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YOUR BOTTOM LINE
America's Ailing Public Education System; Health Care Reform Heads to the Supreme Court; Cheaper to Buy A House Than to Rent
Aired March 24, 2012 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, HOST: Many of you have told us the state of public school education is an embarrassment. A new Council on Foreign Relations study comes to an even more alarming conclusion. America's ailing public education system jeopardizes U.S. national security.
Sunny Hostin is CNN's legal analyst, a mom of two kids. You know, Leigh Anne Toughy is the mom from the movie "The Blind Side." Joel Stein is "Time" magazine contributor, dad to an almost 3-year-old son.
This report, led by former secretary of state, Condoleezza Rice, and former New York City chancellor of the schools, Joel Klein, found that our position as a world leader, our physical safety in this country, are at risk. Dropouts can't get into the military and as a nation we lose out on having a top educated workforce. We recently heard the same thing on this program from Alma Powell, she came on back in October to talk about the dangers of dropout rates to the military and to the economy.
Leigh Anne, worrying about dropouts, though, in high school, that's worrying too late. We should be thinking about crawl through K education, in my view, right? I know that your foundation is very into this. You're really getting kids young.
LEIGH ANNE TOUHY, MOTHER OF NFL PLAYER: Well, I mean, I'm a huge advocate of education, not only through our foundation, but through our business, through our Taco Bells. I mean, we employ several thousand people and it is very important to us, Sean and myself, that you know, they receive the best education possible because they are our future, that is the future of America, that's the future of our workforce. And it is just very, you know, we got to get it right. You know, we're missing on several cylinders and it's something that needs to be corrected, it needs to be corrected immediately.
ROMANS: Yes, certainly the national security thing, Joel, got a lot of people's attention. But you know, even if you're not worried about getting invaded or military issues, national security, like that, you know, I'm worried about the rest of the world beating us on say differential equations. I mean, it's a thought and knowledge based global economy now. Isn't it?
JOEL STEIN, TIME MAGAZINE: Yes. National security seems like a bit of a stretch, but it gets people's attention. My kid is almost three and he can't read. So, I am concerned for him,,.
ROMANS: You're falling behind. Three-years-old -- you are no tiger dad, Joel. You are no tiger dad, I'm telling you now.
STEIN: In China, he'd be doing diffy q's (ph) by now, for sure.
ROMANS: You know, my 18-month-old speaks -- he invented his own language. None of us can understand him, but I know he invented it and is very smart for that.
You know, Sonny, I want to switch gears, here. I mean, you're a mother, you're an attorney, and there's a story that is really an American heartbreak, this week. You know, on February 26 an unarmed black 17-year-old kid named Trayvon Martin was shot and killed by a man named George Zimmerman. A man carrying a licensed gun and conducting rounds on a neighborhood watch patrol in Florida.
This is a tragedy that's stirring strong emotions within communities and social media, of course. The investigation is still ongoing and so is the emotional debate around dinner tables around the country.
Sonny, I want to ask you, what is the dinner table conversation that you're having? Not the legal conversation, the dinner table conversation you're having about the Trayvon story.
SUNNY HOSTIN, CNN ANALYST: You know, and it's a conversation, unfortunately, that I have to have as the mother of a young boy, a child of color and that is you can be perceived as being suspicious just by virtue of the way that you look and you have to be careful.
I mean, my son always complains about the way he's dressed, the clothes that I buy him, he says they aren't cool. He looks like Carlton from "The Fresh Prince." Well, you know what? It's intentional. I do that intentionally because I want him to wear a particular...
ROMANS: No hoodie.
HOSTIN: No hoodie. I want him to wear a particular uniform, and unfortunately that's a sad commentary on our society as to where we are. I've had the opportunity to speak with Trayvon Martin's family, with his parents, with his attorneys and these are good, decent people...
ROMANS: What are his parents saying?
HOSTIN: Well, mother to mother, I spoke to his mother and she just said, "I'm not looking for eye for an eye, I'm looking for justice for my son. That was my son on the videotape that was my baby." I told her I shared her anger, I shared her anguish as the mother of a son. And I got to tell you, I don't even know that it's racial, at this point. I think all mothers should be outraged about the fact that you can send your kid to get skittles and he may never come back.
