a home, you're deciding where your kids go to school, you're figuring out how close you live to jobs, what access to transportation you have, all of those things are important in buying a home.

And the evidence shows that home ownership can help kids do better in school, help people be better neighbors, and so I think we have to get back to basics here, but we have to recognize that home ownership will continue to be an important part of the American dream. And we can't cut it off for folks who really can be successful homeowners.

CROWLEY: And finally, give me your take on the state of the housing market. Do you think it has bottomed out? If you have got the cash and the credit now, is it time to buy?

DONOVAN: I think the answer to that is yes, frankly. Housing is more affordable than it has been in a generation. If you look at most of the important indicators of where the housing market is going, they are improving. The number of people in default is declining, the number of people being foreclosed on is declining, home sales have been up six out of the last nine months. The one area that has been of biggest concern is home prices. And as foreclosures come down, as the so-called shadow inventory starts to decline, that will help prices start to turn up. And in fact last month...

CROWLEY: Do you think home prices have hit bottom, or are they going down further?

DONOVAN: I think it's very unlikely that we see a significant further decline. I think the real question is when will we start to see sustainable increases? Some think it will be as early as the end of the summer or this fall, others think it will be next year. And I wish I had a crystal ball on that. My sense, though, is in the long run it's a good time to buy, whether it's five months away or a year away, to see sustainable increases.

I think it's a good time long-time to become a homeowner because it's so affordable today compared to where it has been for generations.

CROWLEY: Housing Secretary thank you for dropping by.

DONOVAN: Good to see you.

CROWLEY: When we come back, one of the leaders in innovating education, Jeffrey Canada.

(COMMERCIAL BREAK)

CROWLEY: Everyone who loves a child wants his or her life to be better still than their own. That dream starts with a solid education. I visited the Harlem Children's Zone, a 97-block area of New York that provides charter school options and a variety of programs for the children and parents with the goal of supporting those children from birth into college. I spoke to the CEO of the zone, Geoffrey Canada, a man deeply troubled by the state of education.

CROWLEY: So, bottom-line question, is our educational system working?

CANADA: Yeah, so, you know, a number of us who are involved in education are really concerned, because it seems like this generation of students in America are going to have a really different life trajectory than lots of their parents. We are having huge numbers of our young people not get a quality education that's going to lead them to a better job and a better lifestyle.

It is now, I think, very commonplace for young people to not want to leave home because they're not going to be able to afford the kind of lifestyle that they grew up with in their parents' home. And I think we have failed our young people; we have failed our kids; we haven't raised the bar; we haven't demanded excellence in our schools so that our kids coming out are able really to take the much more sophisticated jobs which require higher skill levels than kids have today.

CROWLEY: Is there a way to winnow it down to a single thing that you think has been the most damaging to make the educational system today worse than when you and I were coming up in it?

CANADA: Well, it's the failure to innovate. It is the failure to innovate. What we've done is we've kept the same system of education since essentially I first went to school back 54 years ago.

The way school looked, the way school taught kids, the length of the school day, the length of the school year is actually basically the same, even though we know our young people are facing a much more challenging environment. So we've got to allow schools to innovate, and instead we fight every innovation.

CROWLEY: Wave your magic wand and tell me what you most want to see. Is it an 11-month school year, longer school days? Is it -- is it more parental involvement?

I mean, is there some thing that you just, if I could have this, I could really...

CANADA: I would like to treat our teachers and our school leaders like the professionals they are. In every other profession, you get trained and then you figure out what you need to do to be successful.

We run schools like factories, where we tell folks how many minutes you have for class time, how many minutes you have to have off. We say you can do these kind of things and you can't, that you must shut down these schools across America in June, even though they're needing to be open in July and August. This is foolishness. This is no way to run an education system.

So I think that allowing the professionals to do what they feel like is necessary and getting out of their way and getting the rules out of their way and getting the unions out of their way so that we can figure out what do these kids need? Let's do that. I think that would be a revolution in education.

CROWLEY: We're now seeing in polls more and more people -- still the majority of people believe that college education is worth it. But it's decreasing. The number of people who believe a college education is worth the cost is decreasing. Speak to that.

