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Issue Number One
Big Win for Hillary Clinton in Pennsylvania; Fighting Foreclosure; Foreclosure Rescue Bill; Shrimp Investigation
Aired April 23, 2008 - 12:01 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GERRI WILLIS, CO-HOST: A big win for Hillary Clinton in Pennsylvania, and it's on to North Carolina and Indiana. Where the Democratic race is headed and what issues will be at the forefront.
One state's foreclosures up more than 300 percent. And you'll want to watch this show before you eat another shrimp.
ISSUE #1 is all about the economy. ISSUE #1 starts right now.
(BEGIN VIDEO CLIP)
SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I'm in this race to fight for you, to fight...
(APPLAUSE)
... to fight for everyone who's ever been counted out, for everyone fighting to pay the grocery bills and the medical bills, the credit card and mortgage payments, and the outrageous price of gas at the pump today.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Now it's up to you, Indiana. You can decide -- you can decide whether we are going to travel the same worn path or whether we will chart a new course that offers real hope for the future.
(END VIDEO CLIP)
WILLIS: Welcome to ISSUE #1. I'm Gerri Willis. Ali Velshi will be here in just a bit.
The dust has settled in Pennsylvania, and Hillary Clinton comes away with a big win. Now it's on to North Carolina and Indiana. And ISSUE #1, the economy, is expected to be front and center in those two states.
CNN's Jessica Yellin, part of the best political team in television, is live right now in Philadelphia.
So, Jessica, it sounds like the economy still a very important issue for voters. JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It really is, Gerri. We are going to hear it moving forward in North Carolina and Indiana. You heard it from both of the candidates last night -- gas prices, food prices, health care costs. These are the issues they are driving home on the stump, and in literature to voters, saying that each of them is going to do more to improve conditions for voters on all these fronts.
Now, Senator Clinton, after yesterday's victory, can crow that she really persuaded voters best that she is going to deliver on this front. She won those Reagan Democrats, those blue collar voters who are so crucial to a victory for any candidate in November. Walking away with 54 percent of the vote here among people who make $50,000 or less. That was her margin of victory among them yesterday in Pennsylvania, a key demographic and an area where Clinton will be hammering home her message that she has the experience and the know- how to make a difference and improve the economy.
Of course, Barack Obama will continue to deliver his message that he can change Washington. And so he will do more to improve pocketbook-kitchen table issues for Americans. It is going to be a tough fight on those fronts in the next weeks as we look ahead to the contests in Indiana and North Carolina -- Gerri.
WILLIS: So, Jessica, obviously Obama here having trouble with Reagan Democrats, the blue collar workers. How is he spinning this today?
YELLIN: Well, I'll tell you, I was on a call with his campaign manager who said, look, first of all, Barack Obama has done very well in these groups, even beating Senator Clinton among folks who make $50,000 or less in a number of states. He cited 14 states in which he has won that demo, and Clinton has lost in certain states.
So, he says it doesn't really matter where -- he says the primary results don't necessarily portend what will happen in a general election because those Democrats, in their view, will "come home." They won't vote for John McCain, and that Barack Obama's message will penetrate over time.
But, Gerri, after this victory for Senator Clinton yesterday, it certainly is going to be an uphill fight to convince the superdelegates that they need to make a decision quickly. We are going to see this thing play out through June 3rd -- Gerri.
WILLIS: A long time still to go.
Jessica, thanks for that information.
This election, get the facts and have some fun. Join the League of First Time Voters. For more info, log on to CNN.com/league.
ALI VELSHI, CO-HOST: Now, you're going to hear from Senator Barack Obama in his first national interview since the Pennsylvania primary. CNN contributor Roland Martin will be talking to him on CNN Radio in just a bit, and we will be simulcasting the interview live on CNN.
That is Roland getting ready for the interview, the first national interview with Senator Barack Obama since last night's Pennsylvania primary.
Issue #1 for the next president will be to fix this economy. And there are two challenges -- policy challenges and public perception.
President Bush yesterday said that the U.S. economy is not in a recession, but it is in a slowdown. Some people say the president is not admitting what might be a reality, the fact that we could be in a recession. Others point out that the president has to be very careful about what words he uses when he discusses the economy.
Lakshman Achuthan is with the Economic Cycle Research Institute. He's a friend of our show because he explains these things to us very well.
Let's start by listen to what President Bush said yesterday when asked if we are in a recession. Listen to this.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We're not in a recession. We're in a slowdown.
We grew in the fourth quarter of last year. We haven't had first quarter growth statics yet. But there is no question we're in a slowdown.
(END VIDEO CLIP)
VELSHI: To be precise, we have not gotten statistics from this year at all, 2008. We know that 2007 ended with a little bit of growth. Not much. Not a recession. We don't know what 2008 is.
Did the president choose his words carefully? Is he saying the right thing? Is he in denial, or can he not be talking the economy down?
LAKSHMAN ACHUTHAN, ECONOMIC CYCLE RESEARCH INST.: Well, look, he risks sounding out of touch, because as you know when you do your polling, everybody thinks -- pretty much -- a lot of people thin we are in a recession.
VELSHI: Well, last night, 88 percent of Democrats who were leaving the polls said they thought we're in a recession.
