Return to Transcripts main page

CNN Newsroom

FedEx Cutting Executive Pay & Freezing 401(k) Contributions; Blackwater Could Lose License in Iraq; Consumers Outraged by Credit Card Hikes

Aired December 18, 2008 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: Now thousands of auto workers it's the end of the line.
One carmaker shut down all it's North American plants, another take drastic measures of its own. Want to bet on the snowball's chance in the dessert. Las Vegas, one of many cities reeling from freaky weather. What are the odds?

Good morning everybody. I'm Heidi Collins.

Today, Thursday, December 18th, you are in the CNN NEWSROOM.

We get started this morning with some new numbers on the economy. Initial claims for unemployment dipped last week, a bit more than expected, in fact, but the rate still hovers near a 26-year high.

The new number released minutes ago, a seasonally adjusted level of 554,000. Now that's about 21,000 less than just last week.

Here's more bad news, though, on the unemployment front. Chrysler now says it will close all of its North American manufacturing plants for at least a month beginning tomorrow. The shutdown had been scheduled for just two weeks.

The "Wall Street Journal" is reporting Chrysler and General Motors have restarted merger talks. GM, though, denying that report.

And Ford, the healthiest of the Big Three, also taking drastic measures to save money. Next month it will shut down 10 of the plants for an extra week.

There is an awful lot to cover. Of course, as always, it seems, and CNN's Christine Romans is here now to break it all down for us.

First off, Christine, want to get to you on this information that we, apparently, are hearing about FedEx. What's going on there?

CHRISTINE ROMANS, CNN CORRESPONDENT: Well, the company has come out and said it's going to cut some salaries by about 5 percent and that it's going to suspend matching to the company's 401(k) plan.

Remember, Heidi, we've been talking about some of the things that companies are doing to try to avoid the lay offs and then try to...

COLLINS: Yes. ROMANS: ... kind of tighten the belt? Well, that this means for American workers, as I think you're going to be seeing more companies that might be coming in and asking you, look, you're going to be able to keep your job, but you're going to take a 5 percent paycut or a 10 percent pay cut. And we're not going to be able to match on the 401(k) anymore.

It doesn't mean stop saving, but what it definitely means is that companies are trying to find ways to cut back.

One thing the FedEx said they say the company faces, quote, "some of the worst economic conditions," end quote, in its history, Heidi.

COLLINS: Well, it's interesting, too, because FedEx, obviously, you know, a cargo airline, didn't have to deal with a lot of the issues regarding the passenger airline.

ROMANS: Well -- and jet fuel prices are down, right, so that should be helpful, but it also moves packages and when businesses grow, they send a lot of things. And when businesses don't grow and they're shrinking, they're not sending a lot of things. And that's, that's really the issue there, I'm sure.

COLLINS: All right. So let's talk about these unemployment numbers now, too.

ROMANS: Right. So this number, 554,000 people lined up for the first time for a jobless claims check last week for unemployment benefit. More than 4 million people are continuing to get unemployment benefits. This remains near a 26-year high. We're looking at the worst, the worst kind of situation for people having to need an unemployment check since that terrible recession of the early 1980s.

So that's, sort of, your, your frame of reference, although one economist, Ian Shepherdson, High Frequency Economics, points out that if you adjust for population, we would have to see about a million a week people filing for, for jobless benefits for the first time to get back to how bad it was in the 1980s.

So think of it that way.

COLLINS: Yes.

ROMANS: It's not as bad when adjusted for inflation yet as it was way back in the 1980s, but seriously that doesn't -- you know, not to -- not to under play anybody's problems here right now because it is definitely a problem in the labor market.

COLLINS: No, no. Of course not.

All right, CNN's Christine Romans for us this morning...

ROMANS: Sure.

COLLINS: ... from New York. Thank you, Christine. Well, certainly a lot of weather to talk about this morning. (INAUDIBLE) in fact right before the holidays. Much of the west buried under heavy snow and sheets of ice. And it's snowing in the oddest of places like Seattle and Las Vegas which rarely see snow in town. Even Malibu got a dusting and it's all heading east.

By week's end, we could see some major backups on runways and highways from Chicago to Boston. Winter storm warnings already out for the upper Midwest.

Reynolds Wolf is standing by in the snow center. Should we call it the snow and ice center today, Reynolds?

(WEATHER REPORT)

COLLINS: It's like two or three days away? Is that right?

