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Obama Names Congressional Budget Expert to Head Federal Budget Office
Aired November 25, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: We still don't know, but we know the man who is going to do it. Obama nominated Peter Orszag, currently the Congressional Budget Office chief, as director of the Office of Management and Budget.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: 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 is worthy of the 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 it will survive the next. The old ways of Washington simply can't meet the challenges of today and tomorrow.
(END VIDEO CLIP)
PHILLIPS: Well, that was the president-elect in Chicago where team Obama has set up shop.
Our White House Correspondent Suzanne Malveaux following it all from Washington for us -- Hi, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kyra.
It sounds pretty serious, where the bodies are buried. But Barack Obama today said that budget reform is not an option, it is a necessity. That as president he is going to go through this federal budget, page by page, line by line to get rid of unnecessary spending and make our government work more efficiently.
Now, in terms of just what programs he will cut or just how much is still largely unknown. He did cite a report that identified some wasteful farmers getting millions more in crop subsidies than allowed, as an example of the kind of abuse he would eliminate as president. But it is really clear, Kyra, would just be the tip of the iceberg in dealing with a federal budget that is now approaching $3 trillion.
Today, after Obama announced his pick for the director of the Office of Management and Budget, Peter Orszag. He was asked whether he had any concern that his message may be stepping on President Bush.
(BEGIN VIDEO CLIP)
OBAMA: There is only one president at a time. That president is George W. Bush and he will be president until I am sworn in on January 20th. Given the extraordinary circumstances that we find ourselves in, however, I think that 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.
(END VIDEO CLIP)
MALVEAUX: OK. Well, a part of hitting the ground running is going to be pushing Congress, the new Congress in January, when Obama takes office to push through another stimulus package, and that is estimated, Kyra, at least $0.5 trillion, but Obama believes it will jump start the economy and create 2.5 million new jobs in the first two years of his administration. All of this, Kyra, very ambitious plans and still very much untested.
PHILLIPS: All right, let's bring up big numbers again. Let's talk about the deficit figure in all of this. Are they worried about that? They have to be.
MALVEAUX: You know that number is huge. That is $10 trillion, the federal deficit, it is estimated now. But what Barack Obama -- he keeps being asked this question and he answers it the same way. He says, he believes there is a consensus between Republican leaning, Democratic leaning economists that say you just have to spend, spend, spend now, don't worry about the federal deficit, at leas not for a couple of years or so, because you really have to make sure that this isn't a deepening recession; that that is the most important thing. That eventually the economy will recover and you'll get that money back. But, Kyra, that really is going to be a big problem down the road.
PHILLIPS: All right. Suzanne Malveaux, thanks.
Later this hour, Robert Reich, economic adviser to the president- elect and former Labor secretary to President Clinton, will weigh in on Obamanomics and the men and women who will carry it out.
Well, you won't need any on-the-job training. That's what Delaware's governor says about this man, Ted Kaufman. He was a long- time chief of staff to Delaware Senator Joe Biden, who is now the vice president-elect. The 69-year-old Kaufman will now replace Biden in the Senate for two years. He says he will not run for the seat in 2010. There were reports that Biden's son, Beau, currently Delaware's attorney general, might step into his dad's shoes. Beau Biden is deployed in Iraq as a captain in the National Guard. He said last week that he would not take his dad's job if it were offered to him.
John McCain is still in race, that is the 2010 Senate race. He talked to reporters last hour, in Phoenix. The former GOP presidential contender is setting up a committee as a first step toward running for the fifth term. He looked ahead, but also looked back on his losing campaign, saying that he picked Sarah Palin, as his running mate, because she was quote "a real breath of fresh air", meaning she is not from Washington. He also says that he is ready to help jump start the stalled economy, which he says changed the presidential race. (BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), FMR. PRESIDENTIAL CANDIDATE: When we started the campaign you would probably have argued that the war in Iraq was, you know - a major, major issue. And then, of course, the economic issues and success in Iraq, but that combined with the economy made that a major issue. And the American people decides -- and I respect that decision. I don't in any way criticize it. And that the economy was of vital importance - and it is.
PHILLIPS: Well, the Treasury wants to give credit where credit is due, and so does the Fed. Together, they are rolling out a monumental plan to pump up the market for securities based on mortgages, credit cards, car loans, college loans -- you name it, the goal is to make all of those loans relatively cheap and available for people like us.
