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Existing Home Sales Plunge; Shirley Sherrod Declines Offers From Agriculture Department; Five States Holding Primaries; Building Up The Levees; What's Hot; Military Burial For Convicted Veteran
Aired August 24, 2010 - 11:58 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And hello again, everyone, I'm Tony Harris. Top of the hour in the CNN NEWSROOM, where anything can happen. Here are some of the people behind today's top stories.
Stocks fall as home sales crumble. What does it mean for the economy and your bottom line? We are asking Ali Velshi.
And offer rebuffed -- the former Agriculture Department employee at the center of a racial controversy says thanks, but no thanks to her former boss.
(BEGIN VIDEO CLIP)
SHIRLEY SHERROD, FORMER USDA EMPLOYEE: I just don't think at this point, with all that has happened, I can do that either in the new position that was offered or as state director for rural development in Georgia.
(END VIDEO CLIP)
HARRIS: You are online right now, we are too. Marie Ines Ferre is following what's hot -- Marie.
MARIE INES FERRE, CNN CORRESPONDENT: Mexico is celebrating their native beauty who won Miss Universe.
Also, guess what the pope is betting on his next visit to the UK. Remember these?
HARRIS: Oh, yes.
Let's get started with our lead story. Exiting -- well, not exiting, existing home sales plunge and stocks certainly react.
Plus, House Minority Leader John Boehner calls for the mass firing of President Obama's economic team from the top down.
Let's talk to our chief business correspondent, Ali Velshi. Ali is also the host of CNN NEWSROOM starting at the top of the hour right here in the CNN NEWSROOM.
Ali, what do you make of existing home sales? We knew the number would be bad.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Yes, we knew that. And you and I talked about this yesterday.
HARRIS: Yes. But I'm not sure we thought it would be -- great, lights. I don't think we thought it would be quite this bad or --
VELSHI: It's bad.
HARRIS: It's bad.
VELSHI: Yes. Look, so let's just back up for a second.
There are three things that I always like to say make you feel prosperous, or make you feel prosperous, and that is the value of your savings for retirement are going up, the value of your wage is going up, and the price of your house is going up. At least one of these three things has to be happening. And right now none of them are happening.
HARRIS: Right.
VELSHI: The stock market is evening out, unemployment is still high. And the one thing we were hoping to see a bit of a recovery in is the housing market.
Well, you saw those numbers, down 26 percent last month compared to the year earlier, and we are now on an annual rate of home sales is the lowest in 15 years. Why did this happen?
HARRIS: Yes.
VELSHI: Well, because we had those tax credits in there, largely, $8,000 tax credits that expired at the end of April if you were buying a house for the first time. I find it hard to believe that so many people bought houses because of the $8,000 tax credit, but they did. Remember the conversation you and I had about those two guys who were fighting on my show --
HARRIS: Absolutely.
VELSHI: -- saying keep supporting the housing market or don't? What does this tell you? The minute we take away $8,000 from the system, nobody wants to buy a house anymore. So everybody is working on the coupons. It's like the old car incentives, right? You didn't buy a car unless you got an incentive.
HARRIS: Well, we're looking for value.
VELSHI: Right.
HARRIS: We're looking for value.
VELSHI: But you have 50-year lows on interest rates right now. If that's not value --
HARRIS: And that's not enough when you're worried about your job --
VELSHI: That's right.
HARRIS: Right? It's not enough.
VELSHI: All the deal in the world is not enough if you're worried about your job. So this is the double-edged sword.
If you have credit and you have money, and you were looking to buy a house in which you are going to stay for some time, these interest rates will be more valuable to you than the price of the house. But if you're worried about your job, you're staying away from big-ticket items.
HARRIS: Aren't we going to get new home sales tomorrow?
VELSHI: Yes.
HARRIS: Are those numbers expected to be a little --
VELSHI: But remember, they're a much smaller proportion. Right?
Most houses are existing houses -- 85, 90 percent of the market are existing houses. So this is the big number today.
As for calling for the economic team to resign, I think it's Primary Day. I think we're getting into midterm elections. I think any time anything goes wrong, you're going hear people calling for people to resign. I didn't put too much stock in it.
HARRIS: OK. One more note on housing.
You have sort of outlined what it means for the overall economy and the sense of that. But there is a ripple effect, right? If you're not selling houses -- not necessarily new ones --
(CROSSTALK)
VELSHI: Or you're struggling for money and you can't sell your house now because -- I should tell you though, Tony -- I should tell you, home prices, the median price for an existing home -- that's a single family, one home, median price --
HARRIS: That most of us live in.
VELSHI: -- that most of us live in, half of homes sell for higher, half of homes sell for lower -- $182,000 and change. It's actually up almost one percent from last year. So mixed messages again.
Prices are not dropping just yet, but sales are dropping. Usually sales dropping leads to prices dropping.
HARRIS: Does this sector have to turn around? And I don't even know how you define a turnaround, right? You know, what metrics you use.