REYNOLDS WOLF, AMS METEOROLOGIST: We're a ways off, absolutely.

COLLINS: Yes.

WOLF: But this -- tell that to Mother Nature.

COLLINS: Yes, exactly. Sounded happy, though.

WOLF: Exactly.

COLLINS: All right. Reynolds, thanks so much. We'll check back a little later on.

President-elect Barack Obama finishing up some pre-Christmas business, putting his staff together, that is. He's holding another news conference today. In fact, it's the third one this week. It will be coming up next hour.

CNN's Brianna Keilar is joining us now live from Chicago with a little bit more on all of this.

Brianna, good morning to you. Who are we going to hear about today?

BRIANNA KEILAR, CNN CORRESPONDENT: We're expecting, Heidi, that Mary Shapiro will be announced as the president-elect's pick to head up the Securities and Exchange Commission.

The anticipation being that she is someone who will basically come in as a bit of a regulator, a policeman, answering some of the criticism that the -- that Wall Street has not been regulated enough and that has contributed to this financial crisis.

Just to give you a sense of who Mary Shapiro is. She's currently the CEO of what's called the Financial Industry Regulatory Authority. This is the largest nongovernmental regulator of securities, of all who do business with the U.S. public.

She also has experience with the SEC. She was a former commissioner and would replace the current SEC chairman, Christopher Cox. He's come under a lot of criticisms...

COLLINS: Yes.

KEILAR: ... especially recently because of this whole Madoff Ponzi scheme. So, obviously, the idea here, Heidi, is that Shapiro kind of comes in as a bit of a policeman with this experience in regulation.

COLLINS: Yes, very interesting. Also, we're hearing about another Republican that's going to be announced today.

KEILAR: Yes, and we're expecting this announcement to come tomorrow. We're expecting that Barack Obama will announce a Republican congressman, Ray LaHood from Illinois, as his secretary of transportation.

LaHood is someone who has some -- certainly some positions on transportation issues. He's a proponent of ethanol production. He represents the district in Illinois where there is a lot of farmland. He's been focused on infrastructure improvements in Illinois, highways, airports, that kind of thing.

He's a seventh term congressman. Something kind of interesting, Heidi, is actually that he represents all of the counties that Abraham Lincoln represented when he was in Congress as a representative in the mid-1800s. That's kind of neat. And he's also a member of the very import House Appropriations Committee, so he has some understanding of the purse strings and exactly the fiscal dimension of keeping up with the transportation system in the U.S.

COLLINS: All right. So that one actually expected tomorrow. Appreciate that.

CNN's Brianna Keilar...

KEILAR: Tomorrow.

COLLINS: ... coming to us live from Chicago for now.

And just a reminder for you at home, that Obama news conference is scheduled for 10:45 this morning, and when it happens, we, of course, will bring it to you live right here in the CNN NEWSROOM.

Meanwhile, the president-elect is drawing fire for his decision includes influential pastor, Rick Warren, in the inauguration. Warren will do the invocation. Critics are asking Obama to reconsider the choice.

Warren attracts about 20,000 people to his Lake Forest, California church every week. But many people don't agree with his strong pro-life and anti-gay marriage beliefs. Some of them are the liberal Democrat who helped Obama get elected.

A massacre of unspeakable proportions. More than a half million people killed in Rwanda. And now a conviction and life sentence. We've got a live report coming up. (COMMERCIAL BREAK)

COLLINS: An Illinois committee gets back to business this morning. They're considering possible impeachment for embattled governor, Rod Blagojevich. The first government witness takes the stand today. Blagojevich's attorney spoke to the panel yesterday.

Some good news for Blagojevich. The Illinois Supreme Court is refusing to hear arguments by the state attorney general on whether Blagojevich is fit to serve.

Fallout now from Bernard Madoff's alleged multibillion dollar scheme reverberating from New York to Washington. A federal judge has set new guidelines for his release on bail including a curfew and electronic monitoring.

Our senior correspondent, Allan Chernoff, is in New York now with some details on this.

Hi there, Allan.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Good morning, Heidi.

It's been 14 minutes since Bernard Madoff's curfew ended for the night. He's required to stay in his multi-mullion dollar Upper East Side apartment from 7:00 p.m. through 9:00 a.m. under terms of his $10 million bail agreement. He also has to wear an electronic monitoring advice.

