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Countdown to Shutdown; Interview With Senator Johnny Isakson Of Georgia; Falling Grade; Political Football; Shaqramento Era Begins; Understanding Obamacare; Risks of Washington Dysfunction; Airline Fees Flying High; Can Your Cell Phone Bring Down a Plane?; A Space Vacation; Obamacare to Begin Enrollment in Exchanges; U.S. Government Faces Shutdown and Debt Ceiling Crisis; Study Looks at Electronic Device Use on Airplanes; Space Vacation
Aired September 29, 2013 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN HOST: Obamacare. It is the biggest change to your relationship with the government in your lifetime. But guess what? That government could be shut down say midnight Monday.
I'm Christine Romans. This is YOUR MONEY.
Yes, there is confusion surrounding the new healthcare law, but Congress is only adding to it. Let me cut through all the noise.
Fact, a government shutdown won't stop Obamacare. The law is funded through taxes, fees and mandatory spending. Shutting down the government might even speed up its implementation. That's according to the congressional research service.
Fact, the pseudo filibuster by Senator Ted Cruz whether you admire him or despise him. It was never going to stop Obamacare. The Republicans simply don't have the votes in the Senate. If they did there would still be a veto from the president.
Fact, Obamacare doesn't start on October 1st. This law has been on the books for more than three years. If you've had a mammogram or colonoscopy that didn't cost you a dime out of pocket, that's Obamacare. If you've got a kid who just graduated college and is still on your insurance, that's Obamacare.
Fact, with an undertaking this large, the biggest challenge to health care since the invention of Medicare, there will be surprises, both positive and negative. We don't know if the Affordable Care Act is going to destroy jobs or create them. We don't know if it's going to cost you personally more or less.
But we do know U.S. government will shut down on midnight Monday if no deal is struck. And in just three weeks, if Congress doesn't raise the debt ceiling, America could default on its obligations for the first time in history. The message from the market is clear, the Dow suffering five straight days of losses.
Republican Senator Johnny Isakson is the man we turn to in times like this. He has spearheaded efforts to get Republicans to sit down with the White House. He's a businessman. Most importantly at times like this, he is a grownup. He is an adult in the room.
Senator, you are no fan of Obamacare. You voted nearly 60 times to defund it, dismantle it, repeal it. But a government shutdown won't stop it.
So how far are Republicans willing to go, Senator?
SEN. JOHNNY ISAKSON (R), GEORGIA: Well, hopefully we'll come to our senses and won't shut the government down because you're exactly right. You don't shut down Obamacare by shutting down the government. But you do disrupt a very -- this fragile economy which is what you're seeing happen in the markets right now.
ROMANS: So tell me, what did your fellow Senate Republican Ted Cruz -- what do you think Senator Cruz accomplished this week over 21 crucial hours in this debate?
ISAKSON: You know, every member of the Senate has the same individual power that every other member has.
And our reputations as senators are an accumulation of how we use that power. So it remains to be seen how Mr. Cruz's 21-hour speech will matter or not. It did take away 21 hours from the debate towards this C.R., which was unfortunate. But we've got until midnight Monday night to make a decision.
One of two things probably will happen. Either a short-term C.R. to buy a few more days to negotiate, or in fact a shutdown, which would be wrong for the American people and wrong for the government.
ROMANS: This country does have a debt problem. And the Congressional Budget Office says America's debt is going to hit 100 percent, Senator, of GDP by the year 2038. But it's not Obamacare that's driving the debt, it's entitlements already in existence, like Medicare.
Is Obamacare the wrong target for Republicans here?
ISAKSON: Well, Obamacare is a very unpopular law with the American people. And we should make changes in it or defund it if we could. But, you know, legislative process is a matter of mathematics. And if four equals a majority, three equals zero and unfortunately we're in the minority right now. So we can't stop it.
But what we need to do is put pressure to negotiate the very best changes we possibly can.
ROMANS: All right. If this train keeps going down the track with or without a government shutdown, we've got another big hurdle here, a serious deadline. The Treasury Department says October 17th, sir, that's the day the United States may not have enough cash to pay its bill. Maybe 30 bucks left in the bank unless Congress raises the debt ceiling.
The president says threatening default on our obligations because of Obamacare amounts to blackmail. Listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Republicans do not like the law, they can go through the regular channels and processes to try to change it. That's why we have elections. So they can go through the normal processes and procedures of a democracy, but you do not threaten the full faith and credit of the United States of America.
(END VIDEO CLIP)
ROMANS: Senator, will the GOP demand a delay in Obamacare for individuals as a condition for raising the debt ceiling? I mean is your party willing to risk default because they hate Obamacare so much?
ISAKSON: Well, that remains to be seen. But I don't think default is a good idea. But I do beg to differ with the president.
The legislative process is all about negotiating. The last significant change to federal spending took place in August 2011, when we did raise the debt ceiling but in return we got the sequester which cut over 10 years, $1.2 trillion in discretionary spending. So I beg to differ with the president on his point on legislating, but other than that, we should not shut down the government.