VELSHI: You have to have faith that if you buy a house, it's not going to be worth less five or 10 years down the road. I don't think people should buy houses with the idea of flipping them. But you're not going to put that kind of money into an investment you think is going to go down. Why not rent?
HARRIS: OK. So my point is, does this sector have to turn around for us to come out of this -- well, where we are? This malaise?
VELSHI: And it all comes back to you thinking you have a job. If we think we're going to have a job, people will invest in houses.
HARRIS: All right. Ali, see you at the top of the hour.
VELSHI: All right.
HARRIS: The man.
And of course you can join the conversation with us on Facebook, Twitter -- let's see, my blog page. What's the address here? CNN.com/Tony.
Shirley Sherrod returns to the Agriculture Department for a meeting, but turns down an offer to return to work. Shirley Sherrod was forced, as you know, to resign after her comments on race were misconstrued.
I talked with Ms. Sherrod last hour about her decision and her hopes for the future.
(BEGIN VIDEO CLIP)
SHIRLEY SHERROD, FORMER USDA EMPLOYEE: I'm sure the secretary was sincere with the offer. I believe the secretary would do all he could to assist me in the position. But the secretary is not the only person you deal with, as we saw with what happened to me.
HARRIS: What continues to happen to you? What do you think of the firestorm around, you know, all of the events that happened to you? In the weeks since we had our first conversation, what's your 30,000-foot view of what's happened to you?
SHERROD: Well, I know that people were quick to judge. Hopefully, that won't happen again with others in the future. I'm hoping that because of all that I went through, all that I continue to deal with, at least in the future people will think first, give some opportunity to look before quickly and hastily making a decision.
(END VIDEO CLIP)
HARRIS: CNN's Brian Todd is following today's developments and he joins us from Washington.
And look, Brian, quite a day for Shirley Sherrod. What can you tell us about the meeting with the Agriculture secretary?
BRIAN TODD, CNN CORRESPONDENT: Well, Tony, we know that at one point she did come in at about 8:00 a.m. Eastern Time this morning. At one point, there were several people in the meeting, then it got down to a one-on-one between her and Secretary Tom Vilsack, and that lasted probably close to an hour, maybe even more than an hour.
And then it kind of developed that they were announcing at this news conference at 10:00 a.m. Eastern Time. And we all thought, well, that must mean that she is going to take some kind of a job, that he has talked her back into another position.
And as he said at the top of his news conference, that he leaned on her pretty hard, that he offered the possibility of coming back at her old job as director of rural programs for the state of Georgia for the Department of Agriculture, or a new job as deputy director in the Department of Advocacy and Outreach. And that's a department that is tasked with improving the civil rights programs of the department and improving its public image nationwide.
That could have been a job that she was ideally suited for. But as you spoke to her about it, she said that she just didn't feel that it was time right now to do that.
They have left open the possibility of her coming back later this year, possibly, when an investigation into discrimination practices and other things relating to that at the department is complete. She might come back as a consultant. But again, a lot more questions than answers at this point about her future -- Tony.
HARRIS: And Brian, I tried. You know, what is that job, advocacy and outreach? You show up for work every day. What do you do?
So, you know, some damage control, it seems, on all sides here. And as we all recall, even the NAACP had to do an about-face on this story. Correct?
TODD: They certainly did. I mean, they apologized shortly after it became clear that she wasn't making racist comments. The secretary apologized, the White House apologized.
The White House angle is pretty interesting, because Sherrod herself had said that there was strong pressure from the White House to get her to step down. The White House has vehemently denied that.
Now, I asked Secretary Vilsack today if in the days just ahead of her resignation, if anyone at the White House ever spoke to him, and if so, who was it? This was his answer.
(BEGIN VIDEO CLIP)
TOM VILSACK, AGRICULTURE SECRETARY: I didn't speak to anyone at the White House. As I said earlier, this was my responsibility, and I had to take full responsibility for it. And I continue to take full responsibility for it. I will take it for as long as I live.
This was -- you know, I pride myself on the work that I do, and I know that I disappointed the president. I disappointed this administration. I disappointed the country. I disappointed Shirley.
I have to live with that.
(END VIDEO CLIP)
TODD: So, the secretary getting a little bit emotional as he talked about a possible conversation with the White House that he says never happened.
And, you know, Tony, you get the sense that after all of this is played out today, that their efforts to kind of do some damage control and move past this politically just may not have come to fruition. They may not be able to do that just yet because she has turned this job down.
HARRIS: Yes. You make a good point.
All right. Brian Todd for us in Washington.
Brian, appreciate it. Thank you.
Five hundred fifty million eggs pulled from store shelves, 17 states affected. We will have an update on the recall prompted by the salmonella outbreak.
But first though, our "Random Moment" in 90 seconds.
(COMMERCIAL BREAK)
HARRIS: Let's see here -- our "Random Moment of the Day," the best dead-on head shot since William Tell nailed that apple some 700 years ago. Remember that?
