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American Morning
Rick Perry's Flat Tax; Help for Struggling Homeowners; No Silver Bullet to Housing Market; Immigration Reform in the Works; Baby Rescued from Earthquake Rubble in Turkey; 279 Killed in Turkey Earthquake; Gadhafi Buried at Dawn; Deadly Explosion Outside Bus Station; Wikileaks Close to Shutting Down; Season on the Shrink; Should the President Bypass Congress to Help the Economy?; Baby Rescued From Earthquake Rubble In Turkey; Perry's Flat Tax Proposal; Cain To Debate Gingrich; Baby Rescued from Earthquake Rubble in Turkey; Fixing America's Housing Crisis
Aired October 25, 2011 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: AMERICAN MORNING continues right now.
ALINA CHO, CNN ANCHOR: I'm Alina Cho. Texas Governor Rick Perry will officially unveil his tax plan today, but is an optional flat tax the answer? Will it help improve his standing at the anti-Romney? We'll explain.
COSTELLO: I'm Carol Costello. After five days in cold storage, Moammar Gadhafi has reportedly been buried, but Libyan officials aren't saying exactly where on this AMERICAN MORNING.
CHO: Good morning.
COSTELLO: Good morning, Alina.
CHO: Good morning, everybody. Welcome to AMERICAN MORNING. It is Tuesday, October 25th. I'm Alina Cho along with Carol Costello. Ali and Christine are off today.
COSTELLO: Up first this morning, presidential politics as Texas Governor Rick Perry trying to one-up Herman Cain's 9-9-9 plan and get back into the good graces of GOP voters. This morning, Perry will unveil his economic growth plan that includes a flat tax.
CNN deputy political director Paul Steinhauser joins us from Washington with more details. So he has this 20 percent flat tax, but taxpayers can actually opt out if they like their tax rate better?
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, and his banking on most Americans not liking the way they have their taxes right now, Carol.
And you mentioned as well, maybe he is hoping for some of that 9-9-9 magic that really boosted Herman Cain from an afterthought to basically a frontrunner in the battle for the GOP nomination. So yes, today, this morning, Rick Perry, the Texas governor unveils his plan. Cut, balance and grow, that's the name of it. Let's take a look at some of the details of what he's proposing.
Yes, they got a choice. Americans get a choice, most of them earning under half a million of a 20 percent flat tax or their current income tax rate.
The new flat tax he says would preserve mortgage, interest, charitable state and local exemptions for families making under that $500,000 per year.
He says it would increase standard deductions to $12,500 a year for individuals and dependents. He wants to abolish the debt tax. We hear a lot of Republicans saying that abolish debt tax.
And what about the corporate tax rate? Well, he wants to lower it from about 35 percent, Carol, down to about 20 percent. Perry put a lot of this in the "Wall Street Journal" this morning in an op-ed and again, he'll make his announcement later this morning in South Carolina.
COSTELLO: So who helped him craft this plan?
STEINHAUSER: Well, a guy called Steve Forbes. I think a lot of people know the main guy behind "Forbes" magazine, Forbes Incorporated.
Remember, Steve Forbes ran for the Republican presidential nomination back in 1996 and 2000, and guess what? One of his big platforms was a flat tax.
Rick Perry this morning saying, guess what? My simple 20 percent flat tax will allow Americans to file their taxes on a postcard. Steve Forbes said something very similar back in the day when he was running for the White House.
COSTELLO: Well, no wonder he's endorsed him.
STEINHAUSER: Yes, no wonder.
COSTELLO: So Rick Perry is going to make his formal announcement on his new economic plan in South Carolina. I suspect I know why, but tell us.
STEINHAUSER: Yes, I guess, there are 50 states you can choose any of them, right? Why South Carolina, guess what, the first southern state to vote in the battle for the White House in the GOP presidential nomination battle.
And one of the things we've learned, our Peter Hamby telling us that while he's down there in South Carolina today, Perry will also meet with Senator Jim DeMint, pretty influential Republican senator especially with Tea Party activities so yes, location, location, location -- Carol.
COSTELLO: Paul Steinhauser, many thanks this morning.
STEINHAUSER: Thank you.
CHO: President Obama says he is tired of waiting for a dysfunctional Congress. So, well, he's going to change the rules himself.
In La Vegas, ground zero for the housing collapse, the president announced changes to a government program that's designed to ease the nation's foreclosure crisis.
The president says his new plan makes it easier for responsible homeowners to refinance their mortgages.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: If you meet certain requirements, you will have the chance to refinance at lower rates, which would save you hundreds of dollars a month, and thousands of dollars a year on mortgage payments.
