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YOUR BOTTOM LINE

The GOP Agenda on Health Care; Insurance Open Enrollment Season Brings Big Changes to Employer-Offered Plans; Retailers Hiring for the Holidays; Some Brady Bunch-Size Money Troubles

Aired November 6, 2010 - 09:30   ET

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


CHRISTINE ROMANS, HOST: Everyone's talking about the new Congress, but what about the lame-duck House and Senate? We're talking unfinished business.

Open enrollment is underway. We'll break down the changes you need to know about. And we'll tell you where the jobs are this holiday season.

YOUR BOTTOM LINE starts right now.

Change is the theme of this week, political change. Starting in January, Republicans will control the House and 10 states will shift from Democratic governors to Republican leaders. But before the New Year, the lame duck Congress has a whole lot of decisions to make, including several that could affect your bottom line in a big way.

Jean Sahadi is a senior writer with CNNMoney and Lynnette Khalfani-Cox is a columnist for WalletPop.com.

Lynnette, let's first talk about the tax situation. We have Bush tax cuts set to expire on the last day of this year. We can talk about the new Congress, but this Congress right now has some decisions to make.

LYNNETTE KHALFANI-COX, WALLETPOP.COM: Right. You know, the idea is are we going to extend them or not? And I think we're looking at -- to use a kind of football metaphor, you know, punt or play. What are they going to try to do? Are they going to pass this off to the next one?

I think they're actually going to be incentivized to try to get something done right now. Obviously, you know, the advantage, so to speak, goes to the Republicans, right now. They've got a lot more leverage.

But if you look at what happened already, you had Obama and a number of Democratic leaders coming out saying, OK, let's talk about this. So they're signaling their willingness to either raise the limit they've talked about before, going above that 250,000 or just saying, what should we do and showing a lot more flexibility.

ROMANS: Let's listen to what the president specifically said about this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My goal is to make sure that we don't have a huge spike in taxes for middle class families. Not only would that be a terrible burden on families who are already going through tough times, it would be bad for our economy.

(END VIDEO CLIP)

ROMANS: Less likely then we're going to see -- more likely we're going to see the tax cuts extended for everybody, you think?

JEANNE SAHADI, CNNMONEY.COM SENIOR WRITER: I talked to a couple tax experts, they really expect the end game will be a one to two-year extension for everyone. Republicans can say, hey, we're protecting high-income payers, although they won't phrase it that way. Democrats can say, hey, we can give ourselves some time to save the deficit and think about how these tax cuts will work in a context of those deficits, because it is expensive to extend them just for the middle class it's about $3 trillion over the 10 years.

ROMANS: Also starting to hear people talking about the political strategy of maybe separating out rich people from everyone else. Extensions for everyone, and then in an election year, 2012, you can let the Republicans vote on specifically on millionaires and higher.

KHALFANI-COX: Again, a bit of a punch strategy, put it off for two years and let that become at that point a Republican issue to deal with, potentially.

ROMANS: Let's talk about health care in the GOP because we know that right away -- and on the campaign trail it was all about repeal and replace health care reform, Jeanne. That'd be hard to do with the Democratic president sitting there who could just veto anything, but the idea here is that -- and Boehner and others have said, Congressman Boehner and others have said, look, we want to keep the drum beat up and then maybe when we have a Republican president we would change this completely.

SAHADI: Well, when the health reform law was passed, one of the things people said was, well it's going to need to be tweaked as we go, so in some sense we were going to see changes in the health reform law anyway. And the president yesterday came out and talked about the 1099 provision for small businesses, which is considered...

ROMANS: Remind us of this. I mean, and I've talked about this a little bit. This is if you're a small household business, even for example, you have one person on your payroll, every single person, service that you buy $600 or more, you have to send a 1099.

SAHADI: That's right. So, it used to be something -- for income other than wages to individuals. Now you have to send out a 1099 for any service or good you buy from a company or a person that costs more than $600 a year.

ROMANS: I talked to a restaurant owner, he said, you know how many mozzarella vendors I'm going to have to be preparing tax forms for? It's incredible.

SAHADI: So, I think there might be bipartisan support to change that, but that's the kind of tweak that Republicans are going to say, yes, that's not enough, we want to go farther.