And the stocks are getting cheaper on Wall Street as well. Investors are cashing in after the biggest two-day rally in two decades.
CNN's Susan Lisovicz following all these developments from her post at the New York Stock Exchange. Susan, let's start with this new credit program, it is actually two programs, right?
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Two programs -- and it is an awful lot of money, Kyra. I mean, we are talking about up to $800 billion, which is more than the TARP program, basically trying to unfreeze the credit system. It is very few people outside of Bill Gates and Warren Buffett who can buy something without credit.
I want to talk about one of them first. It is coming from the New York Federal Reserve committing up to $200 billion, really focused on small businesses and consumers. So these are everyday kind of things that we all need. Things like auto loans, student loans, credit card loans, and it is really trying to focus that, making them more available. That is the first one, up to $200 billion. This is, as I said, in addition to the TARP program, although about $20 billion from that remaining first half of the TARP is going to be used for that program, Kyra.
PHILLIPS: So, the second program unwrapped today, is supposed to make it easier and less expensive to get a mortgage, right?
LISOVICZ: Yes. And the housing market, of course, is the epicenter of where this mess began. That is where the bulk of the money, that was announced today by Secretary Paulson, would be going, up to $600 billion. And the idea here is to try to make home mortgage cheaper and more available. So Fannie Mae, Freddie Mac, some of these government-sponsored entities would be seeing that. Secretary Paulson today, talked about the dual challenges that the administration faced when crafting this plan.
(BEGIN VIDEO CLIP)
HENRY PAULSON, U.S. SECRETARY OF TREASURY: The challenge in developing these programs is how to get the balance right between, you know, helping those homeowners who need it the most, and not providing government funds to those homeowners who don't need it, or government funds for modifications that would be taking place anyway; given all of the various things that are going on. And, again, how to get the balance right between the homeowners and the banks.
(END VIDEO CLIP)
LISOVICZ: And as you know, Kyra, basically these new programs being unveiled because we continue to see signs that the economy is weakening, and the secretary, others, saying that credit basically just dried up in October. Of course, we got a revision on GDP, we talked about it in the last hour. GDP, revised lower. One of the things that happened was consumers really reigned in their spending. You are not going spend if you don't have access to credit. It is just a given.
PHILLIPS: Well, housing prices are fallen at record levels, too.
LISOVICZ: That is right. That is another report that came out today showing the continuing weakness. And that would be an understatement in the housing market. A closely watched study S&P/Case-Schiller showed home prices declined 16.6 percent in the third quarter. It studies 20 large metro areas, showed declines in every city, and in 13 of the 20, there were record declines, Kyra.
PHILLIPS: All right. Susan Lisovicz, thanks so much.
LISOVICZ: You are welcome.
PHILLIPS: A mudslide warning, preparing for the worst, in burned out areas of Southern California. We are going to tell you what may trigger it.
And a tragic mistake on the high seas, a pirate ship that wasn't up in flames. A live report from Kenya with details on how it all went down.
(COMMERCIAL BREAK)
PHILLIPS: Well, first the wildfires and now rain is in the forecast, and that has homeowners in Southern California on edge again, as reporter Suzie Suh, with affiliate KCBS, shows us it is neighbor helping neighbor in a race against time.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Everyone is actually pulling together, and that is what this is all about.
SUZIE SUH, KCBS NEWS REPORTER (voice over): In Yorba Linda, an all-out defense strategy.
UNIDENTIFIED MALE: Drop it down, Steve. Yes! Perfect.
UNIDENTIFIED MALE: Clear! SUH: Against mother nature.
UNIDENTIFIED MALE: You have to make plans for the worst case, that you can.
SUH: Because when your house is hugged by hillsides charred by fire, the ash just days old.
UNIDENTIFIED FEMALE: Survived the fires against all odds and now they may lose their home.
SUH: Rain in the forecast may mean a downpour of danger.
CHERYL KRUEGER, YORBA LINDA, CA: And now we are in a predicament of the hills coming down and who takes care of it.
SUH: Warnings out and sandbags in driveways and in Cheryl Krueger's case, concrete walls on guard with an army of neighbors and helping hands.
BOB LANGAN, YORBA LINDA, CALIFORNIA: I don't know the people at this house, but you know, if you can help, you can help.
