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Ike Eyes Florida; Big Takeover for Fannie Mae and Freddie Mac

Aired September 07, 2008 - 18:00   ET

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

(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The Coast Guard rocks. God bless the Coast Guard.

(END VIDEO CLIP)

RICK SANCHEZ, CNN ANCHOR: They sure do rock. This is a father and a son. They were swept away by Florida high tides. They were stranded for hours treading water in the Atlantic and they live to tell the story. All this while others are getting ready for a really big one. This is Hurricane Ike. It continues to churn their way. Where is it going to hit? Hello, Florida Keys. Be careful.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in the financial markets here at home and around the globe.

(END VIDEO CLIP)

SANCHEZ: All right, that sounds like boring speak, right? Here is the gist of this story. We were told by feel like that this was going to be a bailout. Now it turns out this is a takeover. What gives with Freddie and Fannie?

And we are corralling some undecided voters. Undecideds, meet Sarah Palin, meet John McCain, meet Barack Obama. It is 6 "p" in "hotlanta." Time for news.

All right, here we go, hello again everybody. I'm Rick Sanchez. Bad weather that doesn't seem to want to leave us alone. We are going to be storm intensive throughout this newscast. Just to give you really a shoutout at what's going on out there both with Hanna, really dodged a big one when it comes to Hanna when you really look at it.

I know there's been a lot of rain and those of you watching us from the Northeast are saying, what are talking about? It's been a mess up here.

But we're really bracing for something bigger now. It's called Ike, as in Hurricane Ike. It's now to a Category 3, but it's been four, then three, then four, now three. Still plenty dangerous. We're going to bring you what's going on with that and what people are doing to get ready, especially down south. In fact, we've got some pictures we're showing you now. This is folks down in the area around south Florida. That's from our affiliate WPLG, channel 10 in Miami. They are showing us some of the pictures they've been getting.

This is the Turks and Caicos. Now think about this. When it hit the Turks and Caicos, it went right over the island. The eye of the storm actually hit the top of that area. We still don't know just how bad it was. These were the first pictures we were able to get out. Phone lines are down and there's really very little communication with the folks on that island.

Tropical Storm Hanna, as we mentioned just a little while ago, has left behind - has left the building, I should say, but look at some of the damage that it's caused in parts of New England. Yes, that was a street. This is in Milford, Massachusetts. Rain just washed away, leaving behind, you could call that a sink hole but it looks more like a series of sink holes. Let's go to Jacqui Jeras, she's been following both of these storms now for some time. I don't know Jacqui, which one do you want to start with?

JACQUI JERAS, CNN METEOROLOGIST: Well, I want to talk about Ike because that's the one we're worried about now. You know, Hanna is pretty much out of there, moving through the Canadian maritimes and continuing on a northeasterly track. So we're done there. We're just still dealing with a little bit of water issues and maybe a little bit of cleanup.

In the meantime, Ike is just barreling toward Cuba. It is a Category 3 storm. You mentioned the changes in the strength and intensity. Common thing with tropical systems. We're going through what we call an eye wall replacement cycle and that's why we've been seeing the wind speeds drop down a little bit.

But it's still major. We're talking 120 miles-an-hour barreling towards Cuba. Certainly not a good sign. It has been moving westward throughout the day today. We're going to be seeing landfall, we think, over the northern Cuba coast later on in this evening. We're going to see problems -- you saw that tease for the big rescue that happened off the shores of Florida. Well that's because we've got the threats of rip currents out there. You can see the rain showers are already moving in.

But large swells from Ike are bringing in high tides, rough surf and strong currents. So rip currents a very high risk from the North Carolina beaches all the way down to the south. So stay out of the water. It is going to be a couple of days, we're talking midweek, before we're expecting that to improve.

Now where is Ike going to go after Cuba? We do expect it to be weakening, but something to keep in mind. You know, this is a very narrow island. Look at this cone of uncertainty. If we deviate from this track at all and stay along the waters, we're going to see a stronger storm after this emerges. We're expected to move into the Gulf of Mexico and it's got several days over open, warm water to intensify. So we are preparing for a major hurricane on the Gulf Coast probably Friday possibly as late as Saturday, depending where it goes. But Rick, those models have been shifting a little bit more westerly in the last several runs. So we'll have to watch and see if that trend continues.

SANCHEZ: Speaking of westerly, let's talk about one of the places in the United States that may be most vulnerable for Ike, and that would be the Florida Keys, as impossibly Key West. Susan Roesgen is following the story. She's joining us now from Islamorada. She's off of US-1, which is really the only roadway that goes in and out of that place. It's halfway between Key Largo and Marathon, for those of you know south Florida.

Susan, what are people saying and doing now that the storm looks like it's going a little south of them but still they're in that strong quadrant where the winds are going to be the most effective.

