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Taxpayers React to Paying for Bailout?; Candidates and the Money Crisis; Debate Dilemma: Will Presidential Face-Off Happen?
Aired September 25, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: America's money crisis. Where do things stand right now? Well, here is the big picture. Details will follow.
Congressional negotiators behind closed doors at this hour drafting a compromise bailout bill. The politicians leading the effort say they are on the verge of a deal.
President Bush calling John McCain, Barack Obama and members of Congress to the White House this afternoon, following up on last night's speech. The president warning the economy is in danger.
McCain suspending his campaign to focus on the financial crisis. Tomorrow night's presidential debate in some doubt.
Ali Velshi taking your calls on his radio show. So many of you furious about the $700 billion rescue plan for Wall Street and the financial industry.
Ninety minutes into the trading day, and Wall Street is moving up. After three down days this week, investors lifted by news of a bailout compromise.
Take a look at the numbers. The bulls on a run. The Dow just a little bit off of session highs, but positive territory throughout the morning, 190 points for the Dow.
A lot of you are asking, can the nation really afford the bailout, and why $700 billion?
CNN's Christine Romans, co-host of "YOUR $$$$," is in New York.
And Christine, I know you have been crunching the numbers. What have you found out?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, Tony, certainly the next president has a huge economic challenge. And with that challenge comes a very big bill to pay.
(BEGIN VIDEOTAPE)
ROMANS (voice-over): Just where is $700 billion going to come from? Where it always does.
REP. JIM SAXTON (R), NEW JERSEY: The Treasury doesn't have $700 billion in a big old safe. We have to go borrow it. ROMANS: The piggybank is already empty and the government is borrowing to the limit. To pay for this bailout, Treasury Secretary Henry Paulson wants Congress to raise the debt ceiling to a staggering $11.3 trillion. Talk about living beyond your means.
Filmmaker and author of "I.O.U.S.A." Addison Wiggin.
ADDISON WIGGIN, AUTHOR, "I.O.U.S.A": That money just gets tacked on to the bill that we're passing on to future generations.
ROMANS: Wiggin calculates the bill for everything the government has promised but hasn't yet paid for, like Social Security and Medicare, nears $53 trillion. And by the year 2010, your share will reach $38,000.
WIGGIN: The government is spending beyond its means to a level that, you know, private citizens could never even imagine and even Wall Street banks wouldn't dream of.
ROMANS: And that's before the proposed $ 700 billion Wall Street rescue.
That's got Congress wringing its hands over the enormous taxpayer-funded bailout, and the candidates fine-tuning their messages. Many economists say big tax cuts and New health care programs get less likely by the minute. Ballooning deficits are more likely.
It's still unclear how much this would really cost.
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: I recognize that this is always viewed as a $700 billion program. But again, the fiscal cost of it is going to be much, much less than that.
ROMANS: Because the government hopes to some day sell the toxic securities it buys from the banks.
(END VIDEOTAPE)
ROMANS: It's the cost of not doing something, Tony, that has so many people spooked. You know, the Fed chairman says that that cost could be much higher.
Meantime, the deficits grow even before this $700 billion. Think of it, the national debt grows $1.3 million every single minute. Every minute.
HARRIS: That's a crazy number. All right, Christine. I'm going to let you know. I know you have got some reporting to do on this story. We'll talk to you a little later.
ROMANS: That's a financial technical term, right? A crazy number.
HARRIS: Crazy. There you go. Thanks. You know, anger over the bailout is targeting Wall Street, but protests today may be on your street. A number of groups are calling for protests in dozens of cities. Here you see the locations.
One activist is actually calling on New Yorkers to dump their junk at the bull on Wall Street. He says it's worth as much as the junk the government wants to buy.
Some of you aren't the street protest type. You'd rather send us an iReport to express your outrage.
(BEGIN VIDEO CLIP)
JOEL VETSCH, NEW HAVEN, CONNECTICUT: Seven hundred billion dollars? Why didn't they make it $699 billion? Then we might think we're getting a good deal without the sticker shock. I sincerely hope that taxpayers' interests are looked out for in the end.
(END VIDEO CLIP)
HARRIS: And again, we want to hear from you. Send us your iReports. Go to ireport.com.
A lot of you are also calling in your concerns and questions to senior business correspondent Ali Velshi. Ali, of course, part of our CNN money team. And he is on the air right now at CNN Radio.
Hey, Ali, just before you get fired up this morning, got a couple of thoughts for you.
Oh, he can't hear us yet. OK. So we will check back with Ali in just a couple minutes and find out what some of his listeners are talking about. And he's also been doing a great job in the "Ask Ali" segment on "AMERICAN MORNING."
The financial crisis shaking up the presidential race. Barack Obama says he can campaign and confront the money crisis. John McCain has put his campaign on hold, saying it can wait, but the crisis can't.
