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Extending Bush-Era Tax Cuts; Home Damage After Suspected Tornadoes Across Atlanta; Betting on the iPad; Washington AIDS Crisis; Dow Rallies 200 Points; Credit Card Use on the Decline; Digging America Out of Debt

Aired December 01, 2010 - 11:59   ET

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

TONY HARRIS, CNN ANCHOR: As promised, let`s get back to our senior congressional correspondent, Dana Bash, she`s on Capitol Hill.

And we said at the top of the last hour that your post is the place to be these days. And, Dana, we heard from Treasury Secretary Geithner. I saw Senator Max Baucus, who, if I`m correct, heads up chairman of the Finance Committee.

Fill us in on what we missed.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, let`s just -- let`s play a little bit of what we heard from the Treasury secretary, and I`ll tell you on the other side.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: Very civil constructive discussion, very much in the spirit of the meeting at the White House yesterday. No surprises.

We went through everything on the table and we agreed we`re going to come back this afternoon late in the day and continue the conversations.

And we also agreed that it`s very important that we`re not going to characterize the discussions in the room.

Nice to see you all. Thanks for coming.

(END VIDEO CLIP)

BASH: Now, Tony, they abided by that promise not to discuss what was talked about, because we chased after Republican Senator John Kyl, after Max Baucus, the Democratic representative; no one would say a word.

We do know, obviously, that they are talking about trying to come together on the issue of the expiring Bush-era tax cuts. This was the very first meeting that this group had, and they`re going to come back and meet again this afternoon.

Interestingly, this just happened -- very interesting, Tony. As these people are meeting here to come together in a compromise, in the House of Representatives, the House majority leader, Steny Hoyer, just announced to reporters that despite what`s going on here, they are going to move forward on what the Democrats want to do in the House.

This is going to be a vote tomorrow, and that is to just extend only the tax cuts for the middle class, so to speak, those making $250,000 or less. So you have these negotiators talking, but, still, you have Democrats going ahead to get on record clearly with what they want to do. And you also have, in the Senate, as we talked about in the last hour, you have Republicans holding up everything until these tax cut negotiations get done. So it`s very interesting to see kind of the parallel universe that`s going on here for obvious political reasons, but fascinating times, which --

(CROSSTALK)

HARRIS: It is. It really is. This is a really important debate that`s going on right now on your post there on Capitol Hill. I hope everyone is paying attention.

Dana, we`ll talk to you in just a couple of minutes.

BASH: Thanks.

HARRIS: Top of the hour, everyone. Hi again. I`m Tony Harris, in the CNN NEWSROOM, where anything can happen.

Here are some of the people behind today`s top stories.

Homes ripped apart and buckets of rain still coming down. You`re looking at new aerial views of the damage near Atlanta, Georgia. We are tracking the destructive storms as they move up the Eastern Seaboard.

A tortured teenager. The case of a 16-year-old chained and abused shocked the nation. Now, for the first time, we see video of his desperate escape.

And you`re online, and we are, too. And one of the trending topics, the first-of-its-kind magazine designed only for the iPad.

We talked with the British tycoon Richard Branson about his new venture.

Let`s get started with our lead story.

Terrifying moments for a lot of folks in the Deep South. Tornadoes dropped from the sky in several states. At least four of the twisters in Mississippi. Damage is reported in 10 counties.

At least 32 people were hurt near Atlanta. Suspected tornadoes damaged dozens of homes.

Jacqui Jeras is live for us from Buford, Georgia. And look at this view.

Jacqui, if you would, give us a bit of a view of some of that damage in Buford.

JACQUI JERAS, CNN CORRESPONDENT: It`s just unbelievable here, Tony.

The worst of the damage is confined to a very small area. But overall, 56 homes were damaged; 12 of them were destroyed. And this is one of those 12.

And as you take a look behind me here, this is the roof of the home. You can see the angle from it, along with the chimney on top, and back behind it is the upper level and the rest of the home. So there is just debris which is scattered and spewed all over the place.

It`s just an incredible scene. There is literally nothing left of this home. And it`s amazing, because there are some areas across the street where there wasn`t a home that was even touched.

This storm came with very little warning for these people. There was a watch in effect, a tornado watch yesterday afternoon, but no warning was issued. So residents say that they were surprised.

We talked to one of them, Marion Viar. Her daughter was home at the time.

(BEGIN VIDEO CLIP)

MARION VIAR, HOMEOWNER: So then the TV went out, and she thought something. And then she said she heard this really high-pitch noise like a scream or, you know, hard winds. And she thought oh, no. And she went into the tub and she put her head down, and she said everything got very, very calm, and then, "boom." She heard a big "boom."

