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Issue Number One
Mortgage Relief Could be Way for Thousands of Families; Primary Day
Aired May 20, 2008 - 12:01 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CO-HOST: Senators strike a deal. Will it help you save your home?
And it's Primary Day.
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UNIDENTIFIED MALE: Try being honest with the people.
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VELSHI: From the voters' mouths to the candidate ears, we hear from people who are casting their ballots today.
And you are fed up. From the fees to the seats to the lost luggage, passengers are disenchanted. Are you happy about anything the airlines are doing?
ISSUE #1 is your economy. ISSUE #1 is your vote. ISSUE #1 starts right now.
I'm Ali Velshi. Gerri Willis is off today.
First, let's check out the ISSUE #1 stories that are making headlines today.
Well, mortgage relief could be on the way for thousands of families. The Senate Banking Committee has just agreed on a bill that would guarantee loans to at-risk borrowers and help push down the cost of their homes to help them recover from the mortgage meltdown.
We're going to have a lot more on that in a moment.
The producer price index is out, and it increased by just two- tenths of a percent in April. In other words, companies that buy goods wholesale and turn them around to you, the consumer, didn't have to pay a lot more than usual. Still, compared to last year, inflation at the wholesale level is up more than 6 percent. If only we could say the same about oil.
The price of a barrel crossed $129 for the first time ever this morning. Get this, at that rate, with the U.S. consuming more than 20 million barrels of oil a day, we are getting close to spending a trillion dollars a year on oil.
Trust me on that. We did the math. Well, we begin with the Federal Trade Commission and what it calls the largest telemarketing fraud crackdown in U.S. history. The FTC unveiled Operation Tele-Phoney this morning. In the 13 new cases it cited, the FTC says more than 500,000 consumers were allegedly defrauded by telemarketers resulting in losses of more than $100 million.
In all, the crackdown involved more than 180 cases targeting telemarketing scams like tax rebates, advanced fee loans, and credit cards and prescription drug plans. It involved more than 30 law enforcement agencies in the United States and in Canada.
Let's talk a little more about the Senate mortgage plan that just got through the Senate Banking Committee in the last hour. It would allow the Federal Housing Commission to back $300 billion in new loans to what it calls at-risk borrowers.
Now, here's how it works. Say a distressed borrower has a home loan of $200,000. But in this market, the house has lost value. It's only worth $180,000.
Well, to refinance through the FHA program, the lender, the bank, writes that mortgage down to 90 percent of the home's current value. So the new loan would be $162,000, and that would be on a 30-year fixed mortgage. So, basically, there's $38,000 that's off the table from the original loan.
Now, in exchange for writing that down, the government will guarantee the bank that it will all be paid back, the new loan amount, even if the borrower defaults. This bill is similar to another piece of legislation that already passed the House. Senators hope to get this bill to the president before the July 4th recess.
So what else made it into this legislation and what got left out, and what could it all mean for you and other homeowners out there? We're going to talk to the two men who designed the bill, Senators Chris Dodd and Senator Richard Shelby, from the Banking Committee. They'll be with us in just a moment.
But it is Primary Day, and the battle between Hillary Clinton and Barack Obama for the Democratic presidential nomination is playing out in two more states today. Clinton is expected to win big in Kentucky, Obama is the favorite in Oregon. And he's expected to hit a milestone.
CNN's Jim Acosta is with the CNN Election Express in Frankfort, Kentucky -- Jim.
JIM ACOSTA, CNN CORRESPONDENT: Well, Ali, not much of a horse race here in Kentucky. As you mentioned, Hillary Clinton is expected to do very well here. She could beat Barack Obama by 30 points here, according to the latest CNN Poll of Polls. And Senator Obama not doing too shabby up in Oregon, where he leads Senator Clinton by 10 points, according to the latest CNN Poll of Polls.
And as you mentioned, they are both talking about numbers, not economic numbers per se, but talking about some of these mathematical milestones that they both claim that they're reaching. Barack Obama at his victory rally tonight that he hopes to use to celebrate a win in Oregon, he's actually having that event in Des Moines, Iowa, a state that put him on the national stage. He plans to talk about how his campaign is claiming that they will have reached essentially a majority of the pledge delegates so far in this race.
But not to be outdone, Senator Clinton is also talking about mathematics. She is claiming, to the dismay of some Democrats, that she has actually a popular vote edge. Of course she is counting those disputed delegates, disputed vote tallies in Michigan and Florida.
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SEN. HILLARY RODHAM CLINTON (D-NY), PRESIDENTIAL CANDIDATE: And right now I am leading in the popular vote. More Americans have voted for me. Right now, if you add up the states that I have won, it totals 300 electoral votes. You have to have 270 electoral votes to win.
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ACOSTA: Now, as for Barack Obama, he is brushing off all that talk from Senator Clinton, setting his sights on John McCain and challenging the presumptive Republican nominee on the subject of foreign policy.
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SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Iran's the single biggest strategic beneficiary of our war in Iraq. And I believe that if we had tough direct diplomacy, we could contain the threat that Iran poses.
We've got to change how our foreign policy works. That's not what John McCain is delivering, and that's why he can't be in the White House for another four years or another eight years. He's got the wrong idea and the wrong message.