SUH: Residents are hoping to shield themselves from the worst.
KRUEGER: Right now we are hoping to keep it standing because my kids have been here since babies.
LANGAN: Hopefully we will get everything done before the rain starts.
(END VIDEOTAPE)
PHILLIPS: So when will that rain begin? Let's check that out with Jacqui Jeras back in the Severe Weather Center.
(WEATHER REPORT)
What do you think?
JACQUI JERAS, CNN METEOROLOGIST: Well, really extreme measures. But you know, this is a real serious deal, because when you have the fires that burn as extensively as they did, that is a lot of real estate that is just completely denuded of all vegetation. So there is just nothing on that hill other than burnt up debris. So, every raindrop that falls down is just going to slide right off of this. So, mudflows, debris flows are a very good probability. In fact, I'd be really shocked if we didn't get any out of this rain event.
Our low pressure area is offshore here, but it is kind of a slow mover so it will stick around for a couple of days. Most of the heaviest rain has already been offshore. But we are seeing some light rain and drizzle already into Southern California. The rainfall potential will be heaviest into the foothills and into the mountains where we could see one to three inches. You'll likely see some lesser amounts in the valleys, but what matters is what's falling into those higher elevations where things have been burning. That is something we will be watching closely over the next couple of days.
(NATIONAL WEATHER FORECAST)
PHILLIPS: Well, how are you spending your Thanksgiving holiday? We have heard from some I-Reporters, or we've heard from I-Reporters out there. Bijou from Los Angeles says that he's exploring the open road. Here is a picture that he took at Yosemite National Park. He is going to travel historic Route 66 from Santa Monica to New Mexico. It actually is a beautiful route. Tell us about your plans this week and send us your I-Reports at IReport.com.
Well, the president-elect is rushing to get his team together and he's vowing to hit the ground running when once he takes office, that makes for a quick vetting process, but one that does allow little room for error. CNN's Jim Acosta reports.
(BEGIN VIDEOTAPE)
OBAMA: Good morning.
JIM ACOSTA, CNN CORRESPONDENT: Barack Obama is already making presidential history by naming, or leaking, his Cabinet picks faster than nearly all of his recent predecessors.
OBAMA: And if we do not act swiftly and boldly, most experts now believe we could lose millions of jobs next year.
ACOSTA: With an economic crisis spiraling out of control and a lame duck in office, presidential scholars say the next commander-in- chief simply had no choice.
LARRY SABATO, UNIV. OF VIRGINIA: This is really unprecedented, but it is an unprecedented situation. Obama is doing what the public and the markets demand be done, and that is to show that the next president is in charge even before he takes the oath of office.
ACOSTA: The conventional wisdom was that the Obamas transition team's vigorous vetting requirements, including a probing seven-page questionnaire would slow down the selection process, or scare away talent altogether, but potential Cabinet high-level White House posts are filling up fast from Health & Human Services to Homeland Security.
SABATO: Nobody believes that these individuals, Larry Summers, for example, has produced every e-mail that might have been embarrassing to the president-elect or the new administration. There simply was not enough time.
ACOSTA: In recent times, only President Bush, Sr., moved more quicker, but that was to name confidant James Baker secretary of State, just days after the election. The second President Bush and Bill Clinton waited until December for their fist picks. And two of Mr. Clinton's choices for attorney general were scuttled over revelations they had hired undocumented workers. The Obama team started early to avoid getting blind-sided by unexpected problems.
KENNETH GROSS, VETTY ATTY. FOR POLITICAL APPOINTEES: There is no question that plenty of work was done in anticipation of victory.
ACOSTA: It's a delicate balancing act. Vetting experts say the early roll out of Mr. Obama's team could calm markets, as long as there aren't any surprises.
GROSS: I think calling it a high-wire act is a very good term, because this is high-stakes. These are high-profile positions and the last thing you need is something to blow up in your face.
ACOSTA (on camera): Mr. Obama is not out of the woods yet. There are confirmation hearings coming and one prominent Republican is promising a good old-fashioned Capitol Hill grilling, saying in times of crisis, the public deserves nothing less.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
PHILLIPS: The sinking of a pirate mother ship, or was it? Did Indian navy make a mistake? We will bring you a live report from Kenya.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: More than 25 million Iraqis are free, and a young democracy has taken root where a tyrant once ruled. Removing Saddam Hussein was the right decision then, and it is the right decision today.
