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Issue Number One
Army Relief Fund; Military Financial Help: How Expensive is the War in Iraq?; Interview with Author Linda Bilmes
Aired May 26, 2008 - 12:02 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GERRI WILLIS, CO-HOST: The fight our military faces right here at home, issue #1, the economy. They defend our country, but many are fighting off foreclosure and dealing with the stress of the credit crunch.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's a real crime if lenders and the mortgage brokers, et cetera, do not take into account the active duty status of our young men and women.
(END VIDEO CLIP)
WILLIS: We'll look at the true financial cost of the war, how it's affecting this country, and how members of the military are dealing with their house, their debt, their savings.
ISSUE #1 is your economy. A special military edition of ISSUE #1 starts right now.
Welcome to this special edition of ISSUE #1. I'm Gerri Willis. Ali Velshi will be here in just a minute.
Today's focus, the military and the economy. There are many issue #1 challenges facing both the military and individual members of the military and their families.
We begin in Washington and CNN Correspondent Jamie McIntyre.
Hi there, Jamie.
JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT: Well, hi, Gerri.
You know, when you consider the overall cost of the wars in Iraq and Afghanistan, put at conservatively $635 billion and counting, then the cost of this new GI bill that's in Congress right now doesn't seem that big. It's about $50 million over the next 10 years. That would pay for every active duty military member who served at least three years since September 11th to get four years of college.
The bill's sponsor, Virginia Senator Jim Webb, says, look, if you break it down, it's about $2.5 billion to $4 billion a year. That's what it costs to run the war in Iraq for one week. But the Pentagon says it's not so much concerned about the cost, as how soon veterans would earn the benefits.
(BEGIN VIDEO CLIP)
ROBERT GATES, DEFENSE SECRETARY: The analogy is often made to the GI bill at the end of World War II and the important impact that had on America. That was a conscript military in 1945, and what we're dealing with is an all-volunteer force.
Our desire is to keep soldiers, sailors, airmen, Marines in the military as long as possible. And so our hope would be and our preference would be that the period of service be long enough to, in essence, require at least one reenlistment.
(END VIDEO CLIP)
MCINTYRE: So the Pentagon would like the benefits not to kick in until after people had served for six years, because they are worried about a cost issue here. The cost of attracting and training people to stay in this all-volunteer military.
The bill sponsors, including Senator Webb, argue, look, first of all, the troops deserve this after just three years of dangerous deadly duty in Iraq, and this will serve as a recruiting tool. People will be more anxious to serve in the military if they know that after a short period of time, they can get a full college education.
The bill has passed the House. It's likely to pass the Senate, which will put President Bush in an uncomfortable position of having to consider vetoing a bill that essentially is a big thank you to the men and women of the U.S. armed forces.
(BEGIN VIDEO CLIP)
GEOFF MORRELL, PENTAGON SPOKESMAN: We have no issue with the fact that it is generous. We think our troops conserve to be rewarded for their service. However, we do take issue with a benefit that becomes an inducement, an incentive for them to leave the service prematurely.
(END VIDEO CLIP)
MCINTYRE: How do you keep an all-volunteer military if you make the benefits too generous? Well, one thing the military -- the Pentagon would like to do also is allow veterans to shift that benefit to other members of their family even if they can't take advantage of it right away.
ALI VELSHI, CO-HOST: Well, the true financial cost of the war in Iraq is of course unclear right now, but there are some people out there who see the dollar figure rising above $3 trillion.
Linda Bilmes is the co-author of "The $3 Trillion Dollar War."
(BEGIN VIDEOTAPE)
VELSHI: Linda, good to see you. Thank you for being with us.
When you wrote this book, "The $3 Trillion War," we weren't even spending $125 or more for a barrel of oil. Separate and apart from that, you are talking about what this war has cost the average American, not even that total amount.
How much is it costing the average American?
LINDA BILMES, AUTHOR, "THE $3 TRILLION WAR": Well, I think it's costing the average American at least $12,000 a year, and it's important to understand where that money is going. You know, what the cost is to the average American, because in addition to the oil price increase, what we are doing now is we are spending money and literally putting it into the ground in Iraq.
We're spending money to paying, you know, foreign contractors to do laundry services and provide repairs and cook meals and drive people around. Money that doesn't stimulate the U.S. economy.
VELSHI: When you wrote this, obviously you came under some criticism from the administration. There has been some change since the beginning of this war and what the administration has said it's going to cost. What is the difference now between what you think it's costing and what the administration is saying it's costing?
BILMES: Well, you know, the administration has very little credibility on this issue. Before the war began, the administration said it was going to cost $60 billion. They then revised that upward to about $100 billion. The war has, by the end of this year, will have cost already $845 billion.
And that's just looking at the short-term cash costs, not counting any of the money for veterans or for resetting the military, or for paying interest on the debt. So we think it's going to cost in the neighborhood of $3 trillion.
VELSHI: Tell me how you get from the $850 billion that we're at to $3 trillion. How does that break down?
