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Countdown to Iowa; Doctors Charged With Murder; Shrinking Middle Class; Verizon's New "Convenience" Fee; Verizon's $2 Fee Sparks Outrage; Who's Dropping The Ball?; Times Square Ball Technology
Aired December 30, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ISHA SESAY, CNN ANCHOR: I'm Isha Sesay.
Let's catch you up with everything making news this hour, "Rapid Fire." Let's go.
Four days to go until Iowa Republicans hit their caucus meetings and Mitt Romney is still ahead in the polls there. This hour, he's getting a boost from fellow Governor Chris Christie of New Jersey who's on the campaign trail with Romney's wife, Ann.
We'll monitor all the live campaign events over the next couple of hours. And you can also watch them on CNN.com/live.
A massive day of protests turns deadly in Syria. Hundreds of thousands of pro-democracy demonstrators jammed the streets of Homs and other cities across the country as part of what the opposition called the "Crawl to Freedom Square." Anti-government groups say at least 32 protesters have been killed.
Witnesses say this video that you're looking at right now shows a man who had his legs blown off being carried by friends in a Damascus suburb. The crackdown by President Bashar al-Assad forces continues despite the presence of Arab League monitors. The monitors are in Syria to verify Assad's pledge to pull troops from the streets and end the violence.
Well, two doctors affiliated with this Maryland abortion clinic are facing murder charges. Their medical licenses had already been yanked after an 18-year-old patient suffered serious injuries last year. With an indictment released today, investigators describe finding refrigerated fetuses in that clinic which led to the murder charges.
911 tapes have now been released in the shooting of a marine lieutenant colonel in Deerfield Beach, Florida. Karl Trenker survived wars in Iraq and Afghanistan, only to be shot when he chased after two men who robbed him of his fiancee's necklace.
Our affiliate WSVN picks up the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Bust like 10 shots. Yo, at least.
UNIDENTIFIED FEMALE (voice-over): For the first time, we're hearing the 911 calls from the day a Marine was shot in Deerfield Beach.
UNIDENTIFIED MALE: Hey, buddy, sit down. Sit down. They are coming right now.
UNIDENTIFIED FEMALE: The caller, trying to help Karl Trenker, who was shot three times.
LT. COL. KARL TRENKER, U.S. MARINE CORPS: They hit me in the chest, in the abdomen.
UNIDENTIFIED FEMALE: His fiancee was selling a necklace on Craigslist, but he was the one who went to meet the buyer last Wednesday. With his kids in the truck, Trenker met up with a man.
TRENKER: He kind of picked it up, put it in his hand, and said, "Yeah, that feels real." And then he just took off running.
(END VIDEOTAPE)
SESAY: Well, Trenker chased after the pair until one turned around and fired several shots. Two suspects have been arrested on charges of attempted murder.
Right now North Carolina police are searching a turkey facility they say is owned by Butterball, the largest producer of turkey products in the U.S. The reason? Graphic video and allegations of animal abuse.
We want to warn you, some of it you may find disturbing. It was taken by an organization called Mercy for Animals.
The highly edited video shows farm employees kicking, dragging and throwing turkeys. The Hope County Sheriff's Office says no one has been taken into custody and nothing has been seized from the facility.
Now, a car drags a Florida woman across a parking lot. Watch closely at this.
A woman is walking. A car comes up next to her. Someone inside the car grabs her purse. The car takes off, and so does she.
The woman, she has bumps and bruises but is OK. Police are looking for the suspect.
A huge sinkhole is threatening about a dozen homes in Allentown, Pennsylvania, and it's inching closer to a cemetery. It's gotten so close, a court order now gives the coroner the go-ahead to remove caskets from some 60 graves if need be. The fire chief says the sinkhole is 50 feet long and 30 feet wide. He said a water main break probably caused the ground to give.
And take a look at this with me. This is the last stock market day of 2011.
Looking at the Big Board there, the Dow is down some 39 points. It's fluctuating, standing right now at 12,248. The last market day of 2011 for you there. We've got a lot more to cover in the next two hours. Watch.
(BEGIN VIDEOTAPE)
SESAY (voice-over): Two doctors, their licenses already yanked, now charged with murder. What investigators found inside this abortion clinic is shocking. CNN is on the case.
Then, two bucks a pop just to pay your own bill? Verizon customers are sounding off over a new convenience fee. We're drilling down on the cell phone bill outrage.
UNIDENTIFIED FEMALE: You don't usually put your face in a wolf dog's face.
SESAY: Alaskan wolf dogs freed from a callous roadside attraction find a new purpose and some unlikely friends.
And the ball that will drop in Times Square tomorrow night is super wizbang cool. (INAUDIBLE) to show you just how elaborate this high- tech orb really is.
The news starts now.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
SESAY: Well, four days now until the nation's first presidential nominating event, the Iowa caucuses. We are gearing up. Wolf Blitzer is gearing up. And he is here with us today in Atlanta.