CANADA: Well, you know what, we've got some fundamental changes going on in our economy right now. And, you know, if you look at the class of 2009, 22 percent of that group of college graduates were unemployed. So that's, sort of, never happened before in America. And another 22 percent took jobs that didn't require a college degree.

So there's some idea that college is going to pay off immediately. Now, that's changed somewhat, and I think, as the economy improves, we'll see some improvement in that. But what's clear to me is this. Those low-wage, low-skill jobs that were available when I was a kid -- they are gone and they are not coming back.

And we've got to prepare this next generation for much more sophisticated kinds of jobs that they are going to hold. And they're probably going to hold multiple jobs. And to me, that means a college education. And I don't see any way around that.

CROWLEY: And does it mean -- you were very well-educated in one of the Ivy League schools. Does it mean an Ivy League school education? Can a community college compete with the likes of a Harvard or a -- because it seems to me that we are increasingly having a -- a two-tier educational system?

CANADA: Well, I think you're seeing in -- at the college level, what you've seen in lots of our cities, which is you have some schools which are producing very high-level results for its students and other schools which are really mediocre. We've got to step it up across the board in our community colleges. But they are critical and essential because they can be the places where you can go in and learn a set of skills that you can immediately transfer those skills into a job. And so the science, the technology, which everybody is crying for, you can get those in community colleges, but we've got to make sure that those colleges are designed to help young people reach those skill levels.

So I think they are a key asset and one, right now, which is not delivering the best service for our kids.

CROWLEY: What do you think about the state of the American dream, as you would define it, and can it still be achieved?

CANADA: Look, I think we're really in a crisis right now. If you're in Detroit and you see block after block after block of what looks like an urban wasteland where people are feeling like, you know, no one cares and there's no hope, you recognize that education is the only answer.

And right now, we have not really kept pace with the need in this country. We haven't treated this as if it's a crisis and as if the future of our nation really rests on us getting this thing right.

So could we get it right? Absolutely, yes. There are examples all over America. And I think we have to do it. We can't wait another four to five years to get this right.

CROWLEY: Thank you so much for your time on the July fourth weekend. I appreciate it.

CANADA: Thank you. Thank you, Candy, for having me on this show.

CROWLEY: Up next, a critical look at America's financial security with Suze Orman.

(COMMERCIAL BREAK)

CROWLEY: Joining me now to talk about the struggles of saving for your children's future and your own, certified financial planner, Suze Orman, host of CNBC's the Suze Orman Show and author of "The Money Class: Learn to Create Your New American Dream."

Suze, thank you for joining us, because it's right up our alley here on the Fourth of July weekend. And let me ask you, has the American dream changed now when it comes to retirement? Let's start with that first.

ORMAN: Yeah. So it has changed. You know, before you used to hear people say all the time, I want to work until I'm 60. Maybe I'll retire when I am 62, and then start to collect Social Security. Now the probability and even the possibility, Candy, of them being able to retire at 59 1/2, 62, is nil. Most people are going to have to work, if they have a job, that's a whole other story, but they are going to have to work until they are 67 or 70, simply to be able to get by. So it's really, really, really sad that that American dream has changed dramatically by about seven years.

CROWLEY: And has it changed because of just economic conditions? Or has it changed because of demographic conditions? Because of those the big Baby Boomers coming up so you have fewer in the workforce? What's -- why has it changed?

ORMAN: No, it changed because of the economic conditions. Think about it. Most people bought a home. They had all this equity in their home. It was in their mind that when they retired they most likely would sell that home and downsize and be able to have some extra money, maybe $100,000, $200,000 extra to be able to live on. They don't have equity in their home anymore. Many of them owe more money on their home than their home is worth.

Then you take the stock market. Look at the stock market. They lost 10 years worth of growth -- 10 years worth of growth on their money. And while the stock market may have been doing well the past year or so they aren't anywhere close to being even to where they were just a few years ago even with them putting their money in.

