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Gov. Palin Addresses Future for Republican Governors in Miami; Obama Transition Team Lays Out Restrictions for Lobbyists; Senate Banking Committee Holds Hearings on Economic Crisis
Aired November 13, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: A big jump in jobless claims. But investors don't seem too worried for right now. We're going to be checking back on Wall Street. And the financial crisis taking focus on Capitol Hill. This hour, hearings on how it happened and what's being done.
It is Thursday, November 13th, I'm Heidi Collins. You are in the CNN NEWSROOM.
At this hour, two hearings getting under way on Capitol Hill, both focusing on the country's financial crisis. The House Oversight Committee looks at the role hedge funds may have played in all of this. And the Senate Banking Committee delves deeper into the government's $700 billion rescue program. We're going to be talking about all of it.
In the meantime also talking and looking at this. Dow Jones Industrial Average is down 49 points right now. Over the past three days, we all know the blue chip Dow has actually fallen more than 660 points, about 7 percent or so. Everybody very interested obviously in those numbers again today.
COLLINS: In fact, huge sell-offs across Asia to talk about as well. Stocks tumbled more than 5 percent overnight in Japan and Hong Kong. Seoul lost more than 3 percent. European markets opened lower and are still trading down. The latest economic figures are in too. Some are up and some are down. We want to check in with CNN's Christine Romans in New York now.
Unfortunately, not too much to celebrate, here, Christine.
CHRISTINE ROMANS, CNN CORRESPONDENT: No. And this is a weekly jobs number that we're telling you about. It's the number of people every week who line up every week who line up for the first time for jobless benefits at the local unemployment office. Last week 516,000 people lined up for the first time. That's the most in seven years since after the September 11th attacks.
You dig deeper into that number, and you look at the four-week moving average, that's the worst in 17 years. You dig even deeper and you look at the number of people who are still continuing to claim unemployment benefits, so not the people filing for the first time, but the people who are continuing to get benefits, that's the highest number since 1983, some 3.9 million Americans are on the jobless roles. So all of these numbers painting a picture that's pretty grim of what's happening in the labor market. You know, we know, we've been telling you the past three months you've seen this trend really accelerating, of jobs lost. It's November and December. This is the time of the year when companies and managers are trying to cut costs and cut their costs to make their numbers for the end of the year and to look ahead for next year.
It's one of the reasons why Mayor Daley of Chicago told reporters after the city council meeting this week that, look, things are tough, he said huge layoffs are coming in November and December. And next year there is going to be even more huge layoffs. All the corporation CEOs are coming in to tell me -- they've come to tell that that's just the beginning. It's not the end result.
So Racing for big layoffs in Chicago. We're seeing the big numbers on these unemployment jobless claims. And we know that just about every industry out there, except for health care, education and the government are laying people off.
COLLINS: Yes, and boy, it's not too hard to figure out when people are losing their jobs, it's very hard to keep their homes. I know, we've got the foreclosure numbers, too.
ROMANS: Yes, and this is like the double whammy here. The first reason why the foreclosures were spiking was because people had these crazy mortgages that they just were not appropriate. Now people are losing their homes. And so you're seeing an acceleration of this trend. Last month, in October, 31 days in month, and 84,000 homes were lost to foreclosure. That means they were seized.
Another 279,000 foreclosure filings all together. So that's from the beginning of the process, just that first default notice all the way to having the house seized. So the housing crisis, we're still right in the middle of it, it's still raging. It's a wrenching housing crisis and it continues, Heidi.
COLLINS: All right. Unfortunately, we are going to have to keep on top of all of those numbers certainly, Christine Romans, thanks for that.
Back to bailing out the banks. The credit industry and possibly ailing automakers. Democratic leaders are pushing for the latter. But will Washington cut them check? We're going to get the very latest now from CNN's Kate Bolduan.
(BEGIN VIDEOTAPE)
KATE BOLDUAN, CNN CORRESPONDENT (voice-over): Democrats are ratcheting up pressure on President Bush to go along with bailing out the American auto industry, despite fresh push back from congressional Republicans and the White House.
REP. BARNEY FRANK (D-MA), CHAIRMAN, FINANCIAL SERVICES COMMITTEE: We will pass the bill and then he can decide to veto it or not. BOLDUAN: Barney Frank, chairman of the House Financial Services Committee, is the man tapped to craft the automaker bailout bill. According to a Democratic aide, the new bill will include a provision giving taxpayers an ownership stake in the automakers, raising the question of whether the government will demand reforms.
A bill could be ready as early as Tuesday, perhaps $25 billion coming from the Wall Street bailout package, money Frank says is needed.
BARNEY: In its weakened question that the economy is in, a total collapse of the American automobile industry would do more damage than not doing anything.
BOLDUAN: This may make next week's lame duck session one last showdown with President Bush. Conservative Republicans are finding it hard to stomach the idea, coming hot on the heels of a string of government rescues.
