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American Morning
Plane Crashes off Puerto Rico; Obama to Campaign for Stimulus Package; Chris Brown Under Investigation; Highlights of the Grammys; A-Rod Tested Positive for Steroid Use in 2003; Small Maryland Town Wants a Piece of the Stimulus; Australia Facing its Worst Wildfire in History; Porn Star Might Run for Senate; First Black White House Social Secretary
Aired February 09, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Good morning, and thanks very much for being with us. It's Monday. It's the 9th of February. John Roberts along with Carol Costello, who's here for Kiran Chetry who's off today.
CAROL COSTELLO, CNN CO-ANCHOR: Kiran does have the Monday off, and I'm glad to be here, even though Mondays are hard. Aren't they?
ROBERTS: Mondays are hard regardless of what time you're getting up, but particularly hard when you start work at 6:00 a.m.
COSTELLO: I know, but I've had 12 cups of coffee, so I'm ready to go. So let's begin, shall we?
ROBERTS: That's a lucky 13th and we'll be on our way.
COSTELLO: Exactly.
We begin with breaking news just in to CNN. A small plane with six Americans on board has crashed off the coast of Puerto Rico. Coast Guard teams are now combing the crash off Puerto Rico's northern coast looking for survivors. The private plane reportedly took off from the Dominican Republic overnight. Again, there were six people on board, five passengers and the pilot, all of them U.S. citizens.
Big business news breaking overnight. Nissan announcing massive job cuts after predicting its first full year loss in nearly a decade. The third largest Japanese automaker will slash its global workforce by 20,000. It's also cutting salaries and eliminating bonuses for the board of directors. Nissan now predicts it will end the fiscal year $2.9 billion in the red.
We're also keeping a close eye on breaking news out of Australia. Deadly wildfires continue to burn out of control right now. The country's prime minister describing it as mass murder. So far at least 131 people have been killed.
Victoria, in the southeast, is seeing the worst of it. The fast moving fire fronts (ph) trapping people in their homes and wiping out entire communities. Officials believe some of the fires were deliberately set. More and more Americans are falling victim to identity theft. According to a new study, the crime soared 22 percent last year. Researchers say the poor economy is one reason for the spike. One silver lining to the news, the cost associated with the crime like losses and legal fees are down sharply.
ROBERTS: Well, to the economy now and President Obama hitting the road to sell his stimulus plan directly to the American people. Today, he'll hold a town hall style meeting at a high school in Elkhart, Indiana, a state hit hard by the economic crisis. Then tonight, the president will hold his first primetime news conference.
The p.r. offensive comes as his key legislation hangs in the balance. The Senate is poised to act on its version of the bill tomorrow but the vote is a nail biter. Most Republicans oppose the plan including the president's former campaign rival John McCain who says it's too expensive and that Republicans are being railroaded on it.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: This is generational theft, what's taking place now. We're laying multi-trillion dollars of debt on future generations of Americans. I can't support such a thing.
The president also promised a change which would be bipartisanship, which mean we would all sit down together and work together and put a bill together. And what happened was obviously, this was a Democrat design, Democrat voted and Democrat-sponsored bill, and the outcome is certainly not bipartisan nor was the beginning.
(END VIDEO CLIP)
ROBERTS: CNN's Suzanne Malveaux is the only reporter live at the White House this early in the morning.
And Suzanne, Senator John McCain definitely not happy with the bill. Is that what's forcing the president to get out there across the country and really try to sell this thing to the American people?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely, John. He can't actually stay in Washington and do that with the backdrop. He really needs to go out to the American people and sell this economic stimulus package. He is trying it use the bully pulpit and obviously reshape the tone of the debate. And one of the questions obviously, he's going to be trying to convince folks that this is going to create millions and millions of job. But the question is like what do the American people do?
You talk to folks outside of Washington. They say they're all going to do their part. Perhaps not go to the salon, do their hair their own way and not go out on vacation. A lot of criticism of President Bush for saying after 9/11 go out and shop. But that's exactly what the Obama administration wants folks to do. They've got to get that message out some way. In some ways, there is kind of a disconnect when it comes to behavior and a lot of American people just looking for some guidance from the American president, John.
ROBERTS: Whenever the president takes a road trip, Suzanne, it's usually a fairly well calculated type of event. Why did they choose Elkhart, Indiana?
MALVEAUX: Well, Elkhart, Indiana interestingly enough has an unemployment rate of more than 15 percent and has tripled over the last year or so. And one of the things that you'll see in Elkhart, Indiana, it's the capital of manufacturing, recreational vehicles, those RVs that people buy. They rent, they go out and take vacations.
Well, folks are not going anywhere. They're not taking those vacations or buying those vehicles, so the top three RV makers are really suffering there. They're laying off a lot of folks, so they want to create jobs. And the question, John, is how is this plan, this economic stimulus plan when you look at it, how is it going to help those folks, the manufacturers in bringing back those jobs? So we'll see how the president does this afternoon, John.
ROBERTS: All right. And at the same time, gas prices beginning to go back northward again which will hurt the RV industry.
Suzanne Malveaux for us at the White House. Suzanne, thanks very much.
And a reminder that you can watch President Obama's first primetime news conference here on tonight, 8:00 Eastern. We'll have it live for you on the air. And if you're not around a television set but you do have a computer nearby, you can also catch it live at CNN.com/live.
COSTELLO: Got it going on. Let's keep the conversation going on the stimulus plan. Christine Romans is here "Minding Your Business."