In a speech before the Clinton Global Initiative this morning, McCain said the bailout legislation needs to be done soon and done right.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: ... a call to act both quickly and wisely, but that's what's required right now. Time is short and doing nothing is not an option.
I'm confident that before the markets open on Monday, that we can achieve consensus on legislation that will stabilize our financial markets, protect taxpayers and homeowners, and earn the confidence of the American people.
(END VIDEO CLIP) HARRIS: Barack Obama also talked about the financial crisis in a speech by satellite to the Clinton Global Initiative last hour.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: It's outrageous that we find ourselves in a position where taxpayers must bear the burden and the risk for greed and irresponsibility on Wall Street and in Washington. But we also know that a failure to act would have grave consequences for jobs, for savings, and retirement for the American people.
(END VIDEO CLIP)
HARRIS: So, will tomorrow night's presidential debate be a casualty of the money crisis? John McCain says now is not the right time for debate. Barack Obama says now is exactly the right time.
Senior Political Analyst Bill Schneider live from Washington.
Bill, good morning. Good to see you.
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Tony.
HARRIS: You know, what's going on here?
SCHNEIDER: Well, nobody really knows.
HARRIS: Yes.
SCHNEIDER: We certainly know that John McCain is taking a big risk here coming to Washington, suspending the campaign, saying that he won't participate in the debate. A lot of critics are saying he's overreacting, he's spooking people, that the job of a president should be to reassure voters that the situation is under control. And he's putting a lot on the line that, number one, he can get a deal, and that the deal will be seen as a good deal by the American public, which is right now divided over the bailout plan.
They don't know what to make of it. A lot of people are angry about it. But they also believe it may be necessary.
And most important, he's got to carry his party along. He's the leader of the Republican Party. And it's a lot of Republicans who have been balking at this deal as a government bailout. They don't like it. If they don't go along with McCain, he's going to look like an awfully weak leader.
HARRIS: Hey, Bill, can you imagine that this debate really doesn't move forward tomorrow night? I mean, can you imagine sort of this empty chair debate, Barack Obama, the moderator, everyone else in the audience, and the John McCain seat empty?
SCHNEIDER: It's hard to imagine. I suppose it could happen. I don't think it would be good for John McCain. Too many people would say he's ducking the debate, he's using this as an excuse. He's saying he's putting politics aside, that this is no time to engage in politics.
Obama says, first of all, that you ought to be able to do both at the same time. The electoral calendar is fixed by the Constitution, the debate is part of this process. And he makes an interesting point, that if Obama and McCain both are in Washington at the center of the negotiations over the bailout deal, that doesn't mean the bailout deal becomes less political. It becomes more political.
It injects presidential politics into the deal and becomes a test of strength between these two contenders. So it becomes more political if they're part of it.
HARRIS: Bill Schneider for us in Washington.
Bill, appreciate it. Thank you for the analysis, sir.
SCHNEIDER: Sure.
HARRIS: So let's take you to the site of the debate, if there is one, the University of Mississippi, where preparations are moving forward. We know this because our Suzanne Malveaux is there. And she has her credentials.
Suzanne, great to see you.
My understanding is that there are plenty of folks on that campus none too pleased with the suggestion that this debate should be postponed.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Tony, all indications are that people are at least preparing for this to happen tomorrow as planned. This gives you a pretty good sense of the mood here on campus. The local paper, school paper, "Will He Show?"
It's obviously the big question. A lot of frustration, even some anger among some students and faculty. They've been working very, very hard, more than a year to bring this forward.
I want to bring in one of those officials, Gloria Kellum, who's the vice chancellor of University Relations to give us a sense.
What is the sense of the mood here on campus? You've spoken to a lot of people, you've been involved in this.
GLORIA KELLUM, VICE CHANCELLOR, UNIVERSITY OF MISSISSIPPI: Great expectation. Great expectation that tomorrow night at 8:00 in this hall, on this campus, we'll have the debate. And that's where we are.
MALVEAUX: Has the Debate Commission talked to you today?
KELLUM: Yes.
MALVEAUX: Have they given you an update? What have they told you?
KELLUM: The University of Mississippi works regularly with the commission. We've been in contact with them since yesterday afternoon. And we're all working together to make sure that this debate comes off on Friday night.
MALVEAUX: Have they told you that John McCain is going to show up tomorrow, that this is going to be a go?
KELLUM: The commission has not told us that, but we all -- the commission, the university, all of us expect this to be here.
MALVEAUX: If John McCain doesn't show up tomorrow, is this a situation where you could have Barack Obama on stage being questioned by the moderator, by himself?
KELLUM: The commission and the university are not talking about contingency plans. We have a strong belief that tomorrow night, this debate will be right here.
MALVEAUX: You're operating on that assumption?
KELLUM: I am absolutely. We've spent a year and a half preparing for this. And we are working hard. And the media is here and coming and we are ready for this debate.
