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Hanna Speeds Toward the Carolinas; Jobless Rates Soar; Re- Energized Republicans Party Emerges

Aired September 05, 2008 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Good morning, everybody. I'm Heidi Collins.
TONY HARRIS, CNN ANCHOR: And I'm Tony Harris. Stay informed all day in the CNN NEWSROOM. Here's what's on the rundown.

Hanna in a hurry. The storm suddenly picking up speed and zipping north toward the Carolinas today.

COLLINS: Convention balloons fall, the curtain rises on the McCain-Palin campaign for the Republican team as battleground Wisconsin this morning. We'll have live coverage.

HARRIS: A soaring jobless rate, issue No. 1. The number of Americans out of work jumping to a five-year high today, Friday, September 5th.

You're in the CNN NEWSROOM.

Well, the economy takes another hit, and this one is pretty big. A report released before the opening bell shows tens of thousands of jobs were cut last month and millions of people are out of work. Susan Lisovicz is at the New York Stock Exchange with details.

Susan, I'll let you run the numbers. They're pretty grim.

SUSAN LISOVICZ, CNN CORRESPONDENT: They are. Unfortunately, we have heard this song before. For eight months now, the U.S. economy, the largest in the world, continues to shed jobs. 84,000 is the number the government gave us an hour and a half ago. That was worse than the expectation of 75,000. Perhaps more surprisingly was the unemployment rate, jumping from 5.7 percent to 6.1 percent. Most economists had expected the unemployment rate to hold steady. 6.1 percent is a five-year high.

Where did the U.S. economy lose jobs? A whole lot of places, Tony. Manufacturing, no surprise there, factories, construction, no surprise there, retailers, professional business services, leisure and hospitality.

That was not -- I mean there were gains, but it couldn't offset it. Government, education, health care, those were areas where employers added jobs. But the bottom line is that the U.S. economy has now shed more than 600,000 jobs this year. And one thing that a lot of folks on Wall Street talk about is that the economy needs to create about, you know, 100,000, at least 100,000, jobs a month just to keep up with the rise in the population. New entries into the job market. So this is bad.

HARRIS: Yes. That's interesting. Maybe drill down on that just a bit more. So in any given month, you're going to have losses, you're going to have job gains, but you would like to see what a net job gain of about 100,000, along that order?

LISOVICZ: That's right. And, you know, what's happened is, I think it's something I think we can all relate to is that, you know, the Federal Reserve was pumping liquidity into the markets, the government was providing those stimulus checks, but you know, we have all, all felt the pain of sharply higher commodity prices. I'm not just talking about oil and gas prices. I'm also talking about food prices.

HARRIS: Your food prices, sure.

LISOVICZ: And so that not only affects consumer spending, which would hurt corporate profit but just for companies to make products it costs them more. Some of it's been passed on, but what you've been seeing is employers shedding jobs in addition to doing all sorts of things to improve efficiency is that they're trying to improve their balance sheets.

HARRIS: Right.

LISOVICZ: And one of the things is most obvious is that eventually, you know, they can raise prices being but they are cutting jobs. And we have seen that happen now every month of the year.

HARRIS: And Susan, very quickly, what's the number again, consumer spending accounts for what two-thirds of GDP and if you don't have a job, you're not doing much spending.

LISOVICZ: And we've seen that with back to school, huge time for retailers. And that was one of the factors that weighed on the market sentiment yesterday when the biggest sell offs of the year, was weak back to school spending, a bad omen for the Christmas holidays season.

HARRIS: OK. And Susan, insight on what the first hour of the first trading day, the Dow down 41 points. We'll talk to you a you a little later in the hour.

LISOVICZ: You got it.

HARRIS: OK. Susan, thanks.

COLLINS: Hanna honing in on the Carolina coastline. The tropical storm picking up steam after blowing by the Bahamas. It is now expected to make U.S. landfall tonight or early tomorrow, possibly as a Category 1 hurricane. Myrtle Beach, South Carolina, within Hanna's range. Our Kathleen Koch joining us live from there.

Good morning to you, Kathleen. What's the latest?

KATHLEEN KOCH, CNN CORRESPONDENT: Well, Heidi, actually, the folks here in Myrtle Beach are taking a pretty relaxed attitude toward the approach of Hurricane Hanna. Take a look at the local newspaper. Hanna did not even rate the banner headline. John McCain took that. And think it really is attributable to the fact that this storm may come onshore as just a serious tropical storm, perhaps not even a hurricane.