So you heard Suzanne, people are worried the stimulus really won't create jobs. Will it?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, this is the -- that's the big question, I mean, and that's why there are all these people arguing about what should be in the stimulus plan quite frankly.
The Senate version and the House version are different. They're mostly the same but there are some key differences here. And this is why Washington is all about compromise. We'll have to compromise on a Senate plan.
COSTELLO: They're good at that, aren't they?
ROBERTS: Oh, yes.
ROMANS: And then they have to compromise again. If they pass the Senate plan, then they'll have to compromise again.
ROBERTS: When you arrive in Washington, it says welcome Washington, D.C., land of compromise. ROMANS: Yes, exactly.
ROBERTS: Not.
ROMANS: Yes, exactly. OK. So there's some housing differences here. The Senate version makes some changes to the present signature middle class tax cuts. You know, the president has long campaigned on tax breaks for individuals making $75,000 a year or less. Well, this would be $70,000 a year or less in tax breaks for couples making $140,000 a year or less. That's different than the $150,000 in the house bill.
There's also in the Senate version a one-year provision to patch the AMT, the alternative minimum tax. Most people hate that thing, hate it but it's expensive to do. I think it's $60 billion or $70 billion.
Listen, $10 billion swing, $60 billion or $70 billion to do that. Also, there's some other differences. There's less money for education spending. There's less money direct aid to states in the Senate version. Also, there's a difference. It's a $15,000 first- time homebuyer credit in the Senate version. It's a $75,000 version in the House bill and also a tax deduction to buy a car in the Senate version.
So there's some things that you would feel differently in the Senate version compared with the House version including some differences in how unemployment benefits would be treated and some -- a few differences about how emergency health care would be treated for people who just lost their jobs. But again, once the Senate has version passed, then they have to go out and hash it all again and figure out what the final version is going to look like anyway.
COSTELLO: Let's talk about that $15,000 credit to buy a home.
ROMANS: Sure. Sure.
COSTELLO: Because did you see what happened over the weekend in Connecticut? It was crazy.
ROMANS: Yes.
COSTELLO: Take a look. I mean lawmakers are trying to address this housing crisis, and there are people over the weekend. Hundreds of people in Connecticut trying to save their homes. They staged this dramatic protest in Connecticut. They converged on the estate of some big bank CEOs who they claim are responsible for getting people into homes they can't afford.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: They see who we are now. They know who we are.
That's right.
UNIDENTIFIED MALE: They know who we are right now.
(END VIDEO CLIP)
COSTELLO: You know what they did. They dumped furniture on the CEO's front yard. I mean, what's really disturbing about this, this is a real sign of class warfare.
ROMANS: Yes. There's been a little bit more of that recently, too, especially --
COSTELLO: A lot of anger out there.
ROMANS: Absolutely. Absolutely. But one of the things about the stimulus and the bank bailouts and also the like is that you still are really facing an accelerating foreclosure problem right now. More than a year, a year and a half, we've been talking about how to fix the foreclosure crisis. And it's still -- it's getting worse every day. One of the things I saw was that a house is foreclosed in this country every 13 seconds right now.
ROBERTS: It's unbelievable. And, you know, the problem, too, is that you can give all the tax credits that you like for houses or for cars or whatever but until the credit markets unfreeze and people can get loans again, it's not going to do a whole lot of good.
ROMANS: And the $15,000 tax credit doesn't help somebody who is in default, who is three months behind.
ROBERTS: Yes.
ROMANS: That's for a different part of the housing market.
ROMANS: All these measures help people who can afford houses.
ROMANS: Yes. Well, we still have a foreclosure -- and we're waiting to hear what the Bush administration -- I'm sorry, gosh -- the Obama administration. You know what, when Bush took over for Clinton it took me like a year. It took me a year.
(CROSSTALK)
ROBERTS: (INAUDIBLE) driving.
ROMANS: How did you know it? How did you know?
ROBERTS: I said Senator Obama once last week, immediately corrected myself and that was enough. All right, Christine.
ROMANS: Obama administration, can't wait to hear what they're going to do with foreclosures.
ROBERTS: We'll keep following this. Thanks, Christine.
ROMANS: You're welcome.
ROBERTS: The pilot and crew of the miracle US Airways flight, it splashed landed in the Hudson River will be honored this morning with the key to New York City. Captain Chesley Sullenberger and the four other crew members were interviewed on CBS's "60 Minutes." Sully said that he initially couldn't believe it when the flock of birds disabled both of the plane's engines, leaving him no choice but to land in the Hudson. And he was asked how he felt about being called a hero.
(BEGIN VIDEO CLIP)
CAPT. CHESLEY SULLENBERGER, PILOT OF US AIRWAYS FLIGHT 1549: I don't feel comfortable embracing it, but I don't want to deny it. I don't want to diminish their thankful feeling toward me by telling them that they're wrong. I'm beginning to understand why they might feel that way.
KATIE COURIC, CBS ANCHOR, "60 MINUTES": And why is that?
SULLENBERGER: Something about this episode has captured people's imagination. I think they want good news. I think they want to feel hopeful again. And if I can help in that way, I will.
(END VIDEO CLIP)
ROBERTS: Sullenberger says he plans to fly again. He's not sure when though. And he's going to be our guest here on AMERICAN MORNING. on Wednesday, so make sure that you're with us for that.
Senior Chris Brown in hot water. He's under investigation for an alleged assault at the same time his girlfriend Rihanna was a no show at the Grammys. We're live in Los Angeles with the very latest for you.