Wolf, always great to see you.
WOLF BLITZER, CNN ANCHOR: Thank you.
SESAY: A new poll out. We want to look at those numbers, because one name is screaming out. And we are, of course, talking Newt Gingrich. Newt Gingrich has not only dropped out of the lead, not only dropped out of the top three, Wolf, as you see there, but has plummeted into fifth place in this NBC-Marist poll of likely caucus-goers.
And Wolf, I don't know whether you saw these pictures, Gingrich getting extremely emotional today at an event in Des Moines. He was talking about his mother and her late life struggle with mental illness. He got very, very emotional.
We're going to see if we can get that clip and play it for our viewers a little bit later on, but let's carry on with our conversation.
The fact that he cried in that setting, the fact that his numbers are so bad, you know, the less kind would say it's signs of strain showing. What's your take?
BLITZER: It was certainly a side of Newt Gingrich that -- and I've covered him for 20 years -- that I was not all that familiar with when he broke down and actually started to cry when talking about his mom who suffered from bipolar disease and other issues. And he got really emotional.
Viewers who haven't seen that video, we'll see it. And it's understandable. And I don't think that's necessarily going to hurt him by any means, unlike some of the women who have ran for president.
Pat Schroeder -- remember the congresswoman from Colorado?
SESAY: Hillary Clinton.
BLITZER: Hillary Clinton, when she started to cry, that actually helped her in New Hampshire. Pat Schroeder, it didn't help her. Ed Muskie, when he started to cry when he was running for president, that certainly didn't help him.
Do you have the clip?
SESAY: We have the clip ready. Let's run it for our viewers.
(BEGIN VIDEO CLIP)
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: And my whole emphasis on brain science comes indirectly from dealing with -- see? But dealing with the real problems of real people in my family. And so it's not a theory. It's, in fact, you know, my mother.
(END VIDEO CLIP)
SESAY: Clearly emotional there, but you say that it's OK, it fits into the narrative.
BLITZER: It did. It shows a human side of Newt Gingrich, and I think it will resonate, to a certain degree.
Now, having said that, he's in trouble, and he knows that. He'll be the first to acknowledge.
Our poll this week, the NBC poll that came out today, they really show that he went from early December -- he was in the 30s in Iowa. Now he's in the low teens, the mid teens in Iowa. That's a significant drop. And in my opinion, the main reason is the millions of dollars of negative attack ads that have been bombarding him.
I was in Iowa this week. You can't turn on the TV without seeing these anti-Newt Gingrich ads running from all sorts of sources, including these super PACs. Mostly, these super PACs not directly with any of the campaigns, but clearly supporting either Mitt Romney or Rick Perry or -- Ron Paul doesn't need any super PACs. He's just ready to attack him no matter what. But that has really hurt Newt Gingrich big time.
SESAY: And his lack of response to these ads, is it about policy, taking a principled stand, or was it just a lack of money?
BLITZER: Both. He was trying to take the high road, which was a political blunder. He probably acknowledges that himself right now.
You know, trying to stay above the fray and show that he wasn't going to criticize his fellow Republican candidates, although when he was in "THE SITUATION ROOM" when I interviewed him in Iowa this week, he broke that rule himself. He really went after Ron Paul, he went after Mitt Romney, even though he was going to take the high road.
Look, I think he realizes he should have fought back. In politics, one of the fundamental rules is, if you get slapped, you've got to slap right back. And if you don't, you're going to suffer because that's the nature.
And here's my bottom line on all of this. It apparently worked in Iowa, these attack ads from super PACs and elsewhere, in bringing Newt Gingrich down.
And do you know why they do these negative attack ads? Because they work.
SESAY: Indeed.
BLITZER: And I think in a general election campaign that we're all gearing up for, whoever the Republican nominee is, whether it's Mitt Romney or anyone else, versus Barack Obama in his bid for reelection, these attack ads, the negative campaigning, the negative images we'll see on television, will be blistering. This is going to be a really, really tough general election campaign coming up because it works.
SESAY: I want to move on and talk about Ron Paul, because as you're well aware, there was this newsletter from the '80s and '90s that had his name on it. It had some language that some consider racist and inflammatory. He's disavowed that.
But now new questions being asked about a book under his own name. I want to actually read some of it.
This is his book, "Freedom Under Siege." It was written in 1987.
Well, let's just put up some quotes for our viewers, because it says a lot on various issues. And on victims of sexual abuse, he has this to say: "Why don't they just quit once the so-called harassment starts?"
He goes on, on the issue of Hispanic, black and Jewish caucuses and whether they can exist in the U.S. Congress, but not a white Congress. He calls that absurd.
And this book, Wolf, with its various statements on various issues, you know, some people, again, are asking about this man's character.
Do you think this is a big deal?
