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Flooding Strikes Northeast; Obama Calls for Expanded Oil Drilling; Jobs Growing in Health-Care Industry
Aired March 31, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: CNN NEWSROOM continues right now with our chief business correspondent, Ali Velshi.
ALI VELSHI, CNN ANCHOR: Tony, my friend, good to be back in the same room with you.
I'm Ali Velshi, as Tony said, and I'll be with you for the next two hours and for this two hours every day as I try to break down the stories that we cover and make them understandable to you in a way that you can use them, a way that allows you to make better decisions about your taxes, about your health care or your security, and, boy, about your oil prices.
We just heard Poppy interviewing someone talking about $4 or $5 a gallon. Well, this is an entirely new world that we're looking at right now.
Here's what I've got on the rundown. It's a new hour, and it's a new rundown. Drill, baby, drill. You've heard it before but not from Democrats. Now the biggest Democrat of them all, President Obama, says that he is -- wants more drilling of oil. Now, this has been a hugely contentious issue in the past. We'll break down what it means for you and for the price of gasoline and, importantly, for your environment. And by the way, I'm going to roll out my barrel.
Also on the run down, the flooding in the northeast is one for the history books. Flood-weary residents are praying that history doesn't repeat itself. How bad is it? People are ready to throw down their keys and just walk away from their homes. We'll take you right to Rhode Island and other points east -- on the northeast to show you how bad it is.
Plus, if you're like me, you're busy, and the last thing you want to do is your taxes. It's OK. You can file for an extension. But you can't put off paying your bill. If you're going to file, you'd better file fast. I'll tell you what you need to do, and I'll be paying particularly close attention.
All right. Let's talk about the weather. This is a big deal in the northeast. As Chad always says, I follow the weather around. And that's where I was. I was in the northeast in New York. That rain was nuts. It was just coming down and coming down.
And one of the things I'd like to point out to people is that Rhode Island is, in fact, not an island, most of the time. CHAD MYERS, AMS METEOROLOGIST: No. Right.
VELSHI: But it's certainly looking like parts of it could be an island right now.
MYERS: Yes, but I used to visit a space down by Narakanset (ph), which is down -- two different communities from Newport, because there's the money and here's the fun people that don't have any money. And then -- but that was an island. But the rest of it, although it's called Rhode Island, know that there's just Narakanset (ph) and (INAUDIBLE) all the way up.
VELSHI: Right.
MYERS: So Providence and Cranston and now Warrick. We have pictures from everywhere. And it's not the only state. We're talking Massachusetts, Vermont, Maine. We just have pictures right now from Rhode Island. We'll spread it around as the day goes on.
Take a look at some of these iReports that we have, because in fact, some of them are, in fact, sad. Places that haven't flooded. People had no idea that they were going to flood. People that had no flood insurance because they're not in a floodplain. When you get 16 inches of rainfall in just 30 days, you are going to get flooding. And Warrick could get 8 inches, 8.89 I think they're up to now, something like that, in just 48 hours.
That was a classic car. That's going to take some work to put that back. So...
VELSHI: The governor of Rhode Island was saying, you know, nobody has seen this before. Rhode Island Emergency Management talking about their software for projecting what could happen, this exceeds even that.
MYERS: Right.
VELSHI: Now, here's -- the good news is that this ends at some point.
MYERS: It's over now. But the bubble of water, you know, if you take rainfall and you spread it up here...
VELSHI: Yes.
MYERS: ... just because it stops today doesn't mean the water is going down, because it has to go down into the rivers. And that's where the bubble of water is. Still is going to take some time. So these rivers are still rising, even though the rain has stopped.
VELSHI: OK. All right. There is good weather coming into the northeast over the -- for the weekend, too.
MYERS: Sunny for the next five days.
VELSHI: Yes. MYERS: You have that piece of tape of that guy that was talking about how it's a -- I don't know if we're going to do it now or at the 20. But there's a man that Reynolds interviewed.
VELSHI: Yes.
MYERS: You know, here's the...
VELSHI: Let's play it.
MYERS: There you go.
(BEGIN VIDEO CLIP)
REYNOLDS WOLF, AMS METEOROLOGIST: How quickly did the water come up?
UNIDENTIFIED MALE: Five o'clock is when it really -- because I had to shut down one of the pumps. I was running on a generator, so, you know. Then the fire department told me to shut the generator off, because I had it in the garage. I had the doors open and everything. That's when I lost everything, once I shut the pumps off. My furniture is underwater, high water. Everything.
(END VIDEO CLIP)
MYERS: It was getting out of his house. He had the pumps running, and the fire department said, "No, man, it's too dangerous. You can't have electricity running."