Plus, Alex Rodriguez slug by allegations of doping. And this controversy could cost the New York Yankees star just more than his good name.
It's nine minutes now after the hour.
(COMMERCIAL BREAK)
COSTELLO: He did a great job, didn't he? Soul legend Al Green stepping in at the last minute after Rihanna was a no show at last night's Grammy. She and her boyfriend Chris Brown were both scheduled to perform, but the R&B power couple didn't show this morning.
Chris Brown is home on bail. He turned himself into police last night after an alleged assault. CNN's Kareen Wynter live in Los Angeles to tell us more what happened.
KAREEN WNYTER, CNN ENTERTAINMENT CORRESPONDENT: Carol, a huge story here. This morning Brown is out of jail after posting bond. He was charged Sunday with a felony, this from an incident that happened over the weekend.
Now police say Brown and a woman were in a vehicle near Hollywood early yesterday morning when they began to argue. Officers arrived at the scene following a 911 call and found the woman but say Brown had already taken off. Police haven't identified the victim but say she suffered visible injuries and identified Brown as her attacker. Rihanna's reps aren't saying much but a source close to her camp told us the singer was checked out by a doctor and is going to be OK. Now this wasn't the evening's only headline. The 51st annual Grammy awards delivered some show-stopping performances on music's biggest night.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: We're here to celebrate the music.
UNIDENTIFIED FEMALE: We're actually at the Grammys.
UNIDENTIFIED FEMALE: It feels so amazing.
WYNTER (voice-over): U2 kicked off the 51st annual Grammy awards, but they were far from the only stars. Justin Timberlake, Al Green, Radiohead, Lil Wayne, Taylor Swift and Jennifer Hudson were just some of the big names who took the stage.
Hudson made just her second public appearance since her family tragedy last October. Then the Oscar winner took home her first Grammy for best R&B album.
JENNIFER HUDSON, SINGER: I would like to thank my family in heaven.
WYNTER: This year's show sizzled with two dozen onstage collaborations, including Jay-Z rapping with Coldplay and the Jonas Brothers crooning with Stevie Wonder. The teen sensations went home empty-handed, losing the best new artist title to British songstress Adele. John Mayer won two Grammys, including Best Male Pop Vocal Performance bringing his career total to eight.
JOHN MAYER, GRAMMY WINNER: It's the best thing in the world.
WYNTER: You can say that again. Sir Paul McCartney and the Foo Fighters. Dave Grohl conjured up Beatlemania. Rapper Lil Wayne proved he had the coolest swagger with four wins including the Best Rap Album for Tha Carter III. Song of the Year went to rockers Coldplay, who also won Best Rock Album and Best Pop Performance by a Duo or Group With Vocals.
But the night belonged to Alison Krauss and Robert Plant. The duo swept their categories winning five Grammys including Record of the Year, Pop Collaboration With Vocals, and the coveted Album of the Year for Raising Sand.
UNIDENTIFIED MALE: It's a good way to spend a Sunday.
(END VIDEOTAPE)
WYNTER: And Carol, many artists I spoke with last night say they're truly shocked by Chris Brown's arrest especially given his squeaky clean image here. The singer, by the way, has an upcoming court appearance March 5th -- Carol. COSTELLO: OK. You know what everybody is thinking. Rihanna doesn't show up. You said she went to a doctor to get checked out, so everybody is assuming that Chris Brown allegedly assaulted her. Is there any real evidence pointing that way right now.
WYNTER: That is truly the big question. Again, her reps are not saying much about this. We contacted -- when we contacted LAPD, they said in domestic violence cases such as this, they do not release the victim's name. They protect them intensely here. And even the Recording Academy spoke out and said hey, we are just as much in the dark. We were just notified by her reps saying she was sick and wouldn't show up, so maybe in the next several days something will leak and we'll find out. There is a 911 call that exists. But as for right now, Rihanna has not been named.
COSTELLO: Something will be leaked soon, I'm sure. Kareen Wynter, thanks so much, reporting live for us -- John.
ROBERTS: Thanks, Carol.
A baseball bombshell, new allegations that superstar Alex Rodriguez tested positive for steroids back in 2003. We'll have the details of the "Sports Illustrated" report and what it could mean for A-Rod and the game of baseball.
Sixteen minutes now after the hour.
(COMMERCIAL BREAK)
ROBERTS: Well, New York Yankees slugger Alex Rodriguez is making headlines again. That's not necessarily news, but the latest controversy surrounding A-Rod is stunning. A "Sports Illustrated" report claims Rodriguez tested positive for steroids back in 2003, the same year that he was the American League home run champion, MVP, while playing with the Texas Rangers. CNN's Jason Carroll is following the story for us and certainly the New York tabloids.
JASON CARROLL, CNN CORRESPONDENT: They're brutal.
ROBERTS: Or having a lot of fun with it. Here's the "New York Daily News" this morning talking about A-Rod as a party boy here.
COSTELLO: That's boil (ph), John.
ROBERTS: OK.
CARROLL: It is early.
ROBERTS: And the "New York Post" never known for its subtlety, has this headline today.
CARROLL: Nice.
ROBERTS: Not actually describing Rodriguez himself but describing the situation he finds himself in that he is deep in a hole today. CARROLL: A big one.
(LAUGHTER)
Nicely done. A good way around that one.
Yes, here we go again on this one, guys. There was always a cloud of suspicion around players like Barry Bonds and Roger Clemens regarding steroid use, but Rodriguez was the guy who was known as the clean player. Now, he joins the ranks of other baseball greats alleged to have used illegal steroids.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): Another headline, another embarrassment for a major sports figure. This time, it's the man widely considered to be one of the greatest baseball players in the world. According to "Sports Illustrated," Alex Rodriguez achieved some of that greatness with a little artificial help.
