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Presidential Field Narrows; Another Rate Cut Expected from Fed

Aired January 30, 2008 - 13:00   ET

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

KYRA PHILLIPS, CO-HOST: Six days from Super Tuesday, the race for the White House goes on but with fewer front-runners. Any minute now we're expecting John Edwards to end his Democratic presidential bid where it began in New Orleans.
DON LEMON, CO-HOST: And on the Republican side, America's mayor, well, he won't be America's president. Rudy Giuliani arrives in California in just a few hours to back out of the race and back a former rival. Who will that be?

Good afternoon, everyone. I'm Don Lemon, live at the CNN world headquarters in Atlanta.

PHILLIPS: And I'm Kyra Phillips. You're live in the CNN NEWSROOM.

The field narrows, the landscape changes. Let's bring in Democratic strategist and CNN contributor Donna Brazile live from Washington.

So Donna, the word is we're going to hear from John Edwards. He is going to step out of the race. If indeed that is what he's going to say, why now?

DONNA BRAZILE, CNN CONTRIBUTOR: Well, I think it's obvious that Senator Edwards has run his course in terms of this race. I don't believe this is the last time we'll hear from John Edwards.

John Edwards has fallen behind in raising money. He's fallen behind in the national polls. He's fallen behind in all of the statewide polls, and he's fallen behind in delegates. So I think he's made the wise decision to end his campaign at a time when the two top contenders are talking more and more about the issues that John Edwards has led on: on health care, on the economy, on global warming.

John Edwards started that conversation for the American people. He was a candidate who talked about one America. He talked about ending the divides in this country. He has championed the poor, the middle class. He's also told Washington, D.C., and put D.C. on notice that he would be a fighter to ensure that the middle class had a voice once again in the political arena.

So I think John Edwards has made a wise choice today to end his campaign and to continue his work, his lifelong work on ending poverty and fighting for the causes that he's always believed in.

PHILLIPS: Donna, let's bring in senior political analyst and former presidential advisor David Gergen. He's joining us now from Cambridge, Mass.

David, you heard a little bit there of what Donna had to say. Let's talk about what we can hear now from John Edwards. Apparently, he's going to step up to the mike, step out of the race. Now everybody is wondering who will he endorse? The talk, I guess the rumor mill right now says Hillary Clinton. What do you think?

DAVID GERGEN, CNN POLITICAL ANALYST: I think we'll have to wait and see. It seems less likely he would endorse Hillary Clinton, although he might, because he's essentially been running against much of what she -- he's argued she stands for, and that is the status quo, close alliance with the business community.

If he's going to endorse, it would seem the logic of what he's arguing would suggest Obama, but we'll have to wait and see.

We'll also have to wait and see to what degree his wife's health has played a role in this. Certainly, his wife Elizabeth's health played a major role in his decision to go forward with this campaign.

PHILLIPS: Do you think -- well, that made a -- do you think that will have made a decision -- I mean, you heard Donna. And we've seen how he's fallen behind in the polls. Obama and Hillary Clinton obviously have been the frontrunners here. He's been running out of money. You really think his wife's health played a big part in this decision?

GERGEN: I said we have to wait and see. I don't think we know. What we do know is this from friends of the family, that early on, when she was diagnosed with cancer, he was very close to making a decision not to run. She wanted him to run, very much so. Sent private e-mails to friends in North Carolina and elsewhere, how important that was to her.

And in some ways, the friends of the family have thought, it's in effect, given her something to live for.

PHILLIPS: Wow.

GERGEN: Now she has not been seen much recently. So there's an article in the "Raleigh News-Observer" this morning about how she's been resurfacing recently. I don't know whether -- I think Donna is right. Of course, if he'd been winning I don't think he'd be pulling out.

But we -- I think we'll have to wait and see to what extent Elizabeth's health -- because it's been such an integral part of this campaign right from the beginning -- what role that played. It may not have played any role at all. I'm simply raising that question.

PHILLIPS: That -- that really made my heart sink there for a minute, David, just hearing that this -- you know, Edwards staying in and continuing this run for the White House kind of gave her a reason to live. That was -- wow. I never really looked at it that way. It's really heartwarming, actually.

GERGEN: Well, it's heartwarming, but this is a moment, as can you imagine for them, it's heartbreaking, too.

PHILLIPS: Yes, no doubt.

GERGEN: Because this has -- it's meant so much to her. She's very proud of him. She's been a grand partner for him. She's been battling this cancer valiantly. I think it brought a lot of understanding to him and sympathy for him. And I cannot imagine he made this decision without close consultation with her.

So we'll have to wait and see. But I can just -- whether her health made a difference in getting out, I can tell you for certain that her health made -- and her determination, her desire for him to run and to see this as a culmination, in effect, of their long partnership in both personal and politics, was very important in his decision to stay in this race. He otherwise probably would have spent more time with her, you know, in a quiet way. So...

PHILLIPS: Right, more private.

GERGEN: Yes.

PHILLIPS: Donna, what do you think about VP status? Could we see Edwards in that position?

BRAZILE: Well, look, any smart politician would, of course, include Senator Edwards back on a short, short list for that position. But, you know, I don't know what John Edwards will decide to do.