REP. RANDY NEUGEBAUER (R), TEXAS: Members of Congress all have these voting cards. Right now, we're using them as credit cards.
BOLDUAN: Republicans like Alabama Congressman Spencer Bachus ask, where do the bailouts end?
REP. SPENCER BACHUS (R), ALABAMA: And I'm afraid if we don't answer the question very soon, when does this stop? That it's going to stop when we run out of money. If we don't, I think the American people will simply rise up and stop us.
BOLDUAN: One big question, what happens in the Senate? Democrats maintain a slim voting majority, and there is some skepticism among Republicans. But it's unclear if that opposition is enough to block this bill.
Kate Bolduan, CNN, Capitol Hill.
(END VIDEOTAPE)
COLLINS: Playing an important role for team Obama and setting the wheels in motion ahead of the big economic summit taking place in Washington. CNN's Suzanne Malveaux is joining us live in Chicago this morning to talk about all of it.
Suzanne, we do hear there is more news on the transition team now.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, that's right. Barack Obama is really trying to show that he's on top of things when it comes to the financial crisis and that he will have some representatives in place for that critical meeting over the weekend. President Bush sitting down with world leaders to discuss what is going to be the next step.
So the transition team is putting out former Secretary of State Madeleine Albright as well as Republican former congressman from Iowa, Jim Leach, both of them will represent team Obama in sitting down with President Bush and with those world leaders to talk about the ways that they think is best in dealing with a number of issues, including the automakers, how to help out those big three automakers.
There are some real differences between the way President Bush and Barack Obama see this. Barack Obama really wants some of the $700 billion bailout money to help with those auto companies. So that is just one of many things that they're going to be talking about.
And, Heidi, what's interesting is see the transition here, a lot of former Clinton officials from the former Clinton years, not only Madeleine Albright, but also Joe Biden topping Ron Klain, he was the chief of staff as well as the counselor to Vice President Al Gore -- Heidi.
COLLINS: Yes, yes, we were just saying that. All right. Interesting. Also, Vice President-elect Joe Biden, pretty interesting dinner tonight.
MALVEAUX: Well, that's right. He's actually going to be at Vice President Cheney's residence as well with his wife, Dr. Jill Biden. Their families getting together tonight. It is simply the same thing we saw from President Bush ushering in Barack Obama and his family. They're going to take a tour of the residence, the two of them obviously looking for kind of a smooth transition here.
It is all a part of the tradition, despite the fact Joe Biden once called Cheney the most dangerous vice president in American history, it's expected that these two men and their families will be very respectful, very cordial as they try to make this transition as smooth as possible -- Heidi.
COLLINS: All right. CNN's Suzanne Malveaux reporting for us from Chicago today. Thank you, Suzanne.
Meanwhile, Sarah Palin talking about the future. She spoke just a few minutes ago at the Republican Governors Association, meeting in Miami. You saw it live right here. Governor Palin talked about her fellow governors' role going forward.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R-AK), ALASKA: So very proud to be here with this group. We are united, and we understand what it's going to take to get this economy back on the right track. National security issues, immigration issues, education reform, health care reform, those issues that we deal with every day in our states. We want to reach out to the new administration.
(END VIDEO CLIP)
COLLINS: Palin also said the future for her and the governors is not the election coming up in four years, but in 2010 actually when 36 governors' races will be open.
John McCain back on the campaign trail today. Not for himself though. He is actually in Atlanta to support Republican Senator Saxby Chambliss. Chambliss's Senate seat is one of the three that still have not been decided. There will be a December 2nd runoff between Chambliss and his Democratic challenger, Jim Martin, who you see there on the left.
Quickly, want to get to this now. We are hearing that things are getting under way in the Senate. Going to be talking about in the Senate today the government's $700 billion rescue program. So we want to listen in to what that discussion is. Let's go ahead and listen right now.
SEN. CHRIS DODD (D-CT), CHAIRMAN, BANKING COMMITTEE: ... they amount to just a fraction of the approximately 5 trillion taxpayer dollars that have been put at risk in recent weeks and months for the benefit of our nation's financial institutions. And I want to enumerate those because it's the subject matter of the hearing today, to understand what the expectation is coming back as a result of those kinds of commitments.
Those $5 trillion have been committed in several forms. Let me enumerate them for you. One, the guarantee of all non-interest bearing deposit accounts at federally-insured banks and thrifts, the increase in deposit insurance of interest for interest-bearing accounts to $250,000 per account.
The guarantee of senior unsecured bank debt for a period of three years, which financial institutions may opt out of, the decision to place Fannie Mae and Freddie Mac, whose mortgage financing is used by virtually every home lender in the country, into conservatorship and provide them with a $200 billion federal backstop, the guarantee of hundreds of billions in money market funds.