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ACOSTA: And speaking of issue #1, Ali, one thing that we should note that we've noticed in both of these states is these candidates have talked about green collar jobs, clean coal technology for two different reasons. In Kentucky, for the sake of generating some new jobs in this state. And in Oregon, because an environmentally friendly message certainly works up there with the voters in Oregon.
And believe it or not, Ali, after tonight, just three contests to go. Two states, one territory, if you will. Puerto Rico comes up first on June the 1st, then Montana and South Dakota two days after that.
VELSHI: Jim, if you -- you need a break or if you're not feeling up to Puerto Rico, I'll take that one off your hands.
ACOSTA: No, no, I got that one.
VELSHI: But maybe you're going to be in Florida. You got Puerto Rico covered?
ACOSTA: Yes.
VELSHI: Florida, the candidates are going there later in the week. We heard Hillary Clinton sort of touting Florida and Miami in terms of -- Florida and Michigan in terms of the states that she's hoping that she will have carried if they get counted in the final delegation. What is going on with Florida? Is there a likelihood these delegates will be seated at the convention?
ACOSTA: I think there's a great likelihood that the delegates will be seated at the convention, but not in the way that Hillary Clinton would like them to be seated. The Democratic National Committee has a rules committee that will be weighing in on this by the end of the month. And they will likely come up with some sort of calculation that does not essentially hand the nomination to Hillary Clinton.
They have to take into account that these states moved up their primaries against the wishes of the Democratic Party. And they're all -- it's all about the superdelegates at this point. This is another argument from Senator Clinton to try to persuade those superdelegates.
And Ali, I checked for you. Here in the state of Kentucky, Colonel Sanders, not a superdelegate here in the state of Kentucky.
VELSHI: My favorite food, KFC.
Jim Acosta, good to see you. Happy trails.
And Jim is part of the best political team on television. For complete coverage, tune in to that team, the Kentucky and Oregon primaries, covered starting tonight at 7:00 p.m. Eastern only on CNN, which is your place for politics.
OK. Let's head over to Capitol Hill now.
Moments ago we told you that the Senate Banking Committee has passed a major housing bill. The two senators who hammered out the deal join us now from Washington, Senator Chris Dodd and Senator Richard Shelby.
Gentlemen, thank you to both of you.
Senator Dodd, let's start with you. We talked to you about this issue, we've talked to you both about this issue before.
What is this deal going to do if I am worried about paying my mortgage but maybe I'm not delinquent? If I'm delinquent but I'm not in foreclosure? Or I'm in foreclosure? How would this bill, if it passes the way you've designed it, help me?
SEN. CHRIS DODD (D), CONNECTICUT: Well, first of all, I'm very impressed you could frame the question in that way.
Basically, what this bill is designed to do is three things. And one is to provide an opportunity for those who could be in delinquency, under stress, to be able to try and keep as many people in their homes as we can. It's call the Hope for Homeowners Act.
We do this by providing the resources out of the resources collected by the GSEs, the government-sponsored enterprises. And it also, in addition to keeping people in their homes -- at least the goal is to do that -- is to help provide a floor and a bottom of the residential mortgage market which is under great stress, and no one knows where that bottom is. That's important.
The second piece is affordable housing. We also believe it's important that people who may never be able to afford a home we want to try to help over the years for people to get into home ownership and decent shelters.
And thirdly, an issue that Senator Shelby worked very, very hard on in the past. That is to reform these government-sponsored enterprises, particularly Fannie Mae and Freddie Mac, to see if they have a strong regulator. The still provide a viable, strong, stable form of affordable housing for most Americans. It's very critical that that happen as well.
This bill deals with all three of those issues at the same time, and would not have happened without the gentleman to my left here, the former chairman of the committee working together to make sure it became -- passed overwhelmingly today.
VELSHI: Well, let's ask him.
We know you have all -- you and other legislators have worked very, very hard on this for many, many months. The danger, of course, is that if we -- if we spend too many more months on this, the whole crisis may just pass us by.
Senator Shelby, what is this going to do for Americans who are threatened with foreclosure, who are in foreclosure, or who may be losing their house? A lot of the things that you have done are laudable for a longer period of time to help people get into their homes to reform Freddie Mac and Fannie Mae. But right now we have people who are going to lose their homes.
What's this going to do for them?
SEN. RICHARD SHELBY (R), ALABAMA: What it's going to do, as Senator Dodd said, it's going to give them an opportunity to refinance. Assuming they're not speculators, you know, they've got merit to what they're doing -- and most people do -- this will give them a vehicle to finance their homes for a long period of time and a decent interest rate. And I think it's going to help thousands and thousands of Americans. And we need to do it now.
VELSHI: Senator Dodd, you are asking -- part of this legislation will mean that the banks need to reduce the amount of the loan so that it's only 90 percent of the value of the house. We know so many Americans are caught with mortgages that are worth more than the value of their house. Why on earth would the banks agree to do this?
DODD: Well, because the alternative is getting zero. And so this will allow you to get something back on a mortgage that might otherwise go into foreclosure.
In the month of April, 8,100 filings for foreclosure occurred every single day in the month of April. The previous month it was between 7,000 and 8,000.
There have already been 1,400,000 people that have gone into foreclosure. And according to a Credit Suisse, a major bank, as many as one out of every eight homes could be in foreclosure over the next five years.
