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What the Fiscal Cliff Means for You; Conversion Therapy Lawsuit; Election Decided by Coin Flip

Aired November 27, 2012 - 15:30   ET


BROOKE BALDWIN, ANCHOR, "CNN NEWSROOM": Ali Velshi is about to give his take on what the fiscal cliff means to you. Don't miss it.



ALI VELSHI, CNN CHIEF MONEY CORRESPONDENT: From the CNNMoney Newsroom in New York, I'm Ali Velshi and this is "Your Money."

Starting today I'll join you every day at this time with the most important news affecting business, the economy and your money.

Now, you probably don't need me to tell you this, but you're feeling better about the economy. The U.S. Consumer Confidence Index hit its highest level since February of 2008.

Now, the conference board which conducts a survey that results in the monthly consumer confidence index says that, quote, "over the past few months, consumers have grown increasingly upbeat about the current and expected state of the jobs market and this turn around in sentiment is helping to boost confidence." That's the end of their quote.

Now, for the conspiracy theorists out there who might suggest these numbers are fudged, here is how they're put together. The conference board surveys 5,000 households. It asks them how they feel about business and job conditions, it mixes in their income level and it compares the data to what has been collected since the 1980s.

Now, other than the improving employment situation, other things that are making people feel a little more prosperous are their investments and the value of their home.

And the fact that home prices continue to rise is probably a big factor that might be boosting your confidence.

We got the latest Case Schiller Index of home prices in 20 major metropolitan areas and the news is good. Across those 20 areas, home prices were 3.6 percent higher at the end of September than they were a year earlier.

Now, where were the price increases? Some of the biggest gains were in those areas hardest hit by the housing crisis, like Phoenix, which saw gains of 20.4 percent. Miami, where prices rose 7.4 percent, Detroit, up 7.6 percent, San Diego, more than 4.1 percent. Now, the rebound is being spurred in part by those record-low mortgage rates. If you've got good credit and a down payment, you can get a 30-year fixed mortgage for 3.31 percent. You can see 15 years for 2.63 percent.

A drop in the number of foreclosures as well as a move by the banks to let home owners walk away from their homes using something called a "short sale" rather than foreclosing on them is part of it.

So, all of that is helping consumer confidence. What is hurting it? Well, you know. I don't want to say it. It's that thing.

OK, I'll say it. It's the fiscal cliff. The latest CNN/ORC poll shows nearly a quarter of Americans fear an economic crisis if Congress doesn't act to avoid the cliff.

Another 44 percent predict major problems if a deal isn't reached between Democrats and Republicans to pass more targeted spending cuts and reforms to entitlements like social security in exchange for more tax revenues.

Well, it seems that some Republicans are prepared to budge a bit on the "no-new-taxes" pledge, despite ongoing and escalating threats by Grover Norquist, the founder of the pledge and the head of a group called Americans for Tax Reform.

Norquist told CNN's Piers Morgan that the pledge is a -- is not a pledge of convenience.

His latest target in a growing field of Republicans who say they might reconsider the promise is New York Republican congressman, Peter King.

GROVER NORQUIST, AMERICANS FOR TAX REFORM: The pledge is not for life, but everybody who signed the pledge including Peter King who tried to weasel out of it -- shame on him as "The New York Sun" said today -- I hope his wife understands that commitments last a little longer than two years or something.

But you don't tell the bank, oh, the mortgage, wasn't that a long time ago? If you make a commitment, you keep it.

VELSHI: Now, despite what he said, it is likely that high earners will pay higher taxes, but what sort of benefits could others lose in this trade-off? I mean, something has got to give, doesn't it?

One idea, get rid of the tax benefit that homeowners get by being able to deduct mortgage interest. OK, hold on. Don't throw the remote at the TV set. I know it is a popular deduction. I know you like it, but it costs the feds $100 billion a year in -- and it is of dubious benefit to the federal government.

The housing industry opposes getting rid of it, obviously, because it fears that home sales will collapse again, just when housing is starting to make a comeback.

The National Association of Realtors has spent an estimated $25 million this year to lobby lawmakers against canning it.

Now, the mortgage interest deduction is one of the oldest tax breaks on the books. It is designed to encourage home ownership.

