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Debt-Cutting Panel Drops Fiscal Bombshell; Passengers From Carnival Cruise Finally on Dry Land; Fired for Trashing Boss on Facebook; President Obama in South Korea; At the Feet of Veterans; Alaska Senate Race; First Lady Honors U.S. Troops

Aired November 11, 2010 - 14:01   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ALI VELSHI, CNN ANCHOR: I'm Ali Velshi, with you for the next hour.

We are watching several big stories happening right now.

America is saluting its heroes this Veterans Day, honoring the men and women protecting our freedom around the world, and those who have done so in the past.

That crippled cruise ship limps into San Diego Harbor. We're greeting passengers at the dock and hearing stories about the sanitation problems, the smells, hot cabins, long lines for cold Spam. How bad did it really get?

With gold front and center in the world economy once again, is it time to revisit the gold standard? That's an intriguing question that hits us right in the wallet. We'll answer it in today's "Q&A" with my friend Richard Quest.

But first, "America cannot be great if we go broke." That's not me talking. That two guys President Obama tapped to head a commission on reducing the nation's debt to make that painful, highly unpopular decision that politicians won't.

Well, nine months after the panel was formed, its leaders have come out with a plan to slash our deficits by almost $4 trillion over the next decade. Remember, the deficits are how much on an annual basis we overrun our income.

That sounds huge, and it is. But I want to get to some idea of what America owes.

This is our national debt. That's different from the deficit. The debt is the sum total of all of those deficits.

The middle line on this chart, the red line, assumes that current law stays exactly the same, in which case the debt never drops to a level below 60 percent of our total economic output. That's our GDP.

Now, the really scary top line, the lighter blue color, makes the real world assumptions including a renewal of the Bush tax cuts for the middle class. That is going to cost us money. I know everybody wants it, but it's going to cost us a lot of money. Look at that. If we do that, the debt is twice the GDP by 2035. Our debt will be double the amount of money we generate in our economy by 2035. That equals bankruptcy.

The bottom line, the blue, the dark blue line, look at that at the bottom. That's the one that follows the commission plan. The debt levels off, and then it starts dropping.

How would that happen? Well, in order to do so, everything is on the table, defense and domestic spending alike.

On the Pentagon, the defense side, the panel is proposing freezing pay, cutting procurement, stuff that the Pentagon buys, and reducing overseas bases by a third.

Domestic spending, the panel is looking at freezing government pay, cutting the workforce, and eliminating earmarks, what the critics call pork. Now, how many times have we heard that?

And on taxes, well, they say reform and simplify. Cut tax rates, but also cut deductions, including the near-sacred deduction for mortgage interest.

Leaders also want to jack up the gas tax 15 cents a gallon. And I haven't even gotten to Social Security.

I have to stress, this is a draft of a proposal that's actually going to come out on December 1st. What happens then is anybody's guess. It's a whole lot to chew on.

Joining me now to chew on the business and the political side of things, Chrystia Freeland, global editor-at-large at Reuters; and my partner on "YOUR $$$$$," CNN business correspondent Christine Romans.

Christine, let's start with you. One thing we didn't tackle, Social Security. They did actually tackle that.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Oh, they certainly did. And they are raising the retirement age to 69 by the year 2050. So, if you are Generation Y, that means you, boys and girls, would have to work longer for your full benefits.

And it means tweaking how inflation is used to grow those benefits, the cost of living allowance, the annual increase that's given in the Social Security. And also, maybe means testing, meaning some people would get more than they paid into the system and other people would get much less than they paid into the system based on where you finish at the end to protect poor people and make sure you don't have a lot of elderly people in poverty.

So, this is very, very dangerous territory, because, as you know, progressives and liberals, very concerned about touching what they see as a sacred contract with the American people.

VELSHI: Chrystia, the deal, though, with this commission is that everything had to be on the table. And the fact is, without dealing with some of these things, we're not going to deal with the national debt and with the deficits.

What do you think of the proposal?

CHRYSTIA FREELAND, GLOBAL EDITOR-AT-LARGE, REUTERS: I think the proposals are really interesting. They're clearly proposals made by people who don't have to worry too much about the politics of the proposals.

I was surprised that one thing was missing, which is something that we've seen all the other western developed countries introduce. And, as you know, Ali, our native Canada was really key to conquering the debt, and that was a value-added tax, a national tax on consumption. Now, that would really, really be politically controversial, but it's incredibly effective when it comes to raising money and paying down debt.