BILMES: We simply add in the cost of taking care of our veterans in terms of providing medical benefits and disability compensation; resetting the military, which means replacing all of the equipment that's being used up; and restoring our military strength; and paying interest on all of the money we borrowed to pay for the war, which is all of it.
VELSHI: Now, there's some suggestion, however, that if the money weren't spent on the war, the things that it could of solved. The health care problems, the education problems.
In reality, do you believe that that is the way it works? Would we have taken the money that we spent on the war and applied it to other problems in the economy?
BILMES: You know, when you look at an amount of money that is this large, where you're already looking at many hundreds of billions of dollars spent, I think there is no question that if we had not had this war, we could of spent the money to solve the Social Security problem, to solve the Medicare problem, or to provide health care insurance for children in this country. And these are all issues, don't forget, that the president actually championed, particularly Social Security. But he basically ran out of the money to deal with these problems because all of the money that we had was being spent on Iraq.
VELSHI: So you're saying that if the money were available, we could have continued to have those discussions about where to spend them? You're not suggesting that it necessarily would have gone over to those kind of problems?
BILMES: You know, I think that if we had not had this war, I think that we would have made a major effort in this country to make the Social Security system solvent. This is something that President Bush wanted to do, but there simply was not the money to do that because of the war.
VELSHI: Linda Bilmes, good to talk to you. Thank you for being with us.
Linda Bilmes is the co-author of "The $3 Trillion War."
BILMES: Thank you.
(END VIDEOTAPE)
VELSHI: Well, the economy might be issue #1, but another top issue among American voters, the war in Iraq and the military. All three candidates for president have differing views, and here to help us break at all down is CNN political analyst, Bill Schneider. He's part of the best political team in television.
What do the different positions look like, Bill?
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Well, basically it's a division between the Democrats, who favor phased redeployment from Iraq -- they have slightly different timetables. Barack Obama talks about a 16-month timetable, Hillary Clinton talks about withdrawing American combat troops in Iraq in various stages. But both of them are talking about withdrawing troops from Iraq and ending the American combat presence.
John McCain talks about victory in Iraq, keeping American troops there, basically under general Petraeus' surge policy that was started at the beginning of 2007, until victory is achieved, but he has also talked about his own timetable. He says he does believe that victory will be achieved by the end of his first term as president if he's elected, which basically means in four years from next January.
VELSHI: Bill Schneider is part of the best political team in television.
Bill, thanks very much for that.
SCHNEIDER: Sure.
WILLIS: Up next, we're taking you to Baghdad to hear firsthand how U.S. soldiers are dealing with issue #1.
And the struggles of being a military spouse. We'll head to Fort Benning to hear the families of military members.
You're watching a special edition of ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: Welcome back to a special edition of ISSUE #1.
We're taking a look today at the members of the military and how issue #1, the economy, is affecting their lives.
CNN's Josh Levs headed to Fort Benning, Georgia, to talk to military spouses. That's where he joins us now.
Hi there, Josh.
JOSH LEVS, CNN CORRESPONDENT: Hi, Gerri.
Yes, I'm here at Fort Benning. It's an Army post here in Georgia. And I'm standing next to this, something I want to show you quickly.
This marks one of the first places that U.S. soldiers jumped out of planes in parachutes. It says, "We led the way," Parachute Test Platoon, June 1940. And here you can see marking some of the first U.S. soldiers ever to do that.
Now, on this Memorial Day we wanted to speak with the military families about the financial hardships, but also the financial benefits of having a family member in the military. So, coming up, this group of military wives will be joining me. We'll have that conversation right up here, ISSUE #1.
VELSHI: Members of the military have a tough enough time dealing with finances when they are at home. When you're shipped off around the world it can get a lot more complicated. We've got folks here at CNN who cover these hot spots and witness firsthand what a lot of these folks are going through.
CNN's Arwa Damon lives in Iraq, covering the soldiers there. She joins us now from Baghdad -- Arwa.
ARWA DAMON, CNN CORRESPONDENT: Hi, Ali.
And you really can't put into words just how difficult it is for the soldiers who are operating out here. Not only are they dealing with the intensity of combat, that knowledge that every single time you step off the base, there are no guarantees that you're going to come back, but they are now also dealing with the reality of the struggles that some of their families are facing back home.
They know that for their families, they are dealing with all of the economic issues and the emotional issues as well, but here's another reality that the soldiers have to deal with. They actually do not have the time or the luxury to really be able to dwell on things that are happening back home.
They have to keep focusing on the mission. They are very well aware of what happens if they let their guard down when they are out on the streets of Baghdad and throughout the entire country.
A lot of the guys will also tell you that when they do talk about home, they are talking about how nice it's going to be to be reunited with their families, to hug their children, their wives, and their parents. And they also do end up saying time and time again, how nice it's going to be to be able to sit back, have a nice cold beer, and not have to worry about something blowing up around you.
VELSHI: Arwa Damon in Baghdad.
Thanks very much for that.
WILLIS: Up next, more and more military families are facing foreclosure. We'll show you what is being done to help them out.
