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President-Elect Holds Press Conference on Economy & His Team

Aired November 25, 2008 - 12:00   ET

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

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BARACK OBAMA (D), PRESIDENT-ELECT: ... if Americans of great intellect, broad experience, and good character are willing to serve in our government at its hour of need.

Yesterday, I announced four such Americans to help lead the economic team that will advise me as we seek to climb out of this crisis. Today, I'm pleased to announce two other key members of our team: Peter Orszag as director and Robert Nabors as deputy director of the Office of Management and Budget.

Now, before I explain why I selected these outstanding public servants, let me say a few words about the work that I'm asking them to undertake.

As I said yesterday, the economic crisis we face demands that we invest immediately in a series of measures that will help save or create 2.5 million jobs and put tax cuts in the pockets of the hard- pressed middle class. Many of those new jobs will come in areas such as energy independence, technology, and health care modernization that will strengthen our economy over the long term.

But if we are going to make the investments we need, we also have to be willing to shed the spending that we don't need. In these challenging times, when we're facing both rising deficits and a shrinking economy, budget reform is not an option. It's a necessity.

We can't sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of politicians, lobbyists, or interest groups. We simply can't afford it.

This isn't about big government or small government. It's about building a smarter government that focuses on what works. That's why I will ask my team to think anew and act anew to meet our new challenges.

We are going to go through our federal budget -- as I promised during the campaign, page by page, line by line -- eliminating those programs we don't need and insisting that those that we do need operate in a sensible, cost-effective way.

Let me just give you one example of what I'm talking about. There's a report today that, from 2003 to 2006, millionaire farmers received $49 million in crop subsidies even though they were earning more than the $2.5 million cutoff for such subsidies. Now, if this is true -- and this was just a report this morning -- but if it's true, it is a prime example of the kind of waste that I intend to end as president.

We're also going to focus on one of the biggest long-run challenges that our budget faces, namely the rising cost of health care in both the public and private sectors. This is not just a challenge, but also an opportunity to improve the health care that Americans rely on and to bring down the costs that taxpayers, businesses and families have to pay.

Now, that's what the Office of Management and Budget will do in my administration: It will not only help design a budget and manage its implementation, but it's also going to make sure that our government -- your government -- is more efficient and more effective at serving the American people.

And there's no better person to help lead this effort as director of the OMB than my friend, Peter Orszag. Peter has been one of our nation's leading voices on budgetary issues.

It's said that a nation's budget reflects its values and its priorities. I believe that's true. And I know that Peter will bring to his work at the OMB a set of priorities that I and the American people share.

Throughout his career, he's made significant contributions in our understanding of all the major economic challenges that we're now confronting, from reducing medical costs to saving Social Security to fighting global climate change to helping put the dream of a college degree within the reach of more students.

As director of the Congressional Budget Office, he re-energized and reinvigorated the agency, while shifting its focus to confront the health care crisis that is not only a cause of so much suffering for so many families, but a rapidly growing portion of our budget and a drag on our entire economy.

But it's not simply that Peter's past career makes him qualified for this new appointment; it's also that he has a vision for the future that I share.

He believes, as I do, that even as we take steps to restore discipline to our budget, we also have to take the steps right now that are necessary to solve our immediate crisis. Peter doesn't need a map to tell him where the bodies are buried in the federal budget. He knows what works and what doesn't, what's worthy of our precious tax dollars and what is not.

Just because a program, a special interest tax break, or corporate subsidy is hidden in this year's budget does not mean that it will survive the next. The old ways of Washington simply can't meet the challenges of today and tomorrow.

And no one is more able or more qualified to assist Peter in this work than deputy director of the OMB that I am nominating, Robert Nabors.

Rob will bring to this post experience in the executive branch, at the OMB, where he helped the Clinton administration achieve balanced budgets, as well as in the legislative branch, where he led the Appropriations Committee staff as a driving force for a responsible budget.

Together, Peter and Rob will help steer our budget through Congress so that I can sign it into law.

Now, let me be clear, these appointments, as well as the appointments that I announced yesterday, are not the sum of my economic team. These appointments are going to work closely with those that I have not yet announced -- those include the secretaries of energy and labor, commerce and health and human services, as well as others in my administration -- to design a recovery plan for both Wall Street and Main Street and to put our economy on a path to long-term growth and prosperity.

Because, at this moment, we must not only restore confidence in our markets; we also must restore the confidence of middle-class families that their government is on their side, that it's working for them and on their behalf to meet their families' needs. That's what I intend to do as president of the United States.

