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YOUR MONEY

Interview With Senator Johnny Isakson Of Georgia; Countdown to Shutdown; Falling Grade; Political Football; Shaqramento Era Begins; A Space Vacation

Aired September 28, 2013 - 09:29   ET

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


CHRISTINE ROMANS, CNN HOST: Obamacare. It is the biggest change to your relationship with the government in your lifetime. But guess what? That government could be shutdown say midnight Monday.

I'm Christine Romans. This is YOUR MONEY.

Yes, there is confusion surrounding the new healthcare law, but Congress is only adding to it. Let me cut through all the noise.

Fact, a government shutdown won't stop Obama care. The law is funded through taxes, fees and mandatory spending. Shutting down the government might even speed up its implementation. That's according to the (INAUDIBLE) Service.

Fact, the pseudo filibuster by Senator Ted Cruz whether you admire him or despise him. It was never going to stop Obamacare. The Republicans simply don't have the votes in the Senate. If they did there would still be a veto from the president.

Fact, Obamacare doesn't start on October 1st. This law has been on the books for more than three years. If you've had a mammogram or colonoscopy that didn't cost you a dime out of pocket, that's Obamacare. If you've got a kid who just graduated college and is still on your insurance, that's Obamacare.

Fact. With an undertaking this large, the biggest challenge to health care since the invention of Medicare, there will be surprises both positive and negative. We don't know if the Affordable Care Act is going to destroy jobs or create them. We don't know if it's going to cost you personally more or less.

But we do know U.S. government will shut down on midnight Monday if no deal is struck. And in just three weeks, if Congress doesn't raise the debt ceiling, America could default on its obligations for the first time in history. The message from the market is clear. The Dow suffering five straight days of losses.

Republican Senator Johnny Isakson is the man we turn to in times like this. He has spearheaded efforts to get Republicans to sit down with the White House. He's a businessman. Most importantly at times like this, he is a grownup. He is an adult in the room.

Senator, you are no fan of Obamacare. You voted nearly 60 times to defund it, dismantle it, and repeal it. But a government shutdown won't stop it. So how far are Republicans willing to go, Senator?

SEN. JOHNNY ISAKSON (R), GEORGIA: Well, hopefully we'll come to our senses and won't shut the government down because you're exactly right. You don't shut down Obamacare by shutting down the government. But you -- do disrupt a very -- this fragile economy which is what you're seeing happen in the markets right now.

ROMANS: So tell me, what did your fellow Senate Republican Ted Cruz -- what do you think Senator Cruz accomplished this week over 21 crucial hours in this debate?

ISAKSON: You know, every member of the Senate has the same individual power that every other member has. And our reputations as senators are an accumulation of how we use that power. So it remains to be seen how Mr. Cruz's 21-hour speech will matter or not. It did take away 21 hours from the debate towards this CR, which was unfortunate. But we've got until midnight Monday night to make a decision.

One of two things probably will happen. Either a short-term CR to buy a few more days to negotiate, or in fact a shutdown which would be wrong for the American people and wrong for the government.

ROMANS: This country does have a debt problem. And the Congressional Budget Office says America's debt is going to hit 100 percent, Senator, of GDP by the year 2038. But it's not Obamacare that's driving the debt. Its entitlements already existence.

Is Obamacare the wrong target for Republicans here?

ISAKSON: Well, Obamacare is a very unpopular law with the American people. And we should make changes in it or defund it if we could. But, you know, legislative process is a matter of mathematics. And if four equals a majority, three equals zero and unfortunately we're in the minority right now. So we can't stop it. But what we need to do is put pressure to negotiate the very best changes we possibly can.

ROMANS: All right. If this train keeps going down the track with or without a government shutdown, we've got another big hurdle here. Serious deadline. But the Treasury Department says October 17th, sir, that's the day the United States may not have enough cash to pay its bill. Maybe 30 bucks left in the bank unless Congress raises the debt ceiling.

The president says threatening default on our obligations because of Obamacare amounts to blackmail. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If Republicans do not like the law, they can go through the regular channels and processes to try to change it. That's why we have elections. So they can go through the normal processes and procedures of a democracy, but you do not threaten the full faith and credit of the United States of America.

(END VIDEO CLIP) ROMANS: Senator, will the GOP demand a delay in Obamacare for individuals as a condition for raising the debt ceiling? I mean -- is your party willing to risk default because they hate Obamacare so much?