MALVEAUX: Has the commission told you if there's going to be a deadline, they'll get back to you at the end of the day, if there's going to be a cutoff, when they make some sort of decision either way?
KELLUM: We check with each other on an hourly basis. So every hour we just check and see where we stand at that hour. The commission is working with the candidates and the parties. And they work with them on a constant basis.
MALVEAUX: Give us a sense of what the university has done. Obviously, you've put in more than $5 million for this debate preparation. A lot of people involved.
MALVEAUX: Right, $5.5 million of private money have gone into this debate and the preparation for it. The state of Mississippi, the University of Mississippi wants the world to come and look at us, at Mississippi.
We're ready for this debate. There have been more than 1,200 people that have worked almost constantly over the last four months, particularly, 700 of our students, our volunteers. They're ready, they're standing around ready to go.
MALVEAUX: What kind of loss would this be if it didn't happen?
KELLUM: Well, it's not a loss. It's a lot can be gained from this. This experience of what happens in the American process and democracy together, the kind of infrastructure that we put in will benefit this university for years. This is about democracy in America. MALVEAUX: All right. Gloria Kellum, thank you so much for joining us.
KELLUM: Thank you.
MALVEAUX: Obviously we're all...
KELLUM: Welcome to Mississippi.
MALVEAUX: Thank you very much.
We're all going to be watching eagerly to see if, in fact, this debate goes on without a hitch and that it happens tomorrow -- Tony.
HARRIS: Yes. Can't imagine there would be an empty chair. I just can't imagine it.
All right. Suzanne Malveaux for us.
Suzanne, great to see you.
Let's get you back to Ali Velshi, taking your calls right now. He is such a key member of our CNN money team, and he is on CNN Radio right now.
And Ali, I've got to ask a quick question here. For all of those, particularly in the West, who haven't had an opportunity yet to hear your take on the bailout proposal and the outrage over it on Main Street, what have you been hearing in e-mails, and what are you expecting from callers?
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Tony, we have been getting hundreds and hundreds of e-mails from people. And let me tell you, there is a real disconnect here with people saying, "I do not want to bail Wall Street out. I do not want to be involved with using my taxpayer dollars and our debt to help people out who made bad decisions."
But let me tell you, Tony, there are flaws with this plan, and there are good reasons to support it and there are good reasons why people have very big fears about it. But companies in America get money by borrowing from banks and by borrowing from other companies.
We know they are having trouble doing that right now. So those could be the companies that employ you. If they can't borrow short- term money when they need to -- and that short-term money has dried up, according to people we've spoken to -- that could mean that some bills don't get paid. And you just want to make sure that that's not your salary.
So, I'm only cautioning to people who are very angry about this to make sure you don't cut off your nose to spite your face. If you believe that you really are against the idea that there should be any bailout for anybody...
HARRIS: Yes. VELSHI: ... that's a philosophical disagreement that is valid. But to think that this is something that's isolated to people on Wall Street so they can get their bonuses at the end of the year, that is just not an accurate portrayal.
HARRIS: Do you think that the sale is being made here? Do you believe the pitchmen for this are finally beginning to communicate the real need for this to the American people? We just want transparency, more than anything else. Just lay it all out for us in a way we can understand.
VELSHI: It's difficult, Tony, because you and I have been talking -- two years ago we talked about home prices going down. A year and a half we talked about foreclosures. Then last September, we talked about the fact that we had for the first time seen retail sales start to drop. In a nation of consumers, people were holding on to their money.
Now, I don't have a staff of economists here, we don't have one at CNN. Why is it folks that do have a staff of economists didn't see this coming?
It wasn't January -- it was January before the president said we've got a problem. So, unfortunately, when he comes out and says that there's potential panic in the financial market, folks are second-guessing the administration.
And I'm just here to say you may have reason to. That's up to you. But there is a real connection between Wall Street and you.
And fortunately, by calling it a Wall Street bailout, and that's a popular name, it makes it sound like your tax dollars are going to Wall Street to bail Wall Street and the financial industry out. We have not realized until this week how closely connected everyday Americans are to Wall Street.
HARRIS: Ain't that the truth. OK, Ali. Here is what we're going to do. We're going to sort of drop in from time to time and listen to your conversations with the callers to your radio show.
And thanks for taking a couple of minutes with us. And we'll get back to you a little later. Thanks, Ali.
VELSHI: My pleasure, Tony. Thank you very much.
HARRIS: OK. It's America's financial fallout, you're paying for it. And we're going to have more of your iReports. We'll check back with Ali in just a couple of minutes.
You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: OK. All right. Speaking of riding up, I don't know, do we have a moment just to take a quick look at the Dow? I have got it over at a monitor here.
You want to talk about a bull run? Take a look at this, Mr. Marciano. How is your mutual fund investments looking at this point -- 236 points. Take a look at that. A full-on bull run, what, almost two hours into the trading day.