These days it tends to benefit higher-income homeowners who save on average $5,400 a year on their tax bill. Lower-income homeowners save just around $90 a year.

Despite that, it is not likely to go away. There's too much political and financial capital involved. I'm just saying it is an example of some of the tough discussions that need to be had in Washington.

Well, that's what you need to know right now. I'll be back this time tomorrow with the most important five minutes about business and the economy.

From the CNNMoney Newsroom in New York, I'm Ali Velshi with "Your Money."



BALDWIN: Have you gotten your lottery pool together yet here, talking Powerball?

Here is some new motivation. The Powerball jackpot has grown to half a billion dollars. That's a record for Powerball, which is played in 42 states and the Virgin Islands, and that means, if you choose really to get all your money here at once, you'll receive $327 million in cash, which is pretty sweet.

But here is a number you'll make -- you might be wincing at, odds of winning, 1-in-175 million.

It is known as conversion therapy. Now, a lawsuit is calling it fraud.

The SPLC, the Southern Poverty Law Center says -- and really it's a first of its kind legal action. It's going after conversion or reparative therapy. That's a treatment to turn someone who is gay straight.

On behalf of four men and their families, the SPLC is suing this group. They're called JONAH for Healing.

JONAH, according to their website, stands for "Jews Offering New Alternatives for Healing."

A former client says what he went through was abuse.


MICHAEL FERGUSON, PLAINTIFF AND FORMER JONAH CLIENT: I just got to the breaking point where I just realized this is crazy, that this has become an obsession. When something translates from seeking wholeness, seeking healing into your life's obsession, that's just -- that's really unhealthy.


BALDWIN: CNN legal analyst Sunny Hostin is "On the Case" with us and, Sunny, give me the crux of the case here.

SUNNY HOSTIN, CNN LEGAL ANALYST: You know, it's interesting. This is the first lawsuit of its kind to challenge conversion therapy, Brooke, as a fraudulent business practice.

So, in effect, what they're claiming is that they were defrauded by JONAH, they were defrauded by these therapists into believing that their sexual orientation could somehow be changed through conversion therapy.

And it really is a novel argument because these are the kinds of cases that you don't necessarily see in fraudulent business cases. You see them in other areas of the law.

And I think they certainly have some support for it because, if you look at the stats, I mean, almost every medical and psychiatric association has discredited conversion therapy, and in fact, the American Psychiatric Association discredited it about four decades ago.

So, there is no question that there is certainly support for the argument that this is just inappropriate therapy, that it's just not real and that it is fraudulent.

BALDWIN: Well, let me point out, we tried to get the other side of this here and let me also say we reached out to JONAH and they haven't responded to our e-mails or calls.

But back in October, I actually talked to a reparative therapist and let me be crystal clear. He has no connection to the lawsuit you and I are talking about.

But he did talk about the treatment and how it -- he went through it. It worked for him after he was abused.

Here he was.


DAVID PICKUP, REPARATIVE THERAPIST: I'm talking about authentic reparative therapy.

The other side of this issue will label this quackery and put this all in a ring of things that just aren't true, but I'm talking about authentic, profound, in my case, psycho-dynamic reparative therapy.

Reparative therapy helped save my life. My depression -- clinically depressed twice -- went down. My anxiety went down. My self-esteem went up. (END VIDEO CLIP)

BALDWIN: And apparently this wasn't the only story. If you go to JONAH's website, there are multiple testimonials, people who have had success.

Is that a solid counter to the lawsuit, though?

HOSTIN: Well, that will be the argument, right? The argument will be that this isn't junk science, that this isn't quackery, that certainly this is an appropriate therapy to change one's sexual orientation.

But, again, on the other side of it, there is just so much support in the medical community in terms of saying that this type of therapy is just not real, that it is -- it just has been discredited.

I spoke to many physicians just today about this particular therapy and, bar none, they are all saying that it is just not recognized as an appropriate therapy.

BALDWIN: You know, one of the reasons I spoke with that reparative therapist back in October is the fact that -- that was because California had outlawed reparative therapy.

Do you think that the law at all will play into the lawsuit?

HOSTIN: You know, it is a fairly new ban on conversion therapy in California. California is the only state, as far as I know, certainly the first state in our nation to ban reparative therapy or conversion therapy for people under the age of 18.