ROMANS: You know, Leigh Anne, let me ask you, because you have two sons, one of them is black and one of them is white. Do you, as a mother of those two boys -- are there different sets of realities, as a mother of those kids, that you have to accept or that you are resigned to or that you rebel against? TOUHY: Well, first of all, anybody that thinks racism is not alive and well in this country, you need to turn around, because you're missing the point. It is. And my family sees it day in and day out. And it's amazing the looks and the stares and the opinions that we get. Obviously, if you've seen the movie, you know, I don't care what your opinion is about me or my family. We know what counts.
But the fact this young man was actually doing nothing wrong and because he had a hoodie on, that he was perceived and stereotyped and pigeonholed, is absolutely unacceptable. And this stuff has to stop in this country and it's got to stop, now.
And as the mother of a black child and a white child I can tell you it happens all the time. I mean, we'll walk in and, you know, Michael will get a look and I'm just thinking, oh, my gosh, because he's large, he's African-American he's automatically put in this fear. You know, people look at him and they have fear in their eyes and I'm just going, you're kidding me, you know. And then they realize that, oh, he's with us or who we are and then all of a sudden they do this 360. And I'm going, uh-huh. You had a chance before you knew the facts, you've blown it.
And we value people incorrectly, we stereotype people incorrectly. And I hope that this young man's life, that it was not, you know, all this is not in vain and that we take this and we will learn a lesson for it. Please, people, realize that because you have a hoodie up that there's nothing wrong with that. So, it's a tragedy.
ROMANS: You know, it's still so raw that I feel that the lessons are still something like -- I feel like we're still far away from the lessons, still it's still such a raw, raw, raw time about Trayvon and this country and where we are.
That's a fascinating discussion. Let's -- stick with us, don't move. We're going to talk in just a minute about the bounty scandal in the NFL. I want Leigh Anne's thoughts on that. Also get Joel back in the conversation. Don't go away.
ROMANS: Back with our parents' panel, this morning. The bounty scandal that rocked the NFL has ended with heavy punishments for those involved. Leigh Anne, you're an NFL mom. How would you feel if there was a bounty on Michael?
TOUHY: You'd really have to ask that question? You know...
ROMANS: That's called a softball. It's not a football term.
TOUHY: Yes. I would not be happy, let me just tell you, right now. To me, that -- you know, I'm one of these you take one of mine, I take two of yours kind of people. And I can't imagine if I had heard that.
You know, football's a dangerous sport, anyway. We're all aware of that, we all know that. But to add this on top of everything else? That's just mind blowing to me. When I first heard about it I thought you've got to be kidding. That cannot be accurate. Surely some guys were just sitting around the locker room, you know, blowing off some steam and said hey we're going to, you know -- but obviously, I was wrong. I mean, I think this was to a different level. And I, for one, I'm really glad that, you know, that Roger has come down hard. I hope it stops it. I hope it eliminates it.
ROMANS: She's got Roger on a first-name basis. That's what I love about Leigh Anne, to, when she name drops, it's the people at the top of the sport.
I want to bring in Joel, real quick. I mean, you have a kid, I have three little boys. I see stories like this and I just worry that football is such a violent sport and that maybe this was an exception, what happened in the NFL, but I am worried about head injuries, I'm worried that maybe this is a sport that's just too violent for kids. What do you think?
STEIN: Yes. Well, I was thinking Rog did a great job and I think that -- yes, I don't know if I have the kind of kid I can tell already who's going to play NFL football. I'm doubting it. But, yes, no, you're not going to change football. All you can do is change the culture around it and maybe make some rules that prevent the really bad hits that cause concussions, but it's tough. America likes the hits and we have a culture that kind of promoted that, so we have to fix that.
ROMANS: I'm not sure the moms like the hits. I mean, Sonny's kid's in tennis, right?
HOSTIN: Right. I was going to say that. My kid plays tennis and he is a big kid, but I just -- I think Roger's point is spot on because we've got to change the culture. I don't know that we'll change the dynamics of football, but let's bring some more sportsmanship back, let's bring some more humanity back. I mean, these are our children playing sports. And sometimes you see parents right on the sidelines acting worse than some of the children and so I think it's really about changing the culture.
ROMANS: Can we talk a little bit about...
STEIN: I don't know if it's bringing it back. I mean, it's probably less brutal than it used to be, but it's still pretty brutal.
