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Federal Reserve Cuts Interest Rates
Aired October 29, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: The Fed bellies up to the table with interest rates on its plate. Expected to order up another cut. An announcement comes just minutes from now.
Scare tactics to the extreme. Some religious groups say a vote for Obama, is a vote for apocalypse now. Is this having any affect on undecided people of faith?
And if you've got the cash, have they got a deal for you. From footwear to airfare to hardware, struggling companies are slashing prices. Expert advice on sniffing out the bargains.
And hello, everyone. I'm Kyra Phillips, live in the CNN headquarters in Atlanta. And you're live in the CNN NEWSROOM.
Let's get right to it.
The whole world is watching waiting to hear what the Federal Reserve does within the next few minutes. A rate cut is expected. Hope for that cut has helped stoke a rally across the globe, of course. Most markets in Europe and Asia saw gains today. But the Dow has been pretty reserved so far, as the traders wait on the Fed decision.
Also making news today on Wall Street today, General Motors and its downhill global sales. That news comes as Treasury officals and auto executives talk about a possible government bailout for the big three auto makers who are struggling big time.
Well, the Fed is expected to cut its key interest rate by a half point. That would bring the rate down to a level we haven't seen in several years. Our chief business correspondent Ali Velshi, waiting for the announcement with bated breath.
So Ali, real quickly here, did you get a promotion? I'm introducing you now as chief business correspondent?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Just a change in title. Just a change in title.
PHILLIPS: Did you get a pay raise, too?
VELSHI: I'm still waiting for that.
PHILLIPS: What about your own show?
VELSHI: In this economy, you're just happy that the check clears.
PHILLIPS: All right, so let's talk about the rate cut, here. What do we know?
VELSHI: All right. So, the Fed rate cut -- the rate that the Fed adjusts is called the fed funds rate. Right now, at least for the next 15 minutes or so, it stands at 1.5 percent. Now, the prime rate is always 3 percentage points higher than that, so it is at 4.5 percent. If the Fed were to cut rates, the prime rate would drop and we would start getting that announcement from banks (AUDIO GAP).
That means adjustable loans that are tied to the prime rate would drop, and in the broader economy money the sense of that, Kyra, is that money would get cheaper to borrow, businesses might take the money they saved, that they're not paying on interest payments and expand and hire more people. People would save money because they have lower rates and theoretically people would spend more money. That is what happens in theory.
But, Kyra, as we have been noticing, because of the tough economy and the way consumers are feeling, they are holding on to their money, not necessarily because rates are high, but because they're fearful of loosing their jobs and they're trying to pay down their credit. So, we're not sure that this will have the desired effect, but it is yet one more thing that the Federal Reserve and the government are trying to do to gain confidence in this market and get people spending again.
PHILLIPS: All right. You will let us know, as soon as we hear something?
VELSHI: That's right. Susan Lisovicz is on it. I'm on it.
PHILLIPS: It could be any minute?
VELSHI: Yes, probably around 2:15, that is when they typically do it, but we will be on top of it and we'll bring it back to you as soon as we got it.
PHILLIPS: So, I can't call Susan a chief business correspondent?
VELSHI: You can if you'd like
PHILLIPS: OK, maybe you can invent a title for me. And that's what I'll call her. All right?
VELSHI: All right.
PHILLIPS: In a minute.
Layoffs, freezes, and making workers pay up. That is how corporate America roles in this tight economy. A human resources consulting firm surveyed about 250 companies this month; 26 percent said they would lay off some workers within a year; a quarter expect a hiring freeze, and the same percentage will make employees pay more for their health benefits. Now 18 percent will cut training, the same number will be nixing or watering down the holiday party. Looks like a cash bar this year. And 4 percent will trim the amount they match from the employee's 401(k) contributions.
Well, six days before the Americans elect the next president. Millions of us have already voted. Early voting and advanced voting, absentee voting, by any name it is more popular in more places than ever. Early voting ended yesterday in Louisiana with more than 264,000 ballots cast, that is almost 10 percent of the state electorate and tens of thousands more than expected.
Here in Georgia advance voting runs through Friday. Already more than 1.3 million voters have waited in lines as long as eight hours. In Florida the secretary of state calls the long lines a sign of a healthy democracy. The governor calls them an emergency. He has ordered polling sites to stay open longer, from eight hours a day to 12.
No long lines for early voting in Nevada. Why? Many voters are casting their ballots while doing a little holiday shopping. CNN's Gary Tuchman has the story.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT (voice over): Wander through a shopping mall in the state of Nevada, past the stores and kiosks, and there is a good chance you'll be able to vote for leader of the free world.
UNIDENTIFIED MALE: Don't vote until the screen changes.
TUCHMAN: No state makes it easier to vote early than Nevada.
UNIDENTIFIED FEMALE: I voted for McCain.
UNIDENTIFIED MALE: I am voting for Obama.
UNIDENTIFIED FEMALE: This is made very easy. Polls are open everyday in your neighborhood and every mall it pretty much is open everyday.