And you'll hear from military spouses about what they are going through right now.
You're watching a special edition of ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: From defending our country to fighting off foreclosure, a growing nightmare for many troops right here at home like the Joseph family.
CNN's Deborah Feyerick has the story.
(BEGIN VIDEOTAPE)
CHRISTOPHER JOSEPH, ARMY VET FACING FORECLOSURE: These are the ones I obtained when I went overseas to Kuwait and Iraq.
DEBORAH FEYERICK, CNN CORRESPONDENT (voice over): Army Reserve Sergeant Christopher Joseph injured his back in Iraq when his truck broke down and his unit came under fire.
JOSEPH: It was dark and I couldn't see. It was so dark. And, you know, and the shooting, and they're the yelling out in Arabic in front of us, and they're yelling out in Arabic behind us. And that really me made me nervous because I didn't know what was going to happen next.
FEYERICK: Home safe in New York with his wife and daughter, his back pain was getting worse. Before long, Joseph had to quit his job as an Army mechanic.
JOSEPH: I saw we started getting into trouble then, and we notified them immediately that we're in trouble, and let's try to work this out before it gets too far gone.
FEYERICK: Like a growing number of veterans and active duty troops...
JOSEPH: Yes, a lot of late charges, a lot of penalties, a lot of legal fees.
FEYERICK: ... Joseph fell behind on his mortgage payments.
(on camera): You need to come up with $5,600 or they're going to foreclose on you?
JOSEPH: Exactly.
FEYERICK (voice-over): Joseph realized he was about to lose his house.
(on camera): The Pentagon does not keep statistics on the number of military families facing foreclosure. Neither does the Department of Veterans Affairs. But based on phone calls asking for help, some veterans groups and officials believe the number conservatively is in the thousands.
(voice-over): Congressman Bob Filner heads the House Committee on Veterans Affairs. He sponsored legislation aimed at helping all who serve.
REP. BOB FILNER (D), CALIFORNIA: It's a real crime if the lenders and mortgage brokers, et cetera, do not take into account the active duty status of our young men and women.
FEYERICK (on camera): Did you tell your lender that, look, I'm a veteran? Cut me a break, a little break?
JOSEPH: We tried and we got bounced around a lot. That was a big problem with the lender. We got bounced around so much, and they dragged the process out so long that that made us fall even further behind.
FEYERICK (voice-over): Joseph is now trying to get financial help from nonprofit groups in the hope of saving his house. Filner's legislation would help families like the Josephs by freezing foreclosure on active duty troops for a year after they come home.
JOSEPH: We shouldn't have to go through any type of hard times. You know, we served our country. We volunteered. We weren't drafted, we volunteered to do this. So we should be taken care of a little better and a little faster.
(END VIDEOTAPE)
FEYERICK: For many people like Christopher Joseph, the only real help is through independent veterans group and nonprofit agencies like USA Cares and the American Legion. And it's a temporary solution, piecing together enough financial money to delay foreclosure, but not necessarily prevent it -- Gerri.
WILLIS: Are there any protections for these folks? It seems to me they've served their country, they should get something. FEYERICK: Well, and that's exactly what they're saying. There is a relief act, but it's really limited. And that's why we're seeing an attempt and new laws. The military does give housing allowances to active duty soldiers, but many use it for rent. And another big problem is that service members are being evicted because the actual owners of the rental properties are now being foreclosed on. So it's a real spiral.
WILLIS: Great story. An unfortunate situation. Thank you for that.
I was fortunate enough to meet this family and see they are getting the help they need to be able to live safely in their house. We'll check back with them a little later in the program.
VELSHI: Well, we can talk all we want about military families, but as you saw in Deborah's piece, the best way to see what they are really going through is to ask them.
Let's head back out to Fort Benning in Georgia and CNN's Josh Levs.
Hi, Josh.
LEVS: Yes. Hey there.
I'm at the Army post right here in Georgia. We wanted to talk today with a group of military wives whose husband are either serving right now or have been serving recently. But how issue #1 affects them, the economy.
We're going to start right here with Chris. This is Chris Burrell (ph).
Thank you so much for talking with us today.
Now, you tell me that your husband, he's in the 24th Ordnance, right? He's on a 15-month deployment to Iraq right now. Tell me if I've got this right. You have six kids and you're getting by on $30,000 a year?
UNIDENTIFIED FEMALE: That's correct.
LEVS: Well, tell us, how are you doing that?
UNIDENTIFIED FEMALE: We have a budget. And when I grocery shop, I have to make a menu, and then we make the grocery list and go to grocery store and only shop for what's on the list.
LEVS: You're budgeting just like anyone has to budget?
UNIDENTIFIED FEMALE: Mm-hmm.
LEVS: How is it different for you to budget, given that your husband is in the military? UNIDENTIFIED FEMALE: Well, when he is deployed, he actually makes a little bit more than when he is not deployed. And also, it's one less mouth to feed when he's not here. And for us, too, I work -- I don't work outside the home, so I don't drive anywhere. When he's here, he drives every day. So we actually save on gas that way as well.