With that, I'm going to take a few questions.

QUESTION: Is this a greater degree of public involvement in the economy than you -- sooner than you had originally planned? And if so, how do you square it with your reminder to us that there is only one president at a time?

OBAMA: Well, there is only one president at a time. That president is George W. Bush, and he will be president until I'm sworn in on January 20th.

Given the extraordinary circumstances that we find ourselves in, however, I think it is very important for the American people to understand that we are putting together a first-class team and for them to have clarity that we don't intend to stumble into the next administration.

We are going to hit the ground running. We're going to have clear plans of action. We intend to have the kind of economic recovery plan that is going to put 2.5 million people into jobs. We are going to make sure that we start focusing on energy, on health care, on revamping our education system so that it's competitive in the 21st century, and, as I'm talking about today, that we are not going back to business as usual when it comes to our budget.

I mean, one of the concerns that people may have is, you've got this large stimulus package that the new president is proposing and members of Congress are talking about. Is this going to be more of the same when it comes to Washington spending?

And the answer -- I want to be very clear -- is no. We are going to have to jump-start the economy. And there's consensus that that requires a bold plan to make the investments in the future. But we have to make sure that those investments are wise; we have to make sure that we're not wasting money in every area.

If there is -- if we're talking about health care, we want to put money into health care modernization that can help us save money over the long term. We don't want to continue programs that aren't working and making people healthier.

The same is true for education. The same is true in the Defense Department. The same is true in social spending.

So the fact that Rob and Peter are here today indicates the seriousness with which we're taking this. And I think it's important, given the uncertainty in the markets and given the very legitimate anxiety that the American people are feeling, that they know that their new president has a plan and is going to act swiftly and boldly.

OK. Peter -- where's Peter? I didn't recognize you because you don't have the floppy hat that you had during the campaign.

QUESTION: I actually do.

OBAMA: There it is. Man, that's what I'm talking about.

QUESTION: Thank you, Mr. President-elect. Given the election results, what sort of mandate do you have from the voters, do you believe? And does a large Democratic majority in Congress present an opportunity to pass your agenda or is there a danger in this environment of overreach?

OBAMA: Well, first of all, we had, I think, a decisive win because of the extraordinary desire for change on the part of the American people. And so I don't think that there's any question that we have a mandate to move the country in a new direction and not continue the same, old practices that have gotten us into the fix that we're in.

But I won 53 percent of the vote. That means 46 percent or 47 percent of the country voted for John McCain.

And it's important, as I said on election night, that we enter into the new administration with a sense of humility and a recognition that wisdom is not the monopoly of any one party.

In order for us to be effective, given the scope and the scale of the challenges that we face, Republicans and Democrats are going to have to work together.

And I think what the American people want more than anything is just common sense, smart government. They don't want ideology; they don't want bickering; they don't want sniping. They want action, and they want effectiveness. And that's what Peter and Rob are going to help us provide. When it comes to our budget, I think people don't want to continue a budget -- an argument about big government or small government. They want smart government and effective government.

And so what we're going to do is to work as closely as we can with the Republican Party. My chief of staff, Rahm Emanuel, has already met with both caucuses. We want their input; we want their ideas.

One of the things I'm very pleased about is I think that we're already seeing bipartisan accolades for the budget team that I'm putting together, because they recognize these are serious guys who are going to be honest about the budget challenges that we face.

That's the kind of approach that I want. That's what I think the American people are looking for.

QUESTION: Let me ask you a question on behalf of local political reporters all over the country. As you know, mayors and county board presidents and governors are facing budgets that are hemorrhaging from this economic downturn hundreds of millions of dollars.

And they're faced with layoffs and tax increases they don't want to impose. And they're kind of wondering, to paraphrase the late, great Mike Royko, "Where's ours?"

What in your plan speaks to the needs of governmental bodies? They're not Main Street. They're not Wall Street. They're not the U.S. Capitol. But they're Randolph and La Salle, which is City Hall, and they're 2nd and Capitol, where you worked for eight years in Springfield.

Hundreds of your friends are wondering what you're going to do, because they're in desperate straits from the -- from the standpoint of their budgets.

OBAMA: Well, look, this is an important point, and it's one that I addressed during the campaign and is implicit in the economic recovery plan that I talked about yesterday and that I talked about on Saturday in my weekly address.

We are going to have to make sure that we are investing in roads, bridges, other infrastructure investments that lay the groundwork for long-term economic growth. A lot of that goes through our states and our local governments.