That's what Senator Shelby and I the other 19 members of the Banking Committee decided we wanted to try and stop. And by a vote of 19-2, we were able to pass that legislation now to try and keep people in their homes.
And remember this as well, it's not just the homeowners and foreclosure. But that next door neighbor, that person who lives down the block, with every time you have a foreclosure in a neighborhood like that, the value of every other home on that block...
VELSHI: Yes.
DODD: ... even if they're current, declines immediately by 1 percent. Crime rates go up by 2 percent. You try to sell your home if you've got two houses that are on your block that are in foreclosure. It's impossible.
VELSHI: All right.
Senator Shelby, tell me this in language that our viewers will understand, because they don't understand maybe the roadmap and the wavy road that Congress works in. So we've got Congressman Frank's bill, we've got this bill. We have some provisions in this bill that mean that it may not -- even if it went into effect very quickly, it may not even take effect until October in some cases.
When -- is this bill going to get passed? And when is it going to get passed? And is the president going to sign it, as far as you know?
SHELBY: First of all, I believe it will be passed and soon. That will be up to the majority leader to set the date. That's Harry Reid. Senator Dodd has already referenced that earlier today.
Secondly, assuming we've pass it with the Senate, about like it is, it would go to conference with the House. I think we need to expedite this. We need to do it now. We don't need to do it in October or November.
DODD: Senator Reid, by the way, has been a great help on this legislation. And I know he wants this to go up as soon as we can get it up. We're going to be on recess for Memorial Day next week, but based on Senator Reid's conversations, as early as practical when we come back. He's got some other items we have to deal with.
VELSHI: Do you want it done by July 4th? Do you want it on the president's desk by July 4th, I hope?
DODD: That would be our goal. And Harry Reid has been a major player in making this arrive at where we are today. And I know that's an intention of his as well. So we'll try and get it done by then.
VELSHI: Senators, thanks very much for joining us.
DODD: Thank you.
VELSHI: I hope you guys get it done.
Senator Chris Dodd, Senator Richard Shelby, joining us on the mortgage bill that has passed the Senate Banking Committee. We'll have to follow to see where that goes.
Coming up next on ISSUE #1, is it a pass or fail for the airlines? Well, what about the restaurant industry? We've had a new measure come out of your satisfaction across the board, and we're going to bring you the results.
You're watching ISSUE #1 on CNN. We're coming back in just a minute.
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VELSHI: All right. We know you don't have a lot of extra cash to spend these days, but the good news is those of you who are spending are generally satisfied with what you're getting, and that's according to the new American Customer Satisfaction Index out today.
The survey ranks industries like transportation, utilities, health care, hotels and restaurants. And this year the only sector that really steams the paying public appears to be the airlines.
Rick Seaney is the CEO of FareCompare.com. He joins us to explain why.
Rick, good to see you. Thank you for being with us.
The average satisfaction with airlines is, as I read it, the lowest it's been in several years. What's the beef? What's the thing that's really getting under people's skin?
RICK SEANEY, CEO, FARECOMPARE.COM: Well, I think it has to do with a variety of things. The entire process of travel has become painful for people. Higher airline ticket prices, for sure. And I think it has to do with some antipathy between the different factions within airlines that basically have issues with management on the line level. So I think it's an overall issue that, you know, with delays and cancellations, completely full flights, I don't know if we can actually have a good time on a flight anymore.
VELSHI: Well, let's talk about this.
One of the issues that comes out, of course, most irritating is fare increases. And this is something we talked to you about.
SEANEY: Sure.
VELSHI: Fare Compare tracks these. But as you have often brought up, in some ways the airlines are passing along that increase in the price of fuel, over $129 for a barrel of oil. That may not be their fault.
But the other stuff, the lost luggage, the delays, the fact that they charge -- most of the major airlines now charge for the extra piece of luggage after the first one, even though the rules say you can't carry as much stuff on with you.
What are -- you know, what's the responsibility of the airlines right now to sort of have a covenant, to have a deal with the passengers?
SEANEY: Well, I think we really do need something that goes with passengers because there's airlines like Southwest that consistently rank highly in these things. And there's airlines like US Airways that are always ranking down at the bottom, although they will tell you that they were best on on-time percentage for the first quarter of this year. So they are very aware of these statistics, and they try to inoculate themselves with a lot of stats coming into it.
VELSHI: Yes. And we've both been victim to that.
Let's talk about the airlines. Here's -- of this rating that they used -- they do the study over at the University of Michigan -- 62 is the average now for airlines. So let's look at the ones that came in above average.
Southwest Airlines, as you said, far and away ahead of everyone else. Continental coming in right on average. American coming in right on average. And Continental, by the way, was down quite a bit.
Let's look at those that were below 62, below the average. Delta coming in at 60. Northwest at 57. United coming in at 56. And US Airways bringing it in around 54.
What differentiates these airlines? What makes customers more satisfied with one than the other?
SEANEY: Well, I think that, you know, a lot of times it has to do with getting to your destination on time the most, not having issues with bags. Fees. Like, for instance, a company like Southwest or some of the other low-cost airlines have minimal change fees. A lot of people have emergencies where they need to change their tickets. Instead of going backwards, United and US Airways actually their change fees to $150. A
So you pile on all of these things -- weather delays, cancellations, packed airplanes, where there's nowhere to put you if something bad goes wrong in a system, congestion in the New York area and the Chicago area -- you pile all that on and basically it's just a bad recipe for customer satisfaction.