OK. Pimp your ride green. When it comes to maintaining and upgrading today's eco-conscious cars, not just any corner mechanic will do. Enter Luscious Garage. They will rotate your tires, inspect your brakes, and turn your hybrid into a plug-in vehicle.
Our Chief Technology Correspondent Miles O'Brien reports.
(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN CHIEF TECHNOLOGY CORRESPONDENT (voice-over): San Francisco's Luscious Garage is no ordinary car repair shop. You won't find oily spills on the floor. You will find solar panels on the roof. It's a place where already-green hybrid cars like the Toyota Prius turn even greener.
CAROLYN COQUILLETTE, LUSCIOUS GARAGE: The regular Prius is a gasoline-dependent car. It doesn't get energy from anywhere but the gas tank. What this allows me to do is to get energy through a 110 outlet. So this is like my electric gas tank.
O'BRIEN: Owner Carolyn Coquillette still works on engines, tires and brakes, but these days more customers want plug-in conversions for the option of driving an all-electric vehicle.
COQUILLETTE: I get about three or four calls, e-mails a day, people asking about this particular conversion.
O'BRIEN: The cost is about $7,500 to add and upgrade the batteries in currently available gas-electric hybrids. But the range for an all-electric journey is still pretty limited, about 25 miles to a charge.
But call it a California mindset. It's empowering.
COQUILLETTE: Gas isn't required to move this car anymore. It gives you the flexibility to not have to burn gas if you don't want to. And that's very liberating.
O'BRIEN: So who are the converting clients?
COQUILLETTE: There are some people who are die-hard environmentalists. But there are some customers who come in and they just want to burn less gas.
O'BRIEN: Miles O'Brien, CNN, San Francisco.
(END VIDEOTAPE)
HARRIS: How about this? Paul McCartney in Israel.
(BEGIN VIDEO CLIP)
PAUL MCCARTNEY, MUSICIAN: Who are these people?
(END VIDEO CLIP)
HARRIS: It is a rock concert on shaky ground.
(COMMERCIAL BREAK)
HARRIS: The European Union today joining a growing list of nations banning imports of some foods from China. The 27-nation EU joins Australia, New Zealand and India in pulling contaminated Chinese food products off the shelves. Everything from candy to biscuits being removed right now.
The food containing unacceptable levels of the chemical melamine. The problem with melamine first showed up in infant milk formula in China. More than 50,000 Chinese children have been sickened by melamine-contaminated products. You know, a number of American couples have adopted babies from China.
CNN Medical Correspondent Elizabeth Cohen is with me.
And Elizabeth, I guess the question is, should these parents be concerned right now?
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: You know, we talked to a couple of adoption agencies, Tony, and they said that they are getting phone calls from parents who have just adopted from China. But they say, look, these kids are checked out medically right before they leave China. A kidney problem like the one caused by this formula would show up in that kind of test.
The kids are then tested once they come to the United States. But of course if a parent is concerned, all you have to do is go to your pediatrician and say, test my kid for kidney function.
HARRIS: Right. Well, hang on a second. Is -- and maybe we can clear this up. Is the baby formula in the United States safe? Is there even a hint that it could be contaminated?
COHEN: Safe, safe, safe. That is what we're being told. Baby formula in this country is made in the U.S. It is illegal to sell baby formula made in China in this country.
So the stuff that you go and buy, it's from the United States. It is safe. There has never been any hint whatsoever that it's got melamine in it. It is from the United States.
HARRIS: But here is the thing. We know a number of people buy formula from the Internet to save money. Now, I would imagine there may be some concerns with continuing to engage in that practice.
COHEN: I've got to tell you, I went online just now to try to buy some baby formula.
HARRIS: Yes.
COHEN: Not that I have a baby, but just to see where -- and it was all American formula. I mean, it was Similac and Enfamil and all the American products. And those don't have melamine in them.
So, if you go online and you buy infant formula from China, yes, that's not a good thing. But American formula, whether it's online or in the grocery store, it's fine.
HARRIS: Our watchdog agency on this, the FDA, what is the FDA doing to make sure that none of those tainted products find their way onto store shelves here in the United States?
COHEN: They're going into stores, they're taking products like infant formula made in China -- you know, infant products that could have dairy from China, and they're testing them. They say they have gone into a thousand stores. They have not found anything contaminated.
Now, other countries have taken it a step further, and they're just yanking Chinese products, sometimes without testing them. They're just like, "Made in China," we don't want to have anything to do with it. And the United States, we're taking sort of a different approach.
HARRIS: We just want to put you here every day, because it sounds like, at least for a while, there are going to be developments on this story.
Elizabeth, appreciate it, as always. Thank you.
COHEN: Thanks.
HARRIS: And to get your "Daily Dose" of health news online, just log on to our Web site. There you will find the latest medical news, a health library, and information on diet and fitness. The address, CNN.com/health.
