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CNN Saturday Morning News

White House Planning a Way to Stop the Next Financial Meltdown; Protecting Your Wallet; Fighting Continues Between Insurgents and Iraqi Security Officials; Democrats Busy Campaigning Before Pennsylvania Primary

Aired March 29, 2008 - 09:00   ET

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

T.J. HOLMES, CNN ANCHOR: We got some big news on the economy this morning from that place, coming out of the White House. Yes, a new plan that will impact Wall Street and possibly your wallet. The goal is to stop the next financial meltdown from tanking the economy. We've got all the details for you.
BETTY NGUYEN, CNN ANCHOR: And a big ordeal for such a little kid. He gets stuck in a well and his father then comes to the rescue. That hero dad is going to join us live.

Good morning, everybody, from the CNN Center right here in Atlanta. We do thank you for being with us. I'm Betty Nguyen.

HOLMES: And hey there, everybody, I am T.J. Holmes. Let's get started this hour.

NGUYEN: First, a money industry makeover. The White House trying to prevent a future financial meltdown from dragging down the economy.

HOLMES: The administration proposing a major overhaul in how the nation's financial industry is regulated. The changes could affect everything from your bank to your mortgage broker to your investments.

Let's get to our Jennifer Westhoven, she's in New York. All right, I know there's a lot here, so let's try to break this down. And see what's possible for people?

JENNIFER WESTHOVEN, CNN CORRESPONDENT: Yes.

HOLMES: And on the surface here, what does it mean?

WESTHOVEN: Well, this is a really huge sweeping overhaul of all the companies that are essentially watching all of our money. It's a complete revamp of who's watching Wall Street. The systemic failure that led to the mortgage meltdown has been dragging on the economy. So there's a lot of agreement that the current system is failing us.

So, what this new White House plan would do is set up a new mortgage commission to iron out different rules across the country. It would consolidate the hodgepodge of agencies. It gives the Fed new powers, but the Fed only gets to use these powers if it believes that a firm is in such bad shape that it's threatening markets. So, really part of the surprise here is that it's actually less regulation in some cases, I mean this is going to be a big fight in Washington because I think a lot of people would be expecting more regulation right now so this could take years.

HOLMES: Oh, could take years, great, Jennifer.

WESTHOVEN: Yes.

HOLMES: Well, if it's coming out right now and of course they just didn't put this together in response to what we've been seeing with the economy and with the markets and with mortgage crisis, so are they still putting it out for political reasons maybe to at least give the appearance that they're trying to do something about the current situation?

WESTHOVEN: Well, I think the political reason is that there's this fight over what do we do? There's agreement that we got to do something, but what? And the Republican side wants to make sure that they put out something that's more agreeable to Wall Street, shall we say. Now, there is a key provision in this about a mortgage agency, a new mortgage agency, but really -- you know, so that's something that affects us right now.

But a lot of this sweeping overhaul really doesn't have anything to do necessarily with the current crisis. It's a broad plan and it's likely not going to go down well with Democrats, right? We know they now control Congress. Both sides want this change. But Democrats want far more aggressive change. So this is really about politics, right? It's like watching sausage, you don't want to see it.

HOLMES: You don't want to see it being made. And I think you answered this in the last thing that you just said, but people listening to this, wake up to this big financial story, the federal government proposing this sweeping overhaul, to change how everything is taken cared of. So people are going to hear, oh that must mean some changes are coming my way. But for people, are they going to see anything happen any time soon if we're talking about years before this thing is agreed to?

WESTHOVEN: Well, in some ways the government wants to know that your money is in safe hands. They want you to feel like you can trust it, especially after people saw these upsetting headlines about Bear Stearns and what they're trying to do is make it so that you don't see headlines like that in the future. That the Fed gets these greater powers to catch a problem before it snowballs into a big problem for the market. And not just the stock market, but for lots of companies and for all the costs that we all face every day.

HOLMES: All right. Jennifer Westhoven. We're sorry to get you out of bed on your Saturday, on your weekend but man, it's good to have you with us.

WESTHOVEN: Thanks, I was glad to get up.

HOLMES: All right. Thank you so much. NGUYEN: She says that now. Play to us on a regular basis.

In the meantime, protecting your wallet in this struggling economy. Our personal finance editor Gerri Willis has this week's tips from the top.

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi there, Betty.

No matter how bad the economic news gets, there are things you can do to insulate yourself. First, Uncle Sam is going to be mailing out rebate checks in May if the last two digits of your social security are in the lower digits, you'll get your check sooner.