The decision by the Treasury to reverse over two decades of tax law to allow companies, including financial institutions and banks, to write off their taxes, the losses of companies that they acquire.
The guarantee of major segments of the commercial paper market. And lastly, the creation by the Federal Reserve of numerous facilities and special purpose vehicles for bank holding companies, primary dealers and commercial firms so that they can find sources of reliable, affordable financing for their business activities.
The federal loan has committed to $1 trillion in tax dollars so far to the recovery effort. By any measure, these actions amount to an extraordinary commitment of public resources. On some level, all of us, including members of the public, expect this extraordinary commitment befits the extraordinary financial crisis now facing our nation.
It is an unprecedented sum for these unprecedented economic times. It is no secret that some who have received funds under EESA, including some of the institutions represented here this morning, did not ask for this funding. Nevertheless, they accepted it.
Indeed, given the irrationality of the markets that seemed to target and take down one renowned firm after another, these public investments serve as a seal of approval. That explains why so many other firms are quickly lining up for their capital injections.
Given that fact, it is reasonable, I think, for us to ask now how they -- now that they've had the money they received, what are they going to do with these resources? What is their responsibility to the citizens of our country who are making enormous sacrifices to support the financial sector and the economy as a whole?
The acceptance of public funding carries with it a public obligation, in my view. One cannot benefit from taxpayer support in all of its many forms and assume that one has no duty to serve that same taxpayer.
The people of this great country of ours are generous and understanding. But they are entitled, in my view, to expect that those who benefit from their sacrifices will act with appropriate restraint and purpose.
In my view, lenders who enjoy benefits conferred by taxpayers owe those same taxpayers consideration that include the following. First, that they preserve home ownership. This committee has said this over and over and over again, beginning with the very first hearing almost two years ago.
Over and over again, in fact, one of our witnesses here today was a witness two years ago before this committee and predicted some 2 million foreclosures. It now seems quaint, that number.
And yet at the time it was suggested that somehow he was exaggerating and engaging in hyperbole. We now know the numbers this morning indicate how bad that situation is. And I'm going to continue on this.
It is still confounding to me why the secretary of the treasury and others refuse to understand this is the heart of the problem. And until we address this, this problem is not going to go away.
So the first issue is preservation of home ownership. The foreclosure crisis is the root cause of the larger financial crisis. And the root of the foreclosure crisis, of course, was bad lending practices which many of the well-known lending institutions engaged.
Until we solve the foreclosure problem, we'll not have any hope of solving the larger economic issues. Now I appreciate the efforts numerous lenders have started to make this in this area, including some who are here today. And I appreciate that very much.
But more -- much more must be done on a lender-by-lender as well as on an industry-wide basis to address the foreclosure crisis. Even lenders who have modified a relatively large number of loans are doing so in a manner whereby many of those loans default or re-default. That does not seem to be good for anyone, borrowers or lenders.
Now is the time to utilize Hope for Homeowners and other initiatives designed to truly preserve home ownership and stabilize the economy. Secondly, lenders who receive public funds should use those funds to lend. Many are failing to do that. CEOs have been directly quoted as saying they intend to use public dollars to acquire other financial firms and widen their capital cushion. Let me say as clearly as I can this morning, hoarding capital and acquiring healthy banks are not, I repeat, not reasons why Congress authorized $700 billion in emergency funding.
The core purpose of this law and the purpose of virtually every other action taken during this crisis is to get lenders back into the business of lending. Credit is the lifeblood of the economy. It's absolutely essential to businesses and consumers. Lenders have a duty to use these funds in my view to make affordable loans to credit- worthy borrowers on reasonable terms.
If they do not, then in my view they're acting outside the clear intent of the statute and should reform their actions immediately. Thirdly and lastly, lenders who are eligible for EESA funding and other items on the smorgasbord of federal assistance to financial firms, would do well to examine their executive compensation policies.
EESA sets forth clear if modest, I might add, restrictions on executive compensation for companies that receive financial assistance under this act. I would suggest that these restrictions serve as a beginning, not an end, to the restraint firms should show in compensating the most highly-paid employees.
Our nation clearly is in a crisis. We all know this. We're at war in two distant countries. Our financial markets remain uncomfortably close to the precipice of collapse. Working Americans have been forced to cut back in their personal lives, even as they've been asked to shoulder the enormous burden of propping up the financial sector.
At this time of austerity and apprehension, it would be regrettable if some carried on as if they do not owe a duty of restraint and modesty to those countless Americans whose sacrifice helps make your viability and prosperity possible in this moment of national economic peril.
For those tempted to conduct business as usual with respect to their compensation policies, I would simply ask, where would your company and your industry be today without taxpayer-backed deposit insurance, without taxpayer-backed guarantees of your bank debt, without taxpayer-backed special lending facilities at the Federal Reserve, and without all of the other special benefits that your industry is receiving courtesy of the American taxpayer?
