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Where the U.S. Stands in the Global Market; Alaska's "Road to Nowhere"; Joe Biden's Earmarks for Delaware Projects

Aired September 28, 2008 - 18:00   ET

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

ANNOUNCER: This is "CNN Breaking News."
DON LEMON, CNN ANCHOR: Hello, everyone. I'm Don Lemon at the CNN world headquarters.

A major breakthrough on a mega bailout. The fate of the proposed rescue of the U.S. financial system is heading for a vote in Congress. Tough words from House Speaker Nancy Pelosi just moments ago.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D), HOUSE SPEAKER: The party is over. The era of golden parachutes for high-flying Wall Street operators is over. No longer will the U.S. taxpayer bail out the recklessness of Wall Street.

(END VIDEO CLIP)

LEMON: And it is as big as advertised -- up to $700 billion. And on paper it's 106 pages long.

Among the details in fine print, the $700 billion would be handed out in stages with $250 billion available right away. There would be limits on salaries paid to executives who take part in this bailout, a key concession to some members of Congress. And a new board would be created to oversee how the massive money gets spent.

We have the bailout covered from every single angle from Washington politics to the global marketplace to the rest of us living our daily lives.

CNN's Brianna Keilar is on Capitol Hill and our Kathleen Koch is at the White House. Ali Velshi is working the story for us from New York and CNN's Richard Quest is in Los Angeles, keeping an eye on the world markets which begin Monday trading in just a few hours.

But we want to start at the center of it all where members of Congress cut the deal late last night and early this morning.

Brianna Keilar has been working the story around the clock from Capitol Hill Rena and she joins us now.

Brianna, walk us through this plan. What's in the legislation?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, first, I should tell you, Don, a few more pages than you just said. It's actually 110 pages in this piece of legislation that House Speaker Nancy Pelosi said will go to the floor tomorrow.

So as you said, $700 billion in this bailout package. $250 billion available to the treasury secretary from the get-go, and then curbs on CEO pay, especially golden parachutes and how much corporations can deduct when you're talking about those hefty annual salaries for those CEOs, as well that oversight board.

Let's talk a little bit more about that. The Housing and Urban Development secretary will be on that, the Federal Reserve chairman, the head of the SEC, and Federal Home Finance Agency director who oversees Fannie Mae and Freddie Mac.

So you're talking about four key players who have either orchestrated this rescue or who are very in -- important when it comes to getting the housing market to rebound.

There's another thing as well. Under certain circumstances, the treasury secretary would have the option to take an ownership stake in some of the corporations that participate in this bailout.

That's important because this is considered a taxpayer protection, Don, where if those corporations, after the bailout, profit, presumably the taxpayer would be able to reap profits as well.

LEMON: All right, CNN's Brianna Keilar joining us now from the nation's capitol.

We appreciate that, Brianna.

Senior business correspondent Ali Velshi is in New York.

Ali, help us understand what's in this draft bill and what it means for us and it means for the markets, really.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, you know, markets -- Richard will tell you in a couple of minutes about what we're expecting to see in the markets.

The funny thing is international markets, as Richard will tell you, are not concerned at all with the things that are affecting U.S. taxpayer. They just need the credit freeze that is all over the world to come loose.

And that might be coming loose as we speak right now because there seems to be broad agreement that, on Monday, the House will vote on this. On Wednesday the Senate will vote on this and there are enough votes to overcome the holdouts.

But I should tell you, what isn't in there is there have been discussion about what happens to people with mortgages. Where is the bailout for Main Street America?

And there's language in there that talks about causing the secretary of treasury to do what he can to help -- to force those banks that are benefiting from this bailout to somehow help people out who are in foreclosure. That language is not specific and it doesn't sort of outline whether there will be any help. It's more about if you're helping Wall Street out, make sure you push them to help Wall Street -- to help Main Street out.

What is you're going to see, Don, is you're going to see the availability of money at every level loosen up, whether that's companies or your mortgage or your student loan or whatever you need.

$250 billion of this is going to be available immediately. But every $50 billion will have to be accounted for to Congress.

There are curbs, limitations on CEO pay for companies that are bailed out. But, honestly, Don, that's been sort of a red herring the whole time and it's really not going to have any material effect except in principle.

And this idea that Brianna just mentioned that you -- the government may be able to buy stock in some of these companies that they bailout, so that if they do end up recovering, as a result of this bailout, taxpayers might make some money on it -- Don.

LEMON: All right, CNN's Ali Velshi, our senior business correspondent, appreciate it, Ali.

Meantime, President Bush was in touch by phone last night with House Speaker Nancy Pelosi. As we learn more details, let's bring in CNN's Kathleen Koch.