VELSHI: Right. It's always a trick when you've got pumps running whenever something floods. People have to keep -- keep conscious of that. Because the pumps can handle a certain amount of water, but there's a wire and it's plugged in. And once the water starts getting higher than that point, you're in danger of getting -- of electrocuting yourself.
All right. Thanks very much. We'll check in with you in a few minutes again to see what's going on.
MYERS: See you in 20.
VELSHI: All right. Here's another story that we've been talking about. You've probably heard already that President Obama has said that he wants to now authorize drilling in areas of the country where we don't drill offshore. You may not know this, but not everywhere can you drill offshore.
This is my barrel. You've seen this before. This is my old oil barrel. I usually use this to put the price of oil on. Right now -- or last night oil settled at about $82.37. This is important to remember, because we are -- we're coming out of a recession. We're probably out of the recession. But the reality is, we're still in tough economic times where people are pulling back a little. And if -- if in a time -- in a different world economy, if we're running above $80 a barrel, that's something worth thinking about. Do you know how many of these we use every day? We use more than -- well, every year we use more than 7 billion, with a "b," 7 billion barrels of oil.
Now President Obama's initiative is to open vast new areas of the Atlantic and parts of the Gulf Coast, the Gulf of Mexico to more oil drilling. Let me tell you a little bit about this. Listen to the president, first of all.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: For decades we've talked about how our dependence on foreign oil threatens our economy. Yet our will to act rises and falls with the price of a barrel of oil. When gas gets expensive at the pump, suddenly everybody is an energy expert. And when it goes back down, everybody is back to their old habits.
For decades we've talked about the threat to future generations posed by our current system of energy, even as we can see the mounting evidence of climate change from the Arctic circle to the Gulf Coast. And, this is particularly relevant to all of you who are serving in uniform. For decades we've talked about the risks to our security created by a dependence on foreign oil. But that dependence has actually grown, year after year after year after year.
(END VIDEO CLIP)
VELSHI: Now, let me tell you a little bit about what's proposed. The areas in this sort of yellow color are areas that we already drill for oil in. You're very familiar with the Gulf of Mexico. Generally, the western Gulf of Mexico. And there's an area off the Atlantic coast that is approved for exploration drilling, but it hasn't taken place yet.
Now, the red areas are those areas that the president is proposing for more oil drilling. So this is the northwest. You know, it's just off the northern tip of Delaware, down to central Florida, which will be opened up for exploration.
Now, that means that the Interior Department, which controls all of this offshore land, of all the offshore waters, will have to explore and study to see what's viable.
The first leases are not possible until 2012, except in this area off the coast of Virginia, which has already been approved for work.
Now, I want to show you. This is Alaska. It should be up here, but we've moved it over here for a minute. This area over here is being preserved because of fisheries and because of whales. This area will be preserved. But the north part of Alaska will be opened up to more drilling.
Now, obviously a lot of people are concerned about what this does for tourism. This area around the Gulf and off the East Coast. You won't be able to put an oil rig in more than 125 miles or closer than 125 miles to shore, because that way nobody can see it from shore. So, you know, there are benefits and there are disadvantages. There are people who agree with it and people who don't agree with it. And we're going to be looking at those.
The richest area that is going to be opened is here, though, in the eastern Gulf of Mexico. About 3 1/2 billion barrels of reserves are probably in that area.
Now, there are two parts to the president's announcement. One is increasing oil production, domestic oil production. So we reduce our dependence on oil from elsewhere in the world. The other one is conservation. And here's what the president is also proposing. Increased use of biofuels in military vehicles. He made this announcement at a military base. Also, purchasing 5,000 hybrid vehicles for -- for the military fleet and increasing fuel-efficiency standards for new cars.
We're going to hear more about this tomorrow. But as you probably saw Poppy Harlow at the New York Auto Show, taking a look at that Chevy Volt, taking a look at the Nissan Leaf electric cars.
So you know, two sides to the issue. We've got conservation, and we've got more -- more oil drilling. OK.
That's just the plan. This isn't even the politics. When we take -- we're going to take a break. When we come back on the other side, Mark Preston is going to join me to talk about the politics of this. I'll also be joined by Michael Brune. He's the executive director of the Sierra Club. He doesn't love this idea, and he'll tell us why when we come back. Stay with us. We're continuing this discussion.
(COMMERCIAL BREAK)
VELSHI: Sure, drilling can be a slippery slope for politicians. If you support it constituents sound the alarm about environmental impact. If you oppose it you get complaints about sky-high gas prices and dependence on foreign oil.
Who can forget those calls to "drill, baby drill," from the 2008 presidential election? Well, we're hearing echo of that chant as we approach November's midterm vote.