Now, while the government may want you to spend that check, your best move, pay off your credit card bills. You may also want to make an extra mortgage or car payment. Now, while it may not sound like much fun, you can also put it towards your emergency fund.

Now, knowing where to go to get cash in an emergency is half the battle already. If you have enough equity in your home and that's a big if nowadays, you may be able to take out a home equity line of credit. With a home equity line, you'll be approved for a specific amount of credit depending on the equity you have in your home. And you can borrow from this line of credit if you need it.

Now, you may be allowed to deduct the interest because the debt is secured by your house. And finally, remember, all economies have their ups and their downs and a recession is just part of a cycle. If you have money in a 401(k) or a mutual fund, keep it right there.

Coming up on "OPEN HOUSE," why some middle class families are showing up at food banks. Plus, we're talking loans, debt, even retirement, important answers to money questions from college students and a very creative way to teach your children about money.

That's "OPEN HOUSE," 9:30 a.m. Eastern -- Betty.

(END VIDEOTAPE)

NGUYEN: All right. Thank you, Gerri.

And coming up tonight, how the American dream has turned into a real nightmare for so many. A CNN Special Investigation's report, "Busted! Mortgage Meltdown." That's at 8:00 p.m. Eastern, only on CNN.

HOLMES: Well, renewed fighting this morning between Iraqi security forces and insurgents in Baghdad, Sadr City. Iraqi officials say dozens have been killed in four days of clashes with hundreds wounded. More rockets and mortars fell today in the capital's International Zone. That's the area you'll remember once called the Green Zone.

Our Kyra Phillips are watching all these developments in Iraq. There had been a lot of developments. She joins us now from Baghdad.

And Kyra, it seems like things were going well, relatively speaking, with the ceasefire and the things were working but what has happened now? It seems like a little bit of hell has broken loose.

KYRA PHILLIPS, CNN ANCHOR: Well, that's probably putting it mildly, T.J. I mean, even when the curfew was put into place, we thought things were going to calm down, settle down a bit. But it hasn't made a difference. I mean, in parts of Iraq, obviously the streets are very quiet. It's a little bit eerie but the violence as you've seen has still escalated and it's still is in a majorly Shia neighborhoods.

Just to bring you up to date right now, the Iraqi national police, this is just one more thing to add to the situation. 40 of these officers have actually turned in their uniforms and started supporting the Mehdi army. You know, the army run by Shiite cleric Muqtada Al Sadr. That's one of the fascinating things to watch in this battle. It is just the corruption and the change of force depending on who's influencing you.

And this has been a tremendous problem in Basra and now we're seeing it happening in the middle of these clashes. Also, you remember yesterday, the attacks on the International Zone, not only yesterday, but also the past couple of days. Again this morning more rocket and mortar attacks on the IZ, not only on the office of the Iraqi vice president yesterday, but now right into, close to buildings run by Americans, U.S. forces and also the Iraqi parliament.

Now diplomat employees have been told to stay inside, take cover, state department employees as well. Everybody's still under an intense curfew -- T.J.

HOLMES: That is a disturbing thought to think that some of these Iraqi police as you said who have been outfitted and been trained and been armed by the U.S. Army now switching sides like that.

Talk to us also about what's been happening in Basra and other areas where the U.S. and President Bush really hailed at Iraqi forces were taking over so much of this fighting but Americans have had to get involved. How many involvement, or Americans and American military involved in some of the fighting going on now?

PHILLIPS: Well, this campaign started out as an Iraqi campaign, strictly an Iraqi campaign. And the President said Nuri Al Maliki, Iraq's Prime Minister is making a bold move here. This will show how he can take control of his country and secure his country.

But as the violence escalated and we started to see the protests and the killings that were happening throughout areas of Iraq. The U.S. had to increase its support. You know, they always support Iraqi forces from the air and on the ground when necessary, when Iraqi forces say they need help. But it's escalating. They're getting involved more. They've been dropping bombs, from the strike fighters, particularly in Basra. They say that they've been taking out militia strong holds and the U.K., the British forces also involved in helping. So, it will be interesting to see how all this turns out because it will be a defining moment on what's going to happen next in this war in Iraq -- T.J.

HOLMES: A defining moment and certainly some progress there for the military, Iraqi military, but still obvious they're not ready to do this on their own just yet. Kyra, we appreciate you. We're going to be talking to you again in our 10:00 hour. We'll see you then and thank you so much.