Then look at the price of everything. Look at the price of gasoline. Look at the price of food. Look at what it costs them to actually live. They can't afford those expenses. And the list goes on and on. CROWLEY: And let me ask you one more question about retirement and that American dream, and that is if you are not quite so close to retirement but late say early 50s, late 40s, and what are you hearing, are you hearing talk of Social Security benefits perhaps changing, you're hearing talk of Medicare perhaps changing. Do you now need to save more, looking ahead thinking, you know what, these programs are not going last, so what you thought you might need to save you need to save above that?

ORMAN: And it's not only that, is your pension going to be there? Many of you work for companies that have pension plans that you have been counting on, and their pensions are totally underfunded. Are they going to give it to you, are they not? What is really going to happen there?

So that's what I'm talking about when I say that all of you need to learn how to create your new American dream. What is it that you want for yourself in retirement? And whatever that may be, you cannot count on the government anymore, you can not count on Social Security, you cannot count on Medicare, MedCal or Medicaid, so you have got to literally take your own future in your own hands.

So one of the best ways to do that is to, if you own a home, you better make sure that the mortgage on your home is paid off by the time that you no longer think that you are going to be employed.

Why?

Because that is your largest expense that you have. And you need a lot of money in a retirement account to generate the income to pay a mortgage, especially since retirement accounts in most cases are taxable to you.

So one of the best things you can do is if you own assets that cost you money to keep, and you want those assets such as a home, please make sure it's your number one priority, if you are going to stay in that house forever to pay down the mortgage on that home.

CROWLEY: Let me move you to children and the American dream that your children will live a better life than you do. And we ask this question in 2011, do you believe your kids will have a better life than you? Only 47 percent said yes, and that was 62 percent two years ago.

ORMAN: One key word here that is really destroying, believe it or not, the future potential of these kids is the word productivity. Now corporations have learned to be as productive without workers as they were with workers. Now you have technology that can replace many human beings, now you have outsourcing where many of these students would get jobs at places now that job is being fulfilled overseas.

So we are not replacing all of the things that we're losing with anything that really can take that place. So where are these kids going to be able to get jobs that pay them that kind of money when we don't need as many people any more to do the jobs we used to do. Trouble. Trouble. CROWLEY: Suze Orman, "The Money Class: Learn To Create Your New American Dream." You can get it almost anywhere, I would imagine. Suze Orman, I think it's been depressing but informative. Thanks very much.

ORMAN: Anytime.

CROWLEY: Up next, a check of today's top stories, and then one man who is living the American dream, businessman and author, Russell Simmons.

(COMMERCIAL BREAK) CROWLEY: Time for a check of today's top stories. Efforts are under way to clean up an oil spill in Montana. On Saturday, an Exxon Mobil pipeline spilled an undetermined amount of crude oil spilled into the Yellowstone River near Billings. Hundreds of residents have been evacuated from the region. And the cause of the leak is under investigation.

There is a new contender in the 2012 race for the White House. Michigan congressman, Thaddeus McCotter announced his candidacy Saturday at a rock festival outside Detroit. The guitar playing congressman is the 10th Republican and third member of the House to enter the 2012 race.

And closing arguments under way in the capital murder trial of Casey Anthony. She is charged with killing her young daughter in 2008. The jury is expected to start deliberations tonight. You can watch live coverage of the trial on our sister station, HLN.

Those are today's top stories. Up next, the American dream achieved, my conversation with entertainment mogul Russell Simmons.

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CROWLEY: Our next guest grew up in Queens. He says his first job was selling marijuana on the street corner. That was a long time ago. Russell Simmons is known as the godfather of hip-hop. He co- founded Def Jam Recordings. He's a fashion designer and launched a jewelry company. He has produced several TV shows and starred in his own reality series. He's a best-selling author and a philanthropist. His latest book is "Super Rich: A Guide to Having It All." In his New York offices, Simmons wanted to talk about a different kind of American dream. He calls it inner wealth.

(BEGIN VIDEOTAPE)

CROWLEY: I want to start out with your definition of the American dream. The ideal.

