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AIG Bonuses; Road to Rescue; Tips on Maintaining Sound Financial Position
Aired March 17, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Several developing stories to tell you about right now. First, not taking your medicine in these tough times. Elizabeth, let's go ahead and start with you.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'll be taking questions all day long, Heidi, about how to afford health care when you're on a budget. Please, send me your e-mails at cnnnewsroom@cnn.com. I'll be doing that in the next hour.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: I'm Elaine Quijano, live on a noisy National Mall today. Where are $50 million of your taxpayer dollars from the economic stimulus plan going? I'll give you a hint. It has to do with the hard work that the young people are doing behind me. I'll explain coming up in the next hour.
SUSAN LISOVICZ, CNN CORRESPONDENT: I'm Susan Lisovicz at the New York Stock Exchange. Where are digesting a report that shows Signs of life in the housing market. New home construction rose last month for the first time in eight months. We'll have more on that surprising development at the top of the hour, Heidi.
COLLINS: All right. Thanks, guys. Appreciate that. Plus, how you can save and save big. We'll ask the cheapest family and the coupon mom.
Well, the president and congressional budget leaders have been talking about how best to spend your money to get the nation's economy rolling again. An update from your White House correspondent Suzanne Malveaux is coming up in just a couple of minutes.
Meanwhile, outrage over AIG's plan to pay out executive bonuses after the insurance giant took $173 billion in government bailout money. President Obama and some lawmakers don't want to see it happen. Brianna Keilar is live on Capitol Hill with more on that in just a couple of minutes.
At least $226 million in back taxes, penalties and interest. That's how much the IRS says financier R. Allen Stanford and his wife owe. Investigators are taking a very close look at Stanford's finances. He is accused of scamming more than $9 billion through investment fraud.
The "Road to Rescue:" all this week we are helping plan your route to success through the economic crisis. This hour, your health care. We answer your insurance questions, and your money. Go beyond the Sunday paper. Coupon mom shows you how to save big at the grocery store. Plus, America's cheapest family. How do they pay off their home in just nine years on a modest income? We'll have some solutions for you, coming up.
And just a reminder any minute now, the president is going to come out and talk about our money, and how Congress wants to spend it. We'll be bringing that to you live, just as soon as it happens.
Money matters aside, the president is also taking time today, his 57th in office, to celebrate Saint Patrick's Day. At 11:35, it's the annual Shamrock Ceremony at the White House with the Prime Minister of Ireland, of course. Then, it's on to Capitol Hill for a Saint Patrick's Day lunch and a few remarks there. He will wrap-up the day with receptions backs at the White House coming up later on in the evening.
Let's go ahead and check out the big board now. We were hoping for a fifth straight day of positive gains. That didn't happen. But right now, we are looking at positive numbers. Dow Jones industrial averages resting at about 7230, up by about 12 points or so. We'll keep our eye on those numbers for you.
President Obama outraged over AIG's plans to pay executives $165 billion in bonuses. The President and Congressional lawmakers say they will put pressure on AIG to stop the pay-out. AIG insurance executives are blamed for the company's financial fiasco, which has required the insurance giant to take $173 billion in government bailout money. President Obama Says this is not fair to the American people.
(BEGIN VIDEO CLIP)
PRES. BARACK OBAMA, UNITED STATES: This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonus, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?
(END VIDEO CLIP)
COLLINS: And Brianna Keilar is joining us now, live from Washington. And we are going to actually talk about her -- with her, and congress's response to all of this to the AIG bonuses in a moment, but first I want to get ahead to President Barack Obama, as promised.
OBAMA: Good morning. With the budget committees hard at work this week, I wanted to meet with Chairman Conrad and Chairman Spratt to talk about the progress they are making on this budget resolution. Because these are no ordinary times, I don't just view this budget document as numbers on a page or a laundry list of programs. I see it as an economic blueprint for our future, a foundation on which to build a recovery that lasts.
Now, this budget does not attempt to solve every problem or address every issue. Because the massive deficit we inherited, and the enormous costs of this financial crisis, we have made some tough choices that will cut our deficit in half by the end of my first term, and reduce it by $2 trillion over the next decade. That will bring discretionary spending for domestic programs as a share of the economy to its lowest level in nearly half a century.
What we will not cut back, however, are those investments that are directly linked to our long-term prosperity. As I said last week, we can't go back to a bubble economy. An economy based on reckless speculation and spending beyond our means on bad credit and inflated home prices and some of the shenanigans that have been taking place on Wall Street. Such activity does not lead to the creation of lasting wealth. It leads to the illusion of prosperity.
And as we're finding out, it hurts us all in the end. And that's why this budget makes the investments that will lead to real growth and real prosperity, investments that will make a difference in the lives of this generation and future generations because it makes us more productive. Because so many Americans are just one illness or medical emergency away from bankruptcy, we have made a historic commitment to health care reform in this budget. Reform that will finally lower costs for families, businesses and state governments.