PHILLIPS: OK.

NGUYEN: In the meantime though, we want to get you to some presidential politics now. Hillary Clinton determined to prove that she is a fighter not a quitter and Barack Obama trying to convince voters in Pennsylvania to get on board his campaign.

The Pennsylvania primary just a little more than three weeks away and CNN's Jim Acosta is with the CNN "Election Express" in Philadelphia.

Jim, I got to ask you about this because we just heard it within the past few hours, overnight in fact, that there's been calls from some prominent folks asking Senator Clinton to drop out?

JIM ACOSTA, CNN CORRESPONDENT: That's right, Betty. Perhaps one of the most prominent Democrats to come forward so far, Vermont Senator Patrick Leahy, an Obama supporter and superdelegate urged Senator Clinton to get out of the race yesterday.

Clinton has said -- she's reacted to this saying that while this is part of a pattern coming from the Obama campaign, every time she starts making this a competitive race, one of the Obama supporters comes out of the wood work and suggests that she should drop out. But Leahy says no, that's not the case. He is arguing that Clinton is mathematically in a very difficult position in terms of securing this nomination.

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), VERMONT: I said that she has every right, many would argue not a good reason, but every right to remain a candidate as long as she wants to. But as long as there are two candidates fighting for the nomination when it's obvious which one is going to win, all that does is to help the other party's nominee.

(END VIDEO CLIP)

ACOSTA: As for Barack Obama, he picked up a very important endorsement yesterday, Senator Bob Casey who has said he was going to stay out of endorsing anybody in this Pennsylvania primary instead decided to come out and support Barack Obama, endorsed Barack Obama.

Casey, whose father was a very popular governor in this state, is himself very popular with blue collar and Catholic voters. Casey is a pro life Democrat and the Obama campaign is looking to Casey to help him win over those blue collar workers and Catholic voters who are very crucial to winning this state. Catholics make up some 30 percent of the electorate in this state.

And speaking of those blue collar workers, Barack Obama was campaigning in a sports bar. This is all part of his bus tour across the keystone state which is going to last for some six days moving from west to east. Speaking of that bus, Barack Obama has also picked up the sport of the bus, Jerome Bettis, the ex-Pittsburgh Steeler who remains very popular in this state -- Betty.

NGUYEN: We'll I know that has anything on the Election Express bus but we'll talk about that later. in the meantime, where's McCain today?

ACOSTA: Well, John McCain, he is out there trying to remind voters that he is very much in this race and as a matter of fact yesterday he released his first general election ad post securing this nomination and the election, the ad I should say reminds voters of McCain's war record, the fact that he was a war hero, a prisoner of war in Vietnam and the ad uses the phrase he is the American president Americans have been waiting for.

So the McCain campaign trying to get the message across the voters that while the Democrats are beating themselves up over here, by the way, there's a war hero you can support in this race -- Betty.

NGUYEN: All right. That's how it's shaping up so far. OK, Jim Acosta joining us live today. We do appreciate it, Jim.

So, is party infighting hurting the Democrats? We've been talking a little bit about that. You can tune in to "BALLOT BOWL" though today at 2:00 p.m. Eastern to give you a lot more. Also it's going to give you a chance to learn about the candidate's plans and in the candidate's own words. CNN is your home for politics.

Well, he's doing quite well considering his fall down a well.

HOLMES: Yes, a little boy, rescued by his dad. We're going to be talking to the dad about the ordeal.

(COMMERCIAL BREAK)

NGUYEN: Well, a couple in Sanford, Florida just happy to have their one-day old baby back this morning. Police say the newborn was abducted from a hospital yesterday and they say a woman managed to smuggle the baby out by putting the child in a tote bag.

That's 39-year-old Jennifer Latham there. She was arrested shortly after the alleged abduction. She was pulled over by police in nearby Lake Mary, Florida. Official says hospital alarms indicated that the baby had been removed from the newborn unit and police say the baby was unharmed. So, back with its parents today.

HOLMES: All right. They're little, but they can be quick, you turn away for a few seconds, you turn back and your child is gone, maybe in danger. An Iowa dad heard the screams of his three-year-old after the son fell into a neighbor's well and the dad had to jump in after the boy.

(BEGIN VIDEO CLIP)

MATT CHUMBLEY, FATHER: When my head came out of the water, I already had his out of the water. And he was looking at me crying saying, "Daddy, Daddy help me."

BETH CHUMBLEY, MOTHER: They were soaking wet and had junk all over them.

