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Sen. Tom Daschle's Tax Lapse Is Focus of White House Daily Press Briefing; Sen. Mitch McConnell's Challenge to Democrats to Reign In Spending Sparks Discussion

Aired February 02, 2009 - 14:00   ET

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

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We're putting money back in people's pockets that need it the most and who are likely, not simply because of their declining income, but their increasing bills, they will spend that money and get the economy moving again.

Again, I think that what you're watching and what you see sometimes on the Sunday shows is an argument about a very small portion of a piece of legislation. I think the president believes and his team believe that if members will step back and look at not just 0.07 of 1 percent. You heard me say this last week. But the .93 of the 99 percent of the legislation that you will find -- somebody did the math for me -- you'll find that this meets the president's standard of stimulating the economy, creating jobs, investing in our long-term economic growth through creating jobs in things like a new energy economy that will also make us less dependent on foreign oil. That we do so in a way that's accountable and transparent to taxpayers. And we do it in a way that gets that money quickly into this economy.

That delay is -- delay in this town may not mean much, but delay in America means that the help that the American people need, right now, won't get to them as quickly as they need it to.

QUESTION: Can you clarify the jobs (INUADIBLE) you just said 3 to 4 million jobs. The president two weekends ago in his radio address used that figure. This past weekend, he said over three million jobs. He didn't say three to four. Number two, during the transition, he had said the jobs number would be created over his first two years in office.

GIBBS: This is a two-year bill. The bill we're talking about is a two-year bill.

QUESTION: In his radio address over the weekend he said over the next few years. He didn't say over the next two years. Can you just clarify? What is his promise to the American people?

GIBBS: I'll go back and look at it. For purposes of this event, three to four million jobs saved or created. Again --

QUESTION: Over two years?

GIBBS: Yes. I mean, I'll go back and we'll clarify what all the different numbers are but the bottom line is this. You've got a piece of legislation that creates jobs. You know? And certainly, there's going to be the process will go forward. This bill will go to the Senate. There will be amendments that may change this or that. We have already seen probably the biggest amendment in either house so far was authored by a Republican, to add tax cuts, to the proposal. So I think the notion that somehow people -- Republicans aren't involved in this process is about $70 billion off -- Jake.

QUESTION: Two questions. One, on Tom Daschle, is the president at all concerned that the continuing problem with members of your Cabinet, or aspiring members of your Cabinet, to pay their taxes according to the law will undercut either the president's rhetoric on irresponsibility or the fact that your health plan and your tax plans going forward are likely going to be asking Americans -- some Americans, to pay more in taxes.

Then the second question, to follow up on one of Ed's things, what would the president like to see added to the stimulus package so as to attract Republican supporters, since obviously the Democratic leaders of the House and Senate aren't reaching out enough to do so.

GIBBS: I think I dispute at least the last phrase of that question. I mean, I think unless I read Senator Schumer's remarks incorrectly in the paper today, I think there will be proposals voted on this week to increase the money that's involved for infrastructure despite the money that's already there. I think that's -- that was certainly something Republicans mentioned when the president met last week. I think they may add money on a tax cut for home ownership that I think is offered by a Republican. I would first of all begin by disputing the notion that somehow --

QUESTION: Forget the last clause. What do you want to see added to the bill?

GIBBS: Any idea that we think will help make this bill better.

QUESTION: (OFF MIC)

GIBBS: I'm going to leave the legislating to the legislators. The president believes the basis for what we have right now is quite good. Obviously, this bill will go through the process and likely will be strengthened as we go forward. Whether that's adding money for homeowners, whether that's adding money for additional infrastructure, the president will certainly look at that. Obviously, those are cares and concerns of his. But again, that's something that will happen up on Capitol Hill. And the president looks forward to the process continuing in a timely way to get help to the American people.

QUESTION: My second question was about Tom Daschle, too.

GIBBS: Repeat that again, I was just -

QUESTION: Whether or not the president's at all concerned that with Geithner, and now with Daschle, all these almost $200,000 in unpaid taxes, this is going to undercut the president's cry for an era of responsibility or the fact he's going to be asking for people to pay more in taxes.

GIBBS: I don't want to get ahead of budget discussions or what have you.

QUESTION: He said on the campaign trail he will ask some people to pay more in taxes.

GIBBS: Right. The president, again, is not insensitive, at all, to the reports that are out there. But believes that both Secretary Geithner and Secretary-designate Daschle are the right people for very important jobs and he does not believe that that will undercut their ability to move forward on an agenda that makes sense for the American people.

QUESTION: You will leave the legislating to the legislators. Is the president leaving the legislating to the legislators? Are you suggesting that he's not getting involved?

GIBBS: No, I think he's going to -- I'm not going to get into amendment voting. I received far fewer than the necessary number of votes to participate actively as a member of the United States Senate.

QUESTION: He is getting in there and telling them what he likes in terms of particular programs.

GIBBS: The president will meet with -- obviously the president had members of Congress over last night for the "Super Bowl". The president will meet with leaders from Democratic leaders from the House and the Senate, later this afternoon, here at the White House.

I think the first message he will have for them is thanking them for their speedy work on getting this process, this important process for the American people, started. The House and the Senate thus far have -- the House has moved forward on an economic recovery plan. We've got a fair pay piece of legislation that's made it through both chambers and landed on the president's desk that he signed. We anticipate with some work this week that additional legislation covering four to five million more children that currently lack health care will be up for the president's signature.