Reform that's not a luxury, but a necessity, if we hope to bring down the costs of Medicare and Medicaid so that we can reduce our deficits in the long run. And this is a fight that Kent Conrad and John Sprat have been fighting for a long time. The two gentlemen standing with me today, they have been leaders in efforts to get these entitlement programs under control, and they understand that if we don't solve the problem of health care costs now, we are not going to be able to get a handle on entitlements down the road.
Because we know that the countries who out educate us today will out compete us tomorrow, this budget also invests in a complete and competitive education for every American, in early childhood education programs that work, in high standards and accountability for our schools.
In rewards for teachers who succeed. And an affordable college education for anyone who wants to go. That's the reason the three of us are standing here today. None of us were born with a silver spoon in our mouths. But we got a great education. And if we combine additional resources with a commitment to reform, then I think we can deliver that for every American child.
Because we know that the new jobs and the new industries of tomorrow will involve harnessing renewable resources and renewable sources of energy, this budget will finally spark the transformation we need to create those jobs and those businesses right here in America. It makes clean energy the profitable kind of energy, and it invests in technologies like wind power and solar power, advanced biofuels, clean coal, fuel-efficient cars and trucks.
And because millions of Americans are already struggling under the weight of their monthly bills and mortgage payments, this budget does not raise the taxes of any family making less than $250,000 a year by a single dime. In fact, 95 percent of all working families will receive a tax cut as a result of our recovery plan.
Now, there are those who say the plans in this budget are too ambitious to enact. To say that -- they say that in the face of challenges that we face, we should be trying to do less than more. What I say is that the challenges we face are too large to ignore. The cost of our health care is too high to ignore. The dependence on oil is too dangerous to ignore. Our education deficit is growing too wide to ignore.
To kick these problems down the road for another four years or another eight years would be to continue the same irresponsibility that led us to this point. That's not why I ran for this office. I didn't come here to pass on our problems to the next president or the next generation. I came here to solve them. I know that there are some on Wall Street and in Washington who said that we should only focus on the banking crisis, and one problem at a time.
Well, we're spending a lot of time focusing on this banking crisis. And we will continue to do so, because until we get liquidity flowing again, we will not fully recover. But the American people don't have the luxury of just focusing on Wall Street. They don't have the luxury of choosing to pay either their mortgage or their medical bills. They don't get to pick between paying for their kids' college tuition and saving enough money for retirement. They have to do all these things. They have to confront all these problems. And as a consequence, so do we.
Now, there has been a lot of discussion about this budget already, and I hope we engage in a healthy debate going forward. The challenges we face are not partisan. We're going to get some numbers with respect to the budget that may make this even tougher in the coming couple of weeks. The answers don't have to be partisan. And I welcome and encourage proposals and improvements from both democrats and republicans in the coming days. But the one thing I will say is this.
With the magnitude of the challenges we face right now, what we need in Washington are not more political tactics, we need more good ideas. We don't need more point-scoring, we need more problem- solving. So if there are members of Congress who object to specific policies and proposals in this budget, then I ask them to be ready and willing to propose constructive alternative solutions.
If certain aspects of this budget people don't think work, provide us some ideas in terms of what you do. Just say no is the right advice to give your teenagers about drugs. It is not an acceptable response to whatever economic policy is proposed by the other party. The American people sent us here to get things done. And at this moment of enormous challenge, they are watching and waiting for us to lead.
Let's show them that we're equal to this task before us. Let's pass a budget that puts this nation on the road to lasting prosperity. I know Kent Conrad is committed to do so that, John Sprat is committed to doing that. I'm committed to doing that. We're going to need everybody working together to get this thing done. All right? Thank you, everybody.
COLLINS: President Barack Obama making comments on the budget and covering all of the main areas of emphasis that we have heard him do so many times before, talking about education, energy and health care. And really, making sort of a bipartisan call from Congress saying, look, if you don't like some of these ideas inside the budget, if you object to them, then bring me a better solution, trying to solicit ideas there, once again, President Barack Obama talking on the budget.
Well some people who have lost their jobs as a result of the recession are finding their calling. For example, in South Carolina, the jobless rate there is 10.4 percent. That the second-worst in the country. And it's one of only four states with double-digit unemployment. With figures that bad out there, instead of looking for a new job, some people are making what they know work for them. Larry Collins from our affiliate station WCBD in Charleston, South Carolina has the story.
(BEGIN VIDEOTAPE)
LARRY COLLINS, WCBD REPORTER: On a lazy afternoon in a downtown Charleston coffee shop, one of the country's newest entrepreneurs is hard at work.
KEN HAWKINS, THEDIGITEL.COM: The community seems to like it. They like the product. They like the feel of the site and we're kind of building momentum.
COLLINS: His office may be a tiny wooden table and a laptop, but he is the living, breathing embodiment of the new American dream.
HAWKINS: Largely what I do is sit with the computer all day, kind of watching what everyone is talking about.
COLLINS: Ken Hawkins is the owner and the brains behind thedigitel.com. The site, his baby came about after finding himself out of work after a stint as a graphic designer for the "Post Courier."
HAWKINS: I eventually realized that I had such great ideas, maybe I should go and do it myself.
COLLINS: So with no income and not even a big severance package to rely on, he decided to start his own business. Instead of looking for another job.
