Return to Transcripts main page
Issue Number One
Candidates & the Economy; Western Swing States; Protecting Your Money; Carpooling Tips
Aired August 19, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN ANCHOR: Fay is on shore. Folks in Florida feeling the strength of the storm, but it's not over yet. The VP talk heats up, could an Obama announcement be less than 24 hours away?
Why some of the states hardest hit by foreclosure could help decide who wins the White House.
And why school students are feeling the pain of high oil and gas prices. Issue number one is your economy, ISSUE #1 starts right now.
From the ISSUE #1 headquarters to the CNNmoney.com news room, we are all over the stories that matter to you. Welcome to ISSUE #1, I'm Christine Romans, Ali Velshi is off today.
We've been hearing the speculation for months, but by this time tomorrow, you might know the vice presidential pick for Senator Barack Obama. The latest from the best political team on television.
Michael Phelps may have already won his eight gold medals, but this is when the story gets let's say very rich for the Olympic great. We'll look into the business of Phelps.
And a great way to save gas and save a ton of money. We have the rules for the road for car pooling.
But one of the big stories today. Fay.
GERRI WILLIS, CNN ANCHOR: Tropical storm Fay made landfall this morning, has been whipping up trouble throughout the state of Florida ever since. There's rain, there's wind, now, here's the tough part of the story. This storm could be far from over. With the possibility Fay could strengthen again and maybe yet make another landfall.
(WEATHER REPORT)
ROMANS: Gerri, many Floridians are watching Fay from the road. They are among the thousands who evacuated as the storm approached. Sean Callebs is live in Punta Gorda, Florida. Sean?
SEAN CALLEBS, CNN CORRESPONDENT: You can see right now that we are simply getting drenched. Fay is really using a wide brush to paint the southwestern part of this state. Water just pouring down right now, and the winds about 40 miles an hour are coming in dead from the north.
And this is a storm that people here in Punta Gorda have been watching very closely. They still remember four years ago when a punishing hurricane called hurricane Charlie came through and did a great deal of damage. Well, a lot of people here in this area either don't have the financial means or do not have the ability to flee a storm. And that caused a great deal of anxiety last night.
(BEGIN VIDEOTAPE)
CALLEBS (voice-over): This is the attraction. For more than 35 years, Irene Faust has lived in mobile homes along Florida's coast.
IRENE FAUST, PUNTA GORDA RESIDENT: Everybody likes water. I don't know of anyone that don't. And I love it here. It's really great.
CALLEBS: But with the water comes the wind.
FAUST: Well, yes. But, how many years was it we didn't have a storm?
CALLEBS: For Irene Faust and Punta Gorda, exactly four. This is what hurricane Charlie did to her old neighborhood. Now as Fay closes in, Irene is waiting for her daughter to fly in so the two can drive to South Carolina and safety. If her daughter doesn't make it, Irene says she'll hunker down in the park clubhouse. Four years ago, Bill Bargmanian fled ahead of Charlie.
BILL BARGMANIAN, PUNTA GORDA RESIDENT: Charlie took the whole carport down.
CALLEBS: But since then, he's picked up two German shepherds, including Carla here. And despite pleas from relatives, he has no plans to leave.
BARGMANIAN: They said don't play around, you got to go, go. I said the question is, where am I going? I said I can go to my mother's house, but then I got to leave the dogs here and I really do not want to leave the dogs here.
CALLEBS: Slabs are a silent testimony to Charlie's fury, where people simply haven't rebuilt. Fay's winds may not rival that storm, but Irene Faust has these words of warning.
FAUST: I'd say get out of a mobile home because it's just like a cracker box.
(END OF VIDEOTAPE)
CALLEBS: Just like a cracker box. And Thursday marks Irene's 82nd birthday Christine. I can tell you she didn't want to spend it with Fay, so hopefully she got out of this area and is up safely in South Carolina away from this drenching rain. Christine?
ROMANS: Irene and Bill are both veterans of this then, aren't they?
CALLEBS: Indeed. A lot of people down through here have been through this so many times. You know what's amazing too, we talked to a lot of people yesterday and just the knowledge people have of hurricanes down here. They've been watching the saturation of all the media coverage and people were saying, look as this storm moves in, I really think it's going to be torn apart by this upper level disturbance in the atmosphere. Then once it gets over land it's going to lose its integrity, then we're worried about the tornadoes and the flooding. So people had the drill down, it's just did they get out of the way? Christine?
ROMANS: You were there a few years ago for hurricane Charlie, how did this compare?
CALLEBS: Hurricane Charlie, after a hurricane when you come through, all the humidity is out of the air, the sky is perfectly blue. We went through those two mobile home parks the day after Charlie, and it just looked like a bomb went off. Those trailers were absolutely shredded. A lot of people thought they were completely safe because that was a storm that was supposed to hit far to the north in the Tampa area.