He's a man of tremendous talents and clearly, he has a poverty center down at the University of North Carolina. He's a lawyer. There are so many possibilities for Senator Edwards.

And I just want to say, also, David mentioned Elizabeth Edwards. She's a woman of valor, a woman of tremendous strength and confidence. And I saw when I was up in New Hampshire, Elizabeth was energetic and enthusiastic and, of course, at that time they told me that, "Donna, we're going the distance."

And I just want to also say, because I know Senator Edwards, and he is announcing his departure in my hometown. He made this announcement several months ago down in New Orleans, that he would start this campaign to bring, you know, the national spotlight back on what took place down there in the Gulf Coast.

And you know, you have to admire someone who not only start their campaign focusing on an issue, but end their campaign in the same way, keeping the spotlight on poverty and justice and, of course, the lack of opportunities for the middle class and working poor in this country.

PHILLIPS: Donna Brazile, David Gergen, stay with us. Thank you both so much.

Any moment know we're expecting John Edwards to step up to the mike there in New Orleans. We are hearing that he is going to step out of the presidential race. A lot of things we want to know: what's next for him, how is his wife and her health, and also who will he endorse? Waiting for that live event. We'll take it when it happens.

LEMON: Absolutely. And all of us very familiar with the pictures we're looking at. We're looking at those are live pictures now of -- that's Musicians' Village down in the Ninth Ward of New Orleans, where so many famous people, actors and politicians have gone down to lend their support and their help there. And again, it is a place where he announced his candidacy there in New Orleans.

I'm not sure -- are we going to go to Dugald, then we want to go to Suzanne? I'm seeing Suzanne. OK.

PHILLIPS: Don't forget, Suzanne...

LEMON: We're going to go to Dugald now, who has been traveling -- Dugald McConnell has been traveling now with Mr. Edwards.

It's not the first time you have covered him. You said, Dugald -- he's a producer for CNN here -- that you've been with him, you know, for a very long time. You are surprised that he's going to make this announcement today. Even those behind the scenes are surprised by this.

DUGALD MCCONNELL, CNN PRODUCER: That's true, including top advisors of his. I mean, Joe Trippi told me that yesterday he still had a plane ticket to Atlanta for the debate -- for the CNN debates coming up in the next day or two.

And I thought that that might be one reason that John Edwards would want to stay in the race, to keep using that as a soap box or a platform for some of the causes that he says he's committed to. There is certainly a travel schedule booked for the next few days.

On the other hand, a speech in New Orleans is kind of a graceful way to bring this to a close. A year ago he announced his campaign, beginning here, focusing on those issues, like poverty, that Donna Brazile was just talking about. Now it brings us full circle to insist that that's still in the race (ph).

LEMON: And Dugald, that's what we kind of want to talk about here, because we were discussing the things that went along with John Edwards as he made his announcement for this campaign. Certainly poverty, New Orleans and Katrina a big issue there.

But also cancer with his wife. And we heard Donna Brazile and David Gergen talking about the impact his wife has had on this campaign and their personal life. Of course she announcing that her cancer had recurred.

You said that you haven't seen her on the campaign trail.

MCCONNELL: That's true. She hasn't been at the Senator's side for a week or ten days. On the other hand, we've been told several times, including by the senator himself, that that's not an indication of her health and that she's -- she's been doing well.

We know that she has been, certainly, an important voice in his campaign, not only for issues, but even on strategy and practical issues. She certainly has a smart head for politics and has been playing a little on the campaign. And we...

LEMON: Dugald, let me ask you this, has he -- you said he has been saying that his wife is doing well? Is that from him or are you guys hearing that just on the campaign trail?

MCCONNELL: John Edwards told me about three days ago that his wife is doing fine, but thanks for asking.

LEMON: And that's all he said.

We have -- we're going to get some video in just a little bit from you that you have been -- since you've been covering him and just over the last couple of days. He has been very light-hearted. I see this, you know, funny thing. You said he had the same ink stain on his jean that he had -- jeans that he had in Spartanburg since last Friday. So he's been very casual and comfortable, really, over the last couple days.

And we -- we also heard the criticism, too, in the debate -- hey, there's another person involved in this debate. Also him making the comment, you know, the media sort of -- and I'm paraphrasing here -- has a love affair with Barack Obama and with Hillary Clinton, and he feels that he doesn't get enough press coverage. Did you speak to him about that? Did he talk about that?

MCCONNELL: Yes, several times he's mentioned, even in speeches to audiences, he reminds them that there are three candidates in the race rather than two. It could have been one of the factors that he was closely considering when he made this decision that he's apparently made for today, that given the difficulty in -- in continued exposure, because Hillary and Obama have won so many races, that it's tough for him to still get on the map.

LEMON: And just real quick, he makes a joke. Before I let you go, he makes a joke here, you know. He's like, you know, "I'm the good-looking white guy here" or whatever. And we've heard he even, you know, alluded to that in the debates.

MCCONNELL: Well, that was certainly his strength in the South Carolina voters, that he did well among white men. But on the other hand, among other voters, he didn't have the -- the same strength.

You know, it's ironic that just last night was probably the best speech and best event he's had in the campaigning I've seen in more than a month. The crowd was more enthusiastic than I've seen and probably larger that I've seen, and that was in Minneapolis, which you know is a particularly liberal city.