ACHUTHAN: Right. And then even nonpartisan. If you just look down the middle, you're getting three out of four roughly saying we're contracting.
And it's not true that there aren't statistics. There are. It's just that you don't have a GDP estimate.
We do have statistics on, for example, jobs. And I think the president is certainly hoping obviously that we don't go into a recession. I understand that. And he's probably hanging it on this idea, this misguided idea, that a recession is defined by two negative quarters of GDP.
VELSHI: Well, tell me about that, because we hear that a lot.
ACHUTHAN: Yes.
VELSHI: That's not the case?
ACHUTHAN: No. I mean, if that was -- if that was the true definition of recession, guess what? We didn't have a recession in 2001 when almost three million people lost their jobs. Try to tell them there wasn't a recession. That will be pretty hard.
And already this year we've lost 250,000 jobs. And see, this is a hallmark of a recession, is months on end of job losses.
The GDP numbers will come in. They may be mildly positive because of an opportunity that we had that was very unique to actually avert a recession.
So, in a way, by denying what's going on, you may actually be late with policies that could have forestalled the recession. Therein lies the danger.
Now, I'm not saying the president has to go out and say, rah, rah, we're in a recession. But we did see Chairman Bernanke, for example, at the Fed, belatedly come out and admit that, look, this is possible, and there are a lot of things that are going on -- these housing bubble, credit bubble bursting that are weighing on the economy. And that they are trying to do things, albeit belatedly, to forestall the downturn.
VELSHI: What's the danger? When the president is deciding on how he is going to answer these questions, clearly he doesn't wing it.
ACHUTHAN: Yes.
VELSHI: They've had discussions about it. What's the danger in saying we could be in a recession, some people think we're in a recession. What happens when the president says we're in a recession?
ACHUTHAN: Well, you know, there's many drivers of the cycle, right? There's -- and one of them is psychology. It is not the only one.
Many times people have been depressed as a nation and thought we were in a recession when we weren't. And many times they have been euphoric when actually we were slipping into recession.
So, this isn't the be-all/end-all about how the economy works. And I think that right now, since there has been concern about the economy for years -- and right now you're having months on end of job losses -- it is perhaps healthy to admit that there is an issue, that there is a problem here. And it goes beyond a slowdown, and that we need some more prompt and quicker policy responses than what we've been getting.
VELSHI: And this will be instructive for whomever becomes the new president.
Lakshman, your concern -- and you've always talked about jobs being a big concern. Right now our polling indicates that inflation, gas prices and food prices are sort of at the top of the list for Americans.
ACHUTHAN: Yes.
VELSHI: What's the bigger deal, the food prices, the inflation, the gas prices, housing, credit crisis, jobs? What's the thing that worries you most?
ACHUTHAN: Look, they all go hand in hand, because high prices are tough when you have a job. They are untenable when you don't have a job. OK?
And so if you don't have that income coming in, you can't tighten your belt a little bit and make it happen. And that's what people were doing earlier, in '07, in '06, in '05.
We had oil price spikes, 60 or so percent rises each of those years of higher prices. But because the job market was still adding jobs, we were able to tighten our belt and muddle through. Now with job losses mounting when prices rise, now you don't have an option.
VELSHI: Lakshman, good to talk to you, as always.
ACHUTHAN: Thank you.
VELSHI: Lakshman Achuthan with the Economic Cycle Research Institute.
Listen, it's your turn to weigh in on today's "Quick Vote" question. And by the way, we really, really depend on the information we get when you respond to these.
Let's bring in Poppy Harlow from money.com.
Hi, Poppy.
POPPY HARLOW, MONEY.COM: Hey, Ali.
Well, a troubling study out today shows that about 70 percent of at-risk subprime borrowers are not receiving the help they need to stay in their home. And that indicates a lack of interaction between mortgage servicers and homeowners.
The government has stepped in with several plans to help struggling homeowners, but is it a good idea?.
We want you to weigh in. Here is our question today.
Will a federal mortgage rescue plan be good or bad for the economy? Please vote. We really want to hear from you. Log on to cnnmoney.com. We'll bring you the answers later on in the show.
WILLIS: Thank you, Poppy.
Up next on ISSUE #1, a double whammy for California. Why it's one of the top states in gas prices and foreclosures and what's being done about it.
And choosing between food and medicine, it's a reality for a lot of older folks. Hey, but it doesn't have to be.
The story when ISSUE #1 comes right back.
(COMMERCIAL BREAK)
VELSHI: And we are back with ISSUE #1 on CNN.
No relief at the gas pump for Americans. AAA reports a new record high, $3.53 a gallon.
If you think that's high, folks in the San Francisco Bay area are dealing with even higher prices at $4 a gallon. People there are making permanent changes to the way they live.
CNN's Chris Lawrence has the story.
(BEGIN VIDEOTAPE)
CHRIS LAWRENCE, CNN CORRESPONDENT (voice over): San Francisco drivers are getting past the shock. Now they are changing their lives to live with $4 gas.
DEBBIE JASMIN, CANCELED VACATION: We don't take our Expedition out usually.
LAWRENCE: People have permanently parked their SUVs. Traffic is down on Bay area bridges, and the trains have seven percent more riders than this time last year.
UNIDENTIFIED MALE: That's why I'm riding BART today, because of the price of gas now.