ROMANS: Senator Isakson, thank you so much, and good luck to you. I'm ready for the day when we can talk about long-term solutions and not crisis, and crisis-to-crisis governing. I know that you are, too. Thank you, sir.
All right, speaking of crisis, the financial crisis isn't over. Not for JPMorgan anyway. CEO Jamie Dimon met with Attorney General Eric Holder this week. The bank is facing charges of $11 billion for its role in the 2008 collapse. JPMorgan is accused of selling toxic mortgages and hiding the risks.
For more stories that matter to YOUR MONEY, give me 60 seconds on the clock. It's "Money Time."
(BEGIN VIDEO CLIP)
ROMANS (voice-over): Illegal immigration is on the rise after falling during the recession. The attraction? Low wage jobs are being added. There is also optimism that Congress will eventually reform immigration to provide a pathway to citizenship.
More happy housing news. Home prices jumped 12.4 percent in July from a year ago. And even with rising mortgage rates, new home sales climbed 8 percent in August.
Apple hits a high, BlackBerry hits a low. Apple announced a record 9 million iPhone 5s and iPhone 5c sold in the first weekend. Apple stocks soared on the news. But BlackBerry shares won't be around much longer. The company is going private for $9 a share. Just five years ago, BlackBerry had more than half the smartphone market. Today, 2 percent.
Chrysler is going public. The American automaker filed for an IPO this week. The company has made quite a comeback since going bankrupt in 2009.
New French fries that might not make you fat. Burger King is now offering crinkle cut Satisfries. Forty percent less fat, 30 percent fewer calories than McDonald's fries. The catch? They are slightly pricier than the original.
(END VIDEO CLIP)
ROMANS: Forget next week or next year. Education Secretary Arne Duncan is focused on what governing by crisis means for an entire generation, including your kids.
(BEGIN VIDEO CLIP)
ARNE DUNCAN, EDUCATION SECRETARY: So while we're doing these cuts I worry about what China is doing, what India is doing, what Singapore is doing, what South Korea is doing.
(END VIDEO CLIP)
ROMANS: Find out what a government shutdown could cost your children. That's next.
(COMMERCIAL BREAK)
ROMANS: Deep spending cuts in education make the future for educating our kids uncertain at best. Districts are providing less per student funding for kindergarten to 12th grade than they did before the recession, often far less. U.S. high school students rank 31st in math, 23rd in science versus other developed countries. That's according to the highly regarded PISA rankings.
Since July 2008 more than 300,000 jobs in education have been cut. That's teachers, principals, assistants and support staff.
Secretary of Education Arne Duncan wants to raise teacher pay. He wants to train and hire more teachers. He wants to place an emphasis on math and science.
That all sounds great for our kids, right? But I asked him how he plans to accomplish this at a time of severe cuts and threats of a government shutdown just days away.
(BEGIN VIDEOTAPE)
DUNCAN: Well, unfortunately we've been through this before, obviously. So we are preparing for the worst. I really hope it won't happen. This is bad for children and bad for education and bad for the country way beyond us.
Washington is obviously very dysfunctional these days. But I hope there's enough common sense there that it won't come to a shutdown but we are preparing if we need to for that to happen.
ROMANS: So it will be furloughs then?
DUNCAN: It will be bad at many, many levels and furloughs being one piece of it. But there's no upside to the government shutting down way beyond education. No upside.
ROMANS: Sequester cutting Head Start spots. Department of Education facing a shutdown. Tell me about the political climate.
DUNCAN: Well, what's so sad to me is that this is not how other countries are managing their educational investment. They are investing more in early childhood, they're improving K-12, they're expanding access to higher ed. And as a nation, I worry about our economic competitiveness.
And our children are as smart, as talented as children anywhere in the world. I want to keep high wage, high skilled jobs in this country.
The only way to do that is to have an educated workforce. And while we are doing sequester, while we are doing these cuts, I worry about what China is doing, what India is doing, what Singapore is doing, what South Korea is doing. Those countries are committed to having a great, great educational system.
Right now, our country is struggling. And we're doing our children and ultimately our nation a grave disservice.
ROMANS: You'll hear that there's this skills gap. Companies, CEOs will complain about a skills gap. Academic research shows investing on the front end has kids better skills, better capabilities, better cognitive ability later on. Why aren't we investing more at the front end?
DUNCAN: Because politicians think short-term. They think about the next news cycle. They think about the next election. Early childhood investment is the best investment we as a country can make.
And the president and I are actually convinced of that. It's also the ultimate long-term investment, as you know. And you have folks who are a lot smarter than me, like Dr. Heckman who's a Nobel Prize winning economist, who talks about a 7:1 ROI.