Let's get some perspective on the energy debate. I'm here with Mark Preston, my good friend. He's CNN's political editor. We have traveled across this country at a time when gas prices were just starting to go up and hearing people's frustrations.
Michael Brune joins me, as well, from the Sierra Club in San Francisco.
Michael, thank you for being with us.
Mark, let's start with you. First of all, "drill, baby, drill" was a refrain uttered by Republicans to say allow offshore drilling to take place. It was something President Bush wanted to do. It was not a Democratic platform at all.
MARK PRESTON, CNN POLITICAL EDITOR: It was not a Democratic platform, and it really was made famous by a woman from Alaska, of all places, Sarah Palin. If you remember, "drill, baby drill."
Now, of course, Democrats were very much against that, Ali, because of environmental concerns.
VELSHI: Yes.
PRESTON: We'll hear a little bit more of that. The fact is, though, President Obama during the campaign did say he was not opposed to drilling...
VELSHI: Right.
PRESTON: And of course, here we are today.
VELSHI: That's important. This is not a complete turn for President Obama.
PRESTON: No, not a complete turn, but I'm sure the environmental community, as again we'll hear, is not very happy.
VELSHI: All right. Let's hear from them. Sierra Club executive director Michael Brune. Michael, I saw you've already put out a statement. You don't think this is the answer for our energy needs.
MICHAEL BRUNE, EXECUTIVE DIRECTOR, SIERRA CLUB: No. We've had this debate for years, of course. It's really more of the same. We don't think that expanded oil drilling actually solves the problem. What it does, in fact, do is it perpetuates our dependence on dirty energy. You know, if we want to build the clean-energy economy of tomorrow, we need to stop subsidizing the oil industry today.
VELSHI: All right. Well, President Obama is trying to walk a line here. On one side, he is saying that we need to increase domestic energy production, whether that's oil or anything else.
On the other side, he is agreeing with you, Michael, that we've got to bring down our greenhouse gas emissions, which means using less fossil fuel. Generally speaking, this administration does seem to support that view.
BRUNE: Yes, it's true. And there's a lot that the Obama administration is doing that we strongly support.
The news that we'll hear tomorrow about increased fuel efficiency in vehicles across the country will save more than -- close to 2 billion barrels of oil over the life of the agreement. And there's a lot of other things that the administration is doing that it announced today in terms of buying more hybrid vehicles.
The -- the reason why we're disappointed is because the announcement about expanded oil drilling is a -- is a giveaway to the oil industry, and the cost is going to be born by people who live on our coasts and those who want us to break our dependence on dirty energy.
VELSHI: Well, here's the problem. Here's the problem, Michael. And Mark is going to show us this. New polling. No surprise that, in a new CNN/Opinion Research poll, people think the economy is more important than the environment. That's not the part that surprises me. The part that surprises me is when you drill down -- no pun intended -- drill down further into this polling. Tell us what the rest of it says.
PRESTON: Sure, Ali. And this is one thing that the president has going in his favor. The fact is, 51 percent believe that the economy is the No. 1 issue. You and I have been talking about it for years now.
VELSHI: Yes.
PRESTON: Of course, we're in the tank.
If you drill down and you look at what is the most important vote to voters, most important issue for voters come November, look at the economy: 43 percent. Energy and the environment is only at 2 percent. So it would seem that President Obama has the American public on his side.
VELSHI: Yes. Michael, this is a problem you guys face all the time, isn't it? That when times get tough, everybody who thought they wanted to be green realizes that it may be a little more expensive or may cost them somewhere else. And it looks like support for the idea is actually losing ground as opposed to gaining ground.
BRUNE: Well, no. Actually that's not the problem. There's no conflict here between the environment and the economy. By --
VELSHI: But surely -- surely there is. I'm not taking issue with what you're saying, Michael. But I'm just saying look at the poll in front of you. Clearly, 43 percent think the economy is the issue, and 2 percent think energy and the environment is the issue. So I'm not misunderstanding you, but clearly somebody is.
BRUNE: No, but here's my point. Here's my point. To stimulate the economy -- you just had Bob Lutz on the show a little while ago.
VELSHI: Yes.
BRUNE: To stimulate the economy and to save taxpayers money, the best thing to do is to promote efficiency and to promote conservation. That is the single best thing that we can do when we're talking about the oil industry, to stimulate the economy.
Giveaways to the -- to an industry that is the most profitable industry in the history of the world doesn't help the economy. Forcing drivers to pay more money at the gas pump doesn't help the economy. The best thing we can do is promote efficiency and increase vehicle standards, not to allow for more drilling.
