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Breaking News; Federal Bailout Negotiations; First Political Debate; Paul Newman Dies

Aired September 27, 2008 - 12:00   ET

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

FREDRICKA WHITFIELD, CNN CENTER: Let's check in with Kate Bolduan who is on Capitol Hill. Alan Chernoff is there in New York. Let's begin with you first, Kate. He says he's optimistic, he wants the rest of America to be optimistic, but very few people want to be until they hear about some sort of plan.
BOLDUAN: Yeah exactly and that's something we've been pushing them on and lawmakers say that they're working on. As you heard from Judd Gregg, the principals, there are four principals here, they do plan to sit down this afternoon and you heard it there, he said that they're not going leave until they have an agreement and he hopes to have that agreement at some point. They hope to announce it, McConnell said, the goal is to announce it tomorrow and vote on it on Monday.

So, you heard there, right there, from Senator Judd Gregg, as you said, he had a very dire prediction of what could happen to the markets, to the economy if something isn't done. But at the same time, he says, they are making progress and they are going work toward that end goal of getting an agreement that -- by broad bipartisan support and they can get it out there with an eye towards a market open Monday.

I actually just spoke with Senator Gregg a few minutes ago before he headed into the conference meeting with his colleague and he had a very similar prediction and what he told me is while they're not all on the same page, he said they do seem to be within the same book, he said, which is progress. So we'll eagerly be anticipating and hoping to hear a little bit more once the principals meet this afternoon to really hammer out what kind of plan we're going to be looking at when they come out.

WHITFIELD: And so, Kate, I know a little bit of this is looking into the crystal ball because not everybody on the Hill wants to be forthright about all that they're trying to come to terms with, but is there any way of knowing what the hang up points just might be?

BOLDUAN: Well, the hang up we've been talking about a little bit is the financing. We do know the Democratic leaders that are taking the lead here in the negotiations, they do want to base this play -- they say they have to now, when they talk about time -- base it off the plan that Secretary Paulson came to them with. The $700 billion plan where they buy up mortgages. But the hang-up, part of the hang- up is with the House Republicans who have a problem about putting tax payers on the hook for such a high price tag. They want part of this funding from the bailout to come from private money which would be government-backed insurance plan or something to do with loans that would be privately purchased.

So, they're part of the hang-ups. When I talk to Judd Gregg he said their they could come to some kind of compromise to offer Secretary Paulson some options in financing when he gets this plan from them, but that's of course, what they're going to be talking about this afternoon.

WHITFIELD: All right, Kate Bolduan, thanks so much on Capitol Hill. I know we're going to be checking with you throughout the day as things progress, there.

All right, let's check back in now with Alan Chernoff in New York.

So Alan, when you hear the senators say "dire stress," that potentially this nation could be under dire stress. How much worse could it be?

CHERNOFF: Well, what the senator is describing is essentially what Secretary Paulson, the Treasury secretary described to some key members of Congress two Thursdays ago, right when the market was freezing up and when I say the market, I'm talking about the credit market, the lending market. It just all of a sudden froze up after we had the government came in to rescue AIG. The Treasury secretary and the head of the Federal Reserve were basically stunned, and I can even use the word, they were close to on the verge of panic, that's why they right away rushed together, got over to the Congress and said, guys, we have got to get something done here because this is an economy on the verge of collapse if this situation continues.

That's why they've been pushing so hard to get Congress to move so quickly and, indeed, time is of the essence, here. If we get a big package together it should -- it should calm the markets down and particularly again -- again, I'm not talking about the stock market here, I'm talking about the lending market upon which companies, consumers, everybody depends upon credit, you need to have that grease, that credit grease to keep the economy wheels moving.

WHITFIELD: Yeah, and Gregg underscored that, he's talking about -- we're not just talking about homeownership, we're not talking about lending for a mortgage. we're talking about cars, we're talking about college education and other sort of education. It really is all- encompassing and I'm nervous as an American, I know everybody else is, too, but when you hear folks who know the ins and outside of the economy and they're saying that they're near panic, that's not very comforting to me and to you.

CHERNOFF: And Fredericka, I think this is a key point here. I think part of the problem that the Treasury secretary and the head of the Federal Reserve have had in selling this package, not only to Congress, but to the American people is that, yeah, we have an economy that's in trouble, but it doesn't feel like it's on the verge of collapse. It doesn't seem all that bad and Senator Gregg described a terrible traffic accident. You can almost say it was a stealth accident, but only people who are really keyed in to those credit markets, corporate treasurers, economists, people like that, they saw what happened. All of them have been telling me and I've been speaking with dozens of them over the past week and a half, they've all been saying, they've got to do this. Is there a cry out on the streets on Main Street to do this? Well, no, not really. There's outrage over the fact that we're talking about $700 billion of taxpayer money and hey, that is serious, serious money, here.