LEMON: Yes. Dugald McConnell, very interesting stuff behind the scenes. You're going to join us a little bit later on. We appreciate that. Stand by. We may need your expertise again, sir.

PHILLIPS: And our Suzanne Malveaux, a native of New Orleans, just arrived there on the scene as we wait for John Edwards to step up to the mike.

Suzanne, home stomping grounds for you. You know that area well. It will be interesting to see exactly what Edwards has to say moments from now.

SUZANNE MALVEAUX, CNN CORRESPONDENT: Kyra, I mean, this has really come full circle for him, being in the Ninth Ward of New Orleans, really devastated by Katrina. Obviously, this is where he's going to talk about fighting poverty and big lobbyists, corporate lobbyists.

It is ultimately a theme that really did not catch on and certainly did not create the kind of excitement or the support for his campaign. He didn't win any of the early states, including the one in which he has born, South Carolina. So really a difficult campaign for him.

I've been speaking with his aides throughout the day, throughout the morning when the story first broke. And there was a conference call around 9:30 when he broke the news to his staff. He made this decision just within the last 24 hours, we're told, really a tough decision, because he did feel that there might have been some moments where he could gain, still, some momentum, where he might catch fire and become a bit more viable because it's been such an unpredictable type of race here.

But ultimately, he made the decision that it wasn't going to happen for him. He didn't have those delegates and the votes need to go forward to make a difference in all of this.

He did yesterday, I am told, reach out to his opponents, Senator Hillary Clinton, as well as Barack Obama, telling them what his plans were, what his intentions were, that he was considering dropping out of the race, and he asked them before to make a pledge here to make fighting poverty a central pledge, a part of their campaign, also in the general election. And if they are president, elected president, to try to push that message forward in the next administration.

Now we're told that they did give him that pledge, that assurance, and today he will appear before the cameras with folks, coming from one of those houses behind me to talk about what he's been talking about for years now, and that is confronting poverty and helping the working-class folks.

It's going to be very interesting to see how this impacts the race. Obviously, his biggest supporters were the working-class folks, also white males. Those are two groups that both Hillary Clinton and Barack Obama are going to be fighting fiercely over in the weeks to come -- Kyra and Don.

PHILLIPS: And I know it will be interesting to see who, and if, he does endorse someone, Suzanne Malveaux, when he steps up to the mike. We'll check back in with you, and we'll take it live.

LEMON: Absolutely. We're standing by today for this developing coverage that's happening in New Orleans. We're on the campaign trail here, the 2008 vote. Here's what we're watching here.

We're also watching the stock market and the smart money. The smart money today said there's going to be another interest rate cut by the Fed. The federal bank, the central bank wraps up its two-day meeting just over an hour from now. We're going to have a cut; market down almost 30 points right now. That's to the left of your screen.

On the right of your screen, Musicians' Village in New Orleans, where John Edwards is expected to make an announcement that he's going to drop out of the race, the same place where he made an announcement that he was going to enter the presidential race.

And that little clock you see there on the right hand of your screen, that's our countdown clock to the Republican debate tonight. Simi Valley, California, at the presidential -- at the Reagan Library there. So we'll have that for you on CNN.

We'll be back in just a moment. You're not going to miss it. If he comes out, we'll bring it to you live, right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

PHILLIPS: Senator Barack Obama speaking right now in Denver, Colorado. We actually just got a statement in, as well, with regard to the John Edwards event that we are waiting for there live in New Orleans on the other side of your screen. We are expecting him to step up to the mike and announce that he's dropping out of the presidential race.

In the meantime, we're following Barack Obama live out of Denver, getting this statement in from his camp on John Edwards. Barack Obama saying, "John Edwards has sent -- or spent a lifetime fighting to give voice to the voiceless and hope to the struggling, even when it wasn't popular to do so or covered in the news. At a time when our politics is too focused on who's up and who's down, he made a nation focus once again on who matters: the New Orleans child without a home, the West Virginia miner without a job, the families who live in that other America that is not seen or heard or talked about by our leaders in Washington.

"John and Elizabeth Edwards have always believed deeply that we can change this, that two Americans can become one, and that our country can rally around this common purpose. So while his campaign may end today, the cause of their lives endures for all of us who still believe that we can achieve that dream of one America."

That's Barack Obama talking about John Edwards as we wait for him to step up to the mikes there in New Orleans to announce he is pulling out of the presidential race.

And this statement coming from Hillary Clinton's camp: "John Edwards ended his campaign today in the same way that he started it, by standing with the people who are too often left behind and nearly always left out of our national debates. John ran with compassion and conviction and looked at this campaign with his deep concern for the daily lives of the American people. That is what this election is about. It's about our people, and John is one of the greatest champions the American people could ask for.

"I wish John and Elizabeth all the best. They have my great personal respect and gratitude. And I know they will continue to fight passionately for the country and the people they love so deeply."

That coming from Hillary Clinton with regard to John Edwards, getting ready to step up to the mikes from New Orleans, Louisiana, stepping out of the presidential race. We're going to take it live as soon as it happens.