ROMANS: Yes, that's not on there. And many of the budget analysts and tax policy experts are looking at that and saying that, you know, that would have been a no-flyer for some people, a value- added tax in this country, and so that's off the books.

But one -- Mia McGinnis (ph), who is a budget analyst I talked to earlier today, she said that when you look at the mortgage interest deduction, when you look at Social Security, you look at a handful of other things, including the gas tax on there, it shows, she says, that they're serious here, that they are serious. And this is a starting point.

David Gergen was telling us last hour that they didn't go far enough, that they didn't cut enough.

Wow. Was that the Splendor?

VELSHI: Yes. That was the Splendor. That was subliminal TV.

(LAUGHTER)

ROMANS: They didn't cut enough, they didn't go far -- I guess it's some kind of metaphor about moving a cruise ship, how slow --

(CROSSTALK)

VELSHI: Well, here's a question for you. I mean, Nancy Pelosi came out, didn't like it. A lot of people don't like it.

I have to say, Chrystia, when I looked at it, it's not whether I like it or not, but there are things that are necessary to be done. David Gergen actually, as Christine was saying, an hour ago said it's not even enough.

First of all, how are we going to deal with this politically? Because it's going to hurt. If you want to cut the deficit in this country, and you want to cut the debt, it's going to hurt.

FREELAND: That's absolutely right. I mean, there are also two big unknowns that factor into this whole calculation. So if you think about that really excellent graph that you showed right at the beginning, Ali, that assumes that we actually know what the size of the economy is going to be, like, 10, 20, 30 years from now. And a really big question is, what kind of a recovery is there going to be? And obviously, if there's a really robust recovery, some of these problems go away.

The other really, really big issue that no one is talking about in this conversation is, what's going to happen with inflation? And the big story last week was the Fed pumping $600 billion into the economy. That's another way of dealing with the debt, right? You can inflate it away.

It has some dangerous consequences, but I think those are the two sort of side conversations happening.

VELSHI: Christine, you actually did some research on -- when I say it's going to cost us something, it is going to cost us something. You actually have some numbers.

ROMANS: Right. Well, we're trying to figure out what -- say the average family, mom, dad, 2.1 kids, a dog, and a Suburban, trying to figure out what this means for you. Well, what it means for you, say you make $50,000 to $60,000 a year, the Tax Foundation ran the numbers for us and said that it would be a $94 increase, tax increase, on income tax every year, $130 increase on your gas.

I mean, don't forget, anybody who drives, a 15-cent gas tax is something there. And that's just kind of a little way to look at what the tax implications are.

But, look, you're probably going to see fewer services. You might have to pay for more things that you don't have to pay for now -- going to the county park, for example. We're already seeing a lot of these things happening, frankly, because of the cratering of the -- of the budgets of the -- of municipalities.

If you are in the military, I mean, what's going to happen to TRICARE? This is incredibly important stuff to veterans and military retirees. That's on the table as well.

VELSHI: All right. Well, this is going to be a long discussion. We're going to have to have it many times, and over and over again to try to make sense of it.

Chrystia, good to see you, as always.

Chrystia Freeland is Reuters global editor-at-large.

Christine Romans is my colleague and my co-anchor on "YOUR $$$$$," and we will be discussing it again this weekend on "YOUR $$$$$." That's Saturdays at 1:00 p.m.; Sundays at 3:00.

And while Christine was talking to us, the picture of that Splendor, the cruise line, the Carnival Cruise Lines' Splendor, was on the screen. That cruise was anything but splendid. Forty-five hundred people on board, including crew, leaving the ship right now.

We'll hear what they're saying as they finally step back on to dry land when we come back.

(COMMERCIAL BREAK)

VELSHI: Call it the voyage of bad luck, and then some. It's over at last.

Just a short while ago, the disabled Carnival Splendor docked in San Diego. You'll recall an engine room fire on Monday left the huge ship dead in the water. Some of the 4,500 people on board are now disembarking.

CNN's Paul Vercammen is there for us live -- Paul.

PAUL VERCAMMEN, CNN SR. PRODUCER: Ali, there's a couple here, Josh and Ashlie. It was supposed to be their honeymoon cruise. They delayed it two years. They actually got married in 2008.

And your dream vacation along the coast of the Mexican Riviera turned south in a hurry. Describe for us if you could, Ashley, the conditions on the ship.

ASHLIE VEST, CRUISE PASSENGER ON HONEYMOON: The conditions were hectic. There was no power, no food, no bathrooms for 18 hours. We lived off of sandwiches and water.