WHITFIELD: It really is.

All right, Alan Chernoff. Thanks so much. Of course, we're not done with this topic. We really are just at the very beginning. We're going to delve into this in so many different ways throughout the next hour. And of course, you can continue to follow the cris on Wall Street -- the buyouts, the bailouts, all of that, the political negotiations, as well, all of it at CNNmoney.com. You can just logon right now.

Our very special live edition of YOUR MONEY is coming up in the next 45 minutes, as well -- a look at the bailout complain what lawmakers need to do to save it. YOUR MONEY, 1:00 p.m. Eastern.

OK, and it was front and center during the presidential debate last night. It's the first one, two more to go. So, what's the verdict on last night's face-off? Our senior political analyst Bill Schneider looks at the debate and some viewer reaction.

(BEGIN VIDEOTAPE)

BILL SCHNEIDER, CNN SR POLITICAL ANALYST (voice over): Issue differences? You bet. On topic A, the nation's looming fiscal crisis, Barack Obama placed the blame squarely on the Bush administration's lax policies toward big business. He called it a failure of government regulation.

BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We also have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain.

SCHNEIDER: John McCain blamed corrupt and abusive business practices. He defined himself as a reformer.

JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: As president of the United States, people are going to be held accountable in my administration, and I promise you that'll happen.

SCHNEIDER: Who did viewers believe would better handle the financial crisis? Obama, by a solid margin. The scheduled topic of the debate was foreign policy and that did take up much of the discussion. The biggest difference? Iraq. McCain argued Obama was wrong about the surge.

MCCAIN: Senator Obama said the surge could not work, said it would increase sectarian violence and said it was doomed to failure.

SCHNEIDER: Reporter: Obama argued McCain along with President Bush was wrong about the whole war. OBAMA: You talk about the surge. The war started in 2003 and at the time when the war started you said it was going to be quick and easy...

SCHNEIDER: In the end, viewers thought Obama edged out McCain on the Iraq issue. Bottom line, which candidate did debate watchers believe did a better job in the debate? Obama, by a sizeable margin. Why? Because by nearly two to one, viewers thought Obama was more in touch with the problems of people like themselves.

(END VIDEOTAPE)

WHITFIELD: All right, and Bill Schneider joining us now and that kind of helps me segue into the next topic. While they talk about Iraq and national security they were also asked about what it will be like as president to inherit this financial mess. That's on the minds of everyone these days. So, among viewers or among those polled, does it seem as though people were satisfied with either candidate addressing this issue?

SCHNEIDER: I'm not sure, because the moderator kept pressing both of the candidates to talk about what would have to be cut, what would have to be sacrificed because of the huge cost of this financial bailout and the two candidates were a little bit reluctant to spell that out. They didn't want to go into a lot of detail. Obama said some things would have to be put off for a while like some of the healthcare reforms might take a little longer than he would have initially have hoped and he talked about the tax cuts, there'd be less tax revenue to the federal government. They both talked about the need to sacrifice.

WHITFIELD: Why wouldn't they dance on that topic? Why would they be knowing that is was the firs thing that was going to be addressed right out of the gates. Why didn't they both go for it right away with something concrete?

SCHNEIDER: Because they're talking about painful cuts, painful sacrifices and neither one of them wanted to be the first to say to the country, when I'm president, because of this fiscal crisis, we're going to experience some pain and we're going to have to make sacrifices. Neither one of them wanted to bring that bad news.

WHITFIELD: What is the tone for debate number two and debate No. 3? Now they've shaken off the first one, whatever nerves there may have been, they can shake that off. What might they want to concentrate on for debate two and three?

SCHNEIDER: Well, I think Barack Obama realizes that he can make the case for change, and keep raising the issue of the Bush record for the last eight years. I think John McCain has to do a much better job than he did last night, raising doubts about Barack Obama, essentially warning voters that if they put him in office there could be a lot at risk. He did not do that effectively last night. I thought that a lot of those doubts about Obama were resolved by that performance. If McCain will win this election, the only way he can do it is by making people worry about what can happen if Obama wins. WHITFIELD: All right, Bill Schneider in Oxford, Mississippi, at Old Miss. Thanks so much, appreciate it. I know you'll be hitting the road again because that's what you do lately. You are on the road everywhere to keep our finger on the pulse of America, thanks so much, Bill. Good to see you.

And of course, if you missed good part of the presidential debate last night you'll want to tune in to CNN, 9:00 Eastern tonight and watch it again with John King and the best political team on television, "THE NEXT PRESIDENT: ROUND ONE," that's tonight at 9:00 Eastern, only on CNN, your home for politics.

A huge shift now. Hollywood losing one of its biggest stars. Award-winning actor and director, Paul Newman, has died. His spokeswoman said the 83-year-old Newman died from cancer last night at his home in Connecticut. His success as an actor was only upstaged by his business savvy.