Now, what we've been seeing in the way of preparations since we arrived here yesterday, at hotels up and down the beach. They're bringing in the beach umbrellas. They're bringing in the lawn chairs, securing any outdoor items that might go airborne and the winds are expecting to be only perhaps as high as say 70-mile-an-hour gusts. We did talk to some tourists. That's been the big impact, a lot of tourists leaving. We talked to a couple from Canada that is a little bit nervous.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: We're a little worried. But we feel really safe here at the hotel, and we think that it might be a bit more dangerous to try to get home in the airplane in this weather. So we want to try to ride it out and get home when it's a bit safer.

(END VIDEO CLIP)

KOCH: Now, here in the local area, they have shut down all of the schools. People are going to the local hardware stores as a precaution, picking up those flashlights, generators, water, also obviously this being a beachfront areas, a lot of marinas. So people are securing their boats so they don't come loose or harm somebody else's boat. There is a voluntary evacuation order put out by the Governor Mark Sanford but really only for a few areas, for low lying areas, for people who live in mobile homes or campers. They're encouraged to leave if they choose.

They've opened two shelters here in the county for them. But the biggest impact really that they're looking at here is just to the tourism industry. It's some 10 million people visit Myrtle Beach every year. Say, for instance, our hotel, it went from 80 percent occupancy to 30 percent with the approach of Hanna -- Heidi.

COLLINS: Yes. People watching the news and watching those storms obviously.

All right. CNN's Kathleen Koch -- Thank you, Kathleen.

HARRIS: Our Rob Marciano is tracking Tropical Storm Hanna right now.

Rob, what's the latest? And I know folks are watching this and maybe it didn't rate above the full coverage in the local paper, but winds of 74, 75 miles an hour, that's serious.

ROB MARCIANO, CNN, METEOROLOGIST: Yes, it is. Wind over 50, 55 miles an hour is going to take down some tree limbs, small trees, definitely some power lines. That certainly poses its own danger. And the fact that this thing has kind of flared up, look at the satellite over the last couple of hours. Convection has really flared up around the western part of the storm as the center gets now over the Gulf stream, which has some pretty warm water. So, with 65-mile- an-hour winds right now, we're only nine, ten miles an hour away from hurricane status. So that's still a possibility.

And again, anything over 60 is serious business, and this latest track of this thing brings it as a direct hit across the Carolinas, anywhere from Charleston, Wilmington, late tonight, early tomorrow morning as a strong tropical storm or Category 1 hurricane. And then streaming off across the Potomac and Delmarva and through parts of Long Island. Here's the center of it and there's the action across parts of Florida. And already were starting to get rain bands into North Carolina, will get them thrown into South Carolina as well. We got tropical storm warnings that are posted from the Chesapeake down through Savannah.

And then one more thing, peek on Ike just to kind of get you a little foreshadowing here or a heads-up. Major hurricane Ike expected to get towards Florida by the beginning of next week. And that track doesn't look very appealing at the moment. We'll try to work on that. But Hanna is a serious storm. We certainly don't want to ride it off and focus on Ike just yet. We've got to get Hanna through the mix first.

HARRIS: Well, I hope folks are listening to you. My goodness, you know this stuff. All right. Thanks, Rob.

MARCIANO: You got it.

HARRIS: Hurricane Gustav gone but not forgotten. In southern Louisiana evacuees are returning home to this, damaged homes and downed power lines. Look at the trees there. More than 800,000 homes and businesses are still without power. Man, what a picture that was. Four days after Gustav slammed into Louisiana's coast, there are also food shortages. The Red Cross is providing 400,000 meals a day for people out of their homes and out of power and subsequently out of food.

The organization estimates relief efforts at $70 million. Right now, it is covering costs with borrowed money, and the Red Cross is asking the public for donations. And here is a way to help. Links to the Red Cross and other relief organizations can be found on CNN.com's Impact your World page. Details on recovery efforts are also constantly updated on that site. CNN.com/impact.

COLLINS: Change is coming. John McCain's message as he accepted the Republican presidential nomination, vowing to fight for Americans. Jessica Yellin with some of the highlights from last night's speech coming to us live now from St. Paul, Minnesota.

So Jessica, I'm not sure how late you were up last night talking to all the people about this speech, but what is the word? And not from the pundits, not from the analysts, but the people. Have you had a chance to talk with people there?

JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Yes, Heidi. The speech isn't winning the kind of applaud that Sarah Palin's speech won, which electrified the crowd. But I'd say he got a hearty, warm reception from the Republicans who attended the convention here. They were particularly moved by the section of the speech where he talked about his experiences as a P.O.W. and how that drove him to a life of service, how it inspired the rest of his life.

And, you know, the message that he used within that speech to reach out to independents and undecideds was what you mentioned in your introduction, this message of change, how he wants to be a fighter for the American people. He even very clearly made an attempt to resurrect vision of himself as a maverick. The image he ran on the year 2000. Let's listen to what he had to say.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I've been called a maverick, someone who marches to the beat of his own drum. Sometimes it's meant as a compliment and sometimes it's not. What it really means is I understand who I work for. I don't work for a party. I don't work for a special interest. I don't work for myself. I work for you.

(END VIDEO CLIP)

YELLIN: He called himself again a maverick and he also took on the Republican Congress of the year 2006 when there were so many corruption scandals and says he's disappointed in his party and he would do differently. The Obama campaign immediately hit back saying, if he wants to change Washington, why wasn't he done it in his 26 years there? No doubt that will be the back and forth, the theme of the campaign from here on out.

The jury is out on how this well he appealed to independents and undecideds. We'll have to see in the coming days. But one thing I can tell you with certainty is that the Republican stalwarts who were here at the convention left much happier than they came. They were thrilled with the choice of Sarah Palin and reassured that John McCain shares their conservative values. So he really did solidify his base here. Heidi.

COLLINS: All right. CNN's Jessica Yellin coming to us from St. Paul, Minnesota. Thank you, Jessica.

HARRIS: John McCain and running mate Sarah Palin have a campaign stop in Cedarburg, Wisconsin. It begins at noon Eastern. And of course you will see it live right here in the NEWSROOM.

Barack Obama on the trail in Pennsylvania today after firing back at John McCain and the Republicans. In a statement, the campaign said of McCain's speech last night, let's share that with you here. "He admonished the old do-nothing crowd in had Washington but ignored the fact that he's been part of that crowd for 26 years, opposing solutions on health care, energy, and education." Obama holds a town hall meeting next hour and we will take you there live.

COLLINS: Condoleezza rice calling it a historic moment. She sits down today with Libyan leader, Muammar Gaddafi, the first secretary of state to visit Libya in more than 30, excuse me, 50 years. Gaddafi has high regard for Rice. He told Al Jazeera television last year how he admires how the woman he calls "Leeza" gives orders to Arab leaders. CNN's State Department correspondent Zain Verjee will hear firsthand from Rice in an interview in Tripoli today.

HARRIS: Oh, yes, those fees. They will get you every time. It's the phone bill from ma-hell. An eye-popping 19 grand.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MCCAIN: Instead of rejecting good ideas because we didn't think of them first, let's use the best ideas from both sides. Instead of fighting over who gets the credit, let's try sharing it. This amazing country, this amazing country, can do anything we put our minds to.

(END VIDEO CLIP)

COLLINS: John McCain calling for cooperation in his convention acceptance speech last night. He told delegates and the rest of America change is coming. Joining us to talk more about McCain's message, Republican strategist and CNN political contributor Leslie Sanchez. She is in New York this morning. And in St. Paul, Minnesota, Bill Press, host of the "Bill Press Show."

Thanks to the both of you of being here. Listen, I want to hear a little bit more sound from last night and get your reaction after we listen to this small chunk.

(BEGIN VIDEO CLIP)

MCCAIN: Let me just offer an advanced warning to the old big- spending, do-nothing, me-first, country-second crowd - change is coming.

(END VIDEO CLIP)

COLLINS: And then, even the "New York times" guys, who endorsed Obama as you well know says this today -- Mr. McCain firmly signaled that he intended to seize the mantle of change Mr. Obama had claimed.

So did he do it, Leslie? Let's begin with you.

LESLIE SANCHEZ, CNN POLITICAL CONTRIBUTOR: Definitely. I mean, look at the whole conversation. I think if you look in the context of what happened, this is again a 50/50 race. And John McCain really did a very good job of talking about country first versus me first. I think that's what you're going to hear for the next 90 days. He's going to say, I don't want to change America, but I want to change Washington. And you know, that I know how to do it. I'm somebody who reaches across party lines. He's going to make that strong appeal to independents, to conservative Democrats. And really the race begins today.

