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Open House

Special Election Edition: The Presidential Candidates, Their Plans, and What Resonates With the American Public

Aired November 01, 2008 - 09:30   ET

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

GERRI WILLIS, CNN HOST: Hello, I'm Gerri Willis and this is a special election edition of OPEN HOUSE, the show that saves you money.
Just days from now, Americans head to the polls and we are breaking down the issues that matter most to you and to your bottom line. Let's get right to the candidates, their plans and what's resonating with the America public. Is the U.S. managing editor of the "Financial Times." Jack Otter is the deputy editor of "Best Life." And Gloria Borger is a CNN senior political analyst and, of course, a member of the best political team on television.

All right, let's get down to it. Jack, I want to start with you. You know, where is the good news here? We actually saw the economy contract, news of that this week in the third quarter, the stock market is down more than 30 percent, my home value is down 17 percent, give or take from this time last year. Which candidate has a plan that's going to get this economy back on track?

JACK OTTER, DEPUTY EDITOR, BEST LIFE: Well, I have to give you the bad news first, which is I don't think either candidate has the power to do that much. I mean, this is a business cycle problem. It's a bubble that, depending on how you count, has been going for 20 years that we've been pumping it up, and right now it's collapsing hard. And we just learned this week that we're finally going negative on GDP. We are officially in a recession, which is no big surprise, and it's going to take a long time for all the imbalances to straighten out.

WILLIS: No one candidate? Chrystia, you looked like you wanted to get involved in that. Do you agree?

CHRYSTIA FREELAND, U.S. MANAGING EDITOR, FINANCIAL TIMES: Only in part. I think that no one has a sort of holistic plan. It's a new thing. This is really a new kind of crisis. It's the biggest financial crisis since the Great Depression, and we're in totally unchartered economic waters.

I slightly disagree with Jack, though, because I do think actually what we're going to see and we've seen already is very vigorous government action. We've seen it addressing the financial crisis. We've seen that from the Republicans. You know, Hank Paulson has nationalized more than President Clinton.

WILLIS: It's hard to keep up with all the changes we've actually seen. Gloria, I want to get to you... GLORIA BORGER, CNN SR. POLITICAL ANALYST: We're talking about socialism in this election, too, right? John McCain is accusing Barack Obama of being a socialist, yet it's the Republicans who have effectively nationalized the banks.

OTTER: And what I think is so ironic about that is part of the reason we're in this place is because we didn't want to put in some regulations that compared to what we're doing now are absolutely nothing. I mean, nobody on either side of the political aisle wants to do, wants government to be as involved in the private sector as it is now when, frankly, in my opinion, had we taken a few steps to rein in liar loans, to reduce, I mean, to not increase the capital ratio as we did, then we wouldn't be where we are now.

WILLIS: Let me get you to the individual candidates. Gloria, I want you to talk about Obama for just a second. He had this 30-minute infomercial that got so much play, only not on our network, but people paid attention. He talked a lot about the economy. Is his message resonating with voters?

BORGER: I think it finally is. I think what the infomercial was about was about re-assuring people, you'll notice the office he was in looked an awful lot like the Oval Office. I now believe there should be music and captions when a president speaks from the Oval Office because people pay, pay attention. And his anecdotes were all economic. They were -- and they were all, by the way, from people in battleground states or very contested states and it spoke to Americans' concerns about living their everyday lives.

The big problem, though, Gerri, that Barack Obama has had is on the tax issue because John McCain has said he's going to raise your taxes and I'm not. What Barack Obama says 10 times a day is if you earn over $250,000 a year, you're going to get a bit of a bump. You may go back to where you were under Bill Clinton. But, if you're under $250,000, no, you're going to get a tax cut.

If you look at the polls, the message is getting through because it used to be that more than half the voters believed he was going to raise your taxes. Now that more than half the voters believe he won't. So, it's changed for him.