More than 25 years ago, Newman unveiled a line of salad dressings. You probably have one in your cupboard or your refrigerator. And Newman's own foundation Robert Forrester says what started as something of a joke by Newman became a multimillion dollar food company and quoting here, "True to form, he shared his good fortune by donating all of the profits and royalties he earned to thousands of charities around the world, a total which now exceeds $250 million."

CNN's Brooke Anderson looks back at Newman's award-winning acting career.

(BEGIN VIDEOTAPE)

PAUL NEWMAN, ACTOR: Why have I been arrested and then dressed like this?

BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Paul Newman's debut film, "The Silver Chalice" was so bad he bought an ad in the newspaper to apologize to audiences. But it wasn't long before the method-trained actor redeemed himself in 50's fair like "Somebody Up There Likes Me" and "Cat on a Hot Tin Roof" with Elizabeth Taylor.

NEWMAN: You got a thin skin is what you got.

ANDERSON: Newman's most significant leading lady, however, proved to be Joanne Woodward, who starred with him in films like "The Long Hot Summer" and "Paris Blues." She became his second wife in 1958 and their union proved to be a rarity in Hollywood. It lasted not just years, but decades.

In 1961, Newman scored a hit as Fast Eddie Felson, the pool hall hero of "The Hustler." When he updated the role 25 years later in "The Color of Money," it earned him a long-awaited Best Actor Oscar.

In the '60s, Newman reflected the times playing rebels like "Hud" and "Cool Hand Luke."

NEWMAN: What we've got here is failure to communicate.

ANDERSON: In 1969 came "Butch Cassidy and the Sundance Kid," the first of his two pairings with fellow superstar, Robert Redford.

ROBERT REDFORD, ACTOR: You're scared of him.

NEWMAN: Right down to my socks, buster.

ANDERSON: The rambunctious Henry Gondorff in the conmen comedy "The Sting" followed as did some of the darker more nuanced films of his later years such as "The Verdict and "Road to Perdition."

NEWMAN: Who's got a hug for a lonely old man?

ANDERSON: Although he starred in more than 50 films, his real passions were Joanne, race car driving, and his food company, Newman's Own. His salad dressings, spaghetti sauces and a host of other grocery store staples raised millions for worthy causes, including the Hole in the Wall summer camps for terminally ill children and the Scott Newman Center named for his son, Scott, who died of an overdose at age 28.

NEWMAN: Boy, I got vision and the rest of the world wears bifocals.

ANDERSON: An actor's actor, a devoted husband, a creative philanthropist -- Paul Newman was that rarest of things. A Hollywood star you could look up to on screen and off.

Brooke Anderson, CNN, Los Angeles.

(END VIDEOTAPE)

WHITFIELD: Let's talk more about Paul Newman's passing. It really is hard to stomach and hard to grasp. Tom O'Neil, well known entertainment critic and senior editor of "In Touch Weekly" joining us now.

Good to see you, Tom.

TOM O'NEIL, IN TOUCH WEEKLY: Same here, Fred.

WHITFIELD: I mention it really is hard to grasp because for me it was difficult to accept that he was this ill from cancer because he always seemed to be the picture of health by virtue of his food products and the fact that we know how much he was into race car driving, as well.

O'NEIL: Well, he actually said quite recently it's amazing he lived as long as he did considering that he chain smoked. He died of lung cancer, you know, and so he chain smoked throughout most of his life. He loved a good, cold, beer, shall we say, and he had a very vigorous career and he said it's amazing that he endured it all and had a good, full life.

WHITFIELD: And what an incredible, full, life. He reached the apex of Hollywood celebrity, but he turned his celebrity into philanthropy, and he also made every ordinary citizen a philanthropist, too, because of his products, didn't he?

O'NEIL: Yeah, he really did, and he didn't have to do that, remember. He could have taken some of the profits of this vast food empire for himself. He didn't. He decided to get into drug education right after the death of his son, Scott, in 1978. He cared about the terminally-ill children when he set up the Hole in the Wall Gang and not just that, but he cared in a big heartfelt way about other things like helping young actors. You know, he and Joann have the Westport Theater Complex up in Connecticut which is meant to help nurture young plays and young actors and this was the whole story of their lives and careers.

WHITFIELD: Wow, and where do you think it came from? I mean, you say that it's the story of their lives and careers, but did people know in his heyday of act, I'm talking particularly when he was a younger man, did people -- or did he exhibit then this kind of drive and this interest in helping out other people?

