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Ad Spending Adds Up Big; Future of "Don't Ask, Don't Tell"; China May Halt Some Mineral Exports; Gubernatorial Races Crucial; 490,000Jobs Cut in Britain; Broadband Changes the World

Aired October 20, 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: Wow. That's a tough, tough, tough hit. All right. It is go time.

CNN NEWSROOM continues right now with the man, Ali Velshi.

ALI VELSHI, CNN ANCHOR: My friend, you have a fantastic afternoon, Tony. Thanks very much.

And I'm Ali Velshi. I'll be with you the next two hours today and every weekday.

I' m going to take the maze of information coming your way and together, we're going to learn what's going on at home and around the world. You'll get access to the folk who can best explain what it means today and the impact that these decisions will have beyond today. We'll showcase the best ideas in innovation, philanthropy and public education.

My mission is to help you figure out what's going on around you fits into your life.

So, let's get started right now. Here's what I've got on the rundown:

Kicked out of the military over "Don't Ask, Don't Tell" -- now, this former Iraq war veteran is ready to reenlist after the Pentagon opens the door for openly gay recruits. But a move today by the Obama administration could stop that. Lieutenant Dan Choi joins me live this hour.

OK. Desperate times, desperate measures. The U.K. is planning to hand out half a million pink slips to get its economy back into the black and jobs won't be the only things that get the ax.

Plus, 13 days until election. Our T.J. Holmes out on the road, on the CNN Election Express, talking to voters about their concerns before they head to the ballot box.

Well, when the late House Speaker Tip O'Neill said all politics is local, he summed up the frenzy that America is in right now, 13 days before midterm elections.

President Obama, who many if not most Democratic candidates are running from this year, is nonetheless packing for another multistate road trip aimed at keeping at least the Senate in Democratic hands for two more years. He sets out today for Portland, Oregon, to campaign for Democratic gubernatorial candidate John Kitzhaber; then flies to Seattle for Democratic Senator Patty Murray; in Los Angeles, he'll stump for Democratic Barbara Boxer, and in Las Vegas, for Senate Majority Leader Harry Reid. Finally, in Minnesota, for Democratic gubernatorial candidate Mark Dayton.

Vice President Biden is coming to Harry Reid's defense as well, as we speak, in Reno. As you may know, Reid stands a real chance of being ousted by Tea Party candidate Sharron Angle.

All right. There's -- what we are expected to hear from -- from Vice President Biden at about 1:30 Eastern.

Former President Bill Clinton is spending some time on the campaign trail as well. It will be a second day for him on the campaign trail in Florida. He's trying to shore up support for Democratic candidate Kendrick Meeks there, who is running a distant third right now. Meek has been running behind Republican/Tea Party candidate Marco Rubio and Republican-turned-independent former -- or Governor Charlie Crist.

So, the road trips, the rallies, the meet and greet, that's clearly one way to campaign, even for some of us who like things the way they used to be. It almost seems quaint and archaic compared to flooding the airwaves. Campaign spending in these off-year elections is off the charts, these ones specifically.

And following the dollars in our Washington bureau is CNN senior political editor Mark Preston. From the Campaign Media Analysis Group, next to him is our good friend, Evan Tracey.

Good to see you, guys. Thanks for being with us.

Mark, you wrote about this in your column today. I was struck by the number, $182 million -- $182 million. That is the amount spent on campaign ads nationwide. Not so far this midterm election, this last week.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Insane, right? Isn't it, Ali? That's up 17 percent, according to Evan's analysis from the previous week. And an even astounding number, come December 31st, Ali, predicting it's going to be $3 billion in political advertising.

VELSHI: Wow.

PRESTON: That's been spent in the two term midterm elections.

VELSHI: Evan, let's talk about this.

(CROSSTALK)

VELSHI: Sorry. There's a bit of a delay in our line. We'll see if we can get that fixed.

How much of this has got to do with that court ruling which we referred to as Citizens United, which allowed third parties to spend as much as they want on political advertising?

EVAN TRACEY, CNN CONSULTANT: Yes, Ali. This is the time where you're really feeling the impact of that ruling. One of the things -- everybody sort of focused on the groups and money, but it's the timing that changed. It's those last 60 days where these groups used to not be allowed to operate.

Now, they're really -- this is where they're going to make a big difference. They're trying to be disruptive. They're spending at the end and they can get more money and they can put that money into any race that comes out with close poll numbers right now. So, big impact by the groups in these final 30 days.