(END VIDEO CLIP)
COSTELLO: Today, the president continues his West Coast swing. This afternoon, he's going to sit down with Jay Leno. It will be his fourth appearance on "The Tonight Show" by the way, his second as president. Mr. Obama will then head to Colorado for two final fundraising events.
And getting back to the president's new mortgage plan, last night on "JOHN KING USA," the administration acknowledges not a quick fix to the nation's ailing housing market.
(BEGIN VIDEO CLIP)
JOHN KING, HOST, CNN's "JOHN KING USA": Why should this latest plan will actually prove to be the difference?
SHAUN DONOVAN, HOUSING AND URBAN DEVELOPMENT SECRETARY: We've taken a housing market that was literally falling off a cliff and we've stabilized it. But it's also true that we haven't done enough and we haven't gone far enough.
And we're going to keep pushing, keep expanding these efforts to make sure that we do get to a point where the housing market isn't just stabilized, but it's recovering and recovering in a way that homeowners again have a light at the end of the tunnel and can see themselves getting back above water.
So we're continuing to push. Today's announcement is part of a broader strategy to keep making a difference in the housing market and those are the facts.
(END VIDEO CLIP)
CHO: Coming up, in a little more than 30 minutes, we will talk to Paul Jackson. He's the founder and publisher of "Housing Wire," and he's one of the first people to write about the foreclosure prices.
We're going to talk about whether he believes the president's plan will actually increase housing prices -- Carol.
COSTELLO: Immigration reform could become a big eschew on Capitol Hill come December. Democratic sources telling CNN there are discussions taking place right now that could involve reintroducing the Dream Act.
The Dream Act would allow children of illegal immigrants to go to college or serve in the military to become U.S. citizens. Sources say Democrats want to keep Hispanic voters in the fold by contrasting their positing with Republicans who favor tougher security along the U.S./Mexico border.
CHO: And we have breaking news out of Turkey this hour. A 14- day old baby was reportedly been rescued alive from the earthquake zone in southeast Turkey, incredible news.
Reuters is reporting that the baby was pulled from the rubble of a collapsed building earlier today. We will have much more on the baby's rescue as soon as we get more details.
Meanwhile, rescue workers in Turkey have been using shovels, even their bare hands to look for survivors. The death toll from Sunday's 7.2 magnitude quake now stands at 279.
The area has been hit by several powerful aftershocks, some as strong as 6.0. One Turkish news agency reports 970 buildings in the eastern part of the country were destroyed.
COSTELLO: The body of Moammar Gadhafi has finally been buried according to Libya's National Transitional Council. The dictator was laid to rest at an undisclosed location.
It happened this morning at dawn. Gadhafi's body had been on display in cold storage for public viewing ever since he was killed five days ago in his hometown of Sirte.
Let's go in depth now, Dan Rivers joins us live from Tripoli. So they buried Moammar Gadhafi somewhere in the middle of a desert somewhere?
DAN RIVERS, CNN SENIOR INTERNATIONAL CORRESPONDENT: That's right, yes. The whole idea was to keep it secret. All we know is that he was buried along with his son, the defense minister, Abu Bakir Unis, the Gadhafi tribe were allowed to pray over his body before a convoy took it away into the desert.
And then buried him I presume at a sort of unmarked grave far away from anyone to avoid his grave becoming a shrine to any Gadhafi loyalists left in the country. Hoping to draw a line under this whole affair, but there are still lots of questions being asked about how he died, how they treated his body.
How his son died, and also questions about an apparent massacre in Sirte of what appears to be pro-Gadhafi supporters at hotel. Human rights watches discovered 53 bodies there. There are lots of difficult awkward questions for the NTC going forward.
COSTELLO: When might we know the outcome of that autopsy on Moammar Gadhafi's body?
RIVERS: Well, we know the headline result that he was shot in the head. The details about what range and so on, that bullet was fired, we don't know. We may get those results from the attorney general's office over the next couple of days.
It may be that they never choose to reveal those details. The NTC said that they've set up a committee to look into his death, but, you know I think it's going to be questioned as to how independent and how thorough that committee will be.
And there is still international pressure for them to explain exactly what happened.
COSTELLO: Dan Rivers live in Tripoli this morning. Thank you.
CHO: Also new this morning, an explosion at a crowded bus station in downtown Nairobi, Kenya killed at least one person. It happened yesterday just blocked away from the nightclub where a blast went off earlier that morning.
Twelve people were hurt in that blast. So far no one has claimed responsibility for either attack. The explosions came just two days after the U.S. embassy in Kenya warned of an imminent terror attack.
COSTELLO: Wikileaks founder, Julian Assange announcing the site is close to shutting down. That's because it's running out of money. The site relies on donations.
