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Obama Unwraps Mortgage Makeover Plan; Program Offers Low Rent in Slow-Selling Homes; Americans Obsessed with Stock Market; "Clean Coal" Up for Debate

Aired March 04, 2009 - 13:00   ET



Pushing forward and away from the brink of foreclosure, President Obama's new $75 billion mortgage makeover plan open for business, open for you. Where many investors see misery, the president sees opportunity. A rally is born. Is the West Wing pushing Wall Street forward?

Hello, everyone. I'm Kyra Phillips, live at CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.

So do you want to refinance but can't? Struggling with house payments that now eat up half your income? Well, today the foreclosure prevention policy becomes reality. Let's get straight to Gerri Willis on who can get help and how -- Gerri.


Yes, President Obama's foreclosure prevention program is -- well, it's open for business. And for eligibility and guidelines, you can go to

Now, the program is called Making Home Affordable. You can find it on their Web site. And when you go out and ask for help, that's the name you should use.

This plan has two initiatives. The first is for people who are under water in their mortgage. Let's look at the details.

If you are current on your mortgage but can't refinance because of falling home prices, this program may be for you. Your loan must be held by Fannie Mae and Freddie Mac. Ask your lender for details. And you have to have an income to cover your payments each month. You can't be unemployed. What this does, it allows you to refinance into a loan with lower monthly payments or to avoid a rate reset.

Now, to be truthful here, there's no principal reduction, but you save money over the life of the loan, because the interest rate is lower.

The second initiative, totally different. It's designed to help lower monthly payments for homeowners at risk of losing their homes. These are loan modifications, and they work by reducing interest rating. The new interest rate is in place for five years. Then it begins resetting higher. And for the first time, the issue of second mortgages is addressed by the government. This would eliminate secondary mortgage debt for borrowers who qualify. If you're behind on your mortgage payment, you may qualify. Your mortgage must be on a primary home. You can't have -- this can't be a second home. It can't be a home you're flipping or investing in.

Your monthly mortgage bill has to be more than 31 percent of your monthly gross income. Monthly gross income, this level is basically a safety level. Above 31 percent, you're at risk of losing your home.

What it does, the lender may lower interest rates and/or principal balance through loan modification. They think this part of the program will help three to four million people -- Kyra.

PHILLIPS: Well, what can people do right now to get ready, Gerri?

WILLIS: Well, you've got to contact your lender or your servicer, or if you're working with a housing counselor, call them right now, today. This program is operating right now.

What you need to get the new loan or the modification, is proof of income. You'll need pay stubs. You'll need a most recent income tax return. Second mortgage docs, if you have one. If you have a home equity line of credit, get those documents. Credit card payment proof. So, you know, the last check you sent off to the credit-card company. Information on other loans. If you have a student loan or a card loan, they'll want to look at that, as well.

So basically, all the stuff that you would use to file -- to actually get a loan in the first place, that's the kind of data that you want to gather so they can see that you're on the up and up, you're -- you know, you can pay for your house, that kind of thing.

But let me tell you, this program is operating right now. Go to, see if you qualify. If you're behind on your loan or maybe your house's value has just dropped, it would be great for to you go to, get your documents together, call your lender and see if you qualify for some help here. Look, it might as well be you getting that help.

PHILLIPS: That's right. And next hour we're actually going to go to and actually show our viewers how to kind of weave their way through the Web site. Gerri, thanks so much.

WILLIS: My pleasure.

PHILLIPS: We always want to hear from you. So send us your questions about your mortgage and the President Obama's plan to make it more affordable. The address: Like I said, Gerri is going to join us next hour with some answers for you.

Well, what, if anything, have you given up to save money? IReporter Robin Savage is pretty hardcore. She actually dumped her cell phone. She was all excited at first, but now let's just say it's too bad that there's no gum or patch for cell-phone withdrawal. Here's Robin before and after.


ROBIN SAVAGE, IREPORTER: I'm so tired of the fees. And every month when I get my bill, it's kind of like opening up the envelope for the Academy Awards. You're like opening up, like, "Oh, my gosh, wow." You know? And I just -- every month it's like that. It is complete torture.

And they say cigarettes are addictive. But I'm telling you, I think cell phones could be just as bad. After having been without my cell phone for a few days, people are e-mailing me like, "Why didn't you get my calls?" I don't have my cell phone anymore. So -- but I'm going without a cell phone because I can't stand them.


PHILLIPS: That's got to be tough.

But if you just can't ditch your cellie, there are lots of other ways to fight for your money. For instance, you're probably watching us on cable or satellite TV, right? Well, according to financial guru David Bach, it's pretty easy to get your provider to wheel and deal. So check your junk mail for specials, then call your people and see if they'll match them.