(END VIDEO CLIP)

JERAS: Amazingly, her daughter came out just fine, as well as everybody did across the area. The word is that most people were working as this came in the middle of the afternoon.

But there were also a lot of flood issues across the city of Atlanta as well. We had record rainfall, more than two inches yesterday.

(WEATHER REPORT)

JERAS: So, I`ll tell you, Tony, for people trying to clean up -- and that`s exactly what`s going on, on this building -- everybody`s trying to grab everything they can -- but that wind is also kind of tearing down some of the things that were just kind of hanging by a thread to begin with.

HARRIS: Boy, that`s a real mess.

All right, Jacqui. Appreciate it. Good to see you. Thank you.

(NEWSBREAK) HARRIS: We believe we`re hearing from the co-chairs of the debt commission. This is Senator Kent Conrad, who is speaking now.

Let`s listen in.

(JOINED IN PROGRESS)

SEN. KENT CONRAD (D), NORTH DAKOTA: -- the president, and he went forward with an executive order commission. This is largely along the lines of what we proposed.

Obviously, ours was a statutory commission, and so would have been stronger. We regret that did not get put in place, but we`re pleased that we have this executive order commission and that a plan has now been put before the American people to get our debt stabilized and reduced over time in a very important way.

I believe this is a defining moment for the country. We are on a course that is utterly unsustainable and puts this country at great risk. I don`t think there is any question about that.

Even those who announced today that they won`t support the result have made very clear that they agree with the premise that America must act to get its debt under control. Otherwise, we risk the United States becoming a second-rate economic power.

That is what is at stake. The economic future of this country is at stake. And so I remain very hopeful that in the next 48 hours, colleagues will reflect and decide to support this effort.

We already had a number of commissioners indicate their support. I hope more will join us in the hours ahead.

With that, I want to call on my colleague, the ranking Republican on the Budget Committee, the co-author of the Conrad/Gregg plan, who has been so dedicated to getting the country back on track, Senator Gregg.

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Thank you, Mr. Chairman. And thank you for your leadership, because it really is your energy that has been the driving force for getting movement on this absolutely critical problem.

As the chairman said, this nation is facing the issue of whether or not we`re going to maintain our greatness. For the first time in our history, we are on the verge of passing on to the next generation a nation which is less prosperous and, therefore, less secure, than what we received and what we lived through during our lifetime.

That is totally unfair to our children, and it is totally outside the tradition of the American culture. Our culture demands that we always pass on to our children a greater chance of prosperity and a more secure nation. But because of our fiscal profligacy, our government which has spent far more than it can afford to spend, we are running debts which will essentially bankrupt our children`s future. The product that was put together here, the proposal that`s been put together here called "Moment of Truth," I guess, is the title they put on it, by Erskine Bowles and former Senator Simpson is not the total solution. It has many items in it which I have great concerns about. But it is a very strong, substantive and serious step down the road towards getting our fiscal house in order.

If this type of package were passed by the Congress and signed by the president, the American people, I think, would take great solace in the fact that we were back being fiscally responsible, and there would be an explosion of economic activity which would lead to significant prosperity for us as a nation. And the world would say once again, yes, America is great and America knows how to address its problems.

So that`s what this is about, really. It`s about us as a nation and maintaining our culture and our commitment to always passing on to the next generation a better, stronger and more prosperous nation. And I just want to again thank Chairman Conrad for his extraordinary leadership in getting us to this point.

Are there 14 votes here? I have no idea.

I`m going to vote for it. I`m going to vote for it because I know it`s moving us in the right direction, and not because I agree with all the different parts of it.

Nobody is going to agree with all the different parts of something like this, but it`s time to act. It`s time to govern. It`s time to move forward.

Thank you.

QUESTION: Right now the Republicans are pushing to extend tax cuts. The Democrats are pushing to extend unemployment benefits. Both of those things are extremely expensive. We just spent the least two hours talking about ways to tighten our belt.

How do you reconcile those two policies with what you just spent all this effort doing?

GREGG: You know, the short-term issue of what we do in this economy to try to keep the recovery, which is slow and which is very difficult for a lot of Americans who are still having a hard time, is not at the essence of our problem. The essence of our problem is five, 10 and 15 years from now, when our debt has accumulated to a level that equals or exceeds the Greek situation or the Irish situation. And the question is, what programs do we put together for the long run to get that debt down, get those deficits down?