LEVS: So you manage to save on some of the basics, some food and some gasoline as well. But also, you've got child care. You have other challenges that come from just not having your husband around.
What are some of those?
UNIDENTIFIED FEMALE: Right. My husband -- when he's not here, we have 15, 12 initiatives. So for child care, I get 16 free hours of child care a month per child. So that helps out for just basic things like doctor's appointments and things like that, but...
LEVS: But you're used to this? You've learned to budget at that rate?
UNIDENTIFIED FEMALE: Right.
LEVS: Priscilla Martin (ph), you're in a similar situation as well, right?
UNIDENTIFIED FEMALE: Yes.
LEVS: I understand your husband is on a 15-month deployment right now?
UNIDENTIFIED FEMALE: Yes.
LEVS: He's in the 104th Transport, right?
UNIDENTIFIED FEMALE: Yes.
LEVS: And you have three children. Again, around $30,000 a year that you're getting by.
Talk to us. You know, a lot of people out there having to budget, having to work with a tight budget, especially now with the prices of gasoline and food. The changes in the economy, the new prices of food and gasoline, how are they affecting you?
UNIDENTIFIED FEMALE: Well, we try not to leave the base. We just go to the PX (ph) and the commissary most of the time. Unless we really have to get out of the house, we will go to Wal-Mart and the mall, but mostly try to just stay on base.
LEVS: The stimulus check, what did you do with yours? How much was yours and what did do you do with it?
UNIDENTIFIED FEMALE: It was $1,500. And we ended up paying bills that got racked up when my husband was visiting for R&R.
LEVS: So you had some bills when your husband was home. You had to conquer those.
UNIDENTIFIED FEMALE: Yes.
LEVS: Would you guys say on balance, the two of you, Chris (ph) and Priscilla (ph), would you say on balance that you're in a better or worse position financially because of your husbands being in the military?
UNIDENTIFIED FEMALE: I would say better. What other job can you be in that gets a raise every single year, and they are talking of another one this year?
LEVS: Priscilla, is that similar for you? Do you feel that kind of security?
UNIDENTIFIED FEMALE: Yes, as far as the money goes, yes.
LEVS: OK. Obviously, there are other concerns.
Right now focusing on issue #1.
I appreciate that.
Let's bring in Erin Nash (ph) as well.
Your husband is a Ranger, right?
UNIDENTIFIED FEMALE: Right.
LEVS: 75th Ranger -- he is home right now. Talk to me about when he is home versus when he is not. Economically, for your family, how do things change or even revolutionize if is he on deployment versus when he is home?
UNIDENTIFIED FEMALE: Well, if he's home we tend to do a little more entertainment. We'll go to the movies, go to eat a little bit more, where if it's just me and my son, we tend to stick at home a little more rather than going out. And also, he uses -- you know, he drives, so he uses more gasoline. It's another mouth to feed.
LEVS: Erin (ph), do you think that military families today are being taken care of as well as they were in the past, during some of the wars, decades ago?
UNIDENTIFIED FEMALE: I think -- I would like to think it's about the same. We're definitely taken care of through all the Army, friends, family. Everybody is always there to lend a hand.
LEVS: They are?
All right. Well, we have a little bit of time left, so I want to bring in Michelle Gordon. Now, your husband is a defense lawyer, right?
UNIDENTIFIED FEMALE: Yes.
LEVS: And he has done a series of deployments as well. So you've seen this kind of back and forth.
When you see the financial challenges that you are facing right now, are you -- where do you feel about the military versus the private sector? How much tougher or perhaps better is your family given that your husband is in the military?
UNIDENTIFIED FEMALE: Actually, since he's an attorney here at Fort Benning, I think we're better, because he is not billing hours or having to fight for a place in a law firm. He's here at Fort Benning, he's got job security. So I think that knowing that and knowing that he has a definite source of income, you know, we're probably better off.
Plus, we have, you know, the free medical care for ourselves and our child. So that in the long run definitely outweighs, you know, being out in the private sector.
LEVS: All right. Well, listen, we at CNN obviously wish the best for you and your families. And happy Memorial Day.
We want to thank you very much for joining us today.
And Gerri and Ali, I'll send it back to you.
VELSHI: All right, Josh. Thanks very much for that conversation.
Josh Levs at Fort Benning, Georgia -- Gerri.
WILLIS: Taking care of its own financially is becoming a bigger and bigger task for the army. So what kind of relief can soldiers get? And could it be in jeopardy?
Then, tapping different reserves to fuel the Army.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We are concerned based on the amount of coal that's in the ground to be the Saudi Arabia of coal.
(END VIDEO CLIP)
WILLIS: Is coal the fuel of the future for the U.S. Air Force? And could it save you money?
That's next on this special military edition of ISSUE #1.
(COMMERCIAL BREAK)
T.J. HOLMES, CNN CORRESPONDENT: Good afternoon, everybody. I'm T.J. Holmes at the CNN Center in Atlanta, Georgia.