And by the way, David will join us live with more great tips in just a few minutes.

So how'd you like to save $40 billion a year? President Obama says that we can if the government cleans up the way it does business with contractors and venders. And that's his next order of business.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Peter Orszag, my budget director, will work with cabinet officials and agency heads to develop tough new guidelines on contracting by the end of September.

We will stop outsourcing services that should be performed by the government and open up a contracting process to small businesses. We will end unnecessary no-bid and cost-plus contracts that run up a bill that is paid by the American people. And we will strengthen oversight to maximize transparency and accountability.

Altogether, these reforms can save the American people up to $40 billion each year.


PHILLIPS: All right. So here's the takeaway. The president says that competition and careful oversight are the key to making federal contracts pay off for tax payers. So as you heard, the White House Office of Management and Budget will work with cabinet departments and agency -- agency heads, rather, to rewrite the rules for spending your money. Mr. Obama actually cited a congressional audit that found almost $300 billion in cost overruns in 95 projects underway for the Pentagon.

Well, presidents do it every year, but very few foreign leaders make formal addresses to the U.S. Congress. Gordon Brown is the latest and, as you might have seen here live on CNN, the British prime minister brought lawmakers it their feet repeatedly, citing U.S. and British solidarity in a time of upheaval.


GORDON BROWN, BRITISH PRIME MINISTER: An economic crisis does not stop at the water's edge. It ripples across the world. Climate change does not own a passport control. Terrorism has no respect for borders. Modern communication instantly spans every continent. The new frontier is that there is no frontier. And the new shared truth is that global problems now need global solutions.


PHILLIPS: By the way, Brown didn't come empty-handed. He announced an honorary knighthood for Senator Edward Kennedy, who's undergoing treatment for brain cancer.

They've served with honor, had a fellow soldier die in their arms, and been wounded in action. But what's happening back home might be the toughest blow yet. We're pushing forward for your vet.


PHILLIPS: No ordinary town. That's what you see here: one that's dogged the recession bullet. We've got the low down on why it isn't singing the blues.


PHILLIPS: Well, it's one of the harshest, some would say cruelest side effects of the recession: people losing their homes to foreclosure. But there's one company offering help in a unique way, albeit with a few strings attached. Melissa Mahan of our affiliate KOAT has the story.


MELISSA MAHAN, KOAT CORRESPONDENT (voice-over): Tom Schmidt has been building homes in Albuquerque for decades. But when the economy started to take a hit, he decided to shift his focus and start a unique company.

TOM SCHMIDT, HOMES IN TRANSITION: We like to think of ourselves as being able to really kind of lend a hand out there to the general public.

MAHAN: Homes in Transition places caregivers into vacant homes like this that aren't selling in this market. That person pays a small amount in rent and agrees to maintain the home for potential buyers. A caregiver can be pretty much anyone who needs affordable housing: from people who have gone through foreclosure, to those going through divorce, to someone who just wants to save some money.

CHRISTINE LOHKAMP, HOMES IN TRANSITION: So many people are suffering right now. They can't afford the costs of rents or mortgages. And they could, you know, live in a nice neighborhood and in a nice home at a very reasonable, affordable amount.

MAHAN (on camera): Homes in Transition will put you in a home just like this for $400 a month plus utilities. But there is a catch.

(voice-over): In addition to allowing a realtor to enter the home at any time through a lockbox, the caregiver must also be willing to move with little notice.

SCHMIDT: These properties will all sell. And our caretakers have an option of moving through our service. They can keep going from home to home. We have a moving service that's available for them.

MAHAN: Schmidt says his service provides a way for homeowners and financial institutions to maintain the value of their property until the market picks up again and offers those who are struggling a little financial break.

In Albuquerque, Melissa Mahan, KOAT Action 7 News.


PHILLIPS: All right. I want to show you what two Web sites that we found pretty helpful today as we talk about the foreclosure situation, a lot of us dealing with.

The first site actually helps you, the homeowner, discover what you qualify for in this new homeowner affordability and stability plan. We actually found this through and just today, this Web site popped up. And you can see here, it actually -- it's a little confusing, because when you first log on to it, it says the site is coming soon. But actually, if you come down just a little bit, you can see the specifics of how it can help you in particular.

I'm going to go ahead. What you want to do is you'll click onto "Making Home Affordable," which is this part right here. And this gives you, for example, if you're a homeowner who's current on your mortgage payments but unable to refinance to a lower interest rate because your home value has decreased, you may be able to refinance. And then it kind of gives you the one-two, where to call, what you can logon to. If you answer yes to all these question, you click here, and it actually takes you step by step by step.