So there's a lot to thank Congress for already in just the first two weeks of this administration. They will talk about how to move forward on the recovery plan. No doubt they'll talk about ways to strengthen the bill as we go forward. The president's actively involved in the discussions on how to get this passed. You saw it today with the Republican governor here from Vermont.

QUESTION: Is he getting down in the weeds? Is he really getting down to the level of -

(CROSSTALK)

GIBBS: Let's hope not. I think that's some of what we have staffers.

QUESTION: On Daschle, one question. Some of his defenders on the Hill and in the administration are calling this a bump in the road. Does this president consider failure to pay over $100,000 in taxes a bump in the road? GIBBS: The president understands the report we saw this weekend was very serious. That Senator Daschle's going to meet with the committee and talk with them about the concerns that they have. The president also believes that Senator Daschle continues to be the right person for the job, the very big job, of making sure our health care system works for every day Americans.

QUESTION: I was struck by your opening statement in that it seemed to be a reiteration of talking points that you have used on the stimulus before rather than some sort of new --

GIBBS: That seems a bit gratuitous.

QUESTION: Well, no, I mean, do you feel like you are losing -- that basically the Republicans have done a better job of framing your bill on the Hill?

GIBBS: No. If I can be equally gratuitous, I think there's a tendency in this town, as I said, to cover 0.07 of one percent of a piece of legislation.

QUESTION: By focusing on that it seems as though you were acknowledging that -

GIBBS: I'm focusing -

QUESTION: That having the answer to 0.07 of 1 percent.

(CROSSTALK)

GIBBS: They clearly have clearly gotten you to do that.

QUESTION: (OFF MIC)

GIBBS: Again, let's step back and understand what the basis of this legislation is and what it does. That's why economists from Democrats and Republicans, liberal and conservative, believe this is a good bill, that it will move this economy forward, put people back to work, make the investments that we have ignored for years and years and years. Do so in a way that's accountable and transparent to the American taxpayers, and will put money back in middle class pockets.

QUESTION: On Senator Daschle, is the president concerned, you have written the executive order about lobbying the administration, Congress has passed laws about former members, but is the president concerned of how easily, how easy it is for former members to essentially cash in and make seven figure salaries so quickly? Yes, they are not registering to lobby and you went through this very meticulously last week, you were asked a question about George Mitchell. Well, he doesn't technically lobby, but someone is paying Senator Daschle a lot of money to advise them, maybe, on how to lobby or something. Does that concern the president? That it is so easy in this town that the way Washington works?

GIBBS: Well, I - Chuck I think the American people voted to change the way Washington works and that's what the president's working on doing.

Whether it's in how government conducts its business or in how we get a recovery plan to put people back to work, whether it's restoring our image and respect in the world, whether it's making the investments in energy and health care and education that we have for so long neglected. I think all of that --

QUESTION: Going to Jake's question, don't you worry that Senator Daschle getting there --

GIBBS: My answer to Jake's question is the same.

QUESTION: Would actually undercut the image you're trying to create?

GIBBS: I don't believe it does. Nobody's perfect. It was a serious mistake, one that he caught and remedied. We think he is still the best person to do health care reform and shepherd that very complicated process through Congress to achieve savings and cut costs for the American people -- Jonathan.

QUESTION: In both those cases, Geithner and Daschle, you have had that line. You said Tim Geithner was the perfect and only candidate who could handle that job at this time. You are now saying --

GIBBS: I don't think I said he's the only one. I think he was the best suited.

QUESTION: And Tom Daschle now is the best suited for this particular job. But when does President Obama say look, I campaigned against the ways of Washington. It's time to take a stand? And we are seeing information coming out about Senator Daschle that you were privy to, that the Obama transition office was privy to for quite some time. You pushed ahead. So it wasn't a question of vetting. It was a question of you deciding the infraction was not worth pulling the name. I'm wondering what would be worth pulling the name?

GIBBS: Well, we could get into all sorts of hypotheticals. But I think the last part that you touched on is a reiteration of what I've said earlier. It's a serious mistake, but laying that mistake next to a three decade career in public service, the president believes that Senator Daschle is still the best suited to shepherd health care reform through Congress and get something to the president's desk that will save the American people money and make the quality of health care far better.

That's what he sought when he looked for people to enter this administration and we believe that the team that we have assembled and that is being approved by the Senate meets that test and will improve the lives of the American people.

QUESTION: When was the last time the president spoke to Senator Daschle about this serious but corrected mistake?

GIBBS: I don't know the answer to that. QUESTION: Do you know when the last time he spoke to him about anything was?

GIBBS: No. I just said I don't know the answer to that.

QUESTION: Has he spoken to him specifically about this?

GIBBS: I don't know if he has or not.

QUESTION: You have used the word strengthened on the stimulus package several times today. What things would be deemed to be strengthening in this legislation? Will that be a topic of the meeting later this afternoon?

GIBBS: As I said, it will be a topic of the meeting, along with -- well, again, I'm going to do this and do this in a way not different than the way I did it with Jake when he asked largely an analogous question without using the word I used. They are going to discuss what's in the bill, how the process is likely to change. Obviously, you've got -- how is the process likely to change, there's no question that you've already got a different bill in the Senate than you did in the House, right? I think today also begins the process that is going to have to undertake in order to reconcile those two bills and meet the president's deadline of getting something quickly to the American people.

QUESTION: Can you say does it mean a bit more tax cuts, for example, more green projects?

GIBBS: Again, there's proposals in the Senate to change and alter parts of the bill, whether it's infrastructure or tax cuts. We'll let the Senate work its will as it relates to this. As long as it meets the test that the president believes the legislation thus far meets, which is how do we -

(SOUND OF PHONE KEYPAD)

Are we ordering pizza?