ROMANS: All right, I want to talk about -- speaking about brutal, all right. Think about this: sibling rivalry. Whether you're sharing a bunk bed or you're all grown up with children of your own, guess what? A new study finds that sibling rivalry is inescapable. I say you need a study for that? Maybe you're going to see it with your own children, but it's your relationship with your brothers and your sisters that actually endures past adulthood. Adult sibling rivalry is still one of the more harmful and least addressed issues in a family.
I'm the oldest of four, Leigh Anne. How is your relationship with your siblings? And is that shaping your life as an adult?
TOUHY: You know, I have one brother and thank goodness we get along really well.
ROMANS: Because he listens to you and he knows you're the boss, right?
TOUHY: Yes. You know, it works for me. Actually, we get along great. I'm familiar with this. I mean, I do have friends that, you know, they have issues with their siblings, they are constantly bickering and going back and forth and, you know, I don't know. I mean, I think it's something that's just a part of life and you know, you need to learn to deal with it and if siblings can't get along then, you know, who can you get along with, guys?
You know, I think in life that there's hiccups all along the way and I just think for one that, you know, there's so many issues that need to be addressed that that certainly isn't something that's a priority on my list. I tell him what to do and he does it and life is good.
ROMANS: Now, Joel, do you still -- do you still -- do you have any siblings, Joel?
STEIN: She's such a positive person. I can't almost deal with it. Yes, my sister just stayed with me for four days and now we are competitive about how we raise our children. And to this point, we found something new to be competitive about.
ROMANS: How? Tell me how.
STEIN: Oh, I probably shouldn't, because she might be watching this. She is doing a better job than me. Let's leave it at that. She is the perfect mom.
TOUHY: Don't go there, Joel. Don't go there. Don't go there.
ROMANS: My sister feeds her children better food than I do. I'm not beyond three times a week chicken nuggets. She would never do that.
Sonny, I mean, that's the thing. I mean, sibling rivalry is something. The kids factor is really interesting that you go from, you know, competing over boyfriends or grades to competing over how you're raising your kids.
HOSTIN: Yes, it's very interesting because I'm an only child and I'm raising siblings and so I don't understand why they argue about things like who gets to press the up button in the hotel.
ROMANS: I can't believe you're saying that. It happens all the time.
HOSTIN: I mean, it's just unbelievable. Yes, and I've gotten to the point where I'm...
ROMANS: Who's going to be the first in the car. I'm the first in the car.
HOSTIN: Who is the first in the car. It's unbelievable. But I agree that it's something that's important because it sort of teaches you so many things about getting along and sharing is caring and -- I can't believe I just said that -- but all of these things that really are life lessons that you carry with you in terms of conflict resolution.
ROMANS: All right. We got to leave it there, everybody.
STEIN: Let's deal with the more important issue here, which is McNuggets three times a week. Let's stage an intervention. That's not OK.
ROMANS: That's wrong isn't it?
HOSTIN: I do pizza three times a week.
ROMANS: You do? OK. You guys are all going to have to come back.
HOSTIN: With all the food groups.
ROMANS: I said chicken nuggets not McNuggets and there is a very big difference.
OK, so you guys will all come back...
STEIN: OK, fair, I jumped to conclusions. I apologize.
ROMANS: We'll all talk about -- and what a terrible mother that I am. We'll do that next time when you all come back. So, nice to meet all of you. Have a great Saturday morning.
HOSTIN: Sounds good.
ROMANS: All right, how your health care could change, next on YOUR BOTTOM LINE.
ROMANS: Two years after becoming the law of the land, health care reform heads to the Supreme Court. Twenty-six states want to overturn the president's signature achievement. Cue the Washington message wars.
(BEGIN VIDEO CLIP)
SEN MITCH MCCONNELL (R), MINORITY LEADER: This bill would be unconstitutional even if it did the things the president said it would.
SEN DICK DURBAN (D), ASST MAJORITY LEADER: Let's get rid of that preexisting condition provision. Let those insurance companies deny coverage. America, is that what you want? Is that what you're looking for? Is that too much government?
(END VIDEO CLIP)
ROMANS: The Supreme Court's language no doubt will be a little more subdued. Andrew Rubin is the vice president of Clinical Affairs and Affiliates at NYU's Langone Medical Center. He's also the host of Sirius XM's Doctor. Radio.
Now, this law requires all citizens to enroll in a health care plan or they pay a penalty. Andrew, if the Supreme Court overturns this so- called individual mandate, what happens to patients?