VELSHI: Evan and Mark, I wanted to show you guys this big map that we got on the wall. Again, I looked at this today and I thought, what could those numbers be? Fifty-seven hundred and eighty in Portland, 5,135 in Cleveland, 5,298 in Tampa, 6,020 in Las Vegas -- those are the number of television ads in those markets, political television ads going on right now.

I have to tell you, at some point, Mark, as a business journalist, I -- when you talk about those numbers that you and Evan are talking about, there seems to be something a little out of balance in society, if we're in the struggling economy where some people are on food stamps and unemployment and living in tents and we're spending billions with a "B" on advertising for midterm elections?

PRESTON: Well, it just shows you how much is on the line right now, Ali. Who's spending that money? Big business is spending that money because even when times are bad or times are good, big business has a lot at stake.

And, you know, of course, we talk about the Citizens United and we talk about these groups who are spending money and they're not disclosing who they're donors are -- the fact of the matter is, whether the economy is good, whether at a 4 percent unemployment or at 9 percent where we are right now, big business has a lot at stake.

And I think that's exactly what we're seeing especially in some of the key races, including Las Vegas, which I looked at, Ali. And just looking at Las Vegas, in the past week, 50 hours of airtime, of television airtime in Las Vegas alone was dedicated to political TV advertising.

VELSHI: It gives you nothing but watch TV ads.

Evan and Mark, in the next hour, what we'll do is let's take a look at some of the ads.

The other question we want to talk about, Evan, is it's not just big business, in fact. There are some other groups involved that have taken advantage of Citizens United who are going to be influencing your vote. What kind of return on an investment do you think they're getting? Let's talk about that in the next hour.

Evan Tracey is the president of the Campaign Media Analysis Group. He's a CNN consultant. Mark Preston, you all know, CNN senior political editor.

Guys, we'll check in with you in a little while.

All right. He became the face of the anti-"Don't Ask, Don't Tell" movement. You've seen him. Lieutenant Dan Choi, discharged from the Army for being gay. Now, he's re-upping, and we're following him every stay of the way. He'll join my live -- right after the break.

(COMMERCIAL BREAK)

VELSHI: Just over a week after a federal judge ordered the military to stop enforcing "Don't Ask, Don't Tell," recruiters have complied. The Pentagon has sent a message out to the military: stop enforcing "Don't Ask, Don't Tell."

So, now, recruiters have opened their doors to openly gay and lesbian applicants. And by all accounts, things have gone smoothly.

But just over an hour ago, we got word: the Obama administration has filed, as expected, an emergency motion looking to stay that judge's order. I have it right here in my hand. It says, "The government's emergency motion for stay pending appeal under Circuit Rule 27-3 and for temporary administrative stay." It is filed by Tony West, the assistant attorney general.

Basically, the government wants to bring back "Don't Ask, Don't Tell" pending an appeal, and, really, pending a decision by Congress to repeal it.

Now, remember, the president said he totally opposes the policy of "Don't Ask, Don't Tell," but now, he wants to bring it back.

Senior legal analyst Jeffrey Toobin tries to make some sense of it for us.

(BEGIN VIDEO CLIP)

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: They are in a very bizarre position frankly of their own making. But their view is, look, this needs to be done through the political process. They don't want the courts to deal with this unilaterally. They want to get to the same result, but they want to do it through the political process, through the democratically-elected branches.

But they may wind up losing "Don't Ask, Don't Tell" in both counts. I mean, you know, they have a chance now, if they don't appeal, that "Don't Ask, Don't Tell" is just gone. But if the Ninth Circuit overturns Judge Phillips' decision and Congress does not act to overturn "Don't Ask, Don't Tell," "Don't Ask, Don't Tell" could be back and the Obama administration could be responsible for that.

(END VIDEO CLIP)

VELSHI: That's a tricky predicament. Lieutenant Dan Choi was sitting right next to Jeffrey Toobin last night on "AC 360." You may know him. He was discharged under "Don't Ask, Don't Tell" because he admitted that he was gay while he was in the military. But he's just finished filling out paperwork to rejoin the military.

He joins us now from in front of the Army recruitment center in Times Square, New York, with more on that and reaction to the Obama administration's request for a stay.

Lieutenant Dan, great to see you again. What an interesting day it's been for you. You went over to the recruiting center yesterday. I believe you went to reenlist as a marine.

Is that correct?

LT. DAN CHOI, JUST APPLIED TO REJOIN MILITARY: That's true, Ali. And I was a couple of months too old, but the Army took me in, and now they're trying to figure out do I go as a specialist or do I go in as a sergeant? They take a look at the talent and the skills and the training that was in my background.