If you believe that you would be no worse off than you are today, then I invite you to return to the Treasury the billions of dollars in taxpayer investments, guarantees, and discounts that you currently receive. And I wish you well as you try to make it on your own.
Until that happens, I think I speak for many members of this committee and the Senate in saying that we want to see more progress from your friends in the financial sector, more progress in foreclosure mitigation and affordable lending and in curbing excessive compensation. And if that progress is not forth coming, then we are prepared to legislate now if possible, but next year if necessary.
With that, let me turn to Senator Crapo for any opening comments he may make.
SEN. MIKE CRAPO (R-ID), BANKING COMMITTEE: Thank you very much, Mr. Chairman. And again, I appreciate the attention you've given to the need for strong and continuous oversight by this committee.
We are seeing the extreme and serious repercussions throughout every aspect of our economy as a result of the credit crisis. According to one study, for every dollar of net losses on loans and securities there's a multiplier of 10 in the reduction of credit.
If we use the most recent number of $1 trillion in write-downs and credit losses and take into consideration the fact that the banks have raised $350 billion in new capital, there would be a $650 billion net loss, and using that formula, a $6.5 trillion loss in credit available in the market.
I'm not sure whether these are the right numbers or whether we actually know what they are or what the deleveraging is. But it's clear we're facing a significant credit loss and it has the potential to become even worse.
Secretary Paulson's announcement that Treasury is not planning to buy toxic assets and that there are more effective ways the use the taxpayer dollars that have been provided, provides a perfect opportunity to assess the results of the rescue package and to consider other directional changes.
As you know, Mr. Chairman, I was not one of those who supported the notion of purchasing these toxic assets and have been very concerned that not only was the taxpayer not adequately protected, but that Treasury's proposal to buy toxic assets created an incentive for investors to stay on the sidelines and watch what the government would do to then step in at a later date and either buy or purchase or finance purchases from the government at a discount.
I'm very interested in what ways our witnesses believe these taxpayer dollars should be used and in what direction we should go. I've always believed that the direct utilization of our resources to increase liquidity with specific actions was a more appropriate direction that we should take, and I'm hopeful to hear the witness's advice on those matters as well.
In addition, Mr. Chairman, I hope that we can get into a strong discussion about some of the broad regulatory structural reforms that we need to consider. Again, as you know, I've strongly argued for regulatory reform of our financial institutions. And this is an opportunity now for us to evaluate just exactly what the regulatory structure, our nation, should have.
This week the head of the CFTC said that he believes the United States should scrap the current outdated regulatory framework in favor of an objectives-based regulatory system consisting of three primary authorities. A new systemic risk regulator, a new market integrity regulator, and a new investor protection regulator. The risk regulator would police the financial system for hazards that could ratchet across companies to have broad economic consequences.
The market integrity regulator would oversee safety and soundness of exchanges and the key financial institutions, effectively acting as a replacement for existing bank regulators and the SEC's function of regulating brokerages.
The investor protection regulator would protect investors and business conduct across all firms. This is a similar idea to the outline provided in March by Secretary Henry Paulson of the Treasury.
And I, for one, believe we should evaluate these kinds of proposals. I hope we also evaluate the potential for a single regulator as has been done in other parts of the world where we've seen some significant effectiveness.
But whatever our new regulatory structure is, I think it's important that we move from the outdated regulatory structure that we have now into one that still protects a strong, viable market but allows for the consumer protections and the other protections of our systemic -- against the systemic risks that we're seeing today that the chairman has described.
And I look forward to working with you closely as we evaluate this important part of our regulatory system. Thank you, Mr. Chairman.
DODD: Thank you, Senator, very much. Let me just say to you very quickly here, it is my intent as chairman of the committee that we are going to examine thoroughly the whole issue of modernization of financial regulations. And these suggestions you've made this morning...
COLLINS: OK. So there you have the opening statements for today's meeting there. We obviously had the chairman of the Senate Banking Committee, Senator Chris Dodd, and then also we had Senator Mike Crapo, as you saw, from Idaho. Lots of opinions there being talked about and a whole lot more people will be making their statements today as well.
We will stay on top of that for you. But if you would like to watch more of this live right now, you can always do that. Just go to cnn.com/live and you'll find more of those hearings.
Meanwhile, supplementing your health. New studies taking a closer look at vitamins, find a new disappointing fact along the way.
(COMMERCIAL BREAK)
COLLINS: Want to take you back now live to the Republican Governors Association conference in Miami. We have Alaskan Governor Sarah Palin there talking a little bit more about the campaign and her experiences. (JOINED IN PROGRESS)
PALIN: ... in America, there will be no ceilings on achievement, glass or otherwise. And if I can help point the way...
(APPLAUSE)
PALIN: If I can help point the way for these young women or inspire them to tap into their own gifts and talents and strengths, to find their own opportunities, well, it is a privilege. And I'm going to remember all the people along the way who said that they were praying for us. They were such a strength and a shield, those prayer warriors, and...