VELSHI: Rick, one last thing. You track minute-by-minute increases in airfares. We've had 15 attempts at increases due to fuel this year. Eleven of them have been successful. In other words, 11 of them have been adopted and have stuck?
SEANEY: Yes, that's correct. Eleven have been widely successful. The one bright spot there is in areas where you have low- cost airlines, like JetBlue, Southwest and AirTran, the legacy airlines have been tiptoeing around those increases. So they're about a third to a half less than the smaller cities that absorbed huge increases. So if you're in a small city, you're really taking it in the chin this year.
VELSHI: All right.
Rick Seaney, good to talk to you.
Rick Seaney is the CEO of FareCompare.com.
That brings us to today's "Quick Vote," because we're talking about satisfaction. And she always delivers.
Poppy Harlow from cnnmoney.com.
So the issue is not about you, but what your visitors think about satisfaction.
POPPY HARLOW, CNNMONEY.COM: It's all about you, the viewers.
Customer satisfaction with airlines, you just heard it, dropping to its lowest score since 2001. But are the airlines the worst industry when it comes to keeping you satisfied? Here's our question today.
Which are you least satisfied with, restaurants, utilities, airlines or health care? Weigh in on cnnmoney.com and we'll bring you the numbers later in the show. I think it's going to be airlines, but our viewers may prove us wrong.
VELSHI: Very -- and they have done that several times before.
HARLOW: Yes.
VELSHI: Poppy, thank you. We'll check in with you later in the show. Coming up next, they are being billed as the next Ben Bernankes and Alan Greenspans. You've got to tune in for this one. Yesterday, these kids faced off in the national economic challenge, and CNN was there.
We'll talk to the best political team and the best money team on television as well about what's important to you this election year.
That's coming up next on ISSUE #1 on CNN. Stay with us.
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VELSHI: All right. In case you didn't think so, we still have primaries here.
We have polls closing in Kentucky in seven hours, just a little over seven hours. In Oregon, they're sort of closing in just over 11 hours, but they're not really closing because it's a mail-in, but we'll get the results. We'll start getting the results in about 11 hours.
And we are going to stick to this story until the bitter end. And money and politic goes hand if hand, as we know. We're putting the two of them together right here in our studio on the money team.
I'm joined by Senior Correspondent Allan Chernoff. And on the political team, we have Bill Schneider, part of the best political team, the best political team on television. And Mark Halperin from "TIME."
Gentlemen, welcome to all of you. Thank you so much for being here.
Bill, let's start with you. You follow this stuff so closely.
Kentucky, a much more blue collar state. We're expecting Hillary Clinton to win there. Oregon is less so. And we're expecting Barack Obama to win here.
Boy, we are really drawing the battle lines in this Democratic nomination race.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: And we are. But here's what's interesting about today's races. Oregon in the last election, 90 percent of the voters were white, and in Kentucky, 93 percent of the voters were white.
These are two overwhelmingly white states, and yet Clinton is likely to win Kentucky, maybe by a handy margin, the pre-election polls predict, and Obama is going to win Oregon by a comfortable margin. So it's not a racial thing. There are just different kinds of white voters, and I think it has a lot more to do with culture than class.
VELSHI: Interesting. And some might think it's got to do with the economy. Right now we've got $129 a barrel for oil, we've got a new record in gasoline, $3.80 a barrel. Hillary Clinton firmly in favor of this idea of a gas tax, a federal gas holiday from the gas tax. Barack Obama saying that doesn't make sense.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Right. Well, that is one real difference between the two.
The fact is, on economics, Hillary Clinton, Barack Obama, they are very similar, not all that much of a distinction. And the fact that there's a difference on that issue, well, in a way it's a little comical because neither Hillary Clinton nor Barack Obama are going to be president this summer. So they can't really put that into effect anyway.
VELSHI: But Mark, this is a challenge for both of these two, because the economy remains a dominant issue. Where is this developing? Where is their economic policy developing?
MARK HALPERIN, SR. POLITICAL ANALYST, "TIME": Well, look, it's more of a challenge for Obama since in all likelihood, he will be a candidate for the rest of the year and Clinton will not. I'm still surprised. And if I were a Democrat I would be disappointed that Barack Obama did not choose to go to Kentucky.
He passed on basically on West Virginia, he's passing again on Kentucky. Bill's right, he can do well with these coastal voters, with these elite voters, upper -- more upper income, less concerned about the declining economy. Why, I think the question can fairly be asked, didn't he go into Kentucky and at least practice talking about the economy with these kind of hard-pressed, blue collar voters who are going to be present in the general election, not just in Kentucky and West Virginia, but in almost all the battleground states?
VELSHI: All right. We're going to continue this discussion with our smack-down between the best political team on television and the best money team, the CNN money team.
Here's something that surprised me. What do you think teens are spending most of their money on? Well, here's a hint. It's not clothes. What may be the surprise answer is coming up next on ISSUE #1.
Stay with us. We'll be right back.
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ALI VELSHI, CNN ANCHOR: All right. Well, if your mortgage has you down or your car payment or your credit card balance, don't despair. We have help available. And we'll have more on that in a moment on ISSUE NUMBER ONE.
But first, a check of the headlines with Don Lemon in Atlanta.