Now his attorneys agreed to those bail terms after only his wife and brother, but not his two sons, would sign off on his bond. With only two signatures on that bond, Madoff had to post their homes in Montauk, New York and Palm Beach, Florida as part of the bail agreement.

The criminal complaint against Madoff says he admitted to the FBI that his investment firm had covered up billions in losses. He's facing a single count of securities fraud which carries a maximum sentence of 20 years in prison. And from his lead attorney's comment to CNN, it would appear that he does not plan to contest the charge.

Defense attorney, Ira Sorkin, saying, quote, "This is a tragedy. We are cooperating fully with the government investigation to minimize losses" -- Heidi.

COLLINS: Yes, Allan, a lot of people are wondering in this whole story, where was the regulation? And maybe even to go a step further, how -- do you regulate all of it, all of these deals, if you will, that could be going down?

CHERNOFF: Well, certainly not easy to catch this sort of fraud, but the SEC did have tips, they had leads, they looked into Madoff, but they failed to uncover fraud. And even the chairman of the SEC said that is totally unacceptable.

(BEGIN VIDEO CLIP) CHRISTOPHER COX, SEC CHAIRMAN: I was very concerned to learn this week that credible allegations about Mr. Madoff had been made over nearly a decade and yet never referred to the commission for action.

(END VIDEO CLIP)

CHERNOFF: Chairman Cox says there is no evidence of wrong-doing yet by SEC staff, but he has asked SEC inspector general, David Cox, to investigate. Cox tells CNN, among the issues he'll examine, is the relationship between a former SEC attorney who is part of the team that did inspect the Madoff firm and Bernard Madoff's niece who he married last year.

But a spokesman for the former SEC attorney says that he did not participate in any examination of Madoff while he was involved with Mr. Madoff's niece.

As you can imagine, Madoff investors are absolutely furious and distraught.

(BEGIN VIDEO CLIP)

ROBERT CHEW, INVESTOR: It's kind of like a financial murder. And the feeling that you get is that -- you're hopeless, your life is forever changed, and you just don't even know where to start to pick up the pieces.

(END VIDEO CLIP)

CHERNOFF: Heidi, no question that this is one of the great investment scandals of our time.

COLLINS: Yes, certainly, no question about it. All right. I have a feeling we're going to hear a lot more about it, too.

Allan Chernoff, thanks so much. Live from New York this morning.

Life in prison for genocide. It's the price this man must pay as a convicted mastermind of a 1994 massacre at Rwanda. An international criminal tribunal says the former Rwandan Army colonel ordered the killings that claimed more than a half million lives.

CNN's David McKenzie is joining us now live from that Nairobi, Kenya.

David, good morning to you.

DAVID MCKENZIE, CNN CORRESPONDENT: Good morning, Heidi.

Well, it really is a victory for justice. Long delayed justice. 14 years ago, the Rwanda genocide happened basically over -- 800,000 people were killed in the space of less than 100 days. But today, in a tribunal in Arusha, Tanzania, Theoneste Bagosora, who is a colonel at the time, was convicted of the crime of genocidal, of war crimes and crimes against humanity. He and two others will face life in prison now for all the crimes that they committed. He's widely considered to have armed the militia that then took on Tutsi ethnic group and Hutu minority groups who -- excuse me, the Hutu opposition groups in that -- at that time.

And he's also considered to have helped order the army to do these killings. So this is a significant day for justice for this region and people will be looking now to see if others can be brought to justice in this tribunal, Heidi.

COLLINS: How are they feeling about how long this took from when the massacres happened in Rwanda to now?

MCKENZIE: Well, it took a very long time, obviously, over a decade. The -- Bagosora was caught in 1996 in the Cameron with one of the other accused and then brought to the original tribunal. Their trial started in 2002. It lasted until today.

So a long time in coming. The court has been criticized for the corruption and slowing that had at least two judges presiding over this case. But -- now all of that is kind of forgotten today because they have achieved a significant milestone in this case, because before they were only underlings involved or at least mid-level people involved in the genocide have been convicted and got sentenced.

But now three of the people who are considered in many ways the masterminds of this awful event are going to face jail for the rest of their lives. Heidi?

COLLINS: All right. CNN's David McKenzie for us, live from Nairobi, Kenya.

Thank you, David.

Now to Zimbabwe. In South Africa, people are dying from cholera in epidemic numbers. The U.N. says more a thousand people have died from the water-borne illness and a number of suspected cases now exceeds 20,000.