TUCHMAN: November 4th may be the election day, but in 31 states, where you can vote early without giving a reason, it is one of many election days. In some states, like Indiana North Carolina and Florida, the lines are often long. You can wait for hours. But in Nevada there are so many voting machines and so many places, long waits are uncommon.
(On camera): County elections officials here in Nevada work to come up with creative, convenient locations for early voting. Casinos, bars and brothels, this being Nevada, are not considered, but there plenty of other options.
(Voice over): Besides the malls, outlet centers, health clubs and grocery stores are just a few of those the options. In Clark County, home to Las Vegas, election officials declare --
UNIDENTIFIED FEMALE: More people vote before election day than they do on election day. TUCHMAN: Nevada generally votes Republicans, but Democrats are voting early by a more than three to two margin.
UNIDENTIFIED FEMALE: We thank you for voting early and the Republican Party thanks you for all your vote.
TUCHMAN: At this McCain/Palin phone center in Las Vegas and GOP officials say they are not concerned about that. Mingling with the volunteers? John McCain's daughter Megan, and Linda Ramon, the wife of late punk rock legend Johnny Ramon.
TUCHMAN (on camera): How important do you think early voting is to get your father elected president?
MEGHAN MCCAIN, JOHN MCCAIN'S DAUGHTER: I think early voting is important, but I don't think it's vital. I think it is important, but I think just going out and voting, in general, is important.
TUCHMAN: Sara Palin's brother was also there. More evidence is coming in everyday. I believe strongly, as it comes in, people are, you know, the undecideds are going to sway McCain/Palin's way.
UNIDENTIFIED FEMALE: Tell us where those are and we'll go there.
UNIDENTIFIED FEMALE: This way.
UNIDENTIFIED FEMALE: OK.
TUCHMAN: As they canvass neighborhoods, Democrats say --
UNIDENTIFIED FEMALE: Will you be voting for Obama?
UNIDENTIFIED FEMALE: I haven't made up my mind yet.
UNIDENTIFIED FEMALE: You haven't?
TUCHMAN: They will win Nevada for the first time since 1996.
UNIDENTIFIED FEMALE: We can count on you for an Obama vote?
UNIDENTIFIED MALE: Oh, yes. Oh, yes.
UNIDENTIFIED FEMALE: And are you going to early vote?
TUCHMAN: Across the nation, up to one-third of voters are expected to cast early ballots.
UNIDENTIFIED FEMALE: You want to vote for Obama?
(DOG BARKS)
UNIDENTIFIED FEMALE: You can do it. He's your daddy!
(LAUGHTER)
TUCHMAN: Democracy may be hard. UNIDENTIFIED MALE: I love it! It's easy.
TUCHMAN: But voting doesn't have to be.
Gary Tuchman -- CNN, Las Vegas.
(END VIDEOTAPE)
PHILLIPS: Well, if you stood in long lines to cast your vote early, you probably have some stories to share. We'd love to hear them. Just send them to I-Report.com.
We have some new numbers from a couple of battleground states for you. In Florida, CNN's Poll of Polls shows 49 percent of likely voters choose Obama; 45 percent like McCain; 6 percent still undecided. And in Ohio, our Poll of Polls shows half of the likely voters in the Obama column; 42 percent for McCain; 8 percent undecided. Both of those Obama leads are wider that in a day or two before.
For all of the excitement, all the drama, all the months and months and months the presidential race has dragged on, a small but substantial number of voters still have not made up their minds. We wonder why and what the undecideds are waiting for. Our Doctor Sanjay Gupta has some insights.
(BEGIN VIDEOTAPE).
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (On camera): So you are still undecided? Well, a lot of people are going to call you wishy-washy, and tell you, you can't make up your mind. But the answer as to why you are undecided may lie deep inside your brain.
In fact, neuroscientists from Princeton tried to figure out who are these undecided voters, really? Really, you can break them down into two groups. One group of people simply need to gather a lot of evidence before they can finally commit to a decision. That is one group.
A second group of people may in fact know, they may in fact have a decision in their brain, but they have not emotionally become attached to that decision yet. Let's take a look at what happens in the brain.
This is an area of the brain called the parietal cortex. It is important because this are of the brain specifically is where you gather so much of that evidence. The evidence gathers up, some people need a lot of evidence, and some people need little. You start to gather it up, and at some point the brain suddenly transitions. It is like a switch that goes off and you commit to a particular decision. Those are people who are maybe undecided now, but will be decided by the time the election actually comes around.
As far as the other group, their brain has already decided. It is already pointing them in a particular direction, but they simply don't know it yet. There is a third group as well, that is very interesting. This is a group of people who think they absolutely know who they are going to vote for, but when they walk into that booth, in fact they vote for someone else. Their brain told them to vote for someone else even though the emotions told them to vote for their original choice.
