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American Morning
Obama to Take on the Economy on Fiscal Summit Responsibility; "Wall Street Journal" Report Says Government Eyes Big Stake in Citi; Students Unsure of their Financial Future; Dealing With the Deficit; GOP Governors Rejecting Part of Stimulus Bill
Aired February 23, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: All right. Well, we're coming up right here on 7:00 in New York. A look at the top stories this morning.
Secretary of State Hillary Clinton will make her first trip to the Middle East next week. Just coming in from Palestinian sources to us this morning. She's expected to visit Israel and the West Bank, and it will be her first official visit to the region in her new role as America's top diplomat.
For the eighth straight day, gas prices have dropped. According to AAA, the national average is now $1.91. That's down just less than a penny overnight. Right now, just nine states and Washington, D.C. have gas prices over $2.00 a gallon.
And if you had to go to bed early and you missed the Oscars, well, we have the winners for you this morning.
Sean Penn winning Best Actor award for "Milk." The actress Oscar, the Best Actress Oscar going to Kate Winslet for her role in "The Reader." And one of the most moving moments, the late Heath Ledger won Best Supporting Actor for playing the Joker in "The Dark Knight." But the night's big winner, "Slumdog Millionaire" movie, a small little art house movie that almost went straight to DVD. The rags to riches tale picked up eight Oscars, including Best Picture.
(BEGIN VIDEO CLIP)
CHRISTIAN COLSON, "SLUMDOG MILLIONAIRE" PRODUCER: Together, we've been on an extraordinary, an extraordinary journey. When we started out, we had no stars, we had no power or muscle. We didn't have enough money really to do what we wanted to do. But what we had was a script that inspired mad love in everyone who read it.
(END VIDEO CLIP)
CHETRY: And they were also celebrating Slumdog's win all the way in Mumbai where the movie was set. A lot of cheering and joy when they found out that the movie, indeed, took the top nod at the Oscars.
And the number one issue in Washington today, issue number one, the economy. It's day 35 of the Obama administration and five weeks in, President Obama is turning all of his efforts on the economy. Here's a look at the week ahead. Today, there will be at the White House a summit on fiscal responsibility with lawmakers, scholars and advocacy groups. Then Tuesday evening during prime time, the president will address a joint session of Congress and talk more about his agenda. Thursday, the president will outline his details for his 2010 federal budget, and that's just as the White House officials say that Mr. Obama plans to cut the nation's soaring deficit by half by 2013.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: On Thursday, I'll release a budget that's sober in its assessments, honest in its accounting and lays out in detail my strategy for investing in what we need, cutting what we don't and restoring fiscal discipline.
(END VIDEO CLIP)
CHETRY: Let's turn now to our White House correspondent Suzanne Malveaux.
Suzanne, the White House is talking up this ambitious plan to cut the deficit. A couple of Harvard-educated economists we had on the show today expressed some skepticism that this is a realistic notion right now. What are they saying at the White House?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: There's a lot of skepticism, Kiran, as you know. And this really is meant to hit back hard. And some of the criticism we've heard in the last couple of weeks, these bailout plans, these rescue plans that he has unveiled. And simply a lot of people concerned, not only on Wall Street but just everyday normal Americans think that perhaps this is a bottomless pit.
How much money is it actually going to take to fix the problem? Is there really going to be some accountability here? So obviously, he's going to address that.
The other thing that he is trying to do more on kind a political attempt here is to reach out to moderate Republicans. We saw the debate emerge, the National Governors Association this weekend. You have the California governor, Arnold Schwarzenegger, on one side saying, look, the stimulus plan is a very good idea. He's going to use that money for his state. And then on the other hand, you've got Louisiana Governor Bobby Jindal saying that he's actually refusing some of the federal dollars because he has a philosophical difference with this and believes that the state is going to get caught up in things that they cannot control.
So the president is going to be meeting with the governors later this morning and he's going to be trying to retch out to them still to convince them that this is the right way to go, Kiran.
CHETRY: And how long can this help in the long term?
MALVEAUX: Well, certainly in the short term, they hope that, you know, in the weeks to come, there's going to be other things they're going to lay out, regulations for insurance companies, things like that. But for the long term, this might help with some of the big ticket items. You're talking about reforming Social Security or dealing with health care. Ironically, somebody who's going to be here, Senator Judd Gregg, the one who said no to the commerce secretary position, he is at the forefront of actually reforming Social Security and believes that President Obama has some good ideas that it's something that perhaps they can work on. So, obviously, they're hoping that that goes a long way as well, Kiran.