ISAKSON: Well, that remains to be seen. But I don't think default is a good idea. But I do beg to differ with the president. The legislative process is all about negotiating. The last significant change to federal spending took place in August of 2011 when we did raise the debt ceiling but in return we got the sequester which cut over 10 years, $1.2 trillion in discretionary spending. So I beg to differ with the president on his point on legislating, but other than that, we should not shut down the government.

ROMANS: Senator Isakson, thank you so much, and good luck to you. I'm ready for the day when we can talk about long-term solutions and not crisis, and crisis-to-crisis -- governing. I know that you are, too. Thank you, sir.

All right, speaking of crisis, the financial crisis isn't over. Not for JPMorgan anyway. CEO Jamie Dimon met with Attorney General Eric Holder this week. The bank is facing charges of $11 billion for its role in the 2008 collapse. JPMorgan is accused of selling toxic mortgages and hiding the risks.

For more stories that matter to YOUR MONEY, give me 60 seconds on the clock. It's "Money Time."

(BEGIN VIDEO CLIP)

ROMANS (voice-over): Illegal immigration is on the rise after falling during the recession. The attraction? Low wage jobs are added. There is also optimism that Congress will eventually reform immigration to provide a pathway to citizenship.

More happy housing news. Home prices jumped 12.4 percent July from a year ago. And even with rising mortgage rates, new home sales climbed 8 percent in August.

Apple hits a high, BlackBerry hits a low. Apple announced a record nine million iPhone 5s and iPhone 5c sold in the first weekend. Apple stocks soared on the news. But BlackBerry shares won't be around much longer. The company is going private for $9 a share. Just five years ago, BlackBerry had more than half the smartphone market. Today? 2 percent.

Chrysler is going public. The American automaker filed for an IPO this week. The company has made quite a comeback since going bankrupt in 2009.

New French fries that might not make you fat. Burger King is now offering crinkle cut Satisfries. Forty percent less fat, 30 percent fewer calories than McDonald's fries. The catch? They are slightly pricier than the original.

(END VIDEO CLIP) ROMANS: Forget next week or next year. Education Secretary Arne Duncan is focused on what governing by crisis means for an entire generation. Including your kids.

(BEGIN VIDEO CLIP)

ARNE DUNCAN, EDUCATION SECRETARY: So while we're doing these cuts I worry about what China is doing, what India is doing, what Singapore is doing, what South Korea is doing.

(END VIDEO CLIP)

ROMANS: Find out what a government shutdown could cost your children. That's next.

(COMMERCIAL BREAK)

ROMANS: Deep spending cuts in education make the future for educating our kids uncertain at best. Districts are providing less per student funding for kindergartens to 12th grade than they did before the recession. Often far less. U.S. high school students rank 31st in math, 23rd in science versus other developed country. That's according to the highly regarded PISA rankings.

Since July 2008 more than 300,000 jobs in education have been cut. That's teachers, principals, assistants and support staff.

Secretary of Education Arne Duncan wants to raise teacher pay. He wants to train and hire more teachers. He wants to place an emphasis on math and science. That all sounds great for our kids, right? But I asked him how he plans to accomplish this at a time of severe cuts and threats of a government shutdown just days away.

(BEGIN VIDEOTAPE)

DUNCAN: Well, unfortunately we've been through this before, obviously. So we are preparing for the worst. I really hope it won't happen. This is bad for children and bad for education and bad for the country way beyond us. Washington is obviously very dysfunctional these days. But I hope there's enough common sense there that it won't come to a short down but we are preparing if we need to -- for that to happen.

ROMANS: So it will be furloughs then?

DUNCAN: It will be bad at many, many levels and furloughs being one piece of it. But there's no upside to the government shutting down way beyond education. No upside.

ROMANS: Sequester cutting Head Start spots. Department of education facing a shutdown. Tell me about the political climate.

DUNCAN: Well, what's so sad to me is it -- this is not how other countries are managing their educational investment. They are investing more in early childhood, improving K-12, they're expanding access to higher ed. And as a nation, I worry about our economic competitiveness. And our children are as smart, as talented as children anywhere in the world. I want to keep high wage, high skilled jobs in this country.