And what's amazing right now, this is the first time in history that in the United States, gay people can go in -- and without lying about who they are, without hiding who they are, they can also say, "I want to serve my country," and they're going to get processed.

VELSHI: Dan, what happened? When you went in there, what did they -- did you have to at any point say that you're gay? Did you have to fill out a form? Did you offer it? Did they ask?

CHOI: Are you asking if they had gaydar in there? No. I didn't have to come in and say it. But I've told them that I'm gay and I was discharged under "Don't Ask, Don't Tell." I'd said that I'd be in the recruiting station the moment that "Don't Ask, Don't Tell" is dead. "Don't Ask, Don't Tell" has been dead for seven days now -- dead, kaput.

So, I go in to the recruitment center here and I'm just trying to enlist. They filed all the papers. They say this, you've got to fill all these out. You got to go through medical screenings. You've got to go through physical tests.

I passed my tests today. They said I could do any job in the military, based on these scores. And just so long as the rest of the paperwork gets filed, I'll be serving again, taking my oath of enlistment.

VELSHI: And when do you think that's going to happen?

CHOI: Well, I hope that will happen as quick as possible. But if I would stop doing all these interviews, I suppose I could have the process done a bit quicker. But on Monday, I'm supposed to get a medical screening. And I'm just really excited, Ali.

VELSHI: I can tell.

CHOI: This has been a long time coming. You know, I've been going through all of this entire year wondering if I'm going to get fired, was I called back to duty.

VELSHI: Yes.

CHOI: And now, here I am, and this is a real exciting day, not just for gay people but for all of America. I mean, when I talk about the victims of "Don't Ask, Don't Tell," it's not just the 14,000 who've been kicked out or fired. There are 14,000 units that are deploying overseas and they don't have that capable Arabic or Farsi linguist. They don't have that pilot or that infantryman.

And for the sake of the entire country, our national security, and for the sake of what our country is --

VELSHI: Yes.

CHOI: -- I hope that the Obama administration does not appeal and does not lift a finger to defend discrimination, does not try to resuscitate it and resurrect it from the dead.

I think what the Obama administration should do is walk their talk and finally do something in manifesting equality for all people in our country.

VELSHI: Lieutenant, you're out there. You've come out. Everybody knows your story. But there are groups -- and you saw it last night on TV -- there are groups who are saying if you're in the military and you're gay, don't come out just now, because of this, if you weren't planning to otherwise. What do you think of that?

CHOI: It's despicable. It's shameful and immoral to say that. And I can't believe the gay organizations on a national level or at a local level are ever saying something like -- especially during this time, when we know the consequences of staying in the closet and self- hatred and fear and shame and closetedness.

There are enormous consequences of staying in the closet. I know. And it leads to depression and isolation and suicide.

So, I'm telling everybody that there is never, ever, in my mind or any moral citizen's mind, a valid reason to encourage anybody to stay in the closet. When we come out, you don't just come out for yourself. Somebody else hears it. Somebody --

(CROSSTALK)

VELSHI: Let me ask you this, though. Let me ask you this --

CHOI: Somebody else out there that it gets better.

VELSHI: I love your passion about it. I'm also a business journalist and I have to say --

CHOI: Sure.

VELSHI: -- is one of the reasons the fact that we happen to be in this terrible, terrible economy, and if you risk coming out as an active service person in the military today, and this rule changes again, you could be out of a job? Does that give some weight to the "hold on, let me just wait until we find out how this thing plays out"?

CHOI: Well, Ali, as a businessman and me as a military officer, we know that we have to look at risk. We have to take a look at entire field, and we have to understand what we're getting into. I understood those consequences.

What I'm telling you is that in order to achieve full dignity and equality in this country, nobody ever used a strategy of waiting and patience and timidity and fear and nervousness and got away with calling themselves an actual leader.

VELSHI: Lieutenant Dan Choi, there are many people in this country who think you're a hero. There are some people in this country who may not agree with your decision to do what you're doing, but I think everybody has to agree, you're very brave to do it and we wish you the best of luck. I hope you keep us posted.

And you're right, do fewer interviews so you can get back in the Army. We look forward to watching how that happens.

(CROSSTALK)

CHOI: The one value that makes all of those worthwhile. So, thank you very much, Ali, for doing this story and telling all of the people what's going on out there in the world.

VELSHI: Lieutenant Dan Choi joining me from -- right in front of the Army recruiting center in Times Square. He's a 2003 West Point grad. He's an Iraq war veteran. He referred to being a linguist, he's an Arabic linguist. He's former infantry officer and he was discharged after coming out on TV for being gay.

