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Obama Holds Town Hall Meeting; Senate Passes Stimulus Bill; Restrictions Placed on New Bank Bailout Funds; Australian Inferno; Why the U.S. Cares About Israeli Elections; Salmonella Outbreak Investigation: What Products Are Safe?

Aired February 10, 2009 - 13:00   ET

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

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My hope is, is that the American people expect from me the same thing that I expect from myself, which is not to have every answer, or to never make a mistake, but to feel like every day, me and my staff, that we are thinking about you and your lives, that we're talking to the most knowledgeable people on these problems, that we're making the best decisions for what's good for working families and middle-class folks and not just the powerful and the well-connected, that we are open to any idea, whether it comes from a Democrat or a Republican, or a vegetarian or a -- doesn't matter. And that we are going to be working as hard as we can to solve these problems.

Now, you know, that is how I judge myself every single day. I ask myself, did I work as hard as I could? Did I seek out the best possible advice? Did I stay focused on the people who sent me to Washington? And if I -- if something's not working and I make a mistake, am I open-minded enough to admit it, and then move on and try something else that works?

And that's -- that's the -- that's the best I can do. Now, look. I won't lie to you, if it turns out that a few years from now people don't feel like the economy's turned around, that we're still having problems, that folks are still unemployed, that our health-care system's not more efficient, then, look, you guys won't applaud me next time I come down here. You know, there may be a couple of die- hard Obama folks out here, but -- but, you know, so, I mean I expect to be judged by results.

And there's no -- I'm not going to make any excuses. If stuff hasn't worked, and people don't feel like I've led the country in the right direction, then you'll have a new president.

But I -- but I do think the American people understand that these are some really big, tough problems, and it's going to take some time for us to get ourselves out of it. So I have great faith in the American people and their basic wisdom.

So all right. We've got -- right here. Yes, go ahead.

UNIDENTIFIED FEMALE: Thank you, Mr. President. I'm so grateful to be able to call you that. I met you in Boston in 2004, was so impressed by you.

OBAMA: Thank you so much. UNIDENTIFIED FEMALE: I got to speak with you.

OBAMA: I appreciate that.

UNIDENTIFIED FEMALE: I'm now an elected official myself. I serve on the city council in Bonita Springs, Florida. And hey, Bonita. My mayor's here, as well. He endorsed you.

OBAMA: Good to see you, Mr. Mayor. I like that in you.

UNIDENTIFIED FEMALE: Yes, he's a good man. And my fellow councilman.

Cities throughout Florida are having a difficult time. Because of the mortgage crisis, growth has slowed. We fund our transportation infrastructure needs through impact feeds. Now that we're not getting that, we're falling behind in our ability to keep up with road work, municipal water projects, being able to bring the solar panel down here to an inland port.

We need commuter rails. We need lots of things for infrastructure in this state. If we ran out of oil today, we would not be able to move anything around in this state, honest to God. And I hope you're going to help getting that thing in the gulf to turn that around. We don't want to drill oil in the gulf, thank you. Right on! We've got a beautiful, pristine state.

So I want to ask you: how will we get our state going again in transportation? I'm very worried about our dependence on foreign oil, and I don't want to drill in the gulf. I want some commuter rail, and I want to improve our transportation system.

OBAMA: Well, the -- we have targeted billions of dollars at infrastructure spending. And states all across the country are going through what Florida's going through. There was a study done by the American Association of Engineers -- that might not be the exact title -- but engineers from all across the country. We get a "D" in infrastructure all across the country.

You know, we saw what happened in Minneapolis, where a bridge collapsed and resulted in tragedy. And not only do we need to rebuild our roads and our bridges, our ports, our levees, our dams, but we also have to plan for the future. This is the same example of turning crisis into opportunity. This should be a wake-up call for us.

You go to Shanghai, China right now, and they've got high-speed rail that puts our railroads to shame. They've got ports that are state-of-the-art. Their airports are, compared to the airports that we -- you go through Beijing airport and you compare that to Miami airport?

