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Senate to Vote on President Obama's Stimulus Package; Obama Warns of Catastrophe in Economy; Obama to Make a Call on Executive Salary Cap on Firms That Took Bailout Money; Obama Goes Through a Rough Week; FBI Reopens 1982 Case on Tylenol Killings
Aired February 05, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now, it's 7:00 Eastern, and breaking news this morning. A do or die vote on President Obama's huge stimulus plan. It could happen as soon as today. Almost $1 trillion and millions of jobs hang in the balance. Sources tell us that the president is confident his economic recovery plan will pass the Senate by the end of the week.
There's also a new measure in the Senate's bill that could make it cheaper to buy a new home. More on that for you in a moment.
A warning this morning if you know anyone who received any free food from FEMA after last week's ice storms in Kentucky and Arkansas. FEMA says the meal kits that were passed out may contain peanut butter, the same peanut butter linked to a nationwide salmonella outbreak that has sickened more than 500 people. The agency says all other portions of the meal kits are safe to eat, just not the peanut butter packets.
The president's half million-dollar executive salary cap apparently has a little bit of wiggle room. Many brokers, traders and sales reps will still be able to walk away with huge paydays. And expert say many corporate executives could still cash in huge stock rewards. They'll just have to wait a little bit longer.
And breaking news this morning, help for aspiring homeowners in the economic stimulus plan. The Senate has approved a Republican proposed tax credit of up to $15,000 for anyone who buys a home in the year after the bill is passed. The first lady talked about the impact that the foreclosure crisis is having on the American dream when she visited the Department of Housing and Urban Development.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: In times like these, and we know times are hard right now, there's so many families who've lost their homes and millions are struggling to keep up with their mortgages. You know this firsthand. You and your colleagues are going to be asked to do even more. That's for sure.
It's of critical importance that we stem the tide of foreclosures, and find a way to keep people in their homes, because what we do know is that homeownership, at least as I know it, growing up on the South Side of Chicago, has always been one of the building blocks for strong neighborhoods, for strong schools and strong families, people who own their homes and take care of their homes, at least to the well-being of the entire community. It's critical, and the housing crisis has drastic consequences, not just on our economy, but on the very fiber of our communities all across this country.
(END VIDEO CLIP)
ROBERTS: Christine Romans joins us now. She's "Minding Your Business" this morning. So we've got $15,000, 10 percent of the cost of the home.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right.
ROBERTS: Maximum $15,000. And this isn't just for first-time homebuyers either. It's not just for new homes, it's for everybody.
ROMANS: Yes. It's broadened out. It's broadened out. There are already is a $7,500 tax credit you have to pay back that's on the books. This would be something that will replace that $15,000 for the purchase of a home from a year to the day that this thing gets passed. This is an amendment that was sponsored by Johnny Isakson, a Republican from Georgia. This is what he said.
(BEGIN VIDEO CLIP)
SEN. JOHNNY ISAKSON (R), GEORGIA: This is not a catch phrase and is not a slogan. If we don't fix housing first, it doesn't matter what else we fix because throwing money at the symptoms, as Jon Kyl said, won't work.
(END VIDEO CLIP)
ROMANS: Jon Kyl, his colleague in the Senate there from Arizona. Now, there's two parts of the story, though. There's the fixed housing first coalition that wants to get low mortgage rates for people who can go out and tax credits for people who can buy homes today or in the next year. Then there's also the part that the first lady was talking about. That's keeping people in their homes who are facing foreclosure. That's another part of the story.
This tax credit would not help anybody who's in their home right now, who is three months behind in their mortgage and facing foreclosure proceedings. That's not the part of the equation here, so you've got kind of two ways. You have to go out to the housing problem.
One is, are you going to have a foreclosure moratorium? Are you going to have a three-month time-out where you can try to modify loans? Are you going to help people may be write down some of the value of these loans? Are you going -- I mean, how are we going to fix that? And then there's this other part, which is stimulating demand from people who can afford to buy a home today.
ROBERTS: Yes. A lot of questions yet to be answered particularly for all those people who are out of work.
ROMANS: Yes. Absolutely. ROBERTS: Thanks, Christine.
KIRAN CHETRY, CNN ANCHOR: And the president's turning up the heat on Congress, using some very urgent and serious language to get lawmakers to act now. This morning in a "Washington Post" op-ed, President Obama said the situation is as dire as any since the Great Depression. Also, listen to the warning yesterday.
(BEGIN VIDEOTAPE)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The economic crisis we face is unlike any we've seen in our lifetime. It's crisis of falling confidence and rising debt, and widely distributed risk and narrowly concentrated reward. The crisis written in the fine print of subprime mortgages on the ledger lines of once mighty financial institutions and on the pink slips that have up-ended the lives of so many people across this country and cost the economy 2.6 million jobs last year alone.