SUSAN ROESGEN, CNN CORRESPONDENT: Well you know, they're just sort of looking at thing, Rick. This is why people leave New Jersey and movie to the Florida Keys, because they want to be out here with the palm trees and the sand and the surf. And so it takes a pretty big storm to try to get locals to leave.

There is a mandatory evacuation here. But as you know mandatory does not really mean mandatory, they can't force people to leave. So we found some people here today in the Middle Keys sort of taking it easy. They were watching the weather on television, but they were also watching the Miami Dolphins game. They are paying attention to what is going on but they're just sort of watching and waiting.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a beautiful day. We actually have a day off. We live in paradise. Why not enjoy it, right?

UNIDENTIFIED MALE: If worse comes to worse, we will get out of here. But right now it looks like we'll be OK probably. Just a lot of wind and rain and we are used to that.

(END VIDEO CLIP)

ROESGEN: Now taking it easy doesn't mean unprepared. Certainly people who live in the Keys who have been through much worse like Hurricane Wilma in 2005, it was really devastating, they are ready for this. They boarded up their businesses and they're taking care of their homes. They are not taking this lightly, but they are sort of watching and waiting.

When you talk about businesses here Rick in the Florida Keys, tourism is the number one industry. And we talked to tourism officials who say, get this, that these few days when the tourists have been kicked out and locals are not really shopping, they're just kind of staying where they are or maybe having a beer or two at the bar, this could cost the local tourism industry here Rick between $5 million and $10 million, even though the storm is not supposed to be that great here, just the loss of the tourists who were under the mandatory evacuation yesterday. The evacuation for the locals for those who choose to go is staggered. They start down in Key West and then it moves all the way up to Miami. Some of the people in the lower end of the Keys, the closest to the storm can get out of first. And those who are farther away and have less to travel, they'll get out later.

They say this evacuation should go through about noon tomorrow. No schools open. The kids have a break. Businesses are closed for a couple of days and people here feel pretty good about this. They've seen the track, too, and they think this won't be that big of deal. Rick?

SANCHEZ: Let us know if the worst thing they have to worry about in the next couple of days is the fact that the Miami Dolphins lost.

ROESGEN: Lost to Brett Favre and the Jets.

SANCHEZ: Thank you.

ROESGEN: Terrible loss.

SANCHEZ: Just keep rubbing it in. Appreciate it, Susan, see you later.

All right, now from the place where I grew up to the place where I was born, Cuba. CNN's Morgan Neill is standing by there from a country that has really been reeling over the past couple of weeks because of the storms that have been hitting it, including Gustav, by the way. Morgan, what do you have?

MORGAN NEILL, CNN CORRESPONDENT: Hey, Rick. Well eastern Cuba as you can imagine is really geared up for the arrival of this Hurricane Ike expected to make landfall in the coming hours. We have seen hundreds of thousands of people evacuated ahead of this storm. In one province alone, Sancti Spiritus, authorities say by the time they are done, there will be more than 40 percent of the population there evacuated.

Now there have also been hundreds of tourists evacuated, foreign tourists who are vacationing here in Cuba. Authorities are expecting to see hurricane-force winds just within the coming hours in the provinces of Guantanamo, Holguin, Granma in the north part there. And by morning, they think that those hurricane force winds will have arrived as far as Ciego De Avila, which is essentially in the center of the country. Now this storm is expected to make its way essentially along the spine of Cuba before exiting near Havana itself.

So today we went out to get a look at how people are getting ready for the storm here even though it is still a ways away from Havana. But we see people getting ready. We saw people out at the agricultural markets, where a lot of people buy their fruits and vegetables. Stocking up on that, a lot more people than we usually see.

Also in the normal stores, making sure the stores have food. And I can tell you why, Rick. It's because it's only been eight days since Hurricane Gustav jus tripped through the west of the country. People here in the capital got away fairly easy on that one. But they have seen very closely - a lot of them have family there and they have seen what those people are going through and they want to make sure they are ready if that kind of hurricane comes through the capital.

SANCHEZ: All right, thanks so much, Morgan Neill following that story for us there in Havana, a story that we're obviously going to continue to follow.

Also, we're going to be wanting to know what you are dealing with this. In fact, let's go to our big Twitter board, if we can. I want to see that people are responding to this. In fact, let me put a question in there now as we continue to get some of information that's been coming across the board. How about this one. If you are in the Florida Keys, are you thinking different today?

Since the storm now seems to be taking a westerly track, let's see what people are telling us today from the Florida area around south and certainly in the Florida Keys. We'll share with you what they're saying.

General Russel Honore is going to be coming in in just a little bit. He's going to be sitting down with me and talking about what's going on not just in the Florida Keys and what people may should or should be doing there, but he's also going to be talking about Haiti . He's going to be talking about the Turks and Caicos. Turks and Caicos, folks, have been slammed. There is General Russel Honore, who's putting his material together to share with us, as he continues to look into this.