Got a quick check of the headlines for you.
The middle of the country right now the epicenter of heartbreak. Weekend storms spawned vicious tornadoes across several states. Here is what we know now.
The greatest death toll now in Iowa. A short time ago, the Associated Press reported that seven people now confirmed dead there. Dozens more are injured.
Meanwhile in Minnesota, at least one person is dead and that victim was a two-year-old child. Dozens of homes are destroyed there as well.
Sunday's violent weather also stretched into Texas. At least three confirmed tornadoes touchdown down in the panhandle. There are no reports of injuries there or significant damage.
Also a series of tornadoes raked across Kansas. At least 17 twisters hit the state Friday. The next day, a powerful tornado picked up a car and threw it 150 yards. Both people inside that car were killed.
And, of course, today is Memorial Day. The day we all stop to remember and honor the sacrifice made by U.S. troops around the world. Here now with a look at the Vietnam Wall Memorial in Washington, D.C., a live picture here for you, a gathering place for family and friends to remember those lost at war. Also all across the country today, people will get together for ceremonies and parades.
President Bush was at Arlington National Cemetery a bit earlier today and laid a wreath at the Tomb of the Unknowns.
And the holiday, especially long holiday weekends are prime campaign days. John McCain and Barack Obama both meet with veterans in New Mexico this Memorial Day. We'll bring you that McCain event when it begins here in the "Newsroom." Expecting that possibly to happen at any time.
Also, Hillary Clinton remains in Puerto Rico. She's shoring up support ahead of Sunday's primary. There are 55 pledge delegates at stake there.
Meanwhile, Barack Obama getting closer to clenching the Democratic nomination. He picked up three more super delegates this weekend in Hawaii.
And look for another name on the November ballot. The libertarian party has picked former Republican Congressman Bob Barr to headline its ticket.
Well, searching for signs of life on Mars. In the 3:00 p.m. hour of the CNN "Newsroom," we'll talk to one of the scientists behind NASA's newest mission to Mars.
Well, I'm T.J. Holmes. We'll see you again here shortly. Now want to get you back to ISSUE #1.
WILLIS: We've told you about financial troubles plaguing military families. Now we hear a nonprofit group that helps troops is in need. It's having to help more and more people each and every year.
CNN's Barbara Starr has been looking into it and she joins us now from Washington --Barbara.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, Gerri, some of the personal stories we've heard so far in the program are very touching and they tell the real stories statistics don't. But the statistics we're going to share with you do put some shape around the problem, especially for these young military families which don't get a very high income, of course.
The Army Emergency Relief Fund is an organization that provides that emergency money to these young families when they run into trouble with mortgages, with rent payments, with medical bills. That sort of thing. And what the folks at Army Emergency Relief tell us is business, tragically for them, is booming.
Let's look at some of the recent statistics about just how many people are coming to them for help. If you look at the first chart we have of the past couple of years, you see in 2007, it was 60,000 troops and they gave out about $63 million. That's a significant spike year-over-year since we looked back to that 2004. You can see the number of people needing help and the number of dollars being disbursed by Army Emergency Relief just continues to grow.
So what does it look like so far for 2008? We looked up those statistics as well. For January through April of 2008, it was some $19 million for over 17,000 troops and their families. And look at how that compared to last year, $16 million for just over 16,000 troops and their families.
And what I have to tell you, Gerri, this week, around the Pentagon, I started hearing talk about another cost of living adjustment just because of the rise in fuel prices -- Gerri.
WILLIS: Wow. Barbara Starr, thank you for that.
VELSHI: Well, you hear so much about high gas and oil prices these days. We talk about it every day on this program. But the military has a plan to at least try and lower its costs. One that pushes gas to the side in favor of coal.
(BEGIN VIDEOTAPE)
VELSHI (voice-over): The United States Air Force uses 2.6 billion gallons of jet fuel a year. That's a gas bill of roughly $10 million a day. According to the Air Force, a 10 percent increase in the price of a barrel of oil costs them, and American taxpayers, $660 million a year. Given those prices, and the need to become more energy independent, the Air Force is on a mission.
ASST. SECY. BILL ANDERSON, UNITED STATES AIR FORCE: We are testing multiple aircraft within the Air Force aviation inventory on a blended fuel that includes a 50 percent portion of normal jet aviation fuel made from petroleum and a 50 percent blend of synthetic fuel made via the Fischer-Tropsch method. VELSHI: Fischer-Tropsch is a method of converting natural gas, or coal, into liquid fuel. The process was named after two German scientists who developed it in 1923. Later, the Germans used this technology to convert coal to fuel during World War II. South African company Sasol has been turning coal into gasoline using the Fischer- Tropsch method for decades. They supply Tambo International Airport, in Johannesburg, with its synthetic blend for commercial flights.
So fashion the U.S. Air Force has certified the B-52 to fly on a synthetic fuel blend made from natural gas. But they say they hope to use coal in the future. Performance wise, they say there have been no downside. In fact, the synthetic fuel burns cleaner.