And welcome back, everyone, to the CNN NEWSROOM. Just about half past the hour.
America's money crisis front and center in the NEWSROOM. The markets looking up today on news that a compromise is near on a financial industry bailout.
Congressional negotiators say they're close to a deal. In fact, they're already writing the legislation.
At the White House, President Bush will push the $700 billion plan today. He will sit down in a few hours with John McCain, Barack Obama and members of Congress.
Venting your frustrations, voicing your concerns. Let's check in once again with our Senior Business Correspondent Ali Velshi. He is so key to our CNN money team. And he is fielding calls and questions on his radio show. Ali, what are you hearing?
VELSHI: We are getting a lot of calls with people objecting to the fact that they are being put on the hook for what they think is other people's irresponsible behavior. That is a very big theme here: Why don't you let them fail?
What would happen, Tony, if we would let these banks fail? And that's a big theme that I'm getting. And again, I think if you take the philosophical position that you think we shouldn't be involved in a bailout, one can always defend their own philosophical position.
HARRIS: Because the people who are saying that to you are also saying the markets got us into this, the markets should be allowed to get us out of this.
VELSHI: And they're saying nobody has come to help me out with my mortgage. And I'm getting a lot of calls, Tony, from small business owners. And I want to remind people, small business has been the growth engine of jobs in America.
We have to create a lot of jobs. Small businesses create a lot of those jobs. And they're saying we're getting it in the neck, and no one has come to me to bail me out. And it wasn't even my bad decision.
So, there's such a high level of frustration out there. And I just need to implore people that that is understood. It is valid confusion, it is valid frustration. But please, put that to the side while you weigh the merits of whatever bailout package is presented. And if you still can't stomach it, then you tell your congressman you can't stomach it. But if you can put aside how mad you are about what happened and who got us into it and how you weren't part of that group of irresponsible people, understand that we've not seen something like this before, so we don't want to make the wrong decision because we're angry.
HARRIS: And trust -- come on.
VELSHI: It's very hard to ask people, Tony.
HARRIS: Yes. All right, Ali, maybe we'll get another opportunity to check in with you.
VELSHI: OK. I'll be right here.
HARRIS: OK. Appreciate it.
VELSHI: Thanks, Tony.
HARRIS: A Pittsburgh area couple filing a class action suit against mortgage giant Fannie Mae. The attorney says Fannie knew the company could not survive the subprime melt down, but execs didn't level with the public and continued to take investors' money. The attorney says his clients have lost $140,000 of a $150,000 investment they made in May. (BEGIN VIDEO CLIP)
ROB PEIRCE, PITTSBURGH ATTORNEY: There's accounting information that indicates that the company was not doing that well financially. And when that wasn't made public, now an investor can't make an informed decision.
(END VIDEO CLIP)
HARRIS: Well, the government seized Fannie Mae and Freddie Mac 18 days ago. The new leaders of the companies are on Capitol Hill next hour to outline strategy. And we'll listen in.
The nation's economic slowdown -- just one factor in the closure of a major chain of car dealerships. Bill Heard Chrysler -- or that's Chevrolet -- has shut down its 14 dealerships. The company is based in Georgia and had operations in six other states. It was one of the leading Chevy dealers in the country. The move puts 2,700 employees out of work.
(BEGIN VIDEO CLIP)
MIKE FERINA, BILL HEARD EXECUTIVE: I'm a firm believer that life is 10 percent of what happens to you and 90 percent of how you react to it. So I'm going to go out into the job market and I'm not going to say if I can find a job -- when I find the next job, I'll be able to go back to taking care of my family the way that they expect to be taken care of.
(END VIDEO CLIP)
HARRIS: In a statement, the company cited rising fuel prices, a slowdown in sales, and problems in the banking sector as reasons for going out of business.
The financial fallout, you're telling Congress what you think, and they're listening.
(COMMERCIAL BREAK)
HARRIS: All right. Let's get back to Rob Marciano in the severe weather center.
You know, Rob, when we get some stormy weather, particularly along the East Coast, that usually translates into a whole host of flight delays. I'm wondering if we're seeing some of that today.
ROB MARCIANO, CNN METEOROLOGIST: Just checking up on that. And yes, already, La Guardia -- it's not even noontime, and they are at an hour and a half. So that's only set to increase.
Got a couple things that will affect that. This thing keeps (INAUDIBLE) a little bit to the East. Here is Puerto Rico, Caribbean, Florida, we're hoping that's the on-going trend. A lot of our computers were saying, hey, this thing is going to develop potentially into a hurricane, and then hit the northeast, potentially in places liking New York City or Boston. Indications now are that it will come close and may develop into a tropical storm, possibly a weak hurricane. But it shouldn't at this point take a direct hit. But we'll watch that carefully because obviously it's not out to sea just yet.