For every dollar we invest, we as a country get back $7. Less teenage pregnancy, less dropouts, less crime, more high school graduates, more college graduates, more folks entering the world of work, you know, for your business audience, 7:1 ROI is pretty darn good.
Why don't we make that commitment as a country?
Today, the average child coming from a disadvantaged community starts kindergarten at 5 years old in the fall. They start kindergarten a year to 14 months behind.
Why are we constantly playing catch up? We have to get out of the catch up business and give our babies a chance to enter kindergarten ready to be successful.
(END VIDEOTAPE)
ROMANS: A lot of people say forget the old kindergarten through 12th grade model. We should start earlier. I call it crawl through 12, not K-12 because we need to be educating our kids well before they get to kindergarten.
Hopefully our children's future can make its way under Washington's agenda, an agenda, of course, that's jam-packed with threats to shut the government down and not pay our bills. That's some kind of role model, right?
Coming up, Shaquille O'Neal's rebound from these comments made in 2002.
(BEGIN VIDEO CLIP)
SHAQUILLE O'NEAL, SACRAMENTO KINGS MINORITY OWNER: We are not worried about the Sacramento Queens. Not at all.
ROMANS (voice-over): But now Shaq says king me.
But first, a 21-hour speech. A banana republic comparison. Heated comments to reporters. Does that sound more like politicians or coaches? We're going to play political football with John Berman in just a moment.
(COMMERCIAL BREAK)
ROMANS: There's a game being played in Washington this weekend. But we're not talking about the Redskins. They are visiting the Raiders.
John Berman here, he's going to make sense of all of this, right?
JOHN BERMAN, CNN HOST, EARLY START: Maybe.
(LAUGHTER)
BERMAN: Or maybe not. We'll have to see about that. So for example, this week a Democratic senator who once famously called Obamacare a train wreck now says...
(BEGIN VIDEO CLIP)
SEN. MAX BAUCUS (D), MONTANA: We all need to work together to make it work for families and businesses who depend on it instead of using it as a political football.
(END VIDEO CLIP)
BERMAN: Did somebody say football?
(BEGIN VIDEOTAPE)
OBAMA: This is the United States of America. We're not some banana republic.
BERMAN (voice-over): The pressure of the podium. This time of year it's a spotlight and often a frustration shared by politicians and football coaches alike.
BILL BELICHICK, HEAD COACH, NEW ENGLAND PATRIOTS: I'm moving forward. I'm moving on. I'm moving forward. I'm moving on.
BERMAN (voice-over): Moving on to midnight October 1st, the deadline to avoid a government shutdown, now centered around a 3 1/2-year battle over Obamacare.
SEN. TED CRUZ (R), TEXAS: I intend to speak in support of defunding Obamacare until I am no longer able to stand.
BERMAN (voice-over): Whether or not the government shuts down, Obamacare remains the law of the land.
UNIDENTIFIED REPORTER: Mike, why are you in such a bad mood?
MIKE DITKA, FORMER HEAD COACH, NEW ORLEANS SAINTS: What do you care? OK? If you were 2-7, you'd be in a bad mood, too. What's next?
BERMAN (voice-over): What's next? A seemingly endless supply of politicians insisting they understand the public criticisms and they are here to fix it.
REP. NANCY PELOSI (D), CALIFORNIA: This place is a mess. Let's get our house in order. We are legislators.
MIKE GUNDY, HEAD COACH, OKLAHOMA STATE COWBOYS: Come after me. I'm a man. I'm 40.
BERMAN (voice-over): And with the clock once again ticking towards a government shutdown, tensions are running high.
SEN. PATRICK LEAHY (D), VERMONT: They don't come up with one single idea how they might make it better.
DENNIS GREEN, FORMER HEAD COACH, ARIZONA CARDINALS: If you want to crowd them, then crowd (inaudible). But they are who we thought they were. And we let them off the hook.
BERMAN (voice-over): There have been 42 attempts in the House to delay, defund or repeal Obamacare.
SEN. HARRY REID (D), NEVADA: Any bill that defunds Obamacare is dead. Dead. It's a waste of time.
BERMAN (voice-over): Or is it?
HERM EDWARDS, FORMER HEAD COACH, NEW YORK JETS: You play to win the game.
REP. JOHN BOEHNER (R), HOUSE SPEAKER: Our goal here is to cut spending and to protect the American people from Obamacare. It's as simple as that.
EDWARDS: Hello?
(END VIDEOTAPE)
BERMAN: Yes.
ROMANS: Hello?
BERMAN: Hello. It is such a fun comparison. But maybe it doesn't go far enough, not unless we hear coaches at the podium this weekend reciting "Green Eggs and Ham" like Senator Ted Cruz did in the well at the Senate this week. I'll tell you, football coaches, we'll see if they have it in them to go in the way of congressmen.
ROMANS: They never would. They never would.
BERMAN: No, they have dignity.
(LAUGHTER)
ROMANS: John Berman, I love it. Political football indeed. Thank, John.