So, that will, again, lend support to the plaintiffs in this case that this therapy is just junk science, that it is not appropriate therapy for changing someone's sexual orientation.

And, so, I suspect that we're going to be hearing more not only about the California law banning it, but also just about the medical evidence supporting or not supporting this therapy.

BALDWIN: Just wanted to talk about it, first of its kind lawsuit. We'll see where it goes.

Sunny Hostin, "On the Case," thank you.

HOSTIN: Thanks, Brooke.

BALDWIN: Drugs, gangs, murder, one expert says that's what many Americans think of when they think of Mexico and the country's next leader, minutes away from sitting down with President Obama at the White House.

My next guest explains why Americans have the wrong idea about Mexico.


BALDWIN: On a day of mourning for the victims of that factory fire in Bangladesh, allegations of arson have now surfaced. More than 100 workers died when they were trapped inside that burning building. Now, the country's prime minister says he believes arsonists are to blame.

Meanwhile, Walmart stores which were supplied clothing from this particular factory issued this statement. Let me quote it. "A supplier subcontracted work to this factory without authorization. We have terminated the relationship with that supplier," end quote.

All across Britain, the problem is flooding. Look at this. Pictures here taken across Wales and England. A week of heavy, heavy rainfall has rivers bursting over their banks, major roads look like rivers.

Forecasters have issued 276 flood warnings in just the past couple of days. Hundreds of homes have had to have been evacuated. And now many of the flooded areas are bracing for freezing temperatures tonight.

Yet another day here of protests in the streets of Cairo.

And today they turned deadly. The opposition says one demonstrator died after inhaling excessive amounts of teargas.

In Tahrir Square, a tent city has formed. Protesters are refusing to leave until the newly-elected president, Mohamed Morsi, backs away from his controversial sweep of powers.

CNN's Ian Lee is on the ground there for us in Tahrir Square. He decided to translate the banners that have really themselves become a sign of resistance and revolution.



IAN LEE, CNN CORRESPONDENT: There's no lack of signs here in Tahrir Square, but since a lot of them are in Arabic, I'm going to translate them and tell you kind of what they mean.

This first sign we have here says, "The militias of the Brotherhood will not terrorize the people."

The anti-Brotherhood people are accusing the Brotherhood of having militias that are enforcing their will. The people here say they're going to remain defiant against these people.

Now, this sign is making a reference to the Brotherhood and the Islamists who people say are trying to turn Egypt into an Islamic republic instead of an inclusive public.

This signs says down with the constitutional declaration and the Ministry of Interior needs merging.

This sign is referring to President Morsi's recent decree which gave him pharaoh-like powers. It also is making a reference to the Ministry of Interior which protesters say haven't changed since the downfall of the Mubarak regime.

This is accusing the Muslim Brotherhood's supreme guide, Mohammed Badie, of selling the revolution. A lot of Egyptians feel that he's the one actually pulling the strings behind the scenes and making a lot of these controversial decisions.

And this sign basically sums up the day. It says it's forbidden for the Muslim Brotherhood to enter here.

Ian Lee, CNN, Cairo.


BALDWIN: Ian, thank you. Back here at home, the president of the United States getting ready to sit down with the newly elected president of Mexico and my next guest says the biggest challenges between the U.S. and Mexico are skewed perceptions.

What is she talking about? What are Americans getting so wrong? That's next.


BALDWIN: President Obama meeting with incoming president of Mexico, Enrique Pena Nieto, this hour at the White House.

Really this is a chance to reset the agenda between these two countries, these two -- of course, we're neighbors with which in recent years dominated by thorny issues like immigration, the fight against illegal drugs, security, et cetera.

I want to talk about this with Shannon O'Neil. She is a senior fellow at the Council on Foreign Relations and she is also the author of "Two Nations Indivisible -- Mexico, the United States and the Road Ahead."

Shannon, welcome. Of course I read your piece in "USA Today" and I thought it was interesting that you point out that thee biggest challenge, of all the challenges we could choose in terms of issues facing the U.S. and Mexico, you say is skewed perceptions. Give me examples.