(END VIDEO CLIP)
PHILLIPS: President Bush rallying the troops and defending the war at Fort Campbell, Kentucky. The president says that the day that the troops can come back from Iraq is approaching, and he adds, quote, "They will come home in victory."
A gut-wrenching report on the fighting in Congo as more and more people are forced from their homes. A U.N. report accuses the army of arbitrary rape, torture and executions. The U.N. also accuses both army and rebels of abusing civilians.
Meanwhile, Human Rights Watch says that some 500 opposition members were killed on orders by the Congo's president. The government calls the report nonsense.
The Gulf of Aden, a paradise of sorts for Somali pirates; their latest victim is a Yemeni freighter. Our
David McKenzie joining us now live in Nairobi, Kenya. David, tell us about the latest hijacked ship.
DAVID MCKENZIE, CNN INT'L. CORRESPONDENT: Well, that is right, Kyra. The latest, as you say, is that a Yemeni freighter - we don't have very many details at this stage, but what I can tell you is that cargo ship disappeared about four or five days ago. They are just getting wind that it is taken by pirates, most likely going to those pirate dens off of the coast of Somalia. Piracy has been on the rise here, in the east part of Africa in the past few months. In the last week, there are scores of ships attacked and many hijacked.
The latest though, Kyra, as well is what we thought was a great news out of this region of a successful attack against pirates might in fact be a mistake. The Indian frigate, which said that it attacked a pirate mother ship. Now it turns out from the Thai shipping owner, that that in fact was his ship and that it had 16 sailors, at least, on board when it was attacked. One of those sailors was found days after he had been stranded in the Gulf of Aden, saying they had been attacked by the Indian ship. And the rest of those sailors are now missing, presumed dead. So that one successful attack, in fact, might have just grave mistake, Kyra.
PHILLIPS: Now, David, also I think a lot people don't understand that a lot of these hijackers, formerly used to work on these ships, correct? So they know the ships well. They know the security angles. They know exactly what they are doing when they come aboard and hijack them, correct?
MCKENZIE: Well many of them were in merchant sailing in some shape or form. They were either merchant sailors or if not that they were at least fishermen in the area, who would know the waters, who would know the tides, and the places to wait for passing vessels. So they do realize that this is how they can do this, whether they are from those exact ships is debatable. But they know these waters really well, Kyra. They can use it to their advantage.
PHILLIPS: David McKenzie, live from Nairobi. Dave, thanks.
Well, chaos in Thailand's capital today, anti-government protesters swarmed Bangkok's international airport forcing the suspension of all departing flights. The unrest also spilled into the streets, where opponents and supporters of the government fought each other with guns, knives and slingshots. Police say that 11 people were injured. The opposition accuses the prime minister of being a puppet of his disgraced predecessor and are demanding that he step down.
The president-elect is electing to get out in front of the economic meltdown, but what is going on behind the scenes? We will get an inside look from adviser, scholar, author and friend of the NEWSROOM Robert Reich.
(COMMERCIAL BREAK)
PHILLIPS: Good afternoon, everyone. I'm Kyra Phillips at the CNN World Headquarters in Atlanta. And you're live in the CNN NEWSROOM
It's 2:28 Eastern Time and here are some of the stories we are working on in the CNN NEWSROOM. Michael Vick back in court. The former Atlanta Falcons quarterback pleaded guilty to a state dog fighting charge in Virginia. He got a three-year suspended sentence. Vick is still serving 23 months in federal prison for his role in a dog fighting ring, but today's plea is expected to speed his return to the NFL.
The suspect in Sunday's deadly church shooting in New Jersey, also in court today. A nationwide manhunt tracked Joseph Pallipurath to a motel in Georgia last night. He's accused of killing his wife and a man who tried to help her. A third person was critically wounded.
And another appointment by President-Elect Barack Obama. He says he'll nominate Peter Orszag to head up the Office of Management and Budget. Orszag is an expert on health care, pensions and Social Security.
Well, love him or hate him, Henry Paulson is a lame duck and, and Timothy Geithner is Treasury secretary-to-be. What will that mean for the meltdown and the government response? CNN's Allan Chernoff wondered the same thing.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice over): At a time of economic crisis President-Elect Obama's pick of Timothy Geithner to be Treasury secretary is highly celebrated.