We know that even if we do everything that we should, this crisis was years in the making, and it will take more than weeks or months to turn things around. But make no mistake, a failure to act and act now will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future. Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred.
And that's why I feel such a sense of urgency about the economic recovery and reinvestment plan that is before Congress today. With it, we can save or create more than three million jobs, doing things that will strengthen our country for years to come.
It's not merely a prescription for short-term spending. It's a strategy for long-term economic growth in areas like renewable energy and health care and education.
Now in the past few days, I've heard criticisms that this plan is somehow wanting, and these criticisms echo the very same failed economic theories that led us into this crisis in the first place. The notion that tax cuts alone will solve all our problems, that we can ignore fundamental challenges like energy independence and the high costs of health care, that we can somehow deal with this in a piecemeal fashion, and still expect our economy and our country to thrive.
I reject those theories, and so do the American people, when they went to the polls in November, and voted resoundingly for change. So I urge members of Congress to act without delay. No plan is perfect, and we should work to make it stronger.
No one's more committed to making it stronger than me, but let's not make the perfect the enemy of the essential. Let's show people all over the country who are looking for leadership in this difficult time that we are equal to the task. At the same time, we know that this recovery and reinvestment plan is only the first part of what we need to do to restore prosperity and secure our future. We also need a strong and viable financial system to keep credit flowing to businesses and families alike. And my administration will do whatever it takes to restore our financial system. Our recovery depends on it.
(END VIDEOTAPE)
CHETRY: Suzanne Malveaux joins us now live from the White House this morning. And Suzanne, back to the president's catastrophe line in that address, also the op-ed we talked about in today's "Washington Post." Who is he trying to convince most right now that this is the right plan for right now?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Obviously, he's directing this to lawmakers but what's interesting about this, he is using this dramatic language, talking about a dire situation, catastrophe, is really pointing to Democrats behind the scenes who he's been communicating with, the leadership, saying look, there are things that need to be taken out of this economic stimulus package that we believe are reasonable when it comes to the Republicans.
We've heard a lot about Republican opposition, but I'll tell you, Kiran, I spoke with Senator Olympia Snowe. She's a moderate Republican. She was here at the White House yesterday, and she met though with President Obama. She was quite optimistic.
She said that he was listening. He has a list of those points of things they need to take out of the package, and she believes that those things are going to happen, that he is going to be influential in some way or at least he's reaching out to Democrats to try to make that happen, a bill that will be acceptable to the Republicans. So I really think that he is pushing a little bit, pushing a little bit stronger on his own party -- Kiran.
CHETRY: It's very interesting, though, because Senator Jim DeMint, also a Republican, is saying that at this point he doesn't see anyone, any of his fellow senators agreeing to vote for this right now as it stands. So, is the White House losing control of the message? Are there any fears of that behind the scenes?
MALVEAUX: Yes. There's certainly a concern that they need to get the message out a lot stronger. I mean, what you're seeing is really a public relations campaign. You not only have the president out there with the treasury secretary with these very strong language, talking about perhaps, you know, you think about it as a national security threat, it's an economic threat, but that's the kind of language he's using. But the president himself has an op-ed in the "Washington Post" this morning where he repeatedly says, "Now is the time, now is the time, now is the time to act."
Obviously, they feel like they have got to get their message out. They've got to get it strong and that they are running out of time to do so.
Having said that, he does believe that he has the votes to get this thing passed, and we are seeing at least from some moderate Republicans that there seems to be some wiggle room. They're a bit more optimistic than say DeMint, for instance, that they're going to get some of those concessions needed to actually vote for that bill, Kiran.
CHETRY: All right. Suzanne Malveaux for us at the White House this morning, thanks.
Also, the president's going out, talking about corporate taxes and corporate pay and perks, targeting the Wall Street bankers who many say caused the financial meltdown. Is it the right approach? We're going to talk to some of the most powerful businessmen.
ROBERTS: Plus, 25 years after someone laced Tylenol pills with cyanide killing seven people, the FBI is back on the case again. We'll tell you why just ahead.
CHETRY: Also, online criminals hacking Facebook, trying to use you and your Internet pals to get cash. So, how are they doing it and how can you protect yourself?
It's 10 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: President Obama is making the call for an executive salary cap of $500,000 of companies that took taxpayer bailouts, and that could force some bank executives to take multimillion dollar pay cuts. Many critics say their enormous paydays were a slap in the face to taxpayers. But some critics say that it could be counterproductive and dilute the Wall Street talent pool.
Joining me now from Washington to talk more about this is former Hewlett-Packard CEO and former John McCain economic adviser, Carly Fiorina.
Carly, it's great to see you. It's been a long time.
CARLY FIORINA, CEO, CARLY FIORINA ENTERPRISES: Great to see you, John. Thanks for having me back.