CHETRY: Suzanne Malveaux for us this morning at the White House. Thanks so much.
And just ahead on AMERICAN MORNING, we're going to talk more about the president's ambitious economic agenda with the president's point man from the Office of Management and Budget, Peter Orszag. That's less than 20 minutes away.
CHRISTINE ROMANS, CNN CO-ANCHOR: And we're also watching the developing story that could affect your money, either your tax money or the money you make. The Wall Street Journal" reporting that Washington is in high level talks with Citigroup to take a larger ownership stake in the bank. Friday, the Dow Jones industrial average was down big over fears that banks are in such dire straits they'll have to be nationalized. So what could that mean for the markets, for your money, for your tax dollars, for your savings, the whole bit?
Stephanie Elam is here "Minding Your Business." And this whole Citi thing is so interesting. Bank of America and Citi just got nailed at the and of the week. It's amazing to see what investors are saying about their concerns about these banks.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Truly nailed. If you take a look at it, Christine, on Friday alone, Citigroup lost 22 percent of its value. I mean, you're talking about Citibank, one of the largest -- this is a bank, blue chip stock. This is like huge.
How huge it is for the stocks to be down below $2.00. That's the first time also since 1991. That's the year I graduated from high school. That's a long time ago. So that's just gives you an idea of how big this issue is.
Now, fears over nationalization on Friday actually caused the stock to just tumble. There's overseas shockwaves that were sent through the markets but today because of the same news, the markets are doing well. In fact, the Dow futures are up over 100 points right now. So we're looking as a bit of rebound here because of a sort of, you know, you've got to handle it on some level. If you let them collapse completely, ala Lehman Brothers, that could cause a bigger problem because this is such a huge company rather than stepping in and having the government help out.
Now on Friday, the CEO of Citigroup did tell its employees that the capital base of the company is very strong. The Obama administration also saying that it would be better to keep these banks in private hands, but at the same time, not to just let them collapse if that were to happen.
The one thing I should point out though, this is not going to cost taxpayers anymore money.
ROMANS: Right.
ELAM: Because what they're going to do is part of that $45 billion that they took from the bailout plan that we saw last fall for the Wall Street, that money basically is where they have the shares or ownership in that stock. Instead of taking it and being preferred, they'd now be common shares so that they would have a greater investment. So the taxpayer bill is already out there or basically in that (INAUDIBLE).
ROMANS: And the reason why shareholders got so upset about this Friday is because it dilutes what common stockholders have.
ELAM: Right.
ROMANS: That's what you and I have in our 401(k)s, most likely in terms of the Citigroup shares in the big (ph) initial funds so that's what they were so upset. But I think it just shows how erratic Wall Street is.
ELAM: It shows you that there's no real plan out there that's making -- they don't know what this means because we're in such uncharted territory that every little bit makes people sort of freak out a little bit before they digest it a little more.
ROMANS: Sort of freak out, that's like de-squeaking.
ELAM: Yes.
ROMANS: It's a new -- it's a new technical phrase.
ELAM: Sort of freaked out.
ROMANS: Right. OK, Stephanie, stick with us because, you know, as the economy and the various plans to fix it continue to dominate the headlines, we want to hear from you at home. So send us an e-mail or an iReport. You can go to CNN.com/am.
IReporter Jeremy Coleman of Mapleton, Illinois, sent us this video. Take a look.
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JEREMY COLEMAN, IREPORTER: The majority of the people being affected by all these layoffs are people who are living paycheck to paycheck. So they don't necessarily have a savings and if they do, it's very little. Especially with large utility bills, gas prices are on the rise again. What should these people do?
If they were to get laid off, what are their options? There aren't very many options out there. I mean, it could be weeks before they qualify for food stamps. And if you're living paycheck to paycheck, what then?
(END VIDEO CLIP)
ROMANS: Well, Jeremy, those are good questions. Stephanie, you know, that's the big interesting thing. Before the economy really started to turn south, we already knew, the numbers showed us, a lot of Americans were living paycheck to paycheck. Then you have the funky mortgages and that was a big problem. And now, you're throwing joblessness, it's just one hit after another.