All of these tropical storms we're been covering are kicking up dangerous rip tides on the coast. And this is a story that will amaze you. It's about a father and son, two very lucky people tonight. Walter Marino and son Chris, they were swept to sea last night while swimming off Daytona Beach. They were adrift for 12 hours according to reports, but amazingly they were both rescued early this morning. They were eight miles from shore according to reports and about a mile apart when they were found. Walter Marino, as you might expect, is one really grateful dude.

(BEGIN VIDEO CLIP)

WALTER MARINO, RESCUED BY COAST GUARD: The Coast Guard rocks! God bless the Coast Guard.

SR. CHIEF NEWMAN CNATRELL, U.S. COAST GUARD: Well you know, one thing that is really amazing, is basically for 15, 16 hours now you have had a 40-year-old man and a 13-year-old boy treading water. I have to say a lot to their willingness to survive and it is just a great day.

(END VIDEO CLIP)

SANCHEZ: What a story. We are trying to see if we can nail them down and talk to them tonight. The search went on for most of the night, by the way. Walter Marino was found by a good Samaritan ship and his son Chris was located by the Coast Guard. Do you know how hard it is to find somebody out in the ocean at night? We're told both are in good condition. Up next, It has gone from a bailout to a takeover. What is up with Fannie Mae and Freddie Mac? We've got some answers next from experts.

Also, we hear from a sister of VP candidate Sarah Palin. Some insight into this very public yet very newsworthy situation going on with the man she married who was a state trooper who ended up according to some, pressured her boss or his boss to have him fired. You know the story. We'll tell it again. We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: We were told that this thing was going to be a bailout with, of course, our money, as you might expect. But now today we're learning when it comes to Freddie Mac and Fannie Mae's condition, the patient is actually much more worse off than we originally thought. So much so that the bailout is turning into a total takeover. Here's CNN's Ali Velshi.

(BEGIN VIDEOTAPE)

PAULSON: We have determined that it is necessary to take action. Our economy and our markets will not recover until the bulk of this housing correction is behind us. Fannie Mae and Freddie Mac are critical to turning the corner on housing.

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT (voice-over): And with that, the U.S. government takes control of sister companies Fannie Mae and Freddie Mac, two massive corporations at the heart of the mortgage system. Together, Fannie and Freddie own or guarantee more than half of the U.S. mortgage market. That's more than $5 trillion in loans. Here's how they work. Banks loan money to home buyers. The banks then sell those mortgages to Fannie Mae or Freddie Mac. Banks then use the money from those sales to make new loans. Fannie and Freddie meanwhile bundle those loans up, attach a payment guarantee to them and re-sell them as bonds.

DEAN BAKER, CTR FOR ECONOMIC POLICY RESEARCH: They might issue the mortgage on the Monday and sell it in the secondary market to Fannie and Freddie on Tuesday. And then Fannie and Freddie is putting it together in a mortgage-backed security, selling it a week, two weeks later. So they're incredibly important institutions, even though for most of us, we're never seeing them.

VELSHI: The system provided a continuous supply of relatively low- interest cash, allowing banks to keep making affordable loans to home buyers. But as home prices dropped, mortgage defaults soared, making it harder for Fannie and Freddie to raise money.

BAKER: The interest rate that Fannie and Freddie had to pay began to rise and of course that gets passed on in higher mortgage rates to anyone who guys to buy a home.

VELSHI: So in an emergency move in July, Treasury Secretary Henry Paulson said the government stands ready to provide direct financial support to Fannie and Freddie if needed. He said he hoped it wouldn't be needed. PAULSON: If you've got a squirt gun in your pocket, you may have to take it out. If you've got a bazooka and people know you've got it, you may not have to take it out.

VELSHI: But without an explicit guarantee from the U.S. government, the stock of both companies continued to drop and major investors including the central banks of Russia and China started selling Fannie and Freddie bonds fast. That made it harder and more expensive for Fannie and Freddie to raise money.

(END VIDEOTAPE)

SANCHEZ: We're going to continue to follow some of the situation with this story. And by the way, there are a lot of people who are angry about this. We're going to be asking questions and receiving what you have to say about this on twitter.com/RickSanchezCNN as well and on Facebook and on MySpace. You can see it all there and we'll be expecting some of your responses to what's going on now with the new situation involving Freddie Mac and Fannie Mae. We'll bring it to you or we'll share it with our audience as you bring it to us.

With the presidential elections so close, it's beginning to look like the undecided voter holds all the cards, right? So I'm going to ask them why they can't seem to make up their minds. But first, Hurricane Ike and Haiti. The man who knows a thing or two about powerful storms tells us what we can learn from the Haitians. General Russel Honore joins us here next.