VELSHI: What was the low point for you, Josh?

JOSH VEST, CRUISE PASSENGER ON HONEYMOON: The low point was the electricity, knowing that there's smoke in there, there's no ventilation, no AC, nothing to blow the smoke out.

VERCAMMEN: And so what was the ship telling you? You didn't get a firm answer that there was a fire in the engine room, did you?

A. VEST: No, just that it was on -- that the engine room had a lot of smoke and they were trying to blow it out. That was it. We didn't find out that there was a fire on board. Nothing of it. Everybody at home knew that there was a fire but us.

VERCAMMEN: Now, I understand you had a room with a window, which helped. But what was it like trying to navigate in the dark through the ship?

J. VEST: It was like a search and rescue mission. It's hard to see. Even with the window room and the light from the hallway -- we kept the door open just to get a little bit of light.

VERCAMMEN: Well, we appreciate your taking time out. I'm glad to see you're safe and sound.

And just a little bit of irony, Ashlie actually helps people book their vacations for AAA, and she says she will go on this cruise again, take Carnival up on the refund. And she hopes to take the very same route down the coast of Mexico.

Now back to you -- Ali.

VELSHI: That's what I've been saying, Paul. This happens so rarely. And it does seem like the cruise company was trying to do its best to get everybody sorted out.

I would definitely go again. I think it's very rare that things go wrong on cruises. I hope everybody gets a chance to get the vacation they enjoyed.

Frankly, if these guys waited two years to go on their vacation, they're apparently OK with delays. So I hope they'll have a good second honeymoon.

Good to see you, Paul. Thanks very much for your great coverage of this.

All right. If you go on Facebook and you trash your boss, should you be fired? I'm asking an honest question. I'm not saying what the law should be. I'm saying, do you think that's the right thing to do?

I want to hear from you on Facebook. Go to my Facebook page, Facebook.com/AliVelshiCNN. Tell me what you think, and I'll tell you what other people think when I get back.

(COMMERCIAL BREAK)

VELSHI: Trashing your boss on Facebook -- a Connecticut woman got fired over it. But now she has the National Labor Relations Board on her side.

What do you think about this? Is it a wise thing to do? Listen.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I think that it's your right to say what you want about your employer in general on Facebook or Twitter, but it's in very bad taste.

UNIDENTIFIED MALE: You know, if you say something slanderous, then obviously that has its consequences.

UNIDENTIFIED FEMALE: If you have a status update that says something like, "My boss is an idiot," or whatever, everybody can see that and hear that and know that. And it's just stupid.

(END VIDEO CLIP)

VELSHI: It's kind of like taking a billboard out, right? Mike says on my Facebook page, "If you badmouth your boss online, why wouldn't you be fired? Facebook reaches so many people, it will cast a negative light on your boss and your company. If you were a boss and somebody badmouthed you, wouldn't you can them?"

Rachel Sklar joins me now. She is my good friend, fellow Canadian.

Rachel, what is your title these days?

RACHEL SKLAR, EDITOR-AT-LARGE, MEDIAITE: Editor-at-large at Mediaite, amongst other things.

VELSHI: Very good.

Well, good to se you. But you are a social guru, a social media guru.

SKLAR: I do what I can.

VELSHI: And so I wanted to get -- I immediately thought of you.

This is not really about laws. This is more about, is it wise in this economy to be trashing your boss on Facebook?

SKLAR: You've hit it exactly. There is the legal point, and then there is just good advice.

And good advice is just watch what you say on Facebook, on Twitter, on social networks, because being sued is not fun. Filing a lawsuit is not fun. And being fired and having to do all of those things is not fun. So just avoid it.

VELSHI: Now, from your perspective as a media observer and a media critic, there is something about this whole thing, is that somebody gets fired and then they challenge it. And we want to see how far we can push that envelope.

Where do you stand on that side of things? Should this person have had the right to criticize her boss on social media?

SKLAR: Well, clearly, yes. Right? She won the case.

And I think that it's an important ruling, because what it says is that that is public conversation, but it's in the private realm. It's like water-cooler conversation, and just like water-cooler conversation in an office, could be overheard or, you know --

(CROSSTALK)

VELSHI: But calling it private is a very strange distinction. Right? .

SKLAR: Well, I'm just -- that's my phraseology. I'm not --

VELSHI: But you're right. They call it protective --

SKLAR: But just in general, in terms of, like, interpersonal. But I think in this specific situation, it was the result of a company policy.