O'NEIL: He was always a victorious team player which came from his background. You know, he's from Shaker Heights, Ohio and when he was a young man he had to work in his dad's sporting goods company and he once said what drove him throughout his career was running away from the sporting goods company and he ran all of the way to Broadway and he met Joann, by the way in 1953, when they were both starring -- he was just an understudy, she was the hit of the play "Picnic," William Inge's play, and that kind of started everything and he had a great sense of humor and a great sense of selflessness. When he had the very first film "The Silver Challis" he thought it was so bad that he took out an ad in "Variety" apologizing for the movie.

WHITFIELD: Wow. And Tom, you know, we're looking that the video right now, we're seeing the racetrack behind him and he was one of the voices of the famous animated movie "Cars." he played "Doc Hudson," I know this because this is my son's favorite movie, I think he's seen it once a day at least. And you know, his voice just resonates in that movie and it just really just kind of shows the versatility of this actor, that he could do so much and did so much as an entertainer.

O'NEIL: I know, but Joann certainly didn't like this race car driving bit one bit. She once said -- or he once said quoting her, "She think it is it's the silliest thing in the world and she wishes I would stop it." Well of course, because he took this seriously. He was really out there racing.

WHITFIELD: Wow, what a beautiful couple they were and of course, everyone mourns the passing of this incredible man, Paul Newman. And Tom O'Neil, thanks so much for giving us your take on this man and his legacy. We really appreciate it.

And our own Susan Lisovicz has had her own experience with the legacy of Paul Newman with his Hole in the Wall Gang Camp, there in Connecticut where Tom was talking about, a camp that was primarily for terminally ill children.

Susan, you actually volunteered at this camp and got to know about this project firsthand?

SUSAN LISOVICZ, CNN NEWS CORRESPONDENT: That's right, Fredericka. Talk about a living legacy. Hole in the Wall Gang Camp celebrated its 20th anniversary this year. Hundreds and hundreds of kids have come to this free camp and they have just been kids for a week. They're staffed with medical as well as volunteer people from the healthcare facilities, doctors, nurses as well as therapists and people who are just there as camp counselors like myself, volunteers, and a lot of these children in back as grown ups and they volunteer. It's completely free and it is a beautiful, happy, safe place for children.

WHITFIELD: Oh, that's so nice. And were you ever amazed as a volunteer, maybe the first day when you stepped into the camp, were you ever amazed at the resources and all that was available to make this camp so enjoyable, so complete for these kids?

LISOVICZ: Amazed is just one of the words, I would say. And I'm continually amazed, because you know, it's one person, you know, one person who said, you what? I want to do something. I want kids to get away from it all and just to be with other kids whether they have HIV or leukemia, sickle cell and that's where they are.

And you know, people have asked me, because I've done four years -- I've volunteered four years in a row and they said is that a sad place? That is exactly the opposite of what this camp is all about. It is so happy and so fun. It has every imaginable recreation, you know, whether it's fishing or swimming or gym or crafts, theater, performance nights. It's fantastic and Paul Newman obviously loved it so much that he has a house there. He has a house on the property, very private person. Sometimes he would just wander around. I never happened to see him, but very privately and the kids, of course, don't really know him other than the smiling face on the Newman's Own salad bottles, so they don't really know him as an actor.

And you know, of course, he was a very private and the modest person, so it was really not about him, but, of course, you know, everyone knew that there was one person, one very thoughtful, generous person who started this camp spawned a whole bunch of other camps in the U.S. and around the world.

WHITFIELD: Wow, well it certainly sounds that it was not by chance, but by design that he wanted the kids to enjoy this camp for what it was and not really know about the man who started it all. Thanks so much, Susan Lisovicz, our financial news reporter. We usually see her on Wall Street, this time talking about the Hole in the Wall Gang Camp as a four-year volunteer of the camp founded by this man, the late now, Paul Newman.

And of course, we'll continue to pay tribute to Paul Newman throughout the day and throughout this hour, hearing from people who knew him or in some way were brushed by him.

All right, coming up, we're going to talk about some stormy weather and how North Carolina is in its face.

(COMMERCIAL BREAK)

WHITFIELD: A stormy weekend. Just take a lock at these pictures along the Atlantic seaboard. A system that never quite gained tropical strength has actually smacked the Carolinas and is moving into the New England area, now. People are being warned to prepare for strong winds and heavy rain. One of our iReporters shot this video of the flooding along the North Carolina coast. Pretty remarkable there.

All right, let's check in with our Reynolds Wolf who is in the Weather Center.

Are we talking about flash floods which oftentimes comes that kind of quick deluge of rain?

REYNOLDS WOLF, CNN METEOROLOGIST: Well Fred, there certainly is that possibility. I mean, if you look behind me on this map, got a lot of states we're covering. We're talking in parts of Maine, we have New Hampshire and we have Vermont, even Massachusetts back into Connecticut, Rhode Island and New York. All of the green you happen to see here is parts of a flood watch that is in effect through Sunday. Anywhere from say three to eight inches of rainfall, so this is going to be a big bull's-eye. I guess you could say in terms of a bull's-eye, you might have darts, think of this as being a dart board. You got two darts that are going to be moving in the general direction. One of those will be a tropical system.