VELSHI: Again, no disagreement except that why wouldn't drilling for more oil bring down the price of gasoline? It's a supply and demand issue. If there's more oil out there, gas should be cheaper. So doesn't that argument -- what's to say that drilling for more oil is going to make people pay more?
BRUNE: Well, it hasn't yet -- it hasn't worked yet. Oil prices continue to increase, even as we continue to explore for more oil. There's not that much oil that can be found off of our coasts. And it will take too long to bring to market to have any impact on oil prices five, ten, 15 years from now.
VELSHI: And there are people who -- and Michael, your view is reflected by a lot of people, that it's not that much more oil.
Mark, what does this matter then? I mean, it's really not that big a deal. The oil companies will make some money on the fringes, as Michael said, and maybe we'll get more gas, and maybe that will bring the price of gas down. But ultimately, what does the president get by doing this?
PRESTON: Well, he's got to appeal not only to his base, to the environmentalists --
VELSHI: Yes.
PRESTON: And he also has to appeal to independents. Right? I mean, the idea is that -- is that the country is made up of more than the people who voted for him, and of course, there's that independent block.
But look, he's making this an issue on national security. He held it. He gave the announcement at an Air Force base today.
VELSHI: Meaning that, if we produce more oil that we use here in the United States. I mean, the United States is 5 percent of the world's population and uses a quarter of the world's oil. If we produce more of it here, we're less dependent on countries that are not friendly to the United States.
PRESTON: Exactly. And at the same time, he's talking about the economy. He says that this will help create jobs. And all throughout his speech today, what did we hear him talk about? He talked about his clean-energy initiatives, as well.
He thinks that this is a dual plan. Of course, environmentalists are not going to be very happy about it. Republicans -- some Republicans are not happy about it. It seems like he needs to thread the needle.
VELSHI: Yes.
PRESTON: And he'll take a lot of hits along the way.
VELSHI: Michael, good to talk to you. Thank you for being with us and letting us know a bit about what the Sierra Club feels about this.
BRUNE: Thanks for having me on the show.
VELSHI: Michael Brune is the executive director of the Sierra Club, joining us from San Francisco.
Mark Preston is our CNN senior -- political editor. Thank you for being with us.
PRESTON: Thanks, Ali.
VELSHI: Always good to see you.
All right. There's one key field out there that is expected to drive job creation over the next decade. It may not come as a surprise to you, but Christine, as she always does, has really, really -- can I say drilled down again, because I've been saying it about five times already? She's going to tell you exactly where the jobs are; more importantly, what those jobs pay, right after the break.
(COMMERCIAL BREAK)
VELSHI: All right. If you don't know what area is going to be the biggest growth area for jobs in this economy or what has been the biggest area for jobs in this area, I'm not speaking to you anymore, because I must have been talking about this for the last two years.
But finally, now that we're in this position where we're finally growing some jobs, you know, we're going to get a jobs report on Friday. And a lot of people think it's actually going to be a pretty good one, or at least good compared to what we've seen.
So Christine Romans, as you know, my co-host on "YOUR $$$$$," has decided to drill down a little deeper -- my God, how many times am I going to say that, drill down? You've decided...
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: If it works, Ali, keep with it. If it works, keep doing it.
VELSHI: You've decided to uncover and look into health care, which has really been the prize winner in jobs for the last few years.
ROMANS: Because you have heard me say also for a few years, yes, we're creating a lot of jobs in health care. But be careful. Some of those are low-skill, low-paying jobs...
VELSHI: Right.
ROMANS: -- that will never replace the manufacturing jobs that were a ladder to the American middle class, and that's something that still needs to be addressed.
VELSHI: Yes.
ROMANS: So let's look within health care where there are jobs. We have this sort of scatter image to show you. If you look at this one, this big sphere on the right, this bigger the sphere, that means the more people in that category, and the higher it is on this scale, Ali, the more money. Look, pharmacist --
VELSHI: Can I just -- I just want to show -- I wanted to show you this. I want to look -- just so that the folks know what you're talking about. I'm going to walk over here. You don't need to look at me, Mark. Just see my hand.
Basically, this -- the higher you go up the, better the pay.
ROMANS: Right.
VELSHI: And the further you go out, the more jobs available. OK. So take it from there. You were referring to this big sphere here, right, Christine?
ROMANS: So look at that big sphere, registered nurses. You have a lot of registered nurses. These are people who need at least an associate's degree, maybe more. There's some training involved here. But once you get into this category, sometimes hospitals even pay for more training and the like, and you can move up the ladder.
Look over there. Nursing aides, orderlies and attendants.
VELSHI: Right. Just underneath and to the left. Yes, yes.
ROMANS: Home health aides.