KHALFANI-COX: Sure. On the health care front, I think it's a very risky strategy for Republicans to start talking about, oh, let's repeal what's been put in place so far, for two reasons. One is that this was an enormously contentious issue. And I think there was a lot of voter fatigue over it. And if you talk about bringing this issue up again and stretching it out for two more years, I think you risk alienating some people.

ROMANS: Well, and Republicans also have -- there are some very popular provisions that are already going into place right now, for example -- insuring children 26 and under, also, pre-existing conditions for children, pre-existing conditions in general. I mean, there are popular things in there that you don't want to be the one who says, you know, the good parts of health care reform...

KHALFANI-COX: Are going to be repealed.

ROMANS: Exactly.

KHALFANI-COX: And that's the second risk in this is that the things that are working or the elements that were to rolled out that people actually do like, if you take those away, then you risk alienating those people, as well.

ROMANS: Let's talk about unemployment and jobs, because with 9.6 percent unemployment rate, no matter who's in power, this is still a very big problem here. Jeanne, what's being done? Or how do the new Congress, for our viewers, change their job situation? Or does it?

SAHADI: Well, I think the way the Republicans have positioned it, we're not going to be doing anymore "spending." we're not going to have another stimulus bill. That doesn't mean...

ROMANS: Weren't there jobs related? I mean, I'm seeing teacher jobs go away, I'm seeing municipal jobs go away as the federal money is being pulled back.

KHALFANI-COX: Potentially the energy initiative, the big energy push that President Obama had talked about, which would've required, you know, tens of billions of dollars in additional spending, that will probably go away. It's a fine line we're walking.

But, you know, give it to the voters to say, listen, we -- they voted for change, admittedly, they said we want to see economic progress. And I think this election was a lot about people voting about what's going on with their wallets and feeling like, you know what? I'm seeing my 401(k) go in the toilet or my mortgage is under water, my home is under water, I don't have a job, those kind of issues, and they want the results faster.

ROMANS: It might be, though, that frankly, the unemployment rate could come down a little bit next year. We just don't know. There are some forecasts, CNNMoney has a great forecast this week showing maybe, maybe it could come down in to the eight percent. That could help this administration.

SAHADI: Here's what I -- I actually asked Chris Isadore, who is our economist reporter. I said, Chris, how is the unemployment rate coming down, because it doesn't seem that much is changing? And what economists are saying is that the economy doesn't have to be in high gear, it has to get out of first gear. And there's a lot of cash on the sidelines, both individuals and companies. Eventually they're going to start to spend that. Once they do, that is going to create jobs. Even if companies just pay you a higher dividend if you're a shareholder.

KHALFANI-COX: I saw the same CNNMoney report, and it was just excellent, looking at the prognosis for unemployment two years from now. Best-case scenario maybe seven percent. I saw Mark Zandi saying doesn't necessarily need be seven percent, even 8 percent would be an improvement from where things are now, which would tend to work in President Obama's favor.

ROMANS: Still uncomfortable, but an improvement.

KHALFANI-COX: Exactly.

ROMANS: Lynnette Khalfani-Cox, thank you so much. Jeanne Sahadi, CNNMoney.com, as always, great stuff, Jeanne, thank you.

Election or no election, your health care coverage could change next year, and the time to learn about it is now. Your complete guide to open enrollment, you can't miss this, next.

(COMMERCIAL BREAK)

ROMANS: All right, open enrollment season officially underway and there are big changes you need to know about today. Andrew Rubin is with NYU's Langone Medical Center and the host of "Health Care Connect" on Sirius XM Doctor Radio.

Andrew, what better person than you do help me do this, because I look at the forms, my husband looks at his, we have to decide what to do, very big changes. What should you do first?

ANDREW RUBIN, NYU LANGONE MEDICAL CENTER: Well, I say it every year and I do it myself and it takes time, you got to read what your employer's offering. It's most likely has changed this year. Your co-pays have changed, your deductibles might have changed, your co- insurance has changed and you're probably going to be offered more than one plan choice. So, make sure you're looking at your choices so you understand what you're actually picking.

ROMANS: Good advice, right there, consider an HMO, stay in network whenever possible.