Think of it as a two-step dance. There`s the short term here, where we need to keep the economy going and growing, and you don`t raise taxes in the middle of a slow economy or you slow the economy further. And there`s a long-term issue of getting our fiscal house in order so people can have confidence in the future of this nation. QUESTION: Senator, (INAUDIBLE) didn`t seem to have a problem with the idea of everybody having to sacrifice. But she definitely didn`t agree with the idea that there was an equal level of --

HARRIS: Boy, I think you felt the gravity in the statements by both of those men. The report from the debt commission, "The Moment of Truth."

We`re going to spend some more time with Senator Judd Gregg a little later this hour on the CNN NEWSROOM. He will be joined by CNNMoney.com`s senior writer, Jeanne Sahadi. The both of us will question Senator Gregg.

And we`ll try to get more on the report, what it is recommending, if we can muster the political will in the country to do this.

You heard Senator Gregg say his prediction is that if we could get the recommendations into legislation, get the legislation passed by both houses in Congress, and get the president to sign that legislation into law, his prediction, you would see an "explosion of economic activity."

Let`s take a break. We`re back in a moment.

You`re in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: I don`t know how you feel about this, but maybe no more important conversation for the country to be having about its future right now is what we do about the debt, our nation`s debt.

Take a look. Live pictures now.

This is -- we`ve got members of the president`s debt commission. You`ve got 12 members of Congress who are on that commission coming up with strategies, coming up with a report.

The report has been released. We know what the recommendations are now to cutting $3.8 trillion over the next nine years to start to make a real dent in the deficit that we`ve run up over the years, over the last couple of decades, really.

That`s Senator Kent Conrad there. He`s joined by Senator Judd Gregg.

We`re going to speak with Senator Gregg in just a few minutes as we drill down even deeper on the guts of that report. So we`ll continue to follow that.

(STOCK MARKET REPORT)

HARRIS: Sir Richard Branson calls it the future of publishing. His company is launching a magazine for iPads only called "Project."

Poppy Harlow joins us now from New York. Poppy, great to see you.

You had a chance to speak with Branson. Could the days of flipping magazine pages be numbered?

POPPY HARLOW, CNNMONEY.COM: Can you believe it, Tony? That is what he`s betting on.

And, you know, we all know Richard Branson as someone who comes in and takes a conventional industry like the airline industry or the music industry and he shakes it up. And that`s what he`s doing now to publishers around the world.

He just launched this week what you see on our screen, folks. That is a magazine, believe it or not.

It`s called "Project," and it is only available on the iPad. It`s 2.99 per month.

And this is the future of publishing, so says Sir Richard Branson. He says it is the most creative magazine, made for creative people by creative people.

We talked to him and asked him, can you really make money on this? Take a listen to part of our conversation.

(BEGIN VIDEO CLIP)

SIR RICHARD BRANSON, CHAIRMAN, VIRGIN GROUP: We`ll work with the iPad initially. It`s a fantastic platform. It`s literally exploding around the world.

It enables you to do things with a magazine on the iPad that you could never do with a normal magazine in the stores. So it brings the magazine alive.

HARLOW: Is the future of publishing in apps and not in physically printed products?

BRANSON: Sadly, for physically printed products, I think the future is in apps. I mean, for an appetizer, Virgin Atlantic is -- with our planes, for instance, if we advertise on target, we`re going to be able to, you know, take people into the plane, we`re going to be able to let people hear the roar of the engines, we`re going to let people be able to see what kind of seats they`re sitting in, we`re going to be able to let people see the quality of the food. But we can do it all in a really fun way, which is not possible in a magazine in the bookstores.

HARLOW: Is there real money to be made here, Richard? I mean, you do delve into things that are unexpected, like Galactic. But you also are a savvy businessman. So you clearly see this as a sustainable business.

BRANSON: I have no idea whether we`ll make money out of it. I hope it will pay the bills. And I think if you create the best, and if it`s a really fun magazine, if it`s one that people are telling their friends about, it`s only costing $2.99 a month, so I think word of mouth will get out. And hopefully we`ll get many, many people wanting to subscribe to it.

(END VIDEO CLIP)

HARLOW: So, clearly, Tony, he`s betting on it, but he also says, "I have no idea if we`re going to make any money."

Interesting to note, media mogul Rupert Murdoch, the head of News Corp, he is also betting on the iPad. He`s launching "The Daily," which is going to be an iPad-app-only newspaper. And the British papers, the headlines have been "It`s Murdoch Versus Branson."

Branson says, "It`s not a war between us," but clearly two moguls, two major businessmen, betting on the iPad. What Branson did say, Tony, is he doesn`t know if it will work, but if the bloggers don`t like it, then it will die quickly.