PROF. JEFF FRANKEL, HARVARD UNIV. ECONOMIST: Timothy Geithner is the right guy. I mean he has long experience with dealing with financial crisis.
CHERNOFF: Investors have been frustrated with current Treasury Secretary Henry Paulson's flip-flopping through the financial crisis. Paulson lobbied hard for Treasury to gain $700 million to buy trouble mortgages from the banks, and then abandoned the plan. That accelerated the crisis facing Citigroup, a major owner of mortgages. And helped force Monday's bailout of the bank. Geithner, economists say, should know better than to cause such uncertainty for the financial markets.
AMITY SHLAES, COUNCIL ON FOREIGN RELATIONS: Secretary Paulson was making it up as he went along. It wasn't very clear about the rules.
CHERNOFF: Another contrast, Paulson spend his career at Goldman Sachs rising to chief executive, Geithner has no allegiance to any Wall Street firm. He is a product of the Treasury Department where he spent years handling financial crises around the globe. Even Secretary Paulson expressed admiration of Geithner saying Monday, I have great confidence in his understanding of markets, his judgment and leadership.
Allan Chernoff, CNN, New York.
(END VIDEOTAPE) PHILLIPS: Well, my next guest calls the next president's economic brain trust a wonderful team. He is a former team player himself as labor secretary under President Clinton. And today, Robert Reich is a university professor, economic adviser to the Obama transition team and best selling author, most recently of "Supercapitalism: The Transformation of Business, Democracy and Everyday Life." He joins us from the University of California at Berkeley.
Great to see you again.
ROBERT REICH, FORMER LABOR SECRETARY, CLINTON ADMINISTRATION: Hi, Kyra. How are you?
Well I know you know a number of these players very well. Why don't we start with Tim Geithner. What do you think? Obviously young, experienced -- fits that whole fresh, new cabinet-type position.
REICH: Yes, in fact, I think that there is a kind of consistency in vision here because most of the new additions to the economic team are pretty young. Now, from my standpoint, 47 is pretty young.
They also are fresh in the sense that they are not schooled in the same way. I think that Allan just pointed out Hank Paulson and other Treasury secretaries of recent vintage (ph) have been from Wall Street.
But Tim Geithner is really a Treasury person. He understands the Treasury Department very well. Another very important point is that he understands the global economy and global finance probably better than any recent Treasury secretary. He understands the importance of consistency with regard to the signals that come out of Treasury. And finally, he very much understands and agrees with the president- elect's focus on getting liquidity, getting money, getting loans, down to Main Street.
PHILLIPS: Got another name out there today, Orszag. You know him also.
What is your take on this pick?
REICH: Well, Peter Orszag, who is going to be head of the Office of Management and Budget -- Peter has been, for the last few years, in charge of the Congressional Budget Office. And he has really made that office entirely. Everybody I know up on the Hill tells me that he is a splendid manager. He knows the details of the federal budget. You need somebody at OMB who is a green eye shade person enough that they know exactly where the bodies are buried and what needs to be done and what needs to be changed.
But Peter is also a superb kind of economist. He is not just a technocrat, he's not just a technician. He really understands the big picture as well. And that combination of understanding the details and the understanding the big picture is going to serve the president- elect very, very well. PHILLIPS: In talking with a number of advisers, in addition to you, it seems that everyone has been saying -- we have been talking about Obama's stimulus package, that that is the way to create jobs, that's what President-elect Barack Obama has to do immediately to jumpstart this economy.
Do you agree with that? And will that be his first move?
REICH: It's going to be -- yes, I think it probably will be the first move. I wouldn't be surprised, Kyra. And again, this is my view and I'm not speaking out of school. He is probably going to have Congress tee up the big stimulus package before even inauguration day so that he can maybe on January 20th or January 21st or maybe January 22nd, he can sign this very big, very substantial stimulus package.
Now, again, this is my view, but it seems to me that the stimulus package, if it is going to have any impact in the economy that is a huge economy, it's got to be about 4 percent of the GDP at least, and that means $600 billion at least. And that is justified, in my view, in terms of the importance of getting the economy moving, given that consumers are cutting way back on spending, investment is almost dead in the water, exports are slowing because the recession is spreading around the world, so you need government as spender as last resort if we're going to have jobs and we're going to get an economic turnaround.