VELSHI: Lower paying.
ROMANS: That's kind of the brownish.
VELSHI: Yes.
ROMANS: That's right. And then look, pharmacy techs, a lot of these over here don't necessarily need a whole lot of schooling.
VELSHI: Right. Pharmacy tech is the yellow one here. Yes.
ROMANS: Right. And we're growing a lot of these jobs. Then you look, radiological tech and technician, dental hygienist, physical therapists. You go up -- there are fewer jobs but still growth. And there are better pay.
Now, I want to look at where the growth is going to be. And that's my next screen, Ali. Walk you through.
VELSHI: OK.
ROMANS: We are expected to add more than half a million more nurses over the next 10 years. This is all from the Bureau of Labor statistics. Home health aid, almost half a million there.
The next two categories, home health aids and home care aids together will be 800,000 new jobs over the next two years.
VELSHI: Which again, you pointed out -- you pointed out, not great-paying jobs, but you might -- you're in a field, and if you are dedicated to advancement, you might be able to use those to get to a better paying job.
ROMANS: Well, one of the criticisms is those are not really ladder jobs.
VELSHI: Interesting.
ROMANS: Those are jobs that are a destination for a lot of people, that are not a ladder to the next thing. You have to be clever and figure out a way to make them a ladder, because they don't pay very much money.
And this is how much they pay. Registered nurses -- this is median pay. So that's half make more, half make less. That's about 62,450 a year. Ali, if you do more training than that, you can make a lot of money as a registered nurse.
I just looked up ICU nurses. There are special -- there's special kinds of categories of nursing that make six figures and above routinely. Home health aides, though, 20 grand. Home care aides, 19 grand. Nurses agency (ph), $23,000. And then physicians and surgeons, $193,000. But you're going to have an awful lot of student loans on that one, too.
My point here is that, depending on where you are in health care, there are going to be different opportunities and different pay.
VELSHI: Yes.
ROMANS: And that's what's pretty interesting here. There's a lot of different -- there's a lot of growth in health care, but be careful. Many of these jobs are not replacing the manufacturing jobs that were so good for the tax base. Remember?
VELSHI: Yes.
ROMANS: So good for the school system. I mean, look at a manufacturing worker and how much money that person could move through an economy --
VELSHI: Yes.
ROMANS: -- to build the schools and build the infrastructure. Then you look at a $19,000 home-health aide --
VELSHI: That's the story.
ROMANS: -- and you can see there's a very big difference there.
VELSHI: Christine, great. And we're going to be doing a lot more of this, this weekend on "YOUR $$$$$." Christine is my co-host on "YOUR $$$$$." You can watch it Saturday at 1 p.m. Eastern, Sundays at 3 p.m. Eastern. We're going to talk a lot about jobs this weekend. Thanks, Christine.
All right. Checking some of the top stories we're following now at CNN. Officials at a Massachusetts high school say they disciplined and removed several more students in the Phoebe Prince case. The 15-year- old committed suicide in January after allegedly being bullying on months on end. Yesterday, prosecutors announced charges against nine students at the school.
A trial is underway for five Americans accused of plotting jihad in Pakistan. The men are accused of planning attacks against several specific targets there. The so-called DC5 face life sentences if they're convicted.
And the government wants to go full-speed ahead with its campaign against distracted driving. Transportation Secretary Ray LaHood wants to make permanent a now-interim ban on commercial trucks and bus drivers texting while they're behind the wheel.
A rainy round two for northeast -- for the northeast. Lots of rivers overflowing their banks. Lots of rescues and neighborhoods evacuated. Chad is on the case. More on the flooding when we come back out of this break.
(COMMERCIAL BREAK)
VELSHI: Where would you like it?
All right. We are going to be -- a lot of us take -- even I take vitamins to stay healthy. But what if they made you unhealthy? What if vitamins actually gave you cancer?
A new study finds that older women taking multi-vitamins may actually be more likely to get cancer down the road. Dr. Sanjay Gupta has this for us.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, no doubt, this is a scary headline. And I can tell you right off the bat that a few years ago there was a study that came out that showed almost the opposite of this that, that in fact, multi-vitamins did not seem to have an association with cancer.
What we are talking about here is an association, as opposed to a cause and effect. This large study from Sweden finding 19 percent increased likelihood of developing breast cancer in women who took multi-vitamins. This was over a ten-year period.
Again, no cause and effect. I repeat that because when talking about associations, it's simply saying when they looked at all the women who developed breast cancer out of this group and compared to women who did not, certain features began to emerge. And one of them was that they're more likely to have taken a multivitamin.