But cash has been hard to come by ever since Visa, Mastercard, Bank of America and Paypal stop doing business with the site after it published a number of confidential U.S. diplomatic cables last year.
CHO: The NBA season still on hold and about to get even shorter. Don't tell that to basketball fans. The "New York Daily News" is reporting that the league will announce the cancellation of at least two more weeks of games today.
NBA spokesman told CNN he wasn't commenting on that report. Talks aimed at ending the NBA player lockout collapsed last week after 30 hours with the federal mediator and no new talks are scheduled.
COSTELLO: Let's talk about something good now at least for Texas Rangers fans because Texas Rangers now one win away from their first- ever World Series title. They came from behind to beat the St. Louis Cardinals in game five, 4-2. The mid blow, a two run bases loaded double by Mike Napoli in the eighth inning. He's been insane. He broke a 2-2 tie. The Rangers can clinch Wednesday night in game six in St. Louis.
CHO: You been watching? Paying attention, ever since your team -- well, I don't want to bring up a sore subject, sorry.
COSTELLO: I am not a sore loser, as many Yankees fans are. People out there, Yankees fans. I still watch other teams and can root for them except for the New York Yankees.
Still to come on AMERICAN MORNING, President Obama bypassing Congress and using whatever executive powers he has to try and get the economy moving again. So what do you think about the president's plan to run around the lawmakers? We'll tell you about that.
Plus, look up in the sky. The northern lights make a rare southern appearance. Wow.
And putting the pedal to the metal. A man and his car celebrating 1 million miles together. It's love. It's 11 minutes past.
(COMMERCIAL BREAK)
CHO: Welcome back to AMERICAN MORNING. Police in the Dallas area this morning are hunting for a suspected serial rapist who has attacked at least four members of the same sorority.
The victims all African-American women in their mid-50s to early 60s are alumni of Delta Sigma Theta. All were assaulted in their homes at night over the past couple of months. The most recent, 11 days ago in the Town of Corinth. Police say they're somewhat mystified by the apparent sorority link to the case.
(BEGIN VIDEO CLIP)
CAPT. GREG WILKERSON, CORINTH POLICE: We don't understand how he's obtaining the information. We don't know if he, you know, by chance has a -- has a list of members or if he's just simply looking for members that may be out there sporting different paraphernalia, T- shirts for the sorority, jewelry, license plate placards, things of that nature. So we put out a request to all the members to, at least, not -- not advertise their affiliation with that sorority right now for -- for their own safety.
(END VIDEO CLIP)
CHO: All four victims offered similar descriptions of the man shown in the surveillance video. Police believe he is the man responsible for the attacks. Investigators are urging Delta members not to advertise their affiliation.
COSTELLO: We'll get the surveillance video at some point. Sorry about that. Looks like a volcano, doesn't it? Specialized fire crews called in after an oil rig blowout in Texas. Fire broke out on an oil drilling platform on Sunday. Firefighters say it is contained. It's not posing any threat to the surrounding area, but it could take a week to put the thing out. Officials say 11 workers who were at the site all OK this morning.
CHO: And they threw a parade for a man and his car in Maine. This is Joe LoCicero -- I hope I pronounced that correctly -- just passed the million mile mark on his 1990 Honda Accord. The car had 74,000 miles on it already when he bought the car back in 1996. He says there's no real secret to keeping it on the road for so long, regular maintenance, things like oil changes.
COSTELLO: He's a mechanic.
CHO: Lots of them. And the parade, well, he was presented with a new 2012 Honda Accord. You know, if I still had my Volkswagen Jetta back from my high school days, I might have hit the million mark, too.
COSTELLO: Really?
CHO: I may have hit it (ph) by now.
COSTELLO: It's an -- no, I think it's a real secret, and Jacqui spilled it earlier this morning was the guy's a mechanic.
CHO: Well, that helps. It doesn't hurt.
JACQUI JERAS, AMS METEOROLOGIST: You've got to take care of your car, right?
CHO: Right.
JERAS: Change that oil every 3,000 miles. Check all those --
COSTELLO: I've never done that.
JERAS: Well, you now have somebody do it for you.
COSTELLO: That's why we get married.
JERAS: Exactly. Love that about my husband. I'll tell you.
Hey, if you're out there driving this morning or going by the airways, a couple of trouble spots that we're going to watching here. Most of the rain already starting to pull out of the northeast, so that's good news for you, but the roadways are getting a little bit wet across the Western Great Lakes. And that's where the rain is moving on in.