Now -- now, look, the -- this is America. We are -- we always had the best infrastructure. We were always willing to invest in the future. You know, somebody -- Governor Crist mentioned Abraham Lincoln. In the middle of the Civil War, in the midst of all this danger and peril, what did he do? He helped move the intercontinental railroad. He helped to start land grant colleges. He understood that, even when you're in the middle of crisis, you've got to keep your eye on the future.

So transportation, when -- is not just fixing our old transportation systems, but it's also imagining new transportation systems. That's why I'd like to see high-speed rail where it can be constructed. I would like for us to -- to invest in mass transit, because potentially, that's energy efficient. And I think people are a lot more open now to thinking regionally in terms of how we plan our transportation infrastructure. The days where we're just building sprawl forever, those days are over. I think that Republicans, Democrats, everybody recognizes that that's not a smart way to design communities.

So we should be using this money to help spur this kind of innovative thinking when it comes to transportation. That will make a big difference. All right?

OK. I've only got time for one more question. I feel bad about it. It's got to be a guy. So women, you got to all sit down. Women, you got to all sit down. It's got to be a man.

I'm going to call on this guy, because he has a cap, and he thought I'd called on him and I didn't. So all right. Right here. The guy with the cap. Last question. Of course, now it better be a good one. Go ahead.

UNIDENTIFIED MALE: Oh, it is such a pleasure to see you, Mr. President! Thank you for taking time out of your day! Oh, gracious God! Thank you so much!

OBAMA: All right. What's the question?

UNIDENTIFIED MALE: All right, Mr. President. My name is Julio Asagueno (ph). I'm currently a student at Edison State College in my second semester. And, OK. I've been at the same job, which is McDonald's, for 4 1/2 years because of the fact that I can't find another job.

Now, with the fact that I've been there for as long as I've been there, do you have any plan or any idea of making one that has been there for a long time receive any better benefits than what they've already received?

OBAMA: Well, I tell you what. First of all, couple things I'd like to say.

No. 1, the fact that you are working as hard as you're working at a job that I know doesn't always pay as well as some other jobs, I think that's a source of pride for you. That shows that -- that you're doing the right thing.

Now, the second thing is, is that you will actually benefit from the tax breaks that we're talking about, so you'll be able to keep a little bit of extra money, because we're going to offset your payroll tax. That's going to help. I don't -- I assume that you're not getting health care through your job, and so one of the things that we want to do is reform the health-care system so that you will have access to health care in your job. But the thing that I'm really interested in is, you say you're going to school. What are you studying?

UNIDENTIFIED MALE: I'm looking to study and majoring in communications. Hopefully being a broadcaster or a disc jockey.

OBAMA: Well, you sound like you've got good communication skills.

UNIDENTIFIED MALE: Thank you so much!

OBAMA: So -- so part of -- part of what we want to do is we want to make it easier for you to afford going to college by giving you refundable tax credit for your tuition. Because young people like Julio, who have that much enthusiasm an that much energy, we've got to make sure that we are giving them a pathway so that they can educate themselves and go as far as their dreams take them.

Thank you very much, Ft. Myers. I appreciate you.

PHILLIPS: All right, Julio, he's king for the day. Let me tell you what, he's going to go back to Mickey D's and be just the most popular guy in the place.

A sales pitch, a Senate vote, a second try. It's a huge day for the dwindling U.S. economy. You just heard from not only Julio but also President Obama, holding his second campaign-style stimulus rally in two days, while hundreds of miles away senators pass a gargantuan package of new spending and tax breaks, setting up tough negotiations with the House, by the way.

And on the bailout front, we heard the new treasury secretary outline new plans to revive the comatose credit system. Those include leveraging taxpayer dollars into what could become a trillion-dollar boost to all manner of lending.

We're following it all for you. And even by Washington's standards, the magnitude of the economic fixes and backstops and jump- starts, well, it's pretty incredible, almost inconceivable.

So naturally, we turn to CNN's Candy Crowley to make sense of everything, maybe even Julio, too.

You got to love it, Candy. Really, I saw you laughing. I was getting a kick out of that. That's the beauty of these types of forums. You just never know what you're going to get.

CANDY CROWLEY, CNN CORRESPONDENT: And I don't know whether to call him an say, "Hey, go for that broadcasting career, or don't." I was just trying to think of that.