And one of the things that we're going to also want to make sure of is that as part of our economic plan that we are fast-tracking some of these projects. And so the best way for us to do that may be, in some cases, to see what projects are already being undertaken by state and local governments and making sure that they have the funds to continue those projects.

So we're going to be working very closely with governors. We're going to be working very closely with mayors of towns small and large across the country. This economic recovery plan will require their input, their participation.

And part of our job is to make sure that we are listening to what's happening on the ground, where the rubber hits the road, and not simply designing something out of Washington.

Now, this raises one other important point, though. Part of the charge of Peter and Rob and the rest of our budget team is to make sure that we are proceeding on projects and investments based on national priorities and not based on politics.

You mentioned sort of "my friends." I want to be clear: Friendship doesn't come into this. That's part of the old way of doing business.

The new way of doing business is, let's figure out what projects, what investments are going to give the American economy the most bang for the buck, how can we protect taxpayer dollars so that this money is not wasted, restore a sense of confidence among taxpayers that, when we spend our money, it's on things that are actually going to improve their quality of life, create the jobs that are so desperately needed, help to spur on economic growth and business creation in the private sector.

That's all part of the new way of doing business.

QUESTION: If I may follow up...

OBAMA: No follow-up, because we've got a bunch.

UNIDENTIFIED MALE: Last question.

OBAMA: All right. We've got -- I'm going to call on Steve Thomma. Where's Steve? And the reason I'm going to call on Steve, I understand that, as a lifelong White Sox fan, you were placed in the Cubs section yesterday, and I want to apologize for that. This is also part of the new way of doing business. When we make mistakes, we admit them.

QUESTION: Well, thank you, sir. That's the change we need on behalf of White Sox fans.

(LAUGHTER)

Sir, as you inherit and add to what could be a staggering one- year deficit, maybe approaching $2 trillion, will you draw a line between temporary fixes or permanent programs, such as tax rebates versus tax cuts? And if not, how will you guard against this red ink becoming permanent?

OBAMA: It's a great question. And the answer -- the short answer is, yes, we've got to distinguish between a immediate and temporary infusion that's going to be required to kick-start our economy and some of the structural spending that's been taking place in Washington that has created this huge mountain of debt.

And part of the charge to my economic team is to find areas where we can get a two-fer, where we're getting both a short-term stimulus and we're also laying the groundwork for long-term economic growth.

For example, during my campaign, I talked about the need to provide a tax cut to 95 percent of workers. Now, for us to get that tax cut in place, that is going to put money into the pockets of the middle class and will help them in spending for their basic needs. That can help the economy. The sooner we do that, the better.

That will also, though, restore some balance to our tax code over the long term. So that's an example of where the immediate needs of the economy and the long-term concerns that we have are not necessarily incompatible.

Health care is another example. If we do a smart job of investing in health care modernization -- let's just say, as an example, helping local hospitals and providers set up electronic billing and electronic medical records, that experts across the spectrum consider to be an important step towards a more efficient health care system.

Now, somebody's got to help set those up. We've got to buy computer systems and so forth. That's an immediate boost to the economy, in some cases working with state and local governments, but it's also laying the groundwork for reducing our health care costs over the long term.

Now, the last point I'll make on this: We're still going to have to make some tough choices. There are just going to be some programs that simply don't work, and we've got to eliminate them.

And so I don't think that there's -- there's any way of denying the fact that my first priority and my first job is to get us on the path of economic recovery, to create 2.5 million jobs, to provide relief to middle-class families.

But as soon as the recovery is well under way, then we've got to set up a long-term plan to reduce the structural deficit and make sure that we're not leaving a mountain of debt for the next generation.

And that's the -- that's the job of Peter and Rob and the rest of the economic team that I introduced yesterday.

All right? OK, thank you, guys.

TONY HARRIS, CNN ANCHOR: OK. We have just heard from President- elect Barack Obama about his plans for confronting the nation's financial crisis. He also introduced two more members of his money team.

Let's bring our team of correspondents to break it all down for you.

We will see Ed Henry in just a couple of moments, as soon as he can get into his position. There he is.

How quick are you?

That's Ed Henry. Personal Finance Editor Gerri Willis is with us in New York, and Susan Lisovicz is at the New York Stock Exchange.

So, Ed, you're in position, speedy as ever. Let's start with you.

You know, it appears to me that yesterday was about spending and the team that will initially manage the spending. Today it was all about cutting. Wasn't it?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: It was all about cutting. But once again, for the second straight day, the president- elect did not get into any details about what he'll cut.