(COMMERCIAL BREAK)

SANCHEZ: Hurricane Ike has blown into the Turks and Caicos Islands on the wee hours of the morning. We are talking about a very popular tourist destination, as many people know. These are some of very first pictures that we were able to get out. I can almost guarantee you the situation is worse than these pictures reflect because it came through at a Category 4 and all communication has been cut off.

Let's go to General Russel Honore and start with this very topic. Hard to tell, no way of talking to people. We don't know what's going on, general. But we know this. It was one very powerful storm and that is an island that would be very vulnerable because it doesn't have a lot of high ground. What do you make of this situation?

LT. GEN. RUSSEL HONORE (RET.), CNN CONTRIBUTOR: It had all the negative effects that a hurricane can bring. High winds, surge and enormous amount of rain. In effect, early reports are showing over 80 percent of the homes are destroyed and or damaged. This is a terrible effect on the Turks and Caicos. So they are a British protectorate. And I'm sure they'll get help soon. But the bigger issue as you look there is the effect it has had on Haiti, as you know.

SANCHEZ: Yeah, you know, we could talk about Haiti. And you know what's interesting about Haiti is this is a country that really has more than their share. You talk about people who have suffered in this world and Haiti, at least as far as the Western Hemisphere is concerned, it is tough to beat, isn't it? I mean, with Baby Doc, Papa Doc and the situation they've had with invasions, obviously their economic situation is probably as poor as it can possibly get. These people have got to be in a tough way right now, aren't they?

HONORE: Well every measurable standard in terms of economics, confidence in government, confidence in the military, of the 142 countries that the Gallup poll research find Haiti is one of the poorest countries in the world.

It is certainly one of the very last in terms of economic development in the western world. And the effects of storms on poor people as we saw during Hurricane Katrina, it has a multiplying effect. When you look at Haiti, over 650,000 people affected by this storm, some 300,000 children according to UNICEF, are affected, that are struggling to find food and clean water. UNICEF is in there, you know the U.N. has Blue Helmet peacekeepers in there. It is a devastating effect on a poor country, a country that went through Hanna, survived Fay and took a brushing here from Ike and Gustav. It is a tremendous -- it is teetering on a real disaster in terms of human loss of life and it's a compounding effect, Rick, because as you know over 90 percent of the trees in Haiti have been harvested and cut. And the effects of the rain. You know, we got three or five inches of rain.

SANCHEZ: That flash flooding.

HONORE: From Ike. And the flash flooding, it's the walls of mud destroying hundreds of homes.

SANCHEZ: We are getting a lot of comments now. I asked folks just a little while ago, general, about what is going on in the Florida Keys. Let's go ahead and go to the big board again. Somebody just wrote to me and said, "No, I'm not leaving but my fall break vacation to the Keys won't be happening. This hurricane season is just too dangerous."

Then we've got this fellow who says, "I left the Keys Friday, noticed that the storm was announced as a threat, then gas prices went from $3.44 to $3.65."

So people are talking about this. It's causing them to move. The question today though is, general, now that we seem to be seeing the storm is taking a little bit of a tilt to the south thereby maybe not having a direct impact on Key West anyway, does that make people lower their guard too much at this point? What would you say to them?

HONORE: Well, that's always a precarious situation we get into. You've got to understand if that storm has stayed on the track, it would be having effects on Key West tomorrow afternoon. So I think good government did the right thing, do the precautionary thing because they only have one road out of there.

We couldn't wait until tomorrow to make the call. The call had to be made yesterday and I think the governor of Florida and all of his advisors did the right thing to get people start moving. It's like, so what? Now you can come back. The storm didn't hit but the right thing was done by the government to get the people out of there. SANCHEZ: General Russel Honore joining us. It is always good to be able to talk to somebody who knows his stuff as they say. And he does, when it comes to preparedness and emergencies. Thank you, sir.

How are undecided voters taking to Sarah Palin? Well, you want to find out? Ask them. There they are, undecided voters. By the way, is she pushing this guy out of the picture? How does Joe Biden get noticed again? We'll be back.

(COMMERCIAL BREAK)

SANCHEZ: Welcome back here to the world headquarters of CNN. I'm Rick Sanchez.

Boy, we have a horse race on our hands for the battle of the White House. Check out the CNN polls hot of the press on this Sunday evening. There it is. You can gander it with your own eyes. According to the latest average, Barack Obama now leads John McCain by one point, uno, un, one point, 44 percent to 43 percent.

We should tell you this is a combination of different polls from all over the country that we take in. Some of them for the first time actually included the convention speech that Sarah Palin gave. The one we shared with you yesterday did not include that speech. And you'll notice this is a little tighter now than it was yesterday.

Does that mean that there is a bit of a bounce as a result of the speech that Sarah Palin gave? Perhaps. We are going to be looking into that throughout the course of the evening. Tonight I'm going to be especially looking into it tonight with some of our political experts at 10:00 p.m. Eastern.

