Interest Rate Cut Expected; McCain Fighting for Florida
TONY HARRIS, CNN ANCHOR: All right. Let's see, a quick look at the markets, the New York Stock Exchange now and the Big Board.And again, it's been kind of a mixed day. We've been down, we've been up, but right now it's good news. We are up in positive territory, 38 points. We will get a market check with Susan Lisovicz a little later in this hour. With the markets jumping all over the place, and as the economy looks for some kind of direction, the Fed is eyeing another interest rate cut today. Live now to our Christine Romans in New York. And Christine, on the idea of an interest rate cut, on a percentage basis, what are we expecting today? And how much of a cut is the street looking for? We know those two numbers could be different.</s>CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right. Well, we're looking for on how many percentage points they're going to lower it. And most people expect either a quarter of a point or a half of a point. But keep in mind, we've seen moves already several times this year. We had that emergency rate cut, remember, October 8th, when they came out without even having a meeting and just cut rates pretty dramatically, a half a point. So we don't know for sure. We won't know for sure for two hours and 15 minutes, but the street is expecting another rate cut. So, what would the level be? About 1.5 percent, would be the fed funds target. This is what it is now, sorry, 1.5 percent is where it stands right now. The primary stands at 4.5 percent. The goal of a rate cut, of course -- why would it matter to you? Well, the goal is to make it cheaper to borrow. Businesses can expand and hire more people, can save on lower rates, and consumers are able to spend more. But that's it in theory. Remember, we've had pretty low rates throughout the year, and the concern here is not the level of interest rates being low, but that banks aren't lending, and people aren't lending, and the normal lending isn't happening. So, as cheap as the rates are, you're still not seeing the lending that they would like to see.</s>HARRIS: Yes.</s>ROMANS: But the intention of a rate cut, Tony, as we know, is to make borrowing costs lower, to make it easier to borrow, and to goose the economy. And we know the economy could use some goosing. We got more job cuts announced today from all different kinds of industries, from magazines to auto parts. You know, you saw Qwest Communications announce some job cuts today. Down the line you're seeing job cuts. And that's expected to continue. So pink slips for a lot of people at a lot different kinds of company. Enterprise Rent-A-Car, this was, like, yesterday. They're cutting some 200 jobs. They've never had what are called mass layoffs, 50 layoffs or more at a time, in the history of that company. So you're seeing the belt tightening at the office. How is the economy affecting where you work? Well, you're already starting to see it. In a recent poll, a survey, from Watson Wyatt Worldwide, showed that a lot of employees are expecting hiring freezes and more job cuts. In particular, a quarter of employers surveyed said they're going to lay off workers next year. About a quarter of them said they're going to be having a hiring freeze. They're going to cut training. Eighteen percent said they'd slash the holiday party. And look at this. Four percent of companies surveyed in this Watson Wyatt Worldwide survey said they were going to cut their 401(k) match, at least temporarily.</s>HARRIS: Well, that's the reason a lot of us are involved in those programs to begin with, because we get the match.</s>ROMANS: I know.</s>HARRIS: It makes sense, but we love the match.</s>ROMANS: We love the match. And so if you're an optimist, I think you're going to say it's a tough economy. And 96 percent of surveys said next year they're not going to touch their 401(k) match. But boy, if you're one of those employees that you will see a suspension there, that's certainly not good.</s>HARRIS: Yes.</s>ROMANS: We always say that that's the free money. You know, don't give up the free money. So...</s>HARRIS: Yes.</s>ROMANS: ... most people are still going to get that next year. But you'll be looking at the office, Tony. You're going to see how companies are starting to cut corners. And they have a fine line to walk here. They have to keep morale up, because people are seeing a weak economy all around them. So they have to keep morale up, but they also have to cut costs where they can.</s>HARRIS: Yes.</s>ROMANS: So maybe that big, extravagant Christmas party and the holiday party, out the window maybe for a lot of companies this year.</s>HARRIS: Bye-bye. All right, Christine. Good to see you. Thank you.</s>ROMANS: Bye-bye.</s>HARRIS: The energy crisis and how it contributes to our money problems. Just a short time ago in Ohio, Sarah Palin made her case for offshore drilling and the development of other energy solutions.</s>GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: Oil today is running at about $64 a barrel. That's less than half of what it was just a couple of months ago. And though this sudden drop in prices sure makes a difference for all of our families and our pocketbooks, and for our local communities' budgets and our state budgets, the danger still of our dependence on foreign oil is just as real as it was before this decline in oil and gas prices.</s>HARRIS: Well, Palin says energy prices will stabilize when the U.S. has achieved its own energy security. And for more on the financial crisis, just go to CNNMoney.com. Six days to seal the deal. The candidates packing in as much as possible on their last lap of campaigning. Barack Obama coming to you live any minute now from Raleigh, North Carolina. And we will take you there the minute that he begins speaking. Last hour, John McCain wrapped up his rally in Miami. We brought you his speech live. McCain's got another big event coming up this afternoon in Palm Beach. It is critical strategy time for the McCain camp. Our Ed Henry reports from Miami.</s>ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John McCain spending the day here in Florida because it is the mother of all battlegrounds. First of all, he's meeting with his national security team to try once again to raise questions about whether Barack Obama is fit to be commander in chief, but the rest of the day is all about the economy. McCain aides know that he's behind, but they still believe he can come back, and here's his emerging strategy. First of all, they say he has to hold states that George W. Bush carried in 2004, such as North Carolina, Virginia, and here in Florida. So he was holding an event here at this lumberyard in Miami, a "Joe the Plumber" event, it's called, where he was trying to level the charge once again that if Obama is elected, his tax plan will make the financial crisis worse.</s>SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: You see, Senator Obama believes in redistributing wealth, not in policies that grow our economy and create jobs. He said that even though lower taxes on investment help our economy, he favors higher taxes on investment for "fairness." There's nothing fair about driving our economy into the ground.</s>HENRY: If McCain does succeed and hold the states that George W. Bush covered in 2004, McCain aides say he could get to around 260 electoral votes, 10 short of the magic number of 270. So then he would have to do one of two things -- either carry Pennsylvania with its 21 electoral votes to put him over the top, or carry a combination of smaller states like Nevada, Iowa and New Hampshire. The problem, though, is in all four of those states: Pennsylvania, Iowa, Nevada, New Hampshire. McCain is behind in all those states in the latest CNN Poll of Polls. So this will be an uphill climb. Ed Henry, CNN, Miami.</s>HARRIS: Ten issue, 10 days. Countdown to the presidential election. So far this week we've looked at the candidates' stands on the economy, taxes, energy, and health care. Today we turn to education. Let's look at candidates' plans for teaching your children. Barack Obama would increase early childhood education funding. John McCain emphasizes virtual schools and online education. Obama wants to expand mentoring programs and give scholarships to teachers. McCain favors bonuses for teachers who boost student performance. He also wants extra funding for states that recruit teachers near the top of their graduating class. Obama favors a $4,000 tuition tax credit. He also wants to expand Pell Grants and lower interest rates on college loans. McCain wants to simplify tax benefits and consolidate the government's financial aid program. Those are just some of the things the candidates are proposing. The high cost of college forcing teens to make some tough choices. I'll put a face on the problem for you in an interview with a very smart young lady from Brooklyn. Don't miss it at the bottom of the hour. Barack Obama's campaign spending has been at record levels, and now the way he's spending it is also a political first. And a live picture now, Raleigh, North Carolina, Barack Obama's event to start in minutes. We will take you there when it begins.