ANDREW RUBIN, NYU LANGONE MEDICAL CENTER: For people who think they're going to get health insurance now, who don't have it, it just falls apart. This is the glue that holds the health care reform law, which I really think of as the health care insurance reform part of the law, together. So, all those protections that people are counting on, go away.
Now, there is -- some things will still happen. I mean, we are still working on payment reform systems to take some of the costs out of the health care system, but for most consumers, it goes away.
ROMANS: So, implementing health care reform has already begun, it's been going on for two years. You've even seen it in your business. You see where trying to figure out how to keep costs down, trying to figure out how to change payment systems, that's happening.
RUBIN: That's happening. We're looking at what we call payment reform, which is bundle pricing and...
ROMANS: And that means what? So, for example, if you go in and you need some kind of treatment for what, give me an example.
RUBIN: Hip replacement.
ROMANS: A hip replacement. Instead of paying every time, if you have to be readmitted or you get an infection, it's one cost for all of your care.
RUBIN: It's all of it. it's the doctors, it's the hospitals, it's the rehab facilities, all being put together, home health aides, all that being put together with the goal of keeping the patient out of the hospital, from coming back, and...
ROMANS: It makes sense.
RUBIN: It makes sense and these are demonstration projects. It's not in force yet. Everybody is working on this. But the goal is to take costs out of the system. And if every -- the concept here is everybody works together: hospitals, doctors, and everybody else, it'll be cheaper to provide the health care.
ROMANS: If health care reform is overturned, if the Supreme Court overturns it, preexisting conditions, if someone preexisting condition, can a private insurer deny them health care coverage.
RUBIN: If this individual -- if the Supreme Court rules that the individual mandate is unconstitutional and nullifies this aspect of the law, is gone. They can continue to deny for preexisting conditions as they do now. ROMANS: What kind of changes are happening to Medicare? Which, 40 million people use Medicare as their insurance. That's the government paying your premiums for your health insurance. What kind of change has happened to Medicare under health care reform and then if this is overturned?
RUBIN: Well, again, I think payment reform continues. And when the government looks at payment reform, they're looking at payment reform in the Medicare system, because that's -- and the Medicaid system. That's where the federal government has dollars -- they're spending their dollars. So honestly, other than payment reforms, which is a big deal, that continues. Beneficiaries won't see much of a change.
Now, the Republicans have some interesting ideas about privatizing aspects of the Medicare program.
ROMANS: Let's talk about that, because Paul Ryan, Congressman Paul Ryan, this week, he said that basically the blank check nature of the Medicare subsidy is causing inexcusable fraud and waste and that we have to overhaul this system, that we have to allow people to go buy their insurance coverage on a Medicare exchange or they can keep their public option, nothing would change for people 55 or older, right now. The White House and Democrats and say this is ending Medicare as we know it. the GOP says, yes, we got to fix ichl it. Who's right?
RUBIN: It's a great question, and then of course, it's very political in nature. And the answer is, they're both right. As you point out, the Democrats, if they want to perpetuate the system as they have today, then, that's what happens. If the Republicans want to try a different approach, very controversial approach, scares a lot of seniors, particularly since we talked about this for so many years, the details are unknown, you know, they're right, too. So, we don't know what's going to happen, yet.
ROMANS: Trying to get these exchanges up, the state-run exchanges to buy your health care insurance under health care reform, just as it's going to the Supreme Court really makes for interesting politics and policy for patients.
RUBIN: Absolutely, and it's hard for people to understand. The exchanges, the state exchanges are the underpinning, underpinning as to how people, consumers will get their health care in the future. States are setting them up on their own or the federal government will set them up if the state doesn't want to do it. It's extensive. Some states have started, some states have not. We'll see what's happening.
ROMANS: Massive, massive (INAUDIBLE) changes happening.
RUBIN: Lots of changes down the road.
ROMANS: All right, Andrew Rubin, nice to see you. Thanks.
RUBIN: Good to see you.
ROMANS: Have a nice weekend.
OK, coming up, buying into the recovery. How to take advantage of it, next on YOUR BOTTOM LINE.
ROMANS: Green shoots. Have you heard that phrase? Imagine the forest floor after a wildfire, eventually those little seeds start to sprout again and that's what's happening in the American economy. In 98 of the top 100 metro housing markets, it's now cheaper to buy a house than to rent one, I'm not kidding. Cheaper to buy it. I guess if you've got the money in the bank, et cetera, et cetera.