All right, it's the biggest business deal of the week, and we're not talking about the purchase price.
CNN's sports anchor Rachel Nichols has "The Score."
RACHEL NICHOLS, CNN'S SPORTS ANCHOR: Well, Christine, this is part of a larger trend. Star athletes don't just want to be coaches or broadcasters after they require. They want to buy into team ownership, too. And after some of today's players were making hundreds of millions of dollars more than their predecessors, that lane is open to them. Shaq, for one, is taking advantage.
(BEGIN VIDEOTAPE)
NICHOLS (voice-over): One of the NBA's smallest market franchises got a giant-sized boost this week when Shaquille O'Neal bought a minority ownership stake in the Sacramento Kings.
O'NEAL: We look forward to bringing Sacramento back to where it used to be.
NICHOLS (voice-over): In an interview with CNN, O'Neal said the seed for this moment was planted years ago by Lakers legend Magic Johnson.
O'NEAL: Magic Johnson came to me and said endorsements are fine, but you want to start owning things. At 18 years old, I was like, what the hell is he talking about? But as I got older I realized that, you know, you want to start owning things. You know, for me it's just about, you know, just meeting people. Just, you know, being one step ahead.
NICHOLS (on camera): Now, Shaq, we all remember, of course, when you were playing for the Lakers what you said about the Sacramento Kings, especially back in 2002.
O'NEAL: We're not worried about the Sacramento Queens.
NICHOLS: So there are still fans out there saying, really? Of all teams, Sacramento? That's where he's going to?
O'NEAL: I understand that. And you know, I think they know now that I was a marketing expert. You know, what I did is I drove people to watch the game. I made the fans of Sacramento so upset because it was the toughest place to play. And we want to bring that field back. We want to bring that environment back.
O'NEAL (voice-over): The Kings' majority owner, Silicon Valley software tycoon, Vivek Ranadive, says he isn't worried about any past bad blood.
VIVEK RANADIVE, SACRAMENTO KINGS MAJORITY OWNER: We have this concept in Silicon Valley that there's lots of money. But what you want is smart money. And for the journey that we're undertaking right now, there isn't any smarter money than Dr. Shaquille O'Neal.
NICHOLS (voice-over): So now that he's stopped calling the team the Queens, is it time for a new nickname?
O'NEAL: Of course it is. Are you ready?
NICHOLS (on camera): Give it to me.
O'NEAL: Welcome to Shaqramento, the capital of California.
(END VIDEOTAPE)
NICHOLS: And Shaq told me he had dinner with the governor of California the night before his big announcement. And he did actually clear the new name, Shaqramento. So hey, it's official.
And, Christine, earlier this year Derek Jeter told me that after he retires his goal is to own a baseball team. So watch out for these athletes. They have some money and they're looking to spend.
ROMANS: Thanks, Rachel.
Up next, Obamacare isn't coming. It's already here, it's not going away and it may soon be knocking on your door. We're going to take out of the politics; we're going to show you what this means for you and your family. That's next.
CHRISTINE ROMANS, CNN HOST: Obamacare isn't coming. It's already here. The president signed it into law 31/2 years ago. Since then, this law has survived a challenge in the Supreme Court, a presidential election and a 21-hour rant from Senator Ted Cruz, even a government shutdown won't kill it.
So forget the politics. We've got the facts for you and your family.
CNN's chief medical correspondent Sanjay Gupta will join me in a moment.
Americans without company-sponsored plans can enroll in insurance plans on state based exchanges. Enrollment begins on October 1st, coverage starts January 1st, and by March 31st, just about everyone must have health insurance or they are going to pay a penalty. And everyone, no matter how sick, must be able to get coverage.
Bob Funk runs Express Employment Professionals. That company places 500,000 people with jobs every year. Funk says the Affordable Care Act is good for his business, but it's bad for workers who want full- time positions.
(BEGIN VIDEO CLIP)
BOB FUNK, CEO, EXPRESS EMPLOYMENT PROFESSIONALS: Companies are fearful of hiring anyone on a permanent basis anymore because of the fear of what the cost is going to be.
(END VIDEO CLIP)
ROMANS: Now companies have been relying more on part-time workers since long before Obamacare became law, but it is true that the law is raising new costs on employers. Some companies are responding by cutting back on benefits or passing the cost increases to their workers.
CNN's chief medical correspondent Sanjay Gupta is here with us to explain all these changes.
Sanjay?
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: We're hearing a lot these days from companies who say that Obamacare is forcing them to make some changes. To give you just a couple examples, even one of them a little different, Delta Airlines, they said the law is going to add $100 million to their health care costs just next year, that's what they're telling us.
One piece of that, the example they're citing, is that it's going to cost an extra $14 million to have young adults added to their parents' plans. Remember that, that the law says people under 26 can stay on their parents' plans. It's very popular, but it isn't free. That's what Delta's saying.