At the very end there you heard him saying there are going to be programs that just don't work, that will need to be eliminated. Of course, he didn't spell any out.

Now, at the beginning of his remarks he mentioned this report in the newspapers this morning about some $50 million, I believe he said, going to millionaire farmers, to farm subsidies, going to people who don't deserve it. OK, that might be one program, but $50 million is not going to get you pretty far with something like $9 trillion in debt right now for the nation.

So he's got a long way to go to still explain exactly where he's going to cut. He was supposed to be talking today about sacrifice, about how budget reforms are going to help the economy in the long term, are going to help reduce debt. He did not get into any of those details.

Where I thought he went a little more expansive than we've heard perhaps before is getting into the election results a bit more after thinking about it for a few weeks, where he called it a decisive win and specifically said it was a "mandate" to move the country in a new direction, but then quickly added that John McCain had still gotten 46 percent or 47 percent of the vote, so he needs to approach this with some humility.

And again, that theme we've heard so much from him in recent months about trying to reach across the aisle. But again, he talked about the economy, he's trying to give the markets a shot in the arm by saying he's filling this sort of leadership power vacuum that's out there right now. He again talked and promised to either save or create 2.5 million new jobs, to craft a large economic stimulus plan, but we're not getting any details.

How much will that plan cost? And again, how is he going to pay for it -- Tony?

HARRIS: It is going to be so expensive. You just feel it coming.

All right. That's Ed Henry with the Obama transition team in Chicago. Awesome.

Thank you, Ed.

More from the CNN money team right after this quick break.

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HARRIS: All right. We just heard from President-elect Barack Obama about his plans for confronting the nation's financial crisis. He also introduced members of his money team.

Let's bring in our team of correspondents to break it all down for you.

Ed Henry covering the president-elect in Chicago. Personal Finance Editor Gerri Willis in New York. And Susan Lisovicz at the New York Stock Exchange.

And Susan, this time let me start with you.

Two news conferences in two days. Look, the president-elect could have announced these names in a press release. Why the news conferences and what message is being sent here?

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Well, I think it's no surprise that the president-elect is holding two news conferences in two days because we continue to get very disturbing news about the economy. Just today, for instance, the broadest measure of economic growth showed that the third quarter contracted more than the original estimate, the number of problem banks is growing.

You know, it's those kind of things. More layoffs were announced today. Google said it's going to reduce the number of contract workers.

It's a huge problem, and there is a -- there was a sense last week -- it's one of the reasons why the market was unraveling -- of a power vacuum between the outgoing president, the incoming president. And I think the market was frankly reassured yesterday when the president-elect announced a team that's credible, that's well known, and he approached sort of a centrist stance.

Having said that, the people I was talking to today were saying they wanted to hear additional things from...

HARRIS: Yes. Some details.

LISOVICZ: ... Mr. Obama and they didn't hear it. They wanted to hear about tax increases. What's going to happen? You know, will Obama go through with his tax increases for the wealthiest?

Also, about the coordination between the two administrations. After all, the Obama administration is going to get $350 billion from that TARP money. There was no mention of that.

And finally, the new measures that were announced today by the Treasury and the Fed. These were things that were not done under his watch. It just speaks to the severity of the problem -- Tony.

HARRIS: OK. And let's bring in Gerri Willis. And Gerri, talking about Treasury Secretary Paulson...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right.

HARRIS: ... his announcement this morning of essentially $800 billion being airdropped into the markets here. And my question to you is, once this program is in place, maybe by February of next year, will it theoretically make it easier for folks who are facing foreclosure right now? I just want to know what it means for me and my dollars and my wallet?

WILLIS: Absolutely. Well, yes, the program definitely should help consumers, but let's look at the state of consumers right now...

HARRIS: OK.

WILLIS: ... the pressures on consumers that the new president is going to have to deal with.

Just today we got news that home prices dropped in the last quarter 16.6 percent. Those are S&P Case-Shiller Weiss numbers.

You know, your house is your biggest investment. And so when people see numbers like that, they become conservative, they become worried. They're more likely to go into foreclosures.

Foreclosures should total $3 million this year, Tony. Lots of pain on the home front, as we've talked about that for some time now.

And the typical places you go when you get can't money out of your home, maybe you put something on a credit card. That's more difficult, too, right now.

As we know, credit card limits are being pushed down. Interest rates are going up. So people are sort of having trouble using those cards now. The options are fewer. You're probably getting fewer offers in your mailbox.