We'll continue to follow this story and the story of "Don't Ask, Don't Tell" for you right here.

OK. Here's a quick quiz for you: which country provides minerals to help make a plane engine and an X-ray machine and your iPod? All from the same country. Is it Nigeria, is it China or is it Chile? We've got the answer for you next in "YOUR $$$$$."

(COMMERCIAL BREAK)

VELSHI: We asked you before the break which country provides minerals to help make an airplane engine, an x-ray machine and your iPod.

Now, if you are like me you may not have known you really needed minerals for any of those things. But the answer to the question lies in one of these countries. It is either, what is it, Nigeria, China or Chile? Which one is it? The answer is: B, China. China is the country.

You've seen the headlines. Today, China is halting some exports of something called rare earth minerals.

What does that even mean? Well, there are things -- they're minerals from the ground. It's a dirty business to get them. It is expensive. They are rare.

But someone's got to do it. Why? Because they're important for high-tech stuff. They help make up some X-rays, some plane engines, TV colors, iPods, treatments for cancer.

I'm telling you, these things are used in a lot of different things. We get about a 95 percent of all of those particular rare earth minerals from China.

"China Daily," which is an English newspaper there, quoted an official who said 30 percent of all of those minerals may no longer be exported by next year. Now, China denies this.

Let's get to the bottom of this thing. Christine Romans, my co- host on "YOUR $$$$$." She joins me now from New York. And she has been on top of this story. I've been seeing e-mails flying back and forth since early, early this morning.

You have been on top of this, because it hit your radar as something we really, really need to discuss. It doesn't seem to fit into our normal area that we talk about. Why is this so important?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Because this is so important for the global economy, for the American economy, for manufacturing, for everything that you touch. And it's something that's been on the radar, frankly, in Washington and elsewhere, in western seats of power --

VELSHI: Yes.

ROMANS: -- at least since 2002 when elsewhere around the world, other small mine was closing in countries because of competition from China was so fierce. China didn't have the environmental laws that we do in other countries and China was really gobbling up a lot of the manufacturing prowess.

(CROSSTALK)

VELSHI: But it wasn't profitable, Christine, for other company --

ROMANS: No.

VELSHI: -- other small mines to do this. China could do it. They can do it more cheaply and they could flood the markets with this stuff.

ROMANS: That's right. And now, one of the things that people who are, I would say China hawk on the defense front, people who are concerned about China being a potential defense adversary down the road, they worry that things like fighter jets need this in the cockpit. This is something that's incredibly important for telecommunications, for all the gadgets that we used both for manufacturing, commercial and military uses.

So, they're worried about this being another kind of economic weapon that China would have against the United States and Europe, frankly, as well. One analyst who is always a China critic telling me last night, he thought this was bigger than China holding all of those treasuries that we have.

VELSHI: Wow. Why, by the way --

ROMANS: This is how important this story is.

VELSHI: Why, if China has the market on this stuff cornered? Why would they not want to sell it?

ROMANS: Well, that's a good question. And one of the things that the Chinese have been saying -- and again, they denied that they're going to be halting these or they're going to be restricting these exports --

VELSHI: Right.

ROMANS: -- even at the same time they defended their right to restrict exports of these things, the Chinese turn around and they say, look, you in the West can't tell us that we have to stop polluting everything, and then when we say we're going to consolidate this industry and we're going to, you know, make it a little better, we're going to streamline it and we're going to modernize this kind of mining, you can't complain if you're worried that we're not going to export it to you.

So, interesting position that the Chinese are in as well. But we can't tell you, these rare elements, you heard it here, keep watching it -- it's something that at least since 2002 and Washington people have been concerned about and watching this. This interdependent economic relationship with China becomes ever more important. Our relationship with China literally affects everything you're touching from the minute you wake up in the morning until the time you set your alarm clock that night.

VELSHI: Yes, absolutely right -- and most of what you're wearing, and most of what you're typing on, and all that kind of stuff.

Christine, in addition to why you're just so fabulous, and we're great friends, and we work together seven days a week, I know you when you get a bee in your bonnet on something. So, I know we're going to stay on this story and every development of it, our viewers will know about because Christine is on the case. I certain -- I know it. There's a certain frequency of e-mail that starts happening when Christine thinks of a topic that's really interesting that people should know a lot about.

Thank you, Christine Romans, my colleague.

"YOUR $$$$$" airs Saturdays at 1:00 p.m. Eastern, Sundays at 3:00 p.m. Eastern.

Christine is also the author of a fantastic new book that is worth reading and giving as gift, "Smart is the New Rich" is what it's called. It's on bookshelves right now.