A poll just came out that was done of U.S. perceptions of Mexico. When you look at the results, almost one out of every two Americans when they thought of Mexico thought of drugs.

They also thought of corruption, of poverty and a majority said Mexico is a problem, not a partner for the United States.

And while this is one serious reality of Mexico, particularly the security situation and the drug trafficking that comes through Mexico to the United States, it's not the only reality for Mexico.

And it's not the only reality for U.S.-Mexico relations and, so, that in itself is a problem for the two presidents as they meet today.

BALDWIN: You know, I lived in Mexico City for a couple of months a number of years ago just to live and to study and you can really -- you could tell at the time that it was emerging into this middle-class country and not necessarily this developing nation that so many Americans perceive.

But in listening to an interview that Wolf Blitzer conducted with this newly elected president, you know, he said one of the issues he wants to talk about with the president that the priority really was the economy.

How does our relationship -- how can they help us and help our jobs?

O'NEIL: Well, it's interesting. Mexico actually has always been one of our big trading partners, but particularly when you think about U.S. exports, not just trade overall but U.S. exports, Mexico is the number two destination behind Canada, but the number two destination for U.S. exports.

And, so, that supports U.S. jobs and, in fact, an estimated 6 million American jobs today depend on Mexico.

So, if Mexico does well, if Mexican consumers and business does well, the U.S. does well, too, because we supply them.

BALDWIN: How can this trade help with -- we have to talk about this, the drugs, the immigration, other seemingly unsolvable issues.

O'NEIL: I mean, these are important issues, too, on the agenda.

Security will be a discussion for the two presidents today and it's one that will continue as both presidents begin their new terms and one that we shouldn't forget.

But in addition to security, we should be thinking about the economic ties. We should be thinking about the people and families and communities that span the border because of immigration over the last 30 and 40 years.

And Mexico's relationship with the United States is much more complicated just than security.

And, so, that is a discussion for both presidents to have today but also for the two governments to continue having as they go forward into their new terms.

BALDWIN: Yeah. We'll look forward for that interview, by the way, I mentioned with Wolf in "The Situation Room" in a couple minutes.

Shannon O'Neil, thank you very much.

O'NEIL: My pleasure.

BALDWIN: Question, heads or tails, not a question you really want to answer wrong with an election on the line. That's exactly what happened in DeWitt County in Illinois. Jacob Long of our affiliate, WMBD, has the story.


JACOB LONG, REPORTER, WMBD: DeWitt County clerk-recorder Dana Smith is digging through her purse looking for a coin.

DANA SMITH, CLERK-RECORDER, DEWITT COUNTY, ILLINOIS: Here it is. Now, we have to make sure I have a quarter.

LONG: The reason is a first in her more than 20 years working here.

SMITH: You never know. Anything is possible.

LONG: Smith's search is successful.

SMITH: We have a quarter. We're going to go for it.

LONG: When the clock strikes 3:00, she flips the quarter into the air.


LONG: But this is no ordinary coin toss. It's deciding the outcome of a county board race.

SMITH: We just needed something to break the tie, so here we are.

UNIDENTIFIED MALE: Now, you're trying to make me shoot myself in the foot, ain't ya?

LONG: Republican incumbent Terry Ferguson and independent George Wissmiller both want to serve District B.

The problem? Election results show they're dead even.

SMITH: We've waited 14 days for absentees to come in. We counted. We now have a tie between two of them.

LONG: And since the state has no specific rules for a situation like this, the clerk is getting creative and flipping a coin.

SMITH: It's a head.

LONG: As the incumbent, Ferguson goes first, calling tails, but the quarter lands on heads meaning he loses.

FERGUSON: Well, a little disappointed, but, you know, I guess that's the way the old quarter gets flipped.

LONG: Wissmiller is the winner, but he isn't thrilled. He says this process is like gambling.

GEORGE WISSMILLER (I), INCOMING BOARD MEMBER: This is such a departure from anything even approaching a democratic election process that I'm simply not willing to do it.


BALDWIN: Jacob Long, our affiliate WMBD, a coin toss.

And, now, "The Situation Room" with Wolf Blitzer starts now. Wolf?

WOLF BLITZER, HOST, "THE SITUATION ROOM": Brooke, thanks very much.