U.N. Secretary-General Ban Ki-Moon is blasting the country's leadership for failing to respond to the crisis. He says nearly 80 percent of Zimbabweans don't have access to safe drinking water and most lack proper sanitary facilities.

Adams, Kennedy, Bush. You don't need a famous name to get elected, but it can't hurt. A look at America's political dynasties.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, DAUGHTER OF JOHN F. KENNEDY: I told Governor Paterson that I'd be honored to be considered for the position of the United States. I wanted to come upstate and meet with Mayor Driscoll and others to -- tell them about my experience and also to learn more about how Washington would help. (CROSSTALK)

UNIDENTIFIED MALE: But you've never held public office so what experience?

KENNEDY: And there's a lot of good people in this candidate that the governor is considering. He's laid out a process and -- and I'm proud to be in that process.

(END VIDEO CLIP)

COLLINS: Her father served in the U.S. Senate, so have two of her uncles. Now Caroline Kennedy is talking publicly about her desire to carry on the family tradition. Right now she's hop-scotching across New York seeking support for her quest to replace Hillary Clinton.

There's no denying, Caroline Kennedy has the name recognition. If you're planning to run for office, that is certainly a plus.

CNN's senior political analyst Bill Schneider now takes a closer look at political dynasties, American style.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST (voice over): The United States is not supposed to have dynasties. But we've got the Clintons, husband and wife. The Jacksons, father and son. The Bushes, father and son, and maybe brother.

UNIDENTIFIED FEMALE: Have you told Jeb to run for the U.S. Senate in Florida?

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Yes.

SCHNEIDER: And the Kennedys.

STEPHEN HESS, BROOKINGS INSTITUTIONS: Ted Kennedy wasn't even of age to be in the Senate when his -- when his brother was president, gave up his Senate seat and put in a friend to hold the seat until Ted Kennedy became 30.

SCHNEIDER: The governor of Delaware has named a place holder to take Joe Biden's Senate seat until 2010 when Biden's son will be back from Iraq and able to run.

Stephen Hess has written about America's political dynasties.

HESS: It may be that it has become so incredibly expensive to run for -- Congress, particularly for the Senate that it sure helps to have a brand name.

SCHNEIDER: In a democracy, name recognition is crucial. People don't vote for someone they've never heard of. There are many ways to get name recognition. You can spend a lot of money on ads. You can be a celebrity or you can have a famous name. But your name will only get you so far.

HESS: After one step up the political ladder, you're pretty much on your own.

SCHNEIDER: As a potential senator from New York, Caroline Kennedy is getting some of the same criticism Hillary Clinton got when she first ran in 2000.

JOY BEHAR, CO-HOST, "THE VIEW": Who knows? Maybe she'd be good. I mean I don't think she's qualified. Now, I've said it before. I said Sarah Palin wasn't qualified and I don't think she is.

SCHNEIDER: Hillary Clinton has worked hard to prove herself. If she gets the Senate appointment, Caroline Kennedy will have to prove herself, too.

(On camera): When Governor Frank Murkowski appointed his daughter Lisa to take his old seat in 2002, many Alaska voters were outraged. They passed an initiative to change the method of filling vacancies. Then they elected Lisa Murkowski to a full term.

The voters turned against the father. Governor Murkowski defeated for reelection by a candidate named Sarah Palin.

Bill Schneider, CNN, Washington.

(END VIDEOTAPE)

COLLINS: What a wacky forecast. Sweater weather for some people, but for almost everyone else, find the warmest coat you've got. Reynolds Wolf map it out in just a moment.

(COMMERCIAL BREAK)

COLLINS: American workers are dealt another brutal blow. Auto makers are temporarily shutting down and more people are lining up now to get unemployment benefits.

Susan Lisovicz is at the New York Stock Exchange now with details on this.

Good morning there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Heidi.

We're expecting a modestly higher open despite new signs of the increasing fragility of the Big Three automakers.

Chrysler said it's stopping all vehicle production for at least a month. Usually auto makers shut down for two week period during the holidays, but Chrysler is extending that until at least January 19th. It says potential buyers can't get credit.

Meanwhile, Ford is extending its holiday shutdown to three weeks at several of its plants. That's likely to push up unemployment claim in coming weeks. A new report out this morning shows first-time claims fell last week, still the number of people drawing unemployment close to 550,000, remaining near a 26-year high.