Let me bring you up to speed with what we're following here at CNN.

There's a new warning for women undergoing combined hormone replacement therapy. A study in the "New England Journal of Medicine" says postmenopausal women getting HRT are twice as likely to die from breast cancer as women who aren't treated. Now, this is not the first HRT warning. Increased health risk in 2002 dramatically decreased the number of women getting the treatment. Doctors say HRT should only be used in severe cases.

A major child products company is recalling 2 million strollers because they could potentially strangle small children. Graco announced the recall of Quattro tour and Metro Light stroller models manufactured before July of 2007. Four deaths were blamed on those strollers, all between 2003 and 2005. Kids can slip through the front of the stroller. The problem was fixed on later models.

And the National Football League is cracking down on hits to the head. They announced increased fines up to $75,000 from helmet to helmet hits from the past weekend. They've also said suspensions could follow for repeat offenders. It's all part of the NFL's attempt to cut down on brain injuries.

OK. Imagine flying high in a plane that looks more like a hot rod? It's available for those adventures out there with deep pockets. We'll check it out after the break.

(COMMERCIAL BREAK)

VELSHI: OK. Imagine flying through the sky in an airplane that maneuvers more like a sports car than a plane.

CNN's Gary Tuchman had the chance to check out this hot new plane. Here's this week's "Edge of Discovery."

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN CORRESPONDENT (voice-over): Soaring over these California canyons is the ICON A5. It's an example of the FAA's newest class of plane called light sport aircraft.

KIRK HAWKINS, ICON AIRCRAFT: It's been called the biggest change in aviation in 50 years.

TUCHMAN: To fly it, you'll need a sport pilot license that typically costs less and requires less training than beginner pilots needed before. But the license also comes with more restrictions. Pilots can't fly light sport aircraft at altitudes higher than 5,000 feet in bad weather, at night or congested airspace.

Designers say this bad boy is made for fun, not commuting or long distance travel.

HAWKINS: This airplane is designed to take you and get you out, and let you explore the planet in a very visceral, interactive way, in a way that just blow you away.

TUCHMAN: It's still a prototype. In addition to being able to take off and land in the water, engineers say the final version will have folding wings and a sports car-inspired cockpit -- all for a cool $139,000.

Gary Tuchman, CNN.

(END VIDEOTAPE)

VELSHI: OK. It's a little out of reach, but that is very, very cool. We're going to bring the guy who invented that in one of these days.

OK. Thirteen days to go, everybody is talking about congressional elections in November. Well, not everybody, but most people are. But there are 37 governors running for office right now. They're not congressional races. We'll tell you why those races are just as crucial to your future -- when we come back.

(COMMERCIAL BREAK)

VELSHI: OK. You thought this November was about which party will win control of Congress. Here is why you are wrong, 37 states are going to elect a new governor. The ones in white are not going to.

In battleground states like Ohio, Pennsylvania, Florida, Colorado, Michigan, New Mexico, all battleground states, these races could have a huge impact on who sits in Congress and in the White House in 2012.

CNN's national political correspondent Jessica Yellin joins me this hour from her perch in Washington.

Jessica, come on. When they said, let's do the story on the gubernatorial races did you say, yes, because that's really important or did you say, come on, guys, let me talk about Senate or congressional races?

JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: OK, Ali, I'm not going to lie. I, like most Americans, was not paying as much attention to the gubernatorial races as we should, but here is why they might be even more important than some of the races for Senate right now.

Because who you elect for governor could actually help decide which party controls Congress for the next 10 years and I know that sounds like a reach, but it's not because you know, this year we begin redistricting.

According to the census, every 10 years we redraw the districts and those districts are based on population size, but also drawn through political process. It's run by the state legislature and often by the governor.

If you have a governor who's with your party, there's a bigger chance that that governor will draw the districts to favor your party than the other party. And to make it simple, there are up to 30 seats that could change power just based on redistricting in the House of Representatives.

No vote. Neither you nor I will have a say in that. So the governors are key and that's one big reason we have to care who wins in these 37 states even if you don't live in one of the states.

VELSHI: And a lot of Republicans are saying this is an especially big opportunity for Republicans in order to win some of these races?

YELLIN: It's especially a big opportunity for them because a lot of the Republicans who argue -- the head the Republican Governors Association make the point that right now without controlling Congress or the White House, Republicans have no opportunity to really propose policy.

To say this is what we stand for and watch how well it works and see it work and in the governor's mansion, that's one of the places where a governor can get elected roll out some policy, see how it works and say this is what we should use in the future, the incubator for future ideas.