Here's another Web site that we found. This is through the "New York Times" map, and you can go to any state in the country, hit that state, and county by county it tells you the unemployment rate. For example, we had just recently hit -- let me take you over to -- let's see -- let's say Missouri. OK? And then you can actually go from county to county.

So if I were to flip around the state of Missouri -- it's kind of hard because -- sorry about that. I'm learning how to use the touch screen. But anyway, when the counties pop up, it will actually tell you the unemployment rate. And then it tells you the one-year change, if it's up or it's down.

So we were all going through this map today looking at states where we grew up, clicking on the county where we grew up, and it was telling us the unemployment rate.

So there you go. Two Web sites for you to check on, to helping if you're thinking about possibly refinancing, how that, through the Homeowner Affordability and Stability Plan, you can go And then if you're interested in unemployment rates, state by state, we found this great Web site on

All right. Well, don't talk the "R" word to the folks of Citrus Heights, California, just down the road from Sacramento. It's in the catbird seat, actually, to the tune of a $35 million surplus. And get this: the city has never borrowed money since being incorporated back in 1997.

How is that possible? Well, the city manager sums it up in two words: common sense.


HENRY TINGLE, CITRUS HEIGHTS CITY MANAGER: We had a policy of socking away as much money as we could, because we knew this rainy day would come. I have been accused of being, you know, a penny pincher, but it's paying big dividends for the city now.


PHILLIPS: Well, he's got that right. For example, Citrus Heights has saved interest payments by forking out cash for a new police station and an $11 million community center.

Well, the center of attention these days, the stock market. Even people who don't know their NASDAQ from a hole in the ground are obsessed with the big board. Too obsessed, some people say. And President Obama is one of them.


UNIDENTIFIED MALE: My confidence in the market, I think it's going to rebound, but my confidence is waning. My lips say yes, but I've been (INAUDIBLE) -- I've been losing money and I'm not sure I'll stop losing money on this thing yet.

STEVE SANDE, IREPORTER: I don't really invest except for my 401(k) and in that case, I don't really look at it.


PHILLIPS: Well, it seems we're all a little obsessed with the markets lately, so let's go ahead and check the big board. Up 103 points right now. And if you're caught up in the daily Dow drama or having nightmares about the NASDAQ, President Obama wants you to take stock of the big picture, because that's what he's doing.


OBAMA: What I'm looking at is not the day-to-day gyrations of the stock market but the long-term ability for the United States and the entire world economy to regain its footing. And, you know, the stock market is sort of like a tracking poll in politics. It bobs up and down day to day, and if you spend all your time worrying about that, then you're probably going to get the long-term strategy wrong.


PHILLIPS: Will the nervous nation take Mr. Obama's advice? As our Carol Costello found out, it could be a really tough sell.


CAROL COSTELLO, CNN ANCHOR (voice-over): The Dow has taken on a life of its own. It's up; it's down; it's tanked. And America can't take its eyes off its little wiggly line.

UNIDENTIFIED FEMALE: But it bothers me, because that shows me how the economy is doing.

UNIDENTIFIED MALE: It concerns me more because of how everybody reacts to it.

UNIDENTIFIED MALE: I'm concerned. Definitely I'm alarmed.

COSTELLO: And why wouldn't they feel that way? The joke is their 401(k)s have become 201(k)s, and the falling Dow is all they hear about.

UNIDENTIFIED FEMALE: I hate to say it, but the second target might be 4,000 and maybe 400.

UNIDENTIFIED MALE: Some popping and dropping, largely dropping.

UNIDENTIFIED MALE: I wish I could hold your hand.

COSTELLO: It's the kind of analysis that has talk radio buzzing.

UNIDENTIFIED FEMALE: The Dow Jones will make you feel like a victim.

COSTELLO: Psychologist Dr. Joy Browne says her listeners have become obsessed with the Dow.

JOY BROWNE, CLINICAL PSYCHOLOGIST/WOR RADIO HOST: We've become Henny Penny: "The Dow is falling! The Dow is falling!" And as far as I'm concerned, the Dow is straight id. It's just uncivilized. That's what the Dow is. It didn't mean anything.

COSTELLO: Dr. Browne says you should ask yourself this. Did you become a multimillionaire when the Dow soared to 14,000 in 2007? Browne says if you have a job now and you pay your mortgage, it's not likely the falling Dow will drive you to the poorhouse.

But make no mistake: market analysts like Art Hogan of Jefferies and Company says the Dow is an important economic indicator. When it loses 23 percent of its value, we ought to pay attention. But not obsess.