COLLINS: So Bill, is this going to be seen as the ticket of change now?

BILL PRESS, HOST "THE BILL PRESS SHOW": No way. I mean, I must admit I was stunned last night to hear John McCain say change, change, change, change. Look, that was Barack Obama's mantle of - he's got the mantle of change. It was his theme, his slogan from day one in Iowa. I think it's, number one, Heidi, too late for John McCain to steal it and, number two, I don't think he can present himself as an agent of change because if you really want change, you don't keep the same old gang in power. You know, he is the Republican candidate for president so I don't think he can sell that change.

COLLINS: OK. Listen to this real quickly with me. This is coming to us from a little earlier on CNN today. This is Robert Gibbs. He is a senior adviser to the Obama campaign. Listen in.

PRESS: Right.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, SENIOR ADVISER, OBAMA CAMPAIGN: You can't stand in front of the American people and say, we're the experienced change ticket. The two words just don't match.

(END VIDEO CLIP)

COLLINS: Leslie, why can't you be experienced and bring about change?

SANCHEZ: You know, that's fundamentally - I think the argument is flawed. And for Barack Obama's team to say that they're the change agent when they pick someone who's been in Washington longer than a majority of the senators who are there in seeking Joe Biden for his ticket, I think it's just false. He went from a pro-change ticket to status quo and no change. Let's just start there.

But the distinct difference is, these are both individuals who are mavericks. They're both people who want to come up with a different way in a different course for changing America. We know the country wants that. The difference is, who is proven and who is not? Who's tested and who is not? And who can actually get things done? It fundamentally comes to that.

COLLINS: Hey, Bill, if this is going to be the ticket of change, do you think last night the senator was able to get anyone to change their minds? And I'm talking about undecided voters.

PRESS: Well, you know, again, I'm trying to be as fair as I can here. I think for the people inside the convention hall - first of all, I thought it was a totally uninspiring and a flat speech compared to Sarah Palin's speech on Wednesday night. It didn't come close. Compared to Barack Obama's speech a week ago, it was a total night and day. But you know, I think for the people inside the convention hall, they left feeling good.

I think for most Americans watching the speech they didn't hear anything. They didn't hear any substance. They didn't hear any new ideas. And they didn't hear any way that John McCain was going to break from George W. Bush. If he wants to be the agent of change, I think he's got to say, look, here's where Bush was wrong. Here's what I'm going to do differently. He didn't do can that.

COLLINS: Well, maybe we should talk about the Republicans' choice, which they laid out before the convention even began that the theme of this week would be who is John McCain. Leslie, did they accomplish that or should have gone with issues which we don't often hear that much about during conventions, historically, do we?

SANCHEZ: No, you know, you're exactly right, Heidi.

The convention has basically two missions. I mean, one is team, you're introducing the team, their character, their leadership, their personal identity. And the other is theme, the direction you want to take the country. And I think what's interesting about last night with Senator McCain's speech, he did talk about why the need to put, you know, other issues above, your country first. We talked about that. But he also talked about his P.O.W. experience in the most touching and personal way, in a way that a lot of people who've covered him have never heard before.

COLLINS: Yes, but Bill, let me ask you. Why didn't he do that earlier in his speech?

PRESS: I was surprised that it came so late. But here's what I sensed, Heidi. It's both Wednesday night and Thursday night, it was putting biography over ideas. OK. We heard from Sarah Palin about her family. We heard from John McCain. He's a P.O.W.. You know that's good. We honor, we salute both of them for that. But that doesn't tell what they're going to do for America. It doesn't tell what their ideas are about how to change America, if you will, or where they're going to take us.

COLLINS: But what we did hear -

PRESS: There was no agenda. It was just biography and we need more than that.

COLLINS: You know, before we run out of time, guys, let me just get this in because I think I want to get to the end of the speech last night in case people missed it last night. Here is something that we did hear.

(BEGIN VIDEO CLIP)

MCCAIN: Fight with me. Fight with me. Fight for what's right for our country. Fight for the ideals for character. Fight for our children's future. Fight for justice and opportunity for all. Stand up to defend our country from its enemies. Stand up for each other. You're beautiful, bless you. Stand up for America. Stand up. Stand up. Stand up and fight.

(END VIDEO CLIP)

COLLINS: Very, very quickly, guys, Bill, your reaction to that call for action?

PRESS: It was John McCain's best moment, but Sarah Palin gave a much better speech and I think maybe we got the wrong person at the top of the ticket.