(LAUGHTER)

How do we - how do we save or create three to four million jobs. How do we put people back to work. How do we make the investments we need to make, right now, not just for the jobs -- for jobs to be created tomorrow, but for that sustained long-term economic growth. All of those things are part of the bill and all those things will be topics of, I presume, of this meeting this afternoon -- Helen.

QUESTION: How far is the president willing to go to appease the Republicans in terms of homeowners? He doesn't seem to be worried about foreclosures?

GIBBS: I don't think that is true. I think you have not only seen the president talk about this throughout the transition and in the campaign, also make commitments about how money would be spent in the future to ensure that home foreclosure is addressed. Again, the president said this more often and more eloquently than I have, that home foreclosure is not simply a problem for the person that lives in that home that's being foreclosed.

QUESTION: (INAUDIBLE) drop it from the bill?

GIBBS: Drop?

QUESTION: From the stimulus bill?

GIBBS: I think there's different proposals both in this bill and in other vehicles that are moving in Congress to address different aspects of home foreclosure, be it bankruptcy provisions, or home ownership rates, or mortgage rates. This isn't, as the president has said, as I have said last week, this isn't the only thing that has to happen to this economy in order for it to get better.

There's a financial stability package that will likely include some aspects to address homes and home foreclosures. There's a significant regulation that needs to happen to ensure that the irresponsibilities that caused where we are now, don't happen again. That's a meeting the president's going to have with bipartisan congressional leaders at the white house later this week.

So this isn't the only piece of legislation that will be moving and it's not the only vehicle that the president strongly believes congress must address to get the economy moving again.

QUESTION: But it won't be in this package?

GIBBS: When you say "this" there's a lot of different home foreclosure things that this administration and members of Capitol Hill are working on, a lot moving forward.

Yes, sir.

QUESTION: Couple on Daschle, and I'll follow up on a separate topic, if I may.

(CROSSTALK)

QUESTION: Is there an amount of money in unpaid back taxes for any nominee to the president's Cabinet that would be considered disqualifying?

GIBBS: As I said to Jonathan, I'm not going to get into hypotheticals as it relates to that.

QUESTION: Is there anything you can tell the American public to make them as comfortable with the president is with the fact that after he left Congress, Senator Daschle gave speeches and at times received income from some of the very same industries, in health care, that he would be taking a large role in supervising and regulating as secretary of Health and Human Services?

GIBBS: I can tell the American people that Senator Daschle, our secretary-designate, when approved by the committee and full Senate, will follow closely the ethical guidelines and rules of this administration. And won't deal specifically with those entities.

QUESTION: OK. Why is Judd Gregg at the top of the list for Commerce? And just as a general principle, does the president as the leader of the Democratic party think that Democratic governors should fill vacancies, created in the Senate, with Democrats?

GIBBS: I'm not going to get ahead of the president in making personnel announcements.

QUESTION: Up until this weekend he's the leading candidate. I'm just curious why.

GIBBS: I read those articles.

(LAUGHTER)

I'm not going to get into -- obviously the president has great respect for Senator Gregg. I'm not going to get into personnel announcements before we are there and as it relates to picking senators in states that need new senators, I think you can rest reasonably assured that this administration has had nothing and wants nothing to do with that going forward. And I would bold and underline that -- Jeff.

QUESTION: What specifically is the president doing to ensure that the Finance Committee and members of the Senate are comfortable with the Tom Daschle position? Is he reaching out to them by phone, and is he involved in personally lobbying for his future?

GIBBS: I don't believe he has made calls. I think staff probably has. I think you've seen -- I think the most vocal advocate right now for Senator Daschle, is Senator Daschle. I think you've seen the letter that was released this morning that was sent to the committee last night. I think you've seen the chair of the committee, who's very important in this process and very interested in health care reform moving forward in this session of Congress, come out in support of Senator Daschle.

Yes, sir. Did you just trade seats to get a better --?

QUESTION: I did.

(LAUGHTER)

QUESTION: How do you know the bill will save or create three to four million jobs?

GIBBS: That's what the Council of Economic Advisors has told the president based on estimates of what's in the proposal, that they came up with and forwarded to Congress based on direct spending, putting money in people's pockets, and making the long-term investments that I've talked about.

QUESTION: Could you ever measure that? Could you ever retrospectively be able to know that a job has been saved? GIBBS: Sure. There was a report, Columbus, Ohio. Columbus police recruits are laid off before being sworn in. Columbus police academy recruits were told they would be laid off Tuesday. Three days before their scheduled graduation. City officials said the layoffs were due to budget reasons.

I think it's safe to assume that if the president's package, which addresses the need to ensure that public safety isn't threatened in a recession, and money is specifically put for police officers, my sense is that Columbus, Ohio is probably going to get some of that money. And if one of the 27 would-be graduates that were laid off before they got their would-be diplomas, I think that would count as a saved job.

Again, the analysis that the CEA did was what would happen to the economy without a significant economic stimulus, a similar study in recognition of these facts were done by the Congressional Budget Office which showed a far deeper recession without some Recovery & Reinvestment Plan. You can see what the arc of those jobs numbers would be without a stimulus and what our economic team believes that arc would be with the stimulus.

QUESTION: I understand that example but I'm wondering if you're setting up something that - you know, when you're talking about hundreds of thousands of jobs, are you ever going to be able to measure that this bill succeeded in saving those jobs. Who can tell exactly why some people were let go, and exactly what the causes are? So, it's complicated.