HAWKINS: Some might say being young and naive.
COLLINS: He gathers all the local news around the low country and posts it to his site for easy access.
HAWKINS: I hope it spreads to other cities, and that you know, that will - in a model somewhat reminiscent of Craigslist.
COLLINS: Getting tens of thousands of visitors a week, making profit from sponsors.
HAWKINS: We started off and said, you know, what's the bare minimum we can do this with, start off basically with one person, you know, live cheaply, you know, layoff the fine lines and some things like that.
COLLINS: With every click of the keyboard, he expands his audience, changing the challenge into opportunity.
HAWKINS: Do one thing, do it well, and do something that nobody else is doing.
COLLINS: It's a creed Ken thinks can work for anyone who is laid off or out of work. Find what you do best and make it work for you. For making graphics to now making money, his new audience, the worldwide web.
HAWKINS: We didn't start it to get rich, but you dream, and with something like a website and if you especially think you could take it to other cities, you know, the sky is limitless.
(END VIDEOTAPE)
COLLINS: Once again, Larry Collins reporting for us from one of our stations in South Carolina. Clip and save. Our next guest will show you how to keep a lot of your money in your wallet where it belongs, just by cutting out coupons.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: No more unlimited text messaging for the kids on their cell phones. Didn't need it, anyway. We go to the library and rent books and movies instead of getting cable TV. Saves money, makes life better. We're growing our own vegetables in the backyard. Saves money, great exercise and lots of fun.
(END VIDEO CLIP)
COLLINS: Growing up, you probably remember your mother going to the store with coupons in hand. Wise move, especially in times like these. As we look for ways to get back on the "Road to Rescue," we thought you should meet the ultimate coupon mom.
Stephanie Nelson is here with us now, for some tips. So Stephanie, we've had the pleasure of having you on before, but now, boy, some of your tips are really coming into play here for a lot of people. But I have to ask, because a lot of times you mention coupons people go, oh, I'm not going to do that. It takes too much time. Are they really going out there and using more coupons right now because times are hard?
STEPHANIE NELSON, "THE COUPON MOM": Well, actually, yes. In fact, a study came out just last week. For the first time in 17 years, coupon redemption has increased, fourth quarter 2008, it went up 10 percent. And just perspective, only one percent of grocery coupons are redeemed each year, that's $3 billion in savings. If we could move that one percent, we could put $3 billion in people's pockets.
COLLINS: That's unreal. Think about that. All those coupons that we see, kind of all over the place, even on the backs of our receipts when we go to the grocery store, only one percent of them are really redeemed. I guess I wonder if more of them start being used, are manufacturers going to start cutting back on access to them?
NELSON: It actually works the opposite way. When manufacturers see that redemptions increase, they say this is working. So they push more coupons out, so fourth quarter 2008, they increased coupon issuance by five percent, and face values of coupons increased by nine percent. That's good news for consumers as more savings available, we just want to make it easy for people to use those coupons.
COLLINS: Yes, absolutely. All right. So we have all of these stuff in front of us. All of these groceries, and you have been able to save an unbelievable amount of money on these particular items. Tell us how you did it and how much, and in particular you did save.
NELSON: Well, let me first of all say this is what I bought for my family this week at our two grocery stores that are nearby, $116 worth of groceries. I paid $3. I will say I didn't spend hours figuring this out, because people can use -
COLLINS: OK.
NELSON: - the internet where people have figured out the grocery deals at your store and listed them.
COLLINS: OK.
NELSON: So use the internet. We do this nationally at couponmom. com, but you can put the name of your store and the word deals into a search engine and you'll find all kinds of little blogs in web sites that are figuring out the deals at your store.
COLLINS: OK. So that's how you do it. I want to back up for a minute.
NELSON: Right.
COLLINS: You say let the internet do the work for you, so you just go to the internet and you put in the store that you shop at and then you put in coupons or deals.
NELSON: Or the word "deals."
COLLINS: OK.
NELSON: And you can also - the idea here is, I got all of these items free - because I -
COLLINS: What? NELSON: I used - the item was on sale, and then I also used a coupon, and then many times the stores have automatic rebates. And putting all of that together is what I call strategic shopping.
COLLINS: Well, yes.
NELSON: And if you can do that, as you can see, we have produce, dairy products, cleaning products, personal care products. Things most families use. So if you can save money on these items, you have more money to spend on chicken and meat, and other items that may not have coupons. And here is the easy system. When you go to the website and see the list of grocery deals -
COLLINS: OK.
NELSON: This is the "Sunday Circular."
COLLINS: Right.
NELSON: Most of the coupons I used came from the "Sunday Circular." I put the date, the coupon came out -
COLLINS: OK.
NELSON: And you save the entire circular, you don't have to cut any coupons out. And then when you go to coupon mom and print the list of deals for your store, every deal has the state the coupon came out. So you sit down with your list of deals, your stack of coupons, and you take 10 minutes to cut out the coupons you need.
COLLINS: 10 minutes?
NELSON: 10 minutes, really?
COLLINS: OK. That is what is important to people. I don't have time to do this. But look how much you can save if you do.
