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YOUR MONEY

President's Poll Ratings Drop; Obamacare Rollout Criticized; Connecticut Sets up Retail Store for Obamacare Exchange; Food Stamp Program Budget Cut; Shooter Stopped in LAX Rampage; Boston Celebrates Red Sox World Series Victory; Suspension of New York City Stop and Frisk Law Overturned; Singer Chris Brown Enters Rehab

Aired November 2, 2013 - 14:00   ET

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


CHRISTINE ROMANS, CNN HOST: A legacy on the line. After fighting for fairness, is it the rich riding highest in the Obama economy?

I'm Christine Romans, and this is YOUR MONEY.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): It was just two weeks ago when it seemed the president had won his latest battle.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The way business is done in Washington has to change.

ROMANS: But with an Obamacare fiasco bringing any momentum to a screeching halt, has he lost the war? A president whose signature legislation has turned into a national punch line.

JAY LENO, HOST, "THE TONIGHT SHOW": So if your doctor's only giving you three weeks to live, you are screwed, OK?

ROMANS: Whose spy agencies are tapping allies' cellphones.

SEN. RAND PAUL, (R) KENTUCKY: I guess the real question is who's in charge? The president doesn't seem to know if he's spying on our allies.

ROMANS: The president says he didn't know about it.

The only thing going the president's way these days, the economy, at least for those with the money to take part. The Dow and the S&P 500 hit all-time highs again this week, corporate profits roaring back, and a housing rebound. But you need cash and good credit to get in the game. So what happened to promises of an economy focused on fairness?

OBAMA: This country doesn't succeed when we only see the rich getting richer. We succeed when the middle class gets bigger.

ROMANS: Yes, jobs are returning. But good-paying jobs that once made the middle class strong are disappearing. Stagnant wages and low- paying jobs are the new normal. We're one America with two economies. Is there still hope of that changing in time to save the president's legacy?

(END VIDEO CLIP)

ROMANS: John King is CNN's chief national correspondent. Don Peebles is CEO of the People's Corporation and a member of President Obama's National Finance Committee. John, let me start with you. President Obama's poll numbers hitting new lows just over three years -- three years from the end of his run. Can he reverse this?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Can he reverse it, Christine?

DON PEEBLES, MEMBER, PRESIDENT'S NATIONAL FINANCE COMMITTEE: Absolutely.

KING: Can you see a clear path for him to reverse it? No, for a number of reasons. Number one, you mentioned his personal approval rating, job performance rating is at the lowest point of his presidency. But also people just are in a lousy mood about Washington. Some of it's the government shutdown, some of it's the rollout of Obamacare. So the president would need partners to reverse it, to get things done.

Paul Ryan, who he's negotiating with on the big budget deal, a disciple of Jack Kemp, he would like to work on some of these economic proposals, not unlike what the president wants to do. A lot of these Tea Party members come from districts that are actually struggling. They're behind in the recovery, if you will. So they have common interests.

But, Christine, what they don't have is any common ground. They don't have conversations with each other. So it's very hard to see any major new economic initiatives in the short term. The president would have to have a big win in the 2014 midterms, and anyone can see that happening is reading data that I don't see because right now is seems a break-even or a Republican year coming the president's way.

ROMANS: When I talk about one America with two economies, here's exactly what I mean. The stock market surged, but only half of Americans are invested. Good-paying middle-class jobs being replaced by jobs that have lower wages. Without blaming Republicans, what could this president be doing differently? You're a businessman. You know the economy. What could he be doing differently?

PEEBLES: Well, I think what's missing here is a correlation between the contributions of the business community making and can make versus pulling up the middle class and bringing more people into a pathway to the middle class. So I think we could be more effective. I think the president could be much more effective in terms of bringing businesses into the discussion in terms of expanding the economy, because we need a prospering and expanding small business community and large corporations to go back to expanding as well.

ROMANS: John, we've seen a decline in consumer confidence. You talk about this pessimism taking hold. Even with the stock market surges we've got this decline in confidence. The president didn't create the disconnect, but what has he really done to change it, this disconnect between markets and the rich getting richer and everyone else saying, wait, this is just not working for me?