PHILLIPS: Yes. He'd be a little competition for us, that's for sure. But in all seriousness, why don't we just start out generally, Candy, and just talk about these town halls, the benefit of them, why Obama's doing them now, why he's doing them in these -- well, we know why he's doing them in these specific areas, because of job losses, et cetera. But why this format?

CROWLEY: I think that there are a couple of things. First of all, it shows him outside Washington. So it's the "Listen, I hear you. I understand you. I know what your problems are."

If you listen to what the president has been saying, honestly, almost since that night in Grant Park when he won, there are a couple things out there that are aimed directly at the American people, and that is, No. 1, "I inherited this mess."

No. 2, "This is going to take a while." He needs to buy some time from the American people.

He has said and his treasury secretary has said, his top economic advisors, Larry Summers, has said maybe next year before we begin to see some of the results of this. I mean, that's a year away.

You heard that woman say, "We're living in a car. We don't -- we need a kitchen. We need a bathroom." A year is a very long time for that questioner. So he's trying to buy some time here.

At the same -- at the same moment, it's a message back to Washington, and that is, don't -- don't dally around with this conference committee. Now taking the Senate bill, the House bill, putting it together into one bill. It could be the most contentious part of this entire process, because House Democrats want something very different than what Senate Democrats pushed out of the Senate side. But the Senate had to act the way it did in order to get those Republican votes. So the balance is delicate, but the issues are really big.

So this is certainly President Obama saying, "Don't. You know, I need to have this bill and get some of this money flowing into the system." And he wants it by the end of this week.

PHILLIPS: Are you -- all right. But in realistic terms, how quickly could we see that money start to flow?

CROWLEY: You know, according to the White House, and some estimates from the Congressional Budget Office, maybe about 75 percent of the money will be out and about within two years.

But it really matters what money you're talking about. For instance, the tax rebate that he wants to give people, that will be maybe about $20 less from withholding, on average, every week. That could start in June. In June you might see less withholding from your paychecks.

But if you're -- and if you're talking about unemployment benefits or greater Food Stamp benefits, that can happen pretty quickly.

But if you're talking about the so-called infrastructure -- that is, building bridges, building roads, school construction -- it just takes a while. And that's where a lot of the jobs come.

But, you know, it has to be -- first of all, you have to identify the projects. And then you have to get it set up. And even though they are so-called shovel-ready, that's just going to take a while to get out there. So it really depends on which money you're talking about.

PHILLIPS: Candy, always good to talk to you.

CROWLEY: Thanks.

PHILLIPS: Well, minutes ago the Senate passed an $838 billion rewrite of the president's Recovery and Reinvestment Act. Now the real work begins.

CNN's Brianna Keilar takes a look ahead to a lot more negotiating and more tough votes.

I think negotiating is the key word here right now, Brianna.

BRIANNA KEILAR, CNN CORRESPONDENT: Yes, that's right, Kyra, because the House and the Senate, they now have to reconcile their different versions of the bill.

Remember, if you look at just the price tags, they're not too far off. The Senate version that just passed with the vote breakdown of 61-37, only three Republicans on-board with Democrats, that is $838 billion. The House version is $819 billion.

But what we just saw come out of the Senate is heavier on tax cuts. The House version is heavier on spending to the tune of about $100 billion, spending on education and aid to states for things like health care.

Now House Democrats, obviously, what they wan to do is to increase the spending in these negotiations, increase the spending on some of their priorities like education. But at the same time you have those three Republicans, only a few of them, but they wield a disproportionate amount of power, saying that they are resistant to increases in spending.

And we just learned a short time ago, Heidi -- or pardon me, Kyra -- Susan Collins, one of those Republicans, she told CNN that, as we speak, she is meeting, along with the centrist Republicans and Democrats who figured out this deal in the Senate. They're meeting right now, clearly outlining their parameters for what they will and will not accept in this final legislation, Kyra.

PHILLIPS: All right. Well, of course, we'll be following every ounce of the negotiations and all the drama involved to this point. Brianna, thanks so much.