So who is to blame for Fannie Mae and Freddie Mac? John McCain tells CBS today it is Congress' fault.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: You know, they were originally designed a chance for middle income people to have an affordable home loan mortgage. And it grew into this sprawling, massive bureaucracy ripe with corruption, cronyism, special interests, lobbyists and a relationship with Congress. Congress passed these laws that allowed these massive loopholes to be there.

(END VIDEO CLIP)

SANCHEZ: Meanwhile, the media continues trying to shed light on the life and times of one Sarah Palin. The biggest story being chased revolves around a state investigation that alleges that she fired a state employee who refused to fire her brother-in-law who she wanted fired. Our Drew Griffin catches up with Palin's sister, the one who was married to that state trooper.

(BEGIN VIDEO CLIP)

DREW GRIFFIN, CNN CORRESPONDENT (voice-over): Let me ask you, is she full of surprises like this all her life?

HEATHER BRUCE, GOV. SARAH PALIN'S SITER: Sarah, people think it is surprises, because it is surprising to the outsiders, but Sarah is a private person when it comes to some areas of her life. And that is frustrating to me to hear the criticism on her hiding her pregnancy. Because that part of her life, she and Todd, from the very first pregnancy, that is a sacred area of their life. It is absurd to think they are trying to fleece people and trying to pull one over on the public by keeping their pregnancy private. When they're ready to reveal a pregnancy, they do.

(END VIDEO CLIP)

SANCHEZ: By the way, you are going to be able to hear a lot more about Sarah Palin from her sister, from her father and many others. That's why we have sent a crew out to Alaska all week long. So next weekend, we're going to put all of this together for you. It's going to be called "Revealed," another CNN "Revealed." We're going to showcase Sarah Palin Saturday and Sunday night at 9 Eastern and her Democratic counterpart Joe Biden at 10.

Going to the Democrats now, Barack Obama is weighing in on the housing mess as well. He was on ABC this morning. He said the news that the government is taking over the nation's two mortgage giants is just the latest evidence that the economy needs serious help.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The economy is weak right now. The news with Freddie Mac and Fannie Mae I think along with the unemployment numbers indicates that we are fragile. I want to accelerate those tax cuts with a second stimulus package, get more money into the pockets of ordinary Americans, see if we can stabilize the housing market and then we're going to have to re-evaluate at the beginning of the year to see what kind of hole we are in.

(END VIDEO CLIP)

SANCHEZ: All right, about 13 percent of those polled still don't know who they will vote for in November. And we're going to be staying on top of that. When we come back, we're going to find out if the vice presidential candidates can actually make a difference. We are going to be talking to those undecideds. Sit up gang, you're on TV. You're looking live at them right now. We'll have them. We'll have all the latest news and all the political flap. We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: All right, here we go once again. Barack Obama's running mate Joe Biden is in danger of becoming the forgotten man in this race. You would think so, right, watching the news in the last couple of weeks? Considering all of the attention that's been focused on Sarah Palin. But Biden is not going away and he's certainly not going to remain quiet, not the Joe Biden most people know. Here now is CNN's Jim Acosta.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT (voice-over): She may not be the biggest celebrity in the world but Sarah Palin is elbowing Joe Biden out of the vice presidential spotlight, drawing big crowds for John McCain and solely gracing the covers of national magazine across the country.

Biden does have Palin beat on one score, the Sunday talk shows, making his 42nd appearance on "Meet the Press." The sometimes overheated Biden tempered his criticism of the Alaskan governor.

SEN. JOE BIDEN (D-DE), VICE PRESIDENTIAL CANDIDATE: Eventually she is going to have to answer questions and not be sequestered. Eventually she's going to have to answer questions about the record.

ACOSTA: Steering clear of a dogfight with a self-described pit bull in lipstick, Biden is instead tearing into John McCain, here unloading on the Republican Convention.

BIDEN: It was deafening on jobs, on health care, on the environment, on all the things that matter to the people who live in the neighborhoods I grew up in, deafening.

SEN. HILLARY CLINTON (D), NEW YORK: No way, no how, no McCain, no Palin.

ACOSTA: Still, it is not Biden, it is Hillary Clinton who is seen as Obama's best bet to counter Palin mania. Over the weekend, Clinton offered a preview of what is to come when she campaigns for Obama in Florida this week.

CLINTON: Senator Obama and Senator Biden offered the new ideas and positive change agenda that America needs and deserves after eight years of failed Republican leadership. Senator McCain and Governor Palin did not.

ACOSTA: As for Biden, he is making the case as Senator Clinton once did that he is a kid from Scranton, Pennsylvania, not just a creature of Washington. Part of Palin's star power lies in those now well- known small town roots.

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: You know, they've got a celebrity on the Democratic ticket. His name is Barack Obama. They didn't need a celebrity running mate. John McCain did. That is why Sarah Palin has made so much difference for him, because he needed the star power.