LAWRENCE: It's also changing when people drive and what. Overall, car and truck sales are down. But hybrids are up almost 40 percent.
SCOTT DOUGLAS, PRIUS DRIVER: I used to have the luxury of not really even worrying about the price, partly because I've got the Prius. But now, $43.
LAWRENCE: Think that's bad?
DOUGLAS: Oh my god. Wow.
LAWRENCE: Scott Douglas just saw what the guy before him paid to fill up.
DOUGLAS: When was the last time you saw $115 spent on gas?
LAWRENCE: Especially for taxi drivers who buy their own gas.
DIDDY DENNIS, TAXI DRIVER: When I first started, you know, it was like $2-something.
LAWRENCE: Now every press on the pedal eats into his wallet.
(on camera): Why don't you just raise the rates to make up the difference?
DENNIS: Well, that would be a good thing if I could. But unfortunately, I don't have any control over it.
LAWRENCE (voice over): Only the city can raise taxi rates to keep customers from getting gouged, but it's killing the cabbies and will probably force Diddy Dennis to quit.
DENNIS: It seems like I'm bringing home almost 60 percent less than what I was when I first started.
LAWRENCE: And a lot of Bay area families say there is no end in sight.
UNIDENTIFIED FEMALE: I don't think we'll be doing any big travels this year, or this summer, at least by car.
(END VIDEOTAPE)
LAWRENCE: Yes, especially when you are talking about paying $60, $70 a pop just to fill up. People here have canceled vacations, sold off some of their big trucks, and some companies here in the Bay area have even started to run shuttles to pick up and take their employees to work -- Ali.
VELSHI: Hey, Chris, you know I take a cab in to work from time to time. And the other day, rather than sort of getting one that drove by me, he was parked at the corner. He said, "You know what? I can't afford to drive around just to look for fares. I'll have them come to me."
But over in the Bay area, we know California has the highest gas prices in the continental U.S., so, you know, this hasn't been something that's happened quickly, has it?
LAWRENCE: Well, that's the thing. You know, it's -- you know, we are not talking about a case of, "I remember when gas was a quarter," you know, as my dad likes to say. You know, people have seen their commuting costs double in a matter of about four years, which isn't a long time.
And we talked to a lot of people who have made a concerted effort to say, OK, I was driving 1,000 miles a week. We've got to get that down to 500. I've got this much money to spend. So, if I can't spend anymore and gas doubled over the past four or five years, then, hey, we have to drive half as much. VELSHI: All right, Chris. Those are big choices to make. And some people -- in some cases it means moving closer to work, which is another expense.
Chris, thanks for being on this story for us.
Chris Lawrence in San Francisco -- Gerri.
WILLIS: That's a lot of money.
We are going to talk taxes now, though, too. And that's a lot of money. It's April 23rd, a full eight days after your taxes were due. So, why, why, why are we still talking about taxes?
Well, let's ask Jennifer Westhoven.
JENNIFER WESTHOVEN, CNN CORRESPONDENT: So this is the day you can celebrate Tax Freedom Day.
WILLIS: What is Tax Freedom Day?
WESTHOVEN: When you stop working for the government and you start working for yourself.
WILLIS: That means I finally paid my tab?
WESTHOVEN: Finally. Yes, every dollar that you've made so far this year adds up to just enough to cover your tax bill for the year.
The Conservative Tax Foundation in Washington calls this Tax Freedom Day. You had to work for nearly four months to pay for all these taxes, and this is all of them -- federal, state taxes, sales tax, property taxes.
Americans pay more for government than we do for food, clothes and housing combined. It's almost 31 percent of our income.
Now, obviously, that is an average, because our own tax rates vary. State and property taxes are so different across the country in.
In Alaska, taxes are so low, they were done paying last month. In New York, New Jersey and Connecticut, they still have two weeks left to go. And I think that's partly due to property taxes, I think. And those I consider the most hated tax.
WILLIS: Oh, to be sure. And they've gone nowhere but up.
Well, four months, what I am getting for the money?
WESTHOVEN: Well, 12 days of the year you have to work for property taxes.
WILLIS: Yes. Well, I think I work a little more than that.
WESTHOVEN: It's frustrating. Yes. So, what are you getting for all this work? Well, the federal government spends $2.7 trillion a year. Nearly all of it comes straight from taxpayers' pockets.
Now, by some estimates, these are the three biggest costs. There's defense and national security, and that does include, you know, wars in Iraq and Afghanistan.
There's 21 percent Social Security, 21 percent Medicare/Medicaid. Almost 10 percent on the national debt.
And then -- you know, you'll probably notice this does not add up to 100 percent -- they're almost incidental, even though these are big programs, education, veterans, science, taking care of our roads and bridges.
WILLIS: Important stuff.
WESTHOVEN: Yes. So, it's important stuff, but at least you know that after today, you get to keep every penny.
WILLIS: Well, thank you very much, Jennifer Westhoven. Appreciate that.
Up next, Senator Barack Obama live on CNN Radio with our very own Roland Martin -- there he is right there -- in his first national interview since the Pennsylvania primary.
Then, having to choose between food and medicine, why you should never have to do that, when ISSUE #1 comes right back.