Take it away, Don.
DON LEMON, CNN CORRESPONDENT: Hello to you, Ali.
More bodies, more anguish in China. Here's the very latest for you. China state media is reporting another rise in the death toll today. It now stands at more than 40,000 with nearly 246,000 injured and more than 32,000 missing.
Something positive in all this destruction though. Rescuers pulled two more people from the rebel in Sichuan province. One was buried, get this, almost seven days. The other nearly seven and a half days. China's state council says more than 5 million people have been left homeless since that quake struck.
The president and first lady visiting the Chinese embassy this morning. While there, they signed a condolence book extending sympathy to those who lost family and friends in the quake.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Express our country's condolences for those who are mourning for their loved ones. We stand ready to help in any way that the Chinese government would like.
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LEMON: And President Bush wrote nearly a full page in the condolence book.
Parents fighting to get their children back are back in court today. Members of a Texas polygamist sect are attending the second day of hearings which could go on for three weeks. Four hundred and sixty children have been in state custody since a raid on the group's ranch last month. State officials ordered the children's removal saying the sect pushes under aged girls into marriage and into sex. Members of the group insist there was no abuse.
Charles Manson, the mystery dare (ph), the infamous mastermind of a killing spree, stashed more bodies at his ranch hideout? Well today investigators begin digging to find out if that is indeed true. What details on how the investigation is going ahead in the "Newsroom" starting at 1:00 p.m. Eastern.
I'm Don Lemon. Now back to ISSUE NUMBER ONE and Ali Velshi.
Ali, take it away.
VELSHI: Don, thanks so much.
Well checking now some ISSUE NUMBER ONE top stories.
Help for thousands of homeowners who were caught in the mortgage meltdown might be around the corner. The Senate Banking Committee this morning agreed on a bill that would help up to half a million strapped borrowers with up to $300 billion worth of government-backed mortgages. Funding would come from the profits from government mortgage giants Fannie Mae and Freddie Mac. Well, the housing slump is bad news for Home Depot. The world's largest home improvement chain today posted a 66 percent drop in first quarter earnings.
Billionaire investor Warren Buffett is speaking out on the nation's economy. In his opinion, we're already in a recession. Here's part of what he had to say in an interview with CNN.
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WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY, INC.: In terms of the huge bad news hitting Wall Street and all of that, I think a good bit of that has passed, but I think that the recession could be long and fairly deep as it spreads throughout the economy. You have an American public that for a long time their house was an asset. They kept drawing more and more money out of and now it's just the reverse and you have gas and food prices being what they are. So I think we've seen the worst of it in terms of the affect on the Wall Street firms. I'm not sure we've seen the worst of it at all in terms of the effect on the economy.
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VELSHI: Now according to our next story, Warren Buffett could be a pretty happy man. Debt in America is a growing epidemic and being in debt can take a toll on your health. It can even lead to depression. CNN medical correspondent Elizabeth Cohen joins me now live from Atlanta.
Hi, Elizabeth.
ELIZABETH COHEN, CNN CORRESPONDENT: Hi, Ali.
Ali, this new study from the American Psychological Association shows just how stressed out Americans are about money. Let's take a look at these statistics. They're really quite stunning.
What the Psychological Association survey found was that in 2007, 74 percent, three out of four Americans, said that work or money was stressing them out. And in 2006, that number was just 59 percent. That is a big jump for just one year.
And stress doesn't just hurt your mind, it hurts your whole body. Let's take a look at all the different ways that stress damages your health.
For example, you can start with your jaw. It can cause TMJ. That's that terrible disorder, very painful, in the jaw.
And then if we go down to the rest of the body, it can also have an affect on your heart. People who are stressed out are more likely to have heart disease or more likely to have stroke. And also it can hurt the digestive system. Stress can cause all sorts of problems, heartburn, nausea, weight gain.
And really it's the whole body. Stress can lead to a lack of sleep. It can lead to your immune system getting really messed up. It even affects your cognitive abilities. Your ability to think straight. So stress is definitely taking a toll on not just the American mind by the American body.
Ali.
VELSHI: It gets me in the shoulders. I get all tensed up in the back and all that kind of thing.
COHEN: You feel it in there?
VELSHI: I mean, maybe you can't give us tips on how to get your finance in order, but how do you reduce the stress that you feel from the problems that you might be having?
COHEN: Well, Ali, what's interesting is that attacking stress does mean attacking your finances if that's what's bothering you. You have to sit down and attack the problem head-on. Now don't internalize it. So here's some suggestions from some financial counselors that we got.
You want to have a family meeting. You want to sit down and say, how are we going to deal with our financial problem. Make a realistic budget that you can stick to. And make small changes.
Think about, hey, if I brought my lunch to work two days a week instead of eating out five days a week, think about all the money that would save over the course of the year. If I had two lattes a week instead of 10 lattes a week, think what that could do for my pocket book. Those little changes can really add up.
VELSHI: And it's tough for our viewers but it is one of those things that it's better not to have two problems than one. So if you've got money problems, don't let it effect your health.
COHEN: Right.
VELSHI: Elizabeth, thank you very much for joining us. Elizabeth Cohen.
COHEN: Thanks.
VELSHI: Well, we found a few people who are not stressed about their finances. Look at these kids. Meet some kids who could be vying for Alan Greenspan's old job just as soon as they finish high school. We'll have that story in a minute.