Where last night when Fay came ashore it came far to the south of where we are. But just look at what these outer bands are doing. Christine. So, like Jacqui said, these storms are fickle and they can cause a great deal of damage. So even though it's not great in terms of wind, you don't want to diminish the safety concern. Christine?
ROMANS: All right, Sean Callebs in Punta Gorda, Florida. Thanks Shawn.
WILLIS: Well, new inflation numbers are out today and they are not looking good.
Let's get you right down to CNN's Stephanie Elam who is live at the New York Stock exchange today -- Stephanie.
STEPHANIE ELAM, CNN CORRESPONDENT: Inflation is definitely taking center stage today, Gerri. Producer prices, that's what things cost at a wholesale level, they actually jumped more than 1 percent in July, double what analysts were expecting. That surprise increase put the figure at its highest annual rate since 1981, nearly 30 years. And year-over-year, the wholesale inflation rate, well, it's near 10 percent.
The rise comes as wholesale prices for energy increase affecting other products like automobiles and prescription drugs. And now even if we exclude those surging food and energy prices that we all know about, core prices rose 7 percent, and that is more than triple than what was expected. Keep in mind, these are July numbers. That's a month that saw oil up a record -- to a record $147 a barrel. Today oil is about $35 lower. This means producer prices for August should reflect the recent declines in oil and other commodity prices as well as the strengthening dollar. Many believe that will allow the fed to leave interest rates alone into next year.
In other news, new home permits, often used to gauge future construction, well they found two 17-year lows. So no shock, the markets are feeling a bit deflated today. All three of the major averages are solidly in the red, losing more than at least 1 percent, Gerri, back to you.
WILLIS: Stephanie, not good news. And, of course, we'll keep an eye on those inflation numbers. It's probably going to be no time at all before those wholesale inflation numbers hit consumers' wallets. Thank you.
ROMANS: Lots to tell you about the campaign tail, including some new indications of when and possibly who Senator Barack Obama might put on the ticket with him.
And we're looking at one possible solution to high gas prices. A closer look at electric cars. If or when you might want to own one. We're all over ISSUE #1, right here on CNN.
(COMMERCIAL BREAK)
ROMANS: On the campaign trail today, we expect to find out sometime this week who Obama will pick for his VP slot. We should be hearing about McCain soon, as well. CNN's Ed Henry has been tracking down the rumors in Washington. Ed, what's the latest on who might be chosen?
ED HENRY, CNN CORRESPONDENT: Well, good afternoon Christine. The reason why there's so much speculation really being fueled right now, particularly about Senator Obama. Obviously his he convention kicks off next Monday. There's essentially a deadline there for him to pick someone. And the speculation now, we're hearing from advisers to Senator Obama, it could be as early as tomorrow, but the window is more likely to be Thursday through Saturday. Because the whole point here is the campaign is trying to build momentum coming off his vacation. Last week, heading into that democratic convention, they want to sort of stretch out the news cycle of you will.
The names we're hearing from advisers to Senator Obama that the short list is basically as we've heard it in recent weeks, always a potential for surprise, the short list basically Senators Bayh and Biden. You can see they're on both ends, they've got national security credentials, in the middle there, Governor Bill Richardson of New Mexico, a key swing state, also Hispanic, someone with some foreign policy experience as a former U.N. ambassador. Tim Kaine though, the governor of Virginia, still in the running, as well.
Someone who would be more outside of the box in terms of a Washington outsider. Could underline the Obama theme of change whereas Biden and Bayh and others have been in Washington obviously for a longer period.
Now for Senator McCain, the equation basically also about momentum, but not just building his own, but stopping Obama's momentum. We're hearing from republican advisers to Senator McCain that he's likely, not definite, but likely to make his vice presidential selection public two Fridays from now.
Basically the day after Senator Obama gives his acceptance speech. All of the speculation right now about essentially whether Senator McCain will roll the dice and go with Tom Ridge, the Pennsylvania governor, a moderate. He's somebody who supports abortion rights. They've campaigned together recently. You see the other two there. Mitt Romney, the former governor of Massachusetts, and Tim Pawlenty, the current governor of Minnesota.
They'd sort of be the conventional wisdom as sort of the safer choices, they both support abortion rights or maybe more in the mainstream of the Republican Party. We've been talking to republican activists this morning who basically say that the McCain team has been putting out phone calls in the last couple of days really trying to take the temperature of their party's base about whether Tom Ridge would be palatable.
Some people are saying that's because they think John McCain is leaning towards Tom Ridge, there are other conservatives who insist this is more just, they think basically a head fake to throw Tom Ridge's name out there, but in the end they'll end up picking a conservative. The equation for John McCain, this is monumental, if he picks someone who is more moderate, that could split his party at his convention. But maybe he wants to roll the dice, he wants to try to throw that maverick image out there and try to underline that -- Christine.
ROMANS: All right, these are big decisions. Ed Henry in Washington, thanks Ed.