Now, we talked to researchers about this. They say, look, there is -- it's plausible, biologically plausible there is something in a multivitamin that could increase one's likelihood of developing cancer. What exactly that is, who are the women that are most likely effected, and is it a true cause-and-effect sort of thing. Those are questions I still don't know the answer to.
Sort of looking at multi-vitamins globally, though. There's good evidence that not everyone can take multi-vitamin probably needs one. You have people who certainly should be taking them. Seniors, women who are pregnant, for example. People who have some sort of GI disorder, gastrointestinal disorder, people on a restricted diet. But for the vast majority of people, simply getting a good diet is probably going to be all they need.
In fact, trying to get the good stuff, if you will, out of food and putting it into a pill form is a more daunting task than I think a lot of people realize. So, try and eat the right diet.
Also, know what your goals are as to why you're taking a multi- vitamin. There have been very few studies that show that multivitamins ward off chronic difficult diseases, but they can help eliminate the gaps that we have from time to time in our diet. But again, stand by on this sort of association between multivitamins and breast cancer. Probably going to be a lot more work being done on this particular area in the months and years to come. We'll bring it to you.
Back to you for now.
VELSHI: Sanjay's always got good information. You can catch him on weekend mornings at 7:30 Eastern on "SANJAY GUPTA, M.D."
Let's take it over to Chad right now. Flooding in the Northeast. Even though the rain has stopped, the rivers aren't done yet. Chad?
(WEATHER REPORT)
VELSHI: Good advice. Chad Myers staying on top of the flooding in the Northeast. We'll check in with you very shortly.
You've got two weeks, by the way, and two days until your taxes are due. But what if you know now that you're just not going to make the deadline? Well, Roni Deutch, the tax lady, has the answers. And she'll join us right after this break.
(COMMERCIAL BREAK)
VELSHI: Your taxes are due in 16 days. That's two weeks and two days. If you're not going to make it, you need to file for an extension. An extension to file, by the way, is not an extension of the time you have to pay. You will still owe the money that you owe, and if you don't pay the money, you will owe interest and you may be subject to a late payment penalty.
Let's talk about this. This is important because if you -- it's now crunch time. If you don't think you're going to make it, you need to think about your options.
Roni Deutch is the tax lady. She joins me now from New York.
Roni, always good to see you. I was just in New York. I can't believe I missed you. But good to see you. Roni, you have two weeks to go. Which means you can get your act together, find your forms and get it all done or say "I'm going to run into trouble. What do I need to think about if I need an extension?".
RONI DEUTCH, TAX ATTORNEY: As you point out, Ali, it is crunch time. And crunch times mean you have an important decision to make. Are you prepared to file that return on April 15th, which you and I know millions of people and business owners will be unprepared this April 15th.
I say don't panic. Good news. You absolutely, as you point out, are entitled to a six-month extension to file by merely filing form 4868. But as you pointed out, which is so important that most taxpayers are confused about, you still owe the money to the IRS.
And here's exactly what they're going to assess against you. That failure to pay on time penalty is 0.5 percent per month, and it is not capped. We also know that the IRS will charge interest at the going federal rate, which is anywhere between 3 percent to 4 percent right now.
But the reality is, if you are unprepared, do not file that tax return and get that extension. If you do not get an extension, I have bad news for you. You will be subject to a five percent per month penalty capped out at 25 percent. Very important advice for taxpayers to know.
VELSHI: OK. So, if I'm filing but I think I may owe taxes -- I mean, to some degree, I've got to go through the calculation anyway to figure out whether I get a refund or I owe. But if you know you owe, how do you estimate how much you pay?
DEUTCH: Yes, first of all, what we're going to see this year is different than years past. Because of the recession, the job losses and all the businesses that have closed. You and I know that millions of taxpayers are going to owe the IRS, and they're going to have a decision. The decision is simple. Make sure that you file your tax return or an extension even if you cannot afford to pay.
Here's the good news. The IRS has three outstanding programs available to you. Right? The offer and compromise program, the currently not collectible and an installment agreement. So, the bottom line is, even if you owe the IRS, please do not worry. You can get on the phone with the IRS. You can work out a reasonable payment plan.
But none of those rules apply to you -- none of those great programs apply, Ali, unless you file that tax return or an extension.
VELSHI: All right. I've asked for some questions on Facebook. I've got a great one for you. When we come back with Roni, we're going to answer that question. It's from Pamela. In fact, let's just bring it up so we can see it. Pamela says, "If you didn't have taxes withheld from your unemployment, how badly will you get hit?". Roni, stay there. We're coming back after a break. We're going to answer that question. (COMMERCIAL BREAK)
VELSHI: Roni Deutch is a tax lady. She's the author to "The Tax Lady's Guide to Beating the IRS."