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VELSHI: All right, you're watching ISSUE NUMBER ONE.
If you've looked at your teenager's credit card statement lately, you might have noticed a trend. The number one purchase with plastic is gas. This year's Junior Achievement poll on teens and personal finance shows fuel has surpassed clothing on teen's spending lists. Another tidbit from this year's study, mom and dad are making the payment on those credit cards for 13 percent of teens. Now that stat alarmed Junior Achievement, an organization that teaches young people the importance of responsible bill paying.
All right, let's turn now it's primary day. Let's have a look at someplace a little bit off the campaign trail. Stuck in the middle of hard times, there's little enthusiasm for today's primary in Clay County, Kentucky. CNN's Gary Tuchman reports.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT, (voice over): Next door to a row of boarded up businesses is one of the more popular lunch spots in Clay County, in eastern Kentucky. The cigarette smoke at Pat's Snack Bar is often as thick as the burgers.
Do you come here for lunch a lot?
PAULINE CARTER, CLAY COUNTY RESIDENT: Oh, honey, I was raised here.
TUCHMAN: Nothing on the menu is more than $3.50, which for many customers here is a very good thing.
CARTER: We're bellow poverty, honey. I don't know how much lower we can go.
TUCHMAN: Clay County is the poorest county in the state of Kentucky and one of the poorest in the country. As this county gears up for the Kentucky presidential primary, there is a palpable lack of enthusiasm because the residents, including the mayor of Manchester, the city that's the county's seat, feel forgotten.
MAYOR CARMEN LEWIS, MANCHESTER, KENTUCKY: It's kind of like nobody cares. Nobody cares.
TUCHMAN: The mayor says most people here are unemployed or underemployed. Industry just does not want to move to this county in Appalachia. Per capita income is only about $9,700. Esther Curry's total income with federal assistance is $7,600 a year.
ESTHER CURRY, CLAY COUNTY RESIDENT: You kind of scared to vote for anybody really.
TUCHMAN: How come?
CURRY: Because they ain't never done anything for us yet.
TUCHMAN: Her comparison laughs off the consideration of voting.
JOHN JEWELL, CLAY COUNTY RESIDENT: It don't make no difference. That's why I won't vote. I never have.
TUCHMAN: Their nephew says he can't find (INAUDIBLE) afford the gas to try to find work.
JASON CARPENTER, CLAY COUNTY RESIDENT: I don't feel like none of them are no good for real because, you know, it's just like a small town in America deal. You know, you see how we live and it's never going to change, no matter -- the only way that it's going to change for us is a poor man getting in as president and that's never going to happen.
TUCHMAN: None of the presidential candidates has campaigned here in Clay County. As a matter of fact, old-timers tell us they don't remember a presidential candidate ever coming here. Among the people we've talked to, there's a consensus that Washington is not overly concerned about them.
Election officials here expect a low turnout for the primary. It's a heavily Republican county, but we don't see a lot of excitement about John McCain. That's more than matched, though, by skepticism of the Democrats.
PAM NAPIER, OWNER, PAT'S SNACK BAR: I don't really know what I think about Obama. I don't. I'm kind of leery of him.
TUCHMAN: And regarding Hillary Clinton . . .
CARTER: It's Bible, a woman's place is in the home.
TUCHMAN: She has faith in the Bible, not a lot of faith that a new president will help improve life here.
Gary Tuchman, CNN, Clay County, Kentucky.
(END VIDEOTAPE)
VELSHI: And that's a sense of what some voters are facing in their everyday lives and why it's hard to make a connection to politics.
Well, we're going to check back in with the best political team on television about some of those economic issues and we're going check in with the CNN Money team. That's up next on ISSUE NUMBER ONE. Stay with us.
(COMMERCIAL BREAK)
VELSHI: All right, we're back looking at politics and money. Kind of what we do here. From the CNN Money team, I'm joined by senior correspondent Allan Chernoff and we've shored up our side of the team now with Stephanie Elam. On the political side, we've got Bill Schneider, part of the best political team on television. Mark Halperin from "Time."
Mark, we've got to spruce up that title. Mark Halperin from "Time." Come on, don't you have some kind of a . . .
MARK HALPERIN, SENIOR POLITICAL ANALYST, "TIME": The shorter the better.
VELSHI: There you go. We were watching this Gary Tuchman story from Kentucky, which may have been an extreme example of the fact that folks who feel completely detached from the system, they just feel so out of it, poor voters feeling detached from even voting. Barack Obama is definitely not connecting with these voter but it sounds like nobody's connecting with that particular county.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Well, that county is exceptional. I mean, it's just so poor. But the fact is, I mean, Kentucky is generally a poor state. Hillary Clinton doing very well over there.
So the question is, why wouldn't Barack Obama do pretty well in these lower income states as well, because if you look at the issues on economic policy, they're saying a lot of the same things, on Social Security, on housing, on taxes. They want to help the middle-income people, both of them.
VELSHI: And you, Bill, had pointed out that you don't think it's race. You think it's culture. Why, in answer to that question, does Barack Obama not succeed better in these blue collar, poorest of places?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Barack Obama inspires, Hillary Clinton delivers. That's the difference that people see between them because she insists that she will talk in specifics, she will deliver things right now, like a gas tax holiday, which she has no authority to deliver. But she says, I think we should cut out the gas tax for the summer. And a lot of voters who are very poor and sometimes pretty desperate want someone who's going to get them something right now.