ELAM: Right. And then you think about how this all affects the economy. Two-thirds of the economy is driven by people spending here.
And if you listen to what he's talking there, first of all, not everyone is going to be helped out by this stimulus bill. That part is just true. But one of the things the Obama administration hopes to do is to create or save 3.5 million jobs. So that's one of the ways of trying to help.
With health insurance, for people who are also -- maybe they're dealing with a sick parent or a sick child or something like that, they're hoping to make eligible jobless workers extend their benefits under COBRA.
ROMANS: That's right.
ELAM: So if you lose your job, you'll have more time to do that. Also, unemployment benefits, giving an added 20 weeks and if you're out of a job in a high unemployment state, which there are 30 of them now, then adding on 13 weeks to that as well.
ROMANS: A few extra dollars I think in each of these checks, too.
ELAM: Right.
ROMANS: So a little bit more money.
ELAM: So more money on each of them. Same thing with food stamps. They're increasing that benefit, increasing the unemployment benefit by $25 on top of about $3,300 that you get. So, they're trying to add more money in there in every little place. And if you are living paycheck to paycheck, $13 here and $25 here, all of that can add up. Same thing with food stamps, giving an extra $80 for a family of four on top of the $500 and some that they're getting right now.
So that's the idea, to put a little bit more money in all of these different arenas and then giving states some money so that they can help fund programs for people who are in need of money through like 2010, making sure that they can help out.
ROMANS: That's a great idea.
ELAM: So temporary increases but adding a little bit more money in there on a whole bunch of different spectrums. CHETRY: All right. Stephanie Elam, thanks so much.
ELAM: Sure.
CHETRY: And we're going to take a quick break. Ten minutes after the hour.
A whole new meaning for financial aid.
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MAXWELL BROWN JR., SYRACUSE UNIV. SOPHOMORE: It's always in the back of my mind, when I'm in class, when I'm taking a test.
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CHETRY: AMERICAN MORNING investigates kids of campus and struggling.
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UNIDENTIFIED FEMALE: Semester to semester, that's pretty much how I'm living.
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CHETRY: You're watching the Most News in the Morning.
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CHETRY: It's 12 minutes after the hour. A live look at Columbus Circle this morning right outside of our studios.
Well, even before the recession, the rising cost of education was putting college out of reach for millions of Americans. Now, some who were barely getting by can't get a loan at all, and this could be the biggest threat to our economic future.
Jason Carroll joins us now with part one of our special series on education and financial aid. You know, you take it for granted. Oh, I mean, when we were going to school, that if you needed to take out a loan, you can get one.
JASON CARROLL, CNN CORRESPONDENT: It would be there. Not anymore. It's a very real threat to many of the students that we spoke to. Even just last week, students at NYU here in New York City held a protest about the cost of rising education. In this new economy, many students are forced to live one semester at a time because they just cannot be sure of their financial future.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): If one wanted a case study in how the economy is hurting college students, Akibra Coronaldi (ph) says look no further.
UNIDENTIFIED FEMALE: I came back to school not knowing where and how I was going to pay for school.
CARROLL: Coronaldi (ph) is a sophomore at Syracuse University in New York.
UNIDENTIFIED FEMALE: Well, the untouchables were just completely out of the system.
CARROLL: In her short time, she has taken two jobs and still struggles to pay bills.
UNIDENTIFIED FEMALE: I originally came to Syracuse on a loan. And due to the recession that we're in, my school no longer accepts it.
CARROLL: Coronaldi (ph) applied for 12 loans and was rejected by all. To make matters worse, her mother lost her job.
According to the American Council on Education, an advocacy group, more and more students and families are hurting and facing new barriers in access to higher education.
JIM BOYLE, COLLEGE PARENTS OF AMERICA: Right now, you have this kind of a perfect storm of costs of college continuing to rise, but the economy performing so poorly that parents are not able to rely on stable jobs.
CARROLL: Dozens of schools such as Catholic University in Washington and Princeton University are trying to help by making small tuition increases. Some universities, Lincoln Memorial in Tennessee, and Sierra Nevada College are temporarily freezing tuition.
LORENA ROSE, SYRACUSE UNIV. SOPHOMORE: The thought of how I'm going to get my bills paid permeates my thoughts, my daydreams, everything that I do every day.
CARROLL: Struggling students like Lorena Rose and Maxwell Brown hope the government's money reaches them in time.