UNIDENTIFIED FEMALE: I flat out told him candidly what the evidence is we had that he had tested positive for anabolic steroids. He said, you know, you'll have to talk to the union.
CARROLL: This was Rodriguez's response just over a year ago to CBS's "60 Minutes".
KATIE COURIC, CBS ANCHOR, "60 MINUTES": For the record, have you ever used steroids, human growth hormone or any other performance enhancing substance?
ALEX RODRIGUEZ, NEW YORK YANKEES BASEBALL PLAYER: No.
CARROLL: In 2003, almost 12 hundred players were tested by Major League Baseball to see if regular drug testing was needed. "Sports Illustrated" says Rodriguez is one of 104 players who tested positive. Those names are under seal in California.
LARRY BOWA, FORMER YANKEES COACH: If this is true, he's just got to come forward and say, "You know what? I tried this." If you're going to sit there and deny everything, you're going to be in a world of trouble.
CARROLL: The news comes just one week after another sports figure, Olympic swimmer Michael Phelps, admitted to "regrettable behavior," after a picture of him seemingly smoking pot was published. Phelps lost a lucrative sponsor and was suspended for three months by USA Swimming.
Rodriguez also has a lot at stake. The Yankees star signed a ten-year deal worth $275 million, with incentives that could make that figure even larger.
UNIDENTIFIED FEMALE: I think it's really up to him as to what the -- sort of image of his legacy is going to be. And a lot of that has to do with coming forward and talking about the truth. (END VIDEOTAPE)
CARROLL: Well, could Rodriguez face criminal charges for all of this? Barry Bonds and Roger Clemens ended up part of a criminal investigation for allegedly lying about steroid use under oath. Rodriguez denied using steroids to the media, but he was not under oath as you know.
But you know, here's the thing. I mean, also when it comes down to this, Rodriguez eventually, I think, there's an argument. He's going to come out and say something. He can't just say well, talk to the union. He's going to have to either come out and deny it, or come out and say I did it, but he's going to come out and do something. He owes it to his fans.
ROBERTS: Or come out and say --
CARROLL: I've made mistakes in the past.
(CROSSTALK)
COSTELLO: We were talking about, how can you look into someone's eyes, look into, can tell the nation and just lie? If these allegations are true, I mean, he just flat-out lied. How can you do that?
CARROLL: People do it all the time, you know? I'm with John. I would just simply just, you know, if you've made a mistake, just own up to it and say look, I've made a mistake.
ROBERTS: He's under a lot of pressure though. I mean, we showed you the cover of the "New York Post" today. Here's the little tiny picture that they put in the lower right hand side of it.
COSTELLO: Oh.
CARROLL: Oh.
ROBERTS: Oh, there you go.
COSTELLO: As a human being, though, this has to be painful. You know, no matter how big his ego supposedly is, it's got to be painful for him.
CARROLL: Yes. But you know what I think. I think of all those little leaguers out there, you know, who are out -- those little kids. I mean, where are they going to say now? They look up to him and now they think the only way I can make it, you know, is to do something to enhance myself.
COSTELLO: Right.
ROBERTS: I don't know.
COSTELLO: It takes the pressure off -- it takes the pressure off Barry Bonds. ROBERTS: Yes. He's such a terrific ball player, too.
CARROLL: I know.
ROBERTS: Yes. Well --
COSTELLO: All right. In Congress right now, it's crunch time for a compromise on stimulating the economy. The price tag expected to come in at more than $800 billion, but is that enough?
And the world's number one golfer has reportedly become a father for the second time. All the details for you ahead. It's 24 minutes past the hour.
(COMMERCIAL BREAK)
COSTELLO: Welcome back to the Most News in the Morning. A live look at the White House in Washington where it is 33 degrees, and it's going to be mostly sunny today. In fact, it's going to be a beautiful day in Washington.
And you'll want to stick around because coming up in about 30 minutes, our Lola Ogunnaike takes us inside the White House. Lola scored an exclusive interview with the new White House social secretary and gets a personal tour of the first family's new digs. You're going to want to see this.
Checking out this morning's top stories now, the Obama administration is delaying an announcement on how it will spend the rest of that $700 billion dollar bailout. Treasury Secretary Timothy Geithner will now unveil the plans tomorrow. The announcement was postponed so lawmakers can focus on the economic stimulus plan, which goes to a Senate vote tomorrow.
Fears of salmonella adding insult to injury for the thousands still reeling from last month's crippling ice storm. Officials in Kentucky are delivering fliers warning people in 35 counties not to eat the peanut products from their emergency kits. Some of those kits contain peanut butter that was recalled after the salmonella outbreak. So far there have been no reports of anyone getting sick from the emergency meal kits.
A published report says Tiger Woods has another cub. "The San Diego Union Tribune" reporting that Tiger's wife Elin Woods gave birth to their first son. The couple has a daughter Sam Alexis who is 20 months old. There's been no announcement from the Woodses about the birth.
The world's top golfer has been out of action since last June because of knee surgery. He's expected to return before the masters in April, possibly before the end of the month. For now, he's staying with the new baby -- John.
ROBERTS: Well, congratulations to the happy couple.