(END VIDEO CLIP)

HOLMES: Well, he had junk all over him but he was checked out and other than the bumps and bruises, he was doing just fine. This is certainly a scary story with a happy ending here. And the dad, Matt Chumbley, is on the phone with us from Weldon, Iowa.

Sir, thank you for being here. Glad everything worked out, but tell folks just exactly how long you turned away and had your eyes off your little man before he was gone?

M. CHUMBLEY: Well, it was 20 seconds.

HOLMES: That was it?

M. CHUMBLEY: And he was gone.

HOLMES: I have to ask you here, man, what did you think when you turned around and didn't see him? Did you have to wait to hear him to realize where he was?

M. CHUMBLEY: I had an idea, but when I heard him, I knew for sure.

HOLMES: What did you hear? What were those screams like for a dad?

M. CHUMBLEY: Terrifying. Terrifying. There's no way to put them into -- I, it was just terrifying.

HOLMES: And, sir, were you aware of the well before this? I'm sure you might have been, at least, and you would be warning him about it.

M. CHUMBLEY: Right. But it's just something that you didn't think about. You know, it was something that was there, but it was something that just doesn't cross your mind until something happens.

HOLMES: Now, he has fallen into this well. There was some stuff covering the well, I believe, but he, I guess, stood on top of it and a few things gave way and fell down there. You look down and what -- there was water down there as well. He was managing to stay above water though, is that right? M. CHUMBLEY: Correct. He was floating by to be quite honest with you.

HOLMES: Then, you had even more problems as you were trying to clear off the other stuff from the well something fell.

M. CHUMBLEY: Yes, concrete block fell and hit him and took him under the water.

HOLMES: Oh, my goodness.

M. CHUMBLEY: And when that happens, I just reacted.

HOLMES: And you reacted and jumped down in there certainly no concern for your own safety. It could have been dangerous there. You jumped down and -- what happened when you got down there?

M. CHUMBLEY: I just -- I jumped in and took a couple of deep breaths and just started swimming down feet first and feeling around and I felt something and it kicked me. And it was him.

HOLMES: Well, sir, once you get him, I know he was screaming and crying and still, how do you manage to get out of there? It's kind of a long fall, how did you manage to get out of there with him?

M. CHUMBLEY: Just adrenaline and just -- I don't know.

HOLMES: But you managed to climb your way out.

M. CHUMBLEY: We just -- we worked our way out of there. It was me and him. I just laid him on my stomach and just tried to walk up the sides of the well with my shoulders and my feet and we just got out of there.

HOLMES: Well, sir, we certainly a cautionary tale here for so many other parents and I know you know it, and all parents know it, but it happens every now and then, you take your eye off them for a second and something like this happens.

But certainly a cautionary tale but everything worked out here. Mr. Chumbley, Matt Chumbley, again whose son, three-year-old Ayden there as we're seeing, cut up a little bit, but he's all right.

Sir, thank you. The best of luck in his recovery with those bumps and bruises but we're glad everything worked out. Keep an eye on that boy, all right?

M. CHUMBLEY: Thank you so much for your concern.

HOLMES: Thank you, sir.

NGUYEN: What a story there. And you can hear the father being really choked up about it. I wonder if it's just because, you know, now that the emergency is over, it's really kind of sinking in that he could have lost his son in that well. It's a good thing that he didn't. HOLMES: Glad this one worked out.

NGUYEN: Yes. Absolutely.

So who's in their family tree? We're going to shake down the branches between presidential candidates and famous Americans.

(COMMERCIAL BREAK)

HOLMES: All right, Hillary Clinton and Angelina Jolie. They're actually related.

NGUYEN: Get out of here.

HOLMES: It's common knowledge, really.

NGUYEN: No, it is not.

HOLMES: Barack Obama related to President Bush.

NGUYEN: You can see Barack and President Bush?

HOLMES: There's no doubt. They're the spitting image of each other.

NGUYEN: OK. CNN's Kate Bolduan has been shaking the branches on the candidates' family tress. She joins us now from Washington.

Kate, as we even think about the relationship here, the big question is how in the world did you get from point a to point b. Clinton to Jolie? Obama to Bush?

KATE BOLDUAN, CNN CORRESPONDENT: These researchers they showed us kind of how the family tree would shake down. I mean, they admit they are distant connections clearly, but very interesting nonetheless. And you mentioned a couple of them but you would never think that Hillary Clinton is related to Camilla Parker Bowls or Barack Obama is related to confederate general Robert E. Lee. But those are just some of the unusual connections that we found in the three presidential contenders' past.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: We got some big problems that are going to be left behind by this Bush administration.