PHILLIPS: You know -- and we've got this two-month lag before President-elect Barack Obama is officially in that seat. If he doesn't do anything now -- and really can he do anything now with the President Bush still technically in office? Could this hurt us? Could this damage us? Could this take to us a place where we cannot come back?
REICH: Well, if there was really as much of a leadership vacuum as there was a couple of weeks ago, it could be very, very seriously damaging. But I think what President-elect Obama has done is three important things.
No. 1, he has put the team in place. And this is in record time. He was only elected three-and-a-half weeks ago. We've never had a president before December 1st put so many people in place, particularly the economic time.
No. 2, indicate to the public what his major, first priority is going to be. And he he has done that in terms of talking about a big stimulus package aimed at infrastructure and public investment.
And No. 3, it is very important that he and his team work very closely with the Bush administration so it almost seems seamless, even though the approaches are different, even though the philosophies will be different after January 20th. And he is doing that as well.
So I think he is doing everything he can to restore confidence, even though he is technically no longer president -- I mean he is technically not president yet.
PHILLIPS: Yet.
REICH: I slipped a little bit.
PHILLIPS: Freudian slip.
REICH: Bush is president right now.
PHILLIPS: All right. Robert Reich, always great to see you. Great insight as usual. Appreciate it.
REICH: Thanks, Kyra.
PHILLIPS: Well, if you want to feel better about the economy, you might take heart in a surprising bounce in consumer confidence. That is one of the gauges that we talk a lot about because consumer spending makes up most of the economic activity in America. November's reading came in at 44.9, up from 38 in October. That was an all-time low.
And speaking of economic activity, a second look at third quarter GDP shows that it was worse than we thought. The revised number is negative .5 percent, down from the original report of .3.
On Wall Street, an early rally gave us hope that the market might jump for a third straight day. But that burst of enthusiasm has waned and stocks have pulled back. Susan Lisovicz is at the New York Stock Exchange with a check of the action. Hey, Susan.
LISOVICZ: Hi, Kyra.
Well you were just talking to Secretary Reich and he was talking about the spender of last resort being the government; the government has been spending an awful lot. Treasury Secretary Hank Paulson rolled out another -- well two programs -- an $800 billion rescue plan from the government. It prompted an early rally right at the open, but we continue to see fundamental problems in a lot of different areas, jobs being cut, today -- the world's largest steel maker, ArcelorMittal. Housing prices, meanwhile, fell by a record amount in the third quarter. And the economy is shrinking, as you just mentioned.
But the encouraging news? Well, things could be a lot worse. We are coming off of the best two-day-point gain for the Dow ever and the best percentage gain -- two-day percentage gain since the aftermath of the crash of '87.
Right now, the Dow is down 81 points, or about 1 percent. The Nasdaq is down 2, techs are getting hit harder today.
Home builders are surging, Kyra, after D.R. Horton reported better than expected revenue. D.R. shares are up 29 percent, (INAUDIBLE) is up 37 percent. You don't see that too often these days, Kyra.
PHILLIPS: Yes, that's true. Susan Lisovicz, thanks.
LISOVICZ: You're welcome.
PHILLIPS: A watchdog group has released its annual video game report card. It gives the gaming industry high marks for improving the ratings system. Retailers get a B-plus for making some progress on ratings enforcement. Parents, though, they score an incomplete. The group says that moms and dads need to stay on top of their kids' gaming, especially downloaded content.
Can Barack Obama deliver on his promise to promote clean and renewable energy? Will market variables stand in the way? We're going to have a live report from New York.
(COMMERCIAL BREAK)
PHILLIPS: Family pets paying a high price in the economic crisis. Shelters are inundated with surrenderers (ph) their people can't afford to keep.
(COMMERCIAL BREAK)
PHILLIPS: Well, Ford and its subsidiary, Volvo, topped the insurance industry's annual list of safest vehicles. The Insurance Institute for Highway Safety says for the 2009 model year, Ford has a record 16 vehicles on the list; Honda has 13; Volkswagen 9; And GM and Toyota have 8.
Ford's CEO testified along with other Big Three execs seeking government aid that the company was making significant strides putting safety first.
President-elect Barack Obama has vowed to promote clean and renewable energy, but the gloomy economy, not to mention falling oil and gas prices, could threaten that promise. CNNMoney.com's Poppy Harlow has our Energy Fix from New York.