ART HOGAN, CHIEF MARKET ANALYST, JEFFERIES & CO.: Watching the Dow every day is not going to predict the fact that you may become part of that eight percent that's not working or that you may lose your house. Watching the Dow is more of a reflection of what investors think about the earnings power of those 30 companies that make up the Dow.

COSTELLO: Hogan and other analysts say the erratically diving Dow is more an indication of how Wall Street feels about the president's plans to fix the economy, and traditionally, it has been an indication of how the economy will play out in the short term. And history tells us the Dow has always recovered.

(on camera): The point here is to not allow your mood to be controlled by the ups and downs of the market, because you can't control it.

Dr. Joy Browne says you will feel better if you sit down, come up with a personal plan that will protect you if the worst happens. And it's important to keep in mind, she says, among Americans eligible for and willing to work, 92 percent still have jobs.

Carol Costello, CNN, Washington.


PHILLIPS: Well, calming down and making a plan, sometimes easier said than down, especially since so many people still have so many questions about the market. In fact, a lot of you sent great ones to like Pat in Bridgewater, Virginia. She wants to know do we stock investors, just hold on and on and on, while it all keeps going down and down and down?

Well, Pat, we've got an expert here to answer your question and a bunch more of those e-mails. Financial guru David Bach is joining us from New York.

David, good to see you.

DAVID BACH, AUTHOR, "FIGHT FOR YOUR MONEY": Good to see you. And you know, it's funny. As I walked through the elevator and the hallways, everybody asked me the same question. So this really is what people are worried about. What do I do about my 401(k) plan? Do I stay in the market? What should I be putting my money in?

And you know, to answer this gentleman's question, but really everybody who is here right now and behind me at CNN, and watching, first of all, it depends on your age. You know, you showed a lot of those people before who were in their 20s and their 30s. If you're investing in your 401(k) plan, and you should be, by the way, paying yourself first. Truthfully, the best thing that can happen to somebody who is young, and I consider myself still to be in the category, young -- 40s, 50s, you're still young -- is to have the market go down for a while and stay down. Because it would be buying the market at this price for a long period of time. And then eventually, as you just said, it will go up.

The people who have to be worried, and there are a lot of them, are the Baby Boomers. If you're in your 60s and you're a year or two away from retirement, let's face it: they're terrified. I have parents that are Baby Boomers. I have grandparents. And they're scared. And they have to be scared, because you know what? In the next year or two, we don't know where the market is going. It could go -- honestly, it could go lower. We could see 5,000 before we see 10,000. So it comes down in your time horizon.

PHILLIPS: You know, and here we are talking about 401(k), 401(k), 401(k), what do we do? We received a lot of e-mails from people saying, "Would you stop talking about 401(k)? There's a lot of us out there that don't even have a 401(k)." How would you advise them when thinking about the future and retirement?

BACH: Well, I'll say this: first of all, the bulk of money invested in the stock market happens to be invested in retirement accounts. So if someone's watching and they actually don't have a company-sponsored retirement plan, then really what you need to do is you still need to be opening a retirement account. You should you go down to a bank. You should go down to a brokerage firm. You should open up an IRA account, you know, decide between a deductible IRA account or a Roth IRA account, and you should continue to pay yourself first.

I have to tell you, in 2007, people were excited about the stock market, and it was 14,000. Now we're sitting here at 6,700, and nobody wants to be in the market. This is what's called a sale. Now again, could go lower from here. But I have to tell you something: it's 50 percent off of where it was a year and a half ago. I like the market better at 6,700 if I'm putting new money in than I did at 14,000.

PHILLIPS: Amen. All right, Joy from California asking this, David: "I'm very concerned about paying for college. We put our savings into mutual funds and 529s that have now tanked, and college is just a year and a half away for our oldest. Any suggestions at this point as to how to get our kids through college?"

BACH: You know, look, I have a little boy, Jack. He's five years old. And we put money in a 529 plan for him. The 529 plan last year that we put money into, it's down 38 percent last year, like almost everybody else who's watching. Because he was young, he's in an aggressive asset allocation.

So what am I doing? I'm leaving it alone, I'm adding more money this year. I'll add more money next year. But, again, he's got, what, 13 years to go.

This couple has a year and a half to go. What should they do? Honestly, they should be out of any asset allocation that has stocks. They should be putting it into a fixed income or money market account inside of their 529 plan, because they cannot afford to turn around and have that money go from where it is today down another 20 or 30 percent. And that could happen in the next year.

PHILLIPS: David, stay with us, OK?

BACH: You got it.