Kathleen, any reaction from the White House yet?

KATHLEEN KOCH, CNN CORRESPONDENT: Don, no official reaction. But we are expecting something, a paper statement, we're told, from the president sometime within the hour reacting.

Obviously, the White House may not be keen on the way the Speaker Nancy Pelosi described the whole process saying, well, this was the administration's problem. This was their plan. We managed to improve it.

There is, obviously, though, a sense of relief that it has come to this point that a plan has been put down on paper. (INAUDIBLE) the president has been pushing this very, very stridently and forcefully himself, having the -- an address to the nation earlier where he made it clear how important he believed this was.

The treasury secretary himself and White House and Treasury Department staffers being involved in these negotiations for days and then into the wee hours of this morning crafting this plan. And the administration had to give way.

It had to give way on the curbs on executive salaries, on the oversight board, on breaking the program down into sections instead of giving the treasury secretary the authority for all $700 billion in expenditures at once. And then this requirement that, if after five years the program isn't making any money, that these firms themselves have to make up that -- those losses.

But again, they are not celebrating here, because this is something the president said himself he didn't want to do. He said he's a market guy. This was against his instinct to go for it.

But right now the Treasury Department, the president believe this is the best solution to fix our fiscal woes right now -- Don.

LEMON: Thanks, Kathleen.

The two -- presidential candidates are weighing on the proposed rescue plan but vary in degrees of support.

Barack Obama says he expects he'll be in favor of the final draft assuming it meets several key requirements.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I'm going to be reviewing the language over the next day to make sure that those provisions actually stick.

Ultimately, I believe that we have to get something done. And so if I feel that those are meaningful provisions that provide some constraints on how the treasury operates and this is not going to be welfare for Wall Street, then my inclination is to support it because I think Main Street is now at stake.

(END VIDEO CLIP)

LEMON: And Republican John McCain describes the proposal as something that all of us have to, quote, "swallow hard and go forward with." He also says that while it's the only option available it won't solve all of the problems facing the economy.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: This is not going to, all of a sudden, wow, everything is turned around, everything is going to be fine now. We've got a lot of other difficulties including the continued decline in home -- in housing -- home values.

That has to reach a point where it's stabilized and, again, hopefully we'll go up in America.

GEORGE STEPHANOPOULOS, ABC NEWS: You made the...

MCCAIN: But let's look at this -- let's look at this particular proposal. Let's get it through the Congress and the Senate and then sit down and see what else needs to be done before we say got to do this, this, and this as well.

(END VIDEO CLIP) LEMON: When it comes to the U.S. economy, of course, the whole world is watching. Capitol Hill negotiators said they wanted to get this plan on paper before the start of Monday's trading. Well, they made it just in time.

Traders in Sidney and Tokyo will head to work in less than two hours. Singapore opens at 9:00 Eastern and Hong Kong 9:45. Zurich, Paris, London and Frankfurt will begin trading at 3:00 a.m. Eastern Time.

CNN international correspondent Richard Quest is tracking world market reaction tonight.

Richard, the markets are starting to open for business. Any way to judge how this might affect international trading?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: $250 billion initially will buy you an enormous amount of lubricant for world markets. And that's what we're going to see.

We're going to see about some sort, certainly starting in Auckland which the markets opens first and then across to Sidney. The markets to keep your eye on. The Japanese market is always crucial. A very important market because that country has had experience of severe economic problems that's lasted for many years.

Also keep a watch on Hong Kong. It's a market that is very much in tune with the U.S. equities markets. And then keep an eye on Europe, because, particularly London, the direction London gives in the hours ahead will be crucial in determining whether or not long-term this has done the deed. Has this restored confidence?

But bear in mind, as we're hearing again and again from all my colleagues, this is a deep and dirty mess. And what we'll be looking at in the hours ahead is that each of those individual countries gets the drains up themselves and starts to see what's murky and what needs to be put right.

Today I can tell you, for instance, in the United Kingdom a savings and loan by the name of Bradford & Bingley, the B&B, that has had to be nationalized, taken into government ownership by the UK government.

LEMON: All right. Richard Quest. I'm glad you mentioned the coming hours because Richard is going to join us a little bit later on because we're getting close to the open of those foreign markets.

Thank you very much, Richard.

We're working all angles of this story bringing you the latest developments as they happen all night long here on CNN.

And some of your thoughts. Go to ireport.com or to twitter.com/donlemoncnn, and we'll try to get some of them on the air.

Meantime a major typhoon lashes out at Taiwan. Blowing people away. And a standoff in the Indian Ocean, Somali pirates hijacked a ship packed with Russian guns and tanks. (COMMERCIAL BREAK)

LEMON: It is as big as advertised, up to $700 billion. And on paper it is about 110 pages long. Among the details in fine print, the $700 billion would be handed out in stages with $250 billion available right away.