It was on a Facebook wall where other employees jumped in. So it was deemed to be sort of protected workplace conversation. That doesn't mean that you're free to say, "My boss is an idiot," "My boss is ugly," "My boss is stupid," "My boss has bad hair." Those are things that, you know, you push the envelope a little bit.

But at the very least, if you must criticize on Facebook -- and there's by no means any reason to believe that non-unionized employees are protected -- you might want to make sure you keep it to specific policy considerations.

VELSHI: Let's see what Facebook had to say to us. We have got a statement from Facebook that I want to read to you.

I'll read it of the screen, if we've got that, Michael. Do we have it? There we go. OK.

"Just as in your offline life, there are people you want to be more open with than others, which is why Facebook gives you complete control over how you share information. People who use Facebook should ensure that sharing settings are consistent with the way they conduct themselves in the real world."

That's an interesting point.

SKLAR: It's particularly interesting because Facebook is taking the opportunity to say, like, your privacy settings are your own. You have complete control over your data, which, of course, has been their big bugaboo. But go on. Sorry I interrupted you.

VELSHI: But going back to the issue, private or not private, you can make it private. You can limit that to only people you want to see it.

SKLAR: Sure. You can make it private by telling it to somebody and not recording it, and not putting it out there in public to be found by Google, or copied and pasted on someone else's wall. I mean, it's just being smart about how you deploy yourself in public.

VELSHI: All right, Rachel, Good to see you.

Rachel Sklar.

Always a pleasure to discuss these matters with you.

Rachel is editor-at-large at Mediaite.com.

With the price of gold hitting new highs, should we be setting a new gold standard? The fate of the world's trade could hang in the balance.

Our buddy Richard Quest joins us for a little "Q&A" right after this.

(COMMERCIAL BREAK)

VELSHI: "QUEST MEANS BUSINESS," and so do I.

We're here together in the CNN NEWSROOM around the world.

Hello, Richard.

RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Hello, Ali.

In fact, we're both in different spots from normal today. You're in New York. I'm in Abu Dhabi, in the Gulf. The delay between us is probably horrific. But it won't stop us tackling key topics of the day.

And today it's the gold standard.

VELSHI: That's right. Nothing will stand in our way, Richard.

The president of the World Bank flip-flopped this week on his own opinion on the importance of gold and its role in the international monetary system. So we're going to set our own standards, Richard.

Last week I went first, so this week it's your turn.

Put 60 seconds on the clock for Richard.

QUEST: And here we go, 60 seconds.

When it comes to actually investment and what is valuable, people have always prized this, the gold stuff. People love it. People will do almost anything for it, which is why we tied this to this by making currency convertible into the gold standard.

That was always the way it was meant to be until the 1970s and the Nixon shock, which destroyed the two. Since then, the money has become worthless, but gold is now trading at $1,400 an ounce.

Not surprisingly at this record level. Everybody wants a little bit of it, so much so that now people are saying we must go back to the gold standard.

It's all about gold, because only by linking currency to gold, people believe that it can actually have value. Think about the word "gold," "the golden rule," "The Golden Girls." And after all, remember, "Goldfinger."

No, Mr. Bond, I expect you to die. And that's what might have happened with gold.

(BUZZER)

VELSHI: Richard, pretty good. The problem with your theory is that that value of gold has turned into -- when it comes to money -- the chocolate that you cheated by using. So I'm going to bring you the real thing.

The gold standard is a monetary system in which the standard economic unit, a nation's currency, is fixed against a weight of gold. That means the supply of money is strictly tied to the amount of gold that a country holds. Real stuff.

If people felt insecure about the U.S. dollars that they hold, they could conceivably trade them for a predetermined weight of gold with the Federal Reserve. Nobody uses the gold standard anymore because it restricts the ability of central banks to increase or decrease the supply of money, especially during economic downturns.

The world now uses a system of fiat money, which is pegged to nothing but people's perceptions of its value, generally determined by the amount of money that's in circulation. The more money a nation prints, the less it's worth. A return to some form of gold standard would stabilize currency exchange rates against each other, because governments couldn't go out and print as much money as they like whenever they feel like it.

But countries like to set their own economic direction, Richard, so a return to the gold standard isn't likely to happen anytime soon.

(BUZZER)

VELSHI: Get yourself some real gold. Never mind that chocolate.

QUEST: Hey, at least I can eat my gold.

OK. Time for "The Voice," who will really sort us out, one from the other.