(APPLAUSE)
PALIN: I'm going to remember the Blue Star moms and the special bond that we share, with our loved ones away at war. I'm going to remember all the veterans of war and the POWs, the former POWs that I had such an honor meeting and hearing their stories -- and oh, my goodness, America cannot forget. And we must honor and respect these men who have sacrificed so greatly for us and have such a love of country and need to be heard today.
I'll remember the working people of this country who put their faith in us, the folks who run our factories and grow our food and teach our children and serve us in uniform, those who came out on the campaign trail also to say, you know, they've got a lot of hope for -- for the ideals that we were representing in our ticket.
And I remember folks like "Joe the Plumber," who -- yes, who spoke for so many when Joe the plumber, remember, he suggested that taking more of our families' and our small businesses' hard-earned money, what that does is stifle the entrepreneurial spirit that grew this country into the greatest country on Earth.
And thanks to "Joe the Plumber," people whom he was speaking for felt kind of comforted, like see, I'm not the only one who sees that, in this suggested policy that was proposed, that "Joe the Plumber" kind of got out of Barack Obama that day. That was valuable.
I'll not forget guys like "Tito the Builder." He recently became a U.S. citizen, running his own construction company now. And he on the trail, he was telling us so proudly, he says: "Yes, I was born in Colombia, but I was made in the USA. This is a land of opportunity."
And man, just these everyday hard-working Americans whom we would meet. And again, such a comfort that we had knowing that we aren't the only ones believing in America being the land of possibilities and opportunity, but the federal government, man, it's got to play its appropriate role -- not get in the way of the progress of our families and our businesses -- and for their example and their love, too.
I will remember with gratitude all the families with special needs children who were the stars of the show in our rallies: kids with autism and some in their wheelchairs and these beautiful kids who maybe before were made to feel like there wasn't a place for them in the life of our country.
How could I ever forget the banners held up high that would say: "We're here for Trig," "Trig in the White House," and these beautiful children and their families?
(APPLAUSE)
PALIN: You know, and always being warned you can't cry on the campaign trail or you can't show that -- well, my goodness, speaking to some of these families and the challenges that they have -- and they who aren't asking anything from government or from anybody else -- perhaps a hand up, but not a handout, these families.
I would see them in the audience, and they would hold up their banners. And I'll tell you, I came close to crying few times, because they just touched my heart.
And it's time that America shows them our good collective heart. Governor Crist, one of my favorite persons whom I met along the trail was one of your constituents at a rally right here in Florida. And his name is Charlie. He's a fine young man with Down syndrome. And he's just so proud and strong and tough.
And Charlie and I exchanged e-mail addresses. The last time he replied, he said: "By the way, please quit calling me darling." I was talking about him on the trail once in a while, referring -- and he says: "It's not tough enough."
(LAUGHTER)
So today in your home state a special shout out to Charlie, to tough Chuck -- Darling Charlie.
(APPLAUSE)
And I'll repeat what I told him, because it applies to all children and adults who are so unique: that he is beautiful. And I am so glad that my boy Trig is going to grow up just like him. And every innocent life being so precious and worthy, and truly we must show them the good heart of America.
Another funny thing, too, on the trail, we had a beautiful group of young Down syndrome young adults and children, and they're holding up their signs. And Down syndrome, of course you're born with an extra chromosome. So their slides were all clever about: "We're extra special. We've got this chromosome."
And it reminded me of a bumper sticker that was sent to me from a Down syndrome group in Arizona. You know how we have bumper stickers on our minivans saying, you know: "My kid is on the honor roll and yours isn't," and "my kid's a better soccer player than your kid." Well this bumper sticker -- whatever they say -- the bumper sticker that was sent to me was "my kids got more chromosomes than your kid." I'm like all right. We won. We won.
But so thankful that they knew that they were welcome and that that, too, is what we represent as Republicans, is that good heart of America, that equal opportunity for all and defense of those who maybe are vulnerable and weak. Heaven help us if we ever stray from that principle, from that value in our party. And it was wonderful and I was honored to get to represent that value.
Above all, too, I am grateful to the man who took a chance on a Republican governor, representing you, representing all of you and what we believe in, and with sound executive experience and on the front lines every day. That is who you are. That is who we are. Making tough decisions to best serve the people who hire us. And we are held accountable every day. The buck stops on our desk. We're not just one of many voting yea or nay or present. No, there is no present button in our office, is there? We have to make the tough decisions. John McCain knew what it is that we represent, what I represented and all of you.
From the moment he named me on Election Day, I had the rare enough privilege and politics of praising a candidate whose story and character and personal heroism required no embellishment. I said things about him, about how valiantly he has served and what he has overcome, things he could not say about himself because that's just the kind of man that he is, so humble. And elections, granted they're not a test of valor and merit alone, of course, and the judgment of the majority is not for us to question now. Enough to say that for me, it was the honor of a lifetime to fight for what we believe in at the side of John S. McCain.