There would be limits on salaries paid to executives who take part in this bailout, a key concession to some members of Congress. And a new board would be created to oversee how the massive money gets spent.

Live coverage and all the developments as they happen right here on CNN.

A terrible and tragic helicopter crash that killed four people early this morning in suburban Washington, D.C. The medevac chopper was transporting two car accident victims when it went down in Ritchie, Maryland. One of the patients was a sole survivor.

A capsule carrying three Chinese astronauts safely parachuted back to earth today. China's first ever space walk highlighted their three- day mission.

And check out this video from the capital of Taiwan. Typhoon winds of up to 140 miles an hour battered the island today knocking over people and vehicles. Yes, the wind was that strong. This was the fourth major storm to hit Taiwan this year.

CNN's Jacqui Jeras joins us now from the CNN severe weather center to tell us what's going on in the radar here.

But, Jackie...

JACQUI JERAS, CNN METEOROLOGIST: Yes.

LEMON: Wow, those winds are just horrific there.

JERAS: Incredible pictures. You know this was a super typhoon, you know, equivalent of at least a category 4 so this was no wimpy storm. And yes, you'd think, you know, after having three other ones to hit the island that they might have been a little bit more careful about that.

There you can see the track of the typhoon and it should be weakening a little bit. But, you know, these people can't evacuate from that island so they don't have those kind of options there. And one of the biggest problems is the terrain here, very mountainous, so there's a lot of mudslides and a lot of flash floods. So a devastating.

It has been very active, by the way, in the Pacific. They have had about 14 named storms. Here we've had 11. The number 11 was Kyle and it's still a hurricane right now. Center of circulation down here, category one hurricane, maximum winds of 75 miles per hour.

And this is a really fast-moving storm. So landfall just hours away. It's going to be moving up towards Nova Scotia and weakening. In fact this is starting to take on some more colder core characteristics. And really, just, you know, based on the satellite picture alone, it doesn't even look like a tropical system anymore.

So becoming extra tropical but we still have that threat of the wind and rain. Still plenty of rain going on across much of New England. Heavy showers and flooding. Three to six inches has been widespread in southeastern parts of Maine.

We've got about, maybe 12 hours to go and things are going to be looking a lot better across the northeast -- Don?

LEMON: A cargo ship carrying Soviet made tanks and other weapons bound for Kenya has been seized off the African coast by Somali pirates. The U.S. Navy is on the scene and a Russian warship is en route.

CNN's David McKenzie joins us now from Nairobi with the very latest.

David, I understand that this story within just the last couple of hours has turned tragic.

DAVID MCKENZIE, CNN CORRESPONDENT: Well, the dramatic standoff has, in fact, turned tragic, as you say, Don. We've learned that one of the crew member has, in fact, died. They were kept under hot and difficult conditions in that massive cargo ship. It's now in a tense standoff off the coast of Africa.

(BEGIN VIDEOTAPE)

MCKENZIE (voice over): Very little is stopping the scourge of the seas, even an impressive coalition naval force of Somalia unable to slow the attacks.

Somali pirates have attacked dozens of ships this year and hijacked 25. But it's number 25 that puts a danger into even stalker relief.

This photo taken from a U.S. destroyer shows pirates in small skiffs holding the massive ship MV Faina hostage. The ship has the deadliest of cargo. It was bound for Kenya with 33 Soviet made T-72 tanks, like these, and packed with small arms, grenade launchers and ammunition.

A tense standoff is under way. The U.S. Navy says the USS Howard destroyer, part of the U.S. Navy fifth fleet, is in visual contact with the captured ship and monitoring the situation. And now the Russians are sending a missile frigate directly to the Horn of Africa.

The captured cargo's crew consists of Ukrainians, Russians and a Latvian. The biggest fear for the coalition is that the weapons could help fuel Somalia's conflict. And with such dangerous cargo of the coast, the successful release of the vessel is paramount.

(END VIDEOTAPE)

MCKENZIE: Well, Don, you know, the -- amazing thing when you see those photos, what struck me was how tiny those pirate vessels, those skiffs are, next to that massive cargo. It's almost -- inconceivable that with a couple of RPGs and some rifles they could take on such a massive ship carrying so many weapons.

And we've heard from villagers on the ground there, on the coastline that they, in fact, can see the ship surrounded by coalition vessels. Now you have a Russian missile frigate going there.

So the small handful of pirates are taking on the world's navy and keeping them at bay at this stage -- Don?