NELSON: You can also print coupons, and people say, oh, coupons are 20 cents. You can print a $5 coupon for diapers. This is real money.
COLLINS: Yes, absolutely.
NELSON: These are real money.
COLLINS: Diapers are expensive, I can tell you.
NELSON: Ad if you do all of it, I can tell you, the average family of four will save $100 a week on groceries. And we use to say -
COLLINS: A lot.
NELSON: And we used to say that's extra money for vacation. Now we're realizing that's extra money to put away for the mortgage payment. COLLINS: Yes. You are absolutely right. OK. Now we know that it is actually kind of a realistic thing. We can do all of that.
NELSON: It's possible.
COLLINS: All right. Thank you so much. Coupon mom, Stephanie Nelson, thank you.
Health care and health insurance. You've got questions especially during these tough times. Our senior medical correspondent Elizabeth Cohen is working on your answers.
(COMMERCIAL BREAK)
COLLINS: Want to get some information out to you now that's just come into the CNN NEWSROOM regarding a Supreme Court judge, Ruth Bader Ginsburg. We are understanding that she plans to begin chemotherapy. It's going to be happening later this month. Now, you remember, she did have surgery last month for pancreatic cancer.
Ruth Bader Ginsburg is 76 years old. She says she really doesn't expect to miss any court sessions, because of the treatment. And she is calling it precautionary. Once again, last month doctors did remove a small cancerous growth from Ginsburg's pancreas. The tests did show that the cancer had not spread. So once again, just letting you know, Supreme Court Justice Ruth Bader Ginsburg says she will begin chemotherapy a little bit later on this month. We'll stay on top of that story for you.
Meanwhile, knowledge is power. When it comes to your bottom line, we want you to have the information you need to get yourself and your family through these tough economic times. It's our "Road to Rescue." The CNN survival guide today and all this week.
Helping local entrepreneurs who don't have health care. The president's recovery plan is supposed to provide funds to help small business owners. But what if you own two businesses and can't get any cash from the economic recovery plan? Let's join CNN's Ted Rowlands right now in Burbank, California. He is with a gentleman who owns both a restaurant and a tortilla factory. In fact, Ted, one of them is doing well in the economy but the other isn't. Help us understand why.
TED ROWLANDS, CNN CORRESPONDENT: Yes. Well, Heidi, it's a classic example. Here is his business that is struggling. Down about 50 percent. A restaurant/bakery/convenience store here in southern California. But on the other side, you got an entrepreneur that has sort of redefined himself through an idea of a healthy tortilla, and it's taking off. Alonso Arellano started this business years ago with the bakery and a restaurant, but since December has been creating these tortillas that you'll tell us about how successful it's been since you've been selling them just for a few months.
ALONSO ARELLANO, BUSINESS OWNER: The tortilla has been very successful, mostly because it offers the health-conscious consumer a low calorie tortilla that is a good source of calcium, a good source of dietary fiber tortilla.
ROWLANDS: Talking about the cactus is what you've used some of those ingredients and it's really taking off to the point of where now you've been able to save jobs from the other side working over here. Tell us about some of the people. I know you had a mother of three that is now - still working for you, because of this.
ARELLANO: That's correct. I do have several employees that otherwise would have been laid off, and this way, they - we've retained their jobs and not only secured the jobs for the people with this tortilla, but also hired more additional help.
ROWLANDS: The Obama administration yesterday announcing that more money is going to be available for small businesses. You have grand plans for these tortillas, you're starting to sell them to distributors. You're going to be going for a loan. You said if you had just had a smidgen of the money that the AIG folks had, you and other small businesses, you could revitalize this economy. Explain that.
ARELLANO: That's right. I would go out to the nation and revamp tortilla factories that have been affected by the recession, like mine have been, thus creating jobs and stimulating the economy. And improving health care by -- because the key to health care is prevention. And prevention starts in our own kitchen.
ROWLANDS: Bottom line, Alonso, you're going for a loan over the next few months to try to expand your tortilla business, which is exploding and on the verge of really doing well. You're going to be hiring more people. A huge success story. We're going to be watching to see if you actually get that loan and see if credit markets have loosened up to the point where you can actually make a difference.
The bottom line here, Heidi, Alonso says entrepreneurs are always thinking about how to make a buck. He's got a good idea. He's going to need the funds to do it. He's going to need those loans. We'll see if the money is available for him and others moving forward here during this recovery. Small business owners say they're the key.
COLLINS: Yes, yes, absolutely. That's what we have been hearing. Hey, quickly, before I let you go, Ted, the tortillas are made of cactus? Some type of cactus?
ROWLANDS: Yes, the nopal cactus.
COLLINS: Nopal cactus.
ROWLANDS: For years has - the medicinal properties in the Latin communities. It's known as a great health food. He's put it into a tortilla. And he thinks that - and it is. It's starting to really, really take off.
COLLINS: All right. Excellent. Hey Ted, we sure do appreciate that. Thanks and thanks to Alonso, as well.