(APPLAUSE)
So now with recent elections wrapped up, yes, on the federal level, we are now the minority party. But let us resolve not to become the negative party, too eager to find fault or unwilling to help in this time of crisis and war. Losing an election does not have to mean losing our way. And for governors, the way forward leads to our own state capitals in the reforms that we will carry on or begin anew. And I promise you Americans will be looking to their governors for reaction, for stepped up leadership and for our abilities to unite and to progress. Let the pundits go on with their idol talk about the next election, what happens in 2012. Our concern should be about our state's next great reform, our next budget, our next opportunity to progress in the states that we serve. And on issues like taxes and energy and health care, immigration, education, we will not lack for opportunities to serve and to lead and to show the way.
If the new Congress and president err on the side, for instance, of excess taxes, then it will be falling on us to show them a better way. In our federalist system, we governors have one of the greatest powers there is in a democracy, and that is the power of example. And we in the RGA must use that power to create the growth and the opportunities and the jobs that come from lower taxes and more efficient bureaucracy for everyone.
Now, some things that we need to keep our eye on. If I remember correctly from the campaign, the new president and the congressional majority, they have their own ideas about energy policy. I didn't hear a lot from them about actual production of U.S. energy supplies that we need now to protect our economy and our nation from reliance on foreign cartels and dictators, those who use energy as a weapon. Maybe, though, the fact of having final responsibility for energy policy will change their outlook. But if not, then again, it will be left for the states, for us, to point the way. And from the North Slope oil fields of Alaska to the outer continental shelf of Florida, we will press on with the great work of achieving energy security.
And we can do this. We have to do this. We have the American energy sources, conventional and alternative. And we can bring it about by American ingenuity and we're going to produce it by American workers. And we can do this.
(APPLAUSE)
Other issues that we work on every day in our jobs in public service, when it comes to, for instance, health care, the goal of affordable, accessible care is a goal that we all share. But there still are serious differences about how we reach this. While Congress, led by Pelosi and Reid and some of the other Democrat leaders, Barney Frank, et cetera, and the new president, while they all debate it, we in the states can still advance our reforms to expand choices and increase competition. And I'm not going to assume that the answer is for the federal government to just take it over and try to run America's health care system. Heaven forbid.
Governors let's lead on the forefront, too, with medical savings accounts, those ideas, and transparency in medical record keeping and elimination of CONs and barriers to more choices. Let's just get it done, and again, show the federal government the way.
And now, finally, in every great reform effort, there is an element of self-reform. And Republicans cannot shy away from that challenge either. We must see reform within. The cost of war and security alone, that cannot explain a federal debt that's grown to more than $10 trillion. Washington D.C. leaders spent public money and disregarded the public interest just like the opponents that they used to criticize. They got too comfortable in power. Maybe they forgot why they were sent to Washington and who they were sent to serve.
We're looking now at an American people having to work for their government instead of our government working for the people. And enough, enough of that. All of this must change if we are to lead again in Washington, in changing Washington for the better.
So in the months ahead, let us build our case with actions and not just words and let us reclaim our good name as the party of spending restraint and limited government and economic opportunity and personal freedom and responsibility and American tradition. Let us be true to our beliefs, strong in the defense of the weak, unafraid to speak for American ideals and firm in our support for the men and women who defend those ideals in a dangerous world. And, in the all that we do, let us carry ourselves with good will and confidence and with a servant's heart. Let's lead by example.
A week ago, America did make her choice. And as for us, with this strong group of leaders here, our convictions, our loyalties, our hopes for this country remain the same I am sure. In respect to our presidential campaign, now it is time for us to go our own way and leaving neither bitter nor vanquish, but instead confident in the knowledge that there will be another day and we will gather once more with new strength. We'll rise to fight again.
In the meantime, governors, I know RGA, we're going to be walking the walk of true reform within our own states. We will lead by example. The nation needs us. And I say God bless you and your states. And thank you for all that you are doing for this great country. We're going to step it up even more so RGA.
Thank you, guys. God bless you. Thank you.
COLLINS: Alaskan governor, Sarah Palin, talking to the Republican Governors Association meeting taking place -- the conference there in Miami. They will wrap things up, a three-day conference, tomorrow. She's speaking in this particular session, as I'm sure you heard, about some of her experiences on the campaign trail, some of her memories and thoughts and really focusing, she says, on the future and the role of America's governors in this country.
So there you have again, Sarah Palin at the Republican Governors Association.
Quick break here. We'll be back on CNN NEWSROOM in just a moment.
(COMMERCIAL BREAK)
COLLINS: Jobs, jobs, jobs. That is the big concern for millions of Americans. And there's more tough news on that front in fact. Stephanie Elam is at the New York Stock Exchange with details and Wall Street's reaction to it.