This tropical system is Kyle, not really well defined at this time, you got sheer that is in the top half of the system (INAUDIBLE) some scattered showers now moving through parts of Washington up toward New York City.

But if you look just at the center of the storm, it is expected to continue its trek to the North. Currently, the sustains winds are at around 70 miles-per-hour and once those exceed 73 and into 74, then it will not a tropical storm, but rather a hurricane, Hurricane Kyle. And the latest path and forecast we have for the National Hurricane Center brings this storm due north at a fairly quick clip as we get into Saturday and into Sunday and then into Sunday evening. Notice the path brings it right off the eastern seaboard but then possibly making landfall just to the extreme eastern border of Maine, it still could be a very weak hurricane or a very strong tropical storm and at the very minimum it will bring some very rough surf action to the Bay of Fundy and it's also going to be bringing that hurricane-like conditions to parts of the main coast, tropical storm conditions also to the southern part of the coast and that's one-half. The second part is the scattered showers we can see in parts of Philadelphia back into the keystone state of Pennsylvania and northward along Highway 81 near Syracuse, all of that is due east.

So again, Fred, we got those two system, one from what's onshore, one coming offshore, makes for a very wet weekend for much of New England.

WHITFIELD: Yeah, big ol' one-two punch. All right, thanks so much. WOLF: Anytime.

WHITFIELD: Reynolds, appreciate it. We'll check back with you.

All right, well, ordinarily it's a big no-no, but there's nothing ordinary about this presidential race. Tomorrow, a real difference in some churches. A handful of preachers defying the tax man by mixing politics and religion. We're minutes away from that full story.

(COMMERCIAL BREAK)

WHITFIELD: All right, well, this is strange, or is it? A political showdown from the pulpit. Tomorrow, more than 30 ministers will preach politics in church in defiance of tax laws.

CNN's Jason Carroll reports.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN NATIONAL CORRESPONDENT (voice-over): This Sunday's sermon at Bethlehem's First Baptist Church outside Atlanta, Georgia, will be unlike any before. Parishioners will get the traditional mix of moral guidance and an unusual dose of politics from their pastor.

PASTOR JODY HICE, BETHLEHEM FIRST BAPTIST CHURCH: I'll be endorsing McCain, but again, strictly because of -- not his party, but because of where he stands on biblical issues.

CARROLL: Pastor Jody Hice believes Senator John McCain is more in step with conservative Christian values than Senator Barack Obama. For example, Obama supports abortion rights, McCain generally does not. But when Hice endorses McCain from the pulpit, he'll be breaking federal tax law, which prohibits churches and other tax-exempt entities from participating in political campaigns on behalf of the candidate.

HICE: Ultimately, I've got to trust God with that, but again, my role is to teach the Bible and hopefully to be able to do so without the IRS breathing down my neck.

CARROLL: This Sunday, 30 other pastors in 22 states will follow in Pastor Hice's footsteps. The effort, organized by a conservative organization called Alliance Defense Fund, ADF. Its ultimate goal: repeal the IRS' 54-year ban on political endorsements by tax-exempt houses of worship.

DAVID BRODY, CHRISTIAN BROADCAST NETWORK: There is a split within the Evnagelical law community if you will about exactly how to go about changing this law. There is concern about some of these pastors going ahead and in essence, breaking the law.

CARROLL: A group called Americans United for Separation of Church and State opposes what the ADF and some pastors are doing.

ROB BOSTON, AMERICANS UNITED FOR SEP. OF CHURCH/STATE: A pastor's job really is to bring his congregation together, not to divide them along partisan lines or to say that you voted for a candidate x, so you're a better Christian than the fellow next to you who voted for candidate y.

CARROLL: Pastor Jody Hice says he'll risk losing his church's tax-exempt status for the higher good.

HICE: It's not a matter of whether or not a pastor endorses a candidate. The issue really comes down is who is going to regulate what a pastor can say.

(END VIDEOTAPE)

WHITFIELD: OK, so is that what it comes down to? We'll ask our legal guys, Avery Friedman and Richard Herman coming up.

And the high-stakes bailout. What is Congress doing to clean up the banking mess? And what does it mean to you exactly? We'll have some answers you need to hear.

(COMMERCIAL BREAK)

WHITFIELD: All right, the first day after the first presidential debate from Ole Miss and now to Greensboro, North Carolina. You're looking at the running mate of Senator Joe Biden. We understand that Senator Barack Obama will be taking to the podium momentarily there from Greensboro, North Carolina, not wasting any time leaving Ole Miss to hit the campaign trail once again. Of course, when Senator Obama makes it to the podium, we'll monitor his remarks and bring them to you.