KING: Look, it's -- whatever your political views out there watching, it's not all the president's fault, but he is the CEO of the country right now. You know, he could say I asked the Congress in my state of the union address for more jobs program. I asked the Congress in my state of the union address for an infrastructure bank. The Republicans in Washington won't give it to him.

There are 30 Republicans around the country, Christine you know and god knows many of them would love to get money for roads and bridges, they would love money so she could go to the business community and say we will help you build a new science and high tech center. But it's not going to happen in Washington right now. This is a self- fulfilling prophecy. And if the president has no partners, not enough votes in Washington right now for his ideas, he won't accept the Republican ideas. And the country out there now doesn't believe that Washington, because people are in such a bad mood, could take one and one and even get to two.

ROMANS: Don Peebles, complaining about Obamacare aside, has American business done well under this president?

PEEBLES: Some have. I think some businesses have grown and done very well because they've been well positioned to do that. And, of course, as you pointed out earlier, that in order to take advantage of the housing market or the expanding stock market, you need money. And those businesses that had good reserves and good access to capital have prospered and small businesses have prospered as well. But there are a lot of small businesses and entrepreneurs who have been left behind because this economy has got a vice grip on credit.

ROMANS: All right, Don Peebles, John King, nice to see both of you.

For more stories that artery to YOUR MONEY, give me 60 seconds on the clock. It's "Money Time."

(BEGIN VIDEOTAPE)

ROMANS: It's $17 billion, that's how much the government has collected this year from banks behaving badly. And that doesn't even include JP Morgan's $8 billion tentative settlement with the Justice Department.

And 57 million Social Security recipients will get a 1.5 percent raise next year. It's the smallest cost of living adjustment in years. It averages about $19 a month.

Apple sold nearly 34 million iPhones last quarter. But still profits fell as iPad sales were flat and Mac sales slipped.

The fastest growing segment of the mobile device market is still in diapers. A new study finds 38 percent of children under age two are watching shows and using apps on smartphones and tablets, up from just 10 percent two years ago. In May "Consumer Reports" called the Tesla Model "S" the best car it ever tested but wouldn't recommend it until now. The magazine claims it has enough reliability data to finally grant its blessing. The best-selling car in America, the Toyota Camry, lost its recommendation after the car's performance in a recent crash test.

Morgan Stanley says there's a global wine shortage. Demand is rising worldwide at the very same time bad weather hurts production.

(END VIDEOTAPE)

ROMANS: All right, coming up, feeding three children about to get harder for this grandmother. She's one of 47 million Americans whose food stamp benefits will be smaller this month. As we face the harsh reality of the new normal, are we heading off a hunger cliff?

(COMMERCIAL BREAK)

ROMANS: More than 47 million Americans are on food stamps. That's nearly one in every six people in this country. The number has exploded during the recession and they've kept rising even with the recovery. But on Friday, those 47 million Americans saw their benefits reduced. Rosa Flores is here with us. Rosa, you met with a grandmother who, you know, she's going to have a harder time feeding her family.

ROSA FLORES, CNN CORRESPONDENT: It's going to be a tough time for her and 47 million Americans, like you said, and the timing couldn't be worse, folks. The end to this temporary boost in food stamps comes just weeks before Thanksgiving, Hanukkah, and Christmas. And while Republicans are usually blamed in this case, this time an interesting twist. How the White House took a gamble and lost.

(BEGIN VIDEOTAPE)

KATHERINE MCKINNON: Let's go. I just learn how to survive.

FLORES: It's a walk home from school filled with life lessons.

MCKINNON: That's good for five cents.

FLORES: Katherine McKinnon went from grandma to a single mother of three when her daughter died.

MCKINNON: No matter how people look at you, just keep your head up.

FLORES: But her life on food stamps may be about to get tougher, and this is why. Remember the first lady's initiative to fight childhood obesity? The White House borrowed money from the war on hunger to fight the war on obesity. That means on November 1st, the SNAP program runs out of money from the 2009 American Recovery and Reinvestment Act.