GIBBS: I don't doubt that it's complicated. But again, people far better at math and carrying numbers are working on what happens without a stimulus and what happens with a stimulus. I think there are very real world examples of what happens when states and cities have budget pressures related to a significant downturn in the economy and how that affects their ability, whether it is police officers or teachers. I think the difference between laying those off and keeping them on the job is the definition of a saved job.

I think that's one of the reasons why Governor Douglas was here and Governor Douglas has a different perspective on a stimulus and recovery plan than some people on Capitol Hill do. He doesn't have the luxury of running up a $1.2 trillion debt every year and going home. He is accountable for public safety and health care, in a way unlike many people are. I think that's why he walked in here today and was happy to support the president's plan to ensure that we have a recovery plan that saves or creates 3 to 4 million jobs.

QUESTION: Can you look in the bill and see if any of our jobs are saved? Just help us out?

(LAUGHTER)

GIBBS: I have some very bad news.

(INAUDIBLE) QUESTION: Robert, I wonder if the president thinks that all jobs are created equal and by that I mean, you talked a lot about public sector jobs, police officers, teachers. If at the end of the day a lot of public sector jobs are created on the public dole, as opposed to private sector jobs, is that OK?

GIBBS: First of all, I believe that if the latest statistics based on the economic reports show that 90 percent of these jobs are private sector jobs, no doubt there are public sector jobs, whether it's police officers or teachers, that are important to our long-term economic growth that actions that we take, or don't take, will have a negative impact on whether or not those jobs continue.

But obviously, you saw last week with the CEOs that met with the president, or small business owners, those are the jobs that are going to fuel an economic recovery, not public sector jobs. That's why the president believes as the CEO said, small business owners across this country have said, we need to get a series of things in place -- not just a recovery plan. Again, I think many business owners would and have talked to the president about a stability package that ensures that lending and credit are available to meet payrolls, and to expand those businesses.

The president visited the wind turbine business in Ohio. I think it's an example. Certainly the new energy jobs of the future are just one fairly poignant example of jobs that would be created throughout the public -- I'm sorry, throughout the private sector, in order to ensure immediate as well as sustained job growth.

Yes, sir.

QUESTION: Thank you, Robert. One of the things when you talk about that 0.07 percent, in the package, that figure is right, isn't it?

GIBBS: If my math is right, yes. Shaky at best. But I did it twice on my computer calculator.

QUESTION: Would that mean that some of the more controversial items, as far as Republicans, such as the $50 million for the National Endowment for the Arts, would be on the table then, for discussion?

GIBBS: Well, I think -- I don't want to prejudge what is or isn't on the table for the president to discuss with either leaders of the Democratic Party, as he will later today, or also with leaders of the Republican Party, in any dealings he may have with them.

My point on this is just that we can focus on a very narrow definition of what this proposal does to help the economy, or we can focus on the vast majority of what this legislation and proposal does to get the economy moving again.

QUESTION: The other thing was that in his first interview as Republican National chairman, Mr. Michael Steele said that one should also consider in a stimulus package suspending or abolishing outright the capital gains tax for two years to free up the private sector. Is that something that's ever been discussed in any of the meetings on the stimulus package?

GIBBS: Not that I know of. I think you've seen -- I think we know where business investment is right now and I think you know where the capital gains tax is right now as relating to where it was several years ago. I would I guess posit that the economy is not all together markedly more healthy -- Margaret.

QUESTION: We had the same questions.

GIBBS: Choose amongst yourselves.

QUESTION: The Republican Senate Leader Mitch McConnell, said earlier today talking about President Obama and the stimulus plan, I think I know where he wants it to go. He said it appears the Democratic leadership has not gotten the memo or the message, if you will, I hope he will be able to put the Democratic leaders of the House and the Senate in line.

I guess I was just wondering, walking up to today's meeting, is he planning on putting them in line?

GIBBS: Depends on if he gets the memo.

QUESTION: Does Mitch McConnell have it right? Or not exactly?

GIBBS: Again, as I said here, I think what Senator McConnell should do is look at the whole bill. I think what Senator McConnell and others should do is talk to their constituents about what's needed to get the economy moving again. Many of them will tell you it's a blend of spending that will create jobs immediately, spending that will ensure investments for long-term economic growth, as well as some mix of tax cuts to put money back in the pockets of middle-class families and small business owners. And that a correct blend of that will get the economy moving again.

I think that's exactly the proposal that the president and his team put together and exactly the proposal that we've seen pass the House of Representatives thus far, and we're encouraged this week will be debated on in the Senate, and will move forward from there.

QUESTION: You don't think that Mitch McConnell and the Republican leadership team is closer to what the president would like to see than the Democrats are?

GIBBS: If I read most of the comments -- I mean, Senator McConnell believe that, if I read the AP story correctly, he didn't think the legislation would pass the Senate. I think the president believes it will not only pass the Senate, but the Senate proposal is a good plan. I think his members want infrastructure spending and this bill contains $123 billion in infrastructure spending. His members want tax cuts and the bill contains more than a third of the money involved is in tax cuts.

I think that the proposal that we have is a strong one and it will create the jobs necessary to get Americans back to work each day. April? QUESTION: Two questions. One, there's a group of Democrats that desperately wants to meet with the president, members of the Congressional Black Caucus. Are they on the president's agenda? They want to talk to him about the stimulus package, issues of education, issues of unemployment benefit extensions, pensions, Pell Grants, things that are in the stimulus package. What say you?