This is very light for the most part. So not much more than sprinkles, but you've got the low overcast conditions. At least it's rain and not snow, right, from Green Bay down towards Milwaukee. Although we're seeing a little mixing in up there towards the U.P. of Michigan. Now, speaking of snow, we're definitely going to see some of that across the Rocky Mountain States and we are expecting to see quite a bit into the higher elevations. This is really our main storm system across the nation's midsection. We had very windy conditions. The rain on the northern tier, much cooler conditions coming in on the back side and we're going to see snow in places like Denver. Yes, Denver, Colorado. You haven't seen much of that yet this year.
Winter storm watches are in effect and this is after a record high yesterday in Denver of 80 degrees. We'll be lucky to get about -- just shy of 68 I think today and probably down into the upper 30 for tomorrow. A couple of feet possible up into the high country, so certainly thinking about that skiing yet again and some of those resorts did open up a couple weeks ago.
Now, south side of this system, we're going to stay extremely warm. Look at this, 87 in Dallas again today; 86 degrees in Houston; 83 into Kansas City. And there you see that cold air back behind it. Minneapolis looking for 52 degrees today.
We're also keeping our eye on the tropics, all right? Hurricane Rina, this thing has been intensifying very rapidly since Sunday and it's now a Category 2. Maximum winds around 100 miles per hour. The forecast track of this thing is bringing in very closer over the Yucatan Peninsula, possibly even making landfall over Cozumel. This is going to happen sometime on Thursday.
Before we get there, though, this thing is going to continue to get stronger and it's forecasted to be a major hurricane. We haven't seen a major hurricane make landfall in this area since Hurricane Wilma. Remember that one back in 2005.
The other thing I want to mention that in the cone of uncertainty down the line for the weekend, you can see the Florida Keys in here. So we're going to watch that very closely, but we think it's much more likely it will stay south of that. So cross your fingers for that.
All right. Some spectacular video to show you out of Michigan from last night. The aurora borealis put on quite the display. Look at those reds and the greens and the purples. Geomagnetic storm on Saturday night, takes about 40 hours for that energy to get here to the earth's atmosphere and, boy, look at those waves of curtains of light. Quite a show. People got to see it all the way from Canada down into parts of the Deep South, believe it or not.
COSTELLO: It doesn't look real.
CHO: That's something you don't see every day.
JERAS: It's so pretty.
COSTELLO: Wow. Look at that.
CHO: It's amazing.
JERAS: It really is. I could watch that all day. COSTELLO: Me, too. Jacqui, thanks.
Now is your chance to "Talk Back" on one of the big stories of the day. This morning's question, should the president bypass Congress to help the economy?
President Obama has gone from yes, we can, to, we can't wait. Since Congress isn't exactly eager to discuss any part of the president's jobs bill, the president is going rogue. Instead of waiting for Congress to act, he's implementing a series of executive actions, like new rules aimed at making it easier for homeowners to refinance.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We can't wait for an increasingly dysfunctional Congress to do its job. Where they wouldn't act, I will. The barrier will be lifted that prohibits responsible homeowners from refinancing if their home values have fallen so low that what they owe on their mortgage is 25 percent higher than the current value of their home.
(END VIDEO CLIP)
COSTELLO: Some economists say it wouldn't be enough to solve the housing crisis. Republicans say it wouldn't solve anything. The president is simply using the excuse of political gamesmanship to get around Congress.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL (R), MINORITY LEADER: They're ashamed to mention any of the things that they do as Republicans because it steps on their story line. Their story line is that there must be some villain out there who's keeping this administration from succeeding.
(END VIDEO CLIP)
COSTELLO: What's clear is the economy wouldn't be greatly helped unless Congress does act in some way, and Congress is not likely to act on the president's jobs proposal. So President Obama is moving forward on his own. Monday, the home mortgage plan, tomorrow, a plan to help with student loans. The president's intent, to show Americans he's doing something and to shame Congress into acting.
So the "Talk Back" question today, should the president bypass Congress to help the economy? Facebook.com/AmericanMorning, Facebook.com/AmericanMorning. I'll read your responses later this hour.
CHO: I'm going to guess we're going to have a lot of them.
Still to come on AMERICAN MORNING, first, Michele Bachmann's New Hampshire staff quits. This morning, they're letting everyone know why, and we're going to share those kernels of information with you when we come back. It's 22 minutes after the hour.
(COMMERCIAL BREAK)
CHO: Welcome back. "Minding Your Business" this morning.
U.S. stock futures are pointing to a flat open this morning. Markets got a boost yesterday from strong quarterly earnings reports and a few merger announcements.
We're one day away from finding out the details of the grand plan to save the European Union and the announcement could not come soon enough. Recession fears to the region are on the rise this week after a new survey shows business activity has stalled. But France in particular showing major weakness in that sector.
More bad news for Netflix. The company announced it lost 800,000 subscribers in the third quarter. Customers had been jumping ship ever since the company announced price hikes this summer. Then there was the whole Flixster debacle. Stock is down nearly 30 percent right now in pre-market trading.