Returning now to the economy and President Obama turning to his old campaign tactics to build support for his stimulus plan. In just a few hours, he'll hold a town hall meeting in Elkhart, Indiana. Then tonight his first primetime news conference. The public press comes as the Senate prepares to vote on its plan which clocks in at $827 billion. But will it do the trick?
Joining me now is economist Adam Posen of the Peterson Institute for International Economics in Washington.
Adam, it's great to see you this morning. A lot of people are concerned that the Senate stripped out billions and billions, tens of billions of dollars for education, assistance to the state. Some economists believe that this package is not big enough and too ill- focused to work. What do you think?
ADAM POSEN, DEP. DIR., PETERSON INSTITUTE FOR INT. ECONOMICS: Well, John, thanks for having me. I think the biggest thing that the Senate did in terms of stripping out as you said was the aid to the states. The best way we can help this economy going is to get spending when there's been this collapse in private demand.
The most efficient way to make sure it all gets spent, it doesn't just get put in the bank is to give money directly to the states where they were going to be furloughing university professors, nurses, policemen, stopping projects that were already underway to give money directly to the states, to Medicaid, to their kind of infrastructure. It immediately gets spent.
ROBERTS: So what do you think? Is this going to work and what are the consequences if it doesn't work?
POSEN: I think it's going to work in the sense that the money that really does get spent. So now, out of the $800 billion, say, around $500 billion of it is going to go to good use, and that $500 billion will go into the economy, will create growth.
I'm not sure it's going to work in the sense that it will stop the loss of jobs. The U.S. economy has to grow about two percent a year to take advantage of all the savings we got, the growth and the population keep people employed, and now I'm not sure it will get to that point.
ROBERTS: Adam --
POSEN: So we're going to have -- sorry.
ROBERTS: I want to ask you about this provision in the Senate bill of a $15,000 tax credit for homebuyers, and this is not just first-time homebuyers.
POSEN: Right.
ROBERTS: Anybody who wants to buy an existing or a new home. Senator Claire McCaskill seems to think that it's pretty important. Let's listen to what she said over the weekend.
(BEGIN VIDEO CLIP) SEN. CLAIRE MCCASKILL (D), MISSOURI: If we don't move, the housing stock, this whole thing is going to be slower and more painful than it needs to be.
(END VIDEO CLIP)
ROBERTS: What do you think of that argument and the tax credit itself?
POSEN: I think it's a bad idea. I think it's total pandering. I mean, we're talking about spending taxpayers' money. We've spent years putting too much money at the housing. That's why we've got so much of an overkill right now.
And the main reason people aren't buying houses because they expect the prices to keep going down and because they're scared about mortgages. It's not because they can get an extra $15,000 on their tax credit. I've done some research with colleague that shows in a lot of financial crisis in the past, including the U.S. in the '80s, consumption and growth started coming back even when housing prices kept falling. So it's not necessary as Senator McCaskill says to dump more money on the housing market just to get the economy going. There are better things we can do.
ROBERTS: It's also pretty difficult to buy a house or to buy a car...
POSEN: Sure.
ROBERTS: With some of the assistance that the senators talking about as well when the credit markets are still as tight as they are.
POSEN: You have it absolutely right. That's the point. I mean, what we really need is the thing that Secretary Geithner is supposed to be talking about tomorrow and there's problems with that, too.
But, you know, we need the resolution of what's going on with the financial system. That's what will put a bottom on the financial system.
ROBERTS: So in terms of what Secretary Geithner is going to talk about on Tuesday, this is the second (INAUDIBLE) of $350 billion from the Troubled Asset Relief Program. He's going to be talking about it so called aggregator or bad bank, where he wants private equity firms, hedge funds, maybe insurance companies to all buy up into this idea and buy up these toxic assets. Are they likely to do that?
POSEN: They're unfortunately not likely to do that or else they would have been buying them already. I think the only way this works is if the government offers them a bunch of guarantees. And that's a transfer of more wealth from the taxpayers. Now better it goes to hedge funds. But it's not clear to me why this is better than we did in the '80s with the resolution trust corporation where the government bought up the bad assets, held on to them, clean them up and then sold them for the tax payer's benefit. I'm not sure why they're trying to this private/public thing. Well, I mean, I can guess, but I don't think it's the right way to go.
ROBERTS: Adam Posen, it's good to talk to you this morning. Thanks for your perspective. Much appreciate it.
POSEN: Thanks for having me, John.
COSTELLO: And as you heard, President Obama makes his stimulus pitch today in an Indiana town with the country's highest unemployment rate. We'll take you to a small town in Maryland that's been in similar economic shape and desperately counting on that stimulus cash.
And it could be Senator Stormy if her fans have their way. We'll tell you why, oh, dear God, a porn star is now being drafted to run against Illinois (sic) Senator David Vitter. Really? It's 32 minutes past the hour.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
SETH MYERS, "SATURDAY NIGHT LIVE": On Friday, the Senate agreed to an economic stimulus package of at least $780 billion, which I know sounds like a lot of money. But remember, that's in American dollars.
(END VIDEO CLIP)
COSTELLO: That's sadly true, isn't it? "Saturday Night Live" folks offering their take on the massive stimulus package, which truth be told is no laughing matter. President Barack Obama begins day 21 of his administration by going back to the future. He'll try to drum up support for his stimulus plan with a campaign style town hall meeting at a high school in Elkhart, Indiana. The recession has hit main street U.S.A. particularly hard.
CNN's Brianna Keilar has the story of a small Maryland town that's also desperately seeking a piece of that stimulus pie.