Tennis ace Roger Federer, the bestest tennis player ever, hits a head top target like a missile looking for a bull's eye. Did you see that?
Again here in slow motion. And in the words of the great Fredricka Whitfield, "What the what?"
Roger the great pulled off the shot on the set of a Gillette commercial. He could have easily rearranged the guy's face if he missed.
One thing that never misses, your "Random Moment of the Day."
(COMMERCIAL BREAK)
HARRIS: So voters are making choices across five states today. It is a Primary Day rolling in big money and steeped in Tea Party politicking.
Deputy Political Editor Paul Steinhauser is in Washington for us.
And Paul, good to see you. Let's do this -- let's start with the role billionaire candidates are playing in Florida's Senate and governor races. What's going on here?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL EDITOR: Tony, a great place to start on this second of the last big night of primaries. You're right, in Florida you've got these two outsiders with big bucks who are taking on the party favorites, the so-called insiders.
Let's start with that Florida Democratic Senate battle where you've got Kendrick Meek, the congressman from south Florida. He's the party favorite. And you know he had the race all to himself until April, when the guy on the right, right there, Jeff Greene, he is a billionaire real estate investor, he jumped into the race.
Tony, he spent about $25 million of his own money. But thanks to his betting against the housing market boom and thanks to his connections to Mike Tyson, Heidi Fleiss, and Lindsay Lohan, he's run into some trouble. This is a nasty primary.
It's also nasty on the Republican side for the gubernatorial nomination, Tony, in Florida. You've got Bill McCollum on the left. He is a former congressman and the attorney general of Florida. He's the insider, the party favorite.
On the right, that's Rick Scott, a millionaire businessman, former health care executive. He spent some $50 million, Tony, of his own money in his primary bid. We'll find out tonight who comes on top.
HARRIS: So, Paul, in Alaska, Sarah Palin and the Tea Party are making a run at the incumbent Republican senator. What can you tell us about that?
STEINHAUSER: Yes, this is another great story.
Sarah Palin, the former governor of Alaska, as we know. Lisa Murkowski, she's the incumbent senator up there. She's running for reelection, but she's got a primary challenge from a guy called Joe Miller. There he is on the right.
Nobody had really heard of him much until about two months ago, three months ago, when he made this bid. He's being backed by Sarah Palin and by the Tea Party Express, Tony. That's one of those big national Tea Party organizations. They spent $500,000 on him.
There is also some family history between Murkowski and Palin. Her father was running for reelection four years ago. Palin took him on and knocked him out -- Tony.
HARRIS: And let's see if we can squeeze one more in here.
John McCain has faced a really visible challenge in his Arizona Senate race. Is there a chance he could lose this election?
STEINHAUSER: Well, the polls that have been taken recently suggest he is the big favorite tonight. But this has been his toughest primary challenge in decades.
He's facing a challenge from a guy called J.D. Hayworth, a former congressman, former conservative radio talk show host. McCain has taken this seriously, Tony. He has sunk in $20 million of money on this campaign, and he also, I think it's fair to say, has moved to the right on some key issues like illegal immigration.
A great race to watch. Illegal immigration such a big issue in Arizona, of course.
HARRIS: All right, Paul. Good to see you. Thank you, sir.
STEINHAUSER: Hey, thanks, Tony.
HARRIS: All right.
(NEWSBREAK)
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: Let's do this -- let's check our top stories now.
The number of U.S. troops in Iraq has dropped below 50,000 ahead of President Obama's August 31st deadline. Starting next month, the U.S. will officially be in the country in a non-combat role.
Former president Jimmy Carter will be heading to North Korea. He is hoping to secure the release of an American in prison for illegally entering the communist nation. Officials say the trip is a private humanitarian mission.
And an out-of-control car in Ohio. Can we take this full?
It goes airborne and smashes into part of a bridge. The video was caught by police dash cam. The 19-year-old driver survived.
Man, survived this, but is still in critical continue.
Kids texting uncontrollably, even in class. So, instead of continuing the losing battle trying to stop them, one school is using it as a teaching tool.
Here's more now from Deb Feyerick.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Seventh grader Cayleb Coyne has texting in class down to a science.
CAYLEB COYNE, 7TH GRADE STUDENT: Open it up, put the phone in there and act like I'm looking for something and send a text message.
FEYERICK: Hallways are also good.
COYNE: It's harder when you go on hallways.
FEYERICK: Because you're moving?
COYNE: Yes.
FEYERICK: You're like a shark. Always moving.
COYNE: Yes.
FEYERICK: Coyne says his cell phone has been confiscated six times in six months. And he's not the only one despite constant reminders from his principal at Haverstraw Middle School.
UNIDENTIFIED FEMALE: Your cell phones are supposed to be where? Yes, in your locker, not in class.
FEYERICK: But class is exactly where they end up. According to the Pew Research Center, even in schools that ban cell phone use, nearly 60 percent of all students admit texting during class, a growing problem in schools across the country.