Swiss pharmaceutical company Novartis announcing fresh job cuts this morning. Two thousand workers mostly in the U.S. and Switzerland will lose their jobs in the next three to five years. The company says the cuts are part of its $300 million restructuring plan.
FedEx is gearing up for the holiday shipping frenzy in a major way. The global shipping giant says December 12th is set to be the busiest day it's ever had expecting more than 17 million packages to be shipped this year. The company says it's also adding 20,000 temporary workers to help handle this holiday rush.
And it's time to literally pig out again. McDonald's is bringing back the cult classic McRib Sandwich and they're going all Willy Wonka on us. McDonald's has also launched the "Quest for the Golden McRib." It's a social media game.
AMERICAN MORNING will be back right after the break.
(COMMERCIAL BREAK)
COSTELLO: It is 30 minutes past the hour. Good morning to you. It's time for top stories:
Texas Governor Rick Perry is looking to reenergize his presidential campaign with a bold economic plan that includes a flat tax. Perry outlined the plan in "The Wall Street Journal" and will officially announce it at an event this morning later in South Carolina.
CHO: President Obama is tired of waiting for Congress to act, so he's rolling out changes to the government's mortgage relief program himself. Under the new rules, homeowners who are up to date with mortgage payments will qualify for new loans at today's new low rates, no matter how far the value of their homes have fallen.
COSTELLO: Five days after he was killed in his hometown of Sirte, Moammar Gadhafi has finally been buried. An official with Libya's National Transitional Council telling CNN the deposed dictator was laid to rest at dawn at an undisclosed location.
ANNOUNCER: This is CNN breaking news.
CHO: And back to this morning's breaking news out of eastern Turkey. A two-week-old baby incredibly has been found alive in the earthquake rubble.
Diana Magnay is here with the latest. She's live from Turkey this morning.
Diana, what do you know about this? It is just remarkable.
DIANA MAGNAY, CNN INTERNATIONAL CORRESPONDENT: Hi, Alina. It is. Some very, very dramatic scenes that have been taking place here at the site behind me in the town of Ercis this morning.
I'm going to step out of the way and we'll zoom in so you can get a closer look. The baby, 14 days old, was pulled out of the rubble here alive. And bear in mind -- the earthquake took place on Sunday. It is now Tuesday morning.
The baby is fine. It's a little girl. She's on her way to the hospital for check, but her relatives said she looked as though she was doing fine.
Now, they're working frantically to take out her mother and her grandmother, both of whom are still in the rubble. I just spoke to a health worker who's coming out, one of the rescue workers and he was thrilled. He came up and said, they're both there, they're healthy, in broken English, wanting to tell us that they were healthy and alive and saying to us that they should be out with the next few minutes. Very, very exciting scene here this morning, Alina.
CHO: Oh, my goodness, Diana, that is unbelievable.
So, are they able to -- do you know if rescuers are able to actually see them? How do they know they're OK? They've just had verbal contact?
MAGNAY: I think they've managed to get quite close to them. I mean, the guy who came up and talked to me -- his English wasn't really good enough for a full interview. But he seemed pretty convince that they were healthy and he said they'd been working on trying to free them for the last two hours, and that it was going to happen really very soon. So they must have gotten close enough to be really in a position where they can get them out fairly shortly.
I talked to one of the rescue workers who sort of overseeing various sites here, and he said, bear in mind, the search and rescue operation, it's going to go on for a good, long time, because you can take people out of the rubble still alive on 17 to 20 days after an earthquake such as this. So, even though moments like this are remarkable, because of lives saved, we can hope this kind of story will continue over the next few days, Alina.
CHO: Let's certainly hope so. Diana Magnay, thank you so much for that update from live Turkey.
And too find out how you can help those devastated by the earthquake in Turkey, visit our "Impact Your World" page. You can find it at CNN.com/Impact.
Attorneys for Dr. Conrad Murray now making their case at the Michael Jackson death trial. Among the first defense witnesses was one of Jackson's longtime doctors. He told the jury that Jackson was looking for someone to give him Propofol so he could sleep.
(BEGIN VIDEO CLIP)
DR. ALLAN METZGER, TREATED MICHAEL JACKSON: He asked me about intravenous sleep medicine.
UNIDENTIFIED MALE: Did he happen to mention the name of this medicine?
METZGER: I think he used the word juice.
(EWND VIDEO CLIP)
COSTELLO: The defense is trying to establish that Jackson was shopping for Propofol in the months before he died. The case could go to the jury by the end of the week.