COLLINS: Leslie, 10 seconds.

SANCHEZ: I love that credibility. You know, kudos for Sarah Palin. I appreciate that. We'll take that. I think the race begins today, you're going to see the presidential debates define them and contrast them even more.

COLLINS: To the both of you, thanks very much. I appreciate your time today. Leslie Sanchez and Bill Press. All right. Thanks, guys.

HARRIS: It's Friday. The bottom line -- our Gerri Willis answers your personal finance e-mails.

(COMMERCIAL BREAK)

HARRIS: Friday, Friday, mailbag. OK Your money problems, her solutions. Gerri Willis answering your e-mails like she does every Friday. Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Good to see you.

HARRIS: You want to dive into this e-mail bag here.

WILLIS: Let's go.

HARRIS: All right.

Anna from Florida writes: "I have some blemishes" -- oh I love this question -- "I have some blemishes in my credit report, such as a high credit card balances and two delinquencies. I have been paying them off and I have kept a good on time payment record for over a year. How fast can I see improvement in my credit score?"

Oh, Gerri.

WILLIS: And you are on the right track. As far as those delinquencies go, it really depends on how bad they were. Two 30-day late payments a year ago aren't nearly as negative as two collection accounts a year ago. Now, while negative info is on your credit report for seven years, the older the items get, the less impact they have on your credit scores. If you have high credit card balances and you want to see an increase in your scores pronto, attack and pay down those credit card balances -- 30 percent of your scores, 30 percent of your scores -

HARRIS: Are you kidding?

WILLIS: Are determined by how much credit card debt you're carrying. So think about that.

HARRIS: So you could see a huge improvement in your score just by really attacking that credit card debt.

WILLIS: Absolutely.

HARRIS: That is amazing. OK.

Daniel from New Jersey has a question for you, Gerri: "I am requesting a reply or a segment on advice for consolidating my Stafford loan. Where should I go? How much of a role does credit play in consolidation?"

WILLIS: All right. for everybody out there, he's talking about college loans here. Eligibility for a federal consolidation loan doesn't really depend on your credit score. That's the good news. For your Stafford loans, go to loanconsolidation.ed.gov. If you want to consolidate. If you have a variable rate loan that's worth consolidating, remember by consolidating your lumping all your loans together and taking out on big loan and even though you may have a lower monthly payment, at the end of the day you're stretching out those interest payments over a longer period of time.

HARRIS: OK. Roshun has a question. Roshun is in California: "My husband and I have a savings of about $25,000, after paying off all student loans and debt, where should we put the money?" Nice to hear from someone who has a little extra cash here. "We would like the money to earn interest and we would like to buy a house by next year."

What are your thoughts on this, Gerri?

WILLIS: Wow, Roshun, first of all, congratulations on paying down the debt. We like your idea of buying a home. And now is a great time to start your search because prices are under so much pressure. Buyers really have some power in this market. Given the fact that you really want to use your savings in a really short period of time, I suggest putting it someplace safe, that means no stocks. Equities are too risky for short-term investors.

Consider a one-year CD, that's a certificate of deposit or a money market account. Now, you should know when your CDs are paying just a little under 3.7 percent, and that's really not going to grow your $25,000 much in a single year. So given the fact that most lenders want healthy down payments of 20 percent or more, you may want to consider investing that money for a longer period of time or buying a home on foreclosure so that you reduce that purchase price. And, of course, if you have any questions, send them to us at toptips@cnn.com. We love hearing from you.

HARRIS: Boy, great questions. Great responses from you, Gerri. Great to see you as always.

WILLIS: Thank you.

HARRIS: Have a great weekend.

WILLIS: My pleasure, Tony. Thanks a bunch. COLLINS: It's coming, Carolina. Tropical storm Hanna on a collision course with the Carolina coast tonight or early tomorrow. Waves are higher off North Carolina in advance of the storm. Some residents have boarded up along the beach front. Others are out in the surf, as you just saw.

A state of emergency is in place though for North Carolina. Voluntary evacuations have been called for low-lying areas in South Carolina and some schools are closed there today. Hanna brushed by the Bahamas yesterday causing minor flooding and some power outages. But the storm has a grim history in Haiti where its flooding is blamed for 137 deaths.

HARRIS: OK. Rob, let's get everyone watching us, maybe from the airport, maybe in the Carolinas right now on the latest information on Hanna. There's Rob in the weather center.