And finally, the big problem here right now, the pain is sharpest for people who are losing their jobs. We've got our unemployment rate at 6.5 percent. It's expected to go to 9, even 10 percent, in the coming career. And when people lose their jobs they're much more likely to lose their home as well.

So this is what the consumer is facing right now. Ed Henry said that it was supposed to be a message of sacrifice today from Barack Obama. I'll tell you who's sacrificing right now, it's definitely consumers who are desperately trying to meet that monthly budget right now.

HARRIS: And let's bring Ed Henry back in on this discussion.

And Ed, to Susan's point a moment ago, the president-elect talked about tax policy yesterday moving forward as we try to sort of decipher what the meat on the bone might actually be.

HENRY: We're still not getting that meat on the bone is the point.

HARRIS: Yes.

HENRY: I think Susan is right, because a lot of people on Wall Street are watching Barack Obama closely. Essentially, they already believe, it seems -- the markets do, anyway -- that the president- elect is the president. They're watching his words closely.

We've seen the Dow going up virtually every day since Friday, when Tim Geithner's name leaked out as the treasury secretary. And yesterday, when pressed on whether he is in fact going to raise taxes on the wealthy, as he promised in the campaign, Barack Obama left the door open to delaying that tax increase for a year or two.

In terms of the sacrifice that Gerri was talking about, he really didn't spell out any details. And so we're in this strange sort of Neverland period where you have a lame-duck president and a president- elect who's not quite president yet, but this week is starting to fill that leadership vacuum.

This is the second day in a row that he's taken questions from reporters, talked about the economy. And tomorrow he's expected to have another one of these events in the morning here in Chicago, take more questions from reporters and talk about the economy. So he's talking almost as if he's moving into this position already.

HARRIS: Yes.

HENRY: But he's not spelling out the details. He can probably get away with that for a little bit longer because he obviously has not been sworn in yet. But the more he talks about these issues and gives an image that he's sort of taking control, he's going to have to start fleshing...

HARRIS: I agree.

HENRY: ... out these details about where the costs are going to be. The American people -- as Gerri said, the sacrifice has been intense. But think about what the taxpayers have paid with these bailouts, one after the other. If there's going to be something like a stimulus bill in the neighborhood of $700 billion, (INAUDIBLE) a lot of details about how we're going to pay for that -- Tony.

HARRIS: Let me do -- let me circle the group one more time here.

Susan, let me start with you. And this is a question to the Treasury secretary's announcement this morning. Now to the extent that this latest plan is viewed as another bailout, and I'm not sure to what extent it is at this point, doesn't the criticism that the Treasury secretary and the Treasury Department has done far too little for people facing foreclosure and far too much for the financial sector, doesn't this criticism now go to the incoming Treasury secretary, Tim Geithner, as well?

LISOVICZ: Well, I mean, I think there are enough conspiracy theorists out there that say that's one of the reasons why $350 billion in TARP money is being left to the next administration. I mean that's the conspiracy theorists.

HARRIS: Nice. Nice. Yes.

LISOVICZ: I think that -- I do think that the president-elect knows that he's in for a rough ride and, you know, that what he is inheriting is enormous. And I think that's one of the reasons why he assembled the team he has. People who worked during times of great economic expansion and those scholars who studied how the U.S. economy got out of the Depression.

But having said that, I think that the current Treasury secretary has acknowledged that this is something that is unprecedented. There's no blueprint for it. And that they've had to be nimble. And, yes, they've had to change course. And he's been under terrible criticism for it. And he certainly -- the market spoke when he changed course on TARP, no question about it.

HARRIS: Yes. Yes. Absolutely.

And, Gerri, let me give you the last word on this. Where is this money, this new money, this $800 billion, where is it coming from? Are we just sort of hand-cranking the printing press on this?

WILLIS: Well, look, you know, some of it is money we're going to have to borrow. Some of it is money that is coming from the New York Fed. You know, at the end of the day, I think consumers can expect that most of this money that you're seeing, the bailout dollar, really comes back to us. It's all got to be about our future taxes, the burden on our grandchildren.

But the reason it's so important to do this spending right now, really the financial system has been at stake. You know the stakes in this are incredibly high and that's why there's been so many dollars thrown at this.

Is this going to make you happy down the road about your taxes? Probably not. But I think there was a sense among both Wall Street and Main Street that something really needed to be done. Now the question is though, and I think you put it best, do consumers get help? When do consumers get help? When do people having trouble with mortgages, when do they see some kind of relief?

We're expecting to see as many as 3 million folks losing their homes this year. That's pretty dramatic and that's very hurtful to their future health and welfare. You've got to be thinking about them.