And also, let's talk about the second thing here, wellness plans, preventive care plans. Don't just disregard those, you need to sign up for those.

RUBIN: You not only need to sign up for them, but more employers are offering them this year. I've looked at three employee plans for several friends of mine and they all have this provision.

And if you participate in the wellness program or go get your free screening, if you want to call it that, you actually get a lower premium for yourself in the coming year. So you want to take advantage of it if it's being offered and it's good for your health.

ROMANS: And we need to do everything we can to get our part of the health care costs down. We know they've been rising. Health care reform is not going to change that. your portion, what you're paying for your health care, folks, is still rising. That's another big thing why people use flexible spending accounts. But flexible spending accounts have very big changes, very big changes. If you count on this to lower your health care bill, listen up.

RUBIN: Well, there are big changes. But first I want to say, most people still don't use them. I don't use one.

ROMANS: You don't use one?

RUBIN: I don't use one and I need to and I'm actually doing it this year. And I'm switching to an HMO this year to lower my costs. But flexible spending rules change in that you can no longer buy over- the-counter medicines with your flexible spending account dollars. So, that's a big change this year for a lot of people.

That being said, you can still, all your prescription drugs, all of your health care expenses that aren't covered by your insurance company can still be used with flexible spending account dollars, and that's tax-free money.

ROMANS: What about over-the-counter kids medicines? Over the counter Tylenol, ibuprofen, that kind of stuff?

RUBIN: Over-the-counter medicines are no longer allowed to be used unless they're prescribed by a physician, so your pediatrician may actually say, you know what? I want you to take children's Tylenol, you need a prescription and then get the prescription.

ROMANS: When you're doing the paperwork with your insurance company, if you say, no, look, my doctor says I have to have this. I mean, a lot of people have e-mailed me about this and they're very upset because to them, to really smart planners, it's like a tax increase to them.

RUBIN: It is.

ROMANS: They have worked this out to where all the saline solution, the aspirin, the vitamins, all of this is something they use pre-tax dollars to pay for, they're not going to be able to do that anymore.

RUBIN: That's exactly what it is. The money's going to be used to fund health care reform.

ROMANS: You folks in health care always tell me about negotiating in health care -- negotiate, negotiate everything's on sale, it's a service, doctors and hospitals just like everyone else want your business. How do you negotiate?

RUBIN: All right, well, first of all, there are a lot of rules and they varying from state to state, federal, you name it. So you have to make sure you're negotiating within the framework. The area you can negotiate most often is when you're paying for things out of your own pocket, so first you have to know the rules and the provider has to know the rules. But if there's an opportunity to negotiate, all you have to do is ask. So, there are a lot of non-covered services, for example. Just pick one, call the hospital, call the doctor and say, listen, I can't afford this, or I can't pay you the full amount, can I have a discount? More often than not, they'll say yes.

ROMANS: All right, Andrew Rubin, thanks so much for great advice. Go with an HMO if you can, pick generics, take the wellness plan if they offer it, but first and foremost read all that stuff about open enrollment because it's incredibly important. Great advice. It's why, frankly, I trusted you so much for writing my new book "Smart is the New Rich." Thank you. I thanked you in the book, but thank you again for everything. We'll talk again very soon.

RUBIN: Happy to do it. Good information.

ROMANS: All right, your job or the lack of one has the biggest effect on your bottom line, but there are jobs to be found this time of year. We'll tell you where they are, how to get one, that's next.

(COMMERCIAL BREAK)

ROMANS: Retailers cut to the bone and they're expecting people to come out shopping for the holiday season. That means they've got to add jobs and quickly. Retailers actually expected to add 600,000 jobs this holiday season. That's according to outplacement firm, Challenger Gray & Christmas. We want to get you going on landing one for yourself or form someone you know. How to get one of those jobs and more importantly, how to make it permanent, stay in the company if you want to. Charles Purdy is the senior editor at "Monster HotJobs" in San Francisco.

Charles, welcome to the program.

CHARLES PURDY, MONSTER HOTJOBS: Thank you.

ROMANS: Watching a lot of these announcements day after day of companies that are hiring, some of them even using Twitter to put out hiring announcements to get people in to apply for these jobs. You can make this a permanent entry into a company if you're smart and nimble, right?