MAXWELL BROWN JR., SYRACUSE UNIV. SOPHOMORE: It's always in the back of my mind, when I'm in class, when I'm taking a test or something like that, like it's always like if I don't do well, you know what I mean, and I lose money like that's going to hurt her and that's going to hurt me, too. So where is that going to come from?
CARROLL: All the students we spoke to are working to make ends meet. Syracuse University is also raising money to assist financially strapped students.
UNIDENTIFIED FEMALE: These students are going to be the students who solve breast cancer, who bring about solutions for poverty, so we've got to invest in our young people.
CARROLL: As for Coronaldi (ph), all she can do is keep working and hoping.
UNIDENTIFIED FEMALE: Semester to semester, that's pretty much how I'm living.
(END VIDEOTAPE)
CARROLL: That's how a lot of them are living unfortunately. Included in the president's new stimulus bill is a little bit more than $30 billion to help students meet the cost of higher education. Some of that assistance coming in the form of Pell Grants. Even so, many of the students we spoke to are not confident that money is going to reach them in time. So what they do in the meantime is they just keep working.
One of the student spoke to works three jobs just to make ends meet. Three jobs.
CHETRY: Yes. And then where do you get the time to study, let alone go to class and study.
CARROLL: Exactly. Exactly.
CHETRY: Poor things. Well, tomorrow, we're going to talk how the economy is impacting college choices. Jason met up with a 16- year-old high school junior who was thinking about an Ivy League education. That's before her mom lost her job at Citigroup. So you can follow all these stories online. Head to our Web site, CNN.com/am.
Great, great pieces, Jason, thank you.
ROMANS: All right. The president rolling out plans to slash the budget deficit in half by the end of his first term, but with the massive stimulus spending, how is that possible? One of the president's top moneymen will join us live with details.
And it was a murder mystery that gripped Washington and the nation, and ruined a congressman's career. Now, police say they have the man who killed Chandra Levy. He was already in prison.
It's 16 minutes after the hour.
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CHETRY: Welcome back to the Most News in the Morning. Now that the stimulus bill has been signed, President Obama is also turning his attention from all the spending to trying to cut the nation's deficit in half by the end of his first term. Joining us now with more is Peter Orszag. He's the director of the Office of Management and Budget.
Thanks for being with us this morning, Mr. Orszag. Great to get a chance to talk to you about this a little more.
PETER ORSZAG, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET: Good morning.
CHETRY: First of all, one of the big questions we have, we're talking about the stimulus, $787 billion and implementing that $700 billion rescue bank for the financial sector. Why are we focused on tackling the deficit now as well with all of these other big looming problems?
ORSZAG: I think the real issue is that we face a pair of trillion dollar deficits. The first is the trillion dollar deficit between how much the economy could produce each year and how much it is producing, that was what the stimulus was aimed at. We also, though, face these trillion dollar budget deficits and if we don't act to address them, we will ultimately create a budget crisis down the road that we want to avoid. So that's going to be the focus of today's fiscal responsibility summit.
CHETRY: One of the plans in what we're getting about how you guys are going to implement this is letting former President Bush's tax cuts expire. These are for people or households making more than $250,000 or more a year. And a lot of leading economists are criticizing this saying that when you raise taxes in the middle of a recession, and you raise taxes on the people that are potentially creating the jobs, you end up in a worse situation. How do you respond to that?
ORSZAG: Well, I think you're going to see more details when we come out with the full budget on Thursday, but rest assure that those tax provisions are not going to occur this year in any case. So while we're in the midst of the recession, we're fighting that with the recovery act. And then as you look out over time, we are going to need to bring those deficits down and shared responsibility is going to have to be a part of the package.
ROMANS: Mr. Orszag, I think it's interesting when you're talking about cutting the deficit in half by the year 2013, but then it would still be higher than last year's deficit, which was a record. So we're still talking about an awful lot of red ink. At the same time, we're talking about a banking system that seems to be on the ropes.
Can you tell us a little bit about what the White House is doing or thinking about what's happening right now with the banking system? There's this "Wall Street Journal" report that perhaps the government would take a bigger stake in Citibank?
ORSZAG: Well, I'm not going to -- I'm not going to comment on that, but let me just come back to what you noted about the deficits.
ROMANS: Sure.