All right. This thing right here -- check it out. That has almost what looks to be an eye. The National Hurricane Center says it's not tropical yet, but it looks to be tapping into at least some of the moisture and heat content in the Gulf stream. So that's really hitting the Carolinas hard.
It is producing some delays, as we mentioned today, from New York, Philly, D.C. and Charlotte. Those delays are expected to increase tomorrow, especially across the northeast corridor, the New York metropolitan areas.
All right. Here is the radar now. There's Wilmington and Myrtle Beach. Kind of a pseudo-eye here, certainly rain bands rolling into the coastline. And some of these rain bands have gusty winds, over 30 miles an hour in some cases. Yesterday we saw gusts over 50 miles an hour and big waves from the Jersey Shore across Hampton Roads, down across parts of the Cape Hatteras area as well.
Let's get your mind off that and let's go to San Francisco. Hello, West Coast. Show you a little snow cow (ph) love. There it is, KGO, couldn't be better. This is the time of year my friends --
HARRIS: Isn't it something.
MARCIANO: -- to eat your Rice-A-Roni. No fog, blue skies, good stuff.
HARRIS: That's good stuff, Rob.
MARCIANO: All right, Tony.
HARRIS: Thank you, sir.
MARCIANO: See you buddy.
HARRIS: A little early for Halloween. Motion activated security cameras catch some creepy goings-on at a Kansas City area gym.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Is there a light bulb going out? Do I need to get up and clean the lens? And they just reviewed it and said I have no idea what that is.
(END VIDEO CLIP)
HARRIS: Well take a look here. You see there, the right side of your screen, the lower right. The ghost, watch it move to the left -- to the left -- do you see it there? The white blob showed up on the camera just one night in the dead of night. The gym's owner says the ghost activated the motion sensor nine times that night. Housing down, jobs down. We're checking the stories, the stocks, your 401(k). That's next.
(COMMERCIAL BREAK)
HARRIS: The nation's financial crisis has countless Americans wondering about the fate of their jobs that at one time seemed so secure. Susan Lisovicz is at the New York Stock Exchange with the latest reading on the employment situation, and also a check on stocks.
Hi, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Tony.
Well there is a disconnect with what we're hearing on the economy and what we're seeing on the stock market. Let's just get to the job market right now.
Much worse than expected on jobless claims, rising much more than expected, to their highest level in seven years. Seven years ago is right after the terror attacks in '01. The boost partially due to the effects of Hurricanes Gustav and Ike. But even so, layoffs have sped up in the last couple of months and hiring has nearly come to a halt. At this point the jobless claims, Tony -- we're approaching 500,000. And a lot of economists get worried when they get around 400,000, just to put that in perspective.
Falling home prices and weak consumer spending, just a couple of factors contributing to the poor job environment. Just this morning, Wall Street received word that new home sales plunged more than 11 percent last month, and prices posted their biggest drop on record. Somehow, though, investors are looking past this, focusing instead on reports of progress -- the Treasury's $700 billion bank rescue plan.
Look for yourself. Right now the blue chips are up 220 points, 2 percent. The Nasdaq, the broader S&P 500, all up 2 percent.
And we should mention that Delta Airlines are taking off. They're up 3 percent. Northwest Airlines are flat. Northwest stockholders voted to approve the combination of the two carriers. The merger still has to receive antitrust approval from the Justice Department -- Tony.
HARRIS: OK, Susan. See you next hour.
LISOVICZ: You got it.
HARRIS: Some sound just into CNN. House speaker Nancy Pelosi just offered an update on negotiations to draft the financial bailout legislation. Here is what she had to say just a short time ago.
(BEGIN VIDEO CLIP)
NANCY PELOSI (D), HOUSE SPEAKER: When I see the president today at our meeting later this afternoon, I hope to get some sign from him that sees the need for it. I take you back almost one year when the president resisted a stimulus package for weeks and weeks and weeks and weeks and then finally he realized what any homemaker in America could have told you, the economy was in a downturn. There was need for a remedy, and that would be a stimulus package.
(END VIDEO CLIP)
HARRIS: Well the president will be meeting with members of Congress and both presidential candidates later this afternoon to talk about the progress that's being made to get the deal done.
Let's talk to a couple of congressmen here. The e-mails, the voice-mails, the outrage. Lawmakers flooded with complaints from voters, from you, about the bailout.
With us from Capitol Hill, Congressman Doug Lamborn, a Republican from Colorado.
Congressman, good to see you.
REP. DOUG LAMBORN (R), COLORADO: Good to be here, Tony.
HARRIS: Good to see you.
And Congressman Jim McDermott, a Democrat from Washington State.
Congressman, good to see you as well.
REP. JIM MCDERMOTT (D), WASHINGTON: Good to be here.
HARRIS: Boy, oh boy, you are getting an earful and your e-mail boxes being jammed.