GIBBS: I don't have the full list in front of me of the president's schedule. I am sure he will meet with, throughout the rest of this week and this month, Democrats and Republicans on any number of those issues, including how to get more unemployment benefits out to the states, how to create jobs and all the things that you speak about.

QUESTION: Also, one more final question. Michael Steele, you guys didn't come out with a statement on Michael Steele Friday. What -- has the president reached out to Michael Steele, he has made several comments about the president to include how do you like me now? He is the other African American male heading a major party in this country.

GIBBS: I would direct them to somebody over at the DNC. Michael?

QUESTION: You said the president was pleased with the House bill as it passed out. It's a very different bill, though, than what the transition talked about in early January. Back then you were talking about $300 billion in tax cuts, 40 percent of the stimulus. According to CBO's score on Friday, it was $122 billion that passed, 22 percent of the stimulus. What does it say about Obama's influence with Congress that they end up passing something very different than what he asked for in January and the president's still happy?

GIBBS: I don't think what ultimately passed was markedly different than what the president proposed. The figures I saw today are different than what you mentioned in CBO. That's not surprising. We've kind of had a little bit of a running debate with some of the figures that have been birthed by the CBO. But again, the basis for the legislation that we have now, the basis for the proposal that the president and his economic team developed, fundamentally contain what's necessary through spending and tax cuts, what's necessary to get the economy moving, to create long-term economic growth, to do so in a way that's accountable and transparent to the American taxpayers, that invests in infrastructure and create jobs and things like the new energy economy. And cuts taxes.

I think all of those were the basis for the president's proposal and he likes what he's seen thus far in the House proposal. Again, the test is what can we do to get the economy moving and get people back to work? And I think he believes that the House bill passes that test.

QUESTION: Is the White House still thinking about that 40 percent figure? Is that still something that you guys would like to ... GIBBS: I would point you to Congress and people that might be able to tell you what the legislative process -- what is going to happen this week, again, as I said earlier, the proposal in the Senate has already been added to significantly with an increase in tax cuts and making it different than what's in the House, and we'll see hopefully sometime next week after this bill passes the Senate and we can begin to reconcile the House and the Senate proposal, what the final outlines of a deal will be.

But I believe and the president strongly believes that the outlines of that deal will largely mirror the proposal that he sent up that creates jobs, and I think that members of Congress in both parties, if they take a clear-eyed look at this proposal, will understand that that test is met in this proposal, and that it will help put America back to work. Thanks, guys.

KYRA PHILLIPS, CNN ANCHOR: All right. Day 14, that wraps up Robert Gibbs' White House news conference for today. Our Ed Henry is right there inside, front row, to the right, going to work his way up to the cameras, talk to us in just a second. We are also going to talk to Dana Bash there on the Hill.

Obviously, he was just talking about the economic stimulus plan there, trying to get a decision. Actually, President Obama going to meet with a number of senators about that today. Also, as we told you earlier on, the vice-chair of the National Governors' Association and they are going to be talking about the $900 billion stimulus plan there, the combination of spending and tax cuts that hits the Senate floor, obviously already has. They are still discussing it, rather. Mr. Obama saying he's only seeing very modest differences that are separating the critics and the supporters with regard to that stimulus plan.

All right. Ed Henry, I see you standing there. Oh, good, you do hear me. I always know that from the wide shot. If you look up and smile, I've got you plugged in. We had lot going on in the set. Ali Velshi is here to plug his new book. He is going to talk about the economy. You can imagine how he's a little distracted. Then I tried to work my way in to you the best I could. I don't think I made any sense.

But for the past hour, or so, we have been listening to Robert Gibbs, day 14, getting a number of questions. You kicked it off right there at the beginning. Why don't you give us the highlights for those that are just tuning in?

ED HENRY, CNN CORRESPONDENT: I think, Kyra, that you're seeing play out obviously is the president this morning was talking about how there's very narrow differences between he and Republicans on the Hill, but in fact, we're seeing a much wider gulf from those Republicans on the Hill. You mentioned Dana will come up in a minute. I will let her report about what she's been talking about all morning, about alternative proposals maybe in the works among some Republicans but also some conservative Democrats like Ben Nelson of Nebraska saying they want to change this bill pretty radically as it came out of the House. In the words of Senator Nelson, wants to turn this into a jobs bill instead of just a spending bill.

Robert Gibbs from the podium continues to insist, though, that the differences are not far apart, there is sort of as miniscule amount of spending that is sort of in dispute here. But instead I think you're hearing from a lot of lawmakers in both parties that they have concern not only about the spending but how the tax cuts are shaped. The president this afternoon as you know is going to go behind closed doors here at the White House with only Democrats. He spent a lot of time over the last week or so without only Republicans, reaching out to them and then did not get any Republican votes in the House for a stimulus plan. Now he is trying to sit down with Democrats.

The White House won't really characterize what he's going to do there behind closed doors but you're already hearing from Republicans on the Hill suggesting well maybe the president is trying to get some of those Democrats in line to change this bill, move it more towards the center. We're going to watching that meeting at the White House this afternoon very closely to see if after the meeting whether the Democrats come out and have anything to say about any tweaks, any changes to this bill, Kyra.

PHILLIPS: All right. Ed Henry, appreciate it. And bipartisanship is the byword, the but bipartisan opposition isn't what the White House really had in mind. Do you think that is what is facing the Senate now, Dana Bash?