HENRY: Thank you.
WILLIS: That brings us to today's quick vote where you get to weigh in.
CNNMoney.com's Poppy Harlow is here with today's question.
Hey there Poppy.
POPPY HARLOW: Hey there Gerri. All the focus on who is going to be the VP for each of these candidates, it's clear to all of us the next president will have a host of economic issues to deal with as soon as he takes office. But his second in command will be key to winning this election. Here's our question today, which presidential candidate could most use a vice president with a strong economic background? McCain, Obama, both, or neither? Let us know on CNNMoney.com. We'll bring you the results a little later.
WILLIS: All right, well that sounds fascinating. Let's move on to today's energy fix. We've been talking a lot about electric cars on this show. But, are they a solution that can really solve the energy crisis and will it make a difference to my pocketbook?
HARLOW: Exactly, that's what it comes down to. People don't have as much money to spend now. They want to know can we even afford these. Just imagine having a car and not making anymore trips to the gas station. Filling up your car would be as easy as plugging into it a wall socket. It could also be cheaper as well. The equivalent of about $1 a gallon. And get this, electric cars would also reduce heavily emissions.
Even possibly eliminate tailpipe emissions. The idea is becoming a reality. Check this out, Nissan just unveiling its first electrical vehicle set to hit the U.S. market in 2010. So less than two years away. Reports are this has a good acceleration. Gerri, that's been a big problem with these electric cars. How fast can they go?
WILLIS: And this is so ugly too. Come on.
HARLOW: I think people are not used to seeing that boxy shape. But, again, not paying for gas is a huge plus. Take a listen. These electric cars, they sound pretty good. I don't know how.
WILLIS: Maybe too good to be true.
HARLOW: It may be too good to be true. The batteries -- here's one downside. They batteries have a limited range. So you're not going to be taking any long road trips in these cars. The bigger problem may be our existing electric grid, what happens when all of these cars are on the grid? Even electric car advocates do concede your electric bill will go up with the cost of electricity. That's just what we saw with corn and ethanol.
And also if there are enough of these vehicles out there, working, they need our electric grid to be upgraded. Also, don't forget that a lot of electricity comes from coal and therefore there is an environmental concern. But advocates do say they believe these issues can be solved if the big automakers will work well with the electric industry.
(BEGIN VIDEO CLIP)
DERON LOVAAS, CNN INDUSTRIAL RESOURCES DEFENSE COUNCIL: General Motors is talking with utilities across the country, Ford is doing the same. The other automakers, I'm sure, are going to follow suit. We need to make sure to get the ground rules of this new marriage right so that it works and doesn't end up on the rocks as the one between the oil companies and the automakers did.
(END OF VIDEO CLIP)
HARLOW: That is, of course, a key concern. Last week, we showed you how hydrogen powered vehicles worked. I also recently drove and showed you about natural gas vehicles, so Gerri there's a lot of options. It's going to be interesting to see how this all plays out.
WILLIS: How much stuff can you really plug in with those electric cars?
HARLOW: There's a lot of questions out there. But a lot of Nissan obviously betting on the space.
WILLIS: All right Poppy, thanks for that.
HARLOW: You're welcome. ROMANS: When kids return to school this fall, tough economic times and higher gas prices will likely have an impact on their lives in and out of the classroom. CNN business correspondent Jennifer Westhoven is here with that story. How, Jennifer?
JENNIFER WESTHOVEN: You know I think kids are really going to actually see it. They're going to be learning about what it means to have higher energy prices. One place you're definitely going to see higher prices is at lunch. Most school cafeterias are going to charge more for lunch this year according to the school nutrition association. Even with federal programs they're not going to be breaking even either.
And worse, you know, even though it costs more, kids are going to be getting less nutrition, milk, fresh fruits and veggies cost a lot more this year. Some schools, about a dozen of them, are also going to try a four-day week. Some kids might be saying yeah about that. But probably catches their attention. Minnesota districts is going to add 10 minutes to every class, certainly also hard on parents they may have to find day care for an extra day.
One of the biggest budget killers though that I think school boards are grappling with, the school bus. Because of diesel prices, it could cost nearly twice as much to fill up the tank in those yellow buses that take kids to school every morning. So districts from coast to coast, some of them are consolidating bus stops, meaning the kids all walk to a neighborhood stop where they get picked up instead of at their front door.
Some schools are also dropping bus service or they're changing the rules. Elementary school kids who live a mile away can take the bus, but high school kids have to live two miles away. That is thousands of students who will be walking or taking their bikes or skate boarding this year. And field trips. Remember the field trips?
ROMANS: I loved them.
WESTHOVEN: They just got more expensive.
They're so much more expensive though. A lot of the schools say they're going to either drop them or they're going to make them a lot shorter. They'll be closer to home. And this is my favorite telling example. When you think about -- we had bake sales to raise money.