There's the opening bell, and ringing the opening bell, Heidi, by the way, is a nurse, a registered nurse who's retiring after 33 years working here at the NYSE.

We need some medical intervention, I think, on the economy as well.

Shipping giant FedEx today calling this economic environment one of the worst...

COLLINS: Yes.

LISOVICZ: ... in its 35 year history. FedEx is cutting pay and temporarily freezing 401(k) contributions. The company's CEO, Heidi, will take the biggest cut of all. A 20 percent reduction. But the company still managed to post a three percent gain in quarterly earnings. FedEx shares in the first few seconds of trading are up 1.5 percent. And FedEx is considered a good barometer of the company because, remember, it serves so many various sectors.

And in the first few seconds of trading, the three major averages are up modestly. The Dow is up 29 points. Nasdaq is up three points. Oil prices continue to go in the opposite direction, dipping below $40 a barrel this morning. A-year low despite OPEC's production cut yesterday, when we saw oil drop a few bucks yesterday as well, Heidi, because the decline in global demand is such that it's offsetting even OPEC's stated production cuts -- Heidi.

COLLINS: All right, Susan. We sure do appreciate that. Thank you.

LISOVICZ: You're welcome.

(BEGIN VIDEO CLIP)

BRAD WILSON, CHRYSLER WORKER: This could be harder on everyone. My wife is back to college, but she we won't continue that because we won't have the money to send her. So, I don't know where we go from here. I mean, no jobs around. The money will run out in 10 months. Then we will be filing bankruptcy, too, just like everyone else will be.

When it sets in, we are off for a couple of weeks, then it gets -- it gets depressing. The Senate House and try to think what you can do and it's just hard. It is hard. It's your life.

(END VIDEO CLIP)

COLLINS: As you just heard our Susan Lisovicz say, too, holidays are in limbo for thousands of U.S. auto workers. Chrysler now said it will close all of its North-American manufacturing plants for at least a month. That will begin tomorrow. The shut down had been scheduled for just two weeks.

Ford, also taking drastic measures now to save money. Next month, it will shut down 10 of its plants for an extra week. In the airline industry, merger talks are off between Qantas and British Airways. In separate statements, the airline said they simply couldn't agree on key issues. British Airways still in merger talks with the Spanish Airline, Iberia.

Well, here's something you don't see every day. Snow in Vegas. The welcoming sign as always, though, a big tourists draw, even more so now. Up to three inches have fallen on the Vegas strip, driving but dicey, get it, for a while. And the airport had to cancel some flights, too. It doesn't compare, though, back to 1974 when Vegas saw nine inches of snow.

Boy, I definitely missed that, Reynolds.

(WEATHER REPORT)

COLLINS: Yes, initially. And much better situation now. But still a lot of them without power.

WOLF: You bet.

COLLINS: All right, Reynolds, we sure do appreciate that.

In fact, we do have some iReports to share with you. This one -- quote -- "unbelievable." That's what Daryl Roberts kept saying over and over as he drove through his Las Vegas neighborhood yesterday. Yes, that's Vegas. His wife, Maria, behind the video camera. They said he can't imagine how excited everyone is there to see snow.

The Lindorfer children in Apple Valley, California pretty thrilled, too. It was snowing around their desert home as well yesterday. Christine Lindorfer told us she couldn't keep her kids inside.

It was not as much fun, though, for these drivers in Portland, Oregon. Despite their best efforts, most of them just couldn't make it up that icy hill. IReporter Bob Cronk caught them trying their hardest.

You can share your images with CNN viewers, too. It's easy. Just go to ireport.com.

The United Nations chief in Afghanistan is urging international military forces to do more to protect the lives of civilians. The U.S.-led military mission in Afghanistan is what President-elect Barack Obama said should be the focus of the war on terror. But here's a memo to the next president. It won't be easy.

CNN Pentagon correspondent Barbara Starr with some insight.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Mr. President, some say the war is Afghanistan isn't going well. It's one of the reasons you Bob Gates to say on as secretary of defense.

BARACK OBAMA (D), PRESIDENT-ELECT: As Bob said not too long ago, Afghanistan is where the war on terror begins and it is where it must end.

STARR: But how to end it? You will soon be asked to approve sending an additional 20,000 troops to join the 30,000 already there.

UNIDENTIFIED MALE: We are hopeful that we will be able to send an additional two combat --brigade combat teams by late spring.