On the "Road to Rescue." We are giving you information to help you through these tough times. Big concerns for a lot of people right now. Health care and health insurance. Our senior medical correspondent Elizabeth Cohen is here now to take some of your questions. We told people a little while ago, that go ahead and send in your questions and ask us some of the things that you want to know, because this can be a very complicated issue for a lot of people.
COHEN: Oh, absolutely. More and more people these days don't have health insurance or they have very bad health insurance. And so they're wondering, how in the world am I going to afford the health care that I need? So let's take a look at our first e-mail. We received an e-mail from a viewer who wanted to know this.
"I need insurance coverage for a short space of time until I find a job. How do I go about doing that, or rather which policy is best suited for me? I'm single with no children." Well, two websites I'm going to mend Miss Gabriel to here. The first is if you go to ehealthinsurance.com, you can compare terms for various kinds of insurance policies. The second website is cnn.com/empoweredpatient.
I read a whole column about how to buy health insurance on your own. And in there, you will see some warnings about short-term policies. Miss Gabriel may think that they're only out of work for a short time, but it may be longer, and if you get a short term and another short term, and then another short term, you'll hear the story of "Time" magazine reporter, Karen Tumulty. Her brother did that and got into huge trouble. So short-term insurance is not always a good thing.
COLLINS: In trouble how, exactly?
COHEN: They denied his coverage. He got kidney disease, and they denied his coverage about these technical reasons of having lots of short term policies one after another. It can really get you in trouble. So cnn.com/empoweredpatient.
COLLINS: Right.
COHEN: All the tips you need to buy health insurance plus the specific warning about short-term policies.
COLLINS: OK. Very good. We have others for now? Or we're going to save for later.
COHEN: We have one more. You got time?
COLLINS: Yes.
COHEN: All right. We have another e-mail from a woman. "I'm curious how the preexisting condition clause in most health insurance policies impacts people with chronic illness and who can someone possibly get coverage for those illnesses when they are in that situation?"
Donna, this is such an important question. As a matter of fact, part of the crisis that we're in is because insurance companies often -- and that's an understatement -- often do not want to insure people with pre-existing conditions because, well, they cost a lot of money.
So, a couple of things you can do. One, just Google "state high- risk pools," and you will see this list of states that have high-risk pools. These are government-led programs where you go, if you are pre-existing conditions, to try to get affordable insurance. Not everybody has them, but a lot of states do.
The second thing you want to do is, you want to see if your state or your city or your county has any charity programs for people who have pre-existing conditions and can't afford health insurance. Just call your county or call your city. Now, I couldn't tell from Donna's e-mail if Donna recently had a job. If she's had a job in the past 63 days, she's in luck. She may be able to get insurance, despite the fact that she has pre-existing conditions. So, if you are about to lose your job or you lost your job in the past two months, act now.
COLLINS: Act now.
COHEN: Act now. There are lots of different options. Act now.
COLLINS: OK, very good. Just want to remind everybody, if they want to send more questions, they send them...
COHEN: CNNnewsroom@CNN.com. Health care 9-1-1, CNNnewsroom@CNN.com.
COLLINS: Love that Web site. All right.
COHEN: Isn't it great?
COLLINS: Very good. Thank you, Elizabeth. Appreciate it. I'm sure you're getting a lot of questions.
COHEN: We certainly are.
COLLINS: Want to move over to wall street now. Signs of life in the housing market. For the first time in eight months, new home construction rose, and in a pretty big way. Susan Lisovicz is at the New York Stock Exchange now with more details on this. Some good news, Susan, luck of the Irish.
SUSAN LISOVICZ, CNN CORRESPONDENT: Luck of the Irish and from the housing sector, of all places, Heidi. Wall Street was expecting housing numbers to fall again. But new housing projects jumped 22 percent in February. And that's the first increase since last June.
Why? Well, mostly because apartment construction surged. Every region except the West, where there was so much building, posted increases in construction. Also, building permits rose 3 percent, and that's a good sign of future activity. We are seeing a wearin' o' the green in companies that build homes, like Biser Homes (ph), for instance. Its shares are up 14 percent. KB Homes (ph) up 4 percent.
But the blue chips, well, they're not green right now. We're seeing them under a little bit of pressure after the four-session win streak ended late in the session yesterday. They're down about a third of a percent. The Nasdaq, though, is better than half a percent, Heidi.
COLLINS: All right, Susan. Well, we were hoping the positive numbers would stick around, but you never know. It's not over yet.
LISOVICZ: It's early in the session. You know that.
COLLINS: All right. Very good. Susan, thank you.
LISOVICZ: You're welcome.
COLLINS: Helping others in this tough economy. Some disadvantaged young people are showing the advantages of training. We'll tell you who will benefit from their labor.
(COMMERCIAL BREAK)
COLLINS: Knowledge is power. When it comes to your bottom line, we want you to have the information you need to get yourself and your family through these tough economic times. It's our "ROAD TO RESCUE: THE CNN SURVIVAL GUIDE," today and all this week.
So, where is the economic recovery plan money going? Well, $50 million of it is heading to a YouthBuild. The project builds homes for low-income families, and, in fact, builds so much more. Here now, CNN's Elaine Quijano.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: I want you to focus on what I have on the board now.
ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): Four years ago, Sydney Jimison (ph) didn't care much for classrooms.
SYDNEY JIMISON (ph), PARTICIPANT, YOUTHBUILD: I really didn't care about anything. I didn't really take life seriously.
QUIJANO: She got pregnant and dropped out. Lillian Rozales (ph) dropped out too, working at a Washington check-cashing store with her baby in a stroller beside her.
LILLIAN ROZALES (ph), PARTICIPANT, YOUTHBUILD: So, I was living paycheck to paycheck, so, yeah, I had to make a change in that.
UNIDENTIFIED MALE: Over 80 percent of people...
QUIJANO: Both women knew they had to do better. They joined Youthbuild.
JIMISON (ph): I found out how serious life was when they started talking to me.
QUIJANO: Youthbuild gives low-income young people the chance to both work towards their GED and high school diploma and learn construction skills building energy-efficient homes for low-income families. Founder Dorothy Stoneman says young people written off can be an asset to society.
DOROTHY STONEMAN, YOUTHBUILD FOUNDER: They tell me, if it weren't for YouthBuild, I would probably be dead or in jail.
QUIJANO: Across the country, YouthBuild has been forced to turn away countless applicants.
STONEMAN: Here in D.C., they decided to call it "the Harvard of the hood" because it was hard to get in. Now, that's a silly situation.
QUIJANO: President Obama included $50 million for YouthBuild in the economic stimulus package. Good news for Sydney Jimison (ph).
JIMISON (ph): I feel more confident in myself now. I feel like helping people is really helping myself.
QUIJANO: And the lesson Lillian Rozales says she'll teach her son: Even if you give up once, you still have a second chance.
ROZALES (ph): The opportunity for you to rebuild yourself.
(END VIDEOTAPE)
COLLINS: Elaine quijano is joining us from Washington in the National Mall there, where members of the program are actually working on a project right now. Right, Elaine?
QUIJANO: They are. And you know what? If there is kind of a hush that's fallen over the crowd, Heidi, it's because we just learned that first lady Michelle Obama is on-site.
So, take a look at what we're talking about here. This is actually the framing of an actual greenhouse that the YouthBuild students are working on behind me here, and Michelle Obama is expected to come in, maybe do a little bit of work herself. We're really not sure. But she's going to be giving some remarks here.
So, that is what you're seeing. It's kind of quiet right now. I tell you, we heard hammering the second we walked in, and all of that has fallen away. Everyone knows Mrs. Obama is here.
COLLINS: They got nervous. So, hey, Elaine, what are they going to do with the house that they're building right now?
QUIJANO: Yes, it's a good question. They are actually building this house for a family, a low-income family in Brownsville, Texas whose own home was actually blown away by a hurricane. So, this is an opportuniity for these students to not only get skills that they can therefore take with them and also work for their GED or their high school diploma, but then they also have that added benefit of knowing for themselves sort of an empowering moment for these young people. You can definitely tell that they were able to help someone else -- Heidi.
COLLINS: Right. Very good. Elaine Quijano for us in Washington, D.C. with YouthBuild. Thank you, Elaine.
The latest numbers from the Department of Labor suggest minority groups are more affected by the deepening recession. During February, the unemployment rate for African-Americans was 13.4 percent. Nearly 11 percent of Hispanics are unemployed. And for whites, unemployment is 7.3 percent. Nearly 7 percent of Asians do not have jobs.
Getting everyone back on the road to rescue. A job fair in Maryland today is looking out for people in minority groups, employers hoping to attract thousands of diverse candidates. And joining us right now from Landover, Maryland, our Barbara Starr. Hello, once again, Barbara.
BARBARA STARR, CNN CORRESPONDENT: Hello to you, Heidi. We are now inside at Fedex Field, the home of the Washington Redskins. But this isn't football day. This is "getting a job" day. There are several hundred people here already, about 50 prospective employers with about 1,600 job openings.
And I want to introduce you now to Janet Franklin, who we were talking to. Janet, you were telling me that you are looking for work today in your profession of health care. It's been a while since you've had regular employment.
JANET FRANKLYN, JOB SEEKER: That is correct. And I'm here today. I'm a dependable health care professional, and I'm looking for an opportunity in the health care industry.
STARR: One of the things you were telling me is that as you walk around to these employers, you know, this is a process, but there is a real bottom line for you here. You want to hear some key words from an employer.
FRANKLYN: Correct. Getting the interview, and going from a "yes" to "you're hired" is what I want to hear. And, "What day can you start?"
But I'm looking forward to hear that as a result of this job fair.
STARR: Tough making the bills?
FRANKLYN: Yes, it's been pretty tough taking the bills. But I'm resourceful and persevere, and I'm optimistic. So, I'm going to keep looking and presenting myself and my credentials. I'm highly qualified. And I can give my e-mail address, janfran@maxxconnect.net.
STARR: And really, Heidi, that's what a lot of folks are trying to do here today. Janet, thank you. Be resourceful. Get out there. There's -- some of these jobs, they tell us, people have been on interviews where there is maybe 200 applicants for just one job. So, people are using whatever edge, whatever advantage they can to try and get an employer to pay attention to them -- Heidi.