The United States has the world's largest known coal reserves. More than a quarter of a trillion short tons. That's about 545 trillion pounds.
ANDERSON: You look at available, in the ground resources that this country has, we are considered, based on the amount of coal that's in the ground, to be the Saudi Arabia of coal.
VELSHI: And Montana has the country's largest reserves of coal. The Air Force is prepared to lease out 700 acres of Malmstrom Air Force Base to anyone qualified and willing to build and operate a plant to make jet fuel out of coal. The price tag, though, could be a billion dollars. Ultimately, the Air Force hopes the coal-to-fuel model crosses over into the commercial aviation industry.
ANDERSON: We're working with the commercial aviation industry and we're working with other air forces around the world as we kind of build a consortium to understand how to do this best and also how to do it in the most environmentally friendly way.
VELSHI: And that's the rub. Environmentalists worry that taking this mainstream could have devastating effect on the environment.
ALICE MCKEOWN, SIERRA CLUB: Coal to liquids are bad from the environment from the time the coal is torn from our mountains, to the time it's burned and pollutes, sending (ph) carbon dioxide in our tail pipes. It's a really dirty process. It uses a lot of water. It creates a lot of global warming pollution and it's not a smart option to move forward.
(END VIDEOTAPE)
VELSHI: There's also another concern. It's a lesson that we've learned from ethanol. Increasing the demand of coal could push the price of energy up across the board. Right ,now coal is used to generate roughly half of all of the electricity that's produced in the United States -- Gerri.
WILLIS: Fascinating stuff.
Up next, what members of the military face money-wise when they get sent out to Iraq, Afghanistan or other parts of the world.
And we'll tell you about a group doing what they can to lend a helping hand to military folks in need.
You're watching ISSUE #1. Stay with us.
(COMMERCIAL BREAK)
WILLIS: We told you earlier about the Josephs. A military family that is struggling to avoid foreclosure. But they say they're confident they'll keep their home and they're getting some help on their way to a fresh start.
(BEGIN VIDEOTAPE)
WILLIS (voice-over): When Army Reserve Sergeant Christopher Joseph left his job because of a back injury, he didn't have the money and he wasn't physically able to make repairs to his family's home.
PAIGE HEMMIS, DESIGNER, "EXTREME MAKEOVER: HOME EDITION: He's the reason why we're here today.
WILLIS: So he reached out to Heroes At Home, a partnership between the nonprofit Rebuilding Together and Sears. Volunteers came together to fix up his home. Joseph says it made a big difference.
CHRISTOPHER JOSEPH, HEROES AT HOME RECIPIENT: It means a lot, you know? It means, you know, for me, because of my daughter, especially, you know, her having some heat in her room, that means a lot to me. And being able to -- the house is better accessible for me with a banister on the stairs and the work done in the kitchen.
WILLIS: All right. So it looks like you did a lot of work in here, Page.
HEMMIS: Yes.
WILLIS: Specifically, let me know, what got changed?
HEMMIS: OK. Starting right here. This big opening. This used to be a tiny little opening and it was actually over there. And this was just a little pass-through window. So what we did is we opened this up. So just think about someone with a cane, it's going to be hard to get through a tiny doorway. We've got a nice big doorway.
WILLIS: Paige Hemmis. You may recognize her from ABC's "Extreme Makeover: Home Edition." She's helping with the project.
HEMMIS: This was actually -- you can kind of see -- we have to, you know, finish up the drywall and come back and paint it. But there was a window that went all the way down here. It actually went below the roof line. So it was pooling, it was puddling. Water was coming in and it was freezing.
WILLIS: That's a bad situation for mold, don't you think?
HEMMIS: Bad for mold. Bad for, you know, you don't want someone sleeping in here if they constantly have the wetness and the cold. It's going to be bad. WILLIS: Bad idea.
HEMMIS: Yes. So we've got brand new windows. These are energy efficient. They're not going to have to worry about the cold. And it gets cold here.
WILLIS: You guys put on a new roof. This is a very big deal.
HEMMIS: It's a huge deal because not only does it look nice, it looks better and it improves the look of the neighborhood, but it's actually functional because it's energy-efficient now and they were leaking. It was leaking in every single room. So even on their beds, in their bedrooms, it was leaking. So they are not going to have to worry about that.
WILLIS: Could you have done this yourself?
JOSEPH: No. No. No way. There's no way I could have got this -- especially the roof. It wouldn't of happened. The roof and the fence would never have happened. So I'm really happy that this was able to be done.
WILLIS: Joseph says he plans to live in this house the rest of his life. And he's thankful Heroes At Home made his house a better place to live.
(END VIDEOTAPE)
WILLIS: I got to tell you, I loved this family. They were so wonderful. And the little girl is going to grow up and be a chef. Just a great story.
VELSHI: Yes, that was a lot of fun. The house looks like it -- it is the kind of place he can live in for the rest of his life because it really it's got all the things that they did are the kind of things that are really going to last.
WILLIS: They're real improvements that will last for years and years, absolutely.