We've seen the market already, Stephanie. Positive territory and negative territory, pretty much sticking in -- well actually we did see triple digits positive, too, didn't we? I was going to say double digits, but that's not the case so far this morning.
STEPHANIE ELAM, CNN CORRESPONDENT: Right, we did have some triple digits right out the gate there Heidi, when we checked the markets. But we slipped into the red and came back. Maybe the markets are just liking you today.
COLLINS: Yes. That's it.
ELAM: Every day the picture just seems to be getting worse though, all joking aside. Today a new report shows a number of new jobless claims soared to the highest level since the 9/11 terror attacks. More than half a million Americans signed up for unemployment benefits last week. Usually, anything about 400,000, that is typically seen as a sign of a recession. Initial claims have now been above that level for more than four months. Ohio, Michigan, Pennsylvania, they all show the biggest increases last week. But Wall Street seems to be taking the news in stride today. Let's take a look at the numbers right now. The Dow up 46 at 8329, Nasdaq better, just fractionally, just barely holding on at 1499. So right now we are in the plus column, Heidi.
COLLINS: Yes, we like that. Better than the negative column, obviously.
ELAM: True.
COLLINS: There are more job cuts today, though. So these numbers aren't probably going to be getting any better any time soon?
ELAM: Yes, I wouldn't expect to hear anything good coming out of the job situation anytime soon. Don't expect to hear about relief in the near term.
The newest job cuts include nearly 4,000 at the University of Texas medical branch in Galveston. The hospital says it's running out of money, no thanks to Hurricane Ike of course. Meanwhile, Morgan Stanley is slashing another 2,000 positions. Then there is the major of Chicago, Richard Daley. He says a variety of CEOs have been telling him that a wave of job cuts will hit the Windy City before the end of the year. So obviously we've got more dire predictions out there on the job front, Heidi. Just a rough, rough, end of the year.
COLLINS: Yes, very tough to hear. That's for sure.
Stephanie Elam, appreciate it. Thank you.
ELAM: Thanks.
COLLINS: The president and the economy. He'll be talking issue No. 1 today in New York again. The president's comments about the state of economy expected just before 2:00 p.m. Eastern time. You can catch his speech right here on CNN.
Eye on the economy. President-elect Barack Obama naming two Washington veterans to attend an important economic summit this weekend. Today, Obama and his team are looking at options for automakers. They are also working on putting together the rest of their transition team. We are hearing this morning that Vice President-elect Joe Biden has settled on Ron Klain as his chief of staff. Klain had the same job, you may remember, under Al Gore.
A new chief of staff and a new home, in fact. Vice President- elect Joe Biden gets to tour his new digs tonight. He and his wife, Jill, invited by Vice President Dick Cheney. The Cheneys hosting the Bidens for dinner and a look around the vice president's residence at the Naval Observatory. Should be an interesting evening there.
New rules. The Obama transition team says it will not be business as usual for lobbyists.
(COMMERCIAL BREAK) COLLINS: President-elect Obama wasting no time taking on lobbyists. His transition team laid out what they call the strictest and most far reaching ethics rules of any transition team in history. Special investigations unit correspondent, Abbie Boudreau, is actually joining us live with more about this now.
So, a lot of people may be wondering, what can lobbyists expect under this new administration?
ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: Well these new rules mostly deal with the federal lobbyists. They can't give money to the transition team, they can no longer lobby if they work for the transition team. And there is also a 12-month wait for anyone who works on the transition before they can lobby. All of these changes are meant to reduce the influence of special interests.
(BEGIN VIDEOTAPE)
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I don't take a dime from Washington lobbyists and special interests.
BOUDREAU (voice-over): For months, President-elect Obama has promised tough reforms.
OBAMA: They do not run my campaign. They will not run my White House.
UNIDENTIFIED FEMALE: That's power.
BOUDREAU: Obama's message is critical in this class for lobbyists in training at Georgetown University's law school.
PROF. CHAI FELDBLUM, GEORGETOWN UNIV. LAW CENTER: You heard from -- during this campaign, right, President-elect Barack Obama saying it's not going to be the same. We're not going to have lobbyists controlling things.
BOUDREAU: Michael Lewan could be teaching the class. For 16 years he's lobbied for some of the biggest corporations in America.
MICHAEL LEWAN, LOBBYIST: It's a dirty word partially because we've made it so as an industry. But perhaps more so because it has just gotten to be such a mantra out there on the campaign trails.
BOUDREAU: Lewan says in the wake of former lobbyist Jack Abramoff's conviction of influence peddling on Capitol Hill, in 2006 Congress passed stricter rules. Lewan, and other Washington lobbyists, say the crackdown is long overdue.
LEWAN: Over the course of the campaign, all of us that lobby were vilified. It's my hope that we can sort of bring down that level of vilification by cooperating with the new administration.