WILLIS: We're going to talk about taxes in just a second, but I want to get to housing and talk about this 90-day moratorium that Obama is talking about. A lot of people are saying big mistake. What do you think, Jack?

OTTER: I'm not crazy about it. The reason is what it means is that 91 days after it goes into effect, you will have a flood of foreclosures. If we're going to actually have the government go in and change the terms of a contract, I'd like to get more bang for the buck out of it. I think there are proposals one can do. Workouts would be my solution and make the banks pay a little bit for this very irresponsible lending. But, the moratorium doesn't do much for me.

WILLIS: We're talking economy, we're talking housing. Chrystia, is it the economy in this election? Is that really the only issue at play, right now?

FREELAND: Yes, it is. I mean, this is really a huge economic crisis. It's only going to get worse, and people know that, people have seen their value of their homes fall, they've see seen the value of their 401(k)s fall, but they understand that they're going to start losing their jobs and that's when a recession really bites.

WILLIS: And who gets the benefit?

BORGER: Well obviously, John McCain is suffering. This is a tsunami that's come at him, and Barack Obama's trying to make it even worse because he's tying him to George W. Bush and the last eight years. So, even if John McCain had run a perfect campaign -- and by the way he has not run a perfect campaign, but if he had, any Republican would have difficulty right now and that's why you see all of these congressional races, not just at the presidential level, but at the congressional level, there's a lot of nervousness about how this is going to affect Republican candidates.

WILLIS: Well, let's talk about those swing states for just a second, North Carolina, Ohio. I spent a lot of time in both of those. Pennsylvania, another swing state. How are they going to break? Who's playing them best? Who has the advantage?

BORGER: Well, it's hard to tell how they're going to break. States like Indiana, states like Missouri, Ohio, Pennsylvania, everyone's affected by the economic crisis. I think the irony here to me is that we all think the leadership -- we all thought going into this election the leadership question was going to be about who could be the better commander in chief, who do you trust in that kind of a crisis?

Now the leadership question is who do you trust in an economic crisis? Nobody knew that was going to be the case and I don't think John McCain did himself any favors by rushing back to Washington. When we look back on this election, that was September 24, we may look at that as a key date.

WILLIS: Big turning point in the election, possibly. All right, Chrystia, Jack, Gloria, stick around, we're breaking down the candidates' tax plans as well as what they plan to do about jobs in America. Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: There's been a lot of talk about taxes in this campaign, and the truth is my opponent and I are both proposing tax cuts. The difference is he wants to give them -- he wants to give a $700,000 tax cut to the average fortune 500 CEO.

(BOOING)

I want to put a middleclass tax cut in the pockets of 95 percent of workers and their families.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: This is the fundamental difference between Senator Obama and me. We both disagree with President Bush on economic policy. The difference is he thinks taxes have been too low and I think spending has been too high.

(END VIDEO CLIP)

WILLIS: All right. Chrystia, how can it be possible that these candidates both say the other candidate is going to raise your taxes? How can it be that they are throwing mud at each other on this topic? What's the truth here?

FREELAND: Well, Barack Obama actually doesn't say that John McCain will raise your taxes. He says that both John McCain and I will lower your taxes, it's just that we'll lower them in different ways. And I think that he's actually pretty close to the truth in terms of their policies. They are both talking about lower taxes for most people, although McCain would lower people's taxes even more, but Obama is including more of an element of redistribution.

WILLIS: Right. Let me interrupt you right here. Can either of them, though, get their plans in place? Is it possible? You know, Obama will have both houses of Congress, McCain, if he were to be elected -- I mean, could these guys get these plans -- it's so hard to change the tax code in a major way.

FREELAND: You know, actually I think they could and I think what we will actually see, whoever is president, is taxes lowered for everybody and a real splurge of government spending. It is going to be a kanzian (ph) moment. We are going to see the government really priming the pump of the economy. And actually, America can afford to do it because people want to hold U.S. dollars and they want to hold t-bills.