ROBIN NOVELLI, PRINCIPAL, BAYSIDE HIGH SCHOOL: Why are you so addicted to this technology?
FEYERICK: At Bayside High School in Florida, students risk being suspended if their phone is confiscated more than once. So for this year, 200 kids have had their phones taken away.
NOVELLI: Students need to be fully 100 percent authentically engaged in the classroom and pulling out a cell phone and texting their friends about whatever it is they might be talking about is not the learning environment that I, the principal, want to promote.
FEYERICK: And despite that zero tolerance policy --
NOVELLI: We still daily collect cell phones from students that have them out when they're supposed to be learning in the classroom.
DR. MICHAEL RICH, DIR., CENTER ON MEDIA AND CHILD HEALTH: I don't think we're going to stop the tsunami.
FEYERICK: But pediatrician and media expert Michael Rich says the reality is kids use more than seven hours of media a day. Depriving them of it could back fire.
RICH: Pandora boxes open here. The technologies are here. What we need to do is take control of them instead of letting them control us.
UNIDENTIFIED FEMALE: You can't put the genie back in the bottle. The cell phones are here.
FEYERICK: At Haverstraw Middle School --
RONALD ROYSTER, 5TH GRADE TEACHER: All right, guys, turn on your MODs (ph) again, please. FEYERICK: Teachers like Ronald Royster have decided, if you can't beat them, join them.
ROYSTER: It's not really a phone, it's their computer for class.
FEYERICK: The school handed out 75 cell phones to fifth graders as part of a unique pilot program.
ROYSTER: Click on (INAUDIBLE)
FEYERICK: Texting and calling features are disabled and Internet sites are filtered. Phones are used for things like note taking and research.
For 11-year-olds Kiara, Ryan and Naya, learning is different now.
FEYERICK: When did you make a movie? Did you make a movie during homeroom?
RYAN GUZINSKI, 5TH GRADE STUDENT: No, this is actually in math. It was about decimals. And you can synch it, which means the teachers will get it and they can grade you.
FEYERICK (on camera): So it really is helping reinforce the lessons?
GUZINSKI: Yes, because we're, like, we're memorizing things so much it's easier.
NAYA RIVERA, 5TH GRADE STUDENT: It's almost like you want to look at the screen. It's almost like a mini TV, where you like, you want to look at it. You don't want to look at a piece of paper.
FEYERICK: The district superintendent says dollar for dollar buying phones is more efficient than new computers.
(on camera): There are some educators who say they should not be in school. What is your response to them?
ILEANA ECKERT, SUPERINTENDENT, HAVERSTRAW STONY POINT CENTRAL SCHOOL DIST.: I think we're in the middle of a new revolution. It's part of who they are today and why not use something in a positive way that they are bringing with them.
FEYERICK: As for these fifth graders --
RIVER: I actually started texting less when I had this. Now that I have this, it's kind of more fun to go on the internet on this and experiment with it while I'm home instead of sitting there texting all day, like doing nothing.
UNIDENTIFIED MALE: It's like, bye phone.
(END VIDEOTAPE)
HARRIS: Hey, all right. Deb Feyerick joining me now from New York.
And Deb, look, truthfully speaking here, how big a problem is this whole texting thing in schools?
FEYERICK: You know, that's what's so interesting, Tony, is that educators are spending huge amounts of time and energy trying to come up with policies that will effectively work in their schools. Some principals have spoken about jamming the cell phone signals. They can't do that, that's not legal. Others are suspending kids. Others are charging whenever a phone is taken away.
So there is a lot of thought going into this problem.
HARRIS: And are other schools sort of on the bandwagon here, looking to incorporate this device?
FEYERICK: Well, they are. As you mentioned before, you know, this is sort of a losing battle. What do you do?
You've got to play -- you've got to remain contemporary, up to date. This is the way kids are learning today.
What's interesting about these mobile learning devices, as they're called, is that they're filtered so the kids don't have unlimited access. And not only that, but also, you know, there is no texting, no calling, so they're getting that sort of -- that feeling that they're doing it in class, but they're not really. So they're able to experiment creatively without necessarily texting, and that's why they don't feel the need to do it when they get home.
HARRIS: I think I just heard someone texting you.
Deb Feyerick in New York for us.
Deb, appreciate it. Good to see you. Thank you.
FEYERICK: You too.
HARRIS: Hey, just got some word just into the CNN NEWSROOM. The Department of Education has confirmed that the District of Columbia, Florida, Georgia, Hawaii, Maryland, Massachusetts, New York, North Carolina, Ohio and Rhode Island will receive money as winners in the Race to the Top competition. I should read what the program is.
Race to the Top is, as you know, an Obama administration initiative to award money to states that show that they have a plan for school reforms in four main areas. We're talking about turning around low-performing schools, adopting college and career-ready standards, effective teachers and principals, and using data systems to support student achievement.