COLLINS: Yes. No kidding. And Janet's really been listening, too, because she mentioned health care, and we've been saying for quite a while now that that is where some of the opportunities are. And I know with 1,600 possible positions open there, Barbara, they're expecting a whole lot of people.
It started at 10:00. What do you think? How many people do you see around you? Didn't they say something like maybe 10,000 people could be there?
STARR: Well, they are hoping for 10,000 here today. It's early hours yet. So, we'll see how it goes. But let me just take another minute of everybody's time and introduce you to Danielle Darby (ph), one of the employers here in the health care profession, who is talking to people. And she specifically is looking for that diversity in her workforce. So, Danielle, tell people a little just briefly about your company. And why diversity? Why are you here looking for a diverse workforce today?
DANIELLE DARBY (ph), EMPLOYER: Well, we run 24-hour health care facilities for adults with disabilities, and diversity is very, very important to us. It creates lots of opportunities for our individuals. You know, with diversity, people are exposed to a whole gamut of things that they've never been exposed to. So that's very, very important to us, getting people out in the community.
STARR: So, that's really one of your goals today. And that's the stated goal of this job fair, Heidi, getting diversity in the work force. But, of course, as we have been saying, for the folks out here looking for work, they want a paycheck. That's their real bottom line today -- Heidi.
COLLINS: All right, Barbara Starr for us in Landover, Maryland. Thank you, Barbara.
STARR: They call themselves America's cheapest family, and they've got some saving tips to help your family. Wave, guys.
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COLLINS: All this week, we are on "THE ROAD TO RESCUE," helping you survive the money meltdown. And who better to help than our next guests, America's cheapest family, at least part of them. Steven Economides raised five children while he worked for a modest salary -- I'm talking $35,000 -- and she stayed at home. All that time, they made their mortgage payments, never used credit cards and always had money in the bank.
They turned their "making less seem like more" strategy into a book, "America's Cheapest Family Gets You Right on the Money." They're joining us live from Phoenix. Steve and Annette Economides.
Thanks for being here, guys. We really could all take tips from you. So, I want to get straight to it, if I could. We obviously already talked about some easy budget cuts and some coupons this morning. But we really want to talk to you about some of the harder topics, and most particularly housing.
So, I want to show everybody a graphic really quick with some of the things that you guys did. Your first house, you put down 15 percent, you fixed it up yourselves, you made those extra payments, the principle payments, paid it off in nine years, and all of that happened on an income of less than or about $35,000. Tell us how you did it. Steve, I'll start with you.
STEVE ECONOMIDES, AUTHOR: Well, you know, Annette is going to talk about this one because...
COLLINS: OK, Annette, I'll start with you.
S. ECONOMIDES: ... she really helped us out with this.
ANNETTE ECONOMIDES, AUTHOR: We just made extra princpal payments each month as we covered our expenses. And basically we established a comfortable lifestyle, and any extra money that came in went toward the principle payment.
S. ECONOMIDES: But we didn't buy the the biggest house in the neighborhood. We bought a repo from a bank at the time, and we put down the 15 percent so that our mortgage payment wasn't huge, and we didn't borrow as much as the bank would have allowed us.
A. ECONOMIDES: Right.
COLLINS: OK. So, do you think that this could be done today? I mean, what advice would you have for home buyers today?
A. ECONOMIDES: Well, definitely I would say if you're looking to buy a house, don't borrow what the bank says you can. And make sure you put as much money down as you can, at least 20 percent, so you don't have the private mortgage insurance.
COLLINS: What if you don't have that down payment, though, because 20 percent can be an awful lot of money.
S. ECONOMIDES: You know, people are...
A. ECONOMIDES: I think you need to wait. I think you need to be content with where you are and just survive and just, you know, wait it out.
COLLINS: Go ahead, Steve.
S. ECONOMIDES: The less you borrow, the easier it's going to be for you to make it through the rest of life. If your overhead is really strained because you borrowed so much, you're going to have trouble putting food on the table, you're not going to sleep well at night, you're going to be frustrated. It's better to rent than to be stressed out.
COLLINS: Yes, absolutely. Another big one for you guys: credit card debt. You say forget it. Don't touch the credit cards.
S. ECONOMIDES: We have found that you have a choice when you need something. You can either use credit or you can use creativity. If you don't have the money, there are hundreds ways to get the things you can need. You can look on craigslist, you can look on eBay, you can look for sales, you can negotiate price.
There's no reason to pay retail if you don't have the money. And that applies to clothes, to cars, to houses, to gym shoes. I don't care what it is. Whatever you need, you can get a discount on it.
COLLINS: So, are you talking about specifically, logistically, paying cash for these things or using a debit card or however you want to do that?
A. ECONOMIDES: Same way, debit card or cash, because debit card comes straight out of your checking account. But what's important is to have a budget. And there's a chapter in our book that talks in great detail about how to set up a budget. And we've been told it's very easy to understand and very easy to implement.