Each month Katherine gets about $358 in food stamps, about $4 a meal in a city where cereal at her local store costs $4.50. So she sells cans for money. STACY DEAN, V.P., CENTER ON BUDGET AND POLICY PRIORITIES: After these cuts, the average benefit per person per meal will be $1.40.

FLORES: Katherine and 47 million Americans will now have even less money. That includes 22 million children on food stamps and 9 million elderly or seriously disabled people according to the Center for Budget and Policy Priorities. Even Congressional Democrats were upset about the president's gamble.

ROSA DELAURO, (D) CONNECTICUT: I did not want to do that. This was a -- these were bad choices to make.

FLORES: McKinnon already supplements food stamps by eating two meals a day at a soup kitchen. A Senate version of the farm bill which funds the food stamp program proposes cutting nearly $4 billion more over 10 years, the one in the house, $39 billion more.

REP. MIKE CONAWAY, (R) TEXAS: We need to reform the food stamp program with better policies. I'm not so much concerned about the planned spending that will be reduced as is getting policies that promote work and dignity.

FLORES: Katherine stands to lose $36 a month, dollars that already don't stretch as much as they used to.

MCKINNON: Milk is almost $5.

FLORES: Another important lesson to share.

(END VIDEOTAPE)

FLORES: You're probably wondering, is Katherine receiving SSI or supplemental security income for the children she inherited? The answer is no. She says that the children didn't qualify. And as you just heard, more cuts are coming.

ROMANS: All right, Rosa Flores, thank you, Rosa.

Michael Tanner is senior fellow at the Cato Institute. Thanks for joining us, Michael. You could be a civil libertarian and argue the welfare state has grown too far, we're a nanny state, and 15 percent Americans are being fed by the government. But what do we tell a grandmother like Katherine when she's going to see a benefit cut like this?

MICHAEL TANNER, SENIOR FELLOW, CATO INSTITUTE: Well, don't forget that the "S" in Supplemental Nutrition Assistance Program, the SNAP program, which is what food stamps is officially known is, stands for "supplemental." No one is supposed to be living solely on food stamps. And in fact, very few people on the program are living solely on food stamps. They almost all have either other welfare programs or outside income and bringing it in.

You know, this is a program that has grown from being an $18 billion program as recently as 2000 to being a $78 billion program today. Surely, a five percent cutback is not going to create the great American famine.

ROMANS: So conservatives say this isn't really a cut. We're returning to the way things were just a few years ago. Sort of like last year when Democrats argued they weren't really raising taxes on the wealthy. They were just returning to Clinton era levels. Listen.

(BEGIN VIDEO CLIP)

OBAMA: All we're asking is that folks like me go back to the rates we paid under Bill Clinton.

HARRY REID, (D-NV) SENATE MAJORITY LEADER: The same level they were during the Clinton administration.

SEN. SHERROD BROWN, (D) OHIO: It's bringing tax rates up to what it was for the wealthy in the Clinton era.

(END VIDEO CLIP)

ROMANS: So is this a cut to food stamps or not?

TANNER: Sure, it's a cut to food stamps. Let's not play semantic games. If you were getting a certain amount of food stamps yesterday and today you get less, that's a cut. Now, that said, the fact is that we are still spending more and more money on this program, and we can't just continue to expand it forever.

ROMANS: But isn't it because people need it? Look, there's this perception out there that -- and you've ever seen, not everybody on food stamps needs food stamps to survive. There's this perception that some of these people might be lazy. There's a perception that people are somehow gaming the system. But when we talk to food bank, people who run food banks, they say that is not what we see coming through the front door. I want you to listen to something a woman told me this week.

(BEGIN VIDEO CLIP)

MARGARETTE PURVIS, PRESIDENT AND CEO, FOOD BANK FOR NEW YORK CITY: The largest group within this group of lazy people would be children. Then there are seniors, and then, of course, the disabled. This is the overwhelming amount. More than 40 percent of the people who are on this program actually do work.

(END VIDEO CLIP)

ROMANS: What do you make of that argument, that this is really feeding children, so much of this is about feeding households with children?

TANNER: Well, the number of able-bodied adults on the food stamp program has been rising significantly in recent years, in part because we've largely eliminated the work requirements that were a standard part of this program before. I think what we need to do is go back and institute work requirements, a stronger means in asset testing programs so that we can target these benefits to exactly the sort of people in need that we're talking about.