PHILLIPS: Feel like a lot of -- you feel like you spend money faster than you can -- they can print it, right? Well, it's even worse when your bank burns you with overdraft fees. This is a tip from David Bach. Link your checking to a savings or a credit-card account with the bank just in case.

David is going to come back after the break with some more ways to fight for your money.


PHILLIPS: Two weeks after President Obama outlined new help for struggling homeowners, help has arrived. And if you've fallen behind on your payments or your home value has fallen so much you can't refinance, you can now see whether you qualify for the government's $75 billion mortgage makeover plan.

It aims to help as many as nine million households, either by reducing monthly payments to 31 percent or less of a homeowner's income or by loosening the equity requirements for certain refis. You don't need to memorize this. As of today, you can call your lender to find out exactly what it means for you.

Well, if the government's mortgage help won't help you, you can fight for your money. That's the title and the mission of David's new book. He's back with us from New York.

All right, David.

BACH: Thank you.

PHILLIPS: Yes. No, appreciate you taking viewer e-mails. And now let's get to your book. You pointed out a lot of things that probably, you know, is second hat to you, but it caught our attention. Specifically with cell phones. You never really realize how much money racks up on certain things. And you said don't be taken in by excessive monthly minute plans. That's not always the best way to go?

BACH: It's amazing because I was flipping through the book before we started the segment. In 1985, cell phones were basically a brand new industry. We have 3.3 billion cell phones now around the world, over 270 million cell phones in America.

The average cell phone in America bill right now is nearly $50 a month. But here's what's amazing to me. We're only using two out of three minutes a month that we buy. So basically, imagine going -- every time you bought a meal you knew you weren't going to eat almost half of it. You would buy smaller meals. It's the same thing with cell phones. We are buying too many minutes. We're not using them.

Call your cell phone company today and ask them to review: How many minutes do you use on average over the last six months? Are you in the right plan? Do they have a plan with less minutes that is less expensive? Say, I can't afford this bill right now. I've got to get the fee lower. What can you do? They will find you a better price because they don't want to lose your business.

PHILLIPS: Right. You can always comparison-shop. But you've also -- there's also a lot of little hidden fee, hidden amendments, I guess you could say, to the contract that you never really knew about.

BACH: Well, probably the biggest thing people don't know is that they think they're locked into contracts, and they can't get out. You know, so maybe you've got yourself in a $100-a-month rate, and you see the exact same plan now going $50 a month. If you call your carrier, they'll say, well, you've got another six months on your plan.

If you find a mistake on your bill, legally you have a right, then, to break that contract. And if you bring that up with the person on the phone, they know that that's the case, which at that point, you can start negotiating a better deal. Watch out for mistakes because we're finding that mistakes are on all of our phone bills almost every single month if we're not careful.

PHILLIPS: You know, we've talked a lot about credit cards, but debit cards, we really haven't touched on at least here within my news program. And you go into depth about that. How can we fight for our money when it comes to debit cards? Because the only thing we really think of are the fees when we go to get cash.

BACH: You know, in "Fight for Your Money," we wanted to pull the curtain back on the debit card industry because the debit card industry is now, really is almost bigger than the credit card industry. We use debit cards more than we use credit cards. I used to be a huge proponent for using debit cards because we would spend less. It's like spending cash.

I am not a huge proponent now for debit cards. The reason is this. The banks know that you can use a debit card, and they still allow to you use it even if you've used all the money in your bank account. So what we're seeing is that people will go and they'll use a debit card maybe five times in a day. They'll have no money in their bank account. The debit card is going through, and then the bank is hitting them with overdraft fees.

So, literally somebody might spend $25 on a debit card and get hit with $200 that day in over-the-limit fees. You've got to be very careful with these debit cards. If you've got a debit card and you don't have money in your bank, you should not be using a debit card, you'd be better off to use cash. Also, they're more dangerous if you lose the debit card because in most cases, debit cards only protect you if you will call the bank within two days. If you don't call the bank within two days, you're liable for $50 or up to $500 in money that can be used on your card. So you're safer with a credit card.

PHILLIPS: "Fight for Your Money." David Bach, really appreciate your time today. I hope you'll come back.

BACH: It's a deal (INAUDIBLE). And also, they can go to our Web site,, for more details.

PHILLIPS: Terrific, or pick up the book. Great tips in there. Thanks, David.

BACH: Thank you.

PHILLIPS: Well, we've just received word that President Obama is filling another position on his team. The White House now saying he's going get Craig Fugate to lead the Federal Emergency Management Agency. Fugate is currently Florida state emergency director, a post that he's actually had since 2001. He has served under two Republican governors and has received praise for his efforts steering Florida through numerous hurricanes in the past decade.