LEMON: And both of them mentioned, both of the candidates, Barack Obama and Hillary Clinton, both mentioned Elizabeth Edwards. And Elizabeth Edwards is expected to join her husband there, along with his children, to make that announcement that he will drop out of this presidential race.

The reason this is so interesting is because who knows what he's going to say? This is where he started his campaign, but who knows what he's going to say. Is he going to endorse anyone? That's a big question here.

We're going to continue to leave this picture up on your screen there.

But in the meantime, we've got to check in on business. Another big story happening today as it concerns the Feds. How low will they go? The smart money is on another interest rate cut by the Federal Reserve when the central bank wraps up its two-day meeting just over an hour from now.

We are watching the financial drama from all angles. CNN's Ali Velshi is at the Chicago Board of Trade.

And we start with you, Ali. Smart money on another cut.

ALI VELSHI, CNN CORRESPONDENT: Don, this is the smart money right here. Watching these traders go back and forth. But for most people watching us, it's about your debt. If you have any kind of debt, whether it's adjustable or fixed mortgage, today is going to be very important to you.

In an hour, as you said, the Federal Reserve will announce its decision on interest rates. Just eight days after a massive cut, three-quarters of a percentage point, the Fed is going to make another decision. And the decision is going to be to cut rates. That's almost a certainty.

The betting here, though, is uncertain as to whether it's going to be a quarter of a percentage point or a half a percentage point. They're going back and forth on that sort of thing, and there's actual money being bet and traded here. Now, when the Fed cuts rates, they go down -- let's say the Fed cuts rates by a quarter. Your prime rate goes down by a quarter. The prime rate is always three percentage points higher than the Fed rate. So right now the Fed rate is 3 percent -- 3.5 percent. The prime rate is 3.5 percent.

Now over here you're going to see bonds traded. Bonds are where your fixed mortgage rates are set. Now, if you look over the course of the last five years -- and I think I've got a picture of this for you -- you look at where the Fed fund rates have gone -- that's the figure in the front. The yellow in the back is mortgage rates, 30- year fixed mortgage rates. And you can see that they don't move in lock step with each other.

But take a look at the last few months, ever since the Fed has started cutting rates. You'll see that the 30-year fixed mortgage rate has been going down at the same time. Right now you can get a 30-year fixed for around 5.5 percent. Some people can do better than that. That's assuming you've got good credit and you're not going to get a jumbo loan.

We'll see if that goes down. I'll keep my eye on it for you. In one hour we'll know the answer one way or the other, Don.

LEMON: Ali Velshi at the Chicago Board of Trade, we appreciate your reporting, sir.

Meantime, we want to head over to the New York Stock Exchange. Susan Lisovicz is standing by with a look at how the markets are doing today -- Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, Don, the markets are quiet. That's pretty predictable. What's not predictable is what the Fed will do. The Fed is stuck between a rock and a hard place. Why is that? Well, it's a very important decision.

It's not the kind of decision that's going to make -- you know, erase all those billions of dollars in losses we saw at financial companies. It's not going to make bad mortgages good. It's not going to give people back their homes.

What it would do, theoretically, is make money cheaper. So get consumers to spend again at more affordable rates and get -- get lenders to lend. That is the credit crisis.

But what the Fed has to consider is this: cheap money helped create that housing bubble. It was one of the primary culprits. And not only that, remember that inflation is out there.

We got this terrible read on the GDP this morning, on fourth quarter GDP, the broadest look at the economy. And we saw an indicator of inflation, which was actually getting worse. Oil, for instance, right now at $92 a barrel.

So there's not only a fear of recession; there's a fear of something called stagflation, when the economy is stagnant, economic growth is stagnant, but inflation is out there. And that is -- those are two ugly scenarios.

And that's what the Fed has to consider when it decides to set monetary policy later on in another hour. The betting is, as Ali said, another interest rate cut. How deep it goes, that's another question.

Back to you, Don.

LEMON: And this is a question as a layman, Susan. And I don't know about this. This may be coming out of left field. This was a viable -- at least what some thought was a viable candidate for the presidency who focused on the economy a lot. Does this in any way, him dropping out, affect the markets?

LISOVICZ: No. I think that -- you know, I think that there's a lot of uncertainty, and that is just one of the things that kind of spooks the markets. There's so much we don't know.

But right now it seems to be, there's still a lot of candidates out there. We don't have a clear favorite, it would seem, from the excellent reporting that we have from our political unit, that we have -- you know, it's a real slugfest in both the Democratic and Republican parties. So we really don't know what to expect next year...

LEMON: Yes.

LISOVICZ: ... in terms of who will be occupying the Oval Office.

LEMON: Well, the reason I ask, because politics often will affect what happens with the markets. And you know...

LISOVICZ: Yes. But I do thing one thing. I think that everybody is talking about the economy, because it is in trouble. And I think that's why we got bipartisan cooperation earlier this week.

LEMON: On the stimulus package, yes.

LISOVICZ: Yes, we don't -- we don't see that so often.

LEMON: Absolutely.

LISOVICZ: And it speaks to the urgency of the problem.

LEMON: All right. Susan Lisovicz at the New York Stock Exchange, stand by, because again, we're expecting a possible rate cut from the Fed.

Susan and Ali, thank you very much.