All right, meantime, some airlines are having money problems as well, it's not just you and me. If you've been left holding your ticket, Richelle Carey has some tips for you.

(BEGIN VIDEOTAPE)

RICHELLE CAREY, CNN HEADLINE NEWS ANCHOR (voice-over): Bankruptcy court has been a stop for some in the airline industry and many travelers are concerned about being left stranded with a worthless ticket if the airline goes out of business entirely.

BEN MUTZABAUGH, USATODAY.COM: If you're worried about your airline going out of business, it probably is in your best interest to stay with bigger airlines. They can kind of weather the storm and if things get really bad, they can start burning cash instead of having to resort to bankruptcy immediately.

CAREY: Purchasing travel insurance may help put your mind at ease.

MUTZABAUGH: Make sure that it includes coverage for your airline actually going out of business if that's something you're worried about. The one silver lining is by U.S. law, if you've purchased your airline ticket by credit card, the credit card and the airline that you bought the ticket from cannot charge you for any service they do not deliver.

CAREY: Welcome news for many consumers who may have concerns.

MUTZABAUGH: You know, there's no telling who will go out of business next or when.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WHITFIELD: All right, happening right now, some very sad news to report. Legendary actor and philanthropist Paul Newman has died. His spokewoman says the 83-year-old Hollywood legend passed away yesterday at his home in Connecticut. Newman had been battling cancer and we'll have more on the life and the times of this Hollywood icon throughout the day.

And the post-debate spin game is now in very much high gear the day after Senators John McCain and Barack Obama faced off for their first presidential debate. Last night's showdown in Mississippi had McCain challenging Obama's experience and Obama questioning McCain's judgment on Iraq as well as on the economy.

Well, crucial talks on Capitol Hill are taking place this weekend and it's all about your money, lots of it. Live pictures right now of Capitol Hill. Lawmakers there are trying again to reach an agreement on that $700 billion plan to bailout banks and other financial institutions strapped with bad loans that threaten to derail the economy. Congressional leaders say they are making progress and they hope to strike a deal this weekend.

So, let's talk some more about this. At the top of the hour, we heard from Senator Judd Greg who said that this country just may potentially be under dire stress if they don't reach some sort of agreement right away. So, we decided to call upon one of our economists and professors who's in the area at Georgia State University, Rajeev Dhawan.

You're an economist, you study this. You know, when you hear on the surface the kind of dire straights this country is in, don't you wonder that perhaps this country knew of these problems years ago, if not months ago, but you know, the low totem pole Americans, we're just hearing of this crisis right now. Should the bleeding have been stopped long ago?

PROF. RAJEEV DHAWAN, GEORGIA STATE UNIV.: I think you have to use a metaphor to, you know, describe this situation. I call the situation we, the patient, the American economy. We're a big consumer of housing. We overconsumed on it. So, the first effect was that ready (ph) to slice (ph) the lifeblood of the economy. And within the bloodstream, there is cholesterol and the cholesterol is needed for regeneration of the body cells and other things and the banks are in markets, are like the liver which clean it out.

So, if there's too much, they clean it up, it's too little, they put more into it. It wasn't functioning very well. They tried over the last one year different medications, it didn't work. We had a lot of hiccups in between, seizures and all that. And now, they are saying to us, look --

WHITFIELD: Well, what were those medications? I mean, as far as I can remember, people have been able to borrow as much as they've wanted to.

DHAWAN: Right. We were able to eat or do whatever we wanted to do without any limits and you know, excessive consumption of anything is bad. So, we are now paying the price to some extent and what they're now saying is that, hey, patient, we have found problems in your system, now one of your arteries is clogged and give us the power to go in, not -- medication won't do it. We have to now go in and do the surgery and it's making us nervous because we have to sign the form now.

WHITFIELD: So, what are you hoping to hear from Congress this weekend? They're meeting this weekend. Members of the Senate are saying you know what, as early as tomorrow, if not the latest maybe Wednesday. We're going come to terms, we're going meet on something and help fix this problem, if not revive the economy. Do you have a lot of faith that that can actually happen in this short turnaround? I mean, what's been the rush?

DHAWAN: It has to happen. It has to happen because the entire world is watching. They are saying, look, your system --

WHITFIELD: But if it doesn't happen by Monday, then are we saying that every financial institution in this country is going to collapse? All of our banking institutions are going to dry up of funds? What is the urgency?

DHAWAN: There is a small possibility of that, but that's not the main thing. We had one of the biggest banks go belly up on Friday and somebody else was there to buy it, but there are not too many healthy banks left around. Everybody is a walking wounded one and there are going to be more bank failures. The next wave is going to come when the construction loans which are going sour have to be written off and then, where will the money be?