ORSZAG: We are inheriting a big fiscal mess, there's no question about it. What we're going to do is try to work that deficit down but do it honestly without gimmicks. I mean, for example, previous budgets would assume that there were never any more hurricanes or disasters. That's obviously not particularly realistic. We're not going to play that kind of game.
CHETRY: But the question is you say you're doing it realistically is allowing those tax cuts to expire on households making more than $250,000 and another provision would be that you're factoring in saving money from the Iraq war from pulling out our active troops there. The Iraq war costs approximately $660 billion so far. I mean, even the stimulus dwarfs that amount. So how are you going it get enough for revenue into have the deficit with just those two big elements?
ORSZAG: Well, that's going to be a big part of it. Also, as you know, as we move out over time and the economy recovers, that's going to help the budget also. You're going to see a lot of -- you'll see all the details on Thursday and we can have another discussion then.
ROMANS: Great. Well, you know, a Harvard economist earlier in the program told Kiran that these assumptions were wildly optimistic. You know, how do you -- how do you -- how do you hope to make these targets and how committed is the president to making really tough choices to make it happen?
ORSZAG: Well, I'm not into being wildly optimistic, so I think -- I think that whatever characterization that was is just going to turn out to be wrong once everyone sees all the details. But again, what we're trying to do is use a realistic set of budget projections where we're not going to pretend that there are no more hurricanes or disasters.
ROMANS: Right.
ORSZAG: We're not going to pretend that the alternative minimum tax takes over the tax code and we get the deficit in half by 2013.
CHETRY: The other quick question is you're talking about possibly having to make some painful, you know, choices, cutting defense, possibly cutting health care, possibly having to tackle the entitlement programs. Can you give us any more details on exactly how that might work?
ORSZAG: Well, that's going to be the focus of today's fiscal responsibility summit. What I would say is health care is clearly the key to our fiscal future, so we need to get health care costs under control and we want to do that this year.
ROMANS: All right. Peter Orszag, thank you so much from the White House lawn this morning. Thank you, sir.
ORSZAG: Thank you.
CHETRY: Also a couple of quick reminders, the economy is going to be the big focus of President Obama's address to the joint session of Congress. Tomorrow night you can see live here on CNN and CNN.com. It all start at 9:00 Eastern.
And the president's address also seems to act like a good time to take stock of things through the eyes of every day African-Americans. You can tune in Wednesday and Thursday at 8:00 p.m. Eastern for "Black in America." It's a provocative in-depth look at a subject that most networks won't touch.
It's 25 minutes after the hour. ROMANS: One of America's most notorious murder mysteries may finally come to a close. Eight years after the death of D.C. intern Chandra Levy, do police really have their man?
What the new evidence may prove ahead on the Most News in the Morning.
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CHETRY: It's 27 minutes after the hour. A look at your top stories this morning.
North Korea has deployed new medium range ballistic missiles and expanded special forces training all last year. That's according to South Korean officials. Seoul's military told local media that it thought that these missiles can travel around 1,900 miles and that could put U.S military bases on the island of Guam at risk. South Koreans call Pyongyang's military an immediate and grave threat.
Later today, President Obama will announce a former Secret Service agent will oversee the $787 billion stimulus plan. A White House official says Earl Devaney is taking the post. He's now the inspector general of the Interior Department, and he helped expose shady deals with lobbyist Jack Abramoff.
The economy claiming two more victims. Philadelphia's two major daily papers, "The Philadelphia Inquirer" and the "Philadelphia Daily News." The owner of the two papers filed for Chapter 11 bankruptcy protection trying to restructure under a huge amount of debt.
And today in Washington, talk is turning to the economy. President Obama now in office for five weeks. He hosted the nation's governors for the administrations first formal dinner and that was on Sunday. The president is looking to the states to implement his $787 stimulus plan, telling the governors that they're the ones who have to make sure the plan will work.
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OBAMA: You're where the rubber hits the road and you have to make tough decisions all the time even when there's a lot of fussing and fighting here in Washington, the bottom line is you still have to make sure that schools are open, that children are learning, and that people who are falling on hard times are getting help.
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CHETRY: Some Republican governors are turning up their noses at certain pieces of the stimulus bill. Our Jim Acosta is live in Washington looking into this rejection. Is it political in motivation, or do they really think it's going to actually affect their bottom line in their states negatively?