ACOSTA (on camera): The old political adage is that people don't vote for the bottom of the ticket. Still, Biden versus Palin at this year's vice presidential debate will undoubtedly go down as one of the hottest political events of the year. Jim Acosta, CNN, New York.

(END VIDEOTAPE)

SANCHEZ: Let's get to these folks now, the voters who are going to decide ultimately what happens in this election. But first, they need to make up their own minds about the election cycle that is ever changing. That is that 13 percent we showed you a little while ago, undecided Americans.

You know I have been going all over the country doing this League of First Time Voters thing. Well today, I'm bringing some of these voters into our studio to talk to them.

We're going to start with Andy Hurst, there he is, good looking young lad, huh? Strapping young lad, 19-years-old, libertarian, college student. Now I want to show you Hope Demps. She's 35, she is a lawyer and she is an Independent. Why do I feel like the music is going to say, da, da, da, "The Dating Game." Cynthia Hudson, she is 48 and she is all framed up now. She is an executive assistant and she tells me that she is a Democrat. All right, let's go to Tony Chung now. He's 30-years-old. He's a counselor and he's a proud Republican by golly.

Let's start talking about Sarah Palin, first of all. She had said earlier, at least she was quoted talking to a reporter. And she told that reporter she was at the time for the bridge to nowhere. But the in the last couple of speeches she's given, including the one at the convention she said this. Take a listen.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I told the Congress thanks but no thanks on that bridge to nowhere. If our state wanted to build a bridge, we were going to build it ourselves.

(END VIDEO CLIP)

SANCHEZ: Let's start with you, Tony. You're a Republican. Does she have a problem here?

TONY CHUNG, UNDECIDED VOTER: I personally believe that she has a minor problem in that I actually watched the speech last week, this past week. She presented her case very well, to me.

SANCHEZ: But when she was quoted saying she was for the bridge to nowhere and now she's quoted in a speech that we've all heard saying not only was she against it, but she actually told Washington I'll build my own darn bridge. Is that fair game? Is it something reporters should be talking about?

CHUNG: I do believe that they should be talking about that. It is double talk and I personally don't believe in double talk. If she stands for the truth, then she should not change her case.

SANCHEZ: Hope and Cynthia, weigh in on this.

CYNTHIA HUDSON, UNDECIDED VOTER: I think we got a flip-flop going on already. She was for it, now she's against it, back and forth. I'm not impressed with her at all.

SANCHEZ: You're not? Why not?

HUDSON: I'm not impressed. Because every time she speaks she says the same thing. She hasn't talked about issues at all.

SANCHEZ: All right, let's stop right there. I want to show you something else. Let's go to the other side now. This is Barack Obama being talked about by the man he chose as his running mate, Joe Biden. Take a listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What does Barack Obama's running mate say about Barack Obama?

GEORGE STEPHANOPOLOUS (D-DE), PRESIDENTIAL CANDIDATE: You are asked if he is ready. You said, "I think he can be ready but right now I don't believe he is. The presidency is not something that lends itself to on the job training.

BIDEN: I think I stand by the statement.

(END VIDEO CLIP)

SANCHEZ: All right, let's bring in Hope and Andy on this one. Is this an effective ad? Is this one that can actually hurt Barack Obama or the ticket of Obama and Biden themselves? Either one of you, Hope, get us started.

HOPE DEMPS, UNDECIDED VOTER: I'll tell you, I think it is very powerful. In fact, McCain's best ads are ones in which he quotes Hillary Clinton or Joe Biden. It really grips at the heart of the attack machine that was after Obama for the last 19 months.

SANCHEZ: Because these are effective, credible people and they're saying you've got a bad candidate on your hands.

DEMPS: Right, and now they're on Obama's side and how are they going to explain that away? Do the think the American public is stupid or are they now willing to admit that they were wrong or just being political?

SANCHEZ: Andy, what do you think about that?

ANDY HURST, UNDECIDED VOTER: I think it is sort of a rough call to choose a running mate that you got -- that the two of them have been exchanging shots at each other all throughout the primary season. When McCain picked Sarah Palin, she is a relative unknown. She hasn't been taking any public shots at him. And that's a lot -- there's no sound bytes you can get from that.

SANCHEZ: It's all there. Quick thing before you all go. And I just want you to go give me your choice. I'm going to show you a split image. Are you ready? It's a split image of the two candidates in the Republican side and the other one is going to show the two candidates on the Democratic side. We're going to put them side by side. There they are. Just on general terms, as you look at them, before you know too much about them, which one makes a more appealing pair? Andy, you've got to give me a decision.

HURST: I'm going to go with McCain/Palin.

SANCHEZ: Hope?

DEMPS: I'm going to say Obama and Biden. They look like friends and they like each other and they can unite.