DANA BASH, CNN CORRESPONDENT: It looked that I way. I wouldn't say bipartisan opposition across the board. In fact most Democrats we still talk to in the Senate do agree with the $900 billion bill that will be before them.

However, they need enough for this to pass and to talking the Democratic leadership sources it was pretty clear that a big problem as you just heard in that briefing, even among some conservative Democrats is that they feel that there is too much spending that is not really going for things that cut jobs.

So what they're trying to do inside Democratic leadership offices and later today at the White House is trying to find a way to lure those votes and get - first of all have it passed, obviously first and foremost, and secondly have much more of a bipartisan vote than we saw in the House which was entirely partisan.

Now there have been Republicans who have been meeting behind closed doors who are trying to find out, find a way to perhaps have that bipartisan vote. One of these Republicans is actually John McCain, Barack Obama's former rival and he spoke to AMERICAN MORNING this morning about some of the ideas that he has.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) ARIZONA: Many of the policy changes that they put in have nothing to do with stimulating the economy and everything to do with their agenda which they were unable to get through. We need to have in our view more tax cuts and less spending but we can negotiate. That's what I'm saying. And it hasn't happened so far but Republicans have got to be involved in the active negotiations.

(END VIDEO CLIP)

BASH: OK, let me just give you an example of what's going on behind the scenes here. We were just handed this particular bill or it's really a summary of a bill that's being shopped around by a Republican senator, Mel Martinez of Florida. This is something that they say really does do the trick with regard to the crux of the issue here, at least the main issue. There are a lot of them, but the main issue, which is taking some of that spending out.

This is something that's about a $713 billion bill which does focus primarily on infrastructure spending. Senator Martinez is shopping this around as we speak to his Republican colleagues, some of his Democratic colleagues. This is just one example but perhaps a prime example of the fact that there is a lot of work going on behind the scenes, both at the rank and file level and frankly now, at the leadership level, to try to come up with some way to get this done that will pass but also again, with bipartisan support.

PHILLIPS: All right. Dana Dash from the Hill, thank you so much. Could $128,000 in unpaid taxes come between Tom Daschle and a Cabinet post? Daschle is set for a closed door meeting today with the Senate Finance Committee to talk about that. President Obama picked him to head Health and Human Services but this tax revelation could slow things down or even stop them. The head of the Senate panel said that today, he still supports Daschle's nomination.

And Hillary Clinton has been secretary of state for almost two weeks, now comes the formalities. Clinton gets a ceremonial swearing- in a couple hours from now in the Ben Franklin room at the State Department. Eric holder is not yet confirmed as attorney general. But that's also expected today, despite his role in some controversial pardons by President Clinton. The Senate panel voted 17-2 to recommend him.

And a Republican may be asked to run the commerce department. He's Judd Gregg, Republican senator from New Hampshire. If you wonder why Democrats might be applauding, consider this. The Democratic governor would name his Senate replacement but now consider this. Some sort of deal is supposedly in the works to name a Republican who wouldn't try to hold the seat in 2010.

No, if the governor did choose a Democrat, it would pad the democratic majority to 59 and if Al Franken won his recount fight in Minnesota, that would make 60, a filibuster super majority, rather. Don't bet on the rent.

Michelle Obama is exploring her role as first lady today. She plans to visit the Department of Education. Next hour, you are going to see it live right here on CNN. Education issues were close to the heart of her predecessor, Laura Bush, but we haven't heard which causes Mrs. Obama will champion at the White House. Hopefully we will get some more from her today. January wasn't an ugly month for the economy. It was pretty hideous. About 100,000 job losses were announced. It would take us too long to even list all the companies cutting but here's the top five. Circuit City, 34,000 layoffs. Caterpillar and NEC, 20,000 cuts. Alcoa, 15,000. Boeing, 10,000.

So does all this have our chief business correspondent a little despondent? We are going to ask him. Ali Velshi is going to join us live in just a second. He's working his microphone there. He is here. But I am going to ask you to vent for a little bit there, Steph, with us.

ALI VELSHI, CNN CORRESPONDENT: Stephanie knows the answer to all those things, anyway.

PHILLIPS: Yes, she does.

STEPHANIE ELAM, CNN CORRESPONDENT: You hear Ali's voice but you see me. He can't hear you yet. You can't hear him yet, he's still working the IFB. You might want to plug in there.

PHILLIPS: Stephanie, want to talk about Morgan Stanley? That's the latest news to come across, these layoffs, right?

ELAM: Those potential layoffs. Three or four percent of their workforce here. Yes, we are looking into that as well. We also heard other job cuts today, Kyra, as well. We heard Macy's saying they plan on cutting about 7,000 jobs there. That's about four percent of their work force. So lots of job cuts coming out again today. We're not done with that. But one thing I can tell you about, Kyra, when you look at this past year, we're still looking at some of the year end data. And it's pretty clear most of us had our wallets on lockdown the end of last year. The government's latest reading on personal spending shows a greater than expected one percent drop in December, that marks the sixth straight month spending actually declined. So that's a big difference there. So we will be keeping our eyes on that and all the things that are going on. I have a feeling you probably want to talk to Ali now so I'll stop talking.

So that's the ventriloquist hour can stop.

VELSHI: This worked perfectly. You hit the layoffs at Morgan Stanley. That's one on my list of three things to chat about. And Stephanie, I'm still waiting for you to write your book so I can have you come on and ...

ELAM: I need to get on that. I want to also meet about 79 percent of the people that I work with every day in my ear, so.

VELSHI: That was actually the biggest deal about writing this book, I get to come here and talk to these folks in person.