ROMANS: Right, we sold candy, which is not necessarily that nutritious or educational.
WESTHOVEN: You can raise money that way, Florida's PTA president says that in Jacksonville, Florida, they're having a toilet paper drive.
ROMANS: Interesting. Times are tough in the schools I guess.
WESTHOVEN: That's the kind of supplies they need.
ROMANS: Jennifer Westhoven, thanks Jennifer. WILLIS: Well, we're keeping an eye on tropical storm Fay and exactly where the storm might be going next.
Plus, why some of the hardest hit foreclosure states could make a very big difference in the presidential election.
And why Michael Phelps and his 8 gold medals are about to become very big business. You're watching ISSUE #1.
(COMMERCIAL BREAK)
ROMANS: If there's one golden boy at the Beijing summer Olympics, it's got to be American swimmer Michael Phelps. What a scorecard, eight events, eight gold medals. Like (INAUDIBLE) here, you might have been wondering, how much gold is in this gold medal? And how much is it really worth? According to the Olympic charter, each gold medal must contain at least 6 grams of gold, based on today's rates, the gold in a Beijing gold medal is worth Gerri about $158.
WILLIS: That's all?
ROMANS: That's all.
WILLIS: Well, more on Phelps. You could say he came, he swam, he conquered. Michael Phelps is now an all-time record holding Olympian with eight gold medals and a total of 14 Olympic titles. He's also on his way to becoming the all-time richest Olympian. And for a closer look at the business and marketing machine, that is Michael Phelps, I'm joined now by Rick Horrow, a sports business analyst, wearing pink goggles. What's with you, Rick?
RICK HORROW: Hey, listen, you know if Michael Phelps some say $50 million or so from his overall endorsement take, if I wear these goggles, maybe something is going to rub off on me. I didn't get water in my goggles like Michael but at least we tried. A lot of self esteem.
WILLIS: Well, I don't think a lot of people understand he's already making money and big bucks at that. How much?
HORROW: Well, he's making money from Hilton and Omega and Visa, Speedo gave him a $1 million bonus. What he needs to do right now is turn the $1 million contracts into $6 million, $7 million, $8, $9 million deals quickly before the flying tomato effect.
WILLIS: You're talking about Sean White, aren't you?
HORROW: Sean White, everybody forgot. Now he's got to focus on it. It could be $50 million all told, not in the Tiger category, Lebron James makes $30 million. Dale Earnhardt, Jr. at $22. So when all is said and done he may be in the middle of that.
WILLIS: In the middle of that. All right, you whipped right through his entire career in five to 10 seconds. Let's slow it down a little bit and talk about is he capable of having the kind of charisma that so many of these big time stars do? You talked about Tiger Woods. You know, you talk about these guys, it's not just that they're fantastic at what they do, it's also that they have a lot of charisma, a lot of polish.
HORROW: Eight gold medals is nothing compared to the challenge that he has if he wants to be a worldwide global marketing icon. Because you've got to transcend the swimmer role and enter the worldwide celebrity role, the Tiger, Lebron James, the Michael Jordan, and by the way, maybe he does water world remake, maybe like Johnny Weismauer(ph) he does a Tarzan movie. These are Olympians who are known not because they're Olympic athletes, because of what they did after.
WILLIS: So he can become an actor, you just don't know what's coming next. Let's talk about some dollars and cents for just a second. How much it could really add up to? Who are likely to be the new companies to sign on board? And who may have a fight to keep him?
HORROW: Well, just remember, everybody says they're now an expert about how to market Michael Phelps. Nearly 300,000 of these impressions on his Facebook page. More than Miley Cyrus. Now that is in a different stratosphere. Nike says maybe they're interested, Speedo, obviously, Power Bar, but those are swimming related. The real key and Nike of course is broader. But the Visas, the Kellogg's, the Hilton Hotels, the brands that will sustain his image as an athlete businessman spokesman, not just a swimmer.
WILLIS: Interesting stuff. And we'll be watching this step by step. And I'm sure you'll want to help us out with it. Rick Horrow thank you for that.
ROMANS: Next what the presidential candidates are saying about taxes and the economy. With six days until the first convention, the rhetoric heats up. We'll bring it to you in their own words.
Plus, some new information out today on the state of housing in this country. Why it could be a while until the mortgage meltdown stabilizes. You're watching the home of Issue #1, the economy, CNN.
(COMMERCIAL BREAK)
ROMANS: Every day we're letting you hear what the presidential candidates are saying on the campaign trail. They're talking a lot about the economy. Here is Senator Obama from a town hall meeting in New Mexico yesterday. He was discussing how he and Senator McCain differ on tax policies for the wealthy.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA, (D) PRESIDENTIAL CANDIDATE: Unfortunately, John McCain, what he's proposing are the almost exact same policies that George Bush has been peddling for the last eight years. He wants to give $3 billion worth of tax breaks to some of the wealthiest Americans. He was in a panel the other day with me, Rick Warren, some of you may have seen it. And Rick Warren asked him, well how do you define rich? He said, maybe he was joking, he said $5 million. Which, I guess, if you're making $3 million a year, you're middle class.