Well, more ammunition for supporters of the Obama administration's stimulus plan. GM announces another huge cut in jobs. We're going to tell you how many pink slips are actually being handed out. (COMMERCIAL BREAK)

PHILLIPS: Well, it turns out that the credit system was a lot like electricity, say, or running water. We took it for granted until it wasn't even there. Getting credit flowing again is the mission of the treasury secretary, who today announced steps far beyond what we've come to refer to as the bailout.

CNN's Allan Chernoff keeping track in New York for us.

So Allan, what's new here?

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Kyra, what's new here is that there are going to be strings attached to the money given out to the bankers.

You know, until now, the federal government has just been handing money away to the bankers, without any requirement that they actually go ahead and lend it.

Now the federal government is saying, "You know what? There are going to be strings attached to this. Every dollar that we give you, we want to hear what are you doing with it?" Monthly reports will be filed with the government and posted on the Internet for all to see as to what exactly the bankers are doing with all that money that U.S. taxpayers, essentially, are handing over to the bankers.

And there will be strings in terms of no increase in dividends, no acquisitions made with this money. So they really do want to have some tight regulation here, some tight, tight strings, tight attached to all this money going over to the bankers.

Let's have a listen to what the treasury secretary said this morning about it.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: We believe that access to public support is a privilege, not a right. When our government provides support to banks, it is not for the benefit of banks. It is for the businesses and families who depend on banks, and it's for the benefit of the country.

(END VIDEO CLIP)

CHERNOFF: And to get the country moving again, economically, Kyra, the treasury secretary is saying that you need to get these bankers lending; you need to get that flow of capital moving once again -- Kyra.

PHILLIPS: All right, key word here, the so-called toxic assets. How is the plan to get those off the banks' books?

CHERNOFF: Right. That was a fundamental issue in the prior plan, the TARP plan. What happened there was it never happened. It never got implemented. Now let's use a little piggy bank as an example. I've been using this today. This little piggy has been a very bad banker, filled with toxic assets. Right? A lot of bad mortgage loans made.

Well, we've got to get those mortgage loans out of the bank, out of the piggy. It hasn't just happened just yet, but the government is saying we're going to put private investors to work here, give them loans, give them an incentive to buy those rotten loans from the bankers. That will free -- free up the banks, and then they'll be in much better shape to make new loans and to get the flow of credit running again.

PHILLIPS: I feel like I'm back in elementary school. Allan and the little piggy bank. Now I can visualize the whole thing now, Allan.

CHERNOFF: It's complicated, so you know...

PHILLIPS: Bring it down to basics.

CHERNOFF: ... these little items help.

PHILLIPS: There we go. Allan, thanks so much.

Let's see if Susan Lisovicz has any props for us. The stock market was down before the treasury secretary actually started speaking, and the sell-off has accelerated since.

What do you have for us, Susan? You have papers.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know what? I don't have any props, but I do have an old expression on Wall Street about pigs, which is that bulls make money, bears make money, pigs get slaughtered.

And when you think about the greed that was really rampant, you understand why we have a financial crisis, the likes we haven't seen since the Great Depression.

In any case, why is the market selling off? Well, you know, work in progress. Three words here. Yes, we anticipated a lot of what the treasury secretary said, the four parameters, basically you know, more strings attached to financial institutions getting the money, helping consumers and homeowners, and of course, those toxic assets that -- that Allan was just talking about.

But how do you establish a price for something no one wants? You don't want to sell it too low; the banks won't sell it. You don't want to sell it too high. The hedge funds and private equity firms won't come in. So there are a lot of questions that remain.

And what you're seeing, in the meantime, is the financial stocks, Kyra, are just getting creamed. Bank of America shares down 17 percent. Key Corp. down 22 percent. And basically, if you look at the big board, it's the worst sell-off we've seen since President Obama became President Obama on January 20. The blue chips right now down 348 points. For every stock that's advancing, there are 4 1/2 that are to the downside. And the NASDAQ, meanwhile, down 57 points. So you would say a broad-based sell-off.

And by the way, the market started to really tank around 11 Eastern Time, which is when Timothy Geithner, the treasury secretary, was supposed to start speaking.

PHILLIPS: Well, let's talk about that. Anything specific about Secretary Geithner's plan that has investors so upset? I mean, what's causing the flux?