So check the blogs. We`ll keep an eye on it.

But very, very interesting. And this is taking publishing in an entirely different direction -- Tony.

HARRIS: It really is. Boy, will you follow this for us, Poppy?

HARLOW: We will.

HARRIS: We`d like updates on this.

Thank you, Poppy. Appreciate it.

HARLOW: You got it.

HARRIS: On this World AIDS Day, a new film documents the AIDS crisis in a major world capital. It is not in Asia or Africa. It is Washington, D.C..

(COMMERCIAL BREAK)

HARRIS: Today is World AIDS Day, a time to remember the 33 million people across the globe living with HIV.

In Atlanta`s Centennial Olympic Park, organizers are adding a thousand new panels to the world-renowned AIDS quilt. People can stop by and help make one of the squares.

The White House is adorned today with a huge red ribbon to commemorate World AIDS Day.

The U.N. tells us the number of new HIV Infections fell almost 20 percent across the last decade. At the same time, infections continue to surge in Southeast Asia and Sub-Saharan Africa. Washington`s HIV infection rate is estimated at three percent, the highest in the country, and on par with some countries in Africa. A new documentary about the capital`s AIDS crisis premiers tonight on Showtime.

(BEGIN VIDEO CLIP, "THE OTHER CITY")

UNIDENTIFIED MALE: AIDS represents humanity`s greatest failure. Failure in the way that we`re unable to face certain facts about who we are and, like, what people do.

UNIDENTIFIED FEMALE: Thank you.

UNIDENTIFIED MALE: We`re talking about a disease that is so complex and so stigmatized, that if we can`t even begin having conversations at the most basic level, how are we really supposed to combat this?

(END VIDEO CLIP, "THE OTHER CITY")

HARRIS: Boy.

Sheila Johnson is the filmmaker behind the documentary "The Other City," and she`s joining us now.

Sheila, it is great to talk to you. I can`t wait to see the documentary.

I`m curious as to what got you interested in tackling this. It is such a heavy subject. Was it something you read, someone you had a conversation with?

SHEILA JOHNSON, EXECUTIVE PRODUCER, "THE OTHER CITY": Well, you know, it`s a combination of a lot of things.

I`ve been doing a lot of work over in Africa, working with women who have been inflicted by this disease, and really working with transportation workers. And every time I would come back to the United States and report on this, many people said, you know, "We`ve got this problem right here in our own back yard." And I said, "You`re kidding?"

And I started reading some articles in "The Washington Post" written by Jose Vargas, who is really the narrator behind the articles. And I followed his articles and decided to meet with him, myself and Susan Koch, and to actually put his words on the screen and really do an investigative piece on what was really going on in Washington, D.C. Because when I heard the statistics, I was absolutely shocked.

We`re as high as West Africa and on par with Uganda. I mean, this is ridiculous, to be in the United States and have this problem. Because we`re going have the International AIDS Conference in Washington, D.C., in 2012. So we need to jump on this now to be able to show the world that we can do better.

HARRIS: Yes.

Hey, Sheila, what is going on? I was listening to your response, and I`m curious as to what is going on in Washington, D.C. And how do we explain the high infection rates in the nation`s capital?

JOHNSON: Well, you`ve got two problems. The reason why we call it "The Other City" -- and I just want to says it`s not just Washington, but we have other cities across the country.

But "The Other City," in Washington, you`ve got your federal government and then you have your local government. Unfortunately, neither one is paying attention to the people that are living just one mile from the Capitol steps. And this is our poorer wards, and these are people that really have not been given a chance in life to really blend in, you know, into society.

HARRIS: Yes.

JOHNSON: So you`ve got a convergence of three things going on. You have got men on men having sex. You have got heterosexual issues where women are getting the disease through their husbands or their significant others.

You have got intravenous drug use. And there`s something that we`re not paying attention to that we have brought up in the film, and that is the immigration population that`s coming in. They cannot get jobs, and they are prostituting themselves, which is also causing this rise in this epidemic.

So we have a lot of problems that have converged on this one city that no one wants to take on. The whole reason for --

HARRIS: Sheila, can I --

JOHNSON: I`m sorry. Go ahead.

HARRIS: -- channel a question that, as you outline the problems, that I`m sure people are looking at the set and saying -- you outline the areas of the problem. So much of this seems to be about individual choices.

JOHNSON: Exactly.

HARRIS: Can we -- are we doing an effective enough job? Can we do more to get the message to people, you can`t do these things, and if you do -- we understand economics, we understand poverty, but you can`t add on to poverty HIV and behaviors that could bring you into contact with the virus.