Your financial security is in the spotlight today as President Bush visits California. He's scheduled to talk about stimulating the economy at 3:15 Eastern. You'll want to stay right here in the CNN NEWSROOM for live coverage.

PHILLIPS: Live back to New Orleans, Louisiana, six days from Super Tuesday. The race for the White House goes on but with fewer frontrunners. Any minute now we're expecting John Edwards to step up to the mike there, end his Democratic presidential bid where it all began in New Orleans.

Let's get back to Cambridge, Massachusetts, our senior political analyst and former presidential advisor, David Gergen.

David, why now?

GERGEN: Why now? Why is Edwards getting out now?

PHILLIPS: Yes.

GERGEN: Well, I think the most important reason is that he's not winning. I mean, it doesn't appear that he can win on Super Tuesday. He doesn't have a lot of money. And I think his advisors have been quite candid that the road to the nomination, that seemed clear at one point, is now blocked. And given that, he's frustrated.

What we still don't know is whether there's any -- any relationship of his wife's health to his decision.

We also don't know if he's going to endorse. There are indications from his aides who have been quoted in other sources that he will not endorse today.

The conventional wisdom among people, you know, who comment on these kind of things is that if -- in his pulling out, that more of his voters are likely to go to Barack Obama than to Hillary Clinton. But we can't be sure of that. She'll make -- because they are lower income, and she's done very, very well among lower income people. That's been one of her great strengths, given her husband's record in the '90s.

So it's going to be -- I think everybody asks, you know, where are the Edwards voters going to go?

PHILLIPS: David Gergen, that's what we're watching, too. We want to know if, indeed, he does endorse someone when he steps up to the mikes right now. We're getting a standing ovation. It looks like John Edwards is making his way to the microphone right now in New Orleans, Louisiana, his wife by his side.

David Gergen mentioned something very interesting, as well. Still don't really know the extent of her health, if indeed, that's making an impact on his decision. His three kids by his side, as well, Don.

LEMON: Our Suzanne Malveaux weighing in on this.

Suzanne, on the ground, give us some flavor before he comes up and talk to us about -- you know what? Suzanne, we'll get analysis on the other side from you. We're going to go to John Edwards now and his wife, Elizabeth Edwards, and just take this and listen to his -- apparently, he's got his two kids with him.

PHILLIPS: Three kids.

LEMON: The place where he started. He's expected to drop out now.

JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: Thank you. Good to see you. Good to see you. Thank you. Thank you. Thank you all very much. We are very proud to be back here.

During the spring of 2006, I had the extraordinary experience of bringing 700 college kids here to New Orleans to work. These are kids who gave up their spring break to come to New Orleans to work, to rehabilitate houses, because of their commitment as Americans, because they believed in what was possible, and because they cared about their country.

I began my presidential campaign here to remind the country that we, as citizens, and as a government, have a moral responsibility to each other. And what we do together matters. We must do better. If we want to live up to the great promise of this country that we all love so much.

It is appropriate that I come here today. It's time for me to step aside so that history can -- so that -- so that history can blaze its path. We do not know who will take the final steps to 1600 Pennsylvania Avenue, but what we do know is that our Democratic Party will make history. We will be strong. We will be unified. And with our convictions and a little backbone, we will take back the White House in November, and we will create hope and opportunity for this country.

This journey of ours began right here in New Orleans. It was a December morning in the lower Ninth Ward when people went to work. Not just me, but lots of others went to work with shovels and hammers to help restore a house that had been destroyed by the storm. We joined together in a city that had been abandoned by our government and had been forgotten, but not by us. We knew that they still mourned the dead, that they were still stung by the destruction and that they wondered when all those cement steps and all those vacant lots would once again lead to a door, to a home, and to a dream.

We came here to the Lower Ninth Ward to rebuild. And we're going to rebuild today and work today and we will continue to come back. We will never forget the heartache and will always be here to bring them hope so that some day, one day, the trumpets will sound in Musicians' Village where we are today, play loud across Lake Pontchartrain so the working people can come marching in and those steps once again can lead to a family living out the dream in America.

We sat with poultry workers in Mississippi, janitors in Florida, nurses in California. We listened as child after child told us about their worry about whether we would preserve the planet. We listened to worker after worker say that "the economy is tearing my family apart." We walked the streets of Cleveland, where house after house was in foreclosure. And we said we're better than this, and economic justice in America is our cause. And we spent a day, a summer day, in Wise, Virginia, with a man named James Lowe, who told us the story of having been born with a cleft palate. He had no health care coverage. His family couldn't afford to fix it. And finally, some Good Samaritan came along and paid for his cleft palate to be fixed, which allowed him to speak for the first time. But they did it when he was 50 years old.

His amazing story, though, gave this campaign voice. Universal health care for every man, woman and child in America, that is our cause. And we do this -- we do this for each other in America. We don't turn away from a neighbor in their time of need, because every one of us know that, but for the grace of God, there goes us.

The American people have never stopped doing this, even when their government walked away. And walked away it has, from hard- working people and, yes, from the poor, those who live in poverty in this country. For decades we stopped focusing on those struggles. They didn't register in political polls. They didn't get us votes. And so we stopped talking about it.