VELSHI: Right. It's hard to connect that to the largest economy when it's you're problem that you're facing. Let's take it over to Oregon. There's a primary there. It's a mail-in primary. And I think as a result of that, we sometimes don't get the same degree of coverage on it. What is the economic climate there, Stephanie?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Especially this late into the process.
VELSHI: Yes.
ELAM: Well, I think part of the issue here, and kind of going along with what Bill said, maybe as we move forward, the biggest issue here is not race as much as it is class. And if you take a look at the population of Kentucky versus Oregon, there's a lot more people in Oregon who are college educated. And that tends to help Barack Obama when you look at that.
Also, of the U.S. states, it's the third largest group or percentage of people there who say that they don't find themselves overly religious, is how they put it. So that also may play into how this works out, where it's a very different story in Kentucky.
VELSHI: And we are not even a few days away, Mark, from the fact that Senator Edwards endorsed Barack Obama. It seemed at the time to be a major push, a major thing. How is that influencing the type of people who would vote for Barack Obama? Because he was seen as attracting a lower income, hard-working crowd.
HALPERIN: Well, we've not had voting since then, so we'll see if it has any effect today. But I don't suspect that it will. In fact, Senator Edwards I believe is on the ballot in Kentucky and I think he'll will probably pick up some votes.
Barack Obama cannot rely on endorsements or other people to try to make this case for him. He grew up poor, as he points out. Often in his life, more struggling than Hillary Clinton was or John McCain was. He worked as a community organizer with very poor people in Chicago. He's got to take his biography, connect it up to policy ideas and start talking to these people. And as I said before, he missed a chance to do it in Kentucky. He doesn't have too many more opportunities to do it. He's going to be in a general election. He's going to have to do it.
VELSHI: And, Bill, you're going to be there with the exit polls tonight where we're going to be asking people those types of questions. So we'll get some sense of how voters connected the issues to the way they voted. It will be interesting to see that.
SCHNEIDER: It will be. And Stephanie mentioned something very interesting I noticed in the exit poll from the two states in 2004. Twenty-eight percent of Oregon voters in 2004 said they had no religion. In Kentucky, that number was six. It's a very different culture.
VELSHI: Wow. All right. All right. Well, thank you to all of you. The best political team in television and the CNN Money team.
They are voters and they're leaders of tomorrow. I love this story. They showed off their skills in New York yesterday. We visited the National Economics Challenge. It was a quiz bowl type competition for high school students. Now don't turn off the TV. This is actually really interesting. These kids could be the Alan Greenspans and Ben Bernankes of the future.
(BEGIN VIDEO CLIP)
ROBERT DUVALL, NATIONAL COUNCIL ON ECONOMIC EDUCATION: It is my pleasure to welcome you to the 2008 . . .
UNIDENTIFIED MALE: You have five seconds.
DUVALL: NCEE Goldman Sachs . . .
UNIDENTIFIED MALE: Answer please.
DUVALL: Foundation National Economics Challenge.
UNIDENTIFIED MALE: That is correct.
UNIDENTIFIED MALE: One hundred and fifty-five. UNIDENTIFIED MALE: One hundred and fifty-five is correct to buy 100 euro.
JANE SCHAFER, COACH, VESTAVIA HILLS HIGH SCHOOL: Current events.
UNIDENTIFIED MALE: Foreign investment effect.
SCHAFER: Constantly watching to see the things that are in the news.
UNIDENTIFIED MALE: Decreasing returns to scale.
SCHAFER: That might be related to economics.
UNIDENTIFIED MALE: Volcker and Greenspan.
SCHAFER: I told them this year at a couple practices, all the top headlines are economics.
UNIDENTIFIED MALE: Shut down is correct.
DUVALL: This program was designed to show how we could really reach the students in a competitive environment.
UNIDENTIFIED MALE: Capital.
DUVALL: And this shows that the students have gotten that basic skill set . . .
UNIDENTIFIED MALE: Labor.
DUVALL: That they could use in their lives, all their lives.
UNIDENTIFIED MALE: The score is four to two. This is question number seven.
WILLIAM DESMOND, WINNING TEAM MEMBER: We had like a micro economics one semester course. And then outside of class we would meet about once a week. We've been working on like speed forever. We mostly do buzzers with the buzzers.
SCHAFER: He liked the buzzers. He was obsessed with buzzers.
DESMOND: You can, like, if you want to get faster, you can practice with like with a pen, just like clicking it back and forth. We used to do that in middle school but we're too cool for that now.
DUVALL: If the price of x is $6.00, what is . . .
SCHAFER: When you hear them giving answers to questions that we discussed, topics, you know, we discussed the Costo, Wal-Mart rice quotas in class. They were listening. It's a nice, proud moment.
UNIDENTIFIED MALE: $2.00.
UNIDENTIFIED MALE: That is correct. DUVALL: What effect is responsible for the backward bending . . .
UNIDENTIFIED MALE: Eowani (ph).
UNIDENTIFIED MALE: The wealth effect.
DUVALL: The judges are conferring.
UNIDENTIFIED MALE: That's incorrect.