JOHNSON: Well, that`s the thing. It boils down to ignorance.

I think the problem is, is we`re not talking about it. And we`re also relying, I think, too much on other people to solve our problems. And we do have to take responsibility for ourselves. You know, now, I could get in a lot of trouble for saying it, but it`s very true. Now there are situations -- and I`m thinking about women that I met at the Women`s Collective. They said the only sin in life they committed was getting married.

Now someone is not being honest with their partner. And these are issues that we have got to address with each other. The trust level has really hit rock bottom. The other thing that is happening, we have so many women over the age of 50 that are going back out on the dating force, feel as though because they either can`t procreate any more they don`t need to have protection.

And we`re seeing huge increases of the AIDS epidemic with women over 50. Again it does come down to personal choices but the other thing is it`s being able to communicate your wishes to your partner. And someone has got to be telling you the truth. I mean, and this is -- these are unavoidable situations.

But as this disease is creeping across our country in epidemic levels, the thing that is most important, and I cannot say it enough, is education. We have got to talk to our young people.

As I go across the United States and I am really talking to young people in universities, they are sitting in that audience with their mouths open. They`re shocked. Nobody is talking to them about this disease. They think it has been eradicated. They think it has disappeared.

And just this month I have run into two friends who said they have just tested positivity for HIV.

HARRIS: Sheila, we can`t thank you enough for taking the time to talk about it. Such an important topic that we certainly don`t spend nearly enough time talking about. We do it every year at this time.

JOHNSON: No, we don`t.

HARRIS: But we do it every year at his time. But not much beyond.

The documentary is --

JOHNSON: And I want to thank you all.

HARRIS: Happy to do it.

JOHNSON: Thank you.

HARRIS: Happy to have you on the program.

JOHNSON: All right. You`re so welcome.

HARRIS: Sheila Johnson, "Showtime" tonight --

JOHNSON: Thank you.

HARRIS: The documentary is "The Other City." And watch Alicia Keys as she talks about getting off Twitter, Facebook and other social media to raise money and awareness for World AIDS Day. She is in the CNN NEWSROOM at 3:00 Eastern Today.

(COMMERCIAL BREAK)

HARRIS: Boy, we mentioned a moment ago the Dow is climbing like a rocket. Look out for contrail.

Let`s check in with Alison Kosik at the New York Stock Exchange.

And where are numbers now, Alice.

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Right now we`ve got the doll up,. 244 points. We really saw this spike right after about the noon hour, Tony.

The NASDAQ higher by 56. We`re having a really good day here on Wall Street. You know all this kind of got started right before opening bell. We got a report out of China showing their manufacturing there, it expanded because there`s been this big worry that China has been trying to clamp down on its growth so it was a real relief here to Wall Street to see that its manufacturing growth is really moving ahead there.

Then we have the opening bell. We saw the rally. We also got a report from payroll processing firm ADP showing that last month there were 93,000 jobs added in the private-sector and this is what Wall Street likes to see. Likes to see jobs being added in the private. It`s the engine of growth for this economy.

You know we all know that we`re struggling these days, the economy -- we may be out of a recession but we don`t feel that way because we got so many people oust work. So it`s kind of a relief to see that we`ve got these jobs being added. It`s the first time in three years we`ve seen this many jobs being added -- Tony.

HARRIS: And Alison, if the markets get a sense that now might be the title of the report from the debt commission, a "Moment of Truth" that we have, something of r a serious mandate plan from serious people to attack this debt and deficit problem in the country.

Might that be part of what`s fueling this run up?

KOSIK: It maybe. I mean, one thing that what Wall Street is really looking at is it`s looking at these economic indicators that are coming in today.

HARRIS: Yes, yes, yes.

KOSIK: We also got -- I didn`t mention this. We got a strong manufacturing report here in the U.S.

HARRIS: OK. OK.

KOSIK: Wall Street takes that seriously. It shows we`re growing. There`s a need for more goods to be ordered.

HARRIS: Yes.

KOSIK: And we saw this strong manufacturing report. It shows that the demand is there. That`s also what we`re rallying about. Ideally it`s the jobs. I mean, you know, this recovery is all about jobs. You think about the underemployment rate is sitting at over 17 percent.

These are people who want to work full time but aren`t working and never mind the 9.6 percent unemployment rate. So it`s really the U.S. labor market that`s really dragging down this economy never mind the housing market.

HARRIS: Yes.

KOSIK: But if we see the jobs market pick up that`s where we`re going to really see sustained growth and that`s why Wall Street is rallying.