Now, if you want to sort of tease out these undecideds and who they actually are going to vote for, the pollers are actually doing some interesting question. Instead of the typical question, which might be, if the election were held today would you vote for Senator Obama or Senator McCain? They ask questions more open ended questions. Questions like who do you think understands your problems better? Are you more concerned about the economy or terrorism? Which candidate has the better temperament? I think all this points out that the brains are tricky and polls are not perfect. We are going to have a decision, hopefully, in the next several days -- back to you, for now.
(END VIDEOTAPE)
PHILLIPS: So what about you? Still undecided? Tell us why. Send us an e-mail. The address is CNNnewsroom@ CNN.com.
Well, pornography everywhere, terrorists spilling blood, the end of marriage, some religious extremists insisting we're all doomed if Obama wins. We will take a look at their seriously scary tactics.
And when an interest rate cut breaks out, we're going to break in. The world waits on the Fed's decision. It is coming within minutes.
(COMMERCIAL BREAK)
PHILLIPS: Don't let your plastic go spastic or anything, but there are some really good deals out there right now. We are going to go bargain hunting with the discount diva. All you need to do is to tag along.
(COMMERCIAL BREAK)
PHILLIPS: Straight to the University of Tampa. John McCain holding a national security roundtable, making a statement. Let's listen in.
(JOINED IN PROGRESS)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Active duty in the United States military and I have had the honor and privilege of working with these individuals for many, many years as this nation has faced crisis after crisis and challenge after challenge.
I want to talk a little bit about the ones we are facing today. For weeks now the attention of the country, understandably, has been focused on the serious financial troubles we face. At such a time when the jobs and financial security of our people seem at risk, it is hard to spare much thought even for the great and abiding concerns of this nation's security and the security of our friends and allies across the world. But these dangers have not gone away, while we turned our attention elsewhere.
And the next president will meet no greater test than defending America from these threats. My fellow Americans, we are going to get through this economic crisis. We will get through it. We will even come out stronger, without the corruption and arrogance that have overtaken both Washington and Wall Street. We will pull through the hard times and do it together, just as our country has done before.
But, when that day arrives and the worries of financial crisis have fallen away, we will find awaiting our country all of the same great challenges and dangers that were there all along. They mattered before the economic turmoil of the present. They will matter, still, when it is passed and in a time of war, in a moment of danger for our country and the world, let it not be said of us that we lost sight of these challenges.
Today, I consulted with a number of distinguished senators, who I know, and who know from experience what matters most in the affairs of our country. They understand, many of them a lifetime of service, that no responsibility of government is more fundamental than protecting this country from the threats of the world. They are trusted friends and advisers of longstanding, including Dr. Henry Kissinger, a man whose diplomatic experience includes helping to secure the release of me and my fellow POWs from Hanoi.
By phone, I conferred as well with former Secretaries of State Schultz and Eagleburger. These gentlemen are always good for sound advice and as president, I would be relying on men and women of their caliber and experience.
These statesmen, and those who have joined me here today, are supporting my candidacy, because we share many of the same convictions and the same assessment of the national security challenges before our country. And with good reason they question whether my opponent in this election has the wisdom or the judgment to serve as commander-in- chief. Victory must still be secured in Iraq and Afghanistan. Senator Obama opposed removing the dictator in Iraq and now obstinately oppose s the need to defend the young democracy in that country, even with victory so clearly in sight. He cites his most courageous moment in public life a speech he gave in 2002 against a war resolution on which he had no vote, on a matter of national security for which he bore no responsibility.
He hopes you will forget the votes he cast when he actually did have responsibility. His votes to prevent the strategy that is leading to victory, and to deny funding for the troops who are gaining that victory; and now he hopes that in the cloud of crisis at home, you will forget the stakes in Iraq, the disaster and tragedy that would follow if American forces leave in retreat.
With terrorists still plotting new strikes across the world, millions of innocent lives are still at stake, including Americans lives. Our enemies violent ambitions must still be prevented by American vigilance, by diplomacy and cooperation with our partners, and by force of arms, as a last resort. In the four years in the Senate, two of them spent running for president, Barack Obama has displayed some impressive qualities, but the question is whether this is a man who has what it takes to protect America from Osama bin Laden, Al Qaeda and other grave threats in the world. He has given you no reason to answer in the affirmative. Senator Joe Biden has a way of straying off message and stumbling on the truth. And his most recent warning bears close attention. He cautioned us, in fact, he guaranteed his listeners, some fundraisers by the way, that because he is untested, Barack Obama would only invite an international crisis, and we know well what one of those crises could be, the success of the Iranian regime, and its program of acquiring nuclear weapons.
If such a thing were to happen, our troubles of today would dramatically escalate as a nuclear-armed Iran threatened Israel or sparked an uncontrollable nuclear arms race across the region.