VELSHI: Well, coming up next, details that you likely never heard before. The salaries of soldiers, sailors and Marines. Their benefits. We'll fill you in. And important personal finance information for members of the military and their families. And for anyone who knows them, for that matter.
Stay with us. You're watching ISSUE #1.
(COMMERCIAL BREAK)
VELSHI: You see the men and women of the armed forces. They're serving this country. But not for nothing. They do get paid. They do get benefits. But just what are they? CNN's senior correspondent Allan Chernoff's been looking into it. He's here with more.
Allan, tell us about this. We don't really know much about what it's like to be in the military in terms of money.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Ali, it is, in some ways, similar to corporate America. The people at the bottom, they start pretty low and then, of course, you can move up and the difference is huge.
First of all, let's look at what you make if you're a private just starting out. OK. And these numbers are excluding what you would get if you're living on a base. So if you're actually off a base, here are the numbers. The average, $59,000. A private, $34,000. If you're a general or an admiral, well over $200,000.
Now if you are deployed to Iraq or Afghanistan, there is additional pay as well. Imminent danger pay, $225 a month. Hardship pay, $100 a month. And if you are deployed, all of your pay, your base pay, is excluded from federal tax. That's the least we can do for these guys who are really putting their lives in danger.
VELSHI: Yes. Although the $225 for base pay, for danger, imminent danger pay, doesn't seem like all that much. Tell us about the benefits they get. What sort of job benefits do you get being in the army?
CHERNOFF: Plenty. Especially for health insurance, medical, dental. That is pretty much free and dependents are getting most of it free. Some at a reduced cost. Insurance, very low cost. And, of course, if you are deployed to Iraq or Afghanistan, that's free.
The pension, this is sweet. You don't see this in corporate America very much anymore. After 20 years, you're going to get half of your base pay. And for every additional year, it rises. That percentage rises by 2.5 percent. So if you put in many more years beyond 20 years, you can really get pretty close to your base pay once you're in retirement.
VELSHI: Let's talk about -- you know, we talk a lot about inflation and shopping across the board in America. Do you get certain discounts because you're in the military. I often see those kind of references to discounts for military personnel and their families.
CHERNOFF: Major discounts. You're not paying retail if you are a member of the military. You can go to these commissary agencies and they are selling basically just 5 percent above costs. The savings better than 30 percent. There are other discounts as well that people in the military have. So, you know what, they certainly deserve all of this, without question. I mean these folks . . .
VELSHI: Sure. They work hard and it's tough on those families when those soldiers or those military people are deployed for a long time and their families are left behind.
CHERNOFF: And especially with the guys being at risk, I mean, this is the least that the country can do.
VELSHI: All right. Allan CHernoff, thanks very much for that -- Gerri.
WILLIS: Well, members of the military have to deal, of course, with a host of challenges that civilians never worry about. One thing in particular, keeping their credit clean can be incredibly difficult with the rigors of military life. John Ulzheimer is the president of credit.com. And he has some ways that troops can stay out of trouble.
You know, you say the military folks in particular have to focus on their credit. They're at risk for a host of things like identity theft.
JOHN ULZHEIMER, PRESIDENT, CREDIT.COM: That's exactly right. And they're no difficult -- they're not exempt from the same challenges that consumers not serving in the military have to deal with. They're living in close quarters, which means that the mail is generally delivered to a mail box and there is always the issue of somebody taking the identity of another soldier, a fellow soldier, in some cases, and committing some sort of identity theft or fraud, which is quite sad.
WILLIS: OK. There's something out there called a Service Members Civil Relief Act. It's supposed to provide some help. Does it actually work?
ULZHEIMER: It actually does. And the good news and the bad news with the Service Member Civil Relief Act is like most laws that touch on consumer credit, very, very confusing. And if you don't understand the rights afforded to you under the act, then you may not actually choose or know that you could execute some of them.
One of the primary provisions of the act is the ability to cap interest at 6 percent if, in fact, the job that you have with the military makes it difficult for you to manage a debt that's much more expensive.
WILLIS: Wow. What about delaying court action? What does that mean?
ULZHEIMER: Definitely. Definitely. The act allows for a soldier to delay any court action, for example, eviction is a very good example. You cannot be evicted from your home and your family cannot be evicted from a home or an apartment without the court ordering the eviction.
WILLIS: And you can terminate your lease prior to being shipped overseas, right?
ULZHEIMER: That's where the act differs between someone who's just on active duty versus somebody who is now being deployed. If you entered into either an apartment lease or an automobile lease prior to being deployed, then you can actually execute an out of that lease when you are deployed, which is fantastic because it gets rid of the obligation because who's going to be using their car in Iraq.
WILLIS: Right. Exactly. Let's talk a little bit more about that. Obviously, keeping track of your finances is nearly impossible when you're overseas. What do you do? What kinds of suggestions do you have for folks that are deployed in Iraq?