UPS , they're also blaming Obamacare when they said that they're dropping coverage for about 15,000 spouses. Now it's worth pointing out those are people who already have coverage through their own other jobs.
But Home Depot dropped coverage for about 20,000 part-time workers. The limited plans that these part-time workers had, they are no longer legal, so Home Depot was forced to do this. Now, those workers should be OK because most of them will be eligible for subsidies and they can take their money from the premiums at Home Depot and put it into the federal marketplace. Now a lot of this is confusing and may even sound alarming to people, but don't look at it in a vacuum. There's been this trend toward higher costs and fewer benefits for quite some time now.
ROMANS: All right. Thanks, Sanjay.
There are four tiers plus a low-cost catastrophic option for people under 30. Bronze plans cover 60 percent of costs all the way up to 90 percent for the platinum plans. Now depending on your income, the government may pick up some of your costs for your plan.
If you're a single person making less than $46,000 a year or a family of four, $94,000, you'll likely qualify for a government subsidy. The prices also depend on where you live and how old you are, wide variability around the country.
So let me show you a few examples. A single person living in Mississippi who makes $25,000 a year, pays 75 bucks a month after subsidies for the bronze plan; a family of four making $50,000 a year would pay about $282 a month for the silver plan. Again, that's after subsidies.
Let's take a look at Arizona, for example. That same 27-year old would pay 120 bucks a month. That family of four would pay $282. So you could end up paying less or more than today. We don't know quite yet. It's going to depend on your particular case.
The administration making a big push to educate you all around the country about exactly these issues, the changes and how to sign up. The comedy website "Funny or Die" has created videos, Walgreens is handing out pamphlets, and ad campaigns are targeting moms. And if none of that works, volunteers will come to your door to explain the benefits.
But our own Zain Asher found that all of that outreach, well, it may not be working, or at least it's a big, big job. Zain, a lot of people don't know what health care coverage they even have now, let alone how to switch it. What did they find?
ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Hi, Christine. Yes, we found that very few people even know what Obamacare even means. Yes, these exchanges open on Tuesday and, yes, nonprofit groups are going door to door trying to explain Obamacare to the uninsured.
We spoke to several uninsured Americans who know virtually nothing about what Obamacare even means. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We'll go up the hill and around, but we'll start at the top of the hill.
ASHER (voice-over): With just a few days to go before the new health insurance exchanges go live, an army of Obamacare experts are going door to door.
UNIDENTIFIED FEMALE: Hi. Good morning. Is Christopher home?
UNIDENTIFIED FEMALE: We're not selling anything.
UNIDENTIFIED FEMALE: Do you currently have insurance?
ASHER (voice-over): Trying to explain Obamacare to Americans who don't have health insurance.
MAHER HAMOUI, UNINSURED: I know it has something to do with caring about people, you know, Obamacare, so basically that's all I know.
ASHER (voice-over): According to the Kaiser Family Foundation, 43 percent of uninsured Americans still have no idea about the new exchanges.
JOSE MENENDEZ, LEARNED ABOUT OBAMACARE FOR THE FIRST TIME: I have a question. Who created this affordable health care plan that you're -- ?
(CROSSTALK)
UNIDENTIFIED FEMALE: Well, this was passed by Congress.
MENENDEZ: Oh, Congress created it.
UNIDENTIFIED FEMALE: Yes, the Affordable Care Act, yes.
MENENDEZ: And I'm just wondering, as a citizen of America, how come I did not hear of this?
ASHER (voice-over): Well, health care reform is a frequent source of contention in Congress, many of the people we spoke to here in Northburg (ph) in New Jersey were hearing details of Obamacare for the very first time just this week.
UNIDENTIFIED MALE: I'm definitely going to read into it.
MENENDEZ: Is Obama forcing Americans to get health insurance? It sounds that way.
ASHER: Enroll America, a nonprofit group funded mainly by insurance companies, health care groups and charities, is working to spread the word, dispatching 130 field workers in 10 states.
UNIDENTIFIED FEMALE: We can follow up with you.
ASHER (voice-over): On October 1st, 48 million uninsured Americans will be able to purchase health coverage through federal and state exchanges. Coverage starts January 1st, and they must enroll before March 31st.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They're going to be able to shop, just like you shop for an airline ticket or a flat- screen TV, and see what's the best price for you.
HAMOUI: This is all new to me. I never knew about any of this. (END VIDEOTAPE)
ASHER: I think part of the problem is people sort of see the word Obamacare tossed around in the news, but they have no idea what it actually means. Obviously it is complicated. But people were literally coming up to me in the street, thanking me for doing this story because they had no clue they would soon have to buy health insurance.
ROMANS: Wow. You know how terrifying it is to do your own open enrollment at work, for example. Imagine having no exposure to the health care market; you're uninsured. You're starting this for the very first time. They have a lot of work ahead of them. Zain, thank you so much.