SIMMONS: Oh, my goodness, the ideal. Any dream is really realized when someone is really happy. I think that's the achievement of a happy state, a consciousness. That's it. I mean, we're all here just looking to be comfortable in our seat.

So that, I believe, is not only inherent in the definition of the American dream, but just any person looking for contentment.

CROWLEY: So when you -- growing up as -- here in Queens, right, you grew up?

SIMMONS: That's right.

CROWLEY: What did you aspire to?

SIMMONS: As a kid, you know, I didn't really have that many aspirations for big success. Certainly I may have had them or talked about them but I didn't really have as much faith in them.

You know, one thing happens, it gives you courage. Another thing, kids are hopeless, even in my community growing up, where there was a terrible heroin epidemic. But, you know, every so often someone finds just one stitch of luck, one little twist, that gives them enough courage to keep going.

And I think that's really what happened to me, I got a spark, I found music, I fell in love with music. The work became the prayer. Like every day I'd go there, and the melodies and the songs made me happy. CROWLEY: So what makes Russell Simmons go from where you came from to right now?

SIMMONS: Well, you know, there's really nothing that they could give you to really promote any happiness in you. And the work is the prayer, the results are something you have no control over.

The more we can let go of the need for results, the better we can do our job. When you're making a great record, you hear a melody. That melody is what makes you happy. Then you may think for one minute, I can't wait until my friends hear that record, right?

And then if you're thinking how much money you're going to make off the record, you're not doing a good job making the record. If your mind is on the money you're going to make from that record, you're really not making a good record.

So your mind has to be -- and it's so much as you could engage your focus, so much as you can -- you know, in something -- some single point, this is happiness.

CROWLEY: People are going to look at him and say, as they often do with someone who is quite wealthy, it's easy to say it's all about inner happiness when you have money.

SIMMONS: It's easy to say it when you don't have money, it's easy to say it when you do have money. It's easy to say it, period. Inner happiness is something that when you no access to nothing, sit and meditate on being content.

And when you have a whole lot of crap, it's harder sometimes. But still, you eventually learn to sit and meditate on emptiness. It is good to be content, to need for nothing. This is enlightenment. Every book tells you over and over again, this is why we go to work, you know, to try to not -- get rid of the neediness, right?

Neediness is the cause of suffering, there's no question.

CROWLEY: Russell Simmons, thank you.

SIMMONS: Thank you.

(END VIDEOTAPE)

CROWLEY: When we come back, lawmakers on Capitol Hill on what they see as the American dream.

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CROWLEY: We leave you with a last set of thoughts on the fundamentals of the American dream. Capitol Hill, we found out, remains full of dreamers.

(BEGIN VIDEOTAPE)

REP. BARNEY FRANK (D), MASSACHUSETTS: For me the American dream is the ability of people, no matter what their ethnicity, their religion, their background, their sexual orientation, to live up to their full potential.

SEN. MARCO RUBIO (R), FLORIDA: The American dream is more than just about people that made millions of dollars or own a jet airplane or yacht. It's about the hard-working people that service our lunch at restaurants or clean our offices at night who are working hard so that one day their kids can do all the things they themselves could not.

SEN. MARK WARNER (D), VIRGINIA: We can't guarantee everyone in America that they're going to be successful, but we sure as heck ought to be able to guarantee that everybody gets a fair shot.

SEN. RAND PAUL (R), KENTUCKY: It's not that we will have equal outcome. In fact, the American dream is that those who work harder and those who merit it will have unequal outcomes, that they will gain more of whatever the American dream is.

SEN. CLAIRE MCCASKILL (D), MISSOURI: The American dream means to me that a young girl who grew up going to public schools in a very modest household and who worked her way through college and law school someday has the incredible opportunity to be a United States senator.

(END VIDEOTAPE)

CROWLEY: You can watch all of today's interviews unedited on our Web site, cnn.com/sotu. Thank you so much for watching STATE OF THE UNION. I'm Candy Crowley in Washington. We hope you have a wonderful safe Fourth of July holiday.

Up next for our viewers here in the United States, "FAREED ZAKARIA: GPS."