LEMON: I've got to ask you, with this ransom money that these pirates are getting, what is the concern level about what they might do with this money, David?

MCKENZIE: Well, there's a lot of concern from policy experts, from experts in terror and terrorism issues here in the Horn of Africa and across the region.

I've spoken to experts who've said that, you know, the big issue is not so much the cargo vessels that have been taken. They are often the crews released unharmed. But the issue is they are spending hundreds of thousands, if not millions of dollars, in ransom.

We got to speak to someone who said that they would not tell us how much they spend. The problem is can that money fuel terror.

LEMON: David McKenzie, thank you for that.

Lessons of history.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Everybody closed. Banks was closed. No money. People was starving.

(END VIDEO CLIP)

LEMON: Survivors of the Great Depression speak out on the current financial crisis.

(COMMERCIAL BREAK)

ANNOUNCER: This is "CNN Breaking News."

LEMON: Yes, this is a big deal today here on CNN and throughout the world. A $700 billion bailout plan. And on paper it is about 110 pages long.

We want to give you some of the details in fine print now. The $700 billion would be handed out in stages with $250 billion available right now. There would be limits on salaries paid to executives who take part in this bailout, a key concession to some members of Congress that was. And a new board would be created to oversee how the massive money gets spent.

Live coverage and all the development as they happen right here on CNN.

Well, the current financial crisis is raising all sorts of ominous references to the one that happened nearly eight decades ago.

Our Colorado affiliate, KUSA, talked to a few people who lived through the Great Depression. And to them, this current crisis is nothing.

(BEGIN VIDEO CLIP)

INA HANSEN, GREAT DEPRESSION SURVIVOR: And my kitchen was really quite updated because I had a kitchen pump. But we bathed in an -- aluminum tub.

LUELLA TAYLOR WILLICH, GREAT DEPRESSION SURVIVOR: Well, I kind of -- I had a pump also, but we could drink the water.

UNIDENTIFIED MALE: Denver was feeding people who were just -- starving. And my folks helped furnish beef, meat, to feed the poor people here in Denver.

UNIDENTIFIED MALE: Every month pretty near we was tickled to death to get a pound of hamburger to cook.

UNIDENTIFIED MALE: I could remember my father coming home and telling me everything had crashed.

UNIDENTIFIED MALE: Everybody broke. Banks was closed. No money. People was starving.

UNIDENTIFIED MALE: Well, it's scary.

UNIDENTIFIED FEMALE: They buy on credit cards, max them out, then they can't pay for them. So there you are. You're in bankruptcy. Why would they have the mortgage if they couldn't afford it?

UNIDENTIFIED MALE: Well, I have enough so if something happened tomorrow, I'm not going to starve to death.

UNIDENTIFIED MALE: I don't think we'll ever have the depression that we had in 1929. United States is too involved with the world.

(END VIDEO CLIP)

LEMON: Words of wisdom so take note.

All right, you can say, when we get back to this current crisis, that Fed Chairman Ben Bernanke predicted the current financial crisis on Wall Street 20 years ago.

Well, back then Bernanke was an economics professor who helped develop a computer model known as the financial accelerator. His partner in the project was New York University's economic professor Mark Gertler.

Hi, Mark.

MARK GERTLER, NYU ECONOMIC PROFESSOR: Hi.

LEMON: Professor Gertler joins us now.

GERTLER: OK. So how accurate was this financial accelerator in predicting what's happening now, this current crisis?

Well, I think it can give you a very good perspective on what's going on now -- on now. It explains why credit spreads rose following the subprime initial onset of the subprime crisis and how those rising credit (INAUDIBLE) caused a slow down in spending and employment.

LEMON: So it did predict this? Did it predict it to as drastic as it turned out to be?

GERTLER: Well, basically, yes. Now what the framework also suggested was that the Fed should have responded. And that's exactly what it did, it reduced interest rates, in injected and liquidity, and that's something that did not happen during the Great Depression.

That's why, thus far, it's been contained. But more actions are, obviously, necessary.

LEMON: OK. We know that what they have put in place, what they would like to get passed, has been put online. I don't know if you've had a chance to read it or look over it. Have you?

GERTLER: I have some. I've seen some of it.

LEMON: OK. Then good. Then if you can, with the specifics that you know, will this help according to the financial accelerator?

GERTLER: Absolutely. The problem in the banking system now is shortage of capital relative to assets, which is making it difficult for financial institution toss raise funds. And that's why credit costs are so high.

What this policy is going to do is help raise that capital-asset ratio, partly by the government buying assets and partly by injecting capital. And that's exactly what the theory suggests the government should be doing.

LEMON: So, obviously, this is mostly mathematics that -- some sort of equation that predicts this? Is that what -- is that we're talking here?