WILLIS: Gloria, I want you to get to redistributing wealth, this claim that Barack Obama's a socialist, and he wants to give money, take it from the rich and give it to the poor. True or false?

BORGER: Well, it's interesting. I was listening the other day to Bill Clinton who explains this better, I think, than anyone, he's still a brilliant politician. He said, yeah, Barack Obama -- we've come off eight years of redistributing the wealth in a big way, at the top, to the top and he says what Barack Obama wants to do is distribute it down more evenly and I think that, you know, that's essentially true. Barack Obama may raise taxes on the wealthy. So, call it -- call it what you will, it is what it is. It's not -- it's not socialism. It's, you know...

WILLIS: What is it, Jack?

OTTER: I think it's an important perspective, though, that he would take it back to where Bill Clinton had it at the time of the greatest bull market, the greatest economic growth in the history of the country. So, Bill Clinton's tax rate was not a punitive tax rate, it didn't harm the economy. And what also I think people don't understand in the public is that when you increase marginal tax rates, in the Obama example, it means every dollar over $250,000 would see an increase of about three percent. Their money -- that first 250 grand you make doesn't change, it's only the main you make after that goes up.

BORGER: Do you think he would be so quick to do it anyway, right now?

OTTER: It would be tough, although the -- your kanzian (ph) point is a good one. I think the only chance we have to possibly rein in the deficit, though, is going to be on the revenue side, because clearly we're going to be spending more...

FREELAND: ...until 2010, now.

WILLIS: I want to talk about "Joe the plumber" for just a minute, because has been the star of this campaign, probably one of the most important players, certainly a character unto his own -- he took the vice presidential candidate from the Republican side off TV there for a while which was an amazing thing. Chrystia, tell me what you make of "Joe the plumber." He represents a fairly big demographic. Was he able to get to Barack Obama on this issue of taxes?

FREELAND: I think what "Joe the plumber" represents is not in and of himself, a big demographic because he was at least claiming an income much higher than...

WILLIS: Small business owners, 30 million Americans, it ain't nothing.

FREELAND: Not small business owners who personally make $250,000 a year. Right. That's not how much most plumbers make, most plumbers make $45,000 a year.

WILLIS: But small business owners, the category he really represents, if you're not in it, you aspire to be in it.

FREELAND: Aspiration is the key point and I think the reason Republicans have won the taxation debate in America over the past three decades has been because American voters have been thinking not how much tax would I pay next year under this president, they've been thinking how much tax would I pay five years from now when I achieve my dreams and become rich? And people have been voting on their aspirations. The question in this election on taxes is, will people vote based on their economic reality or on their economic dream?

WILLIS: What do you think, Gloria?

BORGER: Well, it's very hard to say. "Joe the plumber's" been a great rhetorical device for the Republicans, absolutely no doubt about it. But, I think after a while you're sort of like, OK, enough of "Joe the plumber" and how does this affect me, my life, where I feel? And I keep coming back to the economic anxiety, insecurity.

People, when they're insecure, they want a change, but at what risk? And people are going to evaluate what the risk is of Barack Obama or John McCain as a leader in an economic crisis, that's what it's going to come down.

WILLIS: All right, Gloria, Jack, Chrystia, thank you. Don't go anywhere, we are digging deep into the controversial, but important issue of healthcare in this presidential election.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: If I'm elected president, I won't fine small businesses and families with children as Senator Obama proposes, to force them into a huge government-run healthcare plan.

OBAMA: Senator McCain didn't tell us about the studies that say his plan would cause 20 million Americans to lose their health insurance from their employer.

(END VIDEO CLIP)

WILLIS: That was senators John McCain and Barack Obama on healthcare. We're joined again by our top tier panel breaking down the issues affecting your bottom line.

Chrystia Freeland is the U.S. managing editor of the "Financial Times," Jack Otter, the deputy editor of "Best Life," and Gloria Borger is a CNN senior political analyst and part of the best political team on television.