Hey, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey there, Kyra.
Yes the state of the economy is threatening to put a damper on what Obama has planed. He has pledged $150 billion over the next 10 years for alternative energy investments. To make that happen, though, we have to have the power companies onboard. Right now, though, a lot of them are scaling back their plans, that of course amid the ongoing credit crisis. That makes funding these new projects quite a daunting task.
Here are some examples. Florida's FPL, that is a huge wind producer, slashing spending on new energy products by nearly $1 billion next year. North Carolina, Duke Energy, that is a big one, they have cut their capital budget by several hundred million dollars, also postponed construction of some natural gas plants. And then New Jersey's PSE&G has cut its capital expenditures for next year by some 15 percent, more than a third of those cuts in renewable energy at that company.
And even, Kyra, as you know, billionaire oilman, T. Boone Pickens, who turned to wind, he is now delaying his wind project.
PHILLIPS: Well, are any companies looking past today's storm clouds and actually investing more in alternative energy?
HARLOW: Some are. It's a good question.
Some retailers, surprisingly enough, they are leading the way. They have to light, heat, cool all of those stores. Wal-mart just coming out with a deal, tying up with Duke Energy to use wind power at hundreds of their stores in Texas. Starting this spring, they are going to use about 15 percent of the electricity at those stores powered by wind and coal. That retailer -- they're going to power about 65 of their stores across the nation on solar power. That should start by mid-December.
So clearly, Kyra, despite the economic environment and the tough time all those retailers are having, they think this is going to pay off in the end. It is their energy fix at least, Kyra.
PHILLIPS: That's true. All right, well, you are right about times are tough economically, Poppy. Thank you so much.
And so are the choices that many families are having to make. Animal shelters across the country say that they are swamped lately by surrenders, pet owners finding that they just cannot afford to feed and care for their cats and dogs. So larger animals, like horses and livestock, are also suffering, in many cases set loose to fend for themselves. Animal control officers have picked up everything from donkeys to goats.
Let's get a sneak peek at the next hour of NEWSROOM. T.J. Holmes in for Rick Sanchez this week.
What's up, T.J.?
T.J. HOLMES, CNN ANCHOR: Hey there, Kyra.
We've got an interesting one this week having to do with a woman who is having a tough time right now on her job. She works at an elementary school, she works in the cafeteria, she works out on the playground part-time. Everybody has given her rave reviews, says she's doing a great job. There is just one problem, she used to be in the adult film industry, Kyra. And that is now sparking some debate. People want her fired.
But you know what? There is no legal grounds to fire her, she hasn't done anything wrong. And by all accounts, she has done a good job. We're going to delve into that, talk to someone who is -- who actually worked in that adult film industry and talk about just how tough it is out there when you have it on your resume that you used to work on the adult film industry.
Also, Kyra, of course, we saw the markets spike after we heard that Timothy Geithner would be the new Treasury secretary that Obama picked. So it seems like investors, Wall Street and others, like him. Well, not everybody is sold on the new Treasury secretary to be. Of course he has to be approved, but the one that Obama has picked, Timothy Geithner, not everybody is so excited about him. We will talk to somebody who is saying maybe he is not the right guy for the job.
That, and a few other hot topics. Come on back. Kyra, we will see you at top of the hour.
PHILLIPS: Sounds good. Thanks, T.J.
The musical stylings of Mr. Barry Manilow. Beloved by millions, but not so easy listening for one special group.
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PHILLIPS: Well there is probably no other animal in the world as feared as the great white shark. So you might wonder why people are willing to pay big money to get inside a cage and swim with them. It's for the thrill of course, the rush of adrenaline from seeing a one ton animal hurling towards you.
For all the excitement, cage diving with great whites is becoming highly controversial. Some people say it might be making the sharks more dangerous, actually conditioning them to eat humans.
As part of our Planet in Peril series, Anderson Cooper went to South Africa to investigate. Here's a look at part of what he found.
(BEGIN VIDEOTAPE)
ANDERSON COOPER, CNN ANCHOR (voice-over): When Great White sharks start to circle your boat, the feeling is unsettling. 15 feet long, thousands of pounds. These are the animals of so many nightmares.
UNIDENTIFIED MALE: This is the famous shark, Ellie.
COOPER: We've come to dive with these Great Whites to get a up close look at them and the battle that's being waged around them.