And if you have a budget, then you know that everything is covered so that holidays are not an emergency. Car repairs are not an emergency. School clothes are not an emergency. And you're saving in advance for all these things, all these categories in your family for expenses that can occur over time.
S. ECONOMIDES: People used to say that was stupid to save the money in advance and have that money in the bank. But I'm telling you, it cuts stress, and it let's you know exactly where you are, and you have confidence when you buy something.
COLLINS: So, where do you start? When you say, all right, honey, let's sit down, and we're going to make a budget. What are the first couple of things you need to do? Because it really can be sort of an ominous, overwhelming task.
S. ECONOMIDES: First thing is to know where you are. It's like taking a vacation. You want to start with a map, and you need to know exactly where you are. So, you need to know what your income is, what your expenses are. And we have a worksheet in our book that helps people do that.
And we ask more questions than anybody does. I mean, we go down to your pet food, your haircuts, all that stuff, because if you can plan for 90 percent of the expenses, you can handle 10 percent emergencies. But the problem with most budgeting programs is that they cover maybe 50 percent of the expenses, and the rest of the stuff is left, and you end up in trouble.
A. ECONOMIDES: So many people do not have a clue where their money is going. And so, you have to know where your money is going, from the coffee that you buy or the doughnuts that you buy to eating out for lunch to eating...
COLLINS: Absolutely. Well, you know what, guys, we could talk to you all day because you do have some really great tips, and what you've been able to accomplish is excellent, especially with five kids and a family of seven. Steve and Annette Economides, we sure do appreciate it. America's cheapest family. Thanks again, guys.
A. ECONOMIDES: You bet. COLLINS: Quickly want to show you some live pictures now. We are hearing first lady Michelle Obama -- there she is -- is at the event that we showed you a while ago at the National Mall in Washington, D.C. YouthBuild.
UNIDENTIFIED MALE: (INAUDIBLE) to grow, to lead and fulfill your aspirations and your vision for a better society.
COLLINS: There's a quick look for you. Meanwhile, a lot of ideas for you this week as we look down "THE ROAD TO RESCUE." Our Josh Levs is standing by, ready to answer a few of your questions.
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COLLINS: And we have been inviting you to send in your questions today. Our Josh Levs is here now to get some answers about the economy.
JOSH LEVS, CNN CORRESPONDENT: Yes. It's really interesting, Heidi. Yesterday, we invited people to send in questions. We got great ones via both Facebook and e-mail. And we want to get you as many answers as we can all week long. We're going to start off today with some answers from our Gerri Willis. Our personal finance editor joining us right now. Gerri, thanks a lot for doing this.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hey, Josh, good to see you. Yes, these are great questions, by the way.
LEVS: They are. I know. I'm really impressed. Let's zoom to this first one right here. It comes to us from Bill, who says, "Why can't we copy what we did to get out of previous recessions." Gerri?
WILLIS: Well, you know, Bill, it's a great thought, you know, just do what we did before. Those recessions were incredibly short. I mean, think about it, the early '90s, compared to what we're going through right now. Not as severe. And the reason that you can't do the same thing is because in addition to having a slowdown in the economy, we've also had capital valves shut off to business and consumers.
Capital has not been flowing. Money is not available. And as you know, Josh, money is the oxygen for an economy. You have to have money circulating so people can get loans to start new businesses to pay employees. And when those valves are shut off, well, as you see, nothing happens.
LEVS: You know what? That leads beautifully right now to our second question. Let's take a look at this. It comes to us from Roman, who says, "Is there any help for small business owners in the stimulus package? I have a small excavation company." He says, "My bank has basically cut off my credit," Gerri.
WILLIS: You know, my heart goes out to Roman. I know how tough this is. The last report on loans to small business operators through the SBA, the Small Business Administration, fourth quarter of last year they were down 57 percent year over year. Small businesses just aren't getting money. Banks are refusing to lend.
But guess what? There's some help in the stimulus bill. There's some $730 million for loans. And there's been a lot of talk about the small loans that the SBA is going to do, $35,000 loans that small businesses could get, get quickly and then use to pay bills, to pay their employees. So, there is money in the pipelines.
I don't think it's available just exactly this moment, but you need to be picking up the telephone, calling your lender, calling the SBA to find out how to get your hands on that dough, because it's for small business operators. President Barack Obama saying this week that they are the lifeblood of this economy, and we have to have them working and doing their business to make the economy grow and expand.
LEVS: A little bit of hope there for him. And listen, I really want to thank you a lot for doing this, and I just want to tell everyone, you can keep your questions coming to us, CNNnewsroom@CNN.com. Or you can Facebook right here, Josh Levs CNN, and we're going to keep an eye on these all week long, Heidi. We're going to keep getting people as many answers as we can.
COLLINS: Yes, absolutely. Because I know we're getting an awful lot of questions. All right, Josh and Gerri, thank you. Appreciate that.
I'm Heidi Collins. "Road to Rescue: CNN Survival Guide" continues all week. So, join us again tomorrow morning at 9:00 a.m. Eastern, where our "Snapshot across America" will highlight small businesses and how they are working to get people to the door. For now, CNN NEWSROOM continues with Tony Harris after a quick break.
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