All right guys, healthcare, this is huge, huge, huge for people. If it's not economy, it's healthcare. Jack, I want to start with you. Obama proposing coverage for everybody.

OTTER: Well, almost everybody. He's not going quite as far as Hillary Clinton did. I mean, what he's doing is he's doing piecemeal. OK, we can get more kids covered by forcing parents to actually cover them. Personally, I don't think that would work.

I mean, John McCain attacks him and says you're going to fine parents who don't cover their children. McCain's right. I don't think Obama's actually going to fine them -- or, I guess I should say, McCain is wrong, Obama would never dare go there, so there will be probably a rule that says you have to and here will probably zero penalty for not doing it.

WILLIS: Chrystia, I want you to jump in here because McCain's plan is interesting and I'm wondering with either candidate, will we see the end of employer-sponsored healthcare if their plans were put into place, which is a big if, but would it encourage employers to walk away?

FREELAND: I don't think we would see the end of employer- sponsored healthcare under either plan, no. Actually, maybe there should be and end to employer-sponsored healthcare. The United States is an outlier among industrialized countries; most countries have a single-payer state-sponsored healthcare system. It's a lot cheaper and it delivers better outcomes than the United States has. But, that's way too radical and would be a far too of a dramatic shift for the U.S.

So, I think we're mostly going to see sticking with employer- sponsored healthcare at the backbone, but what Obama is proposing is a big deal, because if he has the political power to enact his plan, and I'm not sure he will, then you would see most Americans being covered. That would be a really, really big difference.

WILLIS: But, my question about the McCain plan, in particular. You know, he has this plan where people will get a tax credit, I believe, and pretty substantial. But, wouldn't that encourage employers to get out of the business?

BORGER: Oh, that's what the Democrats say. And they say the tax credit doesn't cover what you will have to pay for your healthcare, anyway. They say it is about half.

OTTER: But, what I think it would do is cover you if you were very young and healthy and it would clearly not cover you if you were older and not as healthy. So, what would happen would be the 23-year- old healthy guy would say, no thanks and take the $5,000 credit and then the family guy who is 55 and ailing would and so the companies would be stuck with the sicker population and rates would go up and that's what would cause some companies to move away.

BORGER: Can I just say, whoever is president really has to make a decision about what the priorities are and that's healthcare or energy. Barack Obama has talked a lot about energy policies being something he wants to do right out of the box. There isn't a lot of money, we've been talking about that. They may be Kanzian (ph), but how Kanzian are they going to do be?

FREELAND: (INAUDIBLE) I interviewed the head of Pfizer this week who is a big supporter of major...

WILLIS: Big pharmaceutical company.

FREELAND: Big pharmaceutical company. And he wants healthcare reform. He's really in favor of it and he's really worried that no matter who is president, even if it is a Democrat, it won't happen, just because it is really, really hard to do and studies have shown, if you don't do your big political changes at the beginning of your presidency, it just doesn't happen.

BORGER: Right and if you do it piecemeal, then you don't have a large impact. So, it's a very interesting political question, which is, you bite off a big thing when you've got the economy hanging over your head. And if you don't, then at the end of your first 100 days or whatever markers we in the media set up, how do we judge whether you've accomplished your goals and it's very tough?

OTTER: Plus, Obama sees what happened to Clinton, and that was the third rail that he stepped on and it really set that administration back. So, I don't think he wants to go there.

WILLIS: Gloria, I got to ask you, shifting the focus for just a second from the presidential candidates to the vice presidential candidates, what do you make of them on the economy? Who is -- who can get the best tracks, say the most commonsensical things about the economy?

BORGER: Well, you know, I look at the vice presidential candidates as appendages, honestly, of the presidential candidates. I know that neither of them would like me to say that, but they're just going to mimic what the person at the top of the ticket is doing. In terms of getting something through the Congress, I think Joe Biden's expertise, honestly, is in foreign policy, Sarah Palin doesn't have a congressional expertise in Washington, so she says she works across the aisle and has done so in the state of Alaska, so I think they're going to take the marching orders from the guy at the top.