PHILLIPS: Did you have fun down there, the book signing?

VELSHI: Yes. It was excellent. Things have changed so much, everybody is now concerned about money. This was something that some people were kind of concerned about ...

PHILLIPS: It was sort of the boring job, the boring position.

VELSHI: Yes.

PHILLIPS: If we had to ...

VELSHI: That's why CNN had to hire me all those years ago, these boring topics. You needed ...

PHILLIPS: To juice it up.

VELSHI: ... somebody hot and sexy to juice it up. Just to show you how hot and sexy I am, I don't know if you guys can get a shot of this, look how many mikes I'm wearing. I'm like Bruce Springsteen.

PHILLIPS: Only I just wish you could sing.

All the cameras are following Ali Velshi around.

But seriously, Stephanie is talking about the layoffs at Morgan Stanley. Yet, what I found interesting in this article coming across, talking about Lehman Brothers holdings.

VELSHI: Good place to work.

PHILLIPS: They are the hottest jobs on Wall Street right now. So what's the deal?

VELSHI: As you know, Lehman's bankruptcy is what actually set much of this financial crisis into fast motion. But the issue is the company's being wound down, and it's so big and involved that even though it went into liquidation and parts of it were bought by other companies, the winding down is going to take a couple of years, and we think the economy will be healthy again in a couple of years but in that interim, there are actually jobs to be had because it takes really smart financial people to unwind all of these sophisticated financial dealings that Lehman had.

So they actually have been rehiring some people who were laid off, and getting resumes from all these other banks and Wall Street firms where people have been laid off because the smartest people in many cases are now looking for jobs in every industry, including the financial industry.

PHILLIPS: Well, what's interesting, a lot of people are taking advantage of all those people looking for jobs. For example, this Ladders commercial, ladders.com, saying we can get you a job for 100k and you don't even necessarily have to have a college education. Is that true?

VELSHI: I think sometimes these ads exaggerate a point. There is work out there for some people, but we have lost -- will have lost by Friday, we will get the January employment reports, we'll have lost more than three million jobs since the beginning of this recession. So work is not abundant out there, and work that you're getting paid a lot of money for is not abundant but there are still fields where there is work.

Now, the interesting thing for our viewers is to say we have seen growth in education, in health care, in energy work over the last few years. Now take a look at what will happen if there's a stimulus bill. It will put focus on certain other industries and if you're training or retraining or unemployed, think about getting trained in those areas that there is going to be new work.

So there haven't been manufacturing and construction jobs created in this country in a few years. Under the stimulus plan, there might be so you might want to sharpen up the skills, you might go to school for three months, six months, get some sort of certification. No point in burying your head in the sand that when jobs are lost, they're going to come back.

PHILLIPS: And it looks like we may, Ali, have to tear away. Michelle Obama there at the Department of Education, coming up to the mike a little early, meeting and greeting folks. What we're hoping to hear from her are the, I guess, basically the issues, the organizations, what she's going to do, how she's going to take part in this new administration.

Every day we have been following the White House briefing. So here you go. First time she's speaking to all of us across America as the first lady and the first time she is - it's just like the president going up to the mike. She's getting quite a welcome.

MICHELLE OBAMA, FIRST LADY: ... ready to go, right?

I am honored to be here this afternoon. First let me tell you that you couldn't be luckier than to have as your leader this guy by the name of Arne Duncan.

Barack and I, my brother, my family, we've known Arne for a very long time and we've seen his growth, his leadership develop over the years. He is someone who is committed, hardworking, passionate but he is someone who is fair, who is honest, who is decent. And who knows that getting to any goal means you have to build the team from within, from the bottom up and I know he's already beginning to do this. This kind of turnout and enthusiasm is sort of for but you're behind - but I know you're also excited about your new secretary.

(APPLAUSE)

So I am honored to be here to share the stage with Arne as well as all of these public servants who have dedicated a lifetime to education and to public service.

Arne wanted me to talk a little bit about myself. But I always sort of feel like after two years of a campaign you know everything. But I think the most important thing to tell you and to remind you is I am a product of you're your work.

I am a product of people who were investing every day in the education of regular kids who have grown up on the South Side of Chicago, kids on the North Side, folks in the South and the West, young people who oftentimes come into these systems not knowing their own power and their own potential, believing that there's some magic out there to great things.

But because of the work that you've put in, you have taught us and helped many of us understand that it is our own hard work and our own belief in self, our commitment to pushing ourselves along, building great communities and families and reinvesting that energy once we have some successes. I am a product of your work.

I wouldn't be here if it weren't for the public schools that nurtured me and helped me along. And I am committed as well as my husband to ensuring that more kids like us and kids around this country, regardless of their race, their income, their status, the property values in their neighborhoods, get access to an outstanding education.

So as Arne said, this is the first stop in many. I am going to be visiting agencies throughout this administration to do just something simple and that's to say thank you. Thank you before we even begin the work, because so many of you have been here struggling and pushing for decades, and Barack and I want to say thank you for what you've done, and thank you for what you will continue to do.

But we also know that there are new faces coming into this work, and we want to welcome you and thank you for the hard work that you're going to put in. And I'm going to spend the next several weeks or months, however long it takes, going from agency to agency just to say hello, to learn, to listen, to take information back where possible, but truthfully, my task here is to say thank you and roll up your sleeves because we have a lot of work to do.

(APPLAUSE)

But the issues that we're collectively working on affect all of us, all of these communities. They affect you and your children and your grandchildren and those of your friends and your family. We're all in this together. So we have a stake in educating every single child, regardless, as I've said, of background and income. So the Department of Education is going to be at the forefront of many of the things that we have to do in this administration.