Good morning, Rob.

(WEATHER REPORT)

HARRIS: When the weather becomes the news, it looks like it's about to happen again here, pretty soon. We want you to send along your iReports. You have really been doing a terrific job of sending us iReports and helping us tell the story. So, just go to ireport.com, or you can type ireport.com into your cell phone. As always, stay safe.

COLLINS: More than half a million jobs lost this year. Unemployment hits a five-year high. The CNN money team watching issue number one for you.

(COMMERCIAL BREAK)

HARRIS: Revving up Republicans and reaching out to undecided voters, presidential candidate John McCain returns to the campaign trail today after accepting his party's nomination. During his speech, a shout out to Independent-minded voters.

(BEGIN VIDEO CLIP)

MCCAIN: To Americans who have yet to decide who to vote for, thank you for your consideration and the opportunity to win your trust. I intend to earn it.

(END VIDEO CLIP)

HARRIS: And we will have a complete wrap-up of the Republican convention, including McCain's speech, just ahead. Barack Obama on the trail in Pennsylvania. He holds a town hall meeting next hour and we will take you there live.

COLLINS: John McCain's acceptance speech. It played well in the convention hall, but how did it play with you? Veronica De La Cruz has been going through some iReports that have come in.

Good morning to you, Veronica.

VERONICA DE LA CRUZ, CNN CORRESPONDENT: Hey, good morning, Heidi.

As you can imagine, reaction to McCain's speech was somewhat of a mixed bag.

So, let's go ahead and with Katy Brown. She's a freshman at Kent University. And she thought McCain handled himself pretty well.

(BEGIN VIDEO CLIP)

KATY BROWN, KENT, OHIO: John McCain handled himself very professionally tonight. He sent out a message to Obama, claiming respect to the man, saying they are fellow Americans and that's an association that means more to McCain than any other. In his speech, he touched on all the issues that Americans are concerned about. He did bring up Obama a couple of times, but simply to compare the standings, rather than to bash him.

(END VIDEO CLIP)

DE LA CRUZ: So there you go. That was Katy Brown. She obviously liked the speech and she's happy that McCain picked Palin as his running mate.

Now, on the flip side of things, Heidi, David Kronmiller felt like McCain's speech unfortunately missed the mark.

(BEGIN VIDEO CLIP)

DAVID KRONMILLER, NORTH HOLLYWOOD, CALIFORNIA: I didn't see very many specifics tonight. The Republican strategy appears to be to respond only to the Democratic strategy. I haven't really seen them present any kind of real, clear plan.

(END VIDEO CLIP)

DE LA CRUZ: So we're asking you, what did you think of John McCain's speech and the Republican National Convention? Go ahead and send us an iReport. All you have to do is log on to the Web site at ireport.com

Heidi, we're going to continue going through those and we're going to get them on the air throughout the day.

COLLINS: Very good. All right. Veronica, thank you.

(BUSINESS HEADLINES)

COLLINS: A disappearing tax credit. Will it makes jobs vanish, too? It's up to Congress. Poppy Harlow has your Energy Fix.

(COMMERCIAL BREAK)

HARRIS: We are tracking tropical storm Hanna, as it closes in on the Carolina coastline today. Our Stephanie Elam is in Wrightsville Beach, North Carolina.

Stephanie, look at you. You've got the hat going, you've got the weather parka going. It's not a parka, what it is? It's a slicker, it's a rain slicker. Here's my question.

How are people there preparing for Hanna? You know, my guess is stocking up on food, water, or, maybe doing absolutely nothing until the storm gets a little closer.

STEPHANIE ELAM, CNN CORRESPONDENT: It's a combination of things. I'm in the business now of covering weather. I'm moving in on Rob's and Wolf's territory.

But, at this point, what I've seen from looking around is that people are pretty much laying pretty low at this point. We have seen that they protect furniture by putting it in the pool. Like the pool deck furniture, we have seen that. We've seen some people with some gas cans on top their car.

But, for the most part, no boarded-up homes or anything like that. So, the thing to keep in mind about this storm is that it did pass through Haiti, and there it left devastating floods. It also more than 130 people dead in its wake. Now it's targeting North Carolina. But, at this point, it should be a much weaker storm.

(BEGIN VIDEOTAPE)

ELAM (voice-over): The effects of Hanna will start being felt later today. But for many along the southern coast of North Carolina, it's business as usual. No boarded-up homes. No deserted restaurants for this beach community that's wrapping up it's peak summer season.