In the same way my opponent assumes to have far more good than is warranted from Kim Jong-Il, the tyrant of North Korea, Hugo Chavez the leader of Venezuela, who wishes to export instability to neighboring countries, of course, the Castro brothers, who have given Cuba 50 years worth of socialist misery, and are still at it. In each case, Senator Obama presents his plan for direct talks, as if no one before had ever considered that. He seems unaware that more talk has been tried many times to no avail and that our adversaries recognize such gestures as a sign of weakness. They will draw similar assumptions from the plans already proposed by the chairman of the House Finance Committee, Congressman Barney Frank, to cut defense spending by 25 percent, even with our troops engaged in two wars. And with a force in need of rebuilding, we are getting only a glimpse of what one party rule would look like under Obama, Pelosi, and Reid.
Apparently it starts with lowering our defenses and raising our taxes. Our national security is dependent on our economic security and the plans of a Democratic-dominated Washington would harm both. Raising taxes and unilaterally renegotiating trade agreements, as they have promised, would make a bad economy even worse and undermine the national security even as they slash defense spending. At least when the European nations chose the path of higher taxes and cutting defense, they knew that their security would still be guaranteed by America. But if America takes the same path, who will guarantee our security?
PHILLIPS: John McCain speaking there at the University of Tampa. He had a national security roundtable. You can see the Governor of Florida Charlie Crist behind him. Also, supporters of his, senators, saying -- talking about national security and why he feels he is the man to protect the U.S. from terrorists, and not Barack Obama.
We will continue to monitor that, but we want to get to right to the breaking news that happened while that talk is taking place. The Fed cut the key interest rates by half a point. The decision came down just a couple of minutes ago. Ali Velshi, Susan Lisovicz both with us to talk about what this means for us now in a tough economy.
All right. It happened. We had a feeling it was going to happen. Ali, you want to take us from here?
VELSHI: Yes, the rate, the federal funds rate is now 1 percent, 1.0 percent. And that is the lowest it has been since June 25th, of 2003. That makes the prime rate, which we will get announcements from the banks in the course of the next half an hour. That takes the prime rate down to 4 percent. If you have a loan that is tied to the prime rate, that is going to bring down the cost of that loan. It will make money cheaper to borrow. Theoretically is should make businesses want to loan money - or want to borrow money to expand and to hire more workers, and theoretically, to get people to loosen up.
But as Susan can tell you that the reasoning behind the Fed cutting these rates, even from the perspective of the Fed, which doesn't tend to overreact to things, seems quite strong, their language is quite strong. Susan, you got that?
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: No question about it, Ali.
First of all, it is the second time that the Federal Reserve has cut interest rates this month. The first time was an unprecedented action with central banks from around the world, including China and the European central bank. But what the Fed said in its statement is what Ali and I basically have been saying on a daily basis. "That the pace of economic activity appears to have slowed markedly" that is the Fed's words. A decline in consumer spending, the chief culprit, the financial market turmoil is likely to exert additional constraints on spending. Partly by further reducing the ability of households and businesses to obtain credit. That is the credit crunch referring there.
But the reason why the Fed is able to - or felt it was able to cut interest rates again is because of this incredible, this breathless pace of decline that we have seen in oil prices in particular, even though that crude is jumping $4.50 today. It is still below $68 a barrel. That is just an extraordinary decline that we have seen since July when it was approaching $150 a barrel. That is the good news, but the big reason why oil is coming down so quickly is because of the decline that we are seeing in this economy and elsewhere, right, Ali?
VELSHI: Yes, and worldwide economies, and the Fed made mention of this. I must say in all the years that I've been doing this, I've not actually ever seen a reference to other economies. They are saying that it is likely to affect other - the idea that other economies are being hurt means it is not going to help the U.S. economy get out of this turmoil.
Remember about a year ago when we were talking about a slowing economy, there were a lot of people who said, but other economies are strong and they will continue to buy the U.S.-made goods, even if the U.S. dollar is lower, it makes things that we make more attractive to others. The Fed is saying that is not working.
As, Kyra, you and I were talking about earlier, the Fed says the "pace of economic activity appears to have slowed markedly owing importantly to a decline in consumer expenditures.
The bottom line, is consumers are worried about their jobs. They are worried about their debt. They're seeing their credit lines being reduced, they're seeing their homes reduce in value so they can't go back to the home to get more money to spend. It is pretty obvious. You don't have to be an economist to understand this. Folks are not spending money and that is slowing the economy down.
LISOVICZ: Yes, and it is interesting, to you point about the slowing global economy. Tomorrow we get third quarter the GDP. I believe it is the first time we get a look at it. The bright spot for the U.S. economy and the reason why it has been so resilient, able to handle this housing crisis and the credit crunch is because of the strength of U.S. exports. Now that the dollar is strengthening, and economies overseas are also declining, slowing down, and is going to affect the GDP. And, in fact, the consensus is for an outright contraction tomorrow in the first look at third quarter GDP, the broadest measure of the U.S. economy.
PHILLIPS: Just as we were talking about a few positive things, now it comes back to the fear. And the - all right, guys appreciate it. Ali Velshi, Susan Lisovicz.