CHO: Also new this morning, Michele Bachmann's camp is trying to downplay claims that her senior staff is downright mean. Yesterday, her entire New Hampshire senior staff, which resigned last week, released a letter, accusing the congresswoman's national campaign of being rude, unprofessional, dishonest, and at times cruel. Her spokeswoman telling our John King it's unfortunate they want to call names.
COSTELLO: You can now add author to the first lady's resume. Michelle Obama writing a book about nutritional and edible gardening. It's called "American Grown: How the White House Kitchen Garden Inspires Families, Schools, and Communities."
The book will be released in April. The first lady accepting no advance for the book. She'll be donating all proceeds to charity.
CHO: Writing a book and sent her first Twitter message last week. Amazing.
COSTELLO: That was kind of pathetic, though. She had to learn how. But she knows, which is good.
CHO: So did I, not too long ago.
(LAUGHTER)
COSTELLO: Coming up next on AMERICAN MORNING: President Obama rolling out new rules to help struggling homeowners refinance their mortgages. But will his plan really help the housing market and boost your home's value?
(COMMERCIAL BREAK)
COSTELLO: Thirty-seven minutes past hour. Good morning.
President Obama expanding the government program to help drowning homeowners refinance their mortgages. The president announced the plan yesterday in Las Vegas, the city with one of the nation's highest foreclosure rates. The administration says the revamped housing program would nix some fees and provide financial relief to hundreds of thousands of borrowers.
(BEGIN VIDEO CLIP)
SHAUN DONOVAN, HOUSING AND URBAN DEVELOPMENT SECRETARY: If you look at the broad population of who's eligible, there are about 4 million families that have Fannie Mae or Freddie Mac loans that are underwater and that could benefit by a refinancing. The average benefit is over $2,500 a year. So, it's a substantial benefit for those families.
(END VIDEO CLIP)
COSTELLO: But one real estate expert tells CNN Money the plan will not help the housing market.
Joining me now with a critical look at the plan, Paul Jackson, who was founder and publisher of "HousingWire."
Welcome.
PAUL JACKSON, FOUNDER AND PUBLISHER, HOUSINGWIRE: Good morning.
COSTELLO: Good morning.
So, help us understand this plan. I mean, who wouldn't want an extra 2,500 bucks a year? But who exactly is eligible? And we have a list of requirements here.
So, I guess your mortgage has to be backed by Fannie Mae or Freddie Mac. You have to have acquired it before May 31st, 2009. You have to be current on your payments. You know, that's -- I think that's pretty strict, though, don't you? Because how many homeowners who are underwater on their mortgage are up-to-date on their payments?
JACKSON: Well, at the end of the day, there are 11 million mortgages that are underwater. And I think as you heard Secretary Donovan mention earlier in the segment, there's 4 million borrowers that might benefit from this. Most of the estimates we're seeing now over at "HousingWire" are about 1.5 million people will benefit from this.
It's certainly a positive. I mean, I don't know how you can say it's not a positive to say we're going to actually help people who are doing the right thing. They are underwater on their mortgage, and yet they're still making payments.
I mean, certainly giving them the ability to access ultra-low mortgage rates is a good thing. It's good for the economy. It's good for the mortgage markets as a whole.
COSTELLO: This program, HARP, the White House originally said it would help 4 million to 5 million people. But it turned out it only helped about 1 million people. This, of course, as you say, it opens it up to more people and takes some of the risk out of it for the banks.
So how many people? I mean, you mentioned a number there. But how many people will this actually help?
JACKSON: Well, the run rate for the HARP program so far has been about 34,000 refinances per month.
Now, most of those have not gone to under water homeowners. Really what I think the change that was announced yesterday will do is allow more under water homeowners to access the program. One of the key changes is that you are allowing borrowers with more than 125 percent LTV to access this program. That's a big change.
But I think the really, really big change, the one that probably -- is probably the largest of all with all the changes made is what's called put-back risk. With the new program, banks don't have to worry as much about buying back bad loans. And that's really what's held the program up to this point in time. So, with the new program guidelines that are announced when they get rolled out, I think you're going to see banks much more willing to lend under this program. And that's probably the biggest change of all.
COSTELLO: Right, because they can take chances because there won't be the same liability there. There are serious some criticisms of this plan. You've outlined some of them. It doesn't help people in foreclosure or people way behind on their payments and it doesn't do anything to reduce what you owe. It just reduces your monthly payment. So --
JACKSON: When you enter into the refinance, I mean what I think people will need to know is, when you get through a refinance with this new program, you're going to owe as much as you did before you get into the refinanced. But like cars, like a lot of other debts I think we face here in the United States, a lot of payment relief can help, especially for performing borrowers, getting an extra $250 a month in your pocket at the end of the day is a plus.