JIM ACOSTA, CNN CORRESPONDENT: Is it political? I wonder if it is, Kiran. That is one of the questions in this debate. Some of these governors sound like they've walked into a New York deli. I'll take the infrastructure but hold the unemployment assistance. Kiran, there are several governors who say there are parts the stimulus they will take and parts they won't. Meanwhile, there are other governors who say they're eager to go back for seconds.
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OBAMA: The last thing I want to do is hold up the food.
ACOSTA (voice-over): The highlight of the winter meeting of the National Governors Association, dinner at the White House. But some governors sound like they bellied up to the stimulus buffet, turning up their noses at parts of the plan they don't like, as if the package is government a la carte.
GOV. BOBBY JINDAL (R), LOUISIANA: We're going to look at every provision, see what's good for the state, see what's not, see what strings are attached. But the reality is the bigger philosophical point is this, I just have a fundamental disagreement with this package.
ACOSTA: Six Republican governors are hinting they may reject parts of the stimulus worth billions of dollars. Three of whom hail from the poorest states in the nation.
UNIDENTIFIED MALE: Sounds like the Soviet Grant of Stalin's time.
GOV. HALEY BARBOUR (R), MISSISSIPPI: There are some we won't take in Mississippi.
ACOSTA: Mississippi's Haley Barbour says the plans money for the unemployed could lead to a tax increase on some businesses.
BARBOUR: I mean, we want more jobs. You don't get more jobs by putting an extra tax on creating jobs.
GOV. CHARLIE CRIST (R), FLORIDA: It's not a matter of bucking the party, it's a matter of helping the people.
ACOSTA: Other Republican governors say this is no time for getting picky.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If you have a team where half of it splits off, if it's a basketball team or a football team, you would never win a game.
ACOSTA: Some state leaders talk as if there may be leftovers.
GOV. JENNIFER GRANHOLM (D), MICHIGAN: The governors who are trying to decide whether they're going to accept the stimulus money or not, we'll take it. We'll take your money. South Carolina, I'll take your money. Louisiana, we'll take it.
ACOSTA: New Orleans Democratic Mayor Ray Nagin accused his Republican Governor Bobby Jindal of political posturing.
JINDAL: We are still a center-right country.
ACOSTA: Hailed as the future of the GOP in 2012, Jindal spoke to a Christian conservative group in Iowa after the November election.
MAYOR RAY NAGIN (D), NEW ORLEANS: I told the governor personally, any dollars he does not want, we will take them gladly.
(END VIDEOTAPE)
ACOSTA: No governor has said he or she will flat-out reject all of the stimulus money precisely because doing so creates a major political problem. If the stimulus works, any opposing governor could find himself or herself out of a job -- Kiran.
CHETRY: All right. Jim Acosta for us this morning. Thanks.
ACOSTA: You bet.
ROMANS: Americans scared and angry about the economy in your Monday political ticker as the president gets ready to address Congress and the nation about his plans to turn things around. A new CNN opinion research poll said eight in 10 Americans think things are bad. More than two-thirds say the economy is still issue number one for the president and Congress to address.
Former Secretary of State Condoleezza Rice has nabbed a three- book deal from Crown Publishers, reportedly worth at least $2.5 million. Her first offering is set to be a memoir about her years at the State Department under President Bush.
Rice's book is planned for the year 2011.
He just needs a name tag that says W. Former president Bush stopped to a Dallas hardware store over the weekend, the one that offered him a greeter job as joke. We're told he messed with the owners a little bit, saying he's looking for a new gig and that his wife sent him. Mr. Bush shook some hands and bought some batteries and night lights for his new home.
CHETRY: Don't forget he bought some WD-40.
ROMANS: And WD-40.
The president likes scallops and pie. Lesson number one for six aspiring chefs the first lady invited to the White House yesterday. It was a good day to learn, they arrived just hours before the Obamas had their first official dinner with the nation's governors.
The First Lady also talked about here favorite things from the White House Kitchen.
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MICHELLE OBAMA, FIRST LADY: There hasn't been anything that I don't like. There's some mean waffles and grits that are made in the morning that have become a regular staple for some of us. I don't eat waffles every day.
(END VIDEO CLIP)
ROMANS: We also learned a little bit about the first lady's china policy. No, not that China. She'll probably stick with tradition and pick out her own china pattern.
CHETRY: At least it gets to good use there. You know when you put than on your wedding registry, do you ever really use it?