SANCHEZ: Cynthia?

HUDSON: I'm going to go with Obama because it seems like there is some connection going on.

SANCHEZ: More of a connection. And finally, you, Tony.

CHUNG: I see the friendship action going on between Obama and Biden. So I go with them.

SANCHEZ: Wow, and you are a Republican.

CHUNG: Yes.

SANCHEZ: That is an earnest response. We thank you all four for joining us this time around. And we are not done. We are going to be talking about the guys at the top of the ticket in just a little bit. We'll look forward to that.

In the meantime, let me tell you what else we're going to be doing. We're going to keep the conversation going on this and also following the latest on what is going on with the hurricanes and the guys at the top of the ticket, as we mentioned. We'll be right back.

(COMMERCIAL BREAK)

SANCHEZ: According to most of the polls there is like 13 to 14 percent of Americans who really have not yet made up their minds yet. They just don't know between John McCain and Barack Obama. We have got four of them here in the studio tonight.

I want to show you something now because a lot of Democrats have been making hay about this. They're actually pretty angry about Rudy Giuliani, they thought it was a very vibrant speech, but at one point he did something where he talked about community organizing work, the one that Barack Obama has done. And people started laughing and he was seemingly scoffing at it. Watch it first and we'll talk about it on the other side. Here it is.

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER NEW YORK CITY MAYOR: He worked as a community organizer. What? He worked, I said - I said, OK, OK. Maybe this is the first problem on the resume. He worked as a community organizer. He immersed himself in Chicago machine politics.

(END VIDEO CLIP)

SANCHEZ: A lot of folks are having a lot of problems with that from the Democratic side and they are using it strategically to make some political hay out of it. In fact, they already printed banners that say "Jesus Christ was a political organizer, Pontius Pilate was a governor." Is this something that is going to hurt Republicans? Going back to you Tony, as a Republican.

CHUNG: As a Republican, I personally wouldn't have preferred Giuliani in the first place.

SANCHEZ: Oh, really? Why? Too strident?

CHUNG: I think his character is a little bit too strong. I am a Christian and from that perspective, I think there needs to be a little bit of grace and a little bit of I guess care, kindness.

SANCHEZ: Does anybody thing -- raise your hand if you think he came off as a bully? Really, you think he came off just too hard? But the base loved it. There were people clapping. And when he said community organizer, people were excited about that, almost as if - it almost came off, did it not, as if they were kind of making fun of him.

DEMPS: Well I mean, the Republicans are known to be elitists so it fed right into that hand. But I didn't think it was bullying. These people want to be president of the United States, so they have to be tough and take harsh criticism. I do think what the strength is of Barack Obama is that he is trying to create change from the community up.

SANCHEZ: But why -- Barack Obama has appeared elitist to many people on many occasions including the comments he made out in California about people clinging to their guns and their religion.

DEMPS: Well then this works for his advantage. He gets to be the community grassroots hard working person and he's fighting against the elitism of the Republican Party in the main state of Washington. So this helps him. He gets to flip the discussion a little bit.

SANCHEZ: Cynthia, when you watched Rudy Giuliani say that and when you heard that Barack Obama had said what the said, how do you reconcile the two?

HUDSON: Well, him talking about the grassroots, the community, the nation is built on community. How can we downsize the community and the work that goes in the community? It starts right there. And if you're working for middle class, we are the community. And it looks like to me, they are pushing the middle class out.

SANCHEZ: As a libertarian, I imagine Andy that you must have some comments about what Giuliani said and probably about what Barack Obama said when he was in California. Many people have considered both of those wrong.

HURST: Well first of all, I'm pretty glad that at least I didn't hear Giuliani mention 9/11 in that segment. It seems like it's been coming out of his mouth kind of a lot. I think what Giuliani was intending to do was to strike at Obama's lack of experience as just being a community leader. But I think that in the way he attacked that, that came off very wrong.

SANCHEZ: He overstepped.

HURST: I think serving your community is by no means is a bad thing.

SANCHEZ: Something to be scoffed at. Interesting perspective.

And by the way, folks at home are loving this as well. I'm reading a twitter right now from twitter.com/RickSanchezCNN. It says "Thanks for the undecideds view." This comes fro mwakka092. He says "Quite an interesting angle." Well thanks for letting us know that you like it. We will continue to do stuff like this.

Guys, you were fantastic, appreciate it, come on back. Quick programming note, on CNN next weekend, Sarah Palin, Joe Biden, who are they? America's vice presidential candidates are going to be revealed in back-to-back special reports, CNN next weekend starting at 9 "p" Eastern, of course.

The Senate gets back in session briefly, but Ted Kennedy is not going to be there. He announced he will not return to Capitol Hill this week when Congress returned from its August recess. Kennedy was diagnosed with brain cancer in the spring. He is going to be undergoing chemo treatments and plans to be back to work in January.