BLITZER: It will hurt him. I don't think with his real core supporters -- and he's got a lot of them in Iowa, New Hampshire, South Carolina, Florida. With them, it's not going to necessarily hurt him. But with moderates, with Independents, certainly with Democrats, it potentially could hurt him a lot. Now, he has said, not necessarily with his book, but with those newsletters that were published, Ron Paul newsletters, he never read those articles. They were published under his name. He didn't know about them or whatever. He only found out about them much later.
He hasn't told us who actually wrote all that stuff for him. So it will hurt him. I'm sure he's not happy that it's all coming out right now.
But if you're running for president of the United States, everything is going to come out, especially, you know -- and he's doing well. He could win in Iowa.
SESAY: Scrutiny.
BLITZER: He could win in Iowa. He's close enough to Mitt Romney in these last polls. Still a few more days left to go.
And what he does have in Iowa is an excellent ground game. He's got all these college students who have come in from all over the country to get out the caucus-goers, to help the elderly get to these locations. That's what you need, because this is a different -- it's not just going to vote, you have got to go sit there for a few hours and you've got to do it publicly.
He's got a lot of these young students who have come in, and they're -- if you read that story in "The New York Times" yesterday, they dress up nicely, they're not showing tattoos. They're shaving.
SESAY: No facial hair.
BLITZER: Yes, they've got ties on, unlike so many of the volunteers who came in for Howard Dean back in 2004. Apparently, they looked like hippies or whatever, and they turned off a lot of Iowans at the time and it didn't help Howard Dean. He came in third in Iowa, even though he had been doing really well.
So they learned that lesson. And I think this is one of the strengths that Ron Paul has.
He's got really devoted supporters out there, including a lot of young people who are going to work really hard on Tuesday to get Ron Paul supporters to these caucuses. He'll do well.
SESAY: He'll do well. But can he win it?
BLITZER: He might be able to win Iowa. I wouldn't be shocked if he wins. Mitt Romney is looking good, but there's still a few days to go.
I will say this, by the way, about Ron Paul. I've interviewed him many times over the years, and in all of the interviews I've done with him, at least in my interviews, he never showed any racism or bigotry or anything like that.
These books or these newsletters going back to the '80s obviously are a problem for him, but in recent years he's been a very, very decent guy, at least in all the interviews he's always done with me.
SESAY: We'll have to wait and see how the Ron Paul campaign responds to all this and these questions being asked.
Wolf Blitzer, always great to see you, always great to talk to you. Looking forward to seeing the coverage next week.
BLITZER: Remember we saw each other in Cape Town, South Africa?
SESAY: We did see each other in Cape Town.
BLITZER: At the World Cup. That was fun, wasn't it?
SESAY: It was a long time ago.
BLITZER: Yes. It seems like a long time ago.
SESAY: It was a long time ago. And it was cold, which has probably affected my memory.
Wolf, thank you.
BLITZER: Thank you.
SESAY: All right.
A reminder -- tune in next week for the country's first vote in the presidential race. "America's Choice 2012," live coverage of the Iowa caucuses begins Tuesday night, January 3rd, at 7:00 Eastern. Wolf and the entire team will be here.
All right. Moving on.
Two abortion doctors in Maryland are now charged with murder. Find out why straight ahead.
Plus, the hunt is on for this man. Police say he stalked a little girl in a Minnesota Wal-Mart and fondled her while she stood right next to her mother. The whole thing was caught on tape. That story coming up after this very quick break.
Stay with us.
(COMMERCIAL BREAK)
SESAY: Investigators are looking for a man they say groped a girl at a Wal-Mart while her mother and older siblings stood right next to her.
It happened Monday at this Wal-Mart in Fridley, Minnesota, just outside of Minneapolis. Surveillance cameras caught the entire thing, and now police are hoping to identify and catch the suspect by releasing these stills of the man they're looking for.
Now, what they're saying to us is that he fixated on the girl, stalked her and her family, then groped the child. Police say the girl is younger than 13. By the time she told her mother what happened, police say the suspect had disappeared.
Well, we've got a disturbing story developing out of Elkton, Maryland, to tell you about. Two doctors linked to this shuttered abortion clinic both have been charged with murder. Those charges contained in an indictment. Both doctors now in custody.
David Mattingly is with me now. He's been working this story for us.
David, how did we go from late-term abortions to a murder case?
DAVID MATTINGLY, CNN CORRESPONDENT: Well, this is, very simply put, a medical case that has turned criminal. And because prosecutors that I've talked to today, they say that the laws were broken here when the doctors performed abortions, aborting fetuses that could have been viable, that could have lived outside the womb. And they were able to make this determination after they went to that clinic that you saw there in Elkton, Maryland.
They looked at the records. They found that abortions had been performed on fetuses that were 20 to 35 weeks old.
Also, they found -- in these five cases for one doctor, they found that -- they believe that none of these cases fell into the exceptions provided under Maryland law, which means the mother's health was not at stake and there were no genetic problems for the child either. So that's -- with that said, they said they have a case of murder here. So we have five counts against one doctor, one count against another doctor.