ROMANS: I actually do.
CHETRY: You do?
ROMANS: Because I said, hey, I've got three sets from grandma, great grandma. I might as well use the one I've got, so I do.
CHETRY: I would break it.
(LAUGHTER)
CHETRY: It's just sitting there in the cabinet.
ROMANS: It doesn't matter if it gets broken.
CHETRY: Well, this morning, "Slumdog Millionaire" cleaning up at the Oscars, and they are just thrilled from Hollywood all the way to Mumbai. But in the meantime, we're going to see those shocking slum homes that a child star from the movie will be going back to. He lives in a tent. We're live in Mumbai.
Also new evidence in the murder investigation of D.C. intern Chandra Levy and why it took eight years get this close to a possible arrest. It's 34 minutes after the hour.
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ROMANS: A developing story we're watching right now. A murder mystery that gripped the nation and ruined a congressman's reputation eight years ago may finally be coming to a close. Today, D.C. police are said to be ready to make an arrest for the murder of Chandra Levy.
CNN senior legal analyst Jeffrey Toobin joins us now. Jeff, welcome to the program. We're learning about this man already in prison, Ingmar Guandique, who reports say police are close to arresting in this case. This is an eight-year-old case. What new do they have now about this eight years later?
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, for those of us who have been following this all these years, Guandique is not a surprise suspect. In fact, one of the big questions about this investigation is why wasn't he focused on earlier.
ROMANS: And why wasn't he? TOOBIN: Well, this was a botched investigation, I think it's safe to say. Remember, Chandra Levy's body was not even found for a year even though police knew where it was. They simply missed it...
ROMANS: It was a jogger or something...
TOOBIN: ... in Rock Creek Park.
ROMANS: ... even after it had been really combed over by police.
TOOBIN: Right. She disappeared in May of 2001. In July of 2001, which is just two months later, Guandique attacked two joggers in Rock Creek Park and got a 10-year prison sentence for doing that. Very similar crimes.
He's now in federal prison in California. So, he's been a focus of investigation for a long time. Now, there are reports that there is new DNA evidence and perhaps even a jailhouse confession leading to Guandique.
ROMANS: Before I ask you about the jailhouse confession, let me ask you about the DNA evidence. Eight years have passed. There are quite a few differences and much more technology in DNA testing, right?
TOOBIN: I don't know if you want to call it an advantage, but it is sort of an advantage that so much time has passed because there are new technologies...
ROMANS: Right.
TOOBIN: ... that -- smaller samples, more degraded samples can now be used in such a way that it can be admitted as evidence in a criminal case. Maybe that's what's at work here.
ROMANS: But you're not necessarily convinced that jailhouse confessions are all that reliable.
TOOBIN: You know, jailhouse confessions are one of the most notorious sources of evidence, especially in high-profile cases, because prisoners are very crafty. They know that if they can come forward with good evidence in a high-profile case, they can sometimes lower their sentences. You know, when you hear about people being acquitted years later on DNA evidence, often you'll find that they were convicted on jailhouse confessions. It's very, very notoriously bad evidence. DNA is great evidence. So, we'll see what the cops have here.
ROMANS: And this was a high-profile case. We've got almost two minutes without saying the words Gary Condit, the former congressman whose reputation was essentially ruined by this whole affair, if you will.
TOOBIN: If you will. Yes.
ROMANS: If you will. So do you think that the focus and the attention on Gary Condit from the very beginning detracted from the investigation and the focus on this new suspect?
TOOBIN: Well, it certainly seems...
ROMANS: Or this old suspect who looks like he didn't --
TOOBIN; ... like the Condit aspect of this case, sensational as it was -- if you remember, the summer before 9/11, this was a complete cable news obsession --
ROMANS: That's right.
TOOBIN: ... was probably a distraction to a lot of people. The cops will say they weren't distracted, but certainly the Washington police did not do their best work in this case. I can't say it's because they were thinking about Gary Condit, but certainly, you, know Gary Condit deserved the criticism he got for having an affair with an intern. Certainly, that's inexcusable behavior, but it is clear now, and it's been clear for a long time that he didn't kill Chandra Levy. And I think in that respect, his reputation deserves to be rehabilitated.
ROMANS: Well, finally, eight years later, maybe this mystery gets put to rest, and this family, this grieving family can finally get some closure. Jeff Toobin, thanks so much, Jeff.