PURDY: Absolutely. About 20 percent to 40 percent can transition into full-time. And a lot of companies do make temporary hires as sort of a first step while the economy is slowly lurching back to life to making long-term hires, yes.

ROMANS: And we do know that they have cut to the bone as the consumer became more frugal and more scared over the past couple of years. You say think beyond your traditional retail mall job and the Santa Claus job. Tell me how.

PURDY: Absolutely. You can also think of industries, other industries that get busy during the holiday season. That could be anything from personal services like limo companies, babysitting services, beauty salons. But also, if you have basic office skills even, look to temporary staffing agencies. A lot of industries have end of year crunch periods a lot of offices also have workers who want to take extra time off during the holidays. So an entry level sort of office job can be a great way not only to make ends meet during the holiday, but also to gain entry and network with people at a new company.

ROMANS: So how do you get the job? Because I'm assuming they're getting an awful lot of applicants who have very similar-looking resumes. How do you stand out and get that job?

PURDY: You know, I recommend customizing your resume for any job you apply for, especially at the holiday season. For instance, if you're going for a retail job and you don't have a lot of retail experience, look to similar qualifications or experience on your resume. For instance, if you haven't had a lot of customer service, you can maybe relate that to dealing with clients or teamwork you've done at your past jobs.

Another way that holiday hiring is different is that the hiring process is a lot shorter. It really does pay to put on your interview suit, make some copies of your resume, and knock on doors, go to the mall and ask people if they're hiring. Go to that temporary staffing agency all dressed up in your interview suit and be prepared to start work soon.

ROMANS: And the regional manager might be right there when you walk into the store and might say, yes, I do need you and for crying out loud don't say you can't work thanksgiving, I don't want to work Christmas Eve, because if you want one of these retail jobs, you better be ready to stand up and stand out. And what I often tell people is right away tell them, hey, I'd like to parley this into something long term, if necessary. What's your advice to making that retail temporary job or the temporary holiday job stick into the New Year?

PURDY: That's definitely true. You not only have to do a good job but also do a great job. Volunteer to do extra tasks, make it clear you are willing to do new things. Speak not only to your supervisors, but also to their supervisors and the HR department about your will willingness so you become known as someone who wants to achieve.

And keep in mind that this fulltime job may not manifest right after the holidays. It may be something that comes open a few months down the line. So when you leave a temporary job, make sure to add your supervisors and colleagues and HR people to your professional network, whether that's via LinkedIn or wherever you keep track of it.

And finally, keep in mind that even if it doesn't turn into a fulltime job, a temporary job can add great things to your resume. Leave with a great reference letter and really sit down and think about the new skills and now achievements you've made so you can speak about them in your next interview.

ROMANS: Two very good points there: Leave with a reference letter and make sure you put those superiors and colleagues on LinkedIn or whatever your social network is so that you can keep networking. Those are two very good pieces of advice.

Charles Purdy, senior editor of Monster + HotJobs in San Francisco, thank you, sir.

Up next meet the real-live Brady Bunch, but with big money troubles. Hear their story and you might just be inspired to make some changes in your own house.

(COMMERCIAL BREAK)

ROMANS: Todd and Laura Bruce are the modern-day Brady Bunch family, but they're broke. The blended family of nine got a rude awakening when they went from expensive dinners, vacations, golf outings and summer homes to having two homes in foreclosure, filing for bankruptcy and living on food stamps. But instead of hiding their trouble, they've put it all out there for the camera.

The family is the subject of the new WEtv series "Downsized" premiering tonight at 9:00 p.m. I recently sat down with them and asked them their situation, what it says about the experience of so many families trying to stay financially afloat.

(BEGIN VIDEOTAPE)

TODD BRUCE, DOWNSIZED: Well, I think the main thing is that you can get through it, you can survive, and if you all stick together, then you will make it. That's really, I think, the bottom line. It's not -- I don't think we're much different than anybody else out there and we're definitely not the worst off, but we did learn how to keep everything together and attribute to the kids.

DYLAN RUMSEY, LAURA'S SON: Well, plus the main focus was that money doesn't buy everything. It's about family, too.

ROMANS: Let me ask you about digging out of debt. What's the hardest thing about giving up for you?