I don't know how it started. I don't know when our party began to turn away from the cause of working people. From the fathers who were working three jobs, literally just to pay the rent. Mothers sending their kids to bed wrapped up in their clothes and in coats because they couldn't afford to pay for heat.

We know that our brothers and sisters have been bullied into believing that they can't organize and can't put a union in the workplace. Well, in this campaign we didn't turn our heads. We looked them square in the eye and we said, we see you, we hear you and we are with you, and we will never forget you. And I have a feeling that if the -- that if the leaders of our great Democratic party continue to hear the voices of working people, a proud progressive will occupy the White House.

Now, I've spoken to both Senator Clinton and Senator Obama. They have both pledged to me, and more importantly through me to America, that they will make ending poverty central to their campaign for the presidency. And more importantly, they have pledged to me that as president of the United States, they will make ending poverty and economic unequality central to their presidency. This is the cause of my life. And I now have their commitment to engage in this cause.

And I want to say to everyone here, on the way here today, we passed under a bridge that carried the interstate where 100 to 200 homeless Americans sleep every night. And we stopped, we got out, we went in and spoke to them. There was a minister there who comes every morning and feeds the homeless out of her own pocket. She said she has no money left in her bank account. She's struggles to be able to do it. But she knows it is the moral, just and right thing to do. And I spoke to some of the people who were there. And as I was leaving, one woman said to me, you won't forget us, will you? Promise me you won't forget us. Well, I say to her, and I say to all those who are struggling in this country, we will never forget you. We will fight for you, we will stand up for you. But I want to say this. I want to say this, because it is important. With all of the injustice that we've seen, I can say this. America's hour of transformation is upon us. It may be hard to believe when we have bullets flying in Baghdad. It may be hard to believe when it costs $58 to fill your car up with gas. It may be hard to believe when your school doesn't have the right books for your kids. It's hard to speak out for change when you feel like your voice is not being heard. But I do hear it. We hear it. This Democratic party hears you. We hear you once again and we will lift you up with our dream of what's possible.

One America, one America, that works for everybody. One America where struggling towns and factories come back to life. Because we finally transformed our economy by ending our dependence on oil. One America where the men who work the late shift and the women who get up at dawn to drive a two-hour commute and the young person who closes the store to save for college, they will be honored for that work. One America where no child will go to bed hungry because we will finally end the moral shame of 37 million people living in poverty. One America where every single man, woman and child in this country has healthcare. One America with one public school system that works for all of our children. One America that finally brings this war in Iraq to an end and brings our service members home with a hero's welcome that they have earned and that they deserve.

Today, I am suspending my campaign for the Democratic nomination for the presidency. But I want to say this to everyone. With Elizabeth, with my family, with my friends, with all of you and all of your support, this son of a mill worker is going to be just fine. Our job now is to make certain that America will be fine. And I want to thank everyone who has worked so hard, all those who have volunteered, my dedicated campaign staff who have worked absolutely tirelessly in this campaign.

And I want to say a personal word to those I've seen literally in the last few days. Those I saw in Oklahoma yesterday, in Missouri, last night in Minnesota, who came to me and said, don't forget us, speak for us, we need your voice. I want you to know that you almost changed my mind. Because I hear your voice, I feel you and your cause is our cause. Your country needs you, every single one of you. All of you who have been involved in this campaign, in this movement for change in this cause, we need you. It is in our hour of need that your country needs you.

Don't turn away because we have not just the city of New Orleans to rebuild, we have an American house to rebuild. This work goes on. It goes on right here in musicians village. There are homes to build here and in neighborhoods all along the Gulf. The work goes on for the students in crumbling schools just yearning for a chance to get ahead. It goes on for daycare workers, for steel workers risking their lives in cities all across this country. And the work goes on for 200,000 men and women who wore the uniform of the United States of America, proud veterans who go to sleep every night under bridges, or in shelters, or on grates just as the people we just saw on the way here today. Their cause is our cause. Their struggle is our struggle. Their dreams are our dreams. Do not turn away from these great struggles before us. Do not give up on the causes that we have fought for. Do not walk away from what's possible, because it is time for all of us, all of us together, to make the two Americas one. Thank you, God bless you, and let's go to work. Thank you all very much.

PHILLIPS: John Edwards side-by-side there with his wife, Elizabeth, his three kids and all his supporters. It is where his campaign for the presidency began. It's now where his campaign has ended. Donna Brazile, our Democratic strategist and CNN contributor joining us live from Washington.

OK, we didn't hear an endorsement and we didn't really hear exactly what is next. What are your thoughts?

DONNA BRAZILE, CNN DEMOCRATIC STRATEGIST: Well, John Edwards could not break out -- he couldn't break away from the two top contenders that have really energized the national public. There is no question that John Edwards will continue to fight for the cause of his life, ending poverty in America, speaking up for the middle class, the working poor. Later in the day John Edwards intends to go through the ninth ward and help Habitat for Humanity rebuild some of the homes.

He will continue to be a voice in the Democratic party. He's inspired so many and clearly he's inspired the candidates to take up the issue of poverty -- 36 million Americans in our country now living below the poverty line. Over 13 million children living in poverty, the homeless. These Americans need someone to champion their cause. And John Edwards was their champion, and now Barack Obama and Hillary Clinton have an opportunity to take up those issues.