Pork-barrel politics still very much alive in Washington despite these tough times that we're in. The new $410 billion spending bill passed by Congress contains billions of dollars in pet projects around the country. These earmarks, as they're known, are drawing a lot of fire from critics.


REP. PAUL RYAN (R), WISCONSIN: We got 9,000 earmarks that the House passed last week, $7.7 billion. Four thousand of those earmarks are from Republicans. So, it's not as if one party is doing this well, and one party's not. Both parties have contributed to the mess we have.


PHILLIPS: Now leading the fight against earmarks, the former Republican presidential nominee, who wants every single one of them banned. Here's CNN's Joe Johns.


JOE JOHNS, CNN CORRESPONDENT (voice-over): They're back. Earmarks. And who better to trash spending on earmarks than longtime earmark archenemy Senator John McCain. Here's a few. They make the senator crazy: $238,000 of your money for the Polynesian Voyaging Society in Hawaii; $300,000 for a World Trade Center in Montana; $24,000 to support abstinence in Pennsylvania. Come on. Didn't anyone notice we're in a deep economic crisis here?

SEN. JOHN MCCAIN (R), ARIZONA: It's outrageous, and it just shows that inside the Beltway, here at the Capitol, we don't get it.

JOHNS: McCain just lost a battle in the Senate to strip billions for earmarks out. But the House has already approved the monster spending bill that's really just supposed to keep the government running. How much of your tax money for these 8,500 pricey little projects? Taxpayers for Common Sense says $7.7 billion.

But if you ask who's throwing all these extra projects in to your shopping basket, you find the usual suspects: Members of Congress who sit on spending committees.

(on camera): Who are the big earmarkers?

UNIDENTIFIED FEMALE: As usual, the big earmarkers are appropriators.

JOHNS (voice-over): Taxpayers for Common Sense says these are the top ten earmarkers in the Senate in the just-passed spending bill. There are also earmarks placed in this spending bill by people who are no longer even in Congress. Vice President and former Senator Joe Biden got $52 million for various projects.

The president's chief of staff and former Illinois Congressman Rahm Emanuel got more than $4 million in earmarks. And we could go on. And yet, the thing is, their boss, the president, has railed against earmarks. So what's going on?

JOHNS (on camera): Now, I know you and the president both said you're going to try to get rid of earmarks and all that. Do you think he's gone back on that?

MCCAIN: Our president committed to earmark elimination in the campaign and a debate. I hope that he will -- I will hope that he'll change his mind. I'll hope that he'll veto this bill. He should veto this bill and tell Congress to send him back one without a single earmark pork-barrel project in it.

JOHNS (voice-over): The White House and congressional Democrats say this big spending bill was a leftover from the last Congress that had to be passed to keep the government running. And that while the president doesn't like the earmarks in it, he's choosing his battles and will still oppose them down the road.

Joe Johns, CNN, Washington.


PHILLIPS: They died for you. Many of them have. So why are some wounded soldiers' medical records MIA? We're pushing forward to find out why.


PHILLIPS: Well, important health news that affects your bottom line. The number of people, your friends and neighbors, living without a medical safety net is rising. A new report from the consumer group Families USA shows almost 87 million Americans, or one this three under the age of 65, were uninsured for parts of 2007 and 2008. Now, of that number, three in five were uninsured for nine months or more. And one-quarter were uninsured during that entire two-year period.

Well, many are calling it a victory for the little guy, or in this case woman. The U.S. Supreme Court ruled in Diana Wynn (ph) Levine's favor today, saying that she had the right to sue Wyeth Pharmaceuticals. Levine, a musician, lost part of her arm to gangrene after a botched injection of a common prescription.

The high court found the pharmaceutical giant didn't adequately label its product, so Levine has the right to collect nearly $7 million from a lower court judgment. The ruling could be one of the biggest in recent years, prompting lawsuits against makers of a wide range of products.

It's an outrage for U.S. troops. We know that more than 31,000 of them have been wounded in Iraq and another 2,700 in Afghanistan. Now, imagine just one of them seeking medical treatment only to find his or her records are MIA. What if he or she has a head wound and no memory of medical history?

We have now learned we can't tell you how many this has actually happening to, but we can tell you why. Chris Lawrence is at the Pentagon. Chris, let's go ahead and put this in perspective. Let's say a Marine corporal comes back after being hit by a bomb and has brain damage and then finds out these medical records have been shredded or they're missing. What does that mean for this Marine in treatment?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Kyra, for him and a lot of others like him, it could mean, A, that you don't get the care that you need. You don't get the specific health care that's going to make you better. Or it could mean another thing, as well, that you don't get the benefits that you deserve. The correct amount of money. You're supposed to get a certain amount of money, and you don't get what you deserve.