SESAY: So, walk us back. This all kicked off when a young woman went to see these individuals and ended up in a hospital.
MATTINGLY: Right. A teenage woman went for an abortion at this clinic. There were problems, complications.
She ended up being taken, driven to the hospital after her abortion there. Her condition was so serious, that that hospital decided to send her to another hospital to --
SESAY: I think it was Johns Hopkins.
MATTINGLY: Johns Hopkins. That's right.
And she had to be flown there. It was a very serious situation. Her uterus had been punctured. She had other internal injuries.
And the doctors then complained, saying, hey, you need to look into this. They complained about the treatment that she got and the fact that she was driven by car to the hospital in the first place when it was a very serious injury.
SESAY: I want to ask you what's next for the doctors. But do we have any follow-up on this woman and her condition?
MATTINGLY: Oh, she was fine.
SESAY: She was fine.
MATTINGLY: She underwent surgery. Presumably, she might be a witness in the case that's against the two doctors now.
SESAY: OK.
And the doctors, themselves, what's next?
MATTINGLY: One doctor is with authorities. He's in custody in New Jersey. Another doctor is in custody in Utah.
We spoke to their attorneys. One did not have any comment. Another attorney said that her client does not need to be held without bond. She said the charges are without merit. The very beginning of this criminal case. We're going to hear more about this next week.
SESAY: Yes, indeed. This is so awful. And to find those fetuses in that refrigerator, I can't even imagine for the investigators and those searching the premises.
David Mattingly, thank you so much for working the story for us.
All right. Stunning new statistics this afternoon. Nearly half of all the people in this country are considered poor or low income, and it is getting worse. More and more people are dropping out of the middle class. Where do they have left to go?
That story is next.
(COMMERCIAL BREAK)
SESAY: I want you to consider this: so many Americans have lost jobs, homes, incomes. Nearly one in every two are now considered to be low income or poor. That's almost half of all Americans.
CNN's Poppy Harlow spent a day with two mothers who are sliding down the income ladder.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: It's a fight every day.
POPPY HARLOW, CNN CORRESPONDENT: A fight every day?
UNIDENTIFIED FEMALE: Every day.
HARLOW (voice-over): They're stuck in the middle, not living in poverty, but not making it either. Many too ashamed to show their face.
We met this young mother at a New Jersey food pantry she used to donate to. But today, she came for help.
(on camera): Why did I meet you here today?
UNIDENTIFIED FEMALE: Five kids, one bag of chicken left in the house, and it's only four pieces in there.
HARLOW (voice-over): A mother of three and helping take care of two other children. Her job, she says, a victim of downsizing.
But it wasn't always this way.
(on camera): 2009, for you, life was good.
UNIDENTIFIED FEMALE: It was great. You know, three cars, house, kids.
HARLOW (voice-over): A similar story for this mother an her daughter.
(on camera): Did you ever think that you would be living with your three kids in a shelter?
UNIDENTIFIED FEMALE: No. I never thought in a million years that I would be at this point this bad. I was working. The money that I was making, I was able to pay my bills until I got laid off from my job.
HARLOW (voice-over): She was bringing in between $40,000 and $50,000 a year. Here in Bergen County, New Jersey, the median household income is more than $77,000 a year, but the cost of living is steep. They were evicted in December.
(on camera): And where do you sleep?
UNIDENTIFIED FEMALE: Well, we transition from church to church.
HARLOW: Do your friends know that you're living in a shelter?
UNIDENTIFIED FEMALE: No. I just feel like they might look down on me or, like, feel pity for me. I don't want that.
HARLOW (voice-over): Nearly one in two Americans is now living on the lower end of the income scale. For a family of four, that's less than $45,000 a year.
The recession may be over, but it doesn't feel that way.
UNIDENTIFIED FEMALE: We're seeing a tremendous increase, and much of that increase has to do with people that never, ever thought that they were going to need to come to an emergency center.
HARLOW (on camera): People that were middle class?
UNIDENTIFIED FEMALE: People that were middle class, people that were donors.
KATE DUGGAN, EXECUTIVE DIRECTOR, FAMILY PROMISE OF BERGEN COUNTY: I think what we're seeing is that the middle class is going away.
HARLOW (voice-over): Kate Duggan runs a local nonprofit and is working to help get this family back on their feet.
DUGGAN: Families that do have educations and had decent jobs are now being laid off.
HARLOW (on camera): These are the families that are stuck in the middle, aren't they?
DUGGAN: Exactly. They fall through the cracks.
HARLOW: And there's a lot of them.
DUGGAN: There are a lot of them. But that's the frightening part.
UNIDENTIFIED FEMALE: I never thought I would be here. I don't know why I have to go through this.
(END VIDEOTAPE)
SESAY: Well, Poppy Harlow joins us now from New York.
And Poppy, just talk to us a little bit more about, you know, what is happening to drive families to this.