But, that's reflected in his policies. Where, you know, for people who are making more than $2.5 million, he's giving folks a $500,000 tax break. And so this is a fundamental difference in this election.
What I've said is, we're going to give 95 percent of working families a tax break. But it's going to be ordinary folks getting $1,000 for family to offset their payroll tax, getting several hundred dollars in additional homeowner interest relief so that, you know, we can start preventing some of these foreclosures, making sure that we're expanding the child tax credit. Dealing with the bread and butter issues that people are facing day-to-day. That's short-term. Long-term, we've got to create jobs.
(END VIDEO CLIP)
GERRI WILLIS, CNN ANCHOR: Next, John McCain in his own words.
But first, the very latest on Tropical Storm Fay. Let's get you back down to Jacqui Jeras live in the CNN hurricane headquarters.
Jacqui.
JACQUI JERAS, CNN METEOROLOGIST: Packing a punch right now. And, in fact, we're getting word now from Florida Power and Light that there are about 93,000 people in the state that are without power. They expect that number to fluctuate throughout the day today. And a lot of that has to do with that wind damage. Those strong winds blowing across the area, knocking down tree limbs and trees on top of power lines. And, unfortunately, those people are going to be without for a while.
There you can see the center of the storm. Not as well defined as it has been the last couple of hours. It's about 20 miles to the southwest of Morhaven (ph), Florida. Notice the red box indicating the threat of tornadoes still continues. And that's mostly in the right front quadrant of the storm here. So we might start to see that watch begin to shave off.
Check out some of the winds, though. They still remain strong. These are sustained winds, not to mention the gusts, which are still around maybe 40, 50 miles per hour. Thirty miles an hour in Fort Myers. Thirty-four up there towards the Cape area and 23 miles per hour in West Palm Beach.
Rain and water. That's going to be probably our biggest issue now with Fay from here on out. The storm is expected to slow down in forward speed. So the slower it moves, the more rain is going to be in one spot. The best thing I can tell you is our most recent computer model shows the worst of the flooding rain staying offshore. But that's only if Fay stays on its current track. So we'll have to wait and see if that happens.
We have a good amount of confidence it's going to stay moving northeast throughout the day today. But then by tomorrow, we could see this thing emerge back over some open waters, intensify just a little bit more, and then take a nice hook on off towards the west. We've got a big ridge of high pressure that's going to make a lot of people happy in the Northeast, bringing some great weather as we approach the weekend. But, unfortunately, it means a flooded mess across north Florida and south Georgia -- Gerri.
WILLIS: Well, Jacqui, I guess we've got a ways to go with Fay. Thank you for that.
Earlier we showed you what Barack Obama had to say about using taxes to boost the economy. Now let's hear from John McCain. He spoke yesterday in Cocoa Beach, Florida, about NASA and how space-age jobs, well they can help turn things around.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: I know that there's great concern in the region and all of Florida on our current economic situation. NASA is in transition, families here and across the state are sitting around the kitchen table and figuring out how they're going to stay in their homes and how they're going to deal with rising gas and grocery bills. I'll get America's economy moving again and it starts with solving our energy crisis once and for all.
We also need an economic surge to keep businesses here at home and create new ones. It's time to make America open for business again. American workers can compete with any workers in the world, but they can't compete with one hand tied behind their back.
America has the second highest business tax rate in the world. That means that businesses here are paying more in taxes than their foreign competitors. We need to lower taxes to make businesses more competitive and create more jobs.
We need to open new markets for products like those made here. We need to reduce the cost of health care. And we need to end the out of control spending in Washington that is wasting your tax dollars.
We need to create new high-paying jobs for workers here in Florida and along this space coast. And as president, that's what I will do.
(END VIDEO CLIP)
ROMANS: You've heard what Obama and McCain are saying on the campaign trail. Now let's see what it all means. CNN deputy political director Paul Steinhauser joins us from Denver.
Paul, the candidates really differ on their tax policies here, don't they?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: They really do. This is an issue where they do not agree and it's very clear to voters. You know, John McCain says that Barack Obama wants to raise your taxes, and Barack Obama says John McCain will be just another four years of George Bush when it comes to taxes. That's the rhetoric. But where do they really stand?
Let's start with John McCain.
He wants to make those tax cuts from 2001 and 2003, the George Bush tax cuts, he wants to make them permanent. He also says he'll keep the current rates on dividends and capital gains. And he wants to permanently reduce the Alternative Minimum Tax, which is the so- called wealth tax that threatens the middle class. And when it comes to the corporate tax rate, he wants to drop it from 35 percent to 25 percent.