PHILLIPS: And he said that he -- Obama and Clinton both reached out to him and promised him, as he said, that they would both make poverty central -- a central issue in their campaign for the presidency. Why do you think he didn't step forward and endorse one or the other? And will he do it before Tuesday?

BRAZILE: Well, right now it is John Edwards' day. And clearly he has time to look at both campaigns and candidates and he knows, as well as I do, I'm sure, and he can decide for himself whether or not his backers should support one of those leading contenders. I think for now what's important is that John Edwards be remembered for -- as someone who championed issues that often are difficult to discuss and for the American people to understand.

Why is it in the land of plenty, a trillion dollar budget, that we have so many people falling farther and farther behind? I think for now the candidates must talk about those issues, try to rally Democrats and independents and others, and perhaps John Edwards will look back on this day and say, you know what, I changed the political landscape. Now we have two top contenders talking about the middle class, talking about poverty, talking about how do we end the corporate domination of Washington, D.C. I think that's what John Edwards is more interested in doing than putting his stamp of approval on one of the two leading contenders.

LEMON: Hey, Kyra, before you let Donna go, let me ask this -- did you find anything interesting in the language that he used? He said suspending, he didn't say ending or quitting. He said he's suspending his candidacy.

BRAZILE: Well, Senator Edwards has several delegates. And before -- you know, while you are in the process of accumulating delegates -- look. There are perhaps hundreds of Democrats today that have signed on to support John Edwards, they're running for delegates, they're on the precinct list. And John Edwards is giving them an opportunity to go to their neighbors and their friends and their supporters and say, I'm still on the ballot as an Edwards delegate.

He may have suspended his campaign but you can still elect me. That's the technical definition of suspending versus ending. That's an opportunity to give people in those 22 states an opportunity to select someone to go to conventions, representing what John Edwards fought for during this race.

PHILLIPS: Democratic strategist, and CNN contributor, Donna Brazile, live from Washington. Donna, thanks so much.

Once again, John Edwards officially out of the presidential race.

LEMON: And on the Republican side, one day after losing the state he had to win, he said he was going to win it, Rudy Giuliani is expected to fold his campaign as well. Giuliani ignored the early primary and caucus states, staking his hopes on Florida where he finished a disappointing third in yesterday's GOP primary. The former New York mayor said very little as he left Florida this morning. But when he spoke to supporters last night, he was talking about his campaign in the past tense.

(BEGIN VIDEO CLIP)

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: I'm proud that we chose to stay positive and to run a campaign of ideas in an era of personal attacks, negative ads, and cynical spin. We ran a campaign that was uplifting.

(END VIDEO CLIP)

LEMON: Well, sources tell CNN that Giuliani will endorse former rival, John McCain, for the Republican nomination.

Let's now talk about our money. The mortgage crisis is destroying the American dream for tens of thousands of people. Should the people responsible go to prison? Well the FBI is investigating that.

PHILLIPS: Fortym, fifty, sixty, which age poses the greatest risk of depression and what can you do about it? We'll fill you in.

(COMMERCIAL BREAK) PHILLIPS: Investors are watching and waiting. Just a short time from now, at 2:15 Eastern, the Federal Reserve is expected to announce another cut in a key interest rate. While analysts are split on how big the cut will be, many people seem to think the Fed will trim the federal funds rate by half a point in hopes of fending off a recession. We're going to let you know as soon as the announcement comes down.

LEMON: The mortgage mess is getting a lot of blame for the slumping economy. Now the FBI is investigating 14 companies involved in subprime lending, or the bungling of subprime loans as security -- bundling, bundling. Well I wonder what that means. I guess putting them all together.

CNN's personal finance editor, Gerri Willis, joins us from New York.

Gerri, when this came across the wires yesterday -- I mean, I went whoa, this is huge. But what are they looking at? They haven't exactly named those banks and organizations yet, have they?

GERRIS WILLIS, CNN PERSONAL FINANCE EDITOR: No, they haven't. They haven't named the 14 companies that they are taking a look at. But it is important that these are criminal inquiries at this point. I think that's a step up from what we have seen in the past. Their investigations include accounting fraud, insider trading -- that's the thinking on what this is going to be.

And just to give you a little background here Don, this is a topic that the FBI has really specialized in. They have done a ton of work in this area. It has tended to be small-time mortgage fraud. They have taken all kinds of reports from all over the country. Take a look at these numbers. In 2003, they had 3,000 reports. Look how much that's gone up -- 48,000 last year, 60,000 expected this year. And I have to tell you, they've said that mortgage fraud is the fastest growing white collar crime there is.

And they've been keeping an eye on it, obviously. And typically, as I said, they were looking at small-time crime. This could -- this is going to be a change for them somewhat. Take a look at these numbers though, too. The top ten mortgage fraud states. They are also the biggest real estate states if you think about it -- California, New York, Texas, Florida, even Georgia. Lots of states there that have seen big changes in prices, big declines. They're obviously ripe for problems with mortgage fraud, Don.

LEMON: All right. So, they've done this investigating before, but this, to this level, is unprecedented.