VELSHI: Yes, it comes up. It comes up in elections, has this person have executive experience and have they've been able to demonstrate that their ideas can actually create prosperity.

Jessica, you sold it well. I appreciate that. Jessica Yellin, my good friend and our national political correspondent.

Our next "CNN Equals Politics" update is coming up very shortly. Check out Jessica's story about the governors' races at cnn.com/politics.

With these midterm elections just around the corner, so is our CNN Election Express. It's around the corner from somewhere, it's on the road. Today in Macon, Georgia where my good friend T.J. Holmes met office seekers who are watching the borders.

Hey, T.J. what's going on? What's with the jacket?

T.J. HOLMES, CNN CORRESPONDENT: What's with the jacket? Trying to dress up for your show, Ali and also bring a little class to the bus. I know you don't like to necessarily dress up when you're out in the field.

No, I thought I'd put a little something on. I'm talking to a couple of guys running for office here, the eighth district. Talk about how Republicans are going to take back Congress, well, this is one of the districts.

They think they can mark in their column possibly taking back from a Democrat. A young man, and I do call him young man because he's 40 years old, one of these young Republicans trying to unseat a four-term Democrat who's 62 years old Jim Marshal. Talked to this young man, Austin Scott is his name, talked about several issues. But one that's big here in Georgia is immigration. Of course, a lot of people talk about Arizona with the new law, but Georgia by some government estimates has more illegal immigrants than Arizona actually does.

This is how he says if he goes to Congress he'll deal with that particular issue.

(BEGIN VIDEO CLIP)

AUSTIN SCOTT (R) GEORGIA CONGRESSIONAL CANDIDATE: What you're seeing from state to state to state, like Arizona and Georgia and the laws we passed in Georgia is frustration from citizens and legislators because the federal government turned its back and ignored this issue.

I'm looking forward to go up there and that being one of the priorities that we address and sealing that border and putting an end to birth right citizenship or the children of illegal immigrants don't have the same right to the future that your child and my child has.

If we have to do it with constitutional amendment we'll do that. There are people who take both sides of that issue that they say it can be done with legislation and there are people who say it needs to be done constitutionally.

I respect our constitution and if it needs to be done constitutionally, that's the way we'll do it. If the parents are not legal U.S. citizens then the child should not be a legal U.S. citizen.

(END VIDEO CLIP)

HOLMES: So, yes. The young Republican, trying to win back one ever those seats. Some 40 the Republicans need to take back the House. Eighth district here, so important, Ali, as we know, the man who wants to be House speaker, minority leader now Boehner, was in this district just yesterday campaigning for the young man.

So here we are, third day, fourth stop on the tour. It continues passed Macon. I think I'll be talking to you, I think I might be done with you, but coming up next hour, talking with a Democrat here in this district. That might be a little rude -

VELSHI: Like a New York bedbug, you're never really done with me. I thought were you going to show me around on the bus today?

HOLMES: Well, Ali, you're always on the bus. I know you know the bus well. You're really always here with us, Ali, no matter what. You're always a presence here, out here on the election express bus. VELSHI: You're in Macon. You're nearby, man. Come back to -- there you go. I'm always on the bus. There's nothing like -- nothing like having a book mark T.J. I was going to say, if you come back into Atlanta.

HOLMES: You found that in the crease of a couch here, man.

VELSHI: Good to see you, my friend. I can't top that. That's excellent. My good friend, T.J. Holmes, your good friend, because he's often right here on this show.

All right, the British government is facing the largest structural budget deficit in Europe, and it is taking action very different action than we are familiar with. It is slashing nearly a half a million jobs. Is there a lesson here for America? For this administration? A live report with my friend Richard Quest in Globe Trekking right ahead.

(COMMERCIAL BREAK)

VELSHI: OK. Time for Globe Trekking destination here is Great Britain. I know a lot of you are very interested in international news. Some of you probably use this Global Trekking as an opportunity to fill your coffee up. Don't do it now.

This one is actually -it's a very important discussion. It's going on in Britain. It affects your life. The British government lowered the boom today spelling out deep budget cuts that triggered an angry response from opposition members of parliament.

Here are the basics of what they did, 490,000 jobs will be slashed over the next four years, slashed. Job cuts from the government. The opposite of what we're doing in America. This involves $130 billion in spending cuts in the private sector.

Even Queen Elizabeth is taking a hit. The royal household budget being cut by 14 percent. What is the aim of all this? To reduce what Britain's treasury chief says is the largest structural budget deficit in Europe.