(BEGIN VIDEOTAPE)
BRIANNA KEILAR, CNN CORRESPONDENT (voice-over): Taneytown, Maryland, just 70 miles from Washington, D.C. But talk to folks in this rural community and they'll tell you it's another world.
BILL RAINES, TANEYTOWN, MD. RESIDENT: I don't think government really realizes how bad it is out here.
KEILAR: Unemployment here is the highest it's been in ten years. Businesses have closed. And residents are facing tax hikes to fund the city's crumbling infrastructure.
UNIDENTIFIED MALE: Our water system and our sewage system probably goes back 55, 60 years.
KEILAR: Taneytown's mayor Jim McCarron has a plan to help this city. He's launched an all-out lobbying effort to get a piece of the billions Washington could spend to jumpstart the economy, drawing up a list of projects that could begin within 90 days, meeting with members of Congress, talking to the governor's office.
(on camera): Full court press, isn't it?
MAYOR JIM MCCARRON, TANEYTOWN, MD.: It is indeed. It's, you know, it's the old "squeaky wheel" theory. I've subscribed to that for many years.
UNIDENTIFIED MALE: This is not fluff. This is not expanding the city hall or buying another staff car. This is stuff that affects everybody's lives and affects everybody's pocketbooks.
KEILAR (voice-over): On Mayor McCarron's $20 million to do list, drilling a new well like this one for the city's (INAUDIBLE) Water System, replacing more deteriorating water pipes and building a road.
MCCARRON: This is Antrim Road, this is the extension.
KEILAR: A road to open up land for new businesses that McCarron says will bring new jobs to the area. You would think more government would be a tough sell to people in this conservative stronghold, angry with the Wall Street bailout. But they see this economic rescue is Main Street's chance to get the help it needs.
DONALD BENFER, TANEYTOWN, MD. RESIDENT: As long as it gets down to the lower levels like the Taneytown and some of the other small towns that would be beneficial.
(END VIDEOTAPE)
ROBERTS: Brianna Keilar reporting on the situation in Taneytown, Maryland for us this morning. And Christine Romans is here with a little bit more of this.
You heard Adam Posen talking about this idea of stripping some of this money to states and local governments out of the Senate version of the stimulus bill, to him is a bad idea because it would have such an effect on places like this.
ROMANS: Every one of these governors and every one of these local community leaders, they have a list of things that have to be fixed right away. I mean things that have -- that are literally crumbling. I mean, the infrastructure in this country is 50 years old, more than that in some cases.
One thing about this conservative community and many, many more like them who you would think would be against, you know, borrowing money from overseas essentially to spend money to try to fix a debt problem in this country, you know, they know that this is their bailout. With the rescue of the banks, a lot of people said where is my bailout? Why are we giving money to the banks? Well, this is supposed to be America's bailout if it's done properly. The middle class bailout, the community bailout if it's done properly.
COSTELLO: It's interesting people are thinking of it in that way, because you can hear the anger over the bailout plan and that nothing went to Main Street and now this is Main Street's chance, but everybody is saying the stimulus plan won't work. Many economists are saying that.
ROMANS: And many others are saying it will work. Many others are saying that there are parts of it that are perfectly target and we'll get money into the economy and will work. I mean, it's the question of there's economics and there's politics. And John, we keep saying this, the intersection of those two can be very, you now, mind numbing, actually.
ROBERTS: Yes. Paul Krugman has a very interesting editorial in today's "New York Times". He was with us on Friday talking about all this. He thinks that President Obama has thrown the baby out with the bathwater in this pursuit of bipartisanship.
COSTELLO: Well, what's really worried is like President Obama is saying if this stimulus plan doesn't pass, it will be catastrophic. Republicans are saying if it does pass, it will catastrophic. It's difficult for the American people to know which side is right.
ROMANS: And the American people are numb because we were told last year if we didn't pass a $168 billion stimulus, it will be catastrophic, that we had to have it. We passed it and it was just a blip of economic activity. And then we were told we had to pass a $700 billion financial system rescue intervention. If not, it would be catastrophic. We did it. And now we're here again talking about huge numbers. Again, you could see, I think, why so many Americans are just like -- just throwing up.
ROBERTS: Just catastrophe after catastrophe after catastrophe.
ROMANS: Right.
ROBERTS: Thanks, Christine.
We're following breaking news this morning. The tinderbox that is southeastern Australia, right now, up in flames. Residents trapped in their homes and their cars. Listen to this. 130 people dead and now officials say nature may not bear all of the blame. It's 40 minutes after the hour.
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ROBERTS: And breaking news out of Australia this morning, where the country is facing its worst wildfires in history. So far, the flames have killed at least 130 people and burned through more than 800 homes. Crews on the front lines describing the destruction in southeast Victoria as, quote, "something of a holocaust." Officials believe some of the fires may have been deliberately set.
Rob Marciano is at the weather center in Atlanta for us this morning tracking the weather here at home and overseas down there in Australia.
And, Rob, 130 people dead in these fires? How does that happen?
ROB MARCIANO, AMS METEOROLOGIST: Well, to start with, they had like a two-week long drought there, John, and in some cases, temperatures got up well over 110 degrees. That has since come to an end, but obviously the drying out and the heating up has had a bit of a big effect.
Here's the continent. Fires on the eastern slope. By the way, the northern part of Australia undergoing floods, mostly due to La Nina. La Nina not really having effect down across the south, but certainly, that heat and, of course, it is summer time down there right now, not helping matters. But it is slightly cooler now than it was about a week ago.