(COMMERCIAL BREAK)
VELSHI: You're watching ISSUE #1 on CNN, the show where we respond to your concerns. And right now your concerns are about the economy.
The American way has been work hard and get ahead, but a new report says that lower-income Americans are actually making less money now than they were 10 years ago. Higher-income Americans are making substantially more.
Elizabeth McNichol is a senior fellow at the Center on Budget and Policy Priorities. She co-authored this report.
Liz, thank you for joining us.
This is something people have hinted at for a long time. But you are telling me that lower-income Americans have actually lost ground. They are making less money than they were 10 years ago.
ELIZABETH MCNICHOL, CENTER ON BUDGET & POLICY PRIORITIES: Thanks.
Yes, we found that over the last 10 years, the incomes of the lowest income families declined 2.5 percent, while the incomes of higher income families grew 9 percent.
VELSHI: How does that happen though? Because we constantly think that we've got to increase -- we've seen this recent increase in minimum wage. We think that people get sort of increases every year. What's happened?
MCNICHOL: Well, when you adjust for inflation, what's happening is that families who depend on wages, those 70 percent of Americans with less than a college education, have found that their real wages are declining or stagnant over the last 10 and 20 years.
VELSHI: Now, when you average this out for the whole economy, we've been hearing for years from many people that we've seen wages go up. Is that because at the highest level we've seen big increases? Does that skew the average?
MCNICHOL: Yes. Wages for those at the very top of the income scale, those college-educated and above, have been growing over this period.
VELSHI: Have you noticed any trends when you were looking at this research? Is there a trend, are there parts of the country where there is more prevalent than others?
MCNICHOL: We found that the gaps were widest in -- tend to be in the southern states and lowest in the Midwest or the plains states.
VELSHI: What is the trend that we should be concerned about? And I want to show you a map, by the way, that you provided us the information on that we are going to put up. It shows the states where -- tell me what is on this map. Some of the states where the income gap is the biggest are the ones in the darker red.
MCNICHOL: Right. The ones in the South, as you can see, that are colored in are the ones where the gap is. In the top third of the widest, and the lighter colors are in the middle group. Those that are more gray or blue are those where the income gap is the lowest, in the Midwest and the plains states, as I said.
VELSHI: What's the think we have to worry about going forward now, particularly in the midst of this election? What is it that the presidential candidates can actually do to try and change this?
MCNICHOL: Well, whether you are a policymaker at the federal level or at the state level, there are things that you can do to push back against this trend. One of those is to look at your tax system. Make sure it's not making things worse by not being based on ability to pay.
Another thing that federal or state tax makers -- policymakers can do is take a look at the federal minimum wage. As you said, the federal minimum wage was just increased, but it's the first time it's been increased in 10 years. You could index it so it would automatically go up as costs rise.
VELSHI: Elizabeth McNichol, thank you for joining us on this. It's a very interesting study.
Liz McNichol with the Center on Budget and Policy Priorities.
MCNICHOL: Thank you very much.
WILLIS: It's an age-old questions for folks with fixed incomes, often being forced to choose between food and prescription medicine. And now a new report out says this shouldn't be an issue.
CNN's Judy Fortin is live right now in Atlanta -- Judy.
JUDY FORTIN, CNN MEDICAL CORRESPONDENT: Hey, Gerri.
It's a heartbreaking reality for so many elderly Americans on Medicare. Some are being forced to make a hard choice between paying for prescription medications or buying basic necessities such as food.
Two studies out in today's Journal of the American Medical Association look at how Medicare Part D, the federal program to subsidize the cost of prescription drugs -- Gerri, back to you.
WILLIS: All right, Judy. Thanks for that. We'll get the rest of the story later.
Now to you, Ali.
VELSHI: Thanks.
Let's look in on CNN contributor Roland Martin, who is going to be talking with Barack Obama in his first national interview since last night's Pennsylvania primary.
Let's go to Roland Martin now.
(JOINED IN PROGRESS)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: ... in Wisconsin, in Iowa, in Virginia. And really, you know, if we had a demographic problem in Pennsylvania, it was that it's an older state than a lot of states. And it is true that Senator Clinton has some strong support among voters over 60.
ROLAND MARTIN, CNN CONTRIBUTOR: Now, when you say older state, we saw about 12, 14 percent of the total electorate were young voters. And basically you've done well. It's been around 18 to 22. Is that what you mean?
OBAMA: Exactly. So -- you know, so there is no doubt that Senator Clinton had some good support built in, in Pennsylvania.
We were starting off 20 to 25 points behind. We were able to close that gap. Made terrific progress, were able to lay the groundwork for a vigorous campaign in Pennsylvania in the fall, when -- you know, should I be the nominee, I'll have the support of people like Governor Rendell, who obviously worked very hard on behalf of this candidate. So, overall, we feel good about the work that we did. And now we are in Indiana and North Carolina, but I think it's very important for people to recognize that if you look at all the states where we've won, you know, we've won most of the vote when it is under 60 among blue collar voters. And the problem is that we still have to do a better job of making sure that we are talking to our seniors, and it's not surprising that Senator Clinton's argument about experience may have more traction with them.
MARTIN: Senator Obama, we are also simulcasting this on ISSUE #1 on CNN. And I've got to get to the economy.