HARLOW: It's a great question, because these two families are just examples of what's happening, Isha, across America to so many different families.
I spoke to dozens of them on the phone, out in field, who just couldn't share their story on camera. They couldn't go that far.
What's happening, it seems, is that wages -- if they still have a job, they're either making less on their wages have been stagnant for a long time. But the cost of living in this country keeps going up. The cost of food, the cost of energy, the cost of rent, if they've lost their home, it keeps getting higher. And they just can't keep up.
If they've lost their job like the mothers in that story, and they've run out of unemployment benefits, there is no more help out there for them. They have literally hit the end of their rope and ended up in these situations that they never expected that they would be in -- Isha.
SESAY: And Poppy, it struck me in watching that piece that if some who consider themselves middle class are now becoming poor, what's happening to those who were the poor before?
HARLOW: And that's the key question. What's happening, the experts tell us who we talked to, and what we're actually seeing happen on the ground, is that these formerly middle class working Americans, if they can get a job, they're getting a job that, say, a working poor person used to have, whether it's a minimum wage job at Wal-Mart or somewhere else. They're getting those jobs. What we're told is that's pushing the poor out of employment.
Also, what you're seeing is if they've lost their home, the middle class person -- for example, one person I talked to, they're looking to rent a much less expensive, say, apartment, and that used to go to someone who was considered part of the working poor. So it's pushing the poor out and making the situation for them even worse. And that's this trickle-down effect of what we're seeing happen.
SESAY: Yes, indeed. A difficult time for so many people.
Poppy, thank you. Appreciate the reporting.
Ever wait until the last minute to pay your cell phone bill, then rush online to put it on your credit card? I know I do. If you're a Verizon customer, that will cost you $2.
Verizon is calling it a convenience fee. We'll show you how to avoid it.
But first, aside from cell phone bills, what drives you crazy? How about overused words? The annual list of banished words is out. Thanks to the folks at Michigan's Lake Superior State University.
Here are a few they came up with. Baby bump. Baby bump, what's wrong with just saying someone is expecting or pregnant? You know, I'm going to blame celebrity parents for this one.
Also on that list, shared sacrifice as in the phrase you hear from politicians. They use it when they're trying to get buy-in on an idea for the masses.
Another one on the list, man cave. Why banish the man to end this little hall in the house? Let's banish that word in the coming year and we'll name a few more of this after a quick break.
(COMMERCIAL BREAK)
SESAY: Finally, a few more words and phrases that are to be banished from your vernacular in the coming years. Occupy, I think we know where that comes from. Another self-explanatory one is pet parent. You are not the mother or father of your cats and dogs, people.
Another fun one on the list, thank you in advance. As in thank you in advance Lake Superior State's next year's list of words.
All right, well, get ready for the latest round of customer unrest. This time it's Verizon Wireless that's jumping into the fray. You may remember recently inhabited by Netflix and Bank of America.
Verizon wireless as you probably know provides cell phone service. Well, take a look at this announcement posted on Verizon's web page. Customers are being told Verizon plans to start charging them a $2 convenience fee for paying their bills.
The FCC is now jumping in telling CNN, quote, "On behalf of American consumers, we're concerned about Verizon's actions and are looking into the matter."
All right, at this point let's bring in Alison Kosik. Alison, a convenience fee, what is that?
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, that's what I was thinking, too. It's funny. It's sort of the spin that seems to be put on that word. I say it's an inconvenience fee.
But what it really means, Isha, is that every time you make a one-time payment, whether it's on the phone or if it's online with your credit card, you're going to be charged $2 meaning if you use a credit or debit card online or on the phone on a month to month basis.
Now Verizon is saying that the fee is really meant to cover costs that are associated with those onetime credit card payments. But the translation is it's actually passing along the transaction fees that banks and credit card companies are charging them.
The companies also saying that it's offering customers numerous free payment options and it's encouraging customers, Isha, to use these options.
SESAY: All right, Great point. Because you know Verizon customers are not reacting positively to this. A short time after Verizon's announcement, this online petition got posted.
Here's a bit of what it says. Since Verizon Wireless is already the most expensive post-paid wireless provider in the United States, we feel this new fee is unjust, environmentally unsound and abusive to your customers.
That's a little bit of what that online petition says. So Alison, here's my question to you. If customers aren't happy, what's the way to get around all this? Is there a way?
KOSIK: There are actually are lots of ways, Isha. You know most customers in reality are not going to be hit with this fee. You can ahead and do is you can use an electronic check online or over the phone.
You can enrol in auto pay. You can use a Verizon gift card. You can even go into a Verizon store and pay your bill there or just, you know what? Do it the old-fashioned way. Put the check in the mail, stick the stamp on the envelope and call it a day.
But once again, Verizon is really trying to steer customers away from paying with a credit card at the last minute. That's essentially what they're doing. But you know what, just the idea of spending an extra 2 bucks for the privilege of paying your bill?