Because right now, the rest of the world is saying it is your problem. You clean it up, we have no money to help you out and literally, there is no money left to help out.

WHITFIELD: Wow. Well, Rajeev Dhawan, we know you're gracious enough to stick around. You're going to join us again at the 4:00 Eastern hour of NEWSROOM. We're going to talk about something that I thought was quite striking.

The front page of "The New York Times" today, the SEC chairman Christopher Cox making an admission that perhaps the Oversight Committee should have done more sooner, particularly when we talk about Bear Stearns. They knew that there were problems well before last March when it collapsed. It's interesting, his words being quoted that "the Oversight Program was fundamentally flawed from the beginning." So, I want to get your take on that and much more straight ahead because we all want to know, you know, is our money safe in the bank. We want to know if we're able to still take out car loans, buy homes, all of that. We're going to try to address all of that at 4:00 Eastern time.

Rajeev Dhawan, thanks so much. Appreciate it.

DHAWAN: Thank you. I'll be here.

WHITFIELD: All right, well, Hurricane Ike, yes, we're still talking about it two weeks after it hit because it is still putting a huge pinch on drivers not just in Texas, but across the country in need of an energy fix.

(COMMERCIAL BREAK)

WHITFIELD: All right, less than 13 minutes away at the top of the hour, a live edition of "YOUR MONEY" hosted by our Ali Velshi right there who's joining us live to talk about what's on tap as Congress -- as members of Congress try to battle out throughout the weekend to find some sort of compromise bill. What do you have on tap?

ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Fred, I don't know -- you remember, go back in your memory years and years ago, you and I used to spend lazy weekend afternoons chatting on TV about money and what people should do.

We're not in Kansas anymore, Fred. And now, we are in an urgent situation. As your last guest said, this doesn't end whether or not we have a bailout. We probably will at some point this weekend. But this doesn't end and what most people are worried about is what to do with their 401(k)s. Do they add to them, do they take them out? Do you buy stocks, do you take them out? Do you go to money markets or CDs or bank accounts? Is your bank account even safe?

And guess what? These questions are not going away, so if they are on your mind, in about 15 minutes, we're going to start taking phone calls on a special live edition of "YOUR MONEY." You tune in, you'll get the phone number, you can send us messages on Twitter.

We have a remarkable panel of experts who can break this down soup to nuts about what is likely to happen in the broader economy and most importantly what happens to your -- as you just asked, your loans, your mortgages and most importantly, Fred, your job. There is a major connection between your job and this bailout for Wall Street.

So tune in, ask the questions that you want to answer and we will get them answered for you, Fred.

WHITFIELD: Good. Lots of questions and we know you'll have lots of answers.

VELSHI: Yes.

WHITFIELD: All right, Ali Velshi, thanks so much. "YOUR MONEY" coming up at the top of the hour.

Meantime, the first day after the big presidential debate last night from Ole Miss to now Greensboro, North Carolina. Let's listen in to Senator Barack Obama.

(JOINED IN PROGRESS)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: ...that's why he's been shifting solutions these last two weeks looking for a photo- op and trying to figure out what to say and what to do. He doesn't really know what to do. Hasn't been clear what to say.

Well North Carolina, I know what we need to do. We need to stop giving tax cuts to corporations and CEOs on Wall Street and start standing up for families on Main Street. We need to turn the page on the failed policies of the last eight years and finally put working people first and that's why I'm running for president of the United States of America.

WHITFIELD: All right, you've been listening to Senator Barack Obama there from Greensboro, North Carolina, almost kind of summarizing some of the points that he made during last night's presidential debate. Two more presidential debates to go and just roughly five weeks and counting before the big election day.

Much more in the NEWSROOM right after this.

(COMMERCIAL BREAK)

WHITFIELD: All right, big week in politics, but in legal cases as well and we want to touch on a few of those cases. Joining me now, our regular legal eagles, Avery Friedman and Richard Herman. Good to see both of you.

And before we delve into those cases, Avery, I want to begin with you because I know you share a certain Shaker Heights, Ohio connection with the now late Paul Newman. All of us grieving the loss of this 83-year-old icon.

AVERY FRIEDMAN, CIVIL RIGHTS ATTORNEY: Yes, sure do. For years, I've been telling my law students you got to go see "The Verdict," one of the classic Paul Newman movies. But in public interest, I got to tell you, there's usually no money and out of the blue, this is about a decade and a half ago, a check arrives from the Paul Newman Foundation supporting a public interest federal lawsuit. What an amazing event. Totally unsolicited. What an amazing, amazing man.

WHITFIELD: Wow. We've heard from a few people who've talked about how unassuming he really was and how ...

FRIEDMAN: Right.

WHITFIELD: ...you know, as a philanthropist, he would do a lot and really didn't want to take a whole lot of credit.