VELSHI: Can I tell you one positive today, Kyra? Because I'll tell you one positive.
PHILLIPS: Yes, give me a positive.
VELSHI: Well, saw that home prices, last week we saw existing home prices down, this week we saw new home prices down. That is not positive, but we are seeing people getting into those houses. We are seeing homes sales tick up and we just got a report about mortgage applications. They are up. So with a mortgage, a fixed-rate mortgage running around 6 percent, or a little higher than that, if you have good credit. People are thinking that houses are becoming affordable.
LISOVICZ: And the inventory is coming down, right, Ali?
VELSHI: Right. That's right.
LISOVICZ: That is what you need to fix this problem.
VELSHI: Well, if you are an optimistic, you could see that as the beginning of a glass starting to fill up to halfway kind of.
LISOVICZ: There is your optimism.
PHILLIPS: There we go. I just wanted to end on a positive note. Thank you, guys.
LISOVICZ: You're welcome.
PHILLIPS: Now I'm going to turn the tables again. Tactics meant to terrify, extremists and their apocalyptic predictions about an Obama presidency. So much for subtlety, huh?
(COMMERCIAL BREAK)
PHILLIPS: The politics of fear, religious extremists are warning of a possible doomsday if Barack Obama is president, and that is not all. CNN's Deb Feyerick takes a look.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice over): To hear some religious extremists tell it, elect Barack Obama and it is end of the world as we know it, to borrow part of a line. Evangelical Christians from Focus on the Family Action, warning children will be awash in pornography, terrorists will strike four U.S. cities. Marriage will be turned inside out. Other evangelical Christians warn an Obama victory is herald the apocalypse.
ANNOUNCER: Just a broad road to destruction.
FEYERICK: And this e-mail sent to 75,000 Jewish voters, equates an Obama presidency to Nazi Germany.
LARRY SABATO, UNIV. OF VIRGINIA: This stuff is just beyond the pale. It is the most negative vicious stuff that I've seen in quite some time.
FEYERICK: Political experts say the extreme attacks underscore the concern far right groups have with Obama. The evangelical group Focus on the Family Action defended its "what if letter" as based on analysis to Obama's record.
CARRIE GORDON EARLL, FOCUS ON THE FAMILY ACTION: To look with a critical eye at recent events and how they may play out in the future; that is not needless alarm, I think that's prudence.
FEYERICK: Political analyst Larry Sabato calls it tragic.
SABATO: Many of these conclusions are extreme and illogical. No president would ever attempt these things. No president who wanted to be re-elected would even think these things.
FEYERICK: The Pennsylvania supreme court judge who signed the e- mail to Jewish voters warning of a holocaust if Senator John McCain looses apologized. And the Anti-Defamation League condemned the e-mail as divisive. While the attacks may rally religious groups, others voters are put off by the negativity.
UNIDENTIFIED FEMALE: It seems pretty extreme and maybe their final days that they are looking for more scare tactics.
UNIDENTIFIED FEMALE: I find it really abysmal for people who call themselves Christians to now, to decide that if someone is different, other than what they consider to be Christian, that now they think it is going to ruin the world.
(END VIDEOTAPE)
PHILLIPS: Well, of course, extremists are not the only religious voters with concerns this year. Some Catholics say they are having a hard time making up their minds, because of the abortion issue. CNN Political Contributor David Brody joins us now from Washington to talk about religion and the election. He is the Christian Broadcasting Network's senior national correspondent. He also does a lot of stuff with us. Great to see you, David.
DAVID BRODY, CNN POLITICAL CONTRIBUTOR: Hey, Kyra. How are you?
PHILLIPS: Good. You know, I always find this stuff fascinating. But just looking at all these attempts to demonize Barack Obama. Why is this going on? And, is it working? Oh, we will try - OK. We will try to get David back. We will take a quick break and try to continue the discussion on the other side.
(COMMERCIAL BREAK)
PHILLIPS: Two thirty-three Eastern Time. Here are some of the stories we're working on in the CNN NEWSROOM. As we have been reporting, the Federal Reserve Board had just cut key interest rates by half a point. The move is designed to spur new spending and help revive the nation's economy. We can hope.
In southwestern Pakistan a magnitude 6.4 earthquake has killed at least 107 people and injured many more. A mayor in the hardest hit region says that hundreds of homes are destroyed and 15,000 people are now homeless.
New York police say they found a woman's body about 13 miles from where a teacher disappeared two days ago. Twenty nine year old Leigh Walsh's (ph) car was found abandoned on a Long Island highway. Police have not identified the body which was found 50 feet down a highway embankment.
And checking out for the race for the White House, Barack Obama and John McCain are out in force today blanketing the highways with six days until the election. McCain has events all day long in Florida before heading north to Ohio. He will be on tonight's LARRY KING LIVE at 9:00 Eastern. Obama holds rallies today in North Carolina and Florida. His campaign has purchased air time tonight on seven TV networks and CNN is not one of them.