My good friend CNN's Richard Quest joins us now from London, he's the host of "QUEST MEANS BUSINESS" on CNNI. He is my partner in Q&A.

Richard, this is a very, very big deal because we are talking meeting stimulus to stimulate an economy, money from the government that replaces that which is not being spent by regular people.

Britain is doing the opposite. Austerity, pull back, spend less. Two very different philosophies on how you solve recessions and soft economies.

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Not necessarily, Ali. It is two sides of exactly the same coin. All that's happened here is that Britain has flipped the coin and realized that a 12 percent deficit with a rising debt to GDP ratio was no longer is a sustainable.

It goes along with France, with Spain, with Germany, all the major countries and yes, to some extent further down the road there will come a day of reckoning for the United States. We've already seeing it. You're already seeing it with states like California and the like, having to make swinging cuts in their own budget to meet deficit spending.

Back to the British parliament, the way the British government said roughly 19 percent to 20 percent of cuts across all government departments, huge numbers, but the British Finance Minister, George Osborne, said it would be reform, fair and it would be for growth.

VELSHI: How's it going over? We know the parliament's -- the opposition in parliament isn't reacting well to this. How is this going over in the British public?

QUEST: Very badly. We've known it's coming. Look, this is the medicine. This is the hangover cure that you have to take after the party. Now we've had it first part of the crisis, but you know, I can give you 1,001 literally metaphors, who pays the piper and so on, but the day has arrived in the U.K. where that happens.

Now tonight, I can tell you, there are demonstrations in London against this. In France, we know there are demonstrations and strikes over there austerity measures. But there is no choice, it says the governments.

The ultimate question, though, Ali, is whether it will kill or whether it will cure.

VELSHI: And that is the question we in America will be watching very closely, Richard, because there are people making these very same arguments here in the United States. We'll watch what you're reporting on very closely.

Richard Quest, my partner.

Remember to tune in Thursday at 2:15 p.m. Eastern time for "Q&A," that's when Richard and I go head-to-head. Tomorrow we'll be talking about why interest rates raised in China have anything to do with the rest of us. So tune in for that, "Q&A" with Richard and me tomorrow.

OK, what do these four countries have in common -- the United States, Latvia, France and Canada? Let me tell you, it directly affects your life online. United States, Latvia, France and Canada. I'll tell you after the break.

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VELSHI: OK, I went to the break, I said what do these four countries have no common -- the United States, Latvia, France and Canada. It has to do with your online life. Here's the answer, they are all tied for 15th place in the world when judged for broadband quality. What do I mean by broadband quality? OK, here's a simple way to describe it. This is what you have, see this little pipe here? See that? All right, what you have for Internet. See this big pipe here? This is what you need for the future of Internet. In some cases, for Internet today.

Why do I need this big pipe? Why do I need more bandwidth? Why do I need better speed? Well, because of video. Because of the stuff that comes over the Internet.

You're going to say, I don't watch YouTube, I don't download videos, I don't watch TV on the Internet. That's not what we're talking about. We are talking about a world that is going to be doing business, conducting health care, doing all sorts of things over broadband and that's why we need more stuff.

Now I will tell you, there's been this study, that was what I was quoting. It was a study done by the University of Oxford. It was sponsored by Cisco. And it looks at a bunch of countries and where they stand. And basically, the way they divide it up are countries that are ready for tomorrow, ready for the challenges that tomorrow brings. And there are countries on there -- Korea, by the way, number one. Japan on that list; Iceland, Hong Kong, places like that.

Then there are countries that are comfortably living in today with the things that we do on the Internet today. That is where the United States sits. We're OK for where we are right now. And there are a bunch of countries that are not ready for the applications of today and there are some countries -- about a handful, about four countries -- Peru, Nigeria, Kenya and Angola -- which can really only still only do basic, basic things on the Internet.

Let's talk about why this matters and to do that I'm going to bring in my friend Mario Armstrong, he is standing by for me in New York. There he is. He's an expert on all of this stuff.

Mario, it's hard to comprehend. When I say this is what we need for tomorrow, why do we care? If I'm not going to be downloading video, if I'm not going to be watching -- if it's not about watching and consuming entertainment, why do we have all these needs for better broadband?

MARIO ARMSTRONG, DIGITAL LIFESTYLE EXPERT: Yes, well, you know what, Ali? You're not the only one that would ask that question. In fact, right now, there is a Pew Internet study that's recently been put out that says 53 percent of Americans don't see the need in having a broadband policy or a broadband priority policy. And so the answer to that question is some of the things you said at the top.