ROBERTS: So this new limitations on executive compensation for financial institutions that take a big piece of this bailout pie, is it too much government involvement in private enterprise or do you think that they're appropriate conditions for companies that go to the public trough for a bailout?
FIORINA: Well, I think first the public's outrage over this is absolutely justified, and therefore, lawmakers' outrage is justified.
I actually wrote in an op-ed in "The Journal" several months ago that I think any CEO who asks for American taxpayer money should tender his or her resignation and their board's resignation before they go to Washington hat in hand, because the fact that they're asking for a bailout means they have failed in some very important ways.
Secondly, I believe that CEO compensation in its entirety should be put up for a shareholder vote each and every year. And the government is now a shareholder, so if the government owns 25 percent of the company, they get 25 percent of the vote.
I personally think that will be more effective over the long run than the government deciding $500,000 is the right number, particularly because that compensation limit, for example, doesn't apply to AIG.
ROBERTS: Right.
FIORINA: Doesn't apply to Bank of America and those are two institutions that clearly have taken a lot of taxpayer money, and have eroded people's trust in business.
ROBERTS: In the interest of a full disclosure, we want to point out that in 2005 you received a $21 million severance package, other stock options on top of that. When you left Hewlett-Packard, the average executive compensation for CEOs in 2008 was $11 million.
How do you think these companies are going to react? Are they going to say hey, you put these limitations on us, you will dilute the talent pool, we just won't be able to attract good people.
FIORINA: Yes. Well, in the interest of full disclosure, my severance was actually $11 million.
ROBERTS: Oh, I'm sorry.
FIORINA: The additional -- it's all right, people get it wrong all the time, but the facts are the severance was $11 million. There was a bonus part, but very importantly, my compensation package was put up for shareholder vote.
I voluntarily gave up my contracts so that shareholders could vote on it. And the point is that I think we live in a country where markets set compensation, and they should.
Clearly, CEO compensation on Wall Street has been way out of sight. Shareholders are upset about it. Taxpayers are upset about it. They should be upset about it, and they should get a vote, and say this is reasonable, this is not.
But $500,000, why is that the right number? Why isn't it $400,000? Why isn't it $600,000? And why are certain institutions exempt? That's why I think a vote would be more effective and some of these folks ought to resign.
ROBERTS: All right. Carly Fiorina for us this morning. It's good to catch up with you. Thanks so much for coming along this morning.
FIORINA: Great to catch up with you.
ROBERTS: All right. Take care.
CHETRY: Well, from setbacks over cabinet appointees to a major battle for a stimulus plan on Capitol Hill. It's been a little bit of a rough week for President Obama. How does he get his mojo back? And essential services like snow and trash removal now becoming a luxury in today's economy? Well, with cities falling deep in the red, mayors are lining up for a share of the stimulus. We're going to ask one mayor why he's supporting President Obama's plan.
It's 16 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Nineteen minutes after the hour. Let's take a look at what's on President Obama's agenda for the day.
At 8:00 Eastern, the president and Mrs. Obama will attend the national prayer breakfast in Washington where he is expected to make remarks on the administration's faith-based initiative. Then at 11:00 a.m. Eastern, he'll be back at the White House to sign an executive order forming the president's council for faith-based and neighborhood partnerships. His adviser, Joshua DuBois, is expected to head up that council.
And finally, this evening at 8:00 p.m. Eastern, President Obama will arrive in Williamsburg, Virginia, to speak at the House Democrats' issues conference. This will mark his first trip outside D.C. as president. He's also going to fly there on Air Force One.
It will be his first trip aboard the plane as president. He flew it once before, but it wasn't called Air Force One when he was on it -- Kiran.
CHETRY: All right. Well, after some smooth sailing through the election with his staff in lockstep and on message, the waters have now gotten a little bit rough for President Obama from cabinet nominees bowing out over tax troubles to partisan bickering about the stimulus plan.
Our Jim Acosta is live in Washington with a look at the president's rough week and his attempts to, as you put it, get his mojo back.
Hi, Jim.
JIM ACOSTA, CNN CORRESPONDENT: Hi, Kiran, good morning. That's right.
You know, Republican Senator Susan Collins from Maine, she said something interesting over at the White House yesterday. She said the president may have made a mistake by not submitting his own stimulus bill and letting the House do this. Of course, there's the question, where does the president go from here?
I talked to Pennsylvania Governor Ed Rendell yesterday and he's a little worried that President Obama has brought a knife to a gunfight. Even after all of the apologies from the president this week, key Democrats and Republicans are not quite lining up behind him on this stimulus plan. That is a shift from the wave of popularity he rode into office. (BEGIN VIDEOTAPE)
OBAMA: We all have to pull together.
ACOSTA (voice-over): President Obama is out to get his mojo back.