STARR: The first wave arrives here in southeastern Afghanistan where there haven't been enough U.S. troops or Afghan police to provide security. The Taliban now controls some towns and villages moving about unchallenged in some cases.

UNIDENTIFIED MALE: They got areas where they can sleep, where they can eat, where they may have contacts and couriers come and deliver money.

STARR: It's an insurgency fuelled by a thriving puppy crop. Your top military adviser warn with all these challenges, even 20,000 more troops won't be enough for all out victory.

UNIDENTIFIED MALE: I think there needs to be a considered effort, economically, and a considered effort in the governance rule of law. Diplomatic, political side.

STARR: Billions of dollars in aide is urgently needed, so are more troops from our allies, but NATO countries have been resisting getting more involved.

In the Afghan security forces, the U.S. is training. The U.S. will pay the tabs for them for decades to come. Your not so new secretary of defense seems frustrated.

UNIDENTIFIED MALE: I think everybody would agree that holding your own is not good enough.

STARR (on camera): Mr. President, the clock will be ticking as soon as you take office to try and get the troops into Afghanistan as quickly as possible. Why?

Afghanistan is set to have its own election in September of 2009. The U.S. troops will be vital for providing security for those elections.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

COLLINS: The private security contractor, whose former employees are accused of killing Iraqi civilians, may be banned from operating in Iraq. Blackwater is the State's Department main private security company protecting American diplomats in Iraq. The State Department inspector general said the Iraqi government may deny Blackwater, a license to operate in Iraq. Five former Blackwater guards have been indicted in a 2007 shooting in Baghdad that killed 17 Iraqis.

The hottest ticket in town. Stars looking for a place at the inauguration willing to pay top dollar.

(COMMERCIAL BREAK)

COLLINS: Another announcement on tap for President-elect Barack Obama. His choice for top spot at the critical Securities and Exchange Commission is expected to come next hour. Sources tell us former, as you see, Commissioner Mary Shapiro is the pick. The Obama news conference scheduled for 10:45 this morning. So, of course, we will be bringing it to you live just as soon as it happens.

Big names spending big money all trying to get a good spot at the inauguration. It's a hotter ticket than any Oscar's party.

CNN's Samantha Hayes now has more.

(BEGIN VIDEOTAPE)

SAMANTHA HAYES, CNN NATIONAL CORRESPONDENT: It promises to be a premier like no other, marked performances by Aretha Franklin, Yoyo Ma, Itzhak Perlman and the Hollywood A-list is snapping up top dollar tickets. In the audience for a change, Halle Berry, Jamie Lee Curtis, Jamie Fox, Sharon Stone, Samuel L. Jackson.

GARRETT GRAFF, EDITOR AT LARGE, WASHINGTON: What we've certainly seen in this inauguration I think is just unprecedented levels of entertainment industry interest and Hollywood interest.

HAYES: For red carpet treatment, all those stars have paid $50,000 to Obama's inaugural committee. So what does 50K get you? Four tickets to the swearing in. Plant box on the parade route and four tickets to the ball of their choice. It's a measure of the excitement around Obama. That the stars are themselves stars truck.

GRAFF: We've never seen this before, especially coming off eight years of President Bush where there just hasn't been that much interest in Hollywood, in Washington and the Bush administration.

HAYES (on camera): It may sound like a velvet rope sweet deal for the stars, but the truth is, the Obama inauguration has dramatically cut the ability of the rich and famous to get insider access.

(voice-over): Linda Douglass, the top spokesperson for the inauguration committee tell CNN, they have placed stringent restrictions on fund-raising. No funds from lobbyists, corporations, unions or pacts, and a $50,000 limit on individual donations, far below some limits in the past.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I, George Walker Bush --

HAYES: The last time around, for example, the Bush Inaugural Committee took donations of up to a quarter million dollars and corporate money was welcome. This time, the privately-raised funds will also buy thinks like JumboTrons and sound systems so people without tickets can see and hear what's happening.

Samantha Hayes, CNN, Washington.

(END VIDEOTAPE)

COLLINS: The perils of plastic. Are you feeling the pain of a credit card rate jump? Lots of people are. Can we get a little help here?

(COMMERCIAL BREAK)

COLLINS: Quickly, let's check out the big board. Up three, there you go. So we got one more day before the full week of trading. The last week of full trading here in the year. So, hopefully, we will see a little more of movement there yesterday when things were all set and down. Dow Jones Industrial Average is closed down about 100 points or so. So, we will be watching those numbers closely as always.