What about Barack Obama? He says he's going to leave in place all those tax cuts from President Bush, except those for couples making over $250,000 a year or individuals making $200,000 a year. Those high income groups would see their taxes go back to what they were before the Bush tax cuts and also their capital gains and dividend tax rates would also revert back to what they were before President Bush had his tax cuts. And he also wants to introduce new tax breaks for lower and middle income households.
So what do the people thing? Well, CNN and the Opinion Research Corporation polled Americans late last month and we asked, "who would better handle taxes?" Barack Obama, 51 percent. John McCain, 45 percent. Pretty close -- Christine.
ROMANS: When these candidates speak, they're bringing in the economy. I mean even John McCain talking about NASA and bringing in the economy, bringing in jobs. Have they sort of left all the other issues behind at this point?
STEINHAUSER: You know, you're right. When they talk about other issues other than the economy, they keep bring the economy back. But they are talking about other issues for sure. I mean you had John McCain yesterday at the VFW convention and Barack Obama today talking about Iraq, Afghanistan, the war in Georgia between Georgia and Russia.
But the economy remains issue number one. Take a look at our latest poll number from late last month, as well. The economy, 48 percent say it is their most important issue. Iraq, second place, look at that, way down at 18 percent. Health care, terrorism and immigration. So, yes, it's been issue number one since late last year and it continues to be issue number one with people and with the candidates.
ROMANS: And, Paul, that $5 million comment that Rick Warren asked Senator McCain this weekend at the forum, you know, what is rich, and he said $5 million. Maybe he was joking, maybe he wasn't, but it gave a little ammunition to Obama, didn't it?
STEINHAUSER: You know, the Democrats have really been trying to capitalize on that. We've seen a lot of e-mails from the Democratic National Committee. They're even up with a web ad as well criticizing John McCain for those comments. What they're leaving out is that when McCain said that, he said he was kind of joking and he also said, I may be paying the price politically for those comments. Well, it looks like the Democrats are trying to make him pay.
Christine.
ROMANS: Paul Steinhauser.
Thanks, Paul.
WILLIS: Well, some new information out today on the state of housing in this country. Why it could be a long time until the mortgage meltdown subsides and why some of the western swing states are some of the hardest hit by the subprime crisis and the credit crunch. Bill Schneider will have the story.
ISSUE NUMBER ONE rolls on next.
(COMMERCIAL BREAK)
ROMANS: Still no bottom for housing. Construction of homes and apartments in July fell to the lowest level in 17 years. The Commerce Department says builders broke ground on 965,000 units on an analyzed basis. That's down from more than 1 million in June. But the July figures, Gerri, are better than analysts expected.
WILLIS: Well, I guess some good news somewhere.
Well, you know, you hear a lot about swing states -- Ohio, Florida, Wisconsin. But could some of our western states swing the election?
CNN's senior political analyst Bill Schneider takes a look.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN CORRESPONDENT, (voice over): There's gold in them there hills. The Democrats are looking to strike it rich in the mountain states. Three in particular where their prospects look good -- Nevada, New Mexico, and Colorado. All battleground states this fall.
BOB LOEVY, COLORADO COLLEGE: Take, for instance, Colorado. It ordinarily runs 4 percent more Republican than the country in presidential elections. But last time out, in 2004, it was only 2 percent more Republican.
SCHNEIDER: The latest Colorado poll, John McCain leads Barack Obama by three points, within the margin of error.
Why so close? The poll shows a striking generation gap. Colorado voters under 35 are going for Obama by a huge margin, 22 points. Seniors are going for McCain by nearly as big a margin, 17 points. In 2004, young voters outnumbered seniors in Colorado and Democrats are making a bigger push to get even more of them to the polls this year, along with Latinos and suburban women, two other groups that have been trending Democratic in Colorado.
What about the economy? Issue number one in Colorado, just like everywhere else. Colorado voters who say the economy and jobs are their top concern favor Obama, but only by a narrow margin.
Obama has yet to establish an undisputed claim on the economic issue. Meanwhile, McCain has seized the advantage among voters whose top concern is energy and gas prices. A 16-point lead over Obama. Asked to name his most significant policy shift, McCain said . . .
SEN. JOHN MCCAIN, (R) PRESIDENTIAL CANDIDATE: Offshore drilling. We've got to drill now and we've got to drill here.
SCHNEIDER: McCain may have struck not gold, but oil in Colorado.
(END VIDEOTAPE)
WILLIS: Well, Bill Schneider joins us now from Denver.
Hey, Bill, aren't some top Christian conservative leaders based right there in Colorado where you are. What's the impact on their politics? I like your at, by the way.
SCHNEIDER: Yes. Indeed they are. Thank you.
Colorado Springs, just south of Denver, is the epicenter of the Christian conservative movement. That's where Dr. Dobson's Focus on the Family is located. A lot of evangelical churches there. They have acquired a lot of influence in the Republican Party here in Colorado.