WILLIS: All right, well great conversation, hang on. So many of you out there are worried about your savings, your investments, your retirement or simply your bottom line. We talk about what candidates plan to do about all of that, next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Our policies should strengthen capitalism, but it should also make sure the businesses live up to their responsibilities to create American jobs and look out for American workers and look out for American investors, the people with the pension, the small person who is just trying to save for their retirement. It should make sure the Wall Street plays by the rules of the road.

MCCAIN: Now, the first thing we must do is protect people's savings and investments and retirement accounts by stopping the declines in the stock markets and getting the credit markets moving again so people can get home, car, and business loans. To do this, we need pro-growth and pro-job economic policies. Not pro-government spending programs paid for with higher taxes.

(END VIDEO CLIP)

WILLIS: Welcome back to the special election edition of OPEN HOUSE. For the past 20-something minutes, Chrystia Freeland, Jack Otter, Gloria Borger have been working with me. We're breaking the issues down for you. Let's talk about a topic so important to you out there. Hey, your savings.

Jack, you know, I was just listening to these quotes from these candidates. When would you have thought a candidate would have been talking about the credit crunch, use that phrase. It's crazy. I mean, when you look at these two candidates, who is most likely to have the best handle on the economy?

OTTER: Well, maybe the very best indicator I have seen is who Obama went to when the crisis really broke open. Robert Rubin, Paul Volcker and Paul Buffett. I'd rather just take Obama out and let those three solve the problem. I mean, I was encouraged by the fact that he went there. On the other hand, I'm not crazy about some of his proposals. You and I talked about his proposal to allow people tap their retirement accounts. Very, very tempting, I'm hurting, I've got all that money in my 401(k), but the fact is, as we know, people are living longer than ever before, pensions are disappearing. It might be bad now, but it doesn't make a difference what the economy is doing if you are 80 and you run out of money, you're in deep trouble.

WILLIS: Chrystia, I want to ask you, because there is conversation now that the 401(k), what a bad idea, maybe we should rethink the entire policy. Who do you think is going to be the best candidate for people who are close to retirement, those boomers right now who are really close and really thinking, boy, I got to have the markets working in order to retire?

FREELAND: Well, I think the bad news for people close to retirement is they are going to be the primary casualties of this economic crisis. And we just heard John McCain saying, we need a president who can get the stock market going again. There doesn't exist such a president.

This is not within the power of any government to raise share prices, overall. And people know that. The real difficulty is that if you are close to retirement, unless the government decides to actually hand out big checks to everyone five years away from retirement or whatever kind of a scheme you can imagine, there isn't any silver bullet.

WILLIS: Well Gloria, when you think about this, what do voters want out of these fellows when it comes to retirement, 401(k), and can they get it?

BORGER: Security. Security. They're the experts, I don't know the answer at this point, can they get it. And that's why seniors, when you look at older voters, who were really very much in favor of John McCain, they've now flipped. They are in favor of Barack Obama. Well, it's not because Barack Obama has become such a genius to them suddenly, it's because they opened up, saw their 401(k)s disappear and they're thinking, gee, maybe we need a change.

WILLIS: All right, great conversation, appreciate you're all helping us out today. Thank you so much. Stay tuned to CNN for complete coverage of "AMERICA VOTES 2008," today at 1:00 p.m. Eastern and tomorrow at 3:00, a special edition of "YOUR MONEY" with Christine Romans and Ali Velshi.

And starting with "AMERICAN MORNING" at 6:00 a.m. on Monday, CNN will be live, non-stop through Election Day and won't stop until a new president has been elected. Make sure you join the best political team on television for the ride.

Your latest headlines are up next. CNN "NEWSROOM" with T.J. Holmes and Betty Nguyen starts right now.