And this week, The Voice, what have you got for us?

UNIDENTIFIED MALE: OK, Gentlemen. Time to go for the gold.

Richard, last week you won, took the gold last time. Ali took silver, which in itself is also kind of first place. First place of all the people who didn't win.

This week it's a fresh start.

Resetting the scores to zero, Gentlemen, here is your first question about gold.

Why is an ounce of gold called a troy ounce? It was, A, named by Helen of Troy; B, established in Troyes, France; C, it's from the Latin, "trey"; D, who knows?

(BELL RINGING)

UNIDENTIFIED MALE: Richard Quest.

QUEST: I'm going for C, it's from the Latin "trey."

(BUZZER)

UNIDENTIFIED MALE: I'm going for you're wrong.

(BELL RINGING) UNIDENTIFIED MALE: Ali?

VELSHI: B, established in Troyes, France.

(BELL RINGING)

UNIDENTIFIED MALE: Exactly. It was named after Troyes, France.

In medieval times, the city of Troyes was host to large annual merchant fairs. At those fairs, standards for weights and measures were established for all of Europe, like how to measure quantities of gold, or how to calculate the incredible cross-continental time delay Richard Quest must endure during this segment.

(LAUGHTER)

UNIDENTIFIED MALE: Question number two, which of these countries is currently the world's number one producer of gold? Is it A, South Africa; B, Canada; C, China; D, Australia?

(BELL RINGING)

UNIDENTIFIED MALE: Richard Quest?

QUEST: It's China.

(BELL RINGING)

UNIDENTIFIED MALE: You're correct, China. South Africa had been the top producer for most of the last century, but now South Africa ranks fifth behind the U.S., Australia, and Russia, and number one, China.

One last chance. It's question number three. Time to calculate.

Now, to be conservative, I'll set the price of gold at $1,000 an ounce. Also, "The Voice" is a little iffy with math, so simply multiplying by 1,000 makes it easier for me.

According to the World Gold Council, what is the approximate value of all the gold that has ever been mined? Is it A, about $6 billion; B, about $9 billion; C, about $20 trillion, or, D, about $5 trillion?

(BELL RINGING)

UNIDENTIFIED MALE: Richard Quest?

UNIDENTIFIED MALE: Five trillion dollars.

(BELL RINGING)

UNIDENTIFIED MALE: Is correct! Of course, the actual totals fluctuate with the price of gold, but it stays in the same ballpark of $5 trillion.

Gentlemen, this time around, our winner was Richard Quest.

Congratulations.

VELSHI: I think I got the bell before him, but I was going to give the wrong answer. I was going to say $20 trillion.

So, you know what, Richard? You go eat your chocolate and I'll just keep my gold.

That will do it for this week. But remember, we're here each week, Thursdays, on "QUEST MEANS BUSINESS" at 19:00 GMT.

QUEST: And here in the CNN NEWSROOM at 2:00 p.m. Eastern.

Keep the topics coming on our blogs at CNN.com/QMB, CNN.com/Ali. Tell us each week what you'd like to see us talk about.

I wish I hadn't eaten that chocolate -- Ali.

(LAUGHTER)

VELSHI: I'll see you next week, Richard. You have a good one.

Up next, a critical issue for veterans after they leave the military. Finding the right kind and right amount of insurance. Some great advice and information that will help us all, coming up next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I just knew it! Oh, my God!

(END VIDEO CLIP)

VELSHI: As we honor our veterans today, we turn our focus to making sure our servicemen and women have the best health and life insurance coverage once they leave the military. June Walbert is a certified financial planner with USAA. She joins me live from San Antonio.

June, great to see you. Thanks so much. You're always keeping us posted on military financial matters. Tell us a little about this issue. So many people, in fact, more than normal of course, are going to be coming back in 2010 and 2011. What do they have to think about on the insurance front?

JUNE WALBERT, CERTIFIED FINANCIAL PLANNER, USAA: Yes, well, right. And a lot of them have never thought about this before, Ali, because in the military, we are given health insurance, dental insurance, life insurance, at a very cheap $28 per month. So, now they'll have to start making decisions on their own. So, we have some people that are just simply transitioning out of the service after maybe a four-, six-, or eight-year stint. And others that are retiring. So, the benefits are slightly different. VELSHI: All right. Tell me about people who are not retiring. They're transitioning. What happens then? Do they still get coverage under the military?