So, once again, we're talking about the District of Columbia, Florida, Georgia, Hawaii, Maryland, Massachusetts, New York, North Carolina, Ohio and Rhode Island receiving money as winners in the next round, the latest round of Race to the Top, the school competition. Still to come, 33 miners trapped for almost three weeks. We will get the latest on what could be a very long wait for everyone from the mine in Chile.
(COMMERCIAL BREAK)
HARRIS: Sounds of life from half a mile underground. It is the first time the families of 33 Chilean miners have heard their voices in almost three weeks now.
Our Karl Penhaul is on the phone with us from the mine.
And Karl, did I read this story correctly last hour, that the men actually sang the Chilean National Anthem?
KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: Exactly, Tony. That was late yesterday evening, and it was after rescue workers on the surface were able to put a cable so they could set up some kind of radio system with the bowels of the earth with these 33 miners. And instead of the normal exchanges of, "Hi, how are you doing?" the miners spontaneously broke into singing the Chilean National Anthem, and that really has lifted the spirits of the rescue workers and the family members as well, because what that really tells them is these men have been through what they have been through for the last 18 days, but they're in good mental health.
They are in high spirits, and they're really showing the tenacity that they're going to hang on and make it through this, because the other conditions -- have to be frank -- really have not been good at all.
Right now, where they are, 2,300 feet below the surface. Temperatures there are around 90 to 95 degrees Fahrenheit, very high humidity. That's why we've seen pictures of these men stripped to the waist.
And in the 17 days they were trapped, they have really had to ration themselves, eating, we're told, only every other day, a few spoonfuls from cans of tuna mackerel. But one day they did have a treat. They had a jar of peaches between the 33 of them -- Tony.
HARRIS: Wow. If you would, Karl, describe the challenges the rescuers face in trying to get these men out.
PENHAUL: There are a number of challenges. Of course, the prime challenge here is the technical challenge. It's a mining challenge to drill down this 2,300 feet to the exact spot where the miners are.
And in the course of this afternoon, we're expecting a new mining drill to be delivered to the site. And what that will do is begin the task of drilling a hole about the width of a man's shoulders. That's the task that's going to take between three and four months.
Why? Because the drill and combination of the performance of the drill, but also the rock, means that the drill can only drill about 60 feet a day. And it has to go down once to drill one hole, and then go and drill a wider hole. But, of course, as that's going on, the challenge also is to keep the men sufficiently well fed.
Now, that may be the easy part. There are some small bore holes that are drilled now, and so rescue workers can deliver oxygen, they can deliver flashlights, they're delivering more water, glucose, medicines, and later on they'll start delivering solid food.
But the other challenge is the mental challenge, keeping these men strong. And what the psychologists are already saying is that natural leaders have emerged within this group. They have to keep the men in good spirits when naturally they may be feeling down or depressed.
They've also got to get a routine going. Do little chores around the small area. It's about 500 square feet, the shelter they're in. So, put that in context. That's about the size of a studio apartment. So, these 33 men have to do chores each day, keeping it clean, going to bed at the same time, getting up the same time. Something that will just mark a routine, mark the days that go by, because they've got to stay mentally strong. Because otherwise that's where this ordeal will have a long, long-lasting effect, Tony.
HARRIS: Wow. Think about that. Thirty-three men in the space the size of a studio apartment. Wow.
All right. Karl Penhaul for us. Karl, appreciate it. Thank you.
Mysterious charges on your credit card bill. Stephanie Elam and the Help Desk Team telling you what to do about it.
(COMMERCIAL BREAK)
HARRIS: Yes, let's get you to CNNmoney.com. There's a lot going on on this page today. Our Money Team does a terrific job, right? Home sales plunge, could sink recovery. Hope that doesn't happen. But look at this -- existing home sales fall 27 percent. Yes, the stimulus. The homebuyer tax credit, that's been removed, right? And this is kind of what you get.
So, there you go. CNNmoney.com and the work of our team, terrific stuff.
Let's get you to the Big Board. New York Stock Exchange. Three hours into the trading daynow , and we are down -- I guess we're off session lows at this point, but still down. We're down 92 points. And the NASDAQ is down 24. We'll keep an eye on those numbers throughout the day for you.
Wrongly billed by your credit card company or dealing with the IRS after settling with a collection agency. You have got question about your money. Stephanie Elam is at the Help Desk with answers.
(BEGIN VIDEOTAPE)
STEPHANIE ELAM, CNNMONEY.COM: Time now for the Help Desk, where we get answers to your financial questions. Joining me this hour, Carmen Wong Ullrich. She's a personal finance author, and also, Ryan Mack is the president of Optimum Capital Management. Thanks so much for joining us today, guys.
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Thank you.
CARMEN WONG ULLRICH, PERSONAL FINANCE AUTHOR: Hello.