HARRIS: OK. Good stuff. All right, Alison appreciate it. Thank you.

Is plastic a thing of the past? Maybe not quite but credit card use is on the decline according to TransUnion a credit researcher. Christine Romans is joining us from New York with more on this. Tell us more with more on this.

So, tell us more, Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Oh, well, we had too many credit cards and we were charging too much on them.

HARRIS: Absolutely.

ROMANS: And we were buying things we couldn`t afford with money we would never going to earn. And that bubble popped and you are seeing a huge pay down of credit card -- credit card debt. So much so, Tony, that in fact you have eight million fewer credit cards out there in circulation. Eighteen million fewer credit card.

I mean it`s incredible. Eight million people who have dropped credit cards all together. There are now 78 million people without a credit card in this country. Why the decline? A couple of things. Cards shut down by the banks. In some cases it`s not because you want to, it`s because the banks won`t give you a credit card any more.

Consumers not purchasing as much in other cases. And in other cases people simply paying down their balances and getting to a more manageable level overall. So you`ve got 78 million people walking around without a credit card.

You know, Tony, as long as we`ve reporting -- since the `70s there`s always been more credit cards every year. More people with credit cards moving in a different direction. The average credit card debt, according to TransUnion, in case you`re interested, is up slightly in the quarter to $4,964. That seems like a lot of money but I`ll tell you it`s down sharply from a year ago.

And also down sharply from a year ago delinquencies. Far fewer people are delinquent on their credit cards right now. That is a good sign, too. That shows you there`s been this big purge and that people -- more people are paying their bills on time and have gotten a little more control over their credit card situation. So there`s -- a great credit card --

HARRIS: Yes.

ROMANS: -- pay down still happening according to TransUnion.

HARRIS: Hey, keep pounding away at this topic, Christine, because I think there`s a real upside to this. And we`re out of time. But I want to ask you maybe tomorrow whether or not there`s a risk at sort of cutting up your cards and cancelling your accounts. But we`ll get to that tomorrow.

Christine`s new book, there it is --

ROMANS: Good question.

HARRIS: I mean here. "Smart Is the New Rich" In it you will find all kind of things to help your bottom line.

Got to sneak in a quick break. We`re back in a moment. Join us in CNN NEWSROOM.

(COMMERCIAL BREAK)

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Time now for "The Help Desk" where we get answer to your financial questions.

Joining me this hour, Carmen Long Ulrich is a personal finance author, and Ryan Mack is the president of Optimum Capital Management.

All right, our first question comes to us from Wayne in Florida who writes, "I have a $20,000 outstanding loan against my retirement account that I defaulted on. The loan amount still reflects on my statement. How do I get it off? I already paid the penalty and tax implications on the load default."

What do you think will help our here, Ryan?

RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, the bottom line is, any bad thing that you`ve done stays on there for seven years. So you`re not going to be able to get it off for at least another seven years. What you might be able to do is any other things on your report, you want to go and try to clean it up.

Anything that you want to dispute. Any bad items. Anything that you did not feel that you did not owe, you want to dispute. And go on there. Go to Annualcreditreport.com, get out your free report, and dispute it as soon as possible.

A lot of those things can be taken off only if they`re filed to be erroneous. But in this case, it`s not. It will be on there for these seven years. So you want to start doing the things around your credit report to make sure you`re building it up.

ELAM: And the only person who really cares to be the sheriff for your credit report is you.

MACK: Exactly.

ELAM: So you`ve got to do it yourself.

All right, next question comes to us from Dan in Virginia who writes, "What are the pros and cons of a reverse mortgage? I`m over 62 and I have a lot of equity in my house. When does the bank have to be paid back the loan in a reverse mortgage?"

Carmen?

CARMEN WONG ULRICH, PERSONAL FINANCE AUTHOR: I`ll answer the first question first.

ELAM: OK.

ULRICH: Reverse mortgages can be very expensive. I think it should be -- a last resort for someone who`s completely cash pouring. No more retirement. And the only cash they have is the equity in their home.

So up 20 percent you`re going to pay on what you borrow in terms of fees and penalties and interests and all that. So the better thing to do here for someone like this is to basically pull it out in a home equity loan or home equity line of credit. The HELOC.

Interest rates are tremendously low. And you only need to pull out what you need as opposed to reverse mortgage which will pull out almost all of it. And the key here with reverse mortgages is, remember, you don`t want to have to pay it back. Basically you want to live off of it until, unfortunately, you either pass away or you sell the home.