On another money note, many people drowning in credit card debt may get some welcome news today. The Federal Reserve expected to adopt new rules, making it harder for credit companies to hike those interest rates. The proposed changes would ban practices like raising interest rates on pre-existing balances unless the payment is over 30 days late. Another proposal would prevent banks from raising a customer's interest rate if they fall behind paying other bills.

So what's going on with those credit card interest rates? Details now from Drew Griffin of our Special Investigations Unit.

(BEGIN VIDEOTAPE)

DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT (voice-over): It arrived in Rich Stevens' mailbox a few weeks ago, the notice he and his wife were being rate-jacked on their Citibank Visa cards.

RICH STEVENS, CREDIT CARD HOLDER: In my case, 9.5 to 16.99 or 15.99. In her case, I'm not sure what her initial rate was, but it -- it went up to 18.99.

GRIFFIN: Stevens doesn't know why. He's got great credit. But, like thousands of credit card customers, he's been notified his rate is skyrocketing.

STEVENS: It almost borders on loan-sharking, from my perspective.

GRIFFIN: In the blogosphere, writers are livid at the instant skyrocketing rates, now dubbed rate-jacking. And Citigroup seems to be the target of most blogger venom, partly because Citigroup issues so many credit cards, and also because Citi began sending the notices right around the same time it was getting a huge government bailout, a $20 billion investment from you, the taxpayer. (on camera): We couldn't find a single person at Citigroup, not one in that whole building, who would come out and talk to us on camera.

Instead, Citigroup sent us a statement, saying that, "To continue lending in this difficult credit and funding environment, Citi is repricing a group of customers."

(voice-over): Citi told us anyone unhappy with the new rates can opt out, continue paying the lower interest, but they must close their account when their card expires. It's all in the fine print.

New York Congresswoman Carolyn Maloney says she is sick of the fine print.

(on camera): The problem has been, credit card companies get away with it whatever they want, as long as they put it in the fine print, right?

REP. CAROLYN MALONEY (D), NEW YORK: Exactly. They all have this provision that says they can raise the rate any time, any reason.

GRIFFIN (voice-over): In September, she got the House to pass the credit card holders bill of rights, that would have stopped rate- jacking and other fees that she says banks have been getting away with. It passed by 200 votes.

(on camera): Yours was the first House vote that went against these banks and credit card companies.

MALONEY: First in history.

GRIFFIN: First in history.

(LAUGHTER)

GRIFFIN: You passed overwhelmingly, like you said, with a huge vote. It goes to the Senate. It goes nowhere. Why?

MALONEY: We have to keep working. We have to pass it . There is a lot of pushback from the financial industry.

GRIFFIN (voice-over): Critics say that pushback is because of greenbacks, money, donated to politicians, who pass -- or don't pass -- laws that regulate credit cards.

"Keeping Them Honest," we contacted the Senate Banking Committee, where Maloney's bill has just sat since September. The chairman of the committee is Connecticut Senator Chris Dodd. His staff told us the senator has his own credit card bill, with tough language to stop things like rate-jacking and shortening the billing cycles, all the things that make consumers angry.

But even his own bill seems stuck in his own committee, no action since July. Maloney won't criticize fellow Democrats, but does say the pressure from the financial sector is intense. And Dodd took in more than $4 million from that financial sector during his last campaign.

Dodd's office didn't respond to our questions about that, but did say that he's tried repeatedly to protect consumers, but "legislation has been met with stiff opposition by the credit card industry." Drew Griffin, CNN, New York.

(END VIDEOTAPE)

COLLINS: What would you do if you found a wallet full of cash? We'll tell you what honest Abe did. And, yes, that is his real name.

(COMMERCIAL BREAK)

COLLINS: It's borderline unheard of. That's what a Colorado surgeon says about a rare brain surgery performed on a 3-year-old boy. The surgeon says he removed a tumor from the newborn's brain that contained a tiny foot and other partially formed body parts. He's not sure what caused the growth, but he says it could have been a case of a fetal twin beginning to form. The baby's parents say their son will need monthly checkups for a while, but otherwise he's doing, OK. Incredible story there.

The effects of alcohol changing as you move through your 30s, 40s and 50s. CNN medical correspondent Judy Fortin takes a look now.