GERTLER: Well, it's a massive -- well, it's economics and we use the mathematics to confirm our logic.

LEMON: OK. Ben Bernanke and you invented this 20 years ago. Had we known this is a crystal ball of sorts, we should have paid more attention to it.

Thank you, Mr. Gertler.

GERTLER: Thank you.

LEMON: We appreciate you joining us today in the CNN NEWSROOM.

GERTLER: Thank you.

LEMON: All right. Well, the deal is done, now the real work begins. Adding up the cost to you and the impact on the global economy. We're working all the angles of this story, bringing you latest developments as they happen.

Live pictures of the capital now and we will stay there and on this story until it's in.

(COMMERCIAL BREAK)

DON LEMON, CNN ANCHOR: All right. Back to the breaking news that happened just moments ago.

Just a short time ago, congress released details of a massive bailout bill. It would put into play a $700 billion attempted government rescue of the U.S. financial system.

Here is what's in that bill. The $700 billion would be distributed or disbursed in stages with $250 billion made available to the Treasury immediately. Curbs would be placed on the compensation of executives at companies that sell mortgage assets. Those so-called golden parachutes would be limited to $500,000; that's down from millions of dollars. An oversight board would be created that includes the Federal Reserve chairman and the Housing and Urban Development Secretary.

Another highlight here; the bill would allow the treasury the option of taking ownership stakes in participating companies under certain circumstances.

All right. Let's get back to the markets now. We're just hours away from world markets being opened for business.

Our international correspondent Richard Quest joins us again.

Richard, we're talking about bank failures, about bailouts. Where does the U.S. stand on the world's financial stage and will this help now that there may be some parameters in place?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: I think you've just got to refer back to what Speaker Nancy Pelosi said earlier this afternoon. She said the party is over.

Now, the rest of the world has looked at the United States as being the large neighbor that has the party flowing with the champagne and all the glittering lights. And now, of course, that's come to a very swift conclusion.

So having said that, you still hope that the booze that's going to be poured as a result of this $250 billion bailout package is going to be the lubrication that's going to keep everybody else turning for the foreseeable future.

Let's talk about markets that are about to get moving. There is already the New Zealand market open. You wouldn't expect too much down in Auckland. You wouldn't be so disappointed either. It's up just roughly one percent at the moment. The dollar has shed just a tad of ground against the euro and British pound; nothing to get excited about at this hour. And oil on the international exchanges that are trading, again off just a fraction, Don.

But the key point to bear in mind, and I'm sorry to put it in blunt terms with U.S. taxpayers, but the rest of the world isn't really worried about that. The rest of the world just wants to see the color of your cash and they want to see it sooner rather than later, greasing the wheels of the international markets.

LEMON: And the color of cash here in the States, Richard, the same as your necktie, green. Thank you. Thank you very much for that, sir.

Congressional negotiators are on Capitol Hill hammering out the finishing touches on the $700 billion bailout legislation.

What about the candidates? Well, Barack Obama attended a rally earlier today in Detroit. He is now on his way back home to Chicago. John McCain in the nation's capital; he's been hunkered down at his campaign headquarters. Both candidates have been in touch with Congressional negotiators and both are cautiously backing the bailout plan.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) PRESIDENTIAL NOMINEE: Senator Obama has shifted on a number of occasions. He has voted in the United States senate to increase taxes on people who make as low as $42,000 a year.

SEN. BARACK OBAMA, (D) PRESIDENTIAL NOMINEE: That's not true, John. That's not true.

MCCAIN: That's just a fact. Again, you can look it up.

OBAMA: Look, it's just not true.

(END VIDEO CLIP)

Lemon: You heard the back and forth at the debates. The he said, he said. What was true, what was false, what was just a flat-out lie?

Our Truth Squad is on the case. Tom Foreman joins us to sort out differences and truth in all of this. We heard John McCain saying that Barack Obama is going to raise taxes on the middle class. What's the truth?

TOM FOREMAN, CNN CORRESPONDENT: You know it's an explosive charge. That's the first truth. You say something like that in the campaign, people pay attention. But this is one of those things where you really have to cut through the numbers.

What he's talking about apparently is a resolution back in June where the Senate voted on this idea of what their budget priorities would be through 2013. One of the assumptions in that vote was that the Bush tax cuts would expire. And because Joe Biden and Barack Obama both voted for it and John McCain did not vote, he says that they were voting for a tax increase because these cuts will go away and therefore some people's taxes will go up.

But it does not seem to be quite fair to judge it that way if you don't include the fact that the Democrats also in that very same resolution talked about a lot of other tax cuts. Doing away with the alternative minimum tax for example, which has been a big bugaboo for a lot of people hurting them badly.