ELAM: Right. So that -- and that`s the whole point of a reverse mortgage.

(CROSSTALK)

ULRICH: Exactly.

ELAM: Good to keep that in mind. All right. Well, thank you so much, Carmen and Ryan, for helping us out.

If you have a question you want to get answered, go ahead and send us an e-mail any time to CNNhelpdesk@CNN.com.

(COMMERCIAL BREAK) HARRIS: The presidential panel on reducing the country`s crushing debt is out with its final report today. The combination of spending cuts and tax changes would slash $4 trillion in deficits over 10 years.

Some of the recommendations on spending, about $200 billion in military and domestic cuts by 2015. On taxes, reforming the tax code by lowering rates but scaling back tax breaks. The plan would also raise the federal gas tax by 15 cents a gallon. On Social Security, gradually raising the full retirement age to 69 and reducing benefits for wealthier recipients.

Republican Senator Judd Gregg of New Hampshire, you heard from him at the top of this hour in the CNN NEWSROOM, is a member of the president`s National Commission on Fiscal Responsibility And Reform. He joins us from Capitol Hill.

Senator, good to see you.

And CNNMoney.com`s senior writer, Jeanne Sahadi, has been covering the debt commission extensively.

Senator, Jeanne and I are both going to fire some questions at you, if you don`t mind. Let me get started first.

So the goal is $3.8 trillion, $4 trillion in cuts over and revenue enhancers over the next nine years. Let`s call it 10 years. You`re going to sign off on this plan. Senator Conrad is signing off on it as well. Tell me why you are supporting these recommendations?

SEN. JUDD GREGG (R), NEW HAMPSHIRE: Well, because we`re on a path to fiscal disaster. And the simple fact is, that under our present fiscal policies, this country`s debt is going to go to a level that`s unsustainable and we`re going to fundamentally undermine the prosperity of our children and reduce our security as a nation as our country moves towards some level of insolvency. We don`t know what it will be, but that`s what we`re headed towards, so action has to be taken.

Now, this plan isn`t perfect. No plan would be perfect in my mine. If it were perfect, it wouldn`t get that many votes, other than my own.

HARRIS: Right.

GREGG: But as a very practical matter, it is a -- and it`s not global either. It doesn`t address all the problems. But it does make a very significant statement that we, as a nation, can get our fiscal house in order and we`re going start. And it says the American people, if we pass this plan, we will govern in a way that is responsible. And it says to the world that we are willing to take on what is a very big issue, not only for us as a nation, but for the world, which is the impending insolvency of our country of we don`t act.

HARRIS: OK, that is what you believe.

Jeanne, one more from me and then I`ll turn it over to you. One --

GREGG: No, that`s not what I believe, that`s the facts. That`s --

HARRIS: OK. OK.

GREGG: Excuse me. Just a second. That`s not what I believe. That is the absolute facts. This country is on a totally unsustainable fiscal course. Everybody admits to that. And the issue is whether or not we`re going to address it in an orderly way through governing or whether we`re going to have a massive --

HARRIS: Right.

GREGG: As I think it was Dave Cody (ph) said, the herd runs against us and fear takes over the mind.

HARRIS: OK. Here`s the point I`m driving at. You`ve got members, congressional, your colleagues in the House and Senate on both sides of the aisle here who will absolutely agree with you on the need to move forward and do something here, but will disagree on revenue enhancers and on cuts. Are you absolutely convinced that all of the areas, even areas where you may disagree with the recommendations, that there has to be some kind of work in those areas in terms of reducing spending? Even in areas where you disagree with what is being proposed, yes even in those areas something has to be done?

GREGG: Well, that`s -- yes, that -- we`re in a situation where doing nothing leads to disaster. Something has to be done. People have to start to govern and to stop shouting.

HARRIS: OK. Jeanne, let me turn it over to you and then I`ve got a couple more for Senator Gregg.

JEANNE SAHADI, SENIOR WRITER, CNNMONEY.COM: Senator, I wanted to -- you made some very eloquent comments at the beginning of the meeting this morning about -- you were trying to convince your fellow Republicans that this is a plan they ought to sign on to, even though there are many things they don`t like about them -- about the measures. In particular about the extra tax revenue that`s raised and the concern that it won`t be spent properly. Do you think that that message will get across not only to your fellow Republicans in the commission but also in the Senate?

GREGG: Well, I think that -- first off on the tax policy. This is conservative tax policy in this bill, which is that basically you eliminate deductions and exemptions and you radically reduce rates on both individuals and business unless people start to invest money, not for the purposes of avoiding taxes, but in order to get the best return, which inevitably leads to huge prosperity and economic growth. This is classic Reagan tax policy and it was what we did in `86. This is -- as I said, this is Reagan-Bradley on steroids.