(WEATHER REPORT)
ROBERTS: All right, Rob, thanks so much for that. It's 45 1/2 minutes now after the hour. Stay with us.
COSTELLO: Storm brewing for a senator. First linked to the D.C. Madam. Now, drama with a porn star.
(BEGIN VIDEO CLIP)
STORMY DANIELS, ADULT ENTERTAINER: I'm always up for a good fight. Politics can't be any dirtier a job than the one I'm already in.
(END VIDEO CLIP)
COSTELLO: Will Stormy, the porn star, really run against him?
(BEGIN VIDEO CLIP)
CLANCY DUBOS, POLITICAL EDITOR, "THE GAMBIT": You're going to need somebody better than a porn star or a lap dancer or a sex worker to nail David Vitter.
(END VIDEO CLIP)
COSTELLO: You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
COSTELLO: Louisiana Senator David Vitter, infamous for his spot in the D.C. Madam's little black book, may face some pretty tough competition next election. That's because, and I kid you not, a porn star is being pumped to replace him. I just can't believe this. I know. I had to say it, though. Sean Callebs is here.
Is this for real?
SEAN CALLEBS, CNN CORRESPONDENT: Well, I didn't write the pump part, but, yes, everything else is for real. There's a big effort to draft Stormy to get her to run against David Vitter. And Vitter ran on family values several years ago, but after being linked to the D.C. Madam, he has really taken kind of a bunker mentality. He hasn't been out talking much. But some people say, look, if you're really trying to get Vitter, this isn't the way.
(BEGIN VIDEOTAPE)
CALLEBS (voice-over): After being linked to the D.C. Madam, Louisiana Republican Senator David Vitter said his wife had forgiven him for what he called a serious sin. Up for re-election next year, the question is have the state's voters? Enter our Web site trying to lure porn star and Baton Rouge native Stormy Daniels into the race.
DANIELS: Originally, the focus wasn't even about making me as a candidate. I think it was about bringing attention to the Senate race in general. And then the response was overwhelmingly positive and, you know, I think everyone is just running with it.
CALLEBS: Vitter's office didn't return numerous calls by CNN. The spokesman for the state GOP said, "Voters here are concerned with real issues that affect their everyday lives and not with political or publicity stunts."
Draft Stormy was started by New Orleanian Zach Hudson, who says he's a fan of Stormy's and that it's a serious effort. If it's meant to remind voters of Vitter's link to the D.C. Madam, some say it could backfire.
CLANCY DUBOS, POLITICAL EDITOR, "THE GAMBIT": You're going to need somebody better than a porn star or a lap dancer or a sex worker to nail David Vitter on this.
CALLEBS: Clancy Dubos, the political director of the New Orleans alternative newspaper "Gambit," says Vitter is a brilliant politician with a $2 million war chest.
DUBOS: You need a serious opponent, who is himself or herself not guilty of something like that to say, let's talk about family values, shall we? And let's talk about criminal behavior because that's what this is.
CALLEBS: As for Stormy, she's not affiliated with the Democratic Party, but is embracing the idea of a possible candidacy and says she's planning a listening tour around Louisiana to talk about the economy and other issues. And when told Vitter can be a tough opponent --
STORMY: Oh, I'm always up for a good fight. And I think anybody that knows me is more than aware of that. Politics can't be any dirtier of a job than the one I'm already in.
(END VIDEOTAPE)
COSTELLO: So true.
CALLEBS: Yes. And she's talking about this listening tour. And she says she's very serious. She wants to go around the state. You know, we said, you know, you're probably going to draw a pretty large crowd. And her answer was, I have before. So --
ROBERTS: You know there's nothing you can say about this story without triggering a double entendre. COSTELLO: I know.
ROBERTS: So I'm just going to zip it.
COSTELLO: I know. I am, Sean. Are there any polls out? And he's like uh-oh.
CALLEBS: No, no. But there are a lot of legitimate candidates out there in the wings. And I think that a lot of people are waiting for those people to face off with Vitter, because he is going to have to address this at some point down the road. Not Stormy the tie to the D.C. Madam. No matter where you go, you just step in quicksand.
ROBERTS: It's always entertaining to see you in the morning. Thanks so much.
It's 51 minutes after the hour. We're going to get out of this before we get in trouble.
Save my city. Is this the angriest mayor in America?
(BEGIN VIDEO CLIP)
VOICE OF MAYOR VIRG BERNERO, LANSING, MICH.: What they're really talking about is cut your wage, just cut your benefits, work for nothing like some peasant somewhere else in the world. Well, I'm sorry -- no, no, I'm hearing a lot of partisan bullcrap is what I'm hearing.
(END VIDEO CLIP)
ROBERTS: As the president hits the road with his stimulus plan, the fed up and furious mayor is back. He's live and he has new issues.
(BEGIN VIDEO CLIP)
BERNERO: I disagree vehemently with you. It is the trade agreement -- it is the trade agreement that puts the American worker at a disadvantage. We are victims of --
(CROSSTALK)
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Converging on an infomercial, mayor.
(END VIDEO CLIP)
ROBERTS: Plus behind the scenes at the Grammys. Rihanna is a no-show as her boyfriend Chris Brown is charged with a felony. We're live in L.A. You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROBERTS: The top videos right now on cnn.com. Most popular, an independent aerospace company beats the big guys Boeing and Lockheed for a NASA contract worth $1.6 billion. Space-X is one of two company's that will deliver cargo to the space station when the shuttle retires in 2010.
Also stretching your way to peace and tranquility with whales in a yoga class at the Georgia aquarium. The class offers a chance to clear your mind and recharge your chakras while Beluga whales swim serenely in front of you.