All right. Coming up, terrorists won't stop planning attacks on America, even if the government shuts down. Last week's vicious attack on a Kenyan mall, is the latest reminder of the threat all around us. But is bickering over budgets sending a dangerous message to America's enemies? Fareed Zakaria is next.
(COMMERCIAL BREAK)
ROMANS: Dysfunction in Washington, the country on the verge of a government shutdown, a self-inflicted wound that risks damaging the still fragile American economy. Meanwhile this week the President of the United States addressing the United Nations, carefully laying out America's policies and interests in Syria, Iran and the Middle East peace process.
Compare that to what was happening back in Washington, a fight over Obamacare that could shut down the government, but it won't stop Obamacare.
Fareed Zakaria is host of CNN's "FAREED ZAKARIA GPS."
Fareed, thanks for being here. The president's former Defense Secretary Leon Panetta spelled out the price of governing from crisis to crisis.
He wrote recently in an op-ed, "U.S. citizens will lose truth in our system of governing and the world will view the United States as less able to back its word with power."
How much does this eternal internal struggle in Washington damage us in the eyes of the world?
FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": I think it does. Right now we don't have a competitor. And so it seems as though we can careen from crisis to crisis and there really doesn't seem to be much of a price to pay. The American economy, the recovery is continuing.
But there are two areas -- first is the credibility of American government. We benefit enormously from the fact that the dollar is the reserve currency of the world and our Treasury bills are the reserve investments of the world.
If that changes, if people start worrying about getting repaid, as they should frankly worry, given what we're doing, that would change things dramatically. It raises huge costs for the United States.
The second is, in all this crisis management, nobody is talking about what we should be doing for the long term in this country.
We are seriously underfunding investments in education, in infrastructure, in basic science. That's the seed capital that produces growth. You know, we had these slogans where people said it's not about big government or small government. It's about smart government. Well, right now what we are doing is stupid government.
ROMANS: And when you look at how petty and stupid it is in Washington, and sometimes there's a news event around the world that really puts it in perspective. For example, more than 60 people killed in Kenya, terrorists attacking a mall, raising a lot of fears about soft targets around the world and here in the United States.
The Al Qaeda leader Ayman al-Zawahiri said he's encouraged his followers to force the United States to spend more on security in order to, quote, "bleed America economically."
Does all the fighting over the budget telegraph an economic vulnerability?
ZAKARIA: Well, I think people see that we're dysfunctional. They see that we can't get our act together, we don't have a strategic plan.
I wouldn't worry too much about Zawahiri. He hasn't been able to orchestrate anything in years. That Al Qaeda central, the guys that planned 9/11, are really on their heels. We've pushed them back.
ROMANS: He's just throwing an insult.
ZAKARIA: He's just trying -- and he's trying to get something going. He knows that the only thing he can do, really, is try to encourage somebody out there to walk into a mall because he can't plan any of it.
And by the way, I hate to put it this way. If we spent more on security right now, it would be good with the economy. What the economy needs is more spending and more consumption.
ROMANS: I want to switch gears and talk about something that John McCain said recently. Russia's leader, Vladimir Putin, he took, of course, "The New York Times" recently, he criticized the president and his policies, and he did that directly to the American people.
And then the president's 2008 Republican opponent, Senator John McCain, responded with an anti-Putin op-ed to the Russian people.
He said this, "I believe you deserve the opportunity to improve your lives in an economy that is built to last and benefit the many, not just the powerful few." He was writing to the Russian people about an economy that benefits everybody. And we looked at these statistics. In 1989, the year the Berlin Wall fell, the ratio of CEO compensation to the average worker was 58 to one. Last year it was 273 to one. The poverty rate in '89 was 12.8 percent. Last year it was 15 percent.
The typical American family now makes less than it did in 1989, Fareed, when you adjust for inflation.
Was John McCain, his lecturing Russia about its economy. But in fairness, a lot of people here are saying, wait, I don't feel like this economy is fair for me.
ZAKARIA: Look, we're a lot better off than Russia, but I think your point is valid.
And part of this is broad structural trends. There's globalization, there's technological change, there's the rise of the knowledge economy, all that creates a winner-take-all system. And the successful CEOs tend to do very well, partly because their compensation is tied to the stock which rises.
But that's all the more reason why we should be making public investments in education, in daycare, in things that can help people move up the ladder of opportunity.
I don't begrudge CEOs doing very well, but I want to make sure that anyone can get to be a CEO and the game is not set so that if you get to school when you're 6 years old and you're malnutritioned and you haven't had any kind of pre-K, we now know you're not going to do well in school, and that means you're not going to get into a good college. And that's the trend we have to stop.
And again, as I say, part of is that our stupid government, that is, the inability to get anything done means we don't invest. We don't spend much money on poor people in America. We think we do. We spend a lot on the middle class. We have lots of subsidies, lots of --
ROMANS: Tax breaks.
ZAKARIA: -- and a bunch on the rich, but the poor are actually neglected, and it's something of a scandal.