WALBERT: Okay. So in terms of health insurance, we've got this great program called Tricare. It covers all active duty and their families for free. They can get a six-month bridge of Tricare free of charge once they leave the service while they're looking for civilian employment.

Now, beyond that, if they're still unlucky and they haven't found that civilian job, they can get another 18 months to 36 months of Tricare, but at sort of a hefty price of $300 for singles and $600 a month for families.

So, what I would suggest instead is maybe you take that active duty service, turn it into reserve or guard service because there's a program called Tricare Reserve Select, which is fairly new. And it comes at a much cheaper price of about $50 for singles and about $200 a month for families. So, that may be a great way to go. In my book, Ali, health insurance is non-negotiable. You've got to have it.

VELSHI: Let me ask you something. A lot of people who have never been involved in the military haven't heard the word Tricare before. But they would have heard it several times in the last 24 hours because for the first time, it's become part of this discussion about cutting the deficit and the debt. Until now, that's been thought of as untouchable, but it looks like there might be something on the horizon that military members and former military need to think about.

WALBERT: Well, that's right. And so, you know, it's -- there's a lot of things that are being considered to try to cut that budget, and Tricare is once again on the table.

I'll tell you what, it's a benefit that our military deserves. You know, no one joins the military to get rich. And so, you know, we join to serve, and then we enjoy wonderful benefits once we leave the service and in retirement, and Tricare is one of those. I will tell you that I've heard from someone that said, you know, for my entire family in retirement, it only cost $500 a year for Tricare. He said he'd be willing to pay more. But I'd certainly keep an eye on that and keep those prices as low as possible in retirement because these veterans deserve it.

VELSHI: All right, June. Good to talk to you. Lieutenant Colonel June Walbert is with USAA. USAA's mission is to serve members of the military and their families, but they do offer some services to people who are not connected to the military at all, and they have a great -- a lot of information to help you understand financial planning in your own life. So, take a look at USAA's Web site.

June, good to see you. Thanks very much for joining us.

WALBERT: Thanks, Ali. VELSHI: Okay. I want you to look at this cute dog. His name is Mason. He has his own tribute for Veterans Day, helping vets heal after they get home from war. We'll meet him and how he does it, coming up next.

(COMMERCIAL BREAK)

VELSHI: As an organization out there called Dublin Dogs. Basically they raise money to train dogs who need extra help. Maybe they're in a wheelchair or a war veteran suffering from PTSD. It's a tough job. Each dog costs $20,00 to $25,000 the train over six to nine months.

This year they focused on helping veterans returning from war. They partnered with Freedom Service Dogs, a nonprofit that does just that. We've talked to them before on this show. Here with us today we have Eric Rudolph from Denver with his dog, Mason. And Jason Watson who is the founder of Dublin Dogs in Charlotte, North Carolina.

Eric, you've got mason there. And I understand that Mason -- you say Mason saved your life a few times?

STAFF SGT. ERIC RUDOLPH, U.S. ARMY (RET.), FREEDOM SERVICE DOG RECIPIENT: Yes, Ali. That's for sure. The first four weekends that I had him -- I have severe diabetes. And he was able to detect the first night that I had a low blood sugar and started to go into diabetic coma shock. And he slapped me with his paw and gave me a bloody nose that woke me right up.

VELSHI: Wow!

RUDOLPH: I thought it was just a fluke the first time I had him, and then three weekends in a row, he did that continuously.

VELSHI: How did he detect that? Is that part of his training?

RUDOLPH: No, it's not something that they're trained for. There's not really a science, I think, as far as training them. Some dogs have that sense. They can detect the body sweat or the body odor that is emitted when you're a diabetic and you get into that condition.

So he's --

(CROSSTALK)

VELSHI: Let's talk to Jason Watson.

Let me ask Jason, what kind of training goes into this 20 to $25,000 over six to nine months?

JASON WATSON, FOUNDER, DUBLIN DOG FOUNDATION: Sure. There's a whole myriad of different factors that go into that. Really a lot of it is contingent upon the specific needs of the soldier. As you mentioned, there are those soldiers that suffer from post-traumatic stress as well as those soldiers that coming back as an amputee. And that is our particular soldier this year, Sergeant Charles Burnhouser, who suffered an amputation after hitting an IED while serving in Iraq.

So, these dogs, everything from retrieval mechanisms to support. I know for the Sergeant Burnhouser, Tux, which is the dog that we're helping to get him, will help support him when he's staying there. I know that it also will retrieve his prosthetic leg first thing in the morning for him.