HARRIS: Take a look at this team. Nice job to each and every one of you. Ed Henry with the Obama transition team in Chicago, there's Gerri Willis at our New York financial desk, and Susan Lisovicz at her post at the New York Stock Exchange. Thank you all. That was great. Thank you.

And still to come in the NEWSROOM, bailout and loans, $700 billion, $600 billion. Just where are we getting all this money? Thin air? (COMMERCIAL BREAK)

HARRIS: Take you to the New York Stock Exchange. Just past three hours into the trading day. And as you can see, we are certainly off session highs. Which we're certainly in the positive territory. Now we're seeing lows. We're down 51 points. Again, three hours into the trading day. We'll check in with Susan Lisovicz once again for a market check in just a couple of minutes.

Lending, as you know, greases the wheels of the economy. Knowing that, the government took steps today aimed at making it easier for you to get a car loan, credit card, even a mortgage. One program announced today in effect sets up a government bank. You, the consumer, wouldn't get the loan directly. Rather, it will go to investors who buy securities backed by car loans, student loans and credit cards. That plan is expected to cost as much as $200 billion.

(BEGIN VIDEO CLIP)

HENRY PAULSON, TREASURY SECRETARY: And strength and the stability of our financial system. And it's very important that that system remain stable and remain strong. And lending is very important to consumers.

And secondly is the economy. And what is going on in the financial system is impacting the economy. And as the economy is turning down, it is very important that lending continued to be available. And be available to consumers. And so what we're doing with this facility is to support -- is to support consumer lending.

QUESTION: (INAUDIBLE) those numbers?

PAULSON: Well, I'm saying, this action shows that we are concerned and we're addressing it.

(END VIDEO CLIP)

HARRIS: Well, a second program unwrapped today is supposed to make it easier and less expensive to get a mortgage. The Fed will buy mortgages and bundled mortgage securities. These aren't bad mortgages. In fact, the opposite. Prime mortgages. Total cost of this program up to $600 billion. All this money.

So what does it mean for you? Will it be easier to get loans. And by getting the loans, maybe this will finally jump start the economy. Joining me now is Eamon Javers, financial correspondent for politico.com.

Eamon, good to see you, as always. Thanks for you time.

EAMON JAVERS, FINANCIAL CORRESPONDENT, POLITICO: Hey, thanks for having me.

HARRIS: Hey, what struck you about the president-elect's news conference moments ago? JAVERS: Well, you know, it was sort of billed in advance as here's a chance for Barack Obama to talk a little bit about sacrifices that people are going to have to make. But he really didn't get into that. I was kind of surprised. I was sort of waiting to hear, you know, the other shoe drop there.

HARRIS: Yes.

JAVERS: He talked about -- the one program he singled out was this report that millionaire farmers are getting agriculture subsidies. And he said, if that's true, you know, we're going to eliminate that with a red pen come January. But that's the kind of thing you kind of always hear from incoming administrations. You know, everyone talks about waste, fraud and abuse in the federal budget. And to be sure, there is a lot of it.

But once they get into office, they realize that each one of those programs has got lobbyists, its got supporter, it's got passionate fans and they all rally to kind of defend that as best they can immediately. So it's very hard for presidents to cut those things, even though they all come in promising that they're going to do it.

HARRIS: What do you think would have happen if he had announced, look, specific areas? Sectors that he would be looking for some savings? I'm just thinking . . .

JAVERS: He would have mobilized every lobbyist from that sector.

HARRIS: Exactly.

JAVERS: You know, they scramble the jets, they fly down to Washington and they start unloading money on Capitol Hill. I mean that's what happens when a sector feels threatened for budget cuts.

So, you know, the gain here as a president-elect is to be as specific as possible to give the impression that you're targeting something, but being as vague as possible so as not to set off the alarms bells of those people who you're targeting because whenever you make a budget cut, somebody feels that pain. And frequently in Washington, that somebody has a lot of political muscle.

HARRIS: So, Eamon, look, what's going on here? Two news conferences in two days. Peter Orszag, and no disrespect to him, he's going to the office of Management and Budget. Rob Nabors. Look, these are names that could have been announced in a press release.

JAVERS: Sure.

HARRIS: What's behind the news conferences?

JAVERS: Well, I mean, the Obama team is sending a real powerful message here by putting the president-elect on national television in front of that blue background with the red and white American flag behind him saying, we've got a new president of the United States. He may not be sworn in yet, but this is the guy who's leading the country and leading us forward. And, furthermore, he is rolling out a list of names which people who are on Wall Street can analyze and get to some familiarity with.