ROMANS: One of the thing that's clear is the country with the most prepared and best educated workforce is the one that's going to win -- the next leader is the one with the best workforce.
Are we investing in our workforce?
ZAKARIA: We're not at all in the sense that we're talking about. What does it mean to have a good workforce? It means you need to have them educated and you need to have the ability to retrain them because some jobs are going to go away, some industries are going away. We do early education very badly. We do secondary education badly and we do job training badly. And in all these cases, while there are lots of reforms that need to take place, it's also true that you just have to spend more money on some of the areas we're not spending it, and I can't see Washington doing that right now.
ROMANS: I can't see them doing anything but politics by the minute. Fareed Zakaria, it's nice to see you. Thank you.
ZAKARIA: A pleasure.
ROMANS: All right. Ready to be stuck in the middle seat of your flight listening to the guy next to you talking on the phone or playing Angry Birds?
Oh, Lord.
The FAA moved one step closer to allowing the use of electronic devices in flight during takeoff and landing. But forget annoying. Is this safe? We're going to tell you if it's safe to have somebody playing Angry Birds on takeoff and landing. That's next.
(COMMERCIAL BREAK)
ROMANS: You and your fees went flying this year. A record year for airline fees, but there are still some deals if you know where to look. More than $27 billion, with a B, generated from your pocket to the airlines from those a la carte fees. That's more than we spend on the entire budget of NASA. Think of that.
So where is this money coming from? It's coming from your pocket. It is the money you pay for roomier seats, for checked bags, early bird boarding, and rebooking your flights, a lot of money there. With costs rising for airlines many are now relying on these fees for a huge share of their revenue. But some airlines hit you harder than others for these extras.
Let me give you an example. Let's talk about JetBlue here. They will let you carry on one bag for free. Southwest will give you two. Spirit, look at Spirit, $100 to carry on a bag if it doesn't fit under your seat. It actually makes about 40 percent of its revenue from exactly those kinds of fees. Bottom line, you need to factor in these extra charges when you're looking at fares.
Now if you want to be extra savvy, Rick Seeny (ph) at Fare Compare tells us the cheapest days to fly are Tuesday, Wednesday and Saturday. The cheapest times are when no one else wants to go, very early flights, noontime flights and dinner flights. The best time to buy a ticket, Tuesdays at 3:00 pm.
If you're planning holiday travel this year, book now. An analysis of last year's fares by travel site Kayak.com found you have about three more weeks before prices start to rise.
Use these rules to help get around high prices, but once you're in the sky, you need to follow the airline's rules. But almost one-third of airline passengers reported that they left on a portable electronic device in flight when they weren't supposed to.
That has the FAA concerned, but can a Bluetooth really bring down an airplane? Rene Marsh, aviation and government regulation correspondent joins me now. Renee?
RENE MARSH, CNN AVIATION AND GOVERNMENT REGULATION CORRESPONDENT: That's right, Christine. It's the rule at takeoff and touchdown, turn off all electronics.
The FAA expects to get recommendations from an advisory group this Monday that could change that rule, but you ask the question, can our devices really take down a plane or even cause all serious safety issues during flight?
We traveled across country to one of the largest manufacturers of commercial airplanes to find out.
(BEGIN VIDEOTAPE)
MARSH (voice-over): This fall the FAA could decide to relax those restrictions. At Boeing's plant in Seattle, we asked the people who build the planes if it's dangerous to keep devices on during all phases of flight.
KENNY KIRCHOFF, BOEING ENGINEER: The emissions are being measured by this antenna here.
MARSH (voice-over): Inside Boeing's electromagnetic interference lab, engineers have been studying the issue for years, testing cell phones, laptops and tablets' impact on airplane systems. Engineer Kenny Kirchoff tested my cell phone.
KIRCHOFF: This phone is communicating with the cell tower, and these spikes show that it has failed.
MARSH: Its emissions cross the threshold and could interfere with systems like the plane's smoke alarm. Next test, a laptop.
KIRCHOFF: It goes above the limit line.
MARSH: It failed, showing potential interference with the pilot's communications radios. A tablet in wi-fi mode also failed. But the same tablet in airport mode tested safe.
KIRCHOFF: It's not necessarily that a phone can bring down an airplane. That's not really the issue. The issue is interfering with the airplane and causing more work for pilots during critical phases of flight.
MARSH (voice-over): A recent survey found one in three passengers left their devices on because they forgot. Despite that, engineers say no electronic device has ever taken down a plane.
MARSH: New planes are being built, knowing passengers are flying with electronics and they want to use them. So planes like this one, being designed with technology that can counter interference. MARSH (voice-over): Kirchoff recommends devices not be used in flight unless the airplane has been tested against every possible electronic device that could be used onboard. And he says there's another problem.
KIRCHOFF: You would be asking all the flight attendance to monitor which devices are good and which devices can't be used. And that's a heavy burden for flight attendants.