And then a lot of it is emotional, as well, giving him the self- confidence he needs to kind of regain his sense of self now that he's back in regular life.

VELSHI: Eric, you got diabetes. You got extra things added to your life. Is the fact that you got this dog now, is that a lot more work for you or is it much more of a -- a help than a hindrance?

RUDOLPH: Well, I suffer from PTSD as well. But I didn't develop my PTSD until ten years after my military service. And that also affects the diabetes. So, the dog helps with reducing my anxiety levels, which improved my diabetes.

I spent two years basically in seclusion from the -- from the symptoms and now I get out a whole lot more. In fact, the first weekend I had the dog, the Freedom Service Staff noticed a big improvement on my face and just how much happier I was. A lot more outgoing. Kind of back to my old self.

VELSHI: Who could not be happy -- who could not be happy with Mason around you? Mason looks like a fantastic friend and a great dog.

Mason, thanks for joining us. Eric, thanks for joining us. Jason Watson from Dublin Dogs, thank you for joining us. We wish you continued success.

By the way, Dublin Dogs continues to have a demand for volunteers to help train these dogs. Obviously with the number of people coming back. If you want to know more about them, there is this army of veterans coming home. They need these army of volunteers to help train the dogs. For more information on how you can help, go to my blog, CNN.com/ali and I will link you to the information you need to know if you want to help train these dogs.

President Obama is at a stalemate in South Korea on a key trade deal. It would have had a big effect on American automakers and cattle ranchers. Ed Henry's up next to tell us why it broke down.

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VELSHI: President Obama is in South Korea today for the G-20 economic summit so is senior White House correspondent Ed Henry. Poor guy. It's the other side of the world. It's the wrong time of the day.

We woke him up again to join us and talk on the phone because it's an important thing. He said, I wouldn't do this just for fun, just because I like getting you out of bed at four in the morning.

But there is this key trade deal that President Obama was trying to get done. It looks like it's off track a little bit. So let's talk about that. Where do we stand with this trade deal?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT (via telephone): Well, you know, the president is still projecting confidence, saying, look, we're going to get this done in weeks, not months, but he may have missed a big window here.

While you're in South Korea, that's obviously the time to seal the deal. He's got one more day here, but it's mostly with G-20 business, not bilateral business back and forth with South Korea.

I think the big sticking point is what the auto industry is saying. You've got Ford Motor Company, which has been behind many of this trade deal before saying get us into these other markets. They've been rebuilding.

Bottom line, Ford is saying we're not there yet and it's because they feel that South Korea is still not opening their markets nearly enough and that's where the -- what the sticking point is. That's where the president is not giving in yet.

On one hand, you know, he's got folks like Ford. He's got organized labor back home saying we're side by side here, some in business as well as organized labor saying this is not a fair enough deal so keep pushing.

That may be good for the president short-term, but long-term he thought he was going to have a deal here. That he was going to be able to hold - just like in India, he had $10 billion of contract and whole dozens.

This means thousands of jobs back home created by this increase in U.S. export. He doesn't have that yet in South Korea. That's a problem for this trip.

VELSHI: All right. So it's not completely off track. It's just a little off track for the moment. Hey, Ed, what about this talk that we've heard. Reports that David Axelrod has said that this White House is prepared to negotiate on the idea of extending the Bush tax cuts not just for the middle class, but for everybody beyond December 31st when they're set to expire?

HENRY: You know, you said just the right word. That maybe David Axelrod is saying the president is willing to negotiate on extending tax cuts for the rich. That's the key, negotiate. That's what the president himself said on November 3rd at that news conference the day after election.

He said, look, ready to negotiate on maybe extending the tax cuts for the rich. That was news then because the president had repeatedly said I'm not going to compromise on that. That's a bit too far.

Day after the election, he himself said we're ready to deal here. We're ready to compromise so it was sort of interesting. It kind of ricochetted halfway around the world here last night in South Korea.

You had everybody running around. The "Huffington Post" had a story saying that David Axelrod basically suggested that the president was caving on this now. If go back and read the actual story, he never actually said anything close to that in the story.

The most important quote though, I think, that White House aides are pointing to is they're trying to say, look, he's not caving. Look at the last quote. But finally, what we can't do is permanently extend those high income tax cuts.

Now the White House is interpreting that to mean that he says he's not giving in on the tax cuts for the rich, but the way I read it is slightly different, which is -- the key word is that Axelrod is saying we can't permanently extend these high income tax cuts basically.