But that seems to have cost the Republican Party some support because what's happening here is a lot of affluent suburbanites, who used to be solidly Republican, resent the influence of the religious right on what used to be their party and they've been trending more and more Democratic. Even in the -- particularly in the affluent suburbs here in Denver -- Gerri.
WILLIS: Interesting stuff, Bill. And I love the way you have the hat like cocked just a little bit. It looks very attractive.
Thank you.
ROMANS: All right. We're about to talk high gas prices, housing debt and how all three influence the race for the White House. The money panel is standing by. We're all over issue number one right here on CNN.
(COMMERCIAL BREAK)
ROMANS: Looking to buy a car? Now might be the time to consider GM. General Motors is again rolling out employee discounts for all of us on nearly all cars and trucks in its showrooms. Starting tomorrow, GM employee discounts, usually 10 percent below the invoice price, it will apply to all 2008 vehicles except some trucks, as well as some 2009 cars. The move, of course, aims to boost sagging sales, which through this month are down almost 18 percent.
WILLIS: Ouch. Well, insulation, housing, more troubling news for the economy. To put it all in perspective for us, I'm joined by Gerri Detweiler from credit.com, and she is the author of "Stop Debt Collectors." Poppy Harlow, our very own Poppy Harlow. And Steve Hargreaves. He covers this stuff every day for money.com.
All right, Poppy, I want to start with you.
We had some very important housing numbers out today. You know, I thought maybe the end was in sight of this terrible time for housing. Not true.
POPPY HARLOW, CNNMONEY.COM: Well, because we saw a better than expected result in June, but July's numbers were horrendous. The worst we've seen in 17 years for home starts and building permits, which is just meaning no one wants to build these new homes.
WILLIS: You know what's interesting about the permit number, of course, is this is the future.
HARLOW: Yes.
WILLIS: You know, like, you know, maybe if you get better, it's worse than last month.
HARLOW: Forward-looking. Yes. And then you combine that with the earnings from Lowe's and Home Depot meaning people not only aren't building these homes, they're not remodeling the new homes. So it's disappointing across the board. And really an analyst I talked to this morning about all of this, she said she's covered the sector for seven or more years and she's just not seen anything like this before. Recovery is still far away.
WILLIS: Recovery's still far away.
And, Gerri, you think about this all the time, the kind of debt people are getting into. Folks under water with mortgages they can't afford. They're starting to hear from debt collectors for the first time ever. What would you tell people do when they're having to deal with these debt collectors?
GERRI DETWEILER, AUTHOR, "STOP DEBT COLLECTORS": Well, the first thing you have to do is gain a perspective and understand that you have to take the initiative. So if you're having problems, you have to seek help. The biggest thing I see, Gerri, is people wait to long. You know, the waiting for the housing market to turn around, so they don't do anything. But if you wait too long, as we see, it could be a long, long wait.
WILLIS: So you're talking about maybe picking up the phone and calling the person who holds your mortgage, talking to them, trying to get a better deal, a better mortgage. Is it easier now than it's been? I know people have had a hard time finding better deals.
DETWEILER: It's still very tough. We don't know what the results of the new housing legislation will be. It may be that FHA loans are more available and provide some relief for some consumers. But you've got to start your homework early. You can't wait until you're 60 days behind. WILLIS: You know so many people, hundreds of thousands of people will go into foreclosure before that bill will goes into effect.
Steve, you've got some great stuff today on the web. I just want to talk about this story a little bit. I'll let you set it up, but it's about the oil industry and what they're doing in Washington.
STEVE HARGREAVES, WRITER, CNNMONEY.COM: Yes. Well, the money that they're spending on lobbying is up quite a bit this year. If the spending continues, it's going to be a record year. They've spent $55 million so far.
WILLIS: $55 million.
HARGREAVES: $55 million so far. And so they're trying to deal with all of these -- you know there's been a barrage of energy bills in Congress and they're trying to deal with it. You know some people have said that, you know, they're spending all this money to keep something from happening. Or at least that's how it happens in Washington. You know, people spend a lot of money to make sure nothing happens. It seems kind of weird. But, you know, it's, you know, it's not the only reason why not much has happened on the energy front.
HARLOW: And I read Steve's piece. We talked about it earlier today. And one interesting thing is that those employers are giving money to the candidates. So many more are giving money to McCain.
WILLIS: Right.
All right. We've got to move on to inflation for just a second, because I want to get this in today. It's a critical number for so many consumers out there. Inflation at the highest level in 17 years. What do you make of this? Poppy, this is really at the wholesale level. It's not our pocketbooks. Not yet anyway.
HARLOW: Well, yes, we saw the Consumer Price Index rise to a 17- year high. The wholesale prices are up. Like you said earlier in the show, just a minute before we feel that -- the same thing happened to us. What I think is very interesting, our salaries aren't rising at the same level. That's how it works. And a good piece in "Fortune" magazine talking about the next credit crisis is going to be credit cards. People supplementing that with their credit cards.