OBAMA: A failure to act and act now will turn crisis into a catastrophe.
ACOSTA: His call to arms on the economy comes after the worst couple of days of the new administration, from tax troubles --
TOM DASCHLE, FMR. HEALTH AND HUMAN SERVICES SECRETARY NOMINEE: I deeply apologize.
ACOSTA: To stimulus stumbles. Even Senate moderates are telling the president, they don't like the plan.
SEN. SUSAN COLLINS (R), MAINE: I believe we need to have a more targeted and effective bill for it to pass the Senate.
ACOSTA: Some of the president's supporters may be tempted to cue up that old B.B. King classic.
(MUSIC)
ACOSTA: The White House says hold on, insisting the stimulus is within reach.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: And to get it to the process of being through the House and partly through the Senate in a 16-day period, I think, is something that's rather extraordinary.
ACOSTA: Some of the president's backers think he should try a different approach.
GOV. ED RENDELL (D), PENNSYLVANIA: It's a rocky start and the president's having trouble because I think he really believes it's in the national interest for this bill to pass with bipartisan support.
ACOSTA: Pennsylvania Governor Ed Rendell says it may be time for the president to get tough, strip away the waste and the stimulus, Rendell says, and then dare the Republicans to block the bill.
RENDELL: If they're going to just continue to ask for more and more and more, and eviscerate the thrust of the president's stimulus bill, then eventually you're going to have to draw the line in the sand and say OK, guys, let's vote.
OBAMA: Thank you.
ACOSTA: This grave new world looks nothing like the campaign, the speeches --
OBAMA: We are the ones we've been waiting for. ACOSTA: The optimism.
OBAMA: And you know, you've just got to kind of let it -- you know.
ACOSTA: Those days are long gone.
LARRY SABATO, UNIVERSITY OF VA, CENTER FOR POLITICS: If you go back in history, you'll find in the first few weeks in particular, presidents have stumbles. He's got to lower expectations. He's been trying to do that. He has to work harder at it.
(END VIDEOTAPE)
ACOSTA: What happens in this town doesn't do this anymore, Kiran. In his first real battle of the administration, the stimulus, there's a big reason why the president may still get most of what he wants. Even with those early missteps, his poll numbers tower over virtually anybody else in Washington, Kiran.
CHETRY: It's also interesting the polling on the stimulus. There seems to be broad consensus. I think it's about three-quarters of the people asked think we need a stimulus. But --
ACOSTA: Yes, that's right.
CHETRY: As for exactly whether this plan is it, that support is not getting a majority right now.
ACOSTA: Yes, and I talked to Governor Rendell yesterday and he said there's something a lot of people aren't thinking about, and that is a lot of these states have balanced budget amendments, like his. And so if they don't get the stimulus money, Ed Rendell is talking about raising taxes in Pennsylvania during this recession. That is a nightmare that could hit a lot of states in this country, Kiran.
CHETRY: Absolutely, you're right. And we're going to be speaking to a governor out of Rhode Island in a couple of minutes as well about that, or mayor actually.
Thanks so much, Jim Acosta.
ACOSTA: You bet.
ROBERTS: Seven people took a pill to feel better only to later die from taking it. Now, 25 years later, the FBI is reopening the 1982 case involving cyanide-laced Tylenol. Find out why, after this long, just ahead.
And how disaster relief handed out from the government is turning into its very own disaster. We'll explain for you.
It's 24 and a half minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning and to a fast-developing story now.
A real-life cold case reopened after 25 years. The FBI is again investigating a man who's already served 12 years behind bars in connection with the 1982 Tylenol poisoning case.
Our Carol Costello is tracking developments for us this morning that the anniversary of this case, who knew that they were going to reopen it, Carol.
CAROL COSTELLO, CNN CORRESPONDENT: I know and remember that time, the Tylenol scare? I mean, it was a really fearful time in all of America.
The FBI isn't really saying much about this, only that tips they received last year on the 25th anniversary of the killing and new technology prompted them to gather possible new evidence. And like I said, you know, it's hard to believe it's been 26 years since seven people were poisoned after taking extra strength Tylenol capsules laced with cyanide.
Well, this is what went down yesterday in Cambridge, Massachusetts. Let's take a look. This is the neighborhood there, in an apartment owned by this John Lewis, the same man who tried to extort $1 million from Johnson & Johnson, the makers of Tylenol, to stop the killing.
Reportedly, the FBI removed several boxes from his apartment and an old Macintosh computer. Now this man, John Lewis, was never charged with murder but he was charged with extortion. He served 12 years in prison and was released in 1995. He has since created this Web site that envisions the futuristic society where all things are free. On that Web site, there is a tab labeled "Tylenol." Click onto that tab and it takes to you this message.