So in the end we talk about the Tax Policy Center here. They have spent a lot of time over there with their experts examining all of these things. And they say that basically when it comes down to it, Obama's plan will increase taxes for the top 20 percent wealthiest people in this country and will give less taxes to the bottom 80 percent.

That seems to be more to the truth. So John McCain was telling the truth in that, yes, some people's taxes would go up under this resolution but that's not the whole picture; so at the very least, misleading.

LEMON: Telling the truth but not the whole truth and nothing but the truth.

FOREMAN: Exactly. LEMON: Let's move on. That was a very important issue, taxes, of course.

Health care, also a very important issue. Here is Barack Obama's assertion about John McCain's health care plan. He says that it's going to include a tax credit but your employer already pays taxes. Explain that one to me? What's the truth in that?

FOREMAN: He's trying to create the image here that it's all offsetting; that you either get no advantage or that you're hurt more. Again, we look at what the Tax Policy Center said, in fact, McCain health care program does call for ending the tax-free status of employer-provided health plans but it also offers as tax credit $2,500 per individual, $5,000 per family.

Initially this really could help people, even though Obama is suggesting it won't. People could get a better deal. What we don't know is how fast medical costs will continue to rise in the future and whether or not these tax credits will offset that. Then it could become not such a good deal.

So Obama really is telling the truth here again, but there's no real measurement of the long-term affects.

LEMON: CNN's Tom foreman, the Truth Squad. CNN's Truth Squad is covering the campaign from all angles all the way up until November. You don't want to turn anywhere else.

It is well-known that Alaska's "bridge to nowhere" never got built. But did you know there was a "road to nowhere" that did?

(COMMERCIAL BREAK)

LEMON: Republican vice-presidential running mate Sarah Palin took time out this morning in Philadelphia to meet with several blue-star mothers. Those are moms who, like Palin, have children serving in the military.

Palin took a quick question about the bailout and she praised John McCain's role in the negotiations. Last night she headed out for Philly cheese steaks and got a few shouted questions from a customer. He asked about the lawless border area between Pakistan and Afghanistan. It is hard to hear so we added subtitles.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN, (R) VICE PRESIDENTIAL NOMINEE: If that's what we have to do to stop the terrorists from coming any further in, absolutely then we should.

(END VIDEO CLIP)

LEMON: Well, those comments appear to contradict John McCain's position on that region. But earlier today McCain said Palin's remarks came in "exchange with some young man and that they don't represent any policy position."

Since Alaska Governor Sarah Palin exploded on the national stage as John McCain's running mate, we've heard a lot about the so-called "bridge to nowhere." But would you believe there is also a "road to nowhere?"

Here is CNN's Abbie Boudreau from our Special Investigations Unit.

(BEGIN VIDEOTAPE)

ABBIE BOUDREAU, CNN SIU CORRESPONDENT: Take a look down there. That's the city of Ketchikan. And over there across the Tongass Narrows, that's Gravina Island. That's where the local airport sits. To get there from Ketchikan you have to catch the ferry; it takes about 10 minutes.

So that brings us first to the plans for the notorious expense "bridge to nowhere." It would have crossed the narrow here. But to get to the airport, they needed a road.

But here is what happened. When the political outcry about the bridge got so loud and they killed it, well, it was too late. They had already signed a contract for the road project. So they built it.

This is Gravina Island Highway. It runs about three miles long at $8 million per mile, paid for by your tax dollars. But there's no one on this road. Many locals call it the "road to nowhere."

The Democratic Mayor of Ketchikan calls it Governor Palin's "road to nowhere."

BOB WEINSTEIN, MAYOR OF KETCHIKAN, ALASKA: She's been saying, "I told Congress thanks but no thanks. I stopped that "bridge to nowhere" project." In fact she didn't tell congress thanks but no thanks and spent $26 million out of a federal earmark for the Gravina access, a.k.a., "bridge to nowhere" project on this road that will not go to a bridge.

BOUDREAU: Weinstein says of course a road would have made sense if a bridge had been built, considering how now locals and tourists have to take a ferry to the airport.

While we were on the road, we met PJ Murphy who works on the island.

PJ MURPHY, TOLL BOOTH COLLECTOR: Not many people are coming out yet.

BOUDREAU: No. Why did you come?

MURPHY: I'm the toll collector down there and I wanted to see where it went. What it looked like.

BOUDREAU: What do you think?

MURPHY: It's nice road. It's a lot better than the road I drive on to go home.

BOUDREAU: And what do you think about where it ends?

MURPHY: The "bridge to nowhere," I mean, come on.