WILLIS: Right. The thinking is that this could be Wall Street firms that are now in the FBI's crosshairs. And that would be very, very different. They'd be taking this whole investigation to a totally new level. But they'll also have a lot of competition. Because don't forget, there are attorney generals all over the country who are doing investigations. Lots of federal arms of the government also looking into this, doing investigations. There are going to be a lot of reports coming out in the coming months as we really get a look inside this mortgage meltdown, and how it was handled by some off the nation's biggest banks.

LEMON: All right. Interesting to see what happens. Thank you very much for that. Gerri Willis, our personal finance editor.

And what's the best way to protect your savings at a time like this? Coming up at 3:00 p.m. Eastern, we'll check back in with our personal finance editor, Gerri Willis, to answer those questions.

PHILLIPS: With age comes wisdom. But with middle age, might come unhappiness. A new study tries to pinpoint the bluest birthday.

(COMMERCIAL BREAK)

PHILLIPS: If you're unhappy about turning 40, you are a little ahead of the curve. A new study suggests that -- 44 is the age when most people are most vulnerable to unhappiness. Medical correspondent Elizabeth Cohen is here with details. As I say with a big smile because we are all trying to be very positive about this story.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Because we're headed right there.

PHILLIPS: That's right, or we're already there.

There is a big difference between unhappiness and depression. I mean, depression is...

COHEN: Right, depression is a psychiatric disease, a clinical diagnosis. We're talking about when do people feel the most blue, kind of a little bit unhappy with how life has turned out. And they looked at two million people, that's what these researchers did.

PHILLIPS: Wow.

COHEN: Yes, that's a lot of people. And what they found is a very interesting curve. They say that people actually start out through their childhood in their 20s and their 30s, they're really pretty happy. They're doing OK. And then at some point there seems to be sort of this downward spiral, and at 44 1/2 is when you have the height of unhappiness. People just feeling kind of dissatisfied. And then as they get older, senior citizens, they're happy again. So if you're feeling that slump in there in the mid 40s, you're not alone.

PHILLIPS: Why? Why do we hit the slump?

COHEN: No one knows for sure but the theory is that around that age you start thinking, huh, I had all these goals. When I was in my 20s and 30s, I had all these things I was going to do, whether it's career or family, and around 44, 45, you start thinking, gosh, am I going to get that done? Am I headed in that direction?

PHILLIPS: We've always got goals. We know, OK, you graduate from college, you do the first job, and then you get to the next job, you have a family, you have kids, and then it's sort of like, hmm. COHEN: Right, am I doing what I wanted to be doing.

PHILLIPS: Exactly. Am I in a good place.

COHEN: Right.

PHILLIPS: Well, were there any other findings besides age on what affects people?

COHEN: Other studies have found other things besides age that correlate really nicely with happiness, like certain groups of people who are happier than others.

So let's go through the list. First of all, people who are religious are more happy -- or happier than other people. Religious people just are happier. Also people who live in the Sunbelt. I guess all that sun makes them happy. Married people turn out to be happier than single people. And married people without children are really happy. They're at the top of the list. Republicans are happier than Democrats. Political season, we've got to talk about this. And Republicans and Democrats are both happier than independents.

PHILLIPS: Well, I can understand the spiritual Sunbelt part of that, that's for sure. All right, Elizabeth, thanks.

COHEN: Thanks.

LEMON: It's called reality, people. You realize it when you get older.

A few weeks ago experts were saying John McCain, well, that he was finished. And Rudy Giuliani had the Florida primary all locked up to himself. So how do you explain last night?

Our Bill Schneider will have some answers.

(COMMERCIAL BREAK)

LEMON: Live pictures now from our affiliate KABC in Los Angeles, California. Just as we came out of this we saw the governor -- there he is -- governor of California walking with the president of the United States there, getting on to Marine One. The president just got off of Air Force One. He's in California today where he is expected to talk about the economy. He's going to Torrence, California. That should happen in about an hour. There's that video. New video just happened moments ago, the president getting off Air Force one in California. He's going to make a statement about the economy. Also probably reference to that stimulus package that passed in the House yesterday. And then today, the Senate Finance Committee is voting on that.

We'll bring this to you -- bring that to you as soon as the president steps up to the mike in just about an hour from now.

Also in our political ticker, just minutes ago, John Edwards dropped out of the Democratic presidential race. He made the announcement in New Orleans, the city where he launched his campaign. Edwards trailed Barack Obama and Hillary Clinton in the early primaries.

Also expected to drop out of the race today on the Republican side, Rudy Giuliani. The former New York City mayor had staked his hopes on Florida where he finished, well, a distant third. Sources say he'll announce his withdrawal today and he, unlike John McCain -- I mean, unlike John Edwards, he's going to make his endorsement. He's going to endorse John McCain.

PHILLIPS: The stage is set for tonight's Republican presidential debate at the Ronald Reagan Library in Simi Valley, California, presumably with one fewer podium. It's just last chance to see the GOP contenders square off before Super Tuesday. That's tonight, 8:00 Eastern, only on CNN, your home for politics.

And you want to see how voters react to the candidates while they debate tonight and tomorrow night? Check out CNN.com/live during the California debates to get realtime reaction from California voters. We'll be streaming it live as it happens.

More news in a moment. You're watching CNN.

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