(BEGIN VIDEO CLIP)
LEWIS: Many enjoy twisting and contorting what I say into something ominous and dreadful, which I do not intend. That, my friends, is the curse of being labeled the Tylenol man. Be that as it may, I cannot change human proclivities. I shan't try. Listen as you like.
(END VIDEO CLIP)
COSTELLO: Make of that what you will. Now, the 1980s killings were all in the Chicago area. Lewis moved to Boston after his release from prison. He lives there with his wife. No one was ever charged with murder in these crimes, although one investigator was quoted at the time as saying Lewis was considered the prime suspect and I believe, John, he still is.
Now, there was one silver lining from this tragedy, if you want to call it that. Johnson & Johnson revolutionized the way over-the- counter drugs were packaged making them virtually tamper-proof.
OK, It's James Lewis. ROBERTS: Right.
COSTELLO: I said John. It's James Lewis.
ROBERTS: No problem with that. But Carol, any idea what they might have found during this search?
COSTELLO: Nothing. They just supposedly brought out this old Macintosh computer and then they brought out like two long packages wrapped in brown paper, but nobody knows what's inside of them. The FBI just isn't talking about this, but they say they have this new technology which may make them able to better examine this evidence, but it's strange that there would still be evidence in this man's apartment after all these years.
ROBERTS: Yes. You would think, 26 years and a move has gone by, why would the evidence still be there? Well, we'll see what they come up with.
COSTELLO: Yes.
ROBERTS: Fascinating story. Carol Costello with that this morning. Carol, thanks so much.
COSTELLO: Sure.
ROBERTS: It is now coming up on 30 minutes after the hour and here are this morning's top stories.
Toyota shutting down all but one of its assembly lines across Japan today. It's an effort to slow production with shrinking demand here in the United States and around the world. The Japanese company, now the world's biggest carmaker, is planning ten more these idle days, as they call them, over the next two months.
If you know someone who still watches television with rabbit ears, they're going to have four extra months before they have to switch to digital TV. Congress approved a delay and now the president is expected to sign it to switch from analog now scheduled to happen on June 12th of this year. But you don't get any more extensions.
And on Long Island, New York, some students are now attending Barack Obama Elementary School. School officials believe it's the first school in the nation to be named for the 44th president and they say that the idea to change actually came from the students.
CHETRY: All right. Well, snow and garbage is piling up on the streets of some American cities. There's no money for the cleanup. In New Orleans, Mayor Ray Nagin has agreed to use close to $3 million in local economic development money to keep the French quarter clean as Fat Tuesday approaches.
And in New England where the snow has not stopped this winter, some cities are out of snow removal money. The city of Cranston, Rhode Island, for example, blew through its $400,000 winter budget. Another quarter million also in additional funds gone. And problems like this are exactly what mayors from across the country are facing and that's what they went to Washington to talk about. They are urging lawmakers to put aside partisan differences and come up with some stimulus plan.
Joining me now is Providence, Rhode Island Mayor David Cicilline. Mayor, thanks for being with us this morning.
DAVID CICILLINE, MAYOR OF PROVIDENCE, R.I.: Good morning, my pleasure.
So you were one of the mayors that went to those meetings in Washington yesterday. How did it go? I know you're dealing with a lot of challenges in your city. What did you tell White House advisers that you met with?
We went to Washington really with one important message and that is the American people need an economic recovery and reinvestment plan that gets Americans back to work. We shared what was happening in our cities, the unemployment, the foreclosure crisis, the fact it was becoming increasingly difficult for people to find work and we were there to support the president's plan that will create three to four million jobs in the next two years.
That will put Americans back to work quickly and in addition to that will make investments in infrastructure, and education and technology and renewable energy that will really lay the groundwork for the rebuilding of our economy so we can continue to compete in the global economy of the 21st century. They're good investments in the short term. I'm sorry.
CHETRY: And Mr. Mayor, there's a big debate over, you know, as you take a look line by line at some of the items that are in this bill. There is debate on many of them, as to whether or not this is going to mean stimulus and jobs now, whether some of these are pet projects and so you know, as you, as well as mayors across the country come to Washington and try to explain why your city or your town or your state needs the money, what do you say? What are some of the shovel-ready projects, for example, in your state, in your city that are ready to go?
CICILLINE: Well, we have a $570 million worth of shovel-ready projects in Providence that will create 666 jobs. And they range from sidewalks to street repairs to rebuilding schools, to installing technology, and every city has those projects but what they share in general all across the country is that there are investments that leave a legacy.
There are investments in infrastructure and technology and education that leave a legacy that produce the framework to get us out of this recession, and rebuild our economy, so they have benefits in the short term, getting Americans back to work but also, in addition to that, really do lay the groundwork for long-term economic recovery.