DUVALL: The students are so bright and quick, sometimes they will buzz in the answer before I get the whole question out.
Describe the activity of a company that attempts to drive its . . .
UNIDENTIFIED MALE: Predatory pricing.
UNIDENTIFIED MALE: Predatory pricing is correct.
DUVALL: I think it would make a tremendous difference in this country if people were economically and financially literate. You know, we have a negative savings rate in this country right now. That's not good for individuals and it's not good for the future of the nation.
SCHAFER: Some of this stuff gets really technical and pretty high level.
UNIDENTIFIED MALE: It's too late to buzz in. Collateralized debt obligation.
SCHAFER: Basic things like supply and demand and inflation, I think it's so important that the general public understands.
UNIDENTIFIED MALE: Stagflation is correct.
DUVALL: And we can show that young people can learn economics.
DESMOND: It helps you better evaluate yourself as far as like why is this -- like what does this mean in the context of me.
DUVALL: And makes all the difference in their lives and makes us hopeful about the future of this country.
UNIDENTIFIED MALE: $10.00 is the price and 800 units of output.
UNIDENTIFIED MALE: That is correct. You're the national champions.
DUVALL: Congratulations.
(END VIDEOTAPE)
VELSHI: Those kids are going to be my boss one day. Results of our Quick Vote poll next. Which one of these industries are you least satisfied with, airlines, health care, restaurants or utilities? It's not too late to cast your vote at cnnmoney.com. We'll be back with the results on ISSUE NUMBER ONE in a minute. Stay with us.
(COMMERCIAL BREAK)
VELSHI: All right. It's time now to get the results of today's Quick Vote. For how you voted, let's check back in with Poppy Harlow from cnnmoney.com.
Hello.
POPPY HARLOW, CNNMONEY.COM: Hello, Ali.
Well, we asked people what industry are you least satisfied with. Overwhelmingly, 49 percent of people said health care, followed by airlines at 27 percent, utilities at 20 percent. And just four of you are not very unsatisfied with restaurants.
I thought it was going to be airlines. People surprised me. You thought it would be health care.
VELSHI: I think they're both frustrating experiences. I guess with a restaurant, if you don't like it, you don't have to go. So it doesn't play as much of a part in your life. But if you need an airline or you need health care or utilities.
Interesting poll. Thank you for weighing in on that. It's always good when we find out exactly what you want because that is what this show is about. It's about you.
Now which way are those of you in Kentucky leaning? Well, no matter how you slice it, Kentuckians are on opinionated bunch. At least that's what our CNN Election Express producer Josh Rubin found out. Listen to what he found us.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Oh, Hillary, of course.
JOSH RUBIN, CNN PRODUCER: Why is that?
UNIDENTIFIED FEMALE: Because I love her. I liked her husband. And I like her. And I like her politics. And I just like her.
UNIDENTIFIED FEMALE: Well, I would like to see a woman in the White House before I die. And I think it's pretty historic that a woman and an African-American both are running.
UNIDENTIFIED MALE: It's a tough decision right now. And I'll have to have a little more time to think about it.
UNIDENTIFIED MALE: Well, right at the present, I would probably have to go with Clinton in the primary. But come the fall, I don't know which way I'll have to go.
UNIDENTIFIED MALE: Well, I was actually for Hillary, but I'm going to have to go with Barack.
RUBIN: So who are you going to vote for on Tuesday?
UNIDENTIFIED MALE: Well, Barack.
RUBIN: Why are you going to vote for Barack?
UNIDENTIFIED MALE: I'm going to do Obama. The opportunity for change. There's still a lot of blue collar support for -- that don't want change, you know, and that's still, regardless of what everybody likes, that's the kind of way Kentucky is.
RUBIN: So if you had something to say to Barack, what would you say?
UNIDENTIFIED MALE: Get your act together. Quit being so black.
RUBIN: And if you had something to say to Hillary?
UNIDENTIFIED MALE: Start being honest with people.
RUBIN: And if you had something to say to McCain?
UNIDENTIFIED MALE: Don't be another Bush.
RUBIN: How is the economy of Kentucky doing?
UNIDENTIFIED MALE: I can only speak for myself. I know that I've lost a substantial amount of money in the last two years.
UNIDENTIFIED FEMALE: Farmers in tobacco, I think that's pretty bad. And a lot of the factories, things like that, they're not doing very well.
UNIDENTIFIED MALE: I've got three kids. I'd like to leave them something. I might not have no millions for them, but it'd like to be able to leave them opportunity.
(END VIDEOTAPE)
VELSHI: Well, tune in tonight for results from Kentucky and Oregon. The CNN Election Center kicks off coverage at 7:00 p.m. Eastern.
Well, for more on how the news of the week affects your wallet, tune in to "Your Money" Saturday's at 1:00 p.m. and Sunday's at 3:00 right here on CNN.
And for more ideas, strategies and tips to save you money and protect your house, watch "Open House," Saturday at 9:30 a.m. Eastern right here on CNN.
The economy is issue number one and we here at CNN are committed to covering it for you. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 Eastern right here on CNN.
Time now to get you up to speed on other headlines. CNN "Newsroom" with Don Lemon and Brianna Keilar starts right now.
BRIANNA KEILAR, CNN ANCHOR: He hid out there. Did he also bury victims there? The digging begins at Charles Manson's Death Valley ranch.