We've been hearing talk about appealing to Reagan Democrats. How do you make the argument -- do you make the argument that, look, you folks need to be voting on your economic interests? Because critics say that Democrats have not made that connection to say that if you are -- if you are a blue collar white person in Ohio and Pennsylvania, you are in the same economic condition as an African-American or Hispanic in the inner city of Chicago. Your economics are the same.
How are you going to make that connection if you are the nominee against John McCain, speaking specifically about the economic interests of those voters?
OBAMA: Well, look, people obviously don't just vote on economics. And so, you know, people are going to be voting on a whole range of issues.
They'll be voting on, you know, foreign policy issues. They'll be voting on issues related to faith. They'll be voting on issues relating to crime.
So there are going to be a whole bunch of things that people care about. But there is no doubt that the economy is the number one issue. I think that is a huge built-in advantage for the Democrats.
Whoever the Democratic nominee is, is going to be able to go up against a Republican candidate who essentially wants to continue George Bush's economic policies, policies that we know the vast majority of people are dissatisfied with. So, the key is just to talk in very specific terms about how we can improve the lives of working people. That if we are changing our tax code and not giving tax breaks to companies that are shipping jobs overseas or to the wealthiest among us, but instead giving tax breaks to working families, that is more money in their pockets and that's actually going to be improve economic growth.
If we talk about investing in infrastructure, green technologies, you know, those are all job generators that could put people back to work. Stabilizing the housing market so that people aren't losing value in their homes. Making sure that we're investing in education and making college more affordable and providing health care for all people.
You know, we are going to be able to, I think, present a clear platform of how ordinary people's lives will be better as a consequence of a Democrat in the White House. And I think we will be able to persuade a lot of people that we need to bring about that kind of change.
ROLAND MARTIN, CNN CONTRIBUTOR: Senator, I've got to ask you this question because I watched the debate last week, I've watched previous debates, and it seems that we gloss over college -- the cost of going to college. Tuition rates exploding all across the country. Sallie Mae announced that they're going to be losing money on giving college loans. They'll be even more selective.
So what will you do, as president, to help those families who flat-out cannot afford to send their kids to college right now? And we're going to see tuition going up big time over the next 12, 24 months.
OBAMA: Well, it's a huge issue. And it's affecting not just the traditional four-year college students, it's affecting a lot of non- traditional students who may go to a community college for two years, work and they need to go back for retraining and they just can't afford it, especially if they're already supporting a family.
So what I've said is, we need to expand Pell grants so that we have more grants relative to loans. We also need to get out the middlemen between federal guaranteed loan programs and students. You know, banks, Sallie Mae, other financial institutions, they're making billions of dollars on a lot of these loan programs. And there's no reason why we can't make those loans directly to students. Saving that money will allow us to expand more loan programs.
And the third thing is, a $4,000 tuition credit, every student, every year. And they don't have to use it all in the same four years. They can stretch it out so that students who may be going to school for two years, then going back for retraining five years later, they can benefit as well in exchange for community (INAUDIBLE).
The final thing we're going to have to do though is, we've got to work with universities to keep their costs down. And some of that has to do with the decline of state assistance, which is why it's so important that the federal government follow through on its commitments to various funding streams to the states so that they have enough money to help the universities. And we've got to work with universities and students to try to lower the cost of inflation generally. And it doesn't just include tuition. It means text books that are sky high.
Now these are all issues I'm, obviously, sympathetic to because Michelle and I, our combined loan debt when we got out of law school, was bigger than our mortgage. And, you know, as somebody who had to finance his own college and law school education, I know how difficult it is for a lot of people.
MARTIN: I'm getting the hook from your people but I've got two more questions. "The Washington Post" had a story today talking about there's a debate going on in your campaign about you growing more negative as we go to North Carolina and Indiana. Is that the case or not or are you going to stay focused on the positive message, one that is about hope and change as you compete against Senator Clinton?
OBAMA: Yes, whoever "The Washington Post" was quoting isn't part of my campaign because we have not had any discussions about going negative the way that that story referred to. You know, we have been consistent in this campaign in talking about the issues and trying to have a different kind of politics and so you might as well "The Washington Post" needs to take that source out of their Rolodex. That's not somebody who was representative of any conversations we've had.
In fact, I've been adamant to say that, you know, we can't run that kind of campaign. It's contrary to our message. And I think it would actually erode support for me, in addition to not solving the problem that the American people need solved.
MARTIN: Now debates. There's not going to be a CBS debate on Sunday in North Carolina, but I do know that there's been talk about a proposed debate in Indiana aired on CNN and I think PBS. What about that? Are you through with debates or are you considering that? And can we get a commitment that you would actually participate in that debate?
OBAMA: Well, Roland, you know, I know you want a scoop but, you know, we'll take each request as they come. Obviously we've had 21 debates at this point. I think the people have a pretty good sense of where Senator Clinton and I stand and, you know, what we're talking about during the course of these debates.
At this point, what's most important to me is making sure I'm talking directly to people. Doing as many town halls as possible. Letting them ask questions of me directly. Me hearing from them and finding out what they think and what they care about. And with only two weeks and two big states to cover, you know, it's not clear that another debate is going to be the best use of our time.