FRIEDMAN: Right. WHITFIELD: All right, well, let's talk about some of the legal cases that we know have your twisted legal minds going this morning.

RICHARD HERMAN, CRIMINAL DEFENSE ATTORNEY: Twisted?

WHITFIELD: Well, let's begin with the case that our Jason Carroll, he profiled a piece, talking about how preachers in about 22 states are going to be taken to the pulpit tomorrow and talking about politics. In fact, taking it ...

FRIEDMAN: Yes.

WHITFIELD: ...further, actually making endorsements on this presidential race. But Richard, aren't they breaking the law?

HERMAN: I don't know if they're breaking the law, Fred. I mean, the religious right -- well --

WHITFIELD: Really? Because, you know, tax-exempt entities are not supposed to talk politics and that's what these churches are, aren't they?

HERMAN: Well, I think they're -- I mean, they're speaking -- they're giving sermons, they're speaking to the congregations. I think that they have a right to discuss current events, politics, with their audiences and that's -- look, the religious right is a powerful voting block, Fred.

WHITFIELD: Yes.

HERMAN: Very powerful.

FRIEDMAN: But the bottom line is the religious left also does the same thing. Bottom line is I love this constitutional battle, Fredricka. I think this is a little bit --

WHITFIELD: This is your thing!

FRIEDMAN: ...of civil disobedience. Yes. I think this case can head to federal court because ...

WHITFIELD: You do?

FRIEDMAN: ...they're going to disregard a federal regulation, they're tax exemption will be challenged and its heading to the federal court under the first amendment.

WHITFIELD: Wow. And the fact that, you know, some of these -- well, do you wonder whether some of these churches are doing this on their own volition, these pastors, or might there be any investigations that would suggest that either one of these campaigns, Richard, because I know how your head thinks, you know, kind of doubtful of everyone out there. Richard, might any of these campaigns be linked to some these churches who are saying we're going to, you know, profess the name of Obama or McCain?

HERMAN: What an explosive bombshell if that comes out, Fred. Wow.

WHITFIELD: It would.

HERMAN: I'd love to see that.

FRIEDMAN: But it's still freedom under the first amendment.

WHITFIELD: Yes.

FRIEDMAN: Religious expression, freedom and I think whether you're right or left, I love the civil disobedience. I think it's great that they're doing this.

WHITFIELD: OK, well let's talk now about the O.J. Simpson case because I know that always gets your blood boiling, both of you. All right, well, now we're talking about some witnesses that kind of backfire on the prosecution. Richard, how often does that happen?

HERMAN: Some witnesses? Listen, Fred --

WHITFIELD: OK, all of them.

FRIEDMAN: No, no way.

HERMAN: The whole prosecution case -- the prosecution case is ridiculous. There are so many holes in it. And if this guy is not acquitted, I'll tell you the truth, it's outrageous. When these -- when one prosecution witness who's a bad guy says another prosecution witness is a worse bad guy, come on. I mean, these guys are horrible.

WHITFIELD: Yes.

FRIEDMAN: Well, ultimately -- ultimately, the jury makes the decision. Give credit to Judge Judy Glass (ph) who's done a very workman-like job.

WHITFIELD: Yes.

FRIEDMAN: Bottom line ...

WHITFIELD: Tough job.

FRIEDMAN: ...the gunmen are testifying, defense tried to beat them up. I think O.J.'s in trouble.

WHITFIELD: Wow.

HERMAN: Fred, it's the credible evidence ...

WHITFIELD: OK.

HERMAN: ...the credible evidence the jury has to ponder. The credible evidence.

FRIEDMAN: That's right. And they make that decision.

WHITFIELD: Oh, well, I know we are just at the beginning of discussions on this case because it's far from over.

Avery and Richard, thanks so much. Always good to see you.

FRIEDMAN: Good to see you.

WHITFIELD: Sorry our segment (ph) was very short this time, a lot going on.

HERMAN: Have a good day, Fred.

FRIEDMAN: Take care.

WHITFIELD: All right, have a good weekend.

All right, we'll be right back with more of the NEWSROOM.

(COMMERCIAL BREAK)

WHITFIELD: All right, this country's financial crisis is certainly no laughing matter, but some of the funny pages are trying to find the lighter side and wanted to share them with you.

Take a look at this one from the "Columbia Daily Tribune" of Columbia, Missouri. All right, well, this is a line. It says there, "Hey, I'm confused! Is this a line for the new iPhone or is this a run on a bank?"

All right. And then, this cartoon coming in from "St. Louis Post Dispatch" showing Wall Street in 1980, yelling at the government to get off its back. Then in 2008, yelling "Where's my government? Who's got my back?"

All right. Just some of the views of the lighter side of the financial crisis which is the focus of "YOUR MONEY" coming up right now. A special edition live, all about your money and what to do with it.