WILLIS: And, Gerri, you know, again with this credit cards, again with the mortgage debt. If you had one piece of advice for folks out there, what would you tell them?
DETWEILER: The best advice I could say is try not to dig the hole any deeper. So look at other solutions besides turning to the plastic because they're already doing it and we're already in trouble.
WILLIS: Great words of advice. Gerri Detweiler, Steve, Poppy, thanks so much for being with us. We appreciate it.
ROMANS: Here's a solution for you. Are you envious of the cars zipping past you in the HOV lane? Are you tired of chugging to work on your own. Are you broke from filling up the tank? Why car pooling may be the way to go. Rules of the road next.
And don't forget to vote. Which presidential candidate could most use a vice president with a strong economic background. Log on to CNNMoney.com and cast your vote results next on ISSUE #1.
(COMMERCIAL BREAK)
WILLIS: As the presidential candidates get closer to announcing their running mates, we wanted to know what you thought who could most use a vice president with a strong economic background. Poppy Harlow is back with the results.
What did people say?
HARLOW: Hey, Gerri.
The answer is clear. The majority of people, 52 percent, said both the candidates need a strong VP when it comes to the economy. Twenty-five percent said McCain really does, 19 percent said Obama does. Only 5 percent said neither of the candidates need a VP who's strong on economics. So it's clear what people are calling for.
WILLIS: And it's pretty logical.
Thank you for that, Poppy.
HARLOW: Sure.
ROMANS: Yes, logical indeed. All right. Thanks.
Are you tired of driving to work on your own? Are gas prices pinching your wallet? Are you envious of those who drive in the HOV lane? If you answered yes to any of these questions, listen up. You might want to consider carpooling. That's right, carpooling is back. John Lyons is the president and CEO of MetroPool.
First off, what is MetroPool?
JOHN LYONS, PRESIDENT AND CEO, METROPOOL: Metro Pool is a not for profit that helps people find a better way to work than driving alone.
ROMANS: And a better way to work is carpooling? How do you find a carpool in your neighborhood?
LYONS: You find a carpool - there's a couple of ways. You can go on the web. Look up ride sharing or carpooling and you'll get many web sites. A lot of the state departments of transportation have agencies like MetroPool that offer free services.
ROMANS: And the advantage here, of course, is that you are not filling up the tank all alone while your neighbor fills up the tank all alone and everyone is paying through the nose for gas.
LYONS: That's correct. I mean you're sharing the ride. It's quite simple.
ROMANS: This for the country where we all have three cars in the garage and we've gotten very used to driving long distances to work by ourselves. Let's talk about the rules of the road then. You can't just jump into a carpool group. You've got to set some rules.
First of all, the route and the schedule, establishing the pick up points. Walk me through what you got to make sure you do right.
LYONS: Well, first you need to find a partner. And typically the destination is where people are going is the key to that. Work, for instance, or an event or whatever. And once you find people, you sit down and you go through it, who's going to drive? Where is the pick up? What time is it?
And then it gets more specific. What's going to happen inside the car? What radio station? Is smoking allowed? Perfume and cologne are actually one of the . . .
ROMANS: You're kidding.
LYONS: If people are sensitive to different, you know, perfumes or whatever, it can be an issue. Tolerance. How late can somebody be before we'll wait no longer?
ROMANS: You've got to learn who's going to pay for the driving expenses. You have to figure out a method for reimbursement there. And insurance must be an issue.
LYONS: Well, insurance. Most of the people we're talking about have a car. So they're already insured.
ROMANS: Make sure it's up to date then.
LYONS: It has to be up to date. There's actually -- people should look into it. If you carpool on a regular basis, you're reducing your mileage if you're sharing it, if you're going back and forth. So you may get a reduction in your insurance. So people need to look out for that. There's an opportunity, if you're driving less, that you could be paying less. And actually the insurance companies are favorable toward carpooling because people typically drive a little more safely.
ROMANS: When there's somebody else in the car watching over them.
LYONS: When there's somebody else in the car.
ROMANS: Do you think we're going to see carpooling because of gas prices, even through they're down, are we going to see carpooling come back?
LYONS: Carpooling is back. I mean we've seen increases since $3.75 on up. We've had doubling and what not of interest in it. And what happens with transit and with car pooling is, once people try it, they like it. They don't have to drive. They relax. They actually see the benefit of it.
ROMANS: Just leave the perfume or the cologne at home.
LYONS: Yes.
ROMANS: John Lyons, MetroPool.
Thanks for joining us, John.
LYONS: Thank you.
WILLIS: Well, the economy is issue number one and we are committed to covering it for you. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 p.m. Eastern, right here on CNN.
ROMANS: Time now to get you up to speed on some other stories making headlines. CNN "NEWSROOM" with Don Lemon and Kyra Phillips starts right now.