ELAM: All right. The first question here is from Samuel. He writes, "I look my credit card bill and besides the high APR, it also had a transfer of funds of $800. I never transferred funds to other credit cards but was told it took place in 2008 over a two-year period. Can I file a lawsuit for charges placed on my account without my knowledge?"
What do you say to this, Ryan? This may be a hard one to prove.
MACK: Well, first of all, there is a guy who just filed a lawsuit against Bank of America for $1.78 septrillion (ph) dollars the other day. It was thrown out of court. But you can file a lawsuit for anything. But whether or not it's worth your time is another question.
One, a lot of credit card companies are making errors. Are you checking your statements regularly so they're not duping things or putting things on there that were inaccurate? Seventy-five percent of all credit card reports have some sort of errors on them. So, you want to make sure you're checking your credit reports frequently.
Identity theft right now is so frequent. Right now, they're doing things such as charging you -- taking $30 here and $30 there from thousands of individuals because it's that much easier to hack into your credit card. So, you want to make sure you go on there at least twice a year, annual credit card report, get your free one, pay for an additional one. And maybe even pay for an additional monitoring service if you see a value added in paying another nine dollars a month to make sure you're really checking your credit card report and being responsible and looking at that.
ELAM: Yeah, you would probably spring for a new shirt, so you probably could spring for an extra credit report check.
MACK: Exactly.
ELAM: All right. Let's go to our next question from BL in Nevada. They write, "If I work out a reduced payoff deal with the credit card, the debt forgiven is reported to the IRS as income and I must pay tax on it. What happens if the debt is sold to a debt collection agency and I work out a reduced payment with them? Is the forgiven amount still reported as income to the IRS?" Good one, Carmen.
WONG: I love this question. I'll tell you why, because it's all about transformation. Your debt goes under a transformation when it goes to the collection agency. So, if you owe a credit card company and you arrange a settlement with them, that is forgiven debt and that will be reported to the IRS. However, when a credit card company sells your debt to a collection agency, basically 10 cents on the dollar pretty much on average, they are the ones who are under -- for the tax lien. It's just a tax write-off for them. The tax issue with you is gone. Now, the collection agency owns it.
Now, they're going to come after you for the original amount. Well, if they pay 10 cents on the dollar, there's a lot of wiggle room in there for you to not pay the full amount. So, you can absolutely reduce that down, and then you don't owe the full amount. It's transformed.
ELAM: Oh. So, this is when you need that information.
WONG: You need the information, and you need to make sure you deal with the collection agency and try to negotiate it down.
ELAM: All right. That's some really good information today, Ryan and Carmen. Thanks so much for that.
The Help Desk is all about getting you answers. Send us an e- mail to CNN Help Desk at CNN.com or log on to at CNN.com/helpdesk to see more of our financial solutions. You can also pick up the latest issue of "Money" magazine on newsstands right now.
(END VIDEOTAPE)
HARRIS: Stephanie, thank you.
Always an American patriot but not a citizen until yesterday. A war hero living under the wrong impression for 75 years.
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HARRIS: Checking top stories now.
Fewer people are buying existing homes. Sales were down 27 percent in June. Realtors say buyers stopped coming around after the homebuyers' tax credit expired.
Shirley Sherrod says no thanks. She has turned down a new job at the U.S. Agriculture Department. She was forced out of her job last month over a racial flap. Turns out she was wrongly accused. Her bosses have since apologized.
And federal regulators now say they don't expect anymore egg recalls. Inspectors are still trying to pinpoint what made so many people sick recently. The contaminated eggs have been linked to two Iowa plants.
Better late than never. After more than seven decades, an American war hero is finally a U.S. citizen.
Frank Leonardowitz rode a tank across Normandy, even getting hit by shrapnel, convinced he was risking his life for God and country. Only he was a Canadian and didn't even know it. In Detroit yesterday, he finally took the oath. Did I mention, he's 90 years old?
(BEGIN VIDEO CLIP)
FRANK LENARTOWICZ, BECAME U.S CITIZEN: During the war, I was sent an absentee ballot and I voted for Roosevelt.
(LAUGHRTER)
LENARTOWICZ: I need to be here, this is my country and always has been. It's something so great that I really don't have the words for it.
(END VIDEO CLIP)
HARRIS: His father told him they were U.S. citizens when he was 15 years old.
Can New Orleans withstand another Katrina? We'll look at the government efforts to shore up the city and rebuild trust with its resident residents.
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HARRIS: A big blow to stem cell research. A federal judge has blocked the Obama adminstration from funding research involving human embryonic stem cells. He ruled that it goes against the will of Congress because an amendment is on the books prohibiting spending federal money on studies that destroy human embryos.
We got reaction last hour from the White House.
(BEGIN VIDEO CLIP)
BILL BURTON, DEPUTY WHITE HOUSE PRESS SECRETARY: The president said very plainly when he laid out his stem cell policy that this is important life-saving -- potentially life-saving research that can have an impact on millions of Americans and people all around the world. He thinks we need to do research. He put forward stringent ethical guidelines, and he thinks his policy is the right one.