BOUDREAU: Mayor Weinstein came with us to see the road, too.

Who's using this road? Since we've been here we haven't seen --

WEINSTEIN: Well, currently, you and I are using the road.

BOUDREAU: He can joke about it now wearing a "Nowhere Alaska" T-shirt but he says that earmark money could have been used to fix roads and sidewalks in town that people actually use.

Simply put, what could Governor Palin have done? If she says she's against earmarks what could Governor Palin have done in this case?

WEINSTEIN: Governor Palin could have stopped construction of this road.

BOUDREAU: Back up in the helicopter, another reality check.

It curves around then it just stops. That's where the bridge was supposed to pick up right there.

We tried to find someone in town who supported the road. So we contacted Palin's former campaign coordinator, an avid Palin supporter. But even he had a hard time backing the project.

Do you think it's a waste of taxpayer money?

MIKE ELERDING, FORMER PALIN CAMPAIGN COORDINATOR: On the road?

BOUDREAU: Yes.

ELERDING: Without the bridge, yes.

BOUDREAU: Meg Stapleton, a McCain-Palin spokesperson tells us the governor had no choice and that's why the project moved forward.

It's hard to imagine that the governor wouldn't think that that's a waste of money, taxpayer money.

MEG STAPLETON, MCCAIN-PALIN SPOKESPERSON The governor could not change that earmark. That earmark was given; that earmark was dictated that that had to be spent on the Gravina road and nothing else. So the governor had no options.

BOUDREAU: Could she have stopped construction?

STAPLETON: My understanding is that -- I'd have to look into that for you. I don't know.

BOUDREAU: Stapleton did get back to us. And she says, under ordinary circumstances, Governor Palin would not have allowed the Gravina road project to move forward. But given the federal earmark and because the contract for the road was already signed before she got into office, the governor was left no viable alternative.

Abbie Boudreau, CNN, Anchorage, Alaska.

(END VIDEOTAPE)

LEMON: Well, that is the view from Alaska.

But there's also another bridge, this one in Joe Biden's backyard. We'll tell you about it straight ahead.

Meantime, we have some new developments on that rescue plan that they have come up with in Congress. We want to get you now to the White House and Kathleen Koch.

Kathleen, we're hearing that the president has reacted to this.

KATHLEEN KOCH: Yes he has, Don. In a paper statement that the White House just put out, the president he said he appreciates the leadership by members of both sides of the aisle in crafting what he called a quote "very good bill."

He said they contributed a lot of important ideas to improve the legislation that his administration had proposed. He said that this is going to be a difficult vote but he urged -- he's confident Congress will do what's best for the economy by approving the legislation promptly.

And I'd just like to read you verbatim a little bit of the middle section. It said, "This Bill provides the necessary tools and funding to help protect our economy against a system-wide breakdown." The president's statement goes on to say "the bill will help allow access to credit so American families can meet their daily needs and American businesses can make purchases, ship goods and meet their payrolls. This plan sends a strong signal to markets around the world that the United States is serious about restoring confidence and stability to our financial system."

And then this main paragraph concludes with the president saying, quote, "without this rescue plan the cost to the American economy could be disastrous."

There you go, Don, the president reacting in a paper statement. Who knows, the president has several items on his agenda tomorrow. So then we reporters will certainly be asking him some questions to get further reaction.

LEMON: Paper statement but very strong words there Kathleen Koch.

KOCH: Indeed.

LEMON: Thank you very much for that.

The deal is done; now the real work begins, adding up the cost to you and the impact on the global economy. We're working all the angles of this story. We're bringing you the very latest developments as they happen all night long.

(COMMERCIAL BREAK)

LEMON: Senator Joe Biden has said a lot about Sarah Palin and the so- called "bridge to nowhere" on the campaign trail. But there is a bridge in his own backyard that she could be talking about.

CNN Special Investigative Unit correspondent Drew Griffin reports.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, SIU CORRESPONDENT: Last week it became part of his stump speech. If you believe Senator McCain and Governor Palin are good for America's road to recovery, Joe Biden says you better check their road map.

BIDEN: I got also a bridge I got to sell you here. Guess what, it is in Alaska and it goes to nowhere.

GRIFFIN: Perhaps Biden believes the "bridge to nowhere" is the symbolic bridge to cross in to the White House.

BIDEN: John McCain's answers for the economy -- and we're in such desperate shape -- is the ultimate bridge to nowhere. It is nowhere. It takes you nowhere.

GRIFFIN: But hold on, Senator Biden.