(BEGIN VIDEOTAPE)

JUDY FORTIN, CNN MEDICAL CORRESPONDENT (voice-over): It's the holidays, time for sharing the bubbly with family and friends, but experts warn watch your heart.

Cardiologists say party people should be aware of Holiday Heart Syndrome, a condition where healthy people drink too much, during the festivities. The alcohol stimulates the heart into an abnormal rhythm which can make you feel like your heart is racing. Even when it's not the holidays, alcohol can have negative side effects, especially as we get older.

In your 30s and 40s, moderation is key. Studies show some alcohol, like red wine, is good for your heart, but you need to limit how much you drink. For women, two drinks per occasion is safe. Men should keep it to less than five. That's because women usually have more water and fat in their bodies which affects alcohol intake.

DR. PETER MARTIN, VANDERBILT UNIVERSITY MEDICAL CENTER: Women metabolize alcohol somewhat differently from men. So if you have a drink of alcohol, there are higher concentrations of alcohol in the bloodstream reaching the brain in women because of these differences.

FORTIN: As you get older, alcohol may become a crutch. New studies have found some people as they approach retirement may become depressed and turn to alcohol.

MARTIN: There are lots of stresses with aging. And so, it's a combination of filling up one's time with drinking or using alcohol as a way to control your emotions and your feelings, to soothe yourself. That alcohol tends to be, for some people, a late onset phenomenon.

FORTIN: And the effects of too much drinking over the years now begin to show up in your 50s. Like ulcers, liver disease, diabetes and high blood pressure.

MARTIN: Chronic effects of alcohol on things like memory and attention and ability to focus and those kinds of things, they usually are the very first aspect that goes awry when people use too much alcohol.

FORTIN: And as you age, watch what prescriptions you're taking. Medications for heart disease, allergies and anxiety should never be mixed with alcohol. Plus, you need to know what you can handle.

MARTIN: As you get older, your brain does get more sensitive to alcohol. So if you were 30 and 40 and could drink two or three drinks at a party, you might only be able to drink one or two.

FORTIN: So best to keep it to a minimum this holiday season.

Judy Fortin, CNN, Atlanta.

(END VIDEOTAPE)

COLLINS: To the new top dog in the SEC. Barack Obama holding a news conference, next hour. We're going to bring it to you live.

(COMMERCIAL BREAK)

COLLINS: Honesty is always the best policy. But when you've got a name like Abe Lincoln, you must really feel the pressure to do the right thing. Kelley Morris of our affiliate WPTZ introduces us to one man who lives up to his reputation of his name sick.

(BEGIN VIDEOTAPE)

KELLEY MORRIS, WPTZ CORRESPONDENT: He's often told he looks like Jerry Garcia. But his name is Abe Lincoln, just like the president and, yes, he's heard the jokes.

ABE LINCOLN, HONEST ABE: Everywhere I go.

MORRIS: And there will be more because of what happened this weekend while Lincoln and his girlfriend were shopping.

(on camera): Lincoln's girlfriend was walking through this parking lot when she saw the man run by and drop a wallet just like this one. She picked it up, but they couldn't catch up to them.

(voice-over): The two opened it and saw it belonged to a 61- year-old man named Raymond Hudson. They started making calls and tracked down the man Hudson worked for, Mason Forenz (ph).

UNIDENTIFIED MALE: He was just devastated.

MORRIS: Devastated, because the wallet had all of Hudson's cash in it, nearly $3,000.

UNIDENTIFIED FEMALE: He was just happy. He hadn't slept since he had lost his wallet.

MORRIS: Hudson will have to wait a while for his wallet and money. He's on a bus headed to Miami. When he gets home to Jamaica, Hudson can give all the credit to that other Abe Lincoln.

UNIDENTIFIED MALE: It's a great story. And it's a great -- refreshing for humanity. You know, that, they're still a lot of good people around.

LINCOLN: In the name, honest Abe, isn't it?

MORRIS: Well, it's honest Abe, isn't it?

LINCOLN: That's what usually comes out.

MORRIS: So, are you? Are you honest, Abe?

LINCOLN: Well, yes.

(LAUGHTER)

LINCOLN: (INAUDIBLE), I'm glad we did it.

(END VIDEOTAPE)

COLLINS: The happy ending was especially meaningful for the man who lost it, because according to his boss, the Jamaican worker lost his wife to cancer recently and has had a really rough year.