We're still reviewing the decision from this judge, but what we have seen so far, from what we can tell, this would also stop the research that President Bush had allowed to go forward early in his presidency. So, we're exploring all possible avenues to make sure that we continue to do this critical, life-saving research.
(END VIDEO CLIP)
HARRIS: Got to tell you, for 300 years, the survival of New Orleans has depended on its levees. And we all remember what happened five years ago during Hurricane Katrina. CNN's Tom Foreman is back in New Orleans to check on the rebuilding.
TOM FOREMAN, CNN CORRESPONDENT: Hey, Tony.
You know, many people here are quite fond of saying there were really two disasters, Katrina itself, and, secondly, the failure of flood walls and levees all around this town, which should have protected it, but did not. That's a problem the Army Corps of Engineers is trying very hard to fix before the next big storm.
(BEGIN VIDEOTAPE)
FOREMAN (voice-over): All around New Orleans, the federal government's latest promise to keep this city safe from the next big storm is rising.
COL. ROBERT SINKLER, U.S. ARMY CORPS OF ENGINEERS: Yes, we're doing about 15 to 20 years of construction work in about 36 months.
FOREMAN: Colonel Robert Sinkler of the Army Corps of Engineers is supervising construction of this two-mile-long storm surge barrier across one major waterway, and improvements to pumping stations, hundreds of miles of levees and flood walls, all of which he admits were never what they should have done.
FOREMAN (on camera): The walls you are building out here are just fundamentally much, much stronger.
SINKLER: Oh, no doubt about it. In it every way, they're much stronger, more robust.
UNIDENTIFIED FEMALE (voice-over): Public safety is the top priority of the United States' Army Corps of Engineers.
FOREMAN (voice-over): In promotional videos by the Corps, the improvements are billed as technological marvels, anchored by pilings driven deep into the earth, reinforced with clay, rock and concrete, a series of defenses working with natural barriers such as marshlands to dull the teeth of even the most fierce storm. Vick Zilmer (ph) is the engineer in charge.
FOREMAN (on camera): If this system were completed and had been in place when Katrina hit, would we have seen the results we did?
VICK ZILMER: Absolutely not. It would have been very, very different.
UNIDENTIFIED MALE: There was a lot of denial from the Corps of Engineers.
FOREMAN (voice-over): But some locals and other experts have their doubts and their own movie. A new documentary, "The Big Uneasy," suggesting the Corps bears much blame for not building better levees long ago. Actor Harry Shearer directed the film.
FOREMAN (on camera): Look, their project looks very big and very impressive.
HARRY SHEARER, DIRECTOR, "THE BIG UNEASY": Yes, it does.
FOREMAN: But you don't have much faith in it. SHEARER: If you place the reassurances, the reassuring statements that the Corps is issuing today, against the reassuring statements the Corps issued before Katrina, they track totally. They've been giving us these reassurance before.
FOREMAN (voice-over): Shearer and others want to see more commitment to restoring those protective wetlands, more attention to possible weaknesses in the Corps plan. With the project scheduled for completion by next summer, the Corps can only offer promises.
ZILMER: So as far as design goes, it's the best humans can do at this time.
FOREMAN: And hope that next time their plans for stopping the big one will work.
(END VIDEOTAPE)
FOREMAN: So groups like levees.org say there must be more accountability. There must be more scrutiny of everything the Corps is doing in the name of protecting this city. The Corps says it knows that it has to rebuild public trust. And Corps officials believe really the proof will be in performance, the next time a big storm comes in and it meets this new much more robust flood protection system.
Tony.
HARRIS: Yes, well-said.
All right, Tom, thank you.
So what's the pope got against the vuvuzelas? It's "What's Hot" on the Internet.
(COMMERCIAL BREAK)
HARRIS: Let's get to some new information about that plane crash in northeast China that we've been telling you about. Emergency crews, we understand, have rescued 47 people now. State run media says at least 90 people were on board the passenger plane. There is also a report that the jet actually overshot the runway and caught fire when it was landing. We'll continue to update this story for you.
Let's get to "What's Hot." All right. Let's take a look at what's hot on the Internet right now. Ines Ferre joining me with that.
We've got a couple of fun items up here. What do you want to start with?
INES FERRE, CNN CORRESPONDENT: Yes, let's start with this one. So the pope is going to be in the U.K. and so the Vatican has banned a couple of items.
HARRIS: Yes.
FERRE: And we just want to tell you that the vuvuzela is one of them.
HARRIS: Is banned?
FERRE: Well, they said you cannot bring vuvuzelas to the public appearances of the pope. You also can't take any alcohol, barbecue -- you can't have barbecues, bring any gazebos --
HARRIS: Banning the vuvuzela has just -- it's just made it absolutely -- you know they're going to be there now.
FERRE: Yes.
HARRIS: If you had said nothing, they wouldn't have been there, and now you're guaranteed to have the vuvuzelas there. OK. All right.