LISOVICZ: Well, you know, one analyst said -- he said, "You know, the good news is that the government is going to spend $1 trillion. The bad news is the government doesn't know how it's going to spend it." And we really just don't have a lot of insight on that -- that yet.

And of course, critics say we're spending ourselves into inflation, into just a massive debt that is going to be with us for years -- years to come.

And, oh, and another criticism is that this new and improved TARP is designed by the same people who kind of -- most of the same people who designed the old and much-criticized TARP.

So -- so it's a very complex plan. Details forthcoming. And right now we don't really know a lot of new -- a lot of new stuff. The market's down, big time -- Kyra.

PHILLIPS: All right. Well, keep tracking it. Dow Industrials down 344 right now. Susan, thanks so much.

LISOVICZ: You're welcome.

PHILLIPS: Well, things keep getting worse at General Motors, as well. It says that it's slashing 10,000 more salaried jobs worldwide this year. Most of the remaining salary employees will have their pay cut. No word yet on where those cuts would come in the U.S.

GM is actually blaming the need to restructure the company and a continued drop in new vehicle sales.

Death, disaster and mourning in Australia, as the Land Down Under deals with one of its worst-ever disasters. We're going to have an update on the huge walls of fire that have swept across the state of Victoria.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The fire (ph) passed with (EXPLETIVE DELETED). Everything's gone. I'm out here at (UNINTELLIGIBLE), which is next door. Every house around us is burnt down. They're Trib's (ph) house over there. There's the neighbors out the back. I'm burnt on me face. I was trying to fight the fires. I did as much as I could. I saved me dog. That's all I was worried about. But we've lost everything. I've lost me grandparents, house (ph). I've lost everything.

(END VIDEO CLIP)

PHILLIPS: Wow. That's in southern Australia. It's pretty heart-breaking, seeing all that devastation firsthand from that gentleman who was shooting it via his own camera.

More than 20 bush fires now burning in the state of Victoria. The death toll is climbing by the day. Right now it's at least 181. Those flames have wiped entire towns off the map, and tent cities have sprung up in a number of those areas.

Authorities now blaming arsonists for some of those blazes. Australia's prime minister, Kevin Rudd, calls it the country's darkest hour.

Well, in a phonecall to the Australian prime minister, President Obama offered his prayers and condolences to the fire victims. The White House says that Mr. Obama also offered U.S. assistance if need.

Chad Myers joins me now with more on the tragedy In Australia.

It's pretty hardcore, Chad. And it doesn't hit home really, truly until you see the actual individuals affected. I mean, the gentleman there with his camera just tugs at your heartstrings.

CHAD MYERS, AMS METEROLOGIST: I've never even heard of a wildfire, any of them, killing 181 people. People unable to get out of the way of these fires because the embers have been just shooting so far ahead of the fire lines. Yes, it's been dry, yes, it's been hot; record breaking heat. This is just unlike any wildfires we even have in California or maybe we're just more prepared or maybe we have better organization getting people out. But this is just, for me, an unprecedented fire event here.

Now, we still have 4,000 firefighters on the line. The weather today a little bit cooler, a little bit better for those firefighters trying to knock these things down. But Kyra, entire towns are being called crime scenes because some of these aren't even natural occurring fires. Some of these are arson fires being purposely set, killing people. So, now you're all the way past arson and into some point of homicide, murder, whatever it might be.

But crazy, crazy series of events. Even the smoke, can you see on the satellite, smoke pouring off Australia even today.

PHILLIPS: Wow. We'll continue to track it and talk about it. Appreciate it, Chad.

MYERS: You bet.

PHILLIPS: Well, another plant suspends operations as the criminal probe into the nationwide salmonella outbreak heats up. (COMMERCIAL BREAK)

PHILLIPS: We did get a vote on the stimulus package. Whether it's that or what's the Treasury Secretary Timothy Geithner has been saying today, Dow Industrials down 344 points right now. Susan Lisovicz monitoring the markets as they're starting to tank. Right now, 1:34 Eastern time. We'll be talking to her in just a little bit.