On the -- I think most of my Republican colleagues reservations go to the omissions in the plan, which is basically that health care is not aggressively addressed and health care is a big driver, and probably the primary driver of our problems as a nation, as the baby boom generation retires. And they think there should have been a revisiting of the whole health care issue, and that`s been their basic concern.

SAHADI: On the issue you of spurring economic activity, Jan Schakowsky, the House Democrat who sits on the commission, was also equally eloquent about describing why she won`t be voting for the plan because she doesn`t think that there is enough attention paid to the issues of fairness and inequality of income and trying to rectify that situation because to her she said spurring economic activity is based on demand, putting money in people`s pockets. And she has a hard time supporting this plan because it doesn`t do that. For her it`s not so much about lower rates. How do you work with a divide between your positions?

GREGG: We don`t. You know, the congresswoman has a very different view of what our problems are and how we should fix them. But this proposal, as it came forward (ph), which I`m supporting, is bipartisan. In fact, it`s basically non-partisan. It is going to have a fair number of people who were appointed by the president and a fair number of Republicans supporting it. And it`s got myself and Senator Conrad who originally came up with the idea of putting together this type of an approach, supporting it.

So, I would, you know, I respect the congresswoman`s views, but the simple fact is that they aren`t going solve our problems because they`re not politically going to get a consensus position or a bipartisan position. And you cannot move down the road on these big issues like Medicare, like Social Security, like tax reform unless you do it in a bipartisan way, first because you can`t get the votes and secondly because, quite honestly, the American people will not accept a partisan action in these areas, as has been shown by the health bill, which was run through this House and the Senate -- through the Senate and the House on a partisan basis and been so fundamentally rejected, I think, by the American population.

HARRIS: OK. And, Senator Gregg, one more from me. Tax policy obviously one of the biggest factors in balancing this budget moving forward and reducing the deficit. We have a moment now, right now where we can talk about tax policy. And you get a vote in this. What should Congress do regarding the Bush era tax cuts? Is it this -- a moment in this lame duck session where the chambers could make a real statement about debt reduction? And, in this case, maybe it is what the House is working on, I`ll get your view on it, allowing the tax cuts to expire for the wealthiest in the country?

GREGG: No. That would be a very serious error. Think of this as a two-step dance. There`s the short term issue of how we keep this economy going and the recovery is, to say the least, fragile and for many Americans it`s non-existent still. A tax increase of any nature in this atmosphere would be extremely counterproductive and would probably throw us back into a very slow economy and maybe even in a recession.

The issue we`re dealing with on this commission is not the short term, how do we get out of this economic downturn. It is the long term of five, 10, 15, 20 years from now making it clear that we`re going to pass on to our children a nation which is as prosperous as we have today or more prosperous and equally secure. On our present path, that not going to happen. We`re going to pass on to our children a nation which is significantly less prosperous and therefore less secure and they will have a lower standard of living because we are adding all this deficit and debt in the out years. We have to control those out years. And that`s a separate set of policies from the short term issue of keeping this economic recovery going which requires that we not raise taxes now. Absolutely requires that.

HARRIS: OK, Senator Gregg, we appreciate it.

GREGG: (INAUDIBLE).

HARRIS: Yes, I understand. The question might be, when? When is the right time to address this? We`re looking at third quarter GDP as --

GREGG: Well, that commission has laid out a very clear blueprint to do that.

HARRIS: OK. Senator --

GREGG: The commission laid out a very clear blueprint of how to do that.

HARRIS: Thank you for your time. We appreciate it.

And Jeanne Sahadi of CNNMoney.com, one of our senior writers there. Jeanne, appreciate it. Thank you.

Let`s get to a break. You`re in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Oh, we`ve got to squeeze in the random moment. When a toddler gets stuck, mama`s got to hear about it. Today`s random moment all the way from China. Yes, mama`s got to hear about it. A three year old boy got wedged in a washing machine while playing hide and seek. He was on heavy duty. Nah, he was on delicate.

Rescuers removed the tiny (INAUDIBLE) and got the boy out. He is safe and most certainly clean now as a whistle. Never a spin cycle from the "Random Moment of the Day."

CNN NEWSROOM continuing right now with Kate Bolduan in for Ali Velshi.

KATE BOLDUAN, CNN ANCHOR: Mom told him to clean his clothes --

HARRIS: Clean them!

BOLDUAN: -- Tony. What else are you going to do?