FERRE: And then this next one is Angelina Jolie dressed like a man and is she -- in the movie "Salt," she was dressed like a man when she went into the White House.
HARRIS: Yes, yes, good movie. Yes.
FERRE: Well, she actually scared her son Maddox on the set, because Maddox and Brad Pitt went to visit and apparently, if you can -- look at her. Look at that.
HARRIS: Yes, yes, yes, I remember that. That's right. That's right.
FERRE: That's her dressed as a man. That's Angelina Jolie.
HARRIS: Yes, that would be a little scary.
FERRE: Yes, so the son got all freaked out, and Brad apparently didn't want to kiss her because of it. She even said so, yes.
HARRIS: OK.
FERRE: And this next one is something that's causing so much outrage online. This woman in England is passing by this little cat. You'll see.
HARRIS: Right.
FERRE: And she --
HARRIS: Right.
FERRE: She pets the cat a little bit.
HARRIS: OK.
FERRE: And then she looks around to see -- to see if anyone's looking.
HARRIS: Right, right, right.
FERRE: And this is in Coventry, England.
HARRIS: OK, not her cat. Just walking by and there's the cat there.
FERRE: Right. And then she opens up that garbage bin right there.
HARRIS: Right. Oh, no. No, no, no, no. No.
FERRE: And dumped the cat right in there.
HARRIS: No.
FERRE: Yes. So that was caught on camera.
HARRIS: Yes.
FERRE: And it's been all over the Internet. There's an animal charity group that is now investigating this. I actually called them up in England and they said that they're investigating this. They know who the woman is.
HARRIS: Kind of a quick investigation, right? This won't be lengthy, right?
FERRE: Well, they're going to interview here. We got a statement from them saying that they are investigating this and that they're going to be interviewing the woman shortly. And also the police is looking into this because so many people are outraged on Facebook, everywhere, people are saying, I can't believe that this woman, they're saying, put this cat in the garbage.
HARRIS: Yes. Oh, that's sad -- OK, that's --
FERRE: The cat's OK, though.
HARRIS: Yes, the cat's -- yes. OK.
FERRE: The cat's OK.
HARRIS: Ines, appreciate it. Thank you.
FERRE: You're welcome.
HARRIS: Let's do this. Let's take a quick break. We're back in a moment. You're in the CNN NEWSROOM. When we come back, a convicted murder and accused of a fake war medal. But a former World War II Marine is still honored with a military burial. We're back in a moment.
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HARRIS: Growing anger over the funeral of a veteran turned convict. World War II Marine Raymond sawyer died while in prison for killing his wife. Now, many veterans insist he does not deserve an honor burial, but it is set to go forward today in Denver. Details now from Kyle Clark of affiliate KUSA. (BEGIN VIDEO CLIP)
COL. BOB FISCHER (ph), U.S. MARINE CORPS (RET.): Well, we all feel betrayed.
KYLE CLARK, CNN CORRESPONDENT (voice-over): And retired Marine Colonel Bob Fischer feels that more than most. He nominated Raymond Sawyer for the legion of valor, believing that he was eligible as a recipient of the Navy Cross. He used to call Fischer a good friend. Today he calls him --
FISCHER: Traitorous, false, phony. That's more than one word, but that's my appraisal.
CLARK: Sawyer was thrown out of the legion of valor when members became convinced the Navy Cross claim was a fraud. Sawyer was thrown in jail in 2007 when he admitted to the cold case murder of his wife.
JOE RYAN, U.S. MARINE CORPS. (RET.): He not only is a -- committed a heinous crime, but he also -- was also guilty of dishonoring the Marine Corps.
CLARK: Retired Marine Staff Sergeant Joe Ryan serves with Fischer on the honor guard that appears at each Marine funeral at Fort Logan, until this one.
FISCHER: We are not going to honor somebody who has dishonored us.
CLARK: Fort Logan says the only criminal conviction that would prohibit a military burial is a sentence of life in prison for killing. Sawyer pleaded guilty to second degree murder. He died last month while serving a 13-year sentence. His family has requested and received permission to have him interred with heroes.
RYAN: And we're pleading sincerely with this family to call off this funeral on Tuesday. And, please, take this funeral somewhere else, not at Fort Logan National Cemetery.
FISCHER: And Ray has dishonored all veterans, not just in Fort Logan, but everywhere.
(END VIDEOTAPE)
HARRIS: Boy, how about this? KUSA reporter Kyle Clark reached out to Sawyer's family for reaction. His daughter responded saying she still believes her father was awarded the Navy Cross and the public does not get a say in where he is buried.
Let's pick it up and move it forward now. CNN NEWSROOM continues right now with Ali Velshi.
ALI VELSHI, CNN ANCHOR: Hey, Tony, great interview with Shirley Sherrod earlier.
HARRIS: Thank you, sir. VELSHI: We're going to be talking about that. You have a great afternoon.