We have not heard the last of ACORN, that is the grassroots group that has been accused of faking voter registration forms in Indiana and elsewhere. Today, the unveiled a TV and that accuses John McCain and other Republicans of trying to intimidating voters, especially minority voters. It's also a party to lawsuits aimed at fighting voter suppression. ACORN stands for the Association of Community Organizations for Reform Now.
The war over purging is being fought today in Colorado. Groups including Common Cause have sued that state in federal court. At issue tens of thousands of Colorado voters whom the state has declared ineligible. Our Dan Simon is watching a hearing in Denver for us. Hey, Dan?
DAN SIMON, CNN CORRESPONDENT: Hi, Kyra. We are outside the federal courthouse in Denver where this case is going to be argued in a couple of hours. And if the allegations are true, you are looking at a potentially very serious situation in Colorado. You have these government watchdog groups who claim they are nonpartisan, that as many as 30,000 Colorado voters have been purged from the voter registration rolls.
How did they get that number? Well, they looked at the registration rolls and they looked at the data and that is the number they came up with. So what does that mean, exactly? Well, it means again, if the allegations are true, that on Election Day, you could have potentially have as many 30,000 people showing up to the polls and finding out that they are truly not registered. I want you to hear one of the attorneys who is handling the case, she boils it down this way.
(BEGIN VIDEO CLIP)
WENDY WEISER, BRENNAN CENTER FOR JUSTICE: Bottom line, there are 30,000 people who we believe were removed from the voter rolls in violation of federal law. Thousands of those people are eligible to vote. They didn't receive any notice from Colorado that their votes are not going to be counted, and we certainly hope that the courts will make it so that they can actually vote and ballots that will count.
(END VIDEO CLIP)
SIMON: All right. So what is the other side of things? The Colorado secretary of state which is responsible for overseeing the registration rolls. He says they have followed all of the applicable laws in the country and they have done everything according to the book and also says that the number is not 30,000, it is actually closer to 14,000 and that the people who have been purged were done so for legitimate reasons and they may have either died or their names were on the registration rolls more than once or that they may have moved out of the state.
So it is sort of a tricky issue here and you would think that the data would speak for itself, and you are dealing with obviously a lot of the paperwork here and ultimately, it is going to be up to the judge to decide whether any names should be reinstated, Kyra, and we are going to keep tabs on this and let you know what happens in court.
PHILLIPS: Sounds good. Thanks, Dan.
CNN is keeping them honest. If you have trouble at the polls, just call the CNN voter hotline, help us track the problems and we will report the trouble in real time. Here is the number, it is 1- 877-462-6608.
We are keeping them honest all the way through the election and beyond.
Well, she is accused of taking big bucks in an undercover sting and prosecutors say it is all on tape. And now lawmakers in Massachusetts are calling for State Senator Diane Wilkerson to resign. Here's Shiba Russell with our Boston affiliate WCVB.
(BEGIN VIDEOTAPE)
SHIBA RUSSELL, WCVB CORRESPONDENT (voice-over): The embattled state senator hid her face late Tuesday night as she picked up clothes and other items from her Roxbury home. Today federal investigators will likely be poring over boxes of files and other evidence carted out of the Democratic lawmaker's office, but the most damning evidence may be these photos which investigators say show Wilkerson receiving cash bribes and in one photo, she is even shown shoving money into the bribe.
MICHAEL SULLIVAN, U.S. ATTORNEY: In total, Senator Wilkerson allegedly accepted a total of $23,500 in cash payments.
RUSSELL: The payments were allegedly made at restaurants across from the state house. Agents say that the goal was to ease liquor licenses, ease the way for a private developer eyeing land in her Roxbury district and finance her sticker campaign for re-election. Governor Duval Patrick who has supported Wilkerson in the past did not mince words Tuesday night.
GOV. DUVAL PATRICK, (D) MASSACHUSETTS: If the issues are proven true, she should resign, and I am deeply, deeply disappointed.
RUSSELL: Meanwhile, Wilkerson's lawyer urged against a rush to judgment.
MAX STERN, SEN, WILKERSON'S ATTORENY: Despite the pictures showed that the United States attorney has chosen to show you just one week before the election, I am sure you know that there is a context to every one of the interactions that you been told about.
(END VIDEOTAPE)
PHILLIPS: Well, Wilkerson did not enter a plea in the initial appearance in federal court.
Alaska's political patriarch is not down fighting - or done fighting, rather. Ted Stevens is calling for the attorney general to investigate the federal prosecutors in his case. Monday, the Republican senator was convicted of corruption for not disclosing thousands of dollars worth of free renovations of his home. He accuses the prosecutors of violating the Constitution and providing false evidence to the jury. Stevens who refuses to drop his re- election bid is ignoring calls from fellow Republicans to step down.