ULZHEIMER: Look, let's be real honest about this. It's difficult enough for folks who are stateside to deal with that and now you add the entire dynamic of being halfway across the world serving the country. It's very, very smart to find a trusted family member or give them sort of durable power of attorney and allow them to help monitor credit, deal with debt, deal with the credit reporter agencies if need be and just generally keep track housekeeping of your general, personal finances.
WILLIS: That's a great idea. And do you think people should freeze their credit?
ULZHEIMER: Absolutely. This is actually one of the rare occasions where I actually suggest spending a little bit of money monitoring credit and going ahead and freezing it, which essentially takes it out of the system while you're deployed.
WILLIS: How do I continue to monitor that over time? I mean is there a way for me overseas? I know you've got me giving information to a trusted friend or adviser. But is there anything else that the service person themselves should be doing?
ULZHEIMER: It's very, very difficult, Gerri, to monitor your credit when you're overseas because generally the alerts that are set up through these companies that do the monitoring for you are e-mail alerts and text message alerts. And think about someone who's actually in a hot zone in Iraq. They don't have e-mail readily available and they're certainly not sitting there on their cell phone looking for alerts, which is why it's really smart to have a trusted family member at home do that for you.
WILLIS: John, great advice. Thank you so much.
ULZHEIMER: Thank you.
VELSHI: All right. Finding help for the members of the military and their families on the Internet. We'll tell you which sites to check out next when this special edition of ISSUE #1 comes back.
Stay with us.
(COMMERCIAL BREAK)
WILLIS: Well, a lot of us look to the Internet for help for a lot of things and there's a lot of information out there, especially for members of the military who are looking for financial help. The key is knowing which sites to use and also relying on the Internet to bridge the distance when you're overseas from your loved ones. CNN.com Live anchor Melissa Long joins us now with more.
Hi, Melissa. MELISSA LONG, CNN.COM LIVE: Hi, Ali.
Well, there is an aggressive program called Military Saves that you can read about online. And the woman leading this financial educational program was a military chaplain for five years. She says 90 percent of the people she counseled were dealing with financial problems and that's why she says, as a civilian, she is now leading Military Saves.
It's tag line, build wealth, not debt. It is sponsored by the Department of Defense. And there are more than 300 military installations all around the globe participating in Military Saves. There are a saver pledge and this web site also has basic reminders that we can all rely on to stop spending frivolously -- Ali.
VELSHI: Well, Melissa, when you're away and you're trying to focus on your job as a soldier or in the military, what's the advice for being in control of your finances when you're that far away?
LONG: Of course it can be challenging. And Military Saves says if you are single, find someone you trust to take control of your finances. And make sure it's someone with good, financial skills. Don't just rely on a family member.
Now if you have a bill that is regularly a certain amount, pay a little bit extra so there's a cushion just in case. And, if possible, the obvious, put your expenses on automatic bill pay. And, yes, the home can be a good long-term investment. But, of course, soldiers often move. So keep in mind, you could be stuck with multiple properties or forced to take losses. It is a difficult housing market, as you know, Ali.
VELSHI: All of that advice is actually good, even if you're not deployed. Even if you just live in the United States and you're not in the military.
Now homes may not be the wisest long-term investment if you're going to be away. What are some other good investment options for soldiers?
LONG: Well, for soldiers deployed to the qualified combat zones, there is a terrific savings vehicle. It's called the Savings Deposit Program. It's a non-retirement plan and those who qualify can stash up to $10,000 in the account with up to 10 percent return rate. That is high.
Also, Military Save encourages soldiers and their families to take advantage of the Thrift Savings Program. The TSP is a retirement plan, just like a 401(k). All service members can participate. But there is no match like so many of the 401(k) programs that we're all familiar with.
VELSHI: Yes, many Americans are getting their stimulus checks right now, Melissa. One hope is that people are going to spend that money to stimulate the economy. That may not be ideal for a lot of people, especially if they're carrying debt. A lot of financial advisers are recommending that people put that money against their debt or into savings.
LONG: Yes, Military Saves, Ali, doing just the same thing. It encourages soldiers and their families to check with the defense credit unions or military banks for incentives that may be there to open new accounts, that are saving accounts, or add deposits to existing ones.
Military Saves, in fact, mentions one in particular, Langley Federal Credit Union out of Virginia, for people who are new to saving. It features a tier dividend rate. And you get the highest rate on really small deposits. And, again, small deposits. So this is a program for new savers to encourage them to make those early contributions to that initial nest egg that we're all trying to create and really create that saving mentality -- Ali.
VELSHI: All right. There are some good opportunities there and some good advice available to military members and their families.
Melissa, thank you for bringing that up to us. That's very informative.
For live events, breaking news and today's top stories online at any time, go to CNN.com/live and you can see Melissa there.
Well, America's economy is issue No. 1 and we here at CNN are committed to covering it for you. Tune in every weekday from noon to 1:00 p.m. Eastern, that's 9:00 to 10:00 a.m. on the West Coast.
WILLIS: Thank you for joining us for this special edition of ISSUE #1.
I'm Gerri Willis.
VELSHI: And I'm Ali Velshi.
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