Existing home sales also appear to be stabilizing, they're down 0.9 percent in February -- in January, rather, but they're up from a year ago. So, that's good years ago.
Richard Florida is author of "The Great Reset."
Richard, are we seeing those greet shoots in housing?
RICHARD FLORIDA, AUTHOR: Well, I think it's pretty clear that housing is at or near its bottom. You know, in certain markets it may overshoot a little. But as you said, you know, that price-to-rent ratio, that the folks -- really great economists at Trulia did. And we published that at our site, the Atlantic cities, it shows that 98 -- 98 of the 100 markets, it's cheaper to buy a house than to rent. And in places like Detroit and those hard-hit rust belt cities, it's like 3.7, you know, in the index it's 20 percent, you know, that's when you should rent. So, in those communities it's probably a good idea to at least look to buy, and if you know you're going stay in your house or you want to make some money by renting it, it's probably the time. Housing may go down a little bit more, but it's probably the time to think about buying.
ROMANS: Mortgage rates went are going up. We saw they crossed four percent, late this week. You know, going up -- when I say mortgage rates are going up, they crossed four percent, I mean, in an earlier life that would sound so crazy, but you have to have, you know, cash in the bank and a good credit score and you can take advantage of what are still very low mortgage rates. Not everyone has cash in the bank and the very high credit score.
FLORIDA: Well, it's a good thing, though. I mean, we had a housing system that was berserk. You know, you could buy a house with nothing down, you could finance it on an interest only basis, it was easy. I think it's smart to make people put a little money down, you know, -- any business, you want to throw a little of your own equity in and then get that bank loan or financing on top of it, so I think it's going to calm the market down.
And what it means is, you know, you have to have your ducks in a row. You have to have your finances in a row. If you can't do that, that's what's keeping the rental market going. You know, on the other hand, people who can't buy have to rent, so it sort of balances each other out.
ROMANS: You know, Richard, a third of all sales now are cash transactions, 33 percent are cash transactions and there's -- here's one of them. it's a 14-year-old girl in Florida. I love this story. She bought a house. Willow Tufano, bought a house in Naples, Florida. She paid $6,000, her mother kicked in $6,000. They were on CNN's EARLY START, this week. I want you to listen to sort of the ingenuity of this girl, where she found the money for her down payment.
(BEGIN VIDEO CLIP)
WILLOW TUFANO, BOUGHT HOUSE AT 14 YEARS OLD: Well, I saved it up by selling things on Craigslist that I found -- that I bought from garage sales, that I found on the side of the road, garbage day, auctions, Craigslist, eBay, Freecycle, just a lot of different places and I saved that to buy a house.
(END VIDEO CLIP)
ROMANS: You want to talk green shoots. Young willow, I guess no pun intended, she Is a green shoot in this economy. I mean, she's picking up a distressed place, she's going to rent it out. She has now become a real estate investor. She's not even old enough to vote.
FLORIDA: No. Good for her. And I think, right now -- you know, and I agree with Bob Schiller and others that say over the long run, for folks listening in, stocks are your best investment, but, heck, this is the greatest fire-sale. And I'm a big believer in rent -- you know, especially if your career is flexible. This is the greatest fire-sale in real estate in American history and kids like Willow are doing it, but look at all the international investors from Brazil, from Europe, from Latin America, even Canadians, coming into American cities and metros and buying homes because they know there's great discount, and so, you know, people look for the sales when they go to buy a new suit or a dress or, you know, new furniture.
You know, this may be one of the greatest sales opportunities, so if you're in the market for a house, if you have your finances together, if you know you're going to keep that house, if you're not a crazy flipper, I think it's a great time to buy one.
ROMANS: Those crazy flippers, those crazy flippers. I will say, though, that I think you could see home sales up for a considerable period of time before you see home prices coming up. There's a lot of factors and variables in there, we still have a lot of foreclosures to get through, but clearly some opportunity green shoot -- I keep talking about the green shoots.
Richard Florida, nice to see you.
FLORIDA: Thank you, Christine. Thanks for having me on. It's great to see you, again.
ROMANS: That's going to wrap things up for us, this morning, but the conversation continues online. Please find us on FaceBook and Twitter, our handle is CNN Bottom Line. My handle is @Christine Romans. Back now to "CNN SATURDAY" for the latest headlines. Have a great weekend.