Yes, that, of course, sparked a lot of outrage. It also caught the eye of the FCC. The FCC now says it's looking into this fee, Isha. And this fee, by the way, is set to go into effect on January 15th. I think it's interesting how it caught the FCC's eye -- Isha.
SESAY: Yes, and you know, the other thing that struck me all of this was the timing of the announcement. The fact they waited until the so-called dead week between Christmas and New Year. It seemed a little calculating.
KOSIK: Well, you know, I don't know about the timing. I mean, customers are going to be notified of the media's covering this like crazy. One other thing that kind of stuck out at me is that, you know, if you play your cards right here, customers really won't have to worry about this.
But the rub here, the real rub here is that probably people who can least afford the fee, meaning people who don't necessarily have bank accounts, they're the ones who are going to get stuck paying it. So, you know, I don't quite see the fairness in that.
But you know, Verizon is offering a lot of ways to get around it. We'll see what happens. Then there could be that consumer backlash a lot like we saw with that Bank of America fee, that $5 debit card fee that Bank of America retracted after the backlash from consumers. We'll see if the same thing goes the way for Verizon Wireless.
SESAY: I love how you're way less cynical than I am, thinking they're trying to sneak it past the customers when everyone is just, you know, after Christmas and all the overeating and not really checking things. Interesting perspective.
KOSIK: Surprise.
SESAY: I appreciate it, Alison, thank you.
All right, well, you don't have to look back very far to see examples of companies adding fees and losing customers. Alison touched on that.
Netflix had to back off a rate hike. Consumer backlash forced Bank of America to drop its $5 debit fees. So how is this going to go for Verizon?
Let's bring in Ioana Rusu, she's with Consumer Unions, they public consumer reports. Thanks for so much for joining us. The internet is buzzing with consumer outrage.
Here's what Lauren posted on change.org, quote, "You people have got to stop nickel and diming us to death. Just charge us a fair fee for using your service and let that be the end of it. Your greed is going to be your downfall."
Ioana, lots of comments like that. How damaging is this for Verizon in your view?
IOANA RUSU, REGULATORY COUNSEL, CONSUMERS UNION: Isha, I couldn't agree more with the consumer who posted on change.org. This is really emblematic of what's happening with telecom companies, with banks, with cable companies. What they're doing is adding on convenience fees that don't really have anything to do with granting us better service.
They're really just a fee for the privilege of paying your bill. This is something, you know, it may be a small fee. You may not notice it at first, but it does add up. Consumers are being nickel and dimed here and there.
Isha, let me point out one other thing. Some people may really not be comfortable with auto pay option that you have, you know, in order to avoid the $2 charge. Some people understand that they would like to review their bill.
They'd like to see the charges on there first then authorize a payment and they know that if they automate this and if they streamline it so much, they probably won't be taking a look at their bill. And that's where those small charges can sneak in.
SESAY: Well, let me ask you something. I don't know whether you have the answer, but I was intrigued. Because obviously off the top of my head, I understand if you pay a bill on the phone, there's a third party that has to handle the transactions. I can understand the company is passing on that cost. How do you work that out for the internet?
RUSU: It doesn't make sense. You know, obviously I don't work for Verizon. I don't know what their costs are, but it seems to me that to claim it costs more to do a one-time fee charge as opposed to a monthly continuous fee charge. I guess, I don't really understand where the higher cost is there.
SESAY: That's good that we're both on the same page and don't understand that one.
RUSU: Yes.
SESAY: Now, Verizon, a cell phone provider, which means of course, long-term contracts, which some people really hate. Let me read to you what Nathan posted online, quote, "I will leave Verizon at the end of my contract if the charge goes into effect." Because of the contracts, are people locked in? Do they have to pay and just wait?
RUSU: It seems like it. It seems that as long as you're in a one- year or two-year contract with Verizon, you will have to pay this charge if you decide to continue paying, doing one time bank payments or one time phone payments for your bill.
SESAY: Let's talk about legality as well because I want to put up this post from Michael. This is what he said. He said, "New Verizon customer. I wouldn't have signed up if I knew this was in the ranks. It should be against the law to charge someone for paying their bill."
And then we got a statement from an FCC official, quote, "On behalf of American consumers, we're concerned about Verizon's actions, and are looking into the matter. Could there be a violation of FCC rules here?
RUSU: There could be and I know the FCC is also looking into another issue also with Verizon, which makes me increasingly concerned about this practice is the practice of cramming.
This is adding mystery charges for services and data that consumers did not purchase and did not want. So Verizon is already under scrutiny from the FCC for that particular area. So I think the fact that they're going ahead with this fee is doubly concerning.
SESAY: And what about credit card company regulations?
RUSU: I guess we will have to see how that one plays out.
SESAY: So we've seen the outcry that erupted when Netflix tried to do the rate hike. We saw what happened with Bank of America and the monthly debit fee charges they tried to put up there.