By and large, we haven't seen anybody who's at all threatening or scary to Wall Street. In fact, most of these people are well-known, establishment players. Peter Orszag, you know, London School of Economic, Princeton University, on and on and on. I mean these are people who have great resumes by and large. So he's sending out a strong command image and also he's sending out a message of, hey, wait a second, these are establishment players. Wall Street, you can work with us.

HARRIS: All right. How about this? The news of the morning. The $800 billion -- I can't fathom these numbers anymore.

JAVERS: Right.

HARRIS: $800 billion essentially air dropped into the markets today. What are your thoughts on that? And isn't this truly money for the investor class? I think we're wondering what it means for you and me if we're looking for the next student loan, if we're looking for the next mortgage, if we're looking for -- you know where I'm going.

JAVERS: Yes, sure. I mean the idea here -- I mean, first of all, look, Hank Paulson, who has been working, you know, day and night tirelessly here on this fiscal crisis since it happened was getting a little bit testy and defensive in the comments there. But the reason is, is because Treasury is now responding to this criticism that, hey, you haven't done enough for consumers. Regular guys out there on Main Street who are trying to earn a living and trying to pay their bills.

HARRIS: And where's the money for Sheila Bair? The FDIC?

JAVERS: Well, and so the question here is, how do you set up a mechanism that increases demand for lending on car loans, on houses, on student loans? The kinds of things where people live their lives. And that's the idea behind this program is, is to stimulate in the financial market a system where these loans can start happening again. They've really been seized up for the past several months and that's really hurting consumers out on Main Street.

HARRIS: Eamon Javers with us. Always great to talk to you, Eamon. Thank you. Appreciate it.

JAVERS: Thanks.

HARRIS: And packing your bags and heading out of town for the holidays. Our Jacqui Jeras is tracking the holiday travel. She's next.

(COMMERCIAL BREAK)

HARRIS: Let's get you to the severe weather center. Jacqui Jeras is tracking the nation's weather for us. And you know, Jacqui, we've been spending a lot of time today talking about the financial players. But the truth of matter is, no one's more important than you and your travel forecast, Ms. Jeras?

(WEATHER REPORT)

HARRIS: Righting a wrong by listening to a song. It is the punishment some teens can't take.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT: The greatest hero, I think, on a global stage is Nelson Mandela. This is a man who spent 28 years in jail, behind bars, just because of his belief that black people are equal to white people and have the same rights. But when he came out of jail, he had no bitterness, he had no hatred, he was not motivated by revenge and he reconciled South Africa peacefully.

NELSON MANDELA, FORMER SOUTH AFRICAN PRESIDENT: I just can remember the hostility (ph) experience I had, because I tried not (ph) to concentrate on the moral construction positive side of my stay in prison.

AMANPOUR: When they had the first real elections in South Africa, he was elected by white people and black people who had never, ever voted before in their lives, who stood in huge, massive lines all over the country just to cast their vote for what was right.

(END VIDEOTAPE)

HARRIS: And another reminder for you to join Anderson Cooper Thanksgiving night to see all the CNN heroes and meet the CNN hero of the year.

(COMMERCIAL BREAK)

HARRIS: You know, lots of families are struggling in this troubled economy. And that means tough choices. More pets are being turned into shelters or turned out on it's streets.

Here's CNN's John Zarrella.

(BEGIN VIDEOTAPE)

JOHN ZARRELLA, CNN CORRESPONDENT, (voice over): Take a look at the faces, the wagging tails. Each one of them seems to beg, can you take me home? There's Spot, Bentley, Diamond, Bella, Tinkerbell the cat. They're all here at the Humane Society of Broward County for the same reason -- they were turned in by their owners.

CHERIE WACHTER, HUMANE SOCIETY OF FT. LAUDERDALE: Their families can't afford to take care of them. They can't afford to buy them food. They can't afford to take them to the vet. ZARRELLA: Cherie Wachter has been with the Humane Society for 13 years.

WACHTER: What, you going to crawl on my lap? Oh, I know.

ZARRELLA: It's never been this bad. Adoptions for the year are down here by 500. Cash donations, way down. Nationwide, the Humane Society says pet surrenders are up more than 30 percent. This shelter in suburban Atlanta, for instance, has seen a tenfold increase in pet abandonment during the past two years. And not just dogs and the cats. Look at this. A farmer had to give up his goats. At least these owners thought enough of their pets to turn them in.

SHERRY MARTS, ANIMAL CONTROL SPECIALIST: Oh, that's it. Right there. And look at the dog laying there.