And with three teenagers abandoned in the last few days, Nebraska's governor says he's got to act. He is calling a special session of the legislature so the state's safe haven can be changed. Nebraska's wording allows parents to actually abandon kids up to 18 years old at state licensed hospitals. In the rest of the country safe haven is limited to babies. Well, at least 23 children have been surrendered since Nebraska's law took effect in July and most of them teens. The special session gets under way November 14th. There is a silver lining in the economy and you can plug it into the wall. The discount diva explains it to us coming up next.
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PHILLIPS: Well, about the last 10 minutes we told you about the Fed rate cut and how it is going affect all of us. Gerri Willis is going to talk to us specifically about our houses and our cars. What does it mean for us?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, Kyra, good to see you. I know you see this headline and you think it is a Wall Street story and what do I care if the Fed cuts interest rates. Well, in reality it does impact you. Here is why. Because it controls prime and that is what the bank gives the best customers.
It is going to affect you if you have a mortgage and adjustable mortgage tied to prime. You'll get a benefit out of this. It is a half point rate cut. That is good news. If you have a home equity line of credit, it will help you as well, because your monthly amount you have to pay goes down as well. So that it is good news for those folk, but right now because of the special situation in the economy, it is not flowing through to other consumer products that you might expect like credit cards. A lot of banks are not cutting the rates on the credit cards, because they have instituted floors on which interest rates cannot go below and keep some of the profits for themselves, and they are going to have a lot of problems with the credit card in the marketplace.
At the end of the day, the consumers really need to think about how to get the loans and not the interest rate right now, because banks have been so stingy with the customers giving them loans. So my best advice for you if you are out there looking for a mortgage right now and a lot of people are trying to take advantage of what is going on in the marketplace, you really want to talk to all of the bankers that you can to find out where to get the best rate. Just because you are turned down on one side of town, doesn't mean you will be turned down on other side of town.
Shop around for the best mortgage you can find. The rates are decent particularly if you have a solid credit history and you can put 10 to 20 percent down and all of the paperwork ready to go -- Kyra?
PHILLIPS: Well, speaking of shopping, you are going to love this next segment. You know how you and I in New York talked about all of those specialty shops we liked. Listen to this, OK.
Well, what do you do if you want to shopping? Do you head to the cave in the hills? Well, no, don't think things have gotten that desperate, so we would like to at least try to boost your confidence when it comes to shopping. For example, there are bargains out there.
And joining us from Dallas with a shopping bag full of tips is Sue Goldstein, otherwise known as the underground shopper and she spent her career as a beacon of discount shopping. Good to see you. SUE GOLDSTEIN, "THE UNDERGROUND SHOPPER": It is a pleasure to be here and see you, too, and although I cannot see you, I can talk about where to go to save the dough. And if you think that money can't buy happiness, you just don't know where to shop. It is available to everyone, and I'm talking about low, low and lower prices. We are talking about the underground, and everything that I have learned over the last 37 years and shopping underground I learned from my mother.
PHILLIPS: Really? All right. Let's get right to it. I know days when you learned the things from your mom, we didn't have the Internet and able to go to Web sites like we do now, but you sent me a couple of Web sites, Sue, and I want to take the series right to them, is that OK?
GOLDSTEIN: That is great.
PHILLIPS: OK. Here I go. I am starting with your Best Priced Travel which is bestpricedtravel.com and tell me why you picked this site for good deals with regard to travel?
GOLDSTEIN: Well, there is such a war on traveling these days from vacationstogo.com to the Best Priced Travel, but I have found overall that the best priced travel is the best site to get overall best prices on everything from airlines to cruises to hotel rooms, and even though Travelocity used to be hotels.com until they sold it, there is an advantage to going online, because you will see what a consolidator, which means it's a lowest, lowest price, can get for you.
PHILLIPS: I'm already checking out the golf packages. All right, let's move on to the next one. This one is, this is the one for cars, ecarone. I have never heard of this before.
GOLDSTEIN: Well, this is the best site for luxury cars. And you can save, the lowest price on luxury cars, whether it is convertibles, whether it is sedans or SUVs, this is the store, the online store to go to if you want a luxury car that will save you at least $2,000 per unit per car.
PHILLIPS: Wow. Oh, my gosh.
GOLDSTEIN: So, I am talking about half price Jags.
PHILLIPS: Half priced Jags. Well, I don't no if I am in the market for a Jag or a lot of people right now, but for those who still have the money to spend on that, too, good for them.
GOLDSTEIN: Well, there is always the Smart Car.
PHILLIPS: Yes, that is true. Much more economical.
GOLDSTEIN: Yes, it is.
PHILLIPS: Let's go to myshoppinggenie.com. What can we find on here? I have never seen this one before actually. GOLDSTEIN: Well, this is a site ready to be employed somewhere in the middle of November that you can get the best prices on everything. So we are talking about undergroundbargains.com which is the site that you would go to the get the lowest price on clothes, on TVs, on washers and dryers and all kinds of things that you are looking for, because there are people who are still spending money, even though they are cheap and they want the lowest prices. There is still an opportunity for some wiggle room in there. You don't want to overspend. That's the mantra of anyone who wants to go underground shopping.