Do you think Verizon will go through with this? I mean, how loud could this uproar, this outcry get when you take a look at what people are saying right now?
RUSU: The outcry could get very loud and as we've seen in the past, Consumers Union was definitely involved with the Bank of America $5 debit card fee. There was a huge outcry because of that.
People were changing their bank accounts. They were pulling their money out of Bank of America, switching to other banks. I think if we see a sufficiently strong consumer outcry here, we can hopefully convince Verizon, but this is really not the best way to have a good consumer image today.
SESAY: All right, we're going to continue to follow this and see what happens in January 15th I believe is when this fee is supposed to go into effect. Ioana Rusu, thanks so much for joining us.
RUSU: Thank you, Isha.
SESAY: So how important is Iowa? Why the huge emphasis placed on this mid-western state with the first in the nation caucuses? Mary Snow explains the real takeaway for those of us who don't live there.
(COMMERCIAL BREAK)
SESAY: If you still have questions about the Iowa caucuses, exactly what they are, and why the political world is so excited, stand by. We have a report from Mary Snow that explains why Iowa truly is important. Here we go.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Republican presidential hopefuls make the final sprint in Iowa as they crisscross the state, campaigns and supporters flood the airwaves with ads, $8 million worth and counting just this month. So how much can a win in Iowa matter? That depends.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: This was the place where America remembered what it means to hope.
SNOW: For Barack Obama, a victory in Iowa proved to be a game changer. On the Republican side, a different story.
MIKE HUCKABEE (R), FORMER PRESIDENTIAL CANDIDATE: Tonight, I love Iowa a whole lot.
SNOW: Mike Huckabee's upset victory in 2008 with the help of Iowa Evangelicals failed to gain momentum outside the state. John McCain was the eventual nominee. (on camera): When you take a look at who won in Iowa compared to the party's eventual nominee, caucus goers have more traction on the Democratic side. A win in 2008 was not only crucial for Barack Obama, but in 2004 for John Kerry, and particularly in 1976 for Jimmy Carter.
On the Republican side, in recent years, Iowa victors George W. Bush in 2000 and Bob Dole in 1996 went on to win their party's nomination, but the their wins in Iowa were not as crucial to their campaigns.
(voice-over): Started in 1972, the caucuses are more about widowing down the field of candidates. Winners gain no delegates. And some political watchers say the Iowa contest has become more about the media attention.
DENNIS GOLDFORD, DRAKE UNIVERSITY: It's essentially in and of itself a meaningless event, but it has tremendous political impact because if a candidate does worse than expected, support and especially funding tends to dry up.
And if a candidate does better than expected, that support tends to expand and in particular funding, campaign contributions, tend to increase.
SNOW: Last presidential election, about 118,000 Republicans took part in the caucuses. And in Iowa, there's a stronger focus on social issues than other parts of the country, 60 percent of GOP caucus goers in 2008 described themselves as Evangelical or Born Again Christians.
That turnout of Republican caucus goers in 2008 amounts to roughly one-fifth of registered Republicans in the state. Estimates for what turnout may be this time are all over the map. Mary Snow, CNN, New York.
(END VIDEOTAPE)
SESAY: And this reminder, tune in next week for the country's first vote in the presidential race. America's Choice 2012 live coverage of the Iowa caucuses begins Tuesday night, January 3rd at 7:00 p.m. Eastern.
This just into us here at CNN. Pop star Katy Perry and Russell Brand are getting a divorce. We just got a statement from Russell Brand via his publicist.
Brand says, sadly Katy and I are ending our marriage. I'll always adore her and I know we'll remain friends. Once again, this news just coming into us here at CNN that Katy Perry and Russell Brand are getting a divorce.
OK, moving on. Dropping the ball in Times Square is a New Year's Eve tradition. Coming up, find out who has the honor of dropping the ball this year.
And Katie Linendoll standing by in Times Square to give us the incredible technology behind it.
(COMMERCIAL BREAK)
SESAY: About a billion people are expected to watch the Times Square ball drop Saturday night. And a pop superstar is going to be pushing the button. Do you know who it is?
Katie Linendoll is in New York with the big reveal and high- tech preps. Katie, first of all, I'm heading your way in a couple of hours.
But, you know, while you're there, give me a sense, what's the atmosphere like in Times Square right now?
KATIE LINENDOLL, CNN TECH REPORTER: My gosh, trying to navigate through the crowds already was crazy. I don't know how people do it. People are already camping out.
I've been here 20 minutes and already have to use the bathroom. I don't know where people go. But luckily this year there was no snow because I was terrified I was going to get pelted in the face with a snowball. We're clear there, Isha.
SESAY: Thank you for making it clear that getting bathroom breaks is indeed tough. People should know that with this assignment. Who's doing the honors of pushing the button?
LINENDOLL: Yes, this is really interesting. Every year there's a special guest that hits a button that has the ball drop at midnight. In the past, notably the guests have included Muhammad Ali, Bill and Hillary Clinton, Colin Powell.