Any number of things could happen. And I've got to tell you, a lot of people in Congress are outraged by this whole situation.


REP. TIM WALZ (D), MINNESOTA: I am still baffled that I can send a package anywhere in the world and get online and track that through UPS and know right where it is and who signed it, and yet I've got veterans two years later wondering where in the heck their file is, who saw it and what's going on with it.


PHILLIPS: Who did see it and what is going on, Chris? I mean, who didn't do what properly?

LAWRENCE: Well, there's all kinds of problems, and it all basically, Kyra, comes back to one thing, and that's that most of the VA is overworked and they're undermanned. You know, if you think back to that "I Love Lucy" episode where Lucy and Ethel are on the assembly line, and the chocolates just keep coming, they start stuffing chocolates in their hat, in their suits, throwing chocolates down, eating them. That's what we're dealing with here.

You've got people who are trying to keep up, and they're doing anything at all to try to do that. It's not just a problem with the shredding. They also uncovered instances where certain regional offices offered what they call mail amnesty. Think of like returning overdue library books, where workers could basically bring in all this mail that they had been hoarding and turn it in with no questions asked. At one of those amnesties, they found 16,000 -- 16,000 -- pieces of mail.

PHILLIPS: OK, so what happens now? Because I think you've made it pretty clear that if you can't find these claims, you can't find the medical history, that these men and women who have a medical condition can't necessarily get coverage or money right away, right?


PHILLIPS: So, do they have to just wait?

LAWRENCE: Well, for a certain number, the VA is making an exception. And they've got about six more months to take advantage of these special circumstances where the VA will basically in a nutshell give then the benefit of the doubt. They're working with some groups to try to say if you come forward, we're going to, like, open up the process, so to speak, so that even if you don't have the specific forms, we're going to assume that you did and count it like you filed it at the original date.

Long term, the solution is really going to an electronic paperless system. But that's at least a year away, and in the meantime, what the VA is going to do is, they're going to have at least two people examine any document before it's shredded.

Now, that's going to add a lot of work. I mean, that's a lot of manpower when you think about that for an organization that's already overworked. But they feel that's what they have to do to try to regain some trust with the veterans that are out there.

PHILLIPS: Well, we'll stay on top of it and track it with you. Chris Lawrence from the Pentagon. Chris, thanks so much.


PHILLIPS: Five out of five dentists wouldn't agree to this: superglue holding in your mouth your teeth together? But that's what one woman is actually doing. We're going to tell you all about it.

But first, do you need a moment to decompress from all the pressures of the day? How about a tour of the ocean? Getting you there is the focus of our "Edge of Discovery" segment today. Here's our Gary Tuchman. (BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Astronaut or aquanaut? The concept of flying under water sounds crazy, right? But not to engineer Graham Hawkes, who gave the submarine wings. Yes, wings.

GRAHAM HAWKES, HAWKES OCEAN TECHNOLOGIES: We just had to tear up everything we knew about submersibles and start again on winged subs, underwater flying machines. The machines we build to move under water should look like airplanes, not submarines. Airplanes don't look like balloons.

TUCHMAN: Hawkes says his so-called underwater submersibles are designed to be more agile than any creature living in the ocean. Well, except for maybe dolphins. He's been building these crafts for over a decade.

HAWKES: We're the first to fly. We're the big shots (ph), and it's a hell of a reward, I can tell you that.

TUCHMAN: But Hawkes isn't keeping all the fun for himself. You, too, may someday fly under water. He's now building submersibles for adventurers and private companies.

HAWKES: Do you want to stalk a shark? Do you want to go to a great white and go woo-hoo. Do you want to do a barrel roll with a whale? Shall we go and find some new territory that humans have never seen before. Now, on land, that's incredibly difficult. Under water, anywhere.

TUCHMAN: Gary Tuchman, CNN.



PHILLIPS: Well, a veteran ski patrol member killed in an avalanche. It happened at Squaw Valley Ski Resort in California as the latest big-winter storm barreled in from the Pacific around Lake Tahoe. That storm dumped up to six feet of snow, and at last word, a big stretch of Interstate 80 was shut down because of poor visibility. That highway is the main route between northern Nevada and California.

Chad Myers is keeping track of what's happening right now. Chad, I don't know, have you ever skied Squaw Valley?


PHILLIPS: Yes, let me tell you, it's one of the best ski patrols in the country out there. There's a lot of history behind Squaw Valley. So, for something like that to come down, those conditions have to be pretty bad.