UNIDENTIFIED MALE: It's such a beautiful day. It's been a beautiful week all week. I mean, you can't ask for anything all better. It's really surprising when you know something's out there coming this way.

ELAM: But many locals don't think Hanna will be a devastating storm. In fact, the town of Wrightsville Beach, North Carolina, isn't forcing its residents to evacuate.

UNIDENTIFIED MALE: We look at it more or less as a nor'easter. A bad storm with some wind and some rain. But not hopefully a lot of damage.

ELAM: But as Hanna swayed between tropical storm and hurricane strength on its approach, North Carolina Governor Michael Easley said Thursday, that he doesn't want people to take any chances.

GOVERNOR MICHAEL EASLEY, NORTH CAROLINA: It simply means people need to prepare now to get preparations out of the way today, first thing in the morning, you still have a little bit of time.

ELAM: The worst of the storm is expected to hit early Saturday morning and clear out by noon. The American Red Cross says it is prepared to help after Hanna churns through. UNIDENTIFIED MALE: We feel confident that we're ready for Hanna. There's a lot more people behind the volunteers that are serving on Gustav.

(END VIDEOTAPE)

ELAM: Now, while Hanna isn't causing too much of a disruption here, residents are definitely keeping an eye on hurricane Ike. It is supposed to be a more powerful, more compact storm and it could actually come right here, same place that Hanna went, in which case, this is just the dress rehearsal -- Tony.

HARRIS: Boy, look at you. You double threats you, with the capabilities of giving us business and weather together on the 5s or something.

Stephanie, good to see you.

ELAM: And there's no oil rigs out there. I guess I should tell you that. No oil rigs right here. So, we're fine on that front.

HARRIS: Thanks, Stephanie. You look good in that slicker.

COLLINS: We know that a large hurricane can have an effect on what you pay at the pump depending upon what could happen damage-wise. Well, will you need to tap your rainy day fund after the next storms roll through?

Let's get the answers now. CNNmoney.com's Poppy Harlow has our Energy Fix from New York.

Hi there, Poppy.

POPPY HARLOW, CNNMONEY.COM: Hi there, Heidi.

Well, you know what? A little sigh of relief for drives out there. Gas prices have been trending lower for nearly two months and this hurricane not affecting them at all. What we're seeing today is a slight pause is what we saw in gas prices when we saw hurricane Gustav. But now, in the wake of that storm, gas is down again, $3.67, that's the average today.

And with the pass of the next storm heading away from the Gulf, as Stephanie just told us, we don't expect much of impact at all when it comes to your gas prices. Still, though, prices are way ahead of where they were last year. That has a lot of people of course, still looking for alternatives, but guess what? There could be a road block in Washington. $500 million worth of tax incentives for alternative energy are set to expire in a few months.

At the end of this year, the solar, the wind industry, they both say those credits need to be renewed. Congress already let those credits expire three times back in 2000, 2002 and 2004. And guess what, each time that happened, the industry suffered in a major way. Demand for wind inflations dropped more than 70 percent. In one case back in 2001, demand dropped more than 90 percent after those tax credits expired.

Now, a study funded by the industries found that if those tax credits do expire at the end of this year, we're going to see 76,000 jobs lost in the wind industry, 40,000 jobs lost in the solar industry. Add that up, that's a total of 116,000 jobs predicted to be lost at a time when we all know the labor market is in big trouble. Add on top of that the reports that the industry could see nearly $19 billion in investments gone -- Heidi.

COLLINS: So why are these credits expiring? I mean, are there really people against this idea when we know that we're losing jobs?

HARLOW: Yes, exactly. It's interesting because it's not that there are a lot of people against it. What this all boils down to is bipartisan bickering in Washington, it's preventing an agreement.

Now, the big issue is how to pay for it, of course. Democrats have proposed offsetting the cost of these credits by cutting taxes for big oil. You've heard Obama talk about windfall profit taxes for oil companies. Republicans have blocked that move. They, of course, want more offshore drilling as a part of that compromise. But, Heidi, we'll need a compromise in Washington, in the next few months. It's going to be tough -- Heidi.

COLLINS: All right. We will continue to watch all of that. CNNmoney.com's Poppy Harlow.

Poppy, thank you.

HARRIS: An exclusive interview with Russian's Foreign Minister and he news with an admission.