Roni, I have a question from Pamela on Facebook. Viewers, you can always send me questions on Facebook. It's the official Ali Velshi page. Pamela says, "If you didn't have taxes withheld from your unemployment, how badly will you get hit?". Your taxes are not typically deducted from your unemployment checks. Tell me about this.
DEUTCH: Pamela, you are like millions of Americans who have received unemployment compensation. You received a 1099-G from the government telling you exactly what you received.
But here's what they forgot to tell you. You have to pay taxes on that money. We certainly know the first $2,400 is not taxable, so that's going to save you, depending on what you state you live in, about $800.
But here's the bad news, Ali. Do you realize how many unemployed people are going to get a tax bill from the IRS? Because they did not put money aside to pay that tax liability.
Again, Pamela, I say please don't worry. You absolutely can work out an installment agreement with the IRS. All you have to do is call them. Explain to them the reality of your situation. "Hey, I'm unemployed. I cannot afford to pay my tax liability," and I'm 100 percent certain that they will work with you on a payment arrangement on whatever it is you owe.
VELSHI: Right. You pointed this out the last time we spoke. You talked about the different options that you have. And you said to me that even in an audit, if you get audited, the IRS is not all that concerned about mistakes that you make. And they might bill you for it, but generally speaking, it's not that serious. They do take it very seriously if you are negligent or you disregard the rules and regulations. There's a distinction that the IRS makes.
DEUTCH: Let's bring up an easy fact that people can understand. What if you have no children and yet you claim the earned income tax credit? Or you don't buy a home but you claim the homeowners buyer credit?
My point to you is simple. If you intentionally abuse the Internal Revenue Service or the lax laws that are in front of you, you bet, Ali, they're going to come after you with a negligent penalty that could be as much as 20 percent.
So, believe me, there's a big difference between intentionally making a mistake on the return and just making a mathematical error. The critical issue is only claim those deductions or credits that are relevant to you or the IRS, when they audit you, could think you intentionally tried to defraud the government. Which now we're talking not only a negligent penalty, we're also talking about a criminal matter. VELSHI: So, don't fool out around with that. Find out what you're entitled to. Do some research. If you make a mistake, that's one thing, but don't try and cheat the system.
Roni, always such a pleasure to talk to you. You're going to come on actually a lot between now and tax day to help us out.
Roni Deutch is a tax attorney, author of "The Tax Lady's Guide to Beating the IRS."
OK. Let me check in on some top stories that we are following here on CNN for you.
As you saw earlier, President Obama is announcing plans to open vast areas of U.S. coastal waters to oil and natural gas drilling, including long stretches of the East Coast, eastern Gulf of Mexico and the north coast of Alaska. The aim is to help end dependency on foreign oil. Voicing their anger, coastal residents and environmentalists.
In Rhode Island, people are battling the worst flooding in more than a century. President Obama has signed a disaster of declaration for the state. Emergencies have been declared in Massachusetts and Connecticut. Hundreds of people have been forced from their homes. Three days of record breaking rains have tapered to a drizzle now. But forecasters warn the worst of the flooding is yet to come.
In Houston, Barbara Bush was released from the hospital today. The former first lady was there for four days to have a series of tests. The statement says the 84-year-old Bush may have surfed a mild relapse of a thyroid condition, which she was first treated for in 1989.
All right. When come back, we're going to continue our conversation about education, Race to the Tp. That's the money that the federal government gives to schools, school districts, and school boards for increasing performance. We're going to talk about that when we come back.
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VELSHI: All right. Two big winners in the battle for education reform. Tennessee and Delaware are the first two states to win grants in the U.S. Department of Education's Race to the Top competition. We talked about this a lot.
Here's what's at stake. The Race to the Top program has about $4 billion in statewide reform grants. The competition rewards states that are leading the way in education reform in these four key areas. Adopting standards that prepare students to succeed in college and the workplace. Measuring or creating a system that measures student growth and reports to teachers and principals on how to improve instruction. Number three, recruiting an rewarding effective teachers and principals. And key here is turning around their lowest performing schools.
Forty states and the District of Columbia submitted applications for the first phase of the grants. Delaware and Tennessee came in first. Delaware will receive about $100 million. Tennessee will get $500 million to put their reform plans into effect over the next four years.
So, what is the secret to their success? Joining me now, Tennessee's education commissioner Tim Webb, and Delaware governor Jack Markell. Thank you, gentlemen, for being with us.
Governor Markell, let's start with you in Delaware. Congratulations. Tell me, this is something that has been vexing states, school districts, schools across the country. It is a heated discussion with all sorts of people pointing fingers at everyone else. Teachers pointing at boards, and parents pointing fingers at teachers. And some people saying the kids don't have enough to eat or don't speak English. This sounds like an insurmountable problem. What have you done in Delaware to overcome this?