REX RUMSEY, LAURA'S SON: Definitely having to give up sports and stuff that we all love and all like to do and just having to make that sacrifice to save money is hard for us all.

ROMANS: What about you, Danielle?

DANIELLE RUMSEY, LAURA'S DAUGHTER: Well, I think giving up sports because I'm not old enough to play school sports, so that was kind of the end for me. And I think about the house situation because like we built everything and it was really special.

ROMANS: Was that a huge expense, the whole family and all the sports?

T. BRUCE: Yes. The three boys at one time all played travel teams, would play together depending on their age. And, you know, we could drop $500 in the weekend just entry into the park and food.

ROMANS: But then the economy crashed, and so suddenly you couldn't support that anymore. How did that feel?

T. BRUCE: Kind of inadequate, I think, is really the way for a male to relate. You just don't feel like you're being able to provide the things that you wanted to or that you should be able to provide for the kids.

LAURA BRUCE, DOWNSIZED: I had a lot of guilty. I mean, as a mother I think that's a difficult thing that mothers feel but, you know, I just felt, you know, I brought them into this world, of course, parents want to provide their kids with everything they can. I felt like they should be able to do those things. They were positive things.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It's a food card.

UNIDENTIFIED FEMALE: OK, it says over limit here. You only have $2.10.

UNIDENTIFIED FEMALE: Two-ten?

(END VIDEO CLIP)

ROMANS: Tell me about the food stamps.

You went to, one day, the grocery store with the debit card and you -- there wasn't enough money on that. Tell us what that's like that whole process of going out to eat whenever you wanted to now that you've got a debit card with government aid on it.

BAILEY RUMSEY, LAURA'S DAUGHTER: Yes, it was a huge transition and stuff. And like, just going -- that grocery store, everybody who I knew worked at it, like my whole school is basically there. And it wasn't the food card itself that was that embarrassing. It was like that on top of like not even having enough on the food card to pay for it.

L. BRUCE: We weren't only on food stamps, we ran out of the money on the food stamps.

B. RUMSEY: So it was like hard at the moment, but looking back, like we laugh about it now and stuff.

ROMANS: So somebody's watching us right now who's broke and really upset and doesn't know what to do next. What do you hope that they can see in the show and come out with?

B. RUMSEY: I think that family is like the No. 1 thing in life and if you have your family like, that's all that counts.

ROMANS: Do you want to grow up and not struggle with money? I mean, have you made the determination that you don't want to go through this again?

LEVI BRUCE, TODD'S SON: Yes, I wouldn't want to go through this it's just I learned through all the mistakes we made and try not to do those when I'm older.

ROMANS: You said something interesting in the first episode. You said you used money to pull this family together by buying things and going out places and doing things. It was the money that was sort of the grease that got these wheels all going that got you all to pull together. Well, now the money's gone, how well do you think the family stuck pretty nicely, right?

T. BRUCE: Oh yes. It allowed us to go as a family and have that golf membership and do those fun things. I mean, we didn't have a yacht in the backyard and things but we did, we got to go eat around a round table where somebody else brought your food to you and have conversations that, you know, we still have when we're cooking but you create a different atmosphere.

DYLAN RUMSEY, LAURA'S SON: When we got broke, our family could have split. Like it could have been so much stress, but instead we all came together and tried to make it like happen. Like if we need spare money, we'd give it to them.

L. BRUCE: But more than anything, you know, nobody expected this to happen. I didn't expect this to happen, so to me it's a lesson in that gratefulness part. Just everybody be appreciative of what you can do in your life and everyday is a blessing.

ROMANS: Thank you, guys. Appreciate it.

T. BRUCE: Thank you.

L. BRUCE: Thank you. Thank you.

(END VIDEOTAPE)

ROMANS: And a lesson they say in saving, they lived to the max and then some. They had no savings and then when the economy crashed it left them with nothing to fall back on. They're rebuilding piece by piece, now.

That's going to wrap up for us for us, but don't forget to tune in to YOUR MONEY today at 1:00 p.m. Eastern for a look at how the new Congress and the decisions it might make could affect your bottom line.

Time now to send it back down to CNN Center for more CNN SATURDAY MORNING and this morning's latest news with my friend, T.J. Holmes.