Now, for the third time in two days, President Obama has stuff for that economic stimulus plan that we've been talking about. Senators were passing as he spoke. And then today's bully pulpit was in Fort Myers, Florida, city at the foremost of the home foreclosure crisis. And then back in Washington, the Senate vote sets up the painstaking process of reconciling now a bill worth $838 billion with a somewhat smaller House version. The House bill is longer on spending and shorter on tax breaks. And then yet on another front, the Treasury secretary today, as we mentioned, outlined what could become a trillion dollar effort to jump-start the U.S. credit system. We're following it all for you today.

Now as he did yesterday in Elkhart, Indiana and last night in the East Room of the White House, President Obama told the crowd at Fort Myers, Florida it's just not enough to do nothing and hope for the best.

(BEGIN VIDEO CLIP)

OBAMA: I believe in hope, but I also believe in action. We can't afford to posture and bicker and resort to the same failed ideas that got us into this mess in the first place. That's what the election was about. You rejected many of those ideas because you know they didn't work. And you didn't send us to Washington because you were hoping for more of the same. You sent us there to change things, and that's exactly what I intend to do as president of the United States.

(END VIDEO CLIP)

PHILLIPS: Well, what would you ask the president? In keeping with his pledge to have the most open and accessible administration in American history, Mr. Obama actually welcomes your comments at the White House website, whitehouse.gov. You can also e-mail us, mailtothechief@CNN.com. What we're going to do is take your questions and pass them on directly to the White House. We've signed up on the website and hopefully we'll get some answers from the White House and we'll read your responses on air.

Turning now to the Middle East, Israeli voters are going to the polls today in a crucial general election that could have a major impact on Mideast peace talks. Polls right now show a tight race between hard-line, former-Prime Minister Benjamin Netanyahu and his Likud Party and also moderate Foreign Minister Tzipi Livni and her Kadima Party. She says that a vote for her is a voter for a tough but sensible prime minister. Netanyahu argues that he's best equipped to deal not only with Hamas but Hezbollah guerillas in Lebanon and also Iran. Well, with all that at stake, the Obama Administration is closely following the Israeli election. Only after the results are in and a new prime minister is in place can President Obama actually put in gear his strategy for peace in the region.

Here's CNN's Jill Dougherty.

(BEGIN VIDEOTAPE)

JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): There's a new face of leadership in Washington. And soon, a new face in Israel.

HILLARY CLINTON, SECRETARY OF STATE: We are looking forward to the results of the Israeli election so that we can begin working with a new Israeli government.

DOUGHERTY: Who heads the Israeli government will help determine what the United States can achieve on Mideast peace.

GEORGE MITCHELL, U.S. MIDEAST ENVOY: American diplomacy can, and I believe, will be helpful in resolving the differences and moving forward toward the peace and stability that everyone wants.

DOUGHERTY: Barely a week in office, President Barack Obama dispatched Mideast Envoy George Mitchell to the region promising to aggressively promote peace between Israel and its Arab neighbors. Can he do that with Israel's next prime minister? Kadima Party candidate and Foreign Minister Tzipi Livni has been Washington's partner in trying to find a two-state solution.

Benjamin Netanyahu, chairman of the Likud Party, opposes concessions to the Palestinians. He favors a deal with Syria and would likely solicit Washington support.

Defense Minister Ehud Barak is no stranger to Americans. The former prime minister came close but failed to reach a deal with Yasser Arafat at the Camp David summit.

As a candidate, Barack Obama visited Jerusalem and did what American presidents have always done - brandished his credentials as a solid supporter of Israel. As president, he's tempering that with more empathy for the plight of the Palestinians, especially in the wake of the conflict in Gaza.

OBAMA: Our hearts go out to Palestinian civilians who are in need of immediate food, clean water and basic medical care and who face suffocating poverty for far too long.

DOUGHERTY (on camera): For decades American presidents have pursued Mideast peace. And for just as long they've expressed unconditional support for Israel. Now, it's Barack Obama's turn, but is he ready to try some tough love with the Israelis to achieve it?

Jill Dougherty, CNN, the State Department.

(END VIDEOTAPE) PHILLIPS: And more on the key Israeli election next hour, including a live report from Jerusalem with our Senior Political Analyst Bill Schneider. We'll bring you the first results expected at 3:00 p.m. Eastern time.