Number one I think of health care. When I think of technology today, here's a scenario right now that's real deal. You can be in an ambulance and if you were in a city that had WiMAX or 4G type of technology that was there, they would be able to transmit high definition video from the ambulance to the ER or to a doctor at that hospital. That is real. I've seen that in tests. I know that that can be there. And those are the types of things -- that's just one example.

The other one could be distance education and distance learning. What if I could get a high definition quality of video where I could watch an instructor in real time. How could that change the education game and maybe reform or make it more accessible to people who maybe can't get traditionally to school.

VELSHI: Mario, when you see that we're 15th, is that really bad? Is that OK? Could we do better?

ARMSTRONG: No, it's really bad, Ali. I mean, I've had the opportunity to go to Seoul, Korea, I've seen it firsthand what it's like to have that kind of connectivity always on and what that means to the culture, what that means to innovation, what that means to the economy. And so, yes, it really is quite embarrassing.

I mean, if you look past a decade or so ago we ranked number one if not in the top five. So this is a slip of a placement that we used to have.

Now, I'll grant it, you know, the fact that we have a large, vast area in the United States. It may be harder to get penetration than you do from somewhere like in Asia or in Seoul, Korea. I get all of that, but it was from the top down. The ones that are -- the nations that are at the top of this -- the countries at the top of this list, Ali, have decided from the top down, from the government top down that broadband was need as a national priority and then it filtered down. We have never had that type of leadership, until now.

VELSHI: OK, I love that you say that, so we're going to keep on talking about it, you and me, broadband is going to be a big issue. Mario Armstrong is the founder of techtechboom.com joining me from New York City.

To check out, by the way, this entire global broadband study -- easy to read, very interesting, you'll get a lot smarter about broadband and what the future holds, find out where the countries rank -- just head to my blog, CNN.com/Ali, I will link you to it.

OK, there are new numbers now on House Speaker Nancy Pelosi's popularity. It's a little good news and bad news depending which party you're in. You're political update coming up next.

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VELSHI: There are now just 13 days left until election day, so we want to get you updated on all of the developing stories from the campaign trail. CNN's Wolf Blitzer is part of "The Best Political Team on Television." He joins us from the Political Desk in Washington.

Hello, Wolf.

WOLF BLITZER, HOST, "THE SITUATION ROOM": Hi, Ali. Lots of stuff moving at CNNPolitics.com on our Political Ticker. Mitt Romney, a lot of people believe he is going to run for the Republican presidential nomination and will announce that shortly after these midterm elections. He's got a new initiative on his own PAC, his political action committee, which is called "Romney's Free and Strong PAC." Ten for ten, he's going to try to help ten House Republican challengers win seats. He's going to be doing this -- it's just another sign, Ali, that he's increasingly involved. He's going all over the country campaigning for Republicans as well trying to score some points. We'll see how he does. We're watching certainly Mitt Romney if, if he decides to run for president once again.

Meanwhile, the first couple, president and the first lady, they've got a new video. It's the first video they've jointly done since the election back in 2008. They're trying to energize the base right now. It's called "Barack and Michelle" and what they're saying, among other things, each of you can make a difference, we've seen it before, we know you can do it again. If you step up to the plate, then together we can continue to move the country forward. So they've released a brand new video. We'll show you some of that video in "THE SITUATION ROOM," by the way, later 5:00 p.m. Eastern.

Meanwhile more bad news for the House speaker, Nancy Pelosi. A new Gallup poll shows her favorability numbers going down and down and down. Only 29 percent think of her with a favorable attitude right now, that's down from seven points in the early summer, down 13 points from January 2009.

Not necessarily good news for Nancy Pelosi. If in fact the Democrats lose the majority in the House of Representatives the question is will the Democrats still ask her to be her leader in the next Congress or will someone else take over the Democratic leadership as the minority leader as opposed to being the speaker of the House.

Ali, lots of news happening. One more point I want to just make, Ali, before I throw it back to you. At 5:00 p.m. Eastern in "THE SITUATION ROOM," we have new CNN/"time" magazine polls coming out in four battleground states. The numbers are still coming in, we're digesting them, we'll release them at five. Florida statewide, Alaska, Ohio and Arkansas.

I think our viewers, especially our political news junkies out there, there are a lot of them, will be interested.

VELSHI: All right, we will keep an eye on that. At 5:00 Eastern we'll release those new poll numbers.

Wolf, good to see you.

Wolf, part of "The Best Political Team on Television." Be sure to stay with CNN for complete coverage of the races and issues heading into these critical midterm elections. Your next CNN politics update is just an hour away, but we'll bring it to you even earlier than that.

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