We did not go to Washington asking the federal government to give us resources to fill our budget gaps and every city faces serious challenges. We're not asking for that. We're asking that the government make investments that will create jobs immediately in cities across this country, but also will, again, invest in infrastructure and technology in education, the things that will ensure that we can continue to grow the economy and create more jobs.
CHETRY: I got you. Also do you, quickly before we go, do you think that the foreclosure problem, I know you guys are facing big foreclosure problems in Providence as well, should that be something that gets hammered out in this bill or is that perhaps another time and another place to be able to get this done as quickly as possible?
CICILLINE: Now, it is urgent that it be done in this bill. It's urgent that it be done now but we were there to say put it aside the partisan bickering. We are Democrats and Republican mayors saying the American people need bold action, they need it now. It should have transparency which the president's plan has unprecedented transparency and accountability, but it needs to be done quickly. We can't wait and we are there to bring that message to Washington.
CHETRY: All right. Mayor David Cicilline of Providence. Good luck with all of this. I know you guys are facing some big challenges there.
Thanks for being with us.
CICILLINE: Thank you so much.
ROBERTS: Well, big families can be fun, right?
Yes, certainly, but perhaps not under one roof all the time. We'll show you how the economy is starting a multi-generational migration back home.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): Scam artists on Facebook.
UNIDENTIFIED MALE: My Facebook status had changed.
ROBERTS: How a hacker can break into a social networking site and pose as you. See what the security experts are saying. You're watching the most news in the morning.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the most news in the morning. Facebook, supposed to be a place to catch up with friends online. Now, Internet criminals are trying to use people's accounts and their friends to cash in. Our Jason Carroll is here now with a cautionary tale for you this morning. Good morning to you.
JASON CARROLL, CNN CORRESPONDENT: Good morning to you. Facebook is really looking out for these types of things. John, you know, it's an old con. You get a letter or an e-mail saying a friend of yours in trouble and needs a little bit of money. It's an old con, but what's new is how scammers are finding their victims on Facebook.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): Facebook has become a popular way to reach out and touch someone in cyber world.
BRYAN RUTBERG, FACEBOOK TRACKING VICTIM: I've reconnected with old friends from high school days, college days, grad school days, people I used to work with.
CARROLL: Bryan Rutberg expected to find old friends. What he didn't expect was for a cyber criminal to find him. What happened to Rutberg started about two weeks ago when his family noticed something frightening.
RUTBERG: When my daughter was alarmed that my Facebook status had changed. And I hadn't changed it.
CARROLL: A new message on Rutberg's page read "Bryan is in urgent need of help." of course he wasn't. He was safe at home in Seattle.
RUTBERG: Somehow they had taken over access to the page. I had been locked out, someone had changed the e-mail address associated with the account.
CARROLL: A hacker, posing as Rutberg, sent messages to friends claiming he was robbed at gunpoint in London and needed money to get home. He even left a message with Rutberg's Facebook friend Benny Rubinstein. Listen to the recording.
UNIDENTIFIED MALE: He is currently in London. He is in trouble um, he was robbed.
CARROLL: Rubinstein wired $1,200 to London.
BENNY RUBINSTEIN, FRIEND VICTIM: It's not only not just a financial thing. It's also an invasion of your privacy, who your friends are.
ROBERT SICILIANO, SECURITY ANALYST: People really have forgotten, you know, basic safety. When mom said don't talk to strangers, that was good advice.
CARROLL: Security experts say there are two ways to better protect yourself.
JIM LEWIS, CENTER FOR STRATEGIC & INT'L STUDIES: Having anti- virus programs and making sure they're up-to-date. The second thing you can do is everyone can kind of push some of these companies to do a little bit better job in protecting privacy.
CARROLL: With the help of Facebook, it took about a day for Rutberg to regain access to his account. RUTBERG: Every user of the web should be better educated and I think Facebook has a role to play there as do any of the social networking sites. Letting users know that if their site is hacked, how to respond and giving them an easy way to get in touch with the companies.
CARROLL: Facebook says though this scam affects a small number of users, they're instituting changes that will better notify users when their account is modified.
(END VIDEOTAPE)
CARROLL: And some more details on what Facebook is doing about all of this, and they will be adjusting their security system to better detect these types of hackers. They are also reaching out to money wiring companies like Western Union to alert them to this type of fraud and they say they're planning to involve law enforcement, but they didn't give any specifics in terms of how law enforcement would exactly be involved.
But one of the other things that, you know, people can do if you're on Facebook, don't put your date of birth on there. Be careful about putting your address on there and something else, the old- fashioned thing, you know pick up the phone. If you see, you know, something strange and one of your friends Facebook pages, pick up the phone and call the person. You know.
ROBERTS: Exactly. Any time anybody's ever asking for money on- line, be suspicious and make sure, too, that when you're on Facebook that you've got your security preferences set in such a way that nobody, not just every Tom, Dick and Harry can get on to your web page.