Another big storm could be heading right for the United States. Jacqui Jeras is keeping an eye on it for us. And an emotional stroll from the Arlington National Cemetery to the Pentagon. Why? 9/11.

(COMMERCIAL BREAK)

SANCHEZ: It's all about one foot in front of the other. This weekend in cities across the United States, people are gathering to remember and honor the victims of September 11th and the people who died in the wars that followed. The Pentagon sponsored several so-called "Freedom Walks," the biggest of which wound through the streets of our nation's capital. One walker this weekend has avoided any 9/11 commemorations until now. And CNN senior correspondent Jamie McIntyre found out why.

(BEGIN VIDEOTAPE)

JAME MCINTYRE, CNN SENIOR CORRESPONDENT (voice-over): Under bright, cloudless skies, the freedom walkers stepped off from Arlington National Cemetery. It was a day eerily reminiscent of September 11th seven years ago. First-time walker, retired air force Colonel Jim Leech.

JOHN LEECH, RETIRED AIR FORCE COLONEL: It is a beautiful day. And when I hear the jets fly over head, my first instinct is to kind of shake a little bit. It's a little bit nerve racking. It is a lot like September 11th.

MCINTYRE: So this will be the first time we actually try to find exactly where you were on September 11th.

LEECH: That's correct. MCINTYRE: It wasn't until this week, Leech returned to see where his old Pentagon office used to be. The memories were just too painful. So you'd have been somewhere in this area here, right?

LEECH: Yes.

MCINTYRE: But Leech agreed to take CNN there, now that he's out to re-engage with the past.

LEECH: We would have been in this area, this area right here when the aircraft struck. And as I said, this was the firewall. The aircraft, as you know, drove in at an angle and it went -- actually, I believe it hit the first floor, drove in three rings. It hit with such force, I have never experienced anything like it in my life.

It just rattled you right down to the bone. The office filled with smoke, the roof started disintegrating. I ran out the door and I stood right about there and secondary explosions started erupting and people were screaming, just blood-curdling screams. At first there was that adrenaline rush and within a few minutes, I was scared. It was the first time I was really scared. I was like, my god, we are under attack.

I was so lucky. If you look at the diagram of how the aircraft entered the building and the damage it did, it's almost as if we were in a protected cocoon. We were virtually untouched. I inhaled a lot of jet fuel vapors and I got dusted up, but that was the extent of my injuries.

MCINTYRE: Another first for John Leech, reviewing videotape of the destruction he escaped.

LEECH: This is where 90-something personnel were killed on the first floor, wow. The devastation is just unbelievable. It makes you feel weak in the knees to see these pictures again.

MCINTYRE: Look at this on the desk here. You can see a pair of glasses.

LEECH: A pair of glasses.

MCINTYRE: A bowl of candy is tipped over there.

Last stop, the Pentagon chapel, where in a photo album, John Leech finds the friend who was with him September 11th, Navy Captain Jack Punches.

LEECH: I've avoided this for the past six years, avoided anything to do with 9/11. So it feels good to be here. I mean, a lot happened that day. A lot of good people died, a lot of very good people.

MCINTYRE: Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

SANCHEZ: And once again, as we continue to get more information from you, either on Facebook or MySpace or Twitter.com/RickSanchezCNN, I'll be sharing it with you. In fact, we've got quite a bevy of those coming in as we speak. I'll check on them, when we come back.

(COMMERCIAL BREAK)

SANCHEZ: All right. Let's go to Jacqui Jeras, she's got some news for us. What have you got, Jacqui?

JERAS: Yeah, well we're just getting new reports in that numerous rescues had to take place today off the Florida coast near the Jacksonville area due to strong rip currents, more than a dozen of them today. We're getting some large swells from Hurricane Ike, creating that high threat, not only along the Florida coastal areas, but all the way up into the Carolinas. Ike, a Category 3 storm now. It's been weakening a little bit, but it's closing in on Cuba now. Those hurricane force wind gusts are arriving and we're going to watch for landfall, we think, late tonight or early tomorrow morning. And of course we'll continue to cover Ike throughout the evening. Watch sure you watch us at 10 for a complete report.

SANCHEZ: All right, thanks a lot, Jacqui. Your comments to us. Here we go. "Rudy made a miscalculation. The RNC itself would be an act of community organization, rallying around its leader."

"Rudy intended to make those remarks about Obama. The repetition was over the top in his speech."

"Rudy is a Rove robot. His puppet strings are easily pulled."

And there we go on and on. "Oh, make no mistake about it, he meant it," says one of our Twitter commenters as well.

There you go, they continue to come in. We'll continue to ask and you continue to respond. Thanks so much for being with us. We'll be looking for you again tonight. Special coverage on some of the political issues and of course the very latest on the polls at 10:00 p.m. Eastern. I'm Rick Sanchez. See you in a bit.

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