Now, U.S. savings rate I believe is around 5 percent right now. So, certainly with long-term savings rate averaging around 8 percent, what that means is the government is hoping people will spend this money.
COSTELLO: Right. But just to be clear: this program will help some people. But it certainly won't help solve the housing crisis in this country?
JACKSON: It is a good first step. You know, it's kind of -- it's tough to say that it's taken us this longer to take a good first step after all of the missteps I think we've seen from the government thus far, but it's a good first step.
COSTELLO: But what really would help our housing crisis -- I mean, legislation has to go through Congress, and that's not likely to happen. So, we're left out there thinking, well, this is nice, but --
JACKSON: Absolutely. So at the end of the day, you know, this is what the Obama administration can do right now. They can do this without congressional approval. And from that perspective I think everybody, including Republicans, will say this is a good first step.
But the truth is, you know, this is only a first step. There is more that needs to be done. I certainly argued over the past few years that where we have to go eventually is towards principle reduction. But that's going to require congressional action, and as you alluded to, Carol, I don't see that taking place, at least until after the election.
COSTELLO: No. I think you're right about that, sadly.
Paul Jackson, many thanks. We appreciate it.
JACKSON: Thank you.
CHO: We have this breaking news. New video just into CNN of a 14-day-old baby rescued alive from the earthquake zone in southwest Turkey. Take a look at this. The baby pulled from the rubble of a collapsed building earlier today. You have to look closely it see that little girl.
COSTELLO: Teeny.
CHO: Rescuers are working to free the mother and grandmother. They are said to be healthy, incredibly, and this rescue could happen in the next day.
The death toll from Sunday's 7.2 magnitude quake now stands at 366. More than 1,300 are being treated for injuries.
What's remarkable, our Diana Magnay is live there in the earthquake zone and she says that people can be rescued 17 to 20 days after the quake and found alive. And so, hopefully, we'll see much more of this in the coming days.
COSTELLO: A couple more days for the baby's family. But, adults, which is they got the baby out in. More difficult for a baby to survive, obviously, in wreckage.
CHO: And said to be doing fine. Amazing story.
COSTELLO: Yes. So cute.
Still to come on AMERICAN MORNING, our talk back question for you: should the president bypass Congress to help the economy? Huh. We'll read some of your thoughts ahead. And believe me, there are many of them.
CHO: Plus, the two GOP candidates set for a face-to-face debate without the rest of the presidential field. What's that about? We'll tell you.
It's 44 minutes after the hour.
(BEGIN VIDEO CLIP)
JEFF CORWIN, OCEAN MYSTERIES: Hey, guys. I'm Jeff Corwin. I spend about 10 months on the road.
Rule number one, keep it to carry on. That way, if luggage's lost, it's not going to be mine. But everything you need is in your carry-on baggage. So, I bring my vitamins with me. I just prepackaged everything and I have it ready to go. And of course, toiletries. So, I found those things that I use at home just miniaturized for the road.
And I've learned my wife, ladies razors are better for your face than the machos ones. And dental floss, see everyone always brings that stuff. Get this little portable ones. And remember, only floss the teeth you want to keep.
Here's my dirty little secret. I use Secret when I'm on the road.
But I also want to be able to have a functional office and that's what's really incredible now, is that I can be optic ready doing research on whale sharks. I mean, then when I'm done, I can sit down and put my kids to bed.
Hey, guys, thanks for hanging out and seeing secrets to surviving being on the road.
(END VIDEO CLIP)
CHO: Forty-eight minutes past the hour. Here's what you need to know to start your day.
(BEGIN VIDEOTAPE)
CHO (voice-over): Another look at a 14-day-old baby just rescued alive from the earthquake zone in Southeast Turkey. The baby was pulled from the rubble of a collapsed building earlier today. Rescuers are now working to free the mother and the grandmother.
Texas governor, Rick Perry, set to formally announce his economic plan this morning at an event in South Carolina. At the heart of the plan, a proposal for a national flat tax to replace the current income tax system.
President Obama kicks off the second day of his three- day trip to the west coast with a visit to Jay Leno. It will be Mr. Obama's fourth time on "The Tonight Show," his second as president. Later today, the president will be in Colorado for two fundraising events.
Moammar Gadhafi has been buried. An official with Libya's National Transitional Council tells CNN the deposed dictator was laid to rest at dawn at an undisclosed location.
A one-on-one debate planned in the GOP race for president. Herman Cain and Newt Gingrich will face off this Saturday, November 5th, near Houston. The debate sponsored by the Texas Tea Party Patriots will focus on fiscal issues.
And the Texas Rangers have never won a World Series, but now, they're just one win away. The Rangers beat the Cardinals 4- 2, so take game five last night in Texas. Game six. and if necessary, game seven will be back in St. Louis.