Turning now to the dicey relationship between the U.S. and Iran, is the deep freeze about to thaw? Well, both President Obama and his Iranian counterpart are speaking out about that very possibility. First, President Obama at his news conference last night expanded on campaign pledges saying that his administration is ready to sit down and talk with the long-time adversary if - and that's a big "if" - years of mistrust can be overcome.

(BEGIN VIDEOCLIP)

OBAMA: We should take an approach with Iran that employs all of the resources at the United States' disposal, and that includes diplomacy. And so, my national security team is currently reviewing our existing Iran policy, looking at areas where we can have constructive dialogue, where we can directly engage with them. And my expectation is, in the coming months, we will be looking for openings that can be created where we can start sitting across the table, face- to-face with diplomatic overtures that will allow us to move our policy in a new direction.

(END VIDEOCLIP)

PHILLIPS: And today a similar theme was sounded by Iranian President Mahmoud Ahmadinejad.

(BEGIN VIDEO CLIP)

MAHMOUD AHMADINEJAD, PRESIDENT, IRAN (through translator): The Iranian nation is ready to hold talks, but talks in a fair atmosphere with mutual respect.

(END VIDEO CLIP)

PHILLIPS: Well, in Baghdad, an unprecedented step. For the first time ever, a French president is visiting Iraq. Nicolas Sarkozy's visit comes just as the U.S. is preparing to draw down its forces after nearly seven years of war. France, you'll recall, opposed George Bush's decision to invade and refused to join the so- called coalition of the willing in toppling Saddam Hussein. Sarkozy hopes his visit will rekindle trade with the new Iraqi government.

The snow was really coming down. California, Arizona and Nevada get slammed by another Pacific storm. We're going to check out what's happening on the weather map right now

(COMMERCIAL BREAK)

PHILLIPS: It's been a pretty busy winter for snowplows on the Pacific Coast. Take a look at these pictures. Another storm dumping heavy snow in California, Nevada and Arizona. Some areas got more than two feet, actually. Even Frasier Park near Los Angeles got four and a half inches. And where it wasn't snowing, well, it was rainy and windy.

And then across the country, rain and warmer weather melting the snow pack in parts of the Northeast. That's triggering a lot of floods right now. It's especially serious in Lawrence County, Pennsylvania, that's about 50 miles northwest of Pittsburgh. Several people there have had to leave their homes and authorities there actually say an ice jam on a nearby creek can make matters even worse. Also a threat of severe storms has the southern plains and Mississippi Valley on alert today.

What did he say? An ice jam? What's an ice jam?

MYERS: Well, you get these ice chunks that are part of the river. They float down river until they hit a bridge or tree.

PHILLIPS: I got it. And then it builds up.

MYERS: And then one ice chunk after another after another, then all of a sudden you have a dam. The water needs somewhere to go around. That's what happens when the ice melts too fast.

(WEATHER REPORT)

PHILLIPS: You don't have any peanut butter in your refrigerator?

MYERS: We still give Grant peanut butter all the time.

PHILLIPS: Really? OK, so you still have it. And do you what you should do with it or not?

MYERS: No.

PHILLIPS: And do know about the salmonella?

MYERS: I done even know what numbers to look at on the side of the can.

PHILLIPS: Well, guess what? Important health news involving that nationwide salmonella outbreak. We're going to tell you why federal agents were paying a visit to a Georgia peanut plant.

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PHILLIPS: Well, new developments in the nationwide salmonella outbreak. The company at the center of the investigation, Peanut Corporation of America, has halted operations and its peanut processing plant in Plainview, Texas. The company says that tests on samples from the plant indicate salmonella might be present. Texas officials say it does not appear that any of the possibly contaminated peanut products from the plant have reached consumers. Some dry roasted peanuts had been shipped out, but were recalled before they were even distributed.

Now that the FBI has joined the salmonella probe, agents are digging into the records of The Peanut Corporation of America. Federal investigators hauled away boxes from its plant in Blakely, Georgia yesterday. Agents also raided the company's headquarters in Lynchburg, Virginia.