Congress McDermott, let me start with you. Just a bit of a sample of what you're hearing: "I am hoping Congress can find the backbone to stand on their feet and not on their knees before big business."
Can you explain to me what you're hearing? What you're feeling? Americans just do not like the idea, Congressman, of this bailout on its face.
MCDERMOTT: Well this is the 400 that I got yesterday. I got 400 the day before. And we're going to do the same today or more.
The fact is -- the people are saying to us, protect Main Street, don't worry about Wall Street. They drove us in the ditch, don't be bailing them out. Figure out how to deal with the housing crisis and stabilizing the credit market so we can keep small business operating. That's what we're -- that's what I'm hearing.
HARRIS: Well, I'm going to ask you how you're going to respond to that.
Congressman Lamborn, here is a sampling of the e-mails that you're getting: "Those of us who have worked hard and planned carefully for our financial futures do not deserve to pay for the poor management and shortsightedness of these companies."
What's your take on that kind of outrage being expressed?
LAMBORN: Well, that's a hard sentiment to disagree with. Like Representative McDermott, I'm getting hundreds of calls. Of the more than 500 I've gotten, they are running 96 percent against a bailout. And it's hard to argue with people that say we shouldn't give any compensation to these fat cats who created the problem in the first place.
HARRIS: Boy, so how do you move forward? How are you going to take care -- Congressman McDermott, how are you going to take care of Main Street?
MCDERMOTT: Well first of all, you throw the president's plan in the waste basket because it was all about Wall Street. And what you've got now is a negotiation going on between the House and the Senate and the Republicans and the Democrats over the issue of how you protect the taxpayer and how you protect Main Street.
The issue of executive compensation, for instance, the president said that would be punitive. Well, there are a lot of people in my district who want to be punitive to those people. And that's going to have to be part of whatever comes out of here, is some control on how much the people get in bonuses when they go out the door. In Japan it would be committing suicide.
HARRIS: Sure.
Congressman Lamborn, bottomline this for us, does -- people don't seem to really trust the information that they're getting. It does, for many people, feel like a bailout for Wall Street. In the final analysis, in what form do you think this bill will pass? In what kind of shape?
LAMBORN: Tony, the kind of elements I would like to see in this plan would be some free market, conservative elements.
For instance, if you put tax incentives in place, you could get private investors -- like Warren Buffett is one example -- you could get private companies who would jump in at the chance to make a profit and the taxpayers would not be on the hook. You could do a moratorium on tropical capital gains, for instance, and you would not believe the money that would flow into our system, providing all kinds of liquidity.
So I would like to see some free market, some conservative elements in the final plan.
HARRIS: Well, you know what? I'm just happy to see that you guys are standing together and talking about this together and working on this. Perhaps we'll get some language on this later today and get it approved and we can move forward here.
To both of you, thank you for your time.
LAMBORN: Thank you, Tony.
MCDERMOTT: You're welcome.
HARRIS: Right now we're going to get to the White House press briefing, the daily briefing. It's underway right now. And there is White House spokesperson, spokeswoman, Dana Perino. Let's listen in.
(JOINED IN PROGRESS)
QUESTION: ... deal comes out of this, then this was a meeting that Senator McCain arranged. It looks like a big victory for him. Isn't the president participating in politicization?
DANA PERINO, WHITE HOUSE PRESS SECRETARY: I think you could look at it actually the other way, which is -- that to get the politics out of it and bring everybody together at the same time at the same table, that would be a way to help all American people by helping us get this resolved today.
Go ahead.
QUESTION: Do you know what the plans are for the candidates as well as the leaders after the meeting? Are they going to --
PERINO: I don't. I'll try to check. But I don't know.
Go ahead, April.
QUESTION: Dana, can you tell us about the conversation, the phone conversation, with President Bush and John McCain yesterday?
PERINO: Can I tell you about the conversation? I think I already did.
QUESTION: Can you -- can you give us more particulars? Can you tell us when, how, what? Because it's something -- there's something it seems like that's missing from all the of the things that happened, the sequencing of things yesterday. And what I'm trying to find out is how did this -- you're saying it's an effort to bring it all together, to give both sides of the aisle. But there's still a piece missing. It's kind of going back to what Keith is saying, political, making this a political stand. And you guys never even came out before with statements saying, we agree with Senator Obama. Now you're saying we agree with Obama and McCain.
I'm just trying to understand more of the dynamics, the nuts and bolts versus -- I'm trying to see what you're saying, but I'm not getting it.
PERINO: All right. Well, as I said yesterday, and I'll say it again today, Senator McCain called the president shortly before he made his announcement that he was going to be suspending his campaign and that he was going to ask the president to call people together. The president took a little bit of time to think about that, and he reached out -- well the senior staff reached out to the staffs of the campaign to find out what their availability would be, if they would be coming back to Washington and would they be willing and available to meet.