PHILLIPS: Well, then you can go to 99only.com. Sue Goldstein, thank you so much, great tips. All right. We'll go shopping.
GOLDSTEIN: Let's go! Let's go in a limo!
PHILLIPS: Only Sue. All right. We are going to take a quick break and be right back.
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(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: What kind of bag did you want? Plastic?
ROB MARCIANO, CNN CORRESPONDENT: At the checkout line most people use plastic, but in Nashville, Belmont University art professor Teresa Van Hatten-Granath checks out with a few of her own bags.
TERESA VAN HATTEN-GRANATH, BELMONT UNIVERSITY: I have been making bags and I have given away over 2300 at this point.
MARCIANO: It started out as a project for herself and a few of her friends, but after launching her own Web site greenbaglady.org, Teresa began giving away fabric bags to anyone who requested them for free.
VAN HATTEN-GRANATH: But the catch is that even though I am giving you a bag for free, they have to use it instead of paper or plastic.
MARCIANO: She also asks for photos of recipients using the bags. Using donated materials, Teresa can make one bag in less than 10 minutes and numbers and labels each bag and mails them out. She does not even charge for shipping. With hundreds of billions of plastic bags ending up in U.S. landfills every year, Teresa says she is helping the environment and inspiring others to do the same.
VAN HATTEN-GRANATH: People also call it pay it forward, I am giving somebody something and they're not using paper or plastic so it is give it back to the planet.
MARCIANO: Rob Marciano, CNN.
(END VIDEOTAPE)
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PHILLIPS: Well, the politics of fear and religious extremists are warning of a possible doomsday if Barack Obama is president, and that is not all. Of course, extremists are not the only religious voters with concerns this year. Some Catholics are saying they are having a hard time making up their minds because of the abortion issue. CNN political contributor David Brody is back with us now. We lost him out of Washington to talk about --
BRODY: It was the end times. Boom.
PHILLIPS: That is what I was thinking, that this is ironic that we were talking about folks wanting to demonize Barack Obama, and the next thing I know, poof, you're off the screen.
BRODY: Like the Rapture, I am gone.
PHILLIPS: Exactly, talking about Revelations, but let's not go there, that is scary. OK. Now, we were talking before we lost you, we were talking about the scare tactics coming forward and a lot of extreme ads and publication and talk about Obama, and why is this going on? And is it working?
BRODY: Well, it may be working to a certain degree, Kyra, but the issue is, why wasn't this done if they were going to do this, some of the traditional evangelicals, why wasn't it done six months ago? The reason I say that is because Barack Obama has been able to brand himself very, very well. He has been up on Christian radio as we have seen, and he has been talking about the bipartisan talk and talking about his Christian values, so if you were going to quote come against him, that really needed to be done much earlier than a week out, a couple of weeks out of the election.
In terms of the extremeness of some of what they are saying, you can make the case if some of it is extreme, but at the same time, there is an underlying current, Kyra, that many of the evangelicals do feel very fearful that some of this may not specifically happen, but it will head in that direction, and that is what they are fearful of.
PHILLIPS: Here are things that caught my attention. Remember, he Obama spoke to a Planned Parenthood conference a year ago and he talked about the Freedom of Choice Act and he said that would be to first bill signed into law. So then you brought to my attention this other strategy out there by some religious groups called the "Judeo- Christian" view and it is and online site and they are playing a lot on the abortion issue. As a matter of fact, there is an ad on there with an abortion survivor talking about the Born Alive Infant Protection Act and I know you asked Obama about this. I want to talk to you about the ad and the ad on this Web site.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Can you imagine not giving babies their basic human rights no matter how they entered our world? My name is Gianna Jessen, born 31 years ago after a failed abortion, but if Barack Obama had his way, I would not be here. Four times Barack Obama voted to oppose a law to protect babies left to die after failed abortions. Senator Obama, please support failed born alive infant protections. I am living proof these babies have a right to live.
(END VIDEO CLIP)
PHILLIPS: What do you make of this?
BRODY: Well, I tell you what. Well, that born alive bill has gotten traction within the social conservative movement. I have to tell you, I spoke to Barack Obama in August in the Saddleback Forum, and his handlers said he has never been hotter in the year and half he has been campaigning, than when I asked him that question, because basically people are killing him a baby killer. This is what some folks on the right are calling him.
He gets very upset of that and he is the father of two young children and so that really got to him and goes to the larger issue which is that Barack Obama cannot be seen this way by the general electorate. If he is seen that way, it is a deal killer and they know it and the campaign knows it and they are proactive to make sure it does not get out there as a general perception and they have done a very good job of that, Kyra.
PHILLIPS: Interesting. David Brody, CNN political contributor. Always great to see you. Great discussion.
BRODY: A pleasure.
PHILLIPS: That does for us here in the CNN NEWSROOM. We will be back tomorrow and now we hand it off to Rick Sanchez. Take it away, Rick.