But, you know, we're going to be taking a look at every avenue to be able to talk to the American people, what they are concerned about, rising gas prices, keeping home foreclosures at bay, making sure that we're investing in the kinds of energy strategies that we need for the future. And that's going to be the central focus from our campaign over the next couple of weeks.
MARTIN: Well, hey, you know, we tried and -- plus you're up 15 points in North Carolina. So you can find a couple of hours to have a debate.
Senator Barack Obama, I certainly appreciate it. Thanks so very much, sir.
OBAMA: Great to talk to you, Roland. Thank you so much. Bye- bye.
MARTIN: Thank you.
And, folks, we tried to get Senator Hillary Clinton but she's actually in the air right now. (END VIDEOTAPE)
ALI VELSHI, CNN ANCHOR: And that was Roland Martin trying to get a commitment for a debate from Senator Barack Obama. Thank you to Roland Martin for that. And thank you to CNN Radio for bringing that to us.
We're going to bring you that story, Judy Fortin's (ph) story, about choosing between medication and food tomorrow on ISSUE NUMBER ONE.
Coming up next, one state sees a one-year rise in foreclosures of more than 300 percent. We'll tell you which one that is and what's being done about it.
And why you might want to think twice about where your shrimp comes from.
ISSUE NUMBER ONE rolls on after a quick stop in the CNN "Newsroom."
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VELSHI: Welcome back to ISSUE NUMBER ONE on CNN.
California's having a rough time -- sky-high gas prices, as we reported on earlier in this program, and it's one of the hardest-hit foreclosure states. The number of California homes lost to foreclosure surged nearly 328 percent in just one year. And in the first quarter of this year, an average of -- are you sitting down for this -- 518 foreclosures every, single day, according to DataQuick. Peter Viles is a senior producer of real estate for the latimes.com and an old friend of mine and a colleague of mine.
Peter, good to see you again, although not under these circumstances. Tell us what you know.
PETER VILES, SR PRODUCER FOR REAL ESTATE, LATIMES.COM: Yes, the market here is as bad as those numbers indicate. We have falling prices. Prices down 20 percent to 30 percent just in the past year. Prices here peaked a little later than in the rest of the country. Prices are falling. Foreclosures are rising.
Foreclosures are becoming a larger and larger portion of the real estate market here. Now they make up one in every three sales in California now as a foreclosed house being sold. And in some of the hard-hit areas, down in the central portion of California, two out of every three houses now being sold in the market is a house that just went through foreclosure.
Ali.
VELSHI: Now, Peter, we know in places where these foreclosures are high, that they're dealing with the things that the rest of the country is worried about -- empty homes, the increasing crime rate, the loss of the tax base. So what's being done about this that could help?
VILES: Well, you know, the market is, to some extent, waiting for Washington to come up with some solution or some approaches. The big hope in California is that some changes that have already been made, to make available financing at the higher end of the market, the increase in limits on conforming loans and FHA-backed loans from the $400,000 up to the $700,000, there is hope that that will breathe some life into the market out here because the higher end of our market, or even the middle end of our market, which is say $400,000 to $700,000 houses, that has been pretty much frozen out here for lack of credit.
Now these changes will make it better than it has been in the past couple months, but they won't bring us back to a year ago and two years ago where almost anybody could get a loan, no money down, no proof of income. Those days are not coming back. So we're not going to go back any time soon to the vibrant real estate bubble, really, that we had here up until about 18 months ago.
VELSHI: Is there a deal to be had? Are there people who couldn't get into the market because of the high prices of property in California who are now seeing prices come down to the point that they can buy?
VILES: This is a very active debate right now in California -- is it a good time to buy? I have readers on my blog at "The L.A. Times" who have bought foreclosed houses recently and they say they think this was a smart move. I have just as many readers, maybe even more readers, who are saying, wait a minute, this is like trying to catch a falling knife on Wall Street. Prices are still falling. We're only halfway into this. We've got a long ways to go. If you buy now, you're going to be under water in a year or two. So a very vibrant debate right now about how much further we have to go on the down side here. Prices, as I say, have fallen 20 percent to 30 percent. We could see a lot more of that.
VELSHI: Peter Viles, good to see you, as always. Thanks for joining us.
VILES: Great to see you.
GERRI WILLIS, CNN ANCHOR: Congress is trying to come up with legislation that would help those folks in California. We've had Representative Barney Frank on the show just last week to talk about his plan. Now it would expand FHA, letting it refinance $300 billion in loans for at-risk borrowers. But our next guest, hey, he doesn't think that's a good idea. Joining us from Washington is Congressman Jeb Hensarling. He's a member of the House Financial Services Committee that is considering this bill.
Now explain to me, sir, what are your objections to the Barney Frank bill?
REP. JEB HENSARLING, (R) TEXAS: Well, first, the person that we're trying to help here is the person who did it right. And when you're struggling to make your mortgage, you shouldn't necessarily be compelled to pay for your neighbor's mortgage, especially when we know a lot of people speculated.
Frankly, there was a lot of mortgage fraud. The Financial Crimes Network, a part of the FBI, has said that there has been a 42 percent increase in mortgage fraud.
And so, again, when people are struggling as their paychecks are shrinking, to sit there and think that they're going to have to be on the tab for $300 billion of exposure when they're struggling to make their mortgage payment, it's just not right.