And a British treasure hunting group believes that they have found the remains of a legendary warship on the floor of the English Channel. It's possible that the wreckage contains, listen to this, up to 4 tons of gold. The British government says that if it is indeed the HMS Victory, then the wreck remains the property of the crown -- Carol.
COSTELLO: State dinners, distinguished guests, even slumber parties for the first daughters, a lot of different things fall on the desk of the White House social secretary. Just like the new first family, Desiree Rogers is adjusting to life under America's busiest roof. Here's part one of our Lola Ogunnaike's exclusive interview with Rogers, America's first African-American White House social secretary.
(BEGIN VIDEOTAPE)
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT: Besides the Obamas, you're probably the most popular person at the white House.
DESIREE ROGERS, WHITE HOUSE SOCIAL SECRETARY: Well, I don't know about that. I think people certainly want to come the White House. So, once they figure out that I'm the social secretary, people do tend to gravitate over.
OGUNNAIKE: Now, what have the Obamas told you they want you to do, exactly? What do they want from you, Desiree?
ROGERS: Well, I think that his latest book, "The Audacity of Hope," has been very clear about what he would like the White House to reflect. And that really is being inclusive. That really is being the house for all people.
OGUNNAIKE: So, are you going to have, say, a Joe the Plumber or Jane the Waitress mixing it up with Gordon Brown or Nicholas Sarkozy? Do you see that happening at a state dinner?
ROGERS: Well, why not? Why not? I think one of the things that, you know, has been really interesting for me is the staff that's worked here over the years, and really getting them to relax a bit. You know, and so, as we...
OGUNNAIKE: Are they a little stiff?
ROGERS: ... as we're setting things up, you know, saying, you know, this is going to be more casual, maybe we don't need as much glassware or silverware, all of those things that put you on guard when you enter. You know, oh, my gosh, look at all those glasses, I don't know what to do with all those, or forks or knives, or whatever it is.
OGUNNAIKE: Salad fork, dinner fork, yes.
ROGERS: Right. You know, those are things that put people on guard. And that's the last thing that we want to do.
OGUNNAIKE: I'm sure you've been flooded with requests.
ROGERS: Yes.
OGUNNAIKE: How do you go about turning people down? Do you have a line yet? Is it...
ROGERS: Well -
OGUNNAIKE: ... you say, it's not you, it's me.
ROGERS: You know, I say to them, we have four years. You know, we just got here. I mean, that line will probably have to go away soon, but I'm going to use at for at least the next six months.
OGUNNAIKE: Then you've got to come up with a -
ROGERS: Give us a chance. Give us a chance.
OGUNNAIKE: The first time that we've had kids in the White House for decades. Slumber parties, are you planning those? Are you planning the birthday parties, the sleepovers?
ROGERS: Well, I think that, you know, it's going to be up to the girls. I mean, I think the big thing that everyone is anticipating in this is the dog. You know, what will the dog be like? What kind of dog will it be? When is the dog coming? I hear that every other week. Do you have the dog yet? We don't have the dog yet.
OGUNNAIKE: Give us a hint.
ROGERS: I really don't know anything.
OGUNNAIKE: Oh, come on, Desiree.
ROGERS: I really don't. I really don't.
OGUNNAIKE: A labradoodle?
ROGERS: It will be cute. It will be cute. Probably sassy.
(END VIDEOTAPE)
COSTELLO: You know she knows what dog they're going to get.
OGUNNAIKE: I was trying to pry it out of her. She was not giving it up. You heard me ask labradoodle.
COSTELLO: I know. You were interrogating her.
OGUNNAIKE: I was going in on her. I tried to get her. And she didn't give it up.
COSTELLO: Does she have the e-mail address? Barack Obama's e- mail address?
OGUNNAIKE: She wasn't giving that up either at all. But the thing that I love about Desiree Rogers is that she is really committed to making this the people's White House. She wants it to be more casual, less formal. And she said that the governor's ball, which is her next event, instead of people just sitting down and watching an act, it's going to be a dance party. So raise the roof.
COSTELLO: Interesting. But what a contrast because, you know, when I think of social secretary, I think of Letitia Baldrige, Jackie (INAUDIBLE) social secretary. How different those two women are? I mean, Desiree Rogers, Letitia Baldrige.
OGUNNAIKE: Yes. She's sort of a modern social secretary if you think about it. She has a huge business background, Harvard MBA. The executive of Allstate. And she said that that will actually help her during this tough economic times because she's going to be watching the bottom loin and watching the dollar and really make it stretch. So the affairs won't be as lavish but they'll still be well done and she's going to be very mindful of how much money is being spent.
COSTELLO: Just give us a hint of what it was like to be in the White House? Because, you know, she wants to make the White House more accessible to Americans. But, you know, unless you get a White House tour and you're limited to where you can go, you're not going to get the access that you did.
OGUNNAIKE: Not quite, but I have to tell you, I've driven past the White House many times as a child. It was beautiful. Manicured lawns, everything was impeccable and the Obama's pictures are up from the inauguration already all over the place. So it was really, really -- it was just really nice to be there. And it was a perfect sunny day. It was one of those picturesque moments that I'll remember for a long, long time.
COSTELLO: We want to know what kind of dog they're getting.
OGUNNAIKE: I'm working on it. I'm working on it.
COSTELLO: OK. You can read more about Lola's trip to the White House on our Web site to check out her blog. Just go to cnn.com/am -- John.