"Keeping Him Honest," we decided to check on 116 reasons in Delaware that one bridge to nowhere in Alaska may not be such a good Democratic talking point. Because 116 is the number of earmarks Senator Biden asked for this year alone; the total bill to taxpayers, more than $342 million. He told our "American Morning" they're all justified.

BIDEN: Everyone's seen them. We have no Walter -- you know, we have no Lawrence Welk Museums. We have no bridges to nowhere in Delaware; it's all straight up.

GRIFFIN: Straight up? We went to Delaware to see for ourselves. True, there is no "Lawrence Welk Museum, but Biden does want $1 million for a children's museum. Another $1 million for opera house renovations, hundreds of thousands for this tiny waterfront park.

And believe it or not, there is also a bridge, maybe not to nowhere, but after the tourists have gone at this time of year, the Indian River inlet bridge can seem like a bridge between two nowheres.

CAROL EVERHART, REHOBOTH BEACH-DEWEY BEACH CHAMBER OF COMMERCE: We need a new bridge and we are so fortunate that this is finally at a place where it's going to happen.

GRIFFIN: Carol Everhart with the local Chamber of Commerce says the Indian River inlet bridge is a vital link in the tourist trade, connecting the vacation towns of Dewey Beach and Bethany Beach. Without this bridge, she says 30,000 summer vacationers a day would have to drive an extra 35 minutes.

The bridge has some erosion problems and if it ever collapsed it would cause economic disaster here, Everhart says.

EVERHART: The bridge as it is, is currently safe.

GRIFFIN: So why is Senator Biden asking for $13 million for this bridge now? That's what Bill Allison of the watchdog group The Sunlight Foundation wants to know.

BILL ALLISON, SUNLIGHT FOUNDATION: Essentially what Senator Biden is doing is saying that well, my state's bridge gets the priority dollars even though it is not a priority project.

GRIFFIN: Now the real twist in this story. Senator Biden must really like bridges because not only does he want you to help pay to replace this bridge here in Delaware, despite what he's been saying on the campaign trail, he actually voted for Alaska's bridge to nowhere; twice.

That's right. He and Senator Barack Obama were among the 93 senators who voted for the massive 2005 Transportation Bill funding the Alaskan "bridge to nowhere" and thousands of other projects across the country. And when another senator tried to divert the bridge to nowhere money to fix a bridge to New Orleans damaged by Katrina, Senators Biden and Obama and 80 other senators present voted against the amendment.

ALLISON: Yes, they had a chance to vote specifically against the "bridge to nowhere" in Alaska to redirect the money and they chose not to. GRIFFIN: John McCain who always opposed earmarks was not in the Senate that day and did not cast a vote. Sarah Palin wasn't even the governor yet.

So why is Biden raising the bridge to nowhere on the campaign trail? Of course we wanted to ask him directly, but his campaign never got back to us.

Drew Griffin, CNN, Dewey Beach, Delaware.

(END VIDEOTAPE)

LEMON: And just to be clear, Drew based his reporting on the number of appropriations Senator Biden requested for the last fiscal year.

Just this week Congress approved the 2009 budget. Reportedly there are at least 2000 earmarks in that bill and reporters are still trying to determine what they are all for.

A programming note for you, Joe Biden and Sarah Palin share the stage on Thursday night right here on CNN. It is the showdown everyone has been waiting for, the vice-presidential debate Thursday, 9:00 p.m. Eastern plus post debate analysis from none other than the best political team on television.

The bailout bill made public on Capitol Hill. CNN's Money Team has all the details. We'll share them with you.

And a CNN I-Reporter sings the $700 billion bailout blues and you might, too.

(COMMERCIAL BREAK)

LEMON: We love our I-Reporters around here, don't we? Josh?

JOSH, CNN FLOOR DIRECTOR: We love them.

LEMON: We love them. Josh is the floor director and he says we love our I-Reporters. And we do. That's because the Wall Street plan has upset a whole lot of Americans, not just us.

And I-Reporter Adam Anderson composed a song that many of you can probably relate to. Take a listen to this.

(BEGIN VIDEO CLIP)

ADAM ANDERSON, I-REPORTER: $700 bailout for the companies that bleed us dry. $700 billion bailout makes a bunch of people wonder why. These companies with their predatory tactics to get at our last dime, yet they're the ones with their hands outstretched looking for the biggest --

(END VIDEO CLIP)

LEMON: That's a catchy tune, don't you think? You can hear the entire song and see what many of our I-Reporters have to say about the bailout at I-Report.com. Kind of catchy.

ANNOUNCER: This is CNN "Breaking News."

LEMON: I'm Don Lemon at the CNN World Headquarters in Atlanta.

Major breakthrough on the mega-bailout, the fate of the proposed rescue of the U.S. financial system is headed for a vote in Congress.