WILLIS: Sir, well let's go back to your first idea there about the fraud in the industry. You've said that it wasn't predatory lending, it was predatory borrowing. You put some of this responsibility right at the feet of the folks who were borrowing the money.
HENSARLING: Well, frankly, there's a lot of responsibility to go around. There's no doubt that there was some predatory lending. But according to our statistics, over half of the mortgage fraud had to do with borrowers who lied about their assets, lied about their incomes, lied about whether or not they were going to occupy the home. And so, again, a guy who may have lived in a cramped apartment for years to put together his down payment, had to work overtime to meet his mortgage payments, for him to have to bail out the other guy just isn't right. It's just not fair.
WILLIS: All right, let's get to your other point. You talk about $300 billion being way too much money to put behind this. Let's hear what Barney Frank had to say about that tab.
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REP. BARNEY FRANK, (D) MASSACHUSETTS: Only if every, single person who got a financial guarantee defaulted and none of the property was worth anything when we sold it would it be $300 billion. We've worked with the Congressional Budget Office. They've told us that a guaranteed level of $300 billion authorization, of $300 billion, you're talking about between 1 percent 1.5 percent of that, maybe $3 billion or $4 billion is the most likely range, that it might cost the taxpayers.
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WILLIS: So, Representative Hensarling, Barney Frank there saying it's not going to cost anything like $300 billion. That's just the backstop. Do you agree or does he have this number wrong?
HENSARLING: Well, of course not. I've got a lot of respect for our chairman. And he's got a lot of talents, but counting is not necessarily one of them. We were told that back in the whole savings and loan debacle back in the '80s that the taxpayer would never have to pay for it. That this insurance fund would be enough. Well, we know it ended up costing the taxpayer about $150 billion. Money that could have been used for low to moderate income people to send kids to college. And so what we know is, under his plan, that people will dump Wall Street -- you can't bail out borrowers without bailing out lenders. And so this is kind of a Wall Street bailout bill and (INAUDIBLE) their worst.
WILLIS: All right. Representative, let me interrupt you for just for a second. Your solution to this crisis, the capital gains tax cut, isn't that just the solution that Republicans always put on the table no matter what's going on in the economy?
HENSARLING: Well, the solution we put on the table is to create more jobs and more opportunity. And it's not just theory that we have, the entire economy needs help. It's not just housing, the entire economy. We've got to protect paychecks. We have to grow paychecks. And every time we reduce corporate gains tax rate, you've got $1 trillion of money sitting on the sidelines that could be used to help refund and to help jumpstart this economy. That's what we need. You can't have capitalism without capital.
WILLIS: Well, Representative, thanks for your time today. We appreciate it.
HENSARLING: Thank you. Thank you.
WILLIS: Up next, the shrimp you buy at some big box stores or eat at several chain restaurants might be a little less appetizing after what we tell you coming up.
And we're going to open up the help desk and answer your questions. The address, issue1@cnn.com. You are watching ISSUE NUMBER ONE.
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VELSHI: Welcome back to ISSUE NUMBER ONE.
Let's talk shrimp for a minute. The United States imports about $4 billion in shrimp. Most of it from Thailand and Bangladesh. Now a new three-year investigation documents dangerous labor practices in those countries. CNN's State Department correspondent Zain Verjee has been working on this story for some time.
Zain, what can you tell us?
ZAIN VERJEE, CNN CORRESPONDENT: Well, Ali, if you order shrimp for dinner or you buy it from the grocery store, you're going to need to know this. A new report says that the shrimp you're eating could be linked to slave labor half a world away.
Now a group called the Solidarity Center, which is allied with the AFL-CIO, has spent three years, as you say, investigating. What they found was this. That there was a growing world appetite for shrimp, especially in the United States. The report says that the average American eats nearly three pounds a shrimp a year and 80 percent of it's imported mostly from Thailand and Bangladesh. The U.S. imports about $1.5 billion worth of shrimp. Now Solidarity found that as the shrimp industries have been booming in those countries, workers who processes the shrimp have become exploited. The report details this. You know things like forced labor, beatings, sexual abuse, low wages, long hours. In places like Thailand, many workers are trafficked from countries like Burma and they're forced to work under brutal and difficult sweat shop like conditions. The State Department's director of human trafficking traveled to Thailand and he met one woman who was abused.
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UNIDENTIFIED MALE: I was stunned to hear the details. Aawin (ph) was caught, dragged back and beaten when she tried to escape this labor camp. She was refused food and water and she had her head shaved to be made an example to other workers who would try and rebel against their oppressors. All this was designed to demonstrate to her colleagues what would happen if they dared to escape. This is forced labor. It can't be described in any other way except slavery.
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VERJEE: The report went on too to give more examples, Ali, saying that workers would sometimes stand on slime for hours and knife and peel 40 pounds of shrimp and get paid something like less than a penny a pound. And a large portion of that shrimp is ending up here in the U.S. We're going to have . . .
VELSHI: Zain, do we know . . .
VERJEE: So, sorry.
VELSHI: Do we know the companies involved in this and have we gotten a response from them?