But this year according to "The New York Post" we're kicking it up a notch. It's actually going to be Lady Gaga who will be ringing in 2012 with Rudy Giuliani, which should be very exciting.
If you're watching the ball drop and you want to sound really smart, there's a lot of technology that goes on that a lot of people don't realize inside the ball, in itself. Understand this is a 104- year-old tradition.
The early ball was actually made of iron and wood. It was 700 pounds. But check out the 2012 stats of this year's ball, pretty impressive. This year it is made of aluminium. It's 12 feet in diameter. It also weighs about 12,000 pounds.
But here's where it gets interesting. The old ball had about 100 light bulbs in it. There are now 30,000 Phillips L.E.D. lights, about 8,000 in each of four colors that illuminate the ball. This can be controlled digitally, remotely.
It has 16 billion colors and allowed to project video on it with a number of different unique patterns. Everybody knows the iconic look with the Waterford crystals.
Every year, there's nearly 3,000 Waterford crystals are updated. This year's theme is let there be friendship. I think a more accurate theme is let's get hopped up and some make bad decisions. But I'll leave that to the Times Square alliance.
SESAY: Yes, indeed. You know, year after year the crowds turn out and it's always a great atmosphere. I'm really excited about the fact the ball can do these fancy new things.
I guess, this is something they work on as soon as they've done the ball drop, they look ahead to the next year to see how they can continue to raise the bar, right?
LINENDOLL: Yes. I'm having a hard time hearing you because it's a little crazy here. I want to note while we have time, something that was really interesting, since 2007 what Phillips has done, they've worked on the ball for 12 years.
And they actually converted all of the light bulb inside there from Halogen to LED, which sounds totally boring, but stay with me because this very fascinating.
The ball, now itself, 12,000 pounds is 88 percent more energy efficient. The bulbs actually last about 30 times more than the Halogen bulbs. And what's cool is for a consumer, you can actually purchase the bulbs that are used on the actual Times Square ball in retail.
So when people go to the store and they're like, my gosh, there's an LED bulb, it's $15. Understand that bulb is going to last 20 to 20 years as opposed to a 50 cent light bulb who's going to last six months. So I think there's an interesting consumer take away -- Isha.
SESAY: I'm glad I stayed with you as you made that point because that is very interesting. Katie Linendoll showing us there from New York. Appreciate it. Thank you so much. Happy New Year in advance.
LINENDOLL: Thank you, happy New Year.
SESAY: We're going to check in on the weather for New Year's Eve not only in New York, but also across the country. Chad Myers is the man stand by with all the information.
Plus, for some reason people like to shoot off their guns on New Year's Eve. We're digging deeper on this disturbing celebratory act next.
(COMMERCIAL BREAK)
HARLOW: Time now for the "Help Desk" where we get answers to your financial questions. Joining me this hour, Gary Schatsky, he's a financial planner and the president of objectiveadvice.com and Gail Cunningham is with the National Foundation for Credit Counselling.
Thank you both for being here today. First question for you, Gary. This comes from Michael in Florida. Michael writes, "My mortgage company requires me to have property insurance and flood insurance, which cost a total of $3,600. I've got 90k left on the mortgage. I have over $200,000 in investment. Should I cash out some of my investments and pay off the mortgage to reduce or eliminate the insurance."
GARY SCHATSKY, FINANCIAL PLANNER: Well, you know, if you borrow money, people want to make sure the property's going to be there. So I understand that concern. But at the end of the day you need insurance. I mean, unless you somehow find you're not in a flood zone then there would be a value to that.
So I think the real analysis would be what's the interest rate on the underlying loan and do you have money that's sitting around? But even if you paid it off, very few people would be well advised to get rid of their homeowners insurance or their flood insurance because they are protect being the value of your home even if they are not protecting the lender's value.
HARLOW: And many are required -- I know I pay renter's insurance.
SCHATSKY: Many people aren't required to have renter's insurance.
HARLOW: But it is good to have.
SCHATSKY: You should absolutely have it. A couple of hundred dollars --
HARLOW: Can go a long way. Gail, your question comes from Lenny in West Virginia. Lenny writes, "Is it possible to declare bankruptcy on a federal college loan?"
CUNNINGHAM: Well, the government is very serious about getting repaid. And as a rule, bankruptcy does not cover student loans. The government though can even garnish your paycheck so you need to treat this very seriously. I would encourage him to do thorough research. Don't make bankruptcy or try to make it your first stop. Make it your last. There are options.
There's a deferment, which would stop the payment for a short period of time. Forbearance would stop or lower the payment for a longer period of time, and even loan forgiveness.
HARLOW: Look at bankruptcy last.
CUNNINGHAM: Exactly.
HARLOW: Because it sticks with you many years.
All right, thank you, guys, very much.
If you have got a question you want answered, send an e-mail any time to CNNHelpDesk@CNN.com.