GOV. JACK MARKELL, (D) DELAWARE: Well, the real key thing is we had the right people at the table. We started a process over the summer. We had more than 100 stake holders sit down every single day for more than a month, and in the end, we had every single school superintendent, every school board, every head of a charter school.
And, importantly, we had every affiliate of our teachers union sign on to a bold plan. And as we said at the interview in Delaware, you don't have to choose between bold and consensus. In Delaware you get both.
VELSHI: How did you get past the first stage, though? Because we find in some areas of the country you can not get past the first stage of one of those constituent groups blaming another, and the other one saying it's not our fault. How did you get the teachers and the charter schools and the boards and the districts all to agree to things?
MARKELL: Well, we have the advantage in Delaware. We've got 15 years -- a legacy of 15 years of academic innovation to build on, starting back in the mid-90s. And all of these groups have worked together over these 15 years. That's not to say we don't have differences from time to time.
But the bottom line is everybody wanted to have their voices heard and everybody did. And we built it around the standards and the data systems, as you mentioned. Having high-quality teachers in every classroom, high-quality principals in every school, and then focusing in on what do you do with the schools that are consistently underperforming.
VELSHI: OK. Governor Jack Markell, stay right there. Tim Webb is the education commissioner. We're going to take a break. And when we come back, we'll talk about the specifics that have been implemented in the two states that have actually resulted in a lot of federal money going their way to make their school system even better. This is something you'll want to know about, no matter where you live in the country. Stay with us.
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VELSHI: Okay. Two big winners in the battle for education reform, Tennessee and Delaware, the first two states to win grants in the U.S. Department of Education's Race to the Top competition.
Joining me now is Tennessee's education commissioner, Tim Webb. Commissioner Webb, my producer, Christina, is from Tennessee, and if that's what you're producing, you're doing an excellent job.
But let me talk about whether or not you in Tennessee had the same, almost love-fest that the governor of Delaware was describing to me, because we see nothing across the country but tension between boards and teachers and parents and students. Tell me what you did in Tennessee to get this money.
TIM WEBB, TENNESSEE EDUCATION COMMISSIONER: Absolutely, Ali. We had the same kind of strategy employed in Tennessee as Delaware did. The governor had built a very cohesive plan. We worked with all the different constituent groups, the teachers unions, the school districts, the business community, bipartisan support in the general assembly. And so a very well-developed, cohesive plan with everybody at the table and went to work with that.
VELSHI: Let's go through some of the points of what you did. You removed the cap on the number of privately run, publicly funded charter schools. What was the effect of that?
WEBB: Yes, sir, we're beginning to see more and more applications and more interest in the charter movement here in Tennessee as a result of that. So we're seeing the charter movement grow. We have some very high-quality charter schools. We've managed that process to ensure the quality rather than quantity, and now we're beginning to see that grow out in larger numbers.
VELSHI: Okay. Point number two, this is the one that seems to be the most challenging. Tying teacher evaluation to student test scores. Some people think it's the most obvious thing in the world, and other people think that just isn't fair, because students have test score problems for reasons other than the quality of the teacher.
WEBB: Yes, sir. We've had a very rich and robust growth -- measurement of student growth in Tennessee for a number of years, and so what we've done now is to take that measure of student growth. We've been able to actually employ that into -- or deploy that into the teacher evaluation system. We're building out a new evaluation system that takes into consideration not just that single measure of growth, but multiple measures of growth.
VELSHI: Okay. That seems to be the key, though. It's not just a single measure, but all sorts of other areas.
WEBB: Yes.
VELSHI: You have had to take drastic measures, however, to turn around some of the worst-performing schools. What has that included?
WEBB: Yes, sir. In the new legislation that was enacted during the extraordinary special session of the legislature here back in January, we are now able to pull schools that have been consistently lowest performing and put them into something we are calling an achievement school district. We actually remove them from the school district where they are and employ very bold and innovative strategies that have never been before been tried.
VELSHI: All right. Bold and innovative was what we need and what you two in your states have been involved in. Tim Webb is the Tennessee education commissioner and Governor Jack Markell from Delaware was joining us as well.
Thank you to you gentlemen, both, and congratulations on the money you're receiving from the federal government. And we'll keep a close eye on what' s going on in education -- public education in those two states.
All right. A fancy U.N. affair. Bigwigs from around the globe are rubbing elbows. And the drink of choice isn't champagne. It's not even even wine. It's mango juice. The more of it you drink, the more you help Haiti. I'm going to tell you about that when we come back.
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