UNIDENTIFIED MALE: Please do not go down unless we tell you to.
COOPER: Mike Rutsgen (ph) takes tourists cage diving with Great White sharks off of the coast of South Africa.
UNIDENTIFIED MALE: And then you can lean back and just hold on and be comfortable.
COOPER: It's become a big business. But it's also, he says, a conservation effort. He thinks if people can see these endangered animals underwater, they're learn to appreciate them and want to help protect them.
Cage diving however is highly controversial. We'll tell you why in a second, but right now the water is filled with blood and fish parts called chum, and the Great Whites have arrived.
(on camera): Are there any recommendations for what to do? UNIDENTIFIED MALE: Well, basically, don't scare the sharks. You're going to be in the water.
COOPER: I'm not worried about scaring the sharks. It's usually the other way around, I think.
(voice-over): After we get used to being in the water with the sharks inside the cage, we have the chance to do something that few others have. We'll go swimming with Great White sharks without a cage.
(END VIDEOTAPE)
PHILLIPS: Well, you can watch Anderson's full report on the worldwide investigation, Planet in Peril, Battlelines, coming December 11th. Be sure to also go to CNN.com/planetinperil for a behind the scenes look at the making of Planet in Peril and dispatches from the field.
Well, a warning. Some of you may find the following clips disturbing.
(BEGIN VIDEO CLIP)
(MUSIC AND SINGING)
(END VIDEO CLIP)
PHILLIPS: Don't be too sure, that Barney. The purple guy is being used as punishment by a crafty Colorado judge.
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PHILLIPS: Well, it's a constant test for the court system making the punishment fit the crime. A Colorado judge wrestled with that when facing noise violators who'd unleashed their blaring music on an innocent public. His solution? Barry Manilow.
Details from Chris Vanderveen of our Denver affiliate, KUSA.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: This is a way I, think now that I look back of teaching manners to people. .
CHRIS VANDERVEEN, KUSA REPORTER (voice-over): Why the teenagers members of Revolving Reverends got into trouble recently is pretty obviously.
(MUSIC PLAYING)
We'll let them tell you that the how it happened part.
UNIDENTIFIED MALE: What happened is that --
UNIDENTIFIED MALE: Well, it was my dad's birthday and he asked us to play there. UNIDENTIFIED MALE: We didn't keep track of time and kept playing music.
UNIDENTIFIED MALE: And the cop's station is like two blocks away.
UNIDENTIFIED MALE: So, yes. That's that.
UNIDENTIFIED MALE: All right.
VANDERVEEN: Judge Sacco says he had no other choice.
(MUSIC PLAYING)
UNIDENTIFIED MALE: These people should have to listen to some music they don't like.
VANDERVEEN: From Barney to Barry.
UNIDENTIFIED MALE: Particularly Barry Manilow. I think that's hard on the kids.
(MUSIC PLAYING)
UNIDENTIFIED MALE: I actually like the Barry Manilow stuff.
VANDERVEEN: Should you violate the noise ordinance in Ft. Lufton, you will get one hour of one really, really long hour of this --
(MUSIC PLAYING)
VANDERVEEN: Those who run the town say it's really cut down on the number of repeat offenders.
UNIDENTIFIED FEMALE: I want to choose my own music in my own house and not listen to my neighbor's music in my house.
(MUSIC PLAYING)
VANDERVEEN: As for the members of Revolving Reverends --
UNIDENTIFIED FEMALE: OK. That ends our class.
VANDERVEEN: Who knows if they will be back.
UNIDENTIFIED MALE: Yes. All of us are going to still rock.
(END VIDEOTAPE)
PHILLIPS: We heard a little more from the Judge Sacco, on CNN's "AMERICAN MORNING."
Take a listen.
(BEGIN VIDEO CLIP) PAUL SACCO, FT. LUPTON, COLORADO MUNICIPAL JUDGE: Initially this started as I said, like any other traffic ticket. And I would look at the kids in the eye and I'd say, that will be an $80 fine plus $40 in costs. And it just didn't seem right, because No. 1, their parents were paying the fines. And No. 2, 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 that kids learned maybe a little bit about manners.
(END VIDEO CLIP)
PHILLIPS: So far no comment from Barry Manilow. A big fan-a- low, T.J. Holmes in for Rick Sanchez this hour. He's going to take it from here.