BOUDREAU (on camera): We have all of these professional trained lobbyists, and then we have you.
EMILY YOFFE, AUTHOR: Yes.
BOUDREAU (voice-over): Emily Yoffe writes for the Slate Web site. She wanted to see if only the powerful lobbyists had the influence.
YOFFE: After Jack Abramoff was sent off to the slammer, my editor said, well, can anyone be a lobbyist? And said, you come up with an organization and go up on the Hill and see where you get.
BOUDREAU: So, she came with SNOP.
YOFFE: Spay and Neuter Our Pets.
BOUDREAU: Yoffe said even she was surprised how far she got.
(on camera): And how seriously did the staffers take you?
YOFFE: My longest meeting was 40 minutes.
BOUDREAU: Wow.
YOFFE: Which I couldn't believe.
BOUDREAU (voice-over): She never met with a member of Congress. But she does feel ordinary people do have influence.
Professor Chai Feldblum says now many other grassroots groups may have a stronger voice.
FELDBLUM: We will see change in this city after January 20th.
(END VIDEOTAPE)
BOUDREAU: And there's already changes. Earlier today I talked with an Obama spokesperson. He told me in addition to the other restrictions, the transition team also has a ban on gifts. He says the team will not accept gifts worth more than $20 unless it's from a family member or a close personal friend. And no gifts, absolutely no gifts, from lobbyists will be accepted.
COLLINS: Interesting. Kind of like the policy here at CNN for journalists, of course. Got to be ethical about all of this stuff.
BOUDREAU: More transparency.
COLLINS: Yes, absolutely.
Abbie Boudreau, great story. Thanks so much.
BOUDREAU: Thank you.
COLLINS: Falling energy prices taking the wind out of energy alternatives for now. Even a billionaire is slowed down by the economic slowdown.
(COMMERCIAL BREAK) COLLINS: Billionaire oil man T. Boone Pickens says the deflated price of natural gas is forcing him to delay plans for a huge wind farm. And it appears the credit crunch isn't helping either. CNNMoney.com's Poppy Harlow has our Energy Fix from New York.
Hi there, Poppy. We've heard an awful lot about this plan that he has. So what's going on?
POPPY HARLOW, CNNMONEY.COM: Oh, we sure have, Heidi.
It seems like the Pickens plan has hit a road bump of sorts. And wind farms and other alternative energy projects are all facing a lot of head winds. Falling energy prices means it's going to take a lot longer to get those projects to pay off. And, the tight credit market is making the projects a lot harder to finance right now. Even billionaire oil man T. Boone Pickens is not immune.
His advertisements, as you said, Heidi, they have been all over the air waves promoting wind energy and a switch to natural gas in our cars and trucks. But now his push for a big wind farm in Texas has blown cold.
(BEGIN VIDEO CLIP)
T. BOONE PICKENS, FOUNDER AND CHMN., BP CAPITAL MGMT.: With natural gas prices down where they are now at $6.50, you can't kickoff a wind project because you aren't economic unless you have $9.00 natural gas.
(END VIDEO CLIP)
HARLOW: Pickens says he thinks prices will rebound, but he's not sure when. His company issued a statement saying trouble in the credit markets could cause them to scale back as well -- Heidi.
COLLINS: So you have to wonder still at this point whether or not the plan is a viable one.
HARLOW: You're right. There's a lot of debate about that right now.
Some feel wind is not very reliable. Others questioned Pickens' plan to switch all vehicles to natural gas. Pickens says if we don't do something, oil will hit $300 a barrel.
One thing is becoming more clear, unlike oil, we have a lot of natural gas in this country. Take a look at the map on your screen. Right at the top there, that is an area where the U.S. Department of the Interior announced just yesterday is a major source of natural gas. It says the North Slope part has enough natural gas to heat 100 million homes for 10 years. That is quite a lot. The natural gas is trapped right now inside water particles. The government says further research, of course, still needs to be done to see if they can extract all that at a reasonable cost.
And of course, Heidi, it all comes back to cost, right? Like with the Pickens project, the higher the price of natural gas, the more likely it is that you'll see investments in this kind of project -- Heidi.
COLLINS: Yes, you're likely right about that.
CNNMoney.com's Poppy Harlow. Thank you so much.
HARLOW: You're welcome.
COLLINS: And breaking down that bailout package now. What could be inside for some homeowners.
(COMMERCIAL BREAK)
COLLINS: Seven days left to vote for your favorite CNN hero. Just go to cnn.com/heroes to see their stories, and then vote. You can join Anderson Cooper on Thanksgiving night to find out who will be CNN's hero of the year. Vote now at cnn.com/heroes. Remember, only seven days left.
I'm Heidi Collins. You can join me again tomorrow morning beginning at 9:00 a.m. Eastern.
And for now CNN NEWSROOM continues with Tony Harris.