ZARRELLA: Sherry Marts with Miami-Dade Animal Services rarely saw animals left behind to fend for themselves. Now it's all the time.

MARTS: People call because people that lived next door to them either got evicted or they couldn't -- they had to move but they couldn't take their animal, so they leave them behind.

ZARRELLA: Two dogs were left behind at this foreclosed home. One takes off when it sees Marts. The other plays a doggy version of cat and mouse. Eventually his luck runs out.

MARTS: Got him.

ZARRELLA: Now he goes to the shelter. If he gets lucky, he gets adopted, a new home, and a second chance.

The holidays are usually the biggest time of the year for animal adoptions. The Humane Society is not sure what to expect this year. Right now, that old saying, it's a dog's life, just doesn't carry quite the same meaning.

John Zarrella, CNN, Ft. Lauderdale, Florida.

(END VIDEOTAPE)

HARRIS: OK. Well, what do you think about this? This next story. Is it cool and unusual?

JOSH LEVS, CNN CORRESPONDENT: You guys are going to love this.

HARRIS: Maybe what's been going on up here is a little cruel and unusual. And violators of a . . .

LEVS: They don't (INAUDIBLE).

HARRIS: Not yet, but it tells me they will in a moment, violate . . ..

LEVS: (INAUDIBLE). HARRIS: May I finish?

LEVS: Yes.

HARRIS: Of a noise ordinance are being forced to listen to Barry Manilow and Barney.

Josh, take it from here, please.

LEVS: Everyone's having a field day with this story.

HARRIS: Yes.

LEVS: And, you know, we're not dissing Barry Manilow. This are three fans . . .

HARRIS: No.

LEVS: Well, two fanalows and someone who thinks he's fine up here right now.

HARRIS: All right.

LEVS: But basically, here's the idea. One man's entertainment is another's punishment.

There he is. There's the man. Barry Manilow singing.

See, here's the thing. Our affiliate, KUSA, is reporting that people in Fort Lupton, Colorado, are being forced to sit for an hour to listen to Barry Manilow and some others. Here's some video of that happening.

HARRIS: Are you kidding me?

LEVS: Listen to what else they have to listen to here. "South Park."

HARRIS: OK. Is that "South Park."

LEVS: Now listen to what's next. This is about to be the worst.

HARRIS: What is this?

LEVS: OK. We've got one more piece of video. This. Listen. Barney.

HARRIS: Oh, this is (INAUDIBLE).

LEVS: This is the absolute worst. OK, this . . .

HARRIS: Yes, this will get it done.

LEVS: I could survive everything else. But an hour of Barney? I mean, so annoying. These are drivers who allegedly blasted music too loudly from their cars. The judge who inflicted this punishment, Paul Sacco, who was on "AM" this morning, "AMERICAN MORNING," he says fines just did not do the trick.

(BEGIN VIDEO CLIP)

JUDGE PAUL SACCO, SENTENCES TEENS TO MANILOW: Number one, their parents were paying the fines. And, number two, it just didn't mean much to the kids, even if they paid their own fines. Whereas, inevitably what happened with this program, I think, is kids learn maybe a little bit about manners.

(END VIDEO CLIP)

LEVS: And no shock right there. He says there are a lot fewer repeat offenders now. We have a little piece of video. Let's close out with some more of this. Four people stuck in that room listening to all this music. So what would drive you crazy? You guys could deal with an hour of Manilow?

HARRIS: Oh, I would love Manilow.

LEVS: You would go to a concern.

HARRIS: No, that wouldn't be punishment.

LEVS: It's the Barney, right?

KYRA PHILLIPS, CNN ANCHOR: I don't know, Chipmunks for me. Chipmunks would take me under.

LEVS: Yes, they would probably explode my brain.

HARRIS: John Jacob Jingle Hymer Schmidt. You remember that one?

LEVS: Oh, no, no, no, this was . . .

HARRIS: I'd be done.

LEVS: Yes, John Jacob, you can't hear more than once of that (INAUDIBLE). Oh, there he is.

PHILLIPS: Oh!

LEVS: (INAUDIBLE).

PHILLIPS: Come on. We had the eight track tapes, Tony. "At the Copacabana" Should we sing? Maybe a little . . .

HARRIS: How about the filange (ph).

PHILLIPS: And I write the songs

HARRIS: Oh! You actually sound great.

LEVS: Thank the Lord for a rap.

HARRIS: CNN NEWSROOM continues right now with the fine voice of Kyra Phillips.