And we're going to need that energy in these times of economic challenge. We are going to be making investments and I shouldn't say we, but the administration, we. With these investments, we're going to create good jobs as we renovate and modernize more than 10,000 schools and improve the learning environment for about five million children across this country.

We will be able to increase Pell Grants and make college more affordable for seven million students, and give nearly four million students tax credits for tuition. Imagine that.

(APPLAUSE)

And with these investments that we hope to make through this stimulus package, we'll be able to prevent teacher layoffs and education cuts in hard-hit states. We need to keep teachers in the classrooms throughout this time. We'll be able to preserve early childhood education programs.

(APPLAUSE)

And I know all of you all know here the importance of investing in early childhood education. Imagine what we can do with millions of dollars of more investment in this area. We can expand opportunities in low income districts for all students, and particularly for students with disabilities.

And then as we look over the longer term, these investments will accelerate education reform, one of Arne's specialties, by funding and rewarding innovation. Innovative approaches to teaching and learning, such as teacher quality initiatives, school turnaround programs and of course, charter schools.

There's a lot of work to do. And we're going to need you. I've said that for two years. Sometimes I don't ask for much other than prayer and hard work and then a little more prayer, and then a little more hard work, but we've got a great leader in Arne and a wonderful leader in our President Obama.

(APPLAUSE)

And more importantly, we have to remember that the children of this country are counting on all of us. They're looking to us for direction. They're looking to us for that ray of hope. They're looking to us to help them figure out how to make it through. And we have everything we need right here and now to make that happen. So we're counting on you every step of the way.

So thank you for taking the time to come. Thank you for your service. And let's get to work.

(APPLAUSE)

PHILLIPS: Michelle Obama there, her first news conference, addressing those at the Department of Education. It happened a little earlier than expected today. I'm actually over here at the weather center next to Chad. Let me get my thoughts together here. Not really organized today. I apologize.

But anyway, Michelle Obama there obviously getting a big cheer from those at the Department of Education. Really saying that that's going to become the forefront of what this administration's going to tackle in particular, her. She will be taking it on. She mentioned all types of specifics on things she's going to work towards.

Talking about the 5 million kids and 10,000 schools that she wants to pay close attention to, Pell grants, so college is more affordable for students, preventing teacher layoffs. We have seen a lot of those across the country within the past four to eight years.

Also, focusing on low income districts, so everybody gets the kind of quality education, no matter where you live, what type of neighborhood, what type of economic background you come from, she wants to try and devote some type of equality or better quality for all students across the country.

Also, students with disabilities. Got a lot of cheers when talking about low income areas, students with disabilities and also making college more affordable. We will be following the first lady, obviously, and everything that she will be focusing on with regard to education as she takes on that role.

Well, the pictures are pretty but the storm wasn't. At least 16 deaths in Kentucky alone tied to last week's nasty, icy weather. National guardsmen are actually aiding in that recovery effort today. Kentucky's governor is asking President Obama to fast track the state's requested federal assistance. And last week, the president signed emergency declarations for Kentucky, Arkansas and Missouri. The storm is blamed for more than 40 deaths in nine states now, and it cut power to more than one million homes.

Well, what happened to that stiff upper lip? Six inches of snow have practically shut down London today. Heathrow Airport is closed, most of the Tube is shut down and London's double-decker buses have even been parked for the day. GPS navigator Tom-Tom says that traffic jams across Britain, when added together, are 1,000 miles long, that's almost twice the length of the main island.

Well, Google's digital universe is unveiling new features we have heard about. We have been pretty excited about it. Chad has been following that for us. What are we going to do? Because I understand we can go under water now and track the depth of the ocean, we can devise our own tour. Look, I could have told you when I was doing on vacation and you could actually follow me via Google?

CHAD MYERS, CNN METEOROLOGIST: I could have taken you to a brand new island in the Hawaiian chain called Loihi (ph).

PHILLIPS: Loihi.

MYERS: Well, it is going to be there in about a thousand years. But it is getting close.

PHILLIPS: That's interesting.

MYERS: Five point oh replacing 4.3. All they are is numbers to you and me. Let me show you what we couldn't do yesterday. Go to earth.google.com. You have to download this. This is not Google Maps you see on your google.com and click on maps, but you can fly under the newest Hawaiian Island. You're kind of flying. You're kind of in a submarine looking out the front window. It's still 3,000 feet from the top of the water so don't book any flights just yet. There's no B&Bs here just yet. But now you can fly under, you can also find shipwrecks, you can find ...

PHILLIPS: What type of shipwrecks?

MYERS: ... sharks and whales that have GPS transponders on them, you can see where they are. The Titanic is down there. All kinds of things are down there.

They are not great pictures, to be honest. We can also take you to history. You can look at the top, see the date, August 16th, 2005. Look how pretty the Ninth Ward was before Katrina. On the left-hand side, the levee is still in good shape, levee is still intact, and all of a sudden, Katrina came through and wiped it out. Houses are floating around like boats.

And they can go to the latest picture and it's cleaning up quite a bit but it's certainly not perfect. Only about one in 10 houses viable there.

PHILLIPS: And what's amazing, you can download all of that in our little Blackberries. That's what's so cool. That's great new stuff. Thanks, Chad.

MYERS: My first computer had 10 megs and that was a big one.

PHILLIPS: I'm still on the typewriter. I'll see you tomorrow. Rick Sanchez is going to take it from here.