ROMANS: The problem here is we need more jobs. We need more jobs that people can get into at all kinds of income and talent levels. If we could just have more jobs first, maybe we could reform these programs a little bit better. Michael Tanner, nice to see you, senior fellow at Cato Institute. Thank you.

TANNER: Thank you.

ROMANS: The Obama administration spent the week apologizing for the botched rollout of healthcare.gov. But one state is trying something a little more low-tech. We're going to take you inside the Obamacare store. That's next.

(COMMERCIAL BREAK)

ROMANS: A small but important change in message this week. Here's what the president said during the presidential campaign after he took office and even during the state of the union.

(BEGIN VIDEO CLIP)

OBAMA: If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.

(END VIDEO CLIP)

ROMANS: All right, here's what he's saying now.

(BEGIN VIDEO CLIP)

OBAMA: For the vast majority of people who have health insurance that works, you can keep it.

(END VIDEO CLIP)

ROMANS: All right, notice that difference? As the Obamacare plans have gone live, some people have been notified that they can't keep their plans after all. Here's why. Most of the time it's because the plans they have don't meet the minimum standards of the Affordable Care Act. That law requires everyone gets mental health care, maternity care, and medication coverage. And out-of-pocket costs are capped at $6,350 a year. That's supposed to stop people from going bankrupt because of an accident or illness. Now, with a few exceptions, the plans that don't meet that minimum will be gone, right? So unless you meet all three of those categories, your plan will not be offered. And the new plans offered that follow Obamacare requirements, they're more expensive often because they have to cover these extra items.

Now, the data mostly anecdotal right now. But for example, our Elizabeth Cohen spoke to a 34-year-old man who buys his own insurance. He's now paying $173 a month with a $5,000 deductible. His new plan would cost $244 a month with a deductible of more than $6,000. That costs more. But his old plan didn't cover everything. It didn't cover maternity care, brand-name drugs, mental health care, and some routine illnesses like hernia's or ear infections. He will pay more.

Now, the administration says the expansion of coverage is necessary because you can face an illness or an accident at any time. You need that coverage. But some people feel they're too healthy to have to pay for coverage they don't want to use.

The Obamacare website, a technical fiasco under fire again this week.

(BEGIN VIDEO CLIP)

REP. PETE OLSON, (R) TEXAS: It's been down the whole time you've been testifying. The system is down at this moment.

(END VIDEO CLIP)

ROMANS: But one state-run exchange has tried to do business the old- fashioned way, offline. Zain Asher is here with more.

ZAIN ASHER, CNN CORRESPONDENT: Hi, Christine. Connecticut state exchange Access Health CT is opening up the first Obamacare brick and mortar store. This is a one-stop shop physical location where Connecticut's uninsured can go for all their health insurance needs. But like the federal website, things don't always run so smoothly.

(BEGIN VIDEOTAPE)

ASHER: Take a trip down Main Street in New Haven, Connecticut, and right next to edible arrangements, you'll pass a storefront that has the locals intrigued.

JOSEPHINE SEMPERE, TRAINING MANAGER, ACCESS HEALTH CT: We have a lot of different questions from individuals because it's new.

ASHER: A retail store set up by Connecticut state exchange dedicated solely to all things Obamacare.

MICHAEL DUNN, RETAIL MANAGE, ACCESS HEALTH CT: It's complicated. And so we want to make sure that people know what the new law really says and how it affects them.

ASHER: Think of it as the first brick and mortar version of an online state exchange. Management says they wanted to be creative, so they used the Apple store as their inspiration.

DUNN: It's clean. It's open. It's bright. And as you can see, you know, it's very open for a customer to walk in and just kind of feel welcome.

ASHER: Past the greeting area, there's a screening area for informational videos on insurance, a play area for uninsured customers with toddlers, and cubicles for insurance brokers.

CARLENE BEAUPRE, INSURANCE SHOPPER: It just feels great, you know, that somebody has your back. Somebody's there to help you.

ASHER: Management also says that by having a physical store, they eliminate some of the confusion about what the exchanges actually are.