CARROLL: All right. Yes.
ROBERTS: Thanks, Jason. Kiran?
CHETRY: Well, it is supposed to be the agency that helps but FEMA may have accidentally put some ice storm victims at risk of catching salmonella. We'll tell you what happened next.
And also about the bad economy is forcing some families to suddenly expand. Life with recession relatives. It's 41 and a half minutes after the hour.
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ROBERTS: New this morning, a new state money maker, expensive tickets for driving without a seat belt. More than a dozen cash strapped states are trying to change their seat belt laws in order to be eligible for millions in federal money. States without primary seat belt enforcement must pass a bill and have it signed by the 30th of June and start issuing citations by September 30th to qualify.
Olympic champion Michael Phelps made his first public comments about the alleged pot-smoking video that could affect his superstar image and endorsement deals. "It's something I'm going to have to live with," he said and "something I have grow from." He added "by no means is it fun for me and by no means is it easy."
CHETRY: Well there's a new salmonella alert this morning. This time, it's the government that could be at fault. Recently distributed FEMA food kits were handed out as part of disaster relief in Kentucky and Arkansas, and they may contain peanut butter that was contaminated with salmonella. Our Susan Candiotti has been working the story, and she joins me now. A lot of it originating from one of those plants, from the distributor of one of those plants. How did it make its way now into this FEMA health kits?
SUSAN CANDIOTTI, CNN CORRESPONDENT: Well that's the answer everyone would like to know, you know, because just imagine, Kiran, you have no power, no light, you're left living in a shelter and now you find out that the food you've been given might be contaminated. I mean you have to be asking what's next. The question is when those outbreak first happened. Did FEMA check its meal kits.
Did it ask to go to its suppliers to try to find out what the heck was going on? Remember, as many as 7,000 people in Kentucky alone are still living in shelters, and might have received food kits that could be contaminated with this peanut butter paste.
These are kits that were made by a company called Red Cloud Food Services in Illinois under a label called Standing Rock and Red Cloud got its peanut product from a company in Georgia, the same company that made the peanut paste that could be contaminated and has been linked to at least eight deaths and has sickened at least 500 people or more. So now we're trying to find out what happened, what did FEMA know and when did it know it.
CHETRY: Right. And also what are they recommending now, just throw those - just throw out the peanut butter if you're receiving any of these kits and wait for further -
CANDIOTTI: Well, that's what they're trying to get the word out. We know that the Kentucky National Guard - I spoke with a spokesman for the governor, Steve Bashir and Jay Blanton says that they are telling the National Guard to go out to all the shelters to get the word out to pull that food but it's just a precaution, they say.
And specifically, he told me we are in the process of finding alternative sources of food for people in shelters. Are they upset? Well, he says we're pretty resilient. We've had a lot thrown in our way and we're coming through it. FEMA has been working closely with us and they assure that this is a precautionary measure.
But really you have to ask, what the heck happened here? Kentucky's governor has had nothing but praise for FEMA, but it comes down to was FEMA vigilant enough to check into these food kits before they were sent out.
CHETRY: And remind people again why there are so many people in shelters right now. CANDIOTTI: Well, because after this winter storm outbreak, naturally, people had to resort to going to shelters because they lost power. They had no heat, no place to go and that's why so many of them are still there as they're trying to get the power turned back on.
CHETRY: A tough winter there for sure. Susan Candiotti, thanks so much.
It's 47 minutes after the hour.
(BEGIN VIDEOTAPE)
ROBERTS (voice-over): They're back, your recession relatives.
UNIDENTIFIED FEMALE: Families come together and do what they have to do.
ROBERTS: Tough times trigger a surge in extended families, moving in together.
UNIDENTIFIED FEMALE: You better pay the rent on time.
ROBERTS: The multi-family migration. You're watching the Most News in the Morning.
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(MUSIC)
ROBERTS: All my sisters, all my brothers, all my parents, all my aunts and uncles. Everybody together in the same house. For many it's a worst case scenario. Moving back in with the parents!
But with tough times, more and more people are being forced to pack it in and head back home. Alina Cho has been checking out this new phenomenon. She joins us this morning.
ALINA CHO, CNN CORRESPONDENT: If that's not a perfect song, I don't know what is. Hey, good morning, John. Good morning, everybody. You know, it's almost a throwback to the way things used to be. Multi-generations living together under one roof and it's becoming more and more common. Why? Well in this economy, they simply can't afford not to and certainly brings families closer together, but it also presents a unique set of challenges.
(BEGIN VIDEOTAPE)
CHO (voice-over): Just a year ago, German and Lillian Tixe had a ribbon cutting ceremony to celebrate their new home. They planned to live on the first floor and rent the second and third but they never dreamed their tenants would be their own adult children until German suddenly lost his job.