Now, nearly 600 people have gotten sick, eight deaths are linked to that outbreak. Contrary to its previous statements, the company now says some of its products were sold directly retailers such as discount dollar stores. Peanut Butter makers not linked to the outbreak are facing an uphill battle convincing people that their products are safe after seeing sales tank more than 20 percent. The makers of Jiff and Peter Pan have actually started costly ad campaigns to reassure the public.

So here's what we want to know: How do you know if the peanut butter in your cupboard is safe? And how can you tell what's safe on store shelves? Well, we want to try to dispel some of your fears. CNN Medical Correspondent Elizabeth Cohen here to try to clear up any of the confusion.

You know, I was just talking to Chad, he said I have to give my son Grant peanut butter. He refuses to take anything else. And I think a lot of parents are in that situation.

ELIZABETH COHEN, CNN CORRESPONDENT: Oh, absolutely. And so I want to just say one thing to start out: The kind of peanut butter you buy in a jar, you mentioned Jiff and Peter Pan, that is not a part of this recall. Those are OK. And I think that's important for people to know, because there is such confusion.

But let's talk about one of the items that Kyra mentioned. If you shop at dollar stores and if you buy peanuts at dollar stores, you've really got to listen to this. Peanuts have been recalled from these dollar stores called 99 Cents Stuff, 99 Cents Only Stores, Dollar Store and Dollar General. Certain products from this company have been recalled. They are products that are sold under the Casey's, Parnell's Pride, Reggie and Robinson Crusoe labels. These are honey roasted peanuts. These just plain roasted peanuts. And they have been recalled. And if you want to see a list of all those products at dollar stores that you should not be buying, go to CNN.com/tips and you will see a whole story there with a link to the FDA about what not to buy from these dollar stores.

PHILLIPS: So I see the tips - what's safe and what's not. Do you want to give us a little review?

COHEN: Yes, let's do a little Peanut 101, because it does get very confusing.

So, we just talked about the dollar stores and we talked about what not to buy there. Now, let's talk for a minute about supermarkets. Again, a jar of peanut butter in a supermarket, OK. Don't worry about that, according to the Food and Drug Administration.

However, if peanut butter is given to grandma in a nursing home or given to your child in a school, that's questionable. If it came from Peanut Corporation of America, it could be a problem. You need to talk to the folks who run those institutions.

Also, peanut butter in crackers, peanut butter in ice cream, so many products have peanut butter in them, also questionable. They may have been recalled. If they're sitting on your shelves, you may not want to eat them.

And again, if you go to CNN.com/tips, you'll see a link to this giant FDA list of all of these things that have been recalled.

PHILLIPS: All right, I don't know if Chad was listening - oh, he's shaking his head. It's OK to have the jar of peanut butter in the fridge.

COHEN: Right. That is OK. It's the products that have peanut butter in them that are a little trickier.

PHILLIPS: Got it. Thanks, Elizabeth.

COHEN: OK, thanks.

Well, late to school, they call your parents. Field trip, got to have the permission trip. So why would a counselor make a girl take a pregnancy test without her parent's OK? Seriously, what the...

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PHILLIPS: California School District is being sued over a mind- blowing claim. A 12-year-old girl says that she was humiliated when a school counselor forced her to take a pregnancy test. He had apparently heard some rumors and wanted to see if they were true. Well, her parents were never asked for permission and weren't even notified afterwards. They hired a lawyer who asked the school for an apology; didn't happen. Oh, and by the way, the girl wasn't pregnant either.

And, hey, man, show us your scar. He's got a little fleshy memento courtesy of a guy who brought an ax to the auto parts store. Well, the ax man really liked a generator and began chopping away at the security cable strung around it. Things degenerated from there. He began swinging at people inside the store, grazed one man's stomach until customers got him under control. Then the ax man's family says he's been fighting a drug problem.

And forgive Sailor, the Tennessee coonhound if he sacks out for awhile. After all, he did spend a week trapped in a cave. Apparently he hounded a raccoon right into the hole, only sailor couldn't get out. Raccoon wins. Volunteers help to get the dog out. No small feat considering Sailor was stuck in a 25-foot pit inside the cave. Sailor should be OK. Might have been lost forever if it weren't for his electronic tracking collar.

Next hour of CNN NEWSROOM starts right now.