JASON MADRAK, CHIEF MARKETING OFFICER, ACCESS HEALTH CT: We got a lot of questions from individuals confusing this for the stock exchange or people thinking that it was physically a place where they had to come and bring their insurance cards in and physically exchange them for something else.

ASHER: But the in-store experience is running into problems. One customer says she's already had to come in three times to try and enroll for health insurance. Every time she moves further along in her online application, problems connecting to the federal data hub force her to come back and start over.

BEAUPRE: It's frustrating because you put your trust in the government, and sometimes it all doesn't come out the way it's supposed to.

ASHER: But Connecticut is going full speed ahead. The state already has plans to open a second retail store in New Haven in the coming week.

MADRAK: We wanted to find a way to really make a firm commitment to physically being in the communities where many uninsured individuals reside. We wanted to literally be part of the community. And so the concept of a retail store was really born out of that thinking.

(END VIDEOTAPE)

ASHER: No word yet on how many people in Connecticut have enrolled in health coverage through the store. It's only been open for less than a week. But they say they've already had a cancel a number of appointments because of issues related to the federal data hub. Christine?

ROMANS: The federal data hub.

ASHER: Same old story.

ROMANS: Issues, issues. Thank you so much for that intriguing look inside Connecticut. Thanks, Zain.

Coming up, still confused about Obamacare?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, Madam Secretary, while you're from Kansas, we're not in Kansas anymore.

UNIDENTIFIED MALE: I was in the third grade there, and I thought I saw you on a tricycle.

UNIDENTIFIED MALE: Ever used a coupon?

KATHLEEN SEBELIUS, HEALTH AND HUMAN SERVICES SECRETARY: Yes.

(END VIDEO CLIP) ROMANS: Of course you are. Why bumper-sticker politics doesn't work for the Affordable Care Act. That's next.

(COMMERCIAL BREAK)

ROMANS: The worst seat in Washington this week? Probably the one occupied by Health and Human Services Secretary Kathleen Sebelius. She was grilled Wednesday by a House committee in a hearing that occasionally was just downright weird.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Toto, we're not in Kansas anymore.

UNIDENTIFIED MALE: I was in the third grade there, and I thought I saw you on a tricycle.

UNIDENTIFIED MALE: Ever used a coupon?

UNIDENTIFIED MALE: Four Pinocchios.

UNIDENTIFIED MALE: The sky is falling. The sky is falling.

SEBELIUS: Don't do this to me.

(END VIDEO CLIP)

ROMANS: None of that is about getting health care. That's about getting reelected and some kind of political parlor game in Washington. And there's a reason it got to wacky, because you can't reduce something as complicated of the Affordable Care Act to a bumper sticker, even though, as you've seen, the president has even tried to do this.

(BEGIN VIDEO CLIP)

OBAMA: If you like your health care plan, you'll be able to keep your health care plan, period.

(END VIDEO CLIP)

ROMANS: As we saw, that's turning out to not be true for some Americans, especially those who buy on the individual market. So the president is getting a bit more specific lately.

(BEGIN VIDEO CLIP)

OBAMA: If you had one of these substandard plans before the Affordable Care Act became law, and you really like that plan, you are able to keep it.

(END VIDEO CLIP)

ROMANS: Of course, President Obama isn't the first president to get tripped up by bumper-sticker politics.

(BEGIN VIDEO CLIP)

GEORGE H. W. BUSH, FORMER U.S. PRESIDENT: Read my lips, no new taxes.

(APPLAUSE)

(END VIDEO CLIP)

ROMANS: Or this.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FORMER U.S. PRESIDENT: Major combat operations in Iraq have ended. In the battle of Iraq, the United States and our allies have prevailed.

(END VIDEO CLIP)

ROMANS: If it fits on a bumper sticker, it's probably missing some important context, nuance, some facts, you know. War, taxes, health care, these are complex policies. They can't be boiled down to a slick slogan. Nuance is necessary. Now there's a bumper sticker I can get behind.

That's it for "YOUR MONEY." We're here every Saturday, 9:30 a.m. 2:00 p.m. Have a great weekend, everybody.