BOLDUAN (voice-over): Barack Obama is so critical of George Bush you wouldn't guess they were cousins, but they are. Tenth cousins once removed. A new genealogy study shows with a common ancestor in Massachusetts in 1662. Some other unexpected connections, John McCain and Laura Bush are sixth cousins. Hillary Clinton and Angelina Jolie are ninth cousins twice removed and Barack Obama and Brad Pitt are ninth cousins.

OBAMA: You know, when they do these genealogical surveys, you're hoping that you're related to somebody cool. BOLDUAN: Senator Obama already learned one of the names on the list a few months ago and did not sound too pleased.

OBAMA: Paul Revere, somebody but Dick Cheney, that's a letdown.

BOLDUAN: It turns out, Obama is also distantly related to five former presidents, Bush, Ford, Johnson, Truman and Madison. But that's not unusual says one of the researchers.

CHRIS CHILD, NEW ENGLAND HIST. GENEALOGICAL SOC.: If you can trace them back say 400 years, it's not particularly surprising to find these interesting connections. People come into our library all the time and we do find say a half dozen presidential connections.

BOLDUAN: Senator Clinton is distantly related to Madonna, Celine Dion and Alanis Morissette. A spokesman for Hillary Clinton tells CNN, "You'd think with all that singing talent in the family, she'd be able to carry a tune, but now it makes much more sense how she snagged a Grammy."

But will these discoveries have an impact on the campaign?

CHILD: Well, these connections are 400 years ago, so I don't think they should necessarily have an impact on votes.

(END VIDEOTAPE)

BOLDUAN: The researchers say they had a little less luck tracing John McCain's lineage, because as they say, in certain parts of the country, particularly in the south, record keeping wasn't as consistent years ago.

NGUYEN: Well, I'm still kind of wondering how these connections were made. I mean, how trustworthy is this science? But you know, a lot of people really are interested. Who knows, maybe we're related, Kate, you never know, right?

BOLDUAN: I would love to be related to you.

NGUYEN: Same here.

So, folks are interested in finding out where that family tree goes, how can viewers get in on this?

BOLDUAN: I did ask the researchers about that. And they say, you know, if you give them a call, it takes them at least a few days to get things together.

NGUYEN: Just a few days?

BOLDUAN: They said they can do at least a very on the surface search in a couple days. As we mentioned, it's called the New England Historic Genealogical Society. You can call them. They're in Boston. You can go into their library. They can give you a tutorial on how to kind of search your records. Of course, it's based on birth records, marriage records and death records. So, it's kind of the things that they'll look at.

NGUYEN: Very good. All right. Kate Bolduan, joining us live. I'll see you at the family reunion.

BOLDUAN: I look forward to it.

NGUYEN: Take care.

HOLMES: I'm actually related to Snoop Dogg and Wolf Blitzer.

NGUYEN: You are not.

HOLMES: Seriously.

NGUYEN: You wish.

OK. A real treat ahead though, we have this for you.

HOLMES: The signs of spring coming up next.

(COMMERCIAL BREAK)

NGUYEN: How pretty is that.

HOLMES: It's always -- have you ever been up there for that?

NGUYEN: Never been there during the season and I always miss out, but look at that.

HOLMES: I haven't either.

NGUYEN: People will travel, you know, from here and there just to make sure they get there for the cherry blossoms.

HOLMES: Well, yes. Spring has sprung, and this is the nation's capital, of course, with the festival.

NGUYEN: It is that time of year and as you can see, people are out taking the pictures. And what a beautiful sight it is on a Saturday morning.

HOLMES: I'm sure we'll get more shots of that throughout the day and throughout the -- how long does it go, the festival?

NGUYEN: You're asking me?

HOLMES: Yes, you haven't been, I haven't been. We should.

NGUYEN: Reynolds Wolf may know.

HOLMES: He'll know.

NGUYEN: We'll get to him in a little bit. But don't blink though, because cities across the world, they are turning off their lights. Now, we want to be clear, they're not shutting down the electricity ... HOLMES: Yes.

NGUYEN: ...they're just turning off the lights, you know, in downtown, the skyline, to help raise awareness about climate change.

HOLMES: We'll be talking about that. But first, "OPEN HOUSE," Gerri Willis, starting right now.

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