And Senator Obama's team said yes, and then the president called Senator Obama and the meeting was arranged. I don't think there's much more to say than that.
QUESTION: So when you put out that statement, your e-mail, was that approved by the president? Did the president tell you to put that out, had he already had in his mind at that time, look, this is what we're going to do?
PERINO: I'm not a freelancer, April. When I said that the president had invited the senators to the White House, along with the bicameral, bipartisan leadership of Congress, of course I was able to make that announcement --
(CROSSTALK)
QUESTION: -- about Barack Obama and John McCain.
PERINO: I'm sorry.
QUESTION: You specifically in that e-mail talked about Barack Obama and John McCain. That was an unprecedented e-mail from you.
PERINO: I'm making it very clear that we want this to be a bipartisan initiative. We don't think that this is a political event. We're not trying to make it a political event. I will go out of my way to say it again, that we want them to come here to be able to offer their ideas. And if their participation could help us save this American economy, then we're going to do it.
QUESTION: Did anybody know about McCain's request at the White House before he made it, or was it just an out of the blue kind of a shock?
PERINO: Before he called the president and told him? Before he made his announcement? Yes. I mean, no -- McCain called the president, but he did so beforehand.
QUESTION: -- people at the White House first found out about it, there was no discussion with the campaign --
PERINO: I believe so. I don't know if anybody was able -- I believe so. I don't know all the phone calls that happen at the White House. But, Jim.
QUESTION: Are you confident that the White House and Congress could reach a deal of this, without this meeting at 4:00?
PERINO: You know, I'm not going to speculate. I don't know.
QUESTION: Central --
PERINO: At this point, it's water under bridge and it doesn't matter because we're going to have the meeting and hopefully we'll have a deal, as well. QUESTION: But just in terms of characterizing what we've got going on here this afternoon. Is this sort of an essential linchpin?
PERINO: I think it's an important meeting. Members of Congress have been working night and day along with the Treasury Department, the Fed chairman and SEC and the White House to resolve differences, to craft the best possible bill. And this meeting is going to happen and hopefully it will help.
QUESTION: Dana I wanted to follow up on something (INAUDIBLE) was asking you.
McCain's words this morning were the same thing he said yesterday. He said, no consensus has developed to support the administration's proposal to meet the crisis. I do not believe that the plan on the table will pass as it currently stands. That was his, as of 8:45 this morning. That's very different from what you're saying.
PERINO: I'm saying, we have made progress every day and we are closer today, to a conclusion than we were yesterday.
QUESTION: I mean, you're saying you're close to an agreement. He's saying that's not the case. You're no where near one.
PERINO: OK. Then there might be a difference of opinions. But, what I'm telling you is the assessment I have from our legislative affairs people that we certainly don't have a deal yet. There are a lot issues and a very complicated bill that we're trying to do in very a short amount of time.
Just imagine Wall Street and Washington move on very different time frames. Wall Street moves very fast. Washington tends to move very slow. We're trying to ask them to move very quickly on something that is very complicated in which we are asking a lot of the American people. The president talked to the American people about that last night.
One thing that is for sure is that members of Congress from both sides of the aisle recognize the urgency with which we need to move. And so that's why we are starting to have -- develop a framework where we can get to a conclusion.
Go ahead. OK. I'm going to go to Goyle (ph).
Go ahead, Goyle. I think we've exhausted --
QUESTION: As per the prime minister of India to visit to the White House this afternoon, this evening concerns, you said that he came after the (INAUDIBLE) nuclear -- or now the new one, one, two, three --
LEMON: The White House daily briefing under way right now, as you can see. And White House spokesperson Dana Perino taking questions. A lot of questions about the meeting that is going to happen later today with the president and key members of Congress, as well as both presidential candidates. And some questions as to the tick tock and how the meeting was actually arranged.
Questions on how, whether John McCain was actually working closely with the president. It was indicated that John McCain made the call to the president to initiate the idea of the meeting and that Barack Obama was ultimately invited to join that meeting. So a bit of back and forth on that point as to how the meeting came to be.
We're going to take a quick break and we'll come back with more of the day's news right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Paul McCartney is preparing to take the stage in Tel Aviv, Israel, just about an hour from now. His performance coming more than 40 years late when the Beatles was booked to perform in Tel Aviv in 1965. But the government banned them saying it didn't want their music to corrupt Israel's young people. Pro-Palestinian have activists urged him not to perform in Israel.
(BEGIN VIDEO CLIP)
MCCARTNEY: I try and represent peace and bringing people together. So I kind of feel that when I go, it's more a humanitarian thing. It's not political.
(END VIDEO CLIP)
HARRIS: Today's concert is part of Israel's year-long 60th anniversary celebrations.
More on the financial package being worked on right now by Congress, at the top of the hour.
(COMMERCIAL BREAK)