(COMMERCIAL BREAK)

COLLINS: A U.S. Navy command ship arrives in the Republic of Georgia. It's anchored outside the key port of Poti. U.S. Military officials says the USS Mt. Whitney is delivering humanitarian supplies. It is intended for Georgians affected by the conflict with Russia. Two other U.S. ships have brought in aid.

Let's get a feel now for how Russia's dealing with Washington's support for Georgia. Want to go live to CNN's senior international correspondent Matthew Chance. He's joining us from Moscow, now. He's been talking exclusively with Russia's foreign minister.

So, Matthew, does it seem like the foreign minister is sort of trying to patch things up?

MATTHEW CHANCE, CNN SR. INTERNATIONAL CORRESPONDENT: Well, Heidi, I certainly think it's true that the words of Sergey Lavrov, the Russian Foreign Minister, were much more conciliatory today, than we've heard from other Russian leaders in the past few weeks since diplomatic tensions between Moscow and Washington have been so tense since the conflict in Georgia.

Sergey Lavrov, the Russian Foreign Minister, saying to some extent he acknowledges that Russia has isolated itself because of its actions in Georgia. But also saying that he's prepared, the country's prepared, to work with the United States on a range of strategic issues, including nuclear nonproliferation and counter terrorism.

But he did reject the criticisms that were leveled at Russia by the U.S. Vice President Dick Cheney, who's on a regional tour, who said that the invasion of Georgia was an illegitimate attempt by Russia to redraw Georgia's borders and raise doubts about Russia's reliability as an international partner.

Let's listen to what Sergey Lavrov had to say.

(BEGIN VIDEO CLIP)

CHANCE (on camera): These are very strong words coming out of Washington, out of the United States, aren't they?

SERGEY LAVROV, RUSSIAN FOREIGN MINISTER: Not the strongest. I feel strongly

CHANCE: This whole episode over Georgia, though, seems to have severely damaged relationships between the United States and Russia. Yet Russia doesn't seem to be concerned about it.

LAVROV: Not our choice. It's not our choice. Nothing we did there had anything to do with pipelines, with gas pipelines, oil pipelines.

As for the Georgia being small and Democratic, while small is beautiful and Georgia is beautiful, I love Georgia and I love Georgian people. But Democratic, I would not use this term to characterize the current government of Georgia.

CHANCE: Is Ukraine next? Does Russia have territorial ambitions in Ukraine?

LAVROV: Well, I hope it's only in the capital of Georgia, that you can find now some medical cases. I heard the statement that Ukraine is next. I heard also statement of new American ambassador to NATO who said that now the NATO members must protect the Baltic states.

Probably, it's you know, nostalgic feeling and the desire to find some frontline states for NATO to get some mission to protect somebody. This is again a virtual project. A project which is aimed at painting us in black colors. We have no intention to raise questions about anybody's territorial integrity.

(END VIDEO CLIP)

CHANCE: Sergey Lavrov there, the Russian Foreign Minister talking about issues about Ukraine, where of course, Dick Cheney, U.S. Vice President, currently on a tour of the country.

Sergey Lavrov also downplaying those allegations made by various other Russian leaders that it was the United States that orchestrated the war in Georgia for political purposes. Sergey Lavrov also downplaying those accusations that U.S. personnel were on the ground during the conflict actually taking part in combat operations -- Heidi.

COLLINS: All right. I was just going to ask you that very question about Vladimir Putin. All right. I appreciate that very much. Matthew Chance, our senior international correspondent.

Thanks, Matthew.

HARRIS: Well, those fees will get you every time. It's the phone bill from Ma Hell. An eye-popping 19 grand.

(COMMERCIAL BREAK)

HARRIS: You're going to love this one. High priced calls. An Oregon family is scratching their heads about a $19,370 cell phone bill. Huh? The 200-page bill covers only one month. Dave Terry says his son used a laptop with a wireless card to send pictures and e-mail while on a trip to Vancouver, Canada. Are you kidding? Terry says his service provider never alerted him about the spiraling charges.

(BEGIN VIDEO CLIP)

DAVE TERRY, GOT BIG CELL PHONE BILL: Well, when you have a bill that runs normally $250 or $350 for our cell phone bill for all of our cell phones, when AT&T saw the numbers getting up over $1,000, I would think that it's their responsibility to inform us that something is amiss because that card could have been stolen.

(END VIDEO CLIP)

HARRIS: Well, AT&T says it is looking into the matter and hopes to have an answer for the Terry family in the next few days.