What does that mean? It means we can temporarily extend tax cuts for the rich maybe a year, maybe two years, whatever it may be. So I think it didn't really move the ball that far is the bottomline. The president did that the day after the election. They're not ready to, quote and unquote, "cave," but they're getting closer.

VELSHI: Hey, Ed, you know, because you're on the phone we have a picture of you on the screen. Let's put that up for a second again. A map with Seoul and then your name and a picture. The picture looks like it was taken 13 years ago. Is it time for a new picture again?

HENRY: You know, first of all, I don't take the picture, but second of all, I'm concerned now because your lead-in to me was dublin dogs and then you hold up my picture. I'm a little worried.

VELSHI: Ed, you stay safe. Thank you for getting up early for us. Always a pleasure. Next week you tell us what that trip was like. I want to get sort of behind and see what you guys do and how it all works.

HENRY: We'd love to do it.

VELSHI: All right. Ed Henry, our senior White House correspondent reliably on the stake out even though he's half way around the world.

They're still working on getting the count right in Alaska. At stake is the final unsettled Senate seat. How close are we to a decision? We'll tell you on the other side of the break.

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VELSHI: Time now for your CNN Political Update. We're still watching the count in the Alaska senate race. I want to talk about that, but let's start with a call for fiscal action. CNN's chief national correspondent, John King joins us now from Washington. John -

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Ali, you know, you're one of the guys at this network, a lot of us get into journalism because we're not good at math. But you know how to crunch the numbers and you know there's fiscal insanity here in Washington, D.C.

Well, if you look CNN Politics today, you'll see a column by David Walker. He's the former comptroller general of the United States. Meaning he was the guy who for 10 years from 1998 to 2008 kept the government's books. He knows how messy they are.

He writes this column in the wake of this new proposal from the president's commission on debt and deficit reduction. David Walker says the country needs an open public debate on three big issues, the role and the size of government, health care spending and the growth in health care spending and comprehensive tax reform.

He goes on to write in that column as the country tries to debate what to do about deficits and long term debt. He says, quote, "the nation's ticking fiscal time bomb is real and must be defused. The time for action is now."

It is worth reading. One of the things you'll find on cnn.com/politics. You mentioned the Alaska vote count. That Senate race, of course, is still unresolved because of the write-in campaign of Lisa Murkowski. They're counting the votes up in Alaska 92,000 write-in votes need to be counted overall, 19,203 were tallied on Wednesday and 89 percent of those were clear votes for Lisa Murkowski.

She's the incumbent senator. She's a Republican, but she had to run as an Independent, as a write in candidate because Joe Miller beat her in the Republican primary. The Miller campaign is challenging about 8.4, 8 percent those votes.

Actually the Miller campaign is challenging some of those ballots. The count is continuing, Ali, but if you look at the trend, the trend has the Murkowski camp very, very confident as they continue this write-in count. But let's let them finish the count and then let's see what the lawyers do.

VELSHI: That's exactly right, John. By the way, David Walker will be on "YOUR MONEY" this weekend, Saturday 1 p.m., Sunday at 3 p.m. and so will you.

We're going to have this conversation in greater detail about what to do about the deficit and what to do about the debt. So I look forward to seeing you on the show this weekend. John, thanks very much. John King. Your next political update, an hour away.

Coming up next, a way to honor our veterans today that could put thousands of in your pocket. Listen to this.

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VELSHI: Today in our Odds and Ends segment, a salute to our veterans and current troops. First lady Michelle Obama helped serve up steak dinners to servicemen and women at Ramstein Air Base in Germany. Her visit came as a surprise. The first lady's plane made a refueling stop over in Germany as she heads home from her tour in Asia.

In New Orleans, school children sat at the feet of veterans today to learn about the sacrifices that they've made for the country. This huge wall with the names of veterans and current troops is another way Americans are marking the day.

Steve Rutherford of West Virginia along with his grandson, Alex, painted it to resemble a U.S. flag. In Illinois, people can buy a scratch-off lottery ticket to help the veterans. Governor Pat Quinn unveiled the latest version of the four-year old program this week.

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GOVERNOR PAT QUINN (D) ILLINOIS: Anyone who purchases this ticket, win or lose, is really helping our men and women who have worn the uniform of our country, our veterans. All the proceeds, all the money that people pay for that ticket goes into a Veterans Assistance trust fund.

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VELSHI: Each ticket costs two bucks with the top prize around $20,000.

And that is it for me. CNN NEWSROOM continues with my good friend, T.J. Holmes.