The only way to do that is to have an educated work force. And while we are doing sequester, while we are doing these cuts, I worry about what China is doing, what India is doing, what Singapore is doing, what South Korea is doing. Those countries are committed to having a great, great educational system.

Right now, our country is struggling. And we're doing our children and ultimately our nation a grave disservice.

ROMANS: You'll hear that there's these skills gap. Companies, CEOs will complain about a skills gap. Academic research shows investing on the front end has kids better skills, better capabilities, better cognitive ability later on. Why aren't we investing more on the front end?

DUNCAN: Because politicians think short-term. They think about the next news cycle. They think about the next election. Early childhood investment is the best investment we as a country can make. And the president and I are actually convinced of that. It's also the ultimate long-term investment, as you know. And you have folks who are a lot smarter than me like Dr. Heckman who's a Nobel Prize winning economist who talks about a 7-1 ROI.

For every dollar we invest, we as a country get back $7. Less teenage pregnancy, less dropouts, less crime, more high school graduates, more college graduates, more folks entering the world of work, (INAUDIBLE) business audience. 7-1 ROI is pretty darn good. Why don't we make that commitment as a country?

Today, the average child coming from a disadvantaged community starts kindergarten at 5 years old in the fall. They start kindergarten a year to 14 months behind. Why are we constantly playing catch up? We have to get out of the catch up business and give our babies a chance to enter kindergarten ready to be successful.

(END VIDEOTAPE)

ROMANS: A lot of people say forget the old kindergarten through 12th great model. We should start earlier. I call it crawl through 12. Not K-12 because we need to be educating our kids well before they get to kindergarten. Hopefully our children's future can make its way under Washington's agenda. An agenda of course that jam-packed with threats to shut the government down and not pay our bills. That's some kind of role model, right?

Coming up, Shaquille O'Neal's rebound from these comments made in 2002.

(BEGIN VIDEO CLIP)

SHAQUILLE O'NEAL, SACRAMENTO KINGS MINORITY OWNER: We are not worried about the Sacramento Queens. Not at all.

(END VIDEO CLIP)

ROMANS: But now Shaq says king me.

But first, a 21-hour speech. A banana republic comparison. Heeded comments to reporters. Does that sound more like politicians or coaches? We're going to play political football with John Berman in just a moment.

(COMMERCIAL BREAK)

ROMANS: There's a game being played in Washington this weekend. But we're not talking about the Redskins. They are visiting the Raiders.

John Berman here, he's going to make sense of all of this, right?

JOHN BERMAN, CNN HOST, EARLY START: Maybe.

(LAUGHTER)

Or maybe not. I want to see about that. So for example, this week a Democratic senator who once famously called Obamacare a train wreck now says?

(BEGIN VIDEO CLIP)

SEN. MAX BAUCUS (D), MONTANA: We all need to work together to make it work for families and businesses depend on it. Instead of using it as a political football.

(END VIDEO CLIP)

BERMAN: Did somebody say football?

(BEGIN VIDEOTAPE)

OBAMA: This is the United States of America. We're not some banana republic.

BERMAN (voice-over): The pressure of the podium. This time of year it's a spotlight and often a frustration shared by politicians and football coaches alike.

BILL BELICHICK, HEAD COACH, NEW ENGLAND PATRIOTS: I'm moving forward. I'm moving on. I'm moving forward. I'm moving on.

BERMAN: Moving on to midnight October 1st. The deadline to avoid a government shutdown. Now centered around a 3 1/2-year battle over Obamacare.

SEN. TED CRUZ (R), TEXAS: I intend to speak in support of defunding Obamacare until I am no longer able to stand.

BERMAN: Whether or not the government shuts down, Obamacare remains the law of the land.

UNIDENTIFIED REPORTER: Mike, why are you in such a bad mood? MIKE DITKA, FORMER HEAD COACH, NEW ORLEANS SAINTS: What do you care? OK? If you were 2-7, you'd be in a bad mood, too. What's next?

BERMAN: What's next? A seemingly endless supply of politicians insisting they understand the public criticisms and they are here to fix it.

REP. NANCY PELOSI (D), CALIFORNIA: This place is a mess. Let's get our house in order. We are legislators.

MIKE GUNDY, HEAD COACH, OKLAHOMA STATE COWBOYS: Come after me. I'm a man. I'm 40.

BERMAN: And with the clock once again ticking towards a government shutdown, tensions are running high.