MYERS: It really was. Six feet of snow, basically, in 48 hours. And the base at the top is now -- I'm just checking -- 170 inches. How about that? With a storm total of 72 inches of snow. As the world turns, so do the sands of the hourglass, or however that thing goes. Hey, you know what? Coming up next hour, we had an asteroid fly by the earth on Saturday. Didn't even know about it until, it was like, oh, here it comes, there it goes. Big as a ten- story building. It was, what, one-fifth the distance between here and the moon away. Kind of scary. Didn't even see it coming. I wonder what they're doing out there, but they didn't see it coming.


PHILLIPS: Well, you know Merrill Lynch. It lost more than $27 billion last year and limped into Bank of America's arms. 2008 might have been a bust for Merrill as a whole, but guess what, it was a boon for 11 top executives.

"The Wall Street Journal" reports that those guys each got more than $10 million in cash and stock last year. One of them pulled in nearly 34 million. Well done. First beer's on you. The stock is worth a lot less now. But New York's attorney general is probing the bonuses.

Superglue, it's not just for broken vases anymore. A Colorado woman has insurance, but it doesn't cover near enough for the dental work that she needs. And because she's insured, she doesn't qualify for dental assistance. So for now, yup, she's using superglue. This is a case where it might be a good idea to work out a payment plan with the dentist, folks.

And contrary to what you might think from this story, Wal-Mart is not including free teeth with a wallet purchase. A man in Massachusetts says he was looking at a wallet and found ten human teeth inside -- one with a filling, by the way. Police say that there was no blood or gum tissue on the choppers, so that rules out DNA tests. Wal-Mart says that it believes it was an isolated incident.

Well, we keep hearing about clean coal as a way to help the U.S. beat its addiction to foreign oil. But is there really such a thing? We're pushing the debate forward.


PHILLIPS: Clean coal, it may sound like an oxymoron. And there's a growing effort to prove it's just that, a big pipe dream. And it's a fight that has some of Hollywood's heaviest hitters onboard. CNN's Jim Acosta has more.



JIM ACOSTA, CNN CORRESPONDENT (voice-over): The battle over clean coal is getting dirty. Take this ad drilling into coal industry claims that it's cleaning up its act.

(VIDEO CLIP -- COAL COMMERCIAL) ACOSTA: To make the spot, environmentalists backed by Al Gore scored none other than Joel and Ethan Coen, the Hollywood heavyweights behind "No Country for Old Men."

AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: Clean cold is like healthy cigarettes. It does not exist.

BRUCE NILLES, SIERRA CLUB: It's sort of like Bigfoot and mermaids.

ACOSTA: Environmentalists say the coal industry is years, perhaps decades, from achieving what many scientists consider true clean-coal technology. That technology consists of capturing carbon as it comes out of the smoke stack, and storing it underground before it's released into the atmosphere. To this day, there is not one power plant in the nation using that technology.

OBAMA: Clean-coal technology is something that can make America energy independent.

ACOSTA: But the coal industry has a powerful ally in President Obama, who promised to support clean-coal research during the campaign. The technology gets a mention on the White House Web site.

(on camera): If the term "clean coal" is misleading, does that mean that the president is misleading the public about clean coal?

NILLES: Great question. The term "clean coal" means different things to different people. What the coal industry uses the term "clean coal" to mean is anything that is built post-1970, regardless of the fact that it's spewing out large amounts of carbon dioxide.

ACOSTA (voice-over): The coal industry and its supporters argue efforts to modernize coal plants are having a positive impact.

JOE LUCAS, AMERICAN COALITION FOR CLEAN COAL ELECTRICITY: With technology, we can reduce greenhouse gas emissions, still preserve access to affordable, reliable energy in this country, promote energy independence and create jobs.

ACOSTA: Still, the industry refuses to say its plants contributes to global warming.

(on camera): Can you just answer that yes or no, if you believe that burning coal causes global warming?

LUCAS: I don't know. I'm not a scientist.

ACOSTA: That debate spilled into the streets outside the power plant that heats the U.S. Capitol, a plant that still runs in part on coal.

UNIDENTIFIED MALE: We're generation last, man. If we don't take action right now, it's going to be too late for America and the whole world. ACOSTA (on camera): Energy Secretary Steven Chu once called coal his worst nightmare. Now, he takes the administration line of supporting clean coal as an energy option to combat global warming. But environmentalists are encouraged by one idea coming from the White House, a policy called cap and trade, which could force coal companies to pay for their emissions.

Jim Acosta, CNN, Washington.