MARSH (voice-over): A burden he says is impractical.
(END VIDEOTAPE)
MARSH: All right. Well, once the FAA receives that panel's recommendations on Monday, the FAA will make the final decision on whether to loosen the restrictions. But individual airlines do not have to agree to adopt those loosened restrictions.
Christine?
ROMANS: All right. Rene Marsh, fascinating piece, thank you, Rene.
Up next, the final frontier in vacationing.
(BEGIN VIDEO CLIP)
RICHARD BRANSON, VIRGIN GALACTIC: We'll start with giving people a taste of space. We'll start building hotels in space. And --
POPPY HARLOW, CNN CORRESPONDENT: Really? In our lifetime?
BRANSON: In your lifetime definitely, hopefully in my lifetime.
(END VIDEO CLIP)
ROMANS: But how many lifetimes of work would it take for you to afford that trip to space? Could be this one if Richard Branson gets his way. That's next.
(COMMERCIAL BREAK)
ROMANS: A trip to space. You might call that the ultimate vacation for the 1 percent. If the FAA gives its blessing, space tourism will soon become a reality. Leonardo DiCaprio, Justin Bieber, Ashton Kutcher, these are among the daredevils who have already signed up, but who are the more than the 600 orders ready to take the trip?
CNN's Poppy Harlow travels to the Mojave Desert to find out.
(BEGIN VIDEOTAPE)
HARLOW (voice-over): Who would spend up to a quarter million dollars just for minutes in space? These people.
(On camera): How much to charter one of these puppies?
PING CHIANG, BOUGHT SPACE TICKETS FOR FAMILY: $1.2 mill.
HARLOW: Wow. And I hear you're going to leave two seats empty? So it's just the family?
CHIANG: No, it's not empty. There's two angels coming with us.
(LAUGHTER)
HARLOW: Passengers won't just check in and hop on board. The whole experience will mean three days of training and health checks, then a few hours in the air, and three minutes weightless in space.
(Voice-over): The mother ship will carry SpaceShip 2 up, then release it to glide back. Unlike NASA's rockets, it won't orbit the Earth. It's Sir Richard Branson who's determined to take them there.
(On camera): Is this the new space race?
BRANSON: I think it's the start of a new space race. It's not been easy. It's taken us five years more than we thought it would take, but -- you know, but finally they pulled it off.
HARLOW (voice-over): That is, if the FAA gives Galactic the green light. Virgin says commercial launch is just months ago.
MICHAEL MOYER, SENIOR EDITOR, SCIENTIFIC AMERICAN: You're broaching out into a new -- a new field in the sky. And we're going to have some mishaps that happen now. Hopefully they won't be catastrophic.
HARLOW (on camera): Do you ever fear that maybe you're putting too much at risk with this?
BRANSON: People risked a lot to get space off the ground in the first place. But unless you risk something, the world, you know, stays still.
HARLOW (voice-over): Branson is such a believer, he plans to take the first flight with his own children. David MacKay will be at the controls.
DAVID MACKAY, CHIEF PILOT, VIRGIN GALACTIC: We don't want to push too hard too quickly. It'd be nice to be first to do it, but the most important is to do it right. Whoever is first has to do it right.
HARLOW (on camera): What is your ultimate dream for this?
BRANSON: You know, we'll start with giving people a taste of space, then we'll send people into orbital flights, we'll start building hotels in space. And --
HARLOW: Really? In our lifetime?
BRANSON: In your lifetime definitely. Hopefully in my lifetime.
HARLOW (voice-over): But will this ever be for the masses?
(On camera): Is this a playground for the wealthiest, the 1 percent only?
BRANSON: Initially it's very much the wealthiest who are going to use it, but through these wealthy people, you know, being willing to be pioneers, I think millions of people will one day have the chance to go to space.
HARLOW (voice-over): Like Mikey Oliveri, who has a dream perhaps bigger than most.
MIKEY OLIVERI, WANTS TO GO TO SPACE: I want to be the first to stay in space. You know, I don't have 200 grand, but I have a dream.
HARLOW: Hoping he may get his moment among the stars.
(END VIDEOTAPE)
HARLOW: If you have the guts to boldly go is one thing. If you have the cash is another. Industry watchers warn don't expect this to become affordable for the masses anytime soon, but then again, this is a concept that knows no bounds, Christine.
ROMANS: Thanks for joining us this week on YOUR MONEY. And head to CNNMoney.com to find out why Al Gore says we not only have a climate crisis but also a democracy crisis.
AL GORE, FORMER VP OF THE U.S.: Special interests have been able to use massive amounts of money and lobbying to hotwire or hack the way the system operates.
Head to CNNMoney.com for Annalyn Kurtz's revealing sit-down with Al Gore. Stay tuned for YOUR MONEY for the very latest on the countdown to shutdown. Looks like we have some very late nights in store.
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