SEN. PATRICK LEAHY (D), VERMONT: They don't come up with one single idea how they might make it better.

DENNIS GREEN, FORMER HEAD COACH, ARIZONA CARDINALS: If you want to crowd them, then you crowd (EXPLETIVE DELETED). But they are who we thought they were. And we let them off the hook.

BERMAN: There have been 42 attempts in the House to delay, defund or repeal Obamacare.

SEN. HARRY REID (D), NEVADA: Any bill that defunds Obamacare is dead. Dead. It's a waste of time.

BERMAN: Or is it?

HERM EDWARDS, FORMER HEAD COACH, NEW YORK JETS: You play to win the game.

REP. JOHN BOEHNER (R), HOUSE SPEAKER: Our goal here is to cut spending and to protect the American people from Obamacare. It's as simple as that.

EDWARDS: Hello?

(END VIDEOTAPE)

BERMAN: Yes.

ROMANS: Hello?

BERMAN: Hello. It is such a fun comparison. But maybe it doesn't go far enough, not unless we hear coaches at the podium this weekend reciting "Green Eggs and Ham" like Senator Ted Cruz did well in the Senate this week. I'll tell you, football coaches, we'll see if they have them in them to go in the way of congressmen.

ROMANS: They never would. They never would.

BERMAN: No, they have dignity.

(LAUGHTER)

ROMANS: John Berman, I love it. Political football indeed. Thank, John.

All right, it's the biggest business deal of the week, and we're not talking about the purchase price.

CNN's sports anchor Rachel Nichols has "The Score."

RACHEL NICHOLS, CNN'S SPORTS ANCHOR: Well, Christine, this is part of a larger trend. Star athletes don't just want to be coaching or broadcasters after they require. They want to buy into team ownership, too. And after some of today's players were making hundreds of millions more than their predecessors, that lane is open to them. Shaq, for one, is taking advantage.

(BEGIN VIDEOTAPE)

NICHOLS (voice-over): One of the NBA's smallest market franchises got a giant-sized boost, this week when Shaquille O'Neal bought a minority ownership stake in the Sacramento Kings.

O'NEAL: We look forward to bringing Sacramento back to where it used to be.

NICHOLS: In an interview with CNN, O'Neal said the seed for this moment was planted years ago by Lakers legend Magic Johnson.

O'NEAL: Magic Johnson came to me and said endorsements are fine, but you want to start owning things. At 18 years old, I was like, what the hell is he talking about? But as I got older I realized that, you know, you want to start owning things. You know, for me it's just about, you know, just meeting people. Just, you know, being one step of that.

NICHOLS (on camera): Now, Shaq, we all remember, of course, when you were playing for the Lakers what you said about the Sacramento Kings, especially back in 2002.

O'NEAL: We're not worried about the Sacramento Queens.

NICHOLS: So there are still fans out there saying, really? Of all teams, Sacramento? That's where he's going to?

O'NEAL: I understand that. And you know, I think they know now that I was a marketing expert. You know, what I did is I drove people to watch the game. I made the fans of Sacramento so upset because it was the toughest place to play. And we want to bring that feel back. We want to bring that environment back.

O'NEAL (voice-over): The Kings' majority owner, Silicon Valley tycoon, Vivek Ranadive, says he isn't worried about any past bad blood.

VIVEK RANADIVE, SACRAMENTO KINGS MAJORITY OWNER: We have this concept in Silicon Valley that there's lots of money. But what you want is smart money. And for the journey that we're undertaking right now, there isn't any smarter money than Dr. Shaquille O'Neal.

NICHOLS: So now that he's stopped calling the team the Queens, is it time for a new nickname?

O'NEAL: Of course it is. Are you ready?

NICHOLS (on camera): Give it to me.

O'NEAL: Welcome to Shaqramento, the capital of California.

(END VIDEOTAPE)

NICHOLS: As Shaq told me he had dinner with the governor of California the night before his big announcement. He did actually clear the new name, Shaqramento. So hey, it's official.

And, Christine, earlier this year Derek Jeter told me that after he retires his goal is to own a baseball team. So watch out for these athletes. They have some money and they're looking to spend.

ROMANS: All right. And thinking ahead. All right. Thanks, Rachel.

So where were you planning to go on your next vacation?