KANESSA TIXE, MOVED BACK WITH PARENTS: He was pretty quiet. He didn't want us to talk about it. We're all going to help you and I can get you a job.
CHO: German's daughter Kanessa Tixe moved in. So did her stepbrother Eric, stepsister Lily and her family. They are all helping out by paying rent and their landlords are strict.
TIXE: You better pay the rent on time! Actually, they charged us a deposit.
CHO: It's a living situation that's becoming common. According to grandparents.com, 65 percent of those surveyed say the bad economy will bring more multigenerational families together under the same roof.
AMY GOYER, GRANDPARENTS.COM: This is a dollars and cents issue. When it comes to the bottom line, can you afford to live on your own? And if you can't, then families come together and do what they have to do.
CHO: It's not without its downfall.
KANESSA TIXE: Every time I go out, they are like looking out the window or asking me where I'm going. It's like I feel 16 again.
GERMAN TIXE, KIDS MOVED BACK HOME: The music is too high and we call it, put it down, because, you know, sometime we have to live.
CHO: Experts say problems are bound to arise.
GOYER: The little things can get to you. I hear the most problems from the kitchen. I know one mom was telling me that she just burst into tears because her mother was criticizing the way she made a peanut butter and jelly sandwich.
CHO: But if living together is a dollars and cents issue, time together is priceless, even more so for the Tixe.
This multigenerational family is about to expand. Lily is due in April.
KANESSA TIXE: We're very close. We're united and I think now that we live together, it shows even more. Many of our friends and families come here and they wish they were this close.
(END VIDEOTAPE)
CHO: Another plus, the new living situation ends up helping the kids, too, by living with their parents, they all pay less rent. Kanessa even joked that they also save money by stopping down at mom and dad's for meals every now and then and of course, there's the laundry. No more Laundromat around the corner. And by the way, with all the concerns about layoffs these days, the family feels that living together provides a safety net for everyone.
And interestingly enough, the Tixes, John, they say the biggest challenge for them is moving the cars in the morning, you know. Somebody comes home late, somebody else has to leave early in the morning and they're trying to do that shuffle in the morning.
ROBERTS: Not to mention the bathroom schedule, too.
CHO: That, too.
ROBERTS: Alina, thanks very much.
We're going to take you to the Hilton in Washington in just a couple of minutes. Here's a live picture. The president, Barack Obama, his wife and Vice President Joe Biden and his wife all attending this morning. The president will be speaking shortly, we expect him probably about seven or 10 minutes' time. This is all part of a faith-based day that he's got going. We'll tell you more about that. Right now, it's 54 minutes after the hour.
(BEGIN VIDEOTAPE)
CHETRY (voice-over): Dick Cheney on the attack.
DICK CHENEY, FMR. VICE PRESIDENT OF THE UNITED STATES: There's nothing more dangerous in the political wars than hypocrisy.
CHETRY: Slam against the new president by the old vice president.
CHENEY: People who are... more concerned about reading the rights to an Al Qaeda terrorist than they are with protecting the United States.
CHETRY: What set him off?
Plus, busted. Calling the cops on the cop.
Help. Police. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: There we see a live picture. This is President Obama arriving at the National Prayer Breakfast. It is a yearly event that's held every year in Washington, D.C. on the first Thursday of February every year. And this is since 1980s, it's been held at the Washington Hilton. There you see his wife, Michelle Obama. The Bidens also present for this.
The keynote speaker this year is going to be former Prime Minister of Britain, Tony Blair. And there is a lot that's going to be going on today. The event actually is a series of meetings, lunches, dinners taking place since 1953. It's also a time for people to get together from around the world and have discussions about religious, political, social divisions, sharing ideas as well.
This year also to note the president is going to be asking for a legal review of the White House faith-based office. This is formed under his predecessor, George W. Bush, about deciding whether to allow federally-funded religious groups to hire only their own. Something that he's going to have staff and lawyers check out as he prepares to look into this and look into continuing a faith-based initiative under his administration.
ROBERTS: Yes, later on this morning after his remarks he's going to be signing executive order creating the office of faith-based and neighborhood partnerships. He will be doing that in the Oval Office. It will be a few minutes before the president speaks here.
And of course, he will be bringing on board his new director of faith-based initiatives, that's Joshua Dubois, a 26-year-old Pentecostal minister from Massachusetts who served as his religious adviser during the campaign. A fellow who managed to do what many people thought would be extraordinarily difficult and that was to bridge the gap between spiritual people, religious people on the left and Christian conservatives, bringing some Christian conservatives over to the Obama camp. That it simply threw in a lot of outrage. So we will be watching for that. That will be on the schedule later on today.
CHETRY: All right. So again, a look at President Obama at the National Prayer Breakfast, and we'll be dipping in on that later as well.