VERJEE: Well, the Solidarity Group saying that it didn't speak to the importers or the retailers of shrimp in the U.S. But what they said was that they've traced these shrimp deliveries to some pretty well-known U.S. companies like Wal-Mart. We asked Wal-Mart what they thought of the report? They said they need to look at it. But they did get back to us w. When we told them what was going on they said this, "food safety is a top priority at Wal-Mart. We hold our shrimp suppliers to the highest safety and quality standards." Then they added, "although we have not seen the Solidarity Center's report, we are working with our suppliers to investigate the allegations shared by CNN. We're not aware of any issues in our supply chain."
We're going to have a full investigative report tomorrow, Ali, on ISSUE NUMBER ONE.
VELSHI: Very good. We look forward to it, Zain. Thanks very much.
WILLIS: Up next, the help desk. We asked for your e-mails and your response has been fantastic. The CNN Money team will tackle your questions when ISSUE NUMBER ONE comes right back.
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WILLIS: We get so many e-mails from you asking for answers to your questions, so we created the Help Desk to do just that. Let's get right down to it. Lynnette Khalfani-Cox is a best-selling personal finance author and Anya Kamenetz is with Yahoo! Finance. Also with us, the lovely CNN business correspondent Stephanie Elam.
Thank you for being here.
Let's get right down to it. Timothy asks, "I have been unemployed or under-employed since February 2007. What income I do have goes to keeping my car and a roof over my head -- and credit cards had to wait. Now even eight years in the military and a masters degree can't help me get a job because of the Fair Credit Reporting Act." This would be the critical part of the e-mail. "How do I overcome my dented credit rating to secure a job that would easily pay down my credit cards?"
What do you think, Lynnette?
LYNNETTE KHALFANI-COX, AUTHOR, "YOUR FIRST HOME": Well, he's in a bind because the two biggest factors that impact your credit score are your payment track record and the amount of revolving debt, particularly the amount of credit card debt you have. The best advice is to cut back on other areas if you can. Try to attack the credit card debt. You need to have a good credit rating nowadays, unfortunately, because employers are looking at that before they give you a job.
WILLIS: It's tough. It's really tough out there.
Another e-mail. This one from Justin at Georgetown University. "I am a 24-year-old student. Should I open an IRA, begin paying into a Social Security account, or should I trust that the economy will support me when I am old?"
Anya, what about Social Security? Is it going to be there?
ANYA KAMENETZ, AUTHOR, "GENERATION DEBT": It may be there. We may have UFO's come. There's a lot of speculation about that. Justin, do not pass go. Get a Roth IRA right now. You need that tax advantage for later. You're going to put in a monthly, you know, transfer from your account and just start that habit now. You're going to be so glad you did.
WILLIS: I think that's great. You know he's even asking the questions.
The next e-mail is from Edgar who asks, "what happens to my credit record if my home goes into foreclosure?"
Stephanie, it's not good.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: It's not good. It's definitely going to be there. I mean, think about it. This is a good way to tell how you will take care of some big possessions that you have. Some things that you own. So it will be seen as a serious problem on your credit and it will linger there for a number of years. They don't really tell you how long, but it will definitely stay on there. Also, if you go to try to rent a place after that, that foreclosure will also make it difficult to do that as well.
WILLIS: Yes, you just don't want to go there.
ELAM: Yes.
WILLIS: OK, Cindy in Colorado has a question. "I would like to know the best investment I can make for my children - three and six -- today. If I have $100 a month to put into an account for them, where should I invest it?"
What do you think, Lynnette? I love the fact that she's asking the question.
KHALFANI-COX: I do, too. And I'm in the same boat. I've got a two-year-old, an six-year -- an eight-year-old, I'm sorry. My son's going to say, six? An eight-year-old and a 10-year-old. Hands down, the 529 savings account. It's a great way to save for college. You can sock away, as she said, as little as $100 a month. Even $25 a month if that's what you choose. But it's a good way to get disciplined about your kids' savings while they're early.
WILLIS: Savingforcollege.com is a great web site to use. Savingforcollege.com.
OK. Emily has a question. "I am 24 years old. I recently racked up some credit card debt which has adversely affected my credit score. My parents gave me a credit card, with my name on it, tied to one of their accounts a few years ago. The card is still active. Will my poor credit score affect theirs?"
Anya?
KAMENETZ: Unfortunately, yes, mom and dad, it is going to affect their credit potentially. And if they -- the good news is that they have a much longer credit history than Emily does and so it won't be as bad of a hit on their credit.
WILLIS: But, you know, piggy backing, you know, is really a thing of the past now. It's really hard to do that.
Stephanie, you know, people just aren't allowed to, you know, get on top of somebody else's credit card and just ride it to the shopping mall anymore.
ELAM: It is the old school way. I think when I was in college, a lot of people did that. But it's something that needs to be watched and it's become such a problem for some of the credit card companies that they started cracking down on that.
WILLIS: Guys, great answers. Love it.
Lynnette, Anya, Stephanie, thanks so much for being with us. Ali.
VELSHI: Thanks, Gerri.
Time to get the results of today's Quick Vote. We asked, will a federal mortgage rescue plan be good or bad for the economy? Fifty- five percent of you think it would have a negative effect on the economy. Thirty-one percent say it won't make a difference. Fourteen percent think it would be good for the economy.
Time now to get you up to speed on other stories that are making headlines. For that, let's head to the CNN "Newsroom" with Don Lemon and Brianna Keilar. It starts right now.