(BEGIN VIDEO CLIP)

RICHARD BRANSON, VIRGIN GALACTIC: We'll start with giving people a taste of paste. We'll start building hotels in space. And --

POPPY HARLOW, CNN CORRESPONDENT: Really? In our lifetime?

BRANSON: In your lifetime definitely, hopefully in my lifetime.

(END VIDEO CLIP)

ROMANS: But how many lifetimes of work would it take for you to afford that vacation in space? Find out why Richard Branson says the final frontier is coming to the masses.

(COMMERCIAL BREAK)

ROMANS: A trip to space. You might call that the ultimate vacation for the 1 percent. If the FAA gives its blessing, space tourism will soon become a reality. Leonardo DiCaprio, Justin Bieber, Ashton Kutcher, these are among the daredevils who have already signed up, but who are more than the 600 orders ready to take the trip?

CNN's Poppy Harlow travels to the Mojave Desert to find out.

(BEGIN VIDEOTAPE)

HARLOW (voice-over): Who would spent up to a quarter million dollars just for minutes in space? These people.

(On camera): How much to charter one of these puppies?

PING CHIANG, BOUGHT SPACE TICKETS FOR FAMILY: $1.2 mill.

HARLOW: Wow. And I hear you're going to leave two seats empty? So it's just the family?

CHIANG: No, it's not empty. There's two angels coming with us.

(LAUGHTER)

HARLOW: Passengers won't just check in and hop on board. The whole experience will mean three days of training and health checks, then a few hours in the air, and three minutes weightless in space.

(Voice-over): The mother ship will carries Spaceship 2 up, then release it to glide back. Unlike NASA's rockets, it won't orbit the earth. It's Sir Richard Branson who's determined to take them there.

(On camera): Is this the new space race?

BRANSON: I think it's the start of a new space race. It's not been easy. It's taken us five years more than we thought it would take, but -- you know, but finally they pulled it off.

HARLOW (voice-over): That is, if the FAA gives Galactic the green light. Virgin says commercial launch is just months ago.

MICHAEL MOYER, SENIOR EDITOR, SCIENTIFIC AMERICAN: You're broaching out into a new -- a new field in the sky. And we're going to have some mishaps that happen now. Hopefully they won't be catastrophic.

HARLOW (on camera): Do you ever fear that maybe you're putting too much at risk with this?

BRANSON: People risked a lot to get space off the ground in the first place. But unless you risk something, the world, you know, stays still.

HARLOW (voice-over): Branson is such a believer, he plans to take the first flight with his own children. David MacKay will be at the controls.

DAVID MACKAY, CHIEF PILOT, VIRGIN GALACTIC: We don't want to push too hard too quickly. It'd be nice to be the first to do it, but the most important is to do it right. Whoever is first has to do it right.

HARLOW (on camera): What is the ultimate dream for this?

BRANSON: You know, we'll start with giving people a taste of space, then we'll -- some people into orbital flights, we'll start building hotels in space. And --

HARLOW: Really? In our lifetime?

BRANSON: In your lifetime definitely. Hopefully in my lifetime.

HARLOW (voice-over): But will this ever be for the masses?

(On camera): Is this a playground for the wealthiest? The 1 percent only.

BRANSON: Initially it's very much the wealthiest are going to use it, but through these wealthy people, you know, being willing to be pioneers, I think millions of people will one day have the chance to go to space.

HARLOW (voice-over): Like Mikey Oliveri, who has a dream perhaps bigger than most.

MIKEY OLIVERI, WANTS TO GO TO SPACE: I want to be the first to stay in space. You know, I don't have 200 grand, but I have a dream.

HARLOW: Hoping he may get his moment among the stars.

(END VIDEOTAPE)

HARLOW: If you have the guts to boldly go is one thing. If you have the cash is another. Industry watchers warn don't expect this to become affordable for the masses anytime soon, but then again, this is a concept that knows no bounds -- Christine.

ROMANS: Thanks, Poppy.

Coming up on a brand-new YOUR MONEY at 2:00 p.m. Eastern, Obamacare isn't coming. It's already here and it's not going away. No politics, just the facts. On a brand new YOUR MONEY at 2:00 p.m. Eastern Time.

And coming up at the top of the hour, she says it all started as a joke. The "New York Post" writer who promised to make her husband 300 sandwiches so he'd marry her. But does she regret making that vow now?

"CNN NEWSROOM" starts right now.