(END VIDEOTAPE)
CHO (on-camera): That's the news you need to know to start your day. AMERICAN MORNING is back after this.
(COMMERCIAL BREAK)
COSTELLO: Fifty-one minutes past the hour. Welcome back.
We ask you to "Talk Back" on one of the big stories of the day. We ask you this question, should the president bypass Congress to help the economy?
This from Alessandro, "Isn't there a reason our founding fathers created a separation of powers? Wasn't it to avoid tyranny or monarchy? Constitutionally, the answer is no. Common sense wise, the answer is still no. Bottom line, the last thing we need is an imperial presidency."
This from Robert, "With Congress' 14 percent approval rating and clear inability to function, I think the president needs to lead by example and finally kick it into gear. Our nation's problem is confidence and having a confident president leading will make a huge difference."
And this from Sharon, "I've always said the president can't do much unless Congress let's him. He can say what he wants to do, but the real power is in Congress, and they have -- they have let it go to their heads. Can anyone say term limits for these people? Maybe then they would do their job. If they won't help fix the problems, then go around them."
Keep the comments coming. Facebook.com/americanmorning. Facebook.com/americanmorning. We'll read more of your comments throughout our show.
CHO: Well, it's a bedtime story for a two-year-old that is melting hearts everywhere.
COSTELLO: That's true. CNN's Jeanne Moos reports on a pre-recorded daddy who even manages to hand out cyber hugs.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The sweet farmer Mickey.
JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): It's like reading a bedtime story --
UNIDENTIFIED MALE: Father Mickey wakes at dawn trying to work the whole day long.
MOOS: Only daddy seems to live inside a screen?
UNIDENTIFIED MALE: The hens lay eggs. The cows munch hay.
MOOS: The wife of an airman away from home for basic training posted this video of her pre-recorded husband reading to his two-year-old daughter. It's got everybody talking about how cute it is. The only one who isn't talking is dad.
UNIDENTIFIED KID: Daddy.
UNIDENTIFIED MALE: The sheep that --
MOOS: She was trying to say silly kitty, because mom tells CNN the cat just knocked something off a shelf. Someone posted the dad, better get back home soon or that kid's going to be nearsighted. The adorability factor goes through the roof as the bedtime story ends.
UNIDENTIFIED MALE: Can I have a hug?
UNIDENTIFIED CHILD: Thank you.
MOOS: Talk about a screen grab. Every time her daughter asks to see daddy, mom would play one of several pre-recorded videos, similar to the United Through Reading program. Parents separated from their children, especially military parents, record themselves reading aloud and send DVDs home to the kids.
UNIDENTIFIED MALE: What sound is a lion? Aaargh!
MOOS: Now, pre-recorded story telling isn't as high tech as say a soldier watching the birth of his first child live via Skype.
UNIDENTIFIED FEMALE: OK, babe. Let's go.
MOOS: Since Army Corporal Greg Bacon was in Iraq when his son was born, Skype was the next best thing to being there.
UNIDENTIFIED FEMALE: I'm just so scared.
UNIDENTIFIED MALE: I know, honey. Just keep talking to me.
UNIDENTIFIED FEMALE: This is the moment.
UNIDENTIFIED MALE: Hang on, honey. Hang on.
UNIDENTIFIED FEMALE: Lots of pressure, lots of pressure. It's going to feel really funny.
UNIDENTIFIED FEMALE: You see him?
UNIDENTIFIED MALE: I can see him.
MOOS: He finally saw him in person three months later.
UNIDENTIFIED MALE: Hey, buddy.
MOOS: You may think of cyber space as cold, but this inspired us.
UNIDENTIFIED MALE: Can I have a hug?
MOOS: To have a group hug.
(on-camera): Thank you.
(voice-over): Jeanne Moos, CNN.
UNIDENTIFIED KID: Bye-bye! Bye-bye.
MOOS: New York.
(END VIDEOTAPE)
COSTELLO: That makes me sad and happy at the same time.
CHO: Yes. Just thinking that, you know? It's not the same thing, but I guess, it's better than not having it, right?
COSTELLO: Exactly.
CHO: Yes. The whole birth thing via Skype was a little, freaked me out a little bit.
(LAUGHTER)
COSTELLO: Alina was like, no, she didn't. You have to have a nurse so you can curse at him during the birth --
CHO: That's true, fairly.
(LAUGHTER)
COSTELLO: So, via Skype was better than nothing.
CHO: Anyway.
COSTELLO: Ahead in the next hour, more on that amazing story of a 14-day-old baby girl rescued alive from the earthquake in Southeast Turkey. We will have a live report to show you more. It's an amazing story. You're watching AMERICAN MORNING.
(COMMERCIAL BREAK)