CHETRY: Well from the stimulus to gas prices, legendary oil man T. Boone Pickens will be joining us live. He's an expert on money, and new sources of energy and he'll address them both.
Also the child stars of "Slumdog Millionaire" have much to celebrate but wait until you see the shocking homes that they'll be going back to. From the glitz of Hollywood to a tent in the slums. It's 41 minutes after the hour.
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STEVEN SPIELBERG, DIRECTOR: And the Oscar goes to "Slumdog Millionaire." Christian Colson, producer.
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ROMANS: Well, if you went to sleep before the end of the Oscars, the little movie that could. "Slumdog Millionaire" took eight awards, including best picture. And the celebrations erupted across India. Many of the movies statues went to natives of Mumbai, where director Danny Boyle shot the film.
And CNN's Mallika Kapur is thousands of miles in tinsel town in Mumbai as well. She visited the city slums where some members of the huge ensemble cast actually live. So Mallika, what are people saying today about this win and what it means to them? Because we knew that there was some differences of opinion in India to say the least about whether or not they thought this film accurately portrayed the nation. MALLIKA KAPUR, CNN CORRESPONDENT: Sure, there were differences, but Kiran, you know, those differences have been put aside today and today really the mood is one of euphoria. And for people who are saying that they're overjoyed. They're ecstatic at this fantastic -- "Slumdog Millionaire" has achieved at the Oscars. And they've also saying you know what it's a dream, it's a dream especially for the child actors who took part in the film and for their friends, family and neighbors who got together and threw an impromptu Oscar viewing party in the slums of Mumbai.
There was cheering in Hollywood, lots in Mumbai, too. It's unbelievable, says this woman, who joined an impromptu Oscar viewing party around a small TV set in a slum in North Mumbai.
UNIDENTIFIED FEMALE (through translator): Our children have made India so proud, it's a dream.
KAPUR: Two of the child actors in the film "Slumdog Millionaire" live in this slum. (INAUDIBLE) who plays Salin and nine-year-old Rubiana who plays young Latika. Both are living the dream in Hollywood. The film's producers flew them to Los Angeles to attend the Oscars.
I don't really know what the Oscars are, says Rubiana's mother, watching it on TV. I'm just glad my daughter looks happy, though she told me she misses Indian food. Across the vast and crowded slum, friends, family, neighbors of all kinds showed their pride and blasted music in the streets when the film bagged eight Academy awards.
It's runaway success, and all the media frenzy accompanying it are a welcome distraction from the drudgery of their daily lives. Poverty, no schools, open drain, garbage everywhere, children lead a dog's life, says Rubiana's mother. I'm happy someone decided to make a movie on it. The rest of India and the world should know how we live.
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KAPUR: After this life-changing trip to the United States to Hollywood -- remember, this is the first time these children even got on a plane -- they are coming back to Mumbai in just two or three days, back to the slums, back home and back to reality -- Kiran.
CHETRY: And Mallika, that's what a lot of people are wondering, I mean, does anything change for them? I mean, do they have the ability perhaps to pursue other acting roles? I mean they were fabulous in this film.
KAPUR: They were absolutely fabulous. I'm not really sure what will change for these children, and I asked their parents about it today. And they, too, said you know what, it's up to fate. Rubiana, the young girl, her mother said, I don't want her to pursue an acting career just jet.
The producers of the film have been kind to get her admission in an English medium school, and they really want to give her an education. They hope that she will continue with school. And she can pursue an acting career when she grows up, and her role model is a very famous Bollywood actress called Preity Zinta. And that's what Rubiana wants to emulate when she's all grown up.
CHETRY: That's wonderful, though, about the schooling, because that really is, of course, a ticket out of there as well, besides the, you know, the shot at stardom. Mallika Kapur, thanks so much for being with us this morning. It's 47 minutes after the hour.
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ROMANS (voice-over): Slashing the Pentagon's budget and the expensive war chest with it. The jets, the tanks.
UNIDENTIFIED MALE: We're going to have lots of fights in the next two or three months over various parts of the defense budget.
ROMANS: Billions and billions for high-tech weapons. Why they may have to go, ahead on the Most News in the Morning.
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ROMANS: It is now 10 minutes to the top of the hour. Time to fast-forward to see what stories are making news later today.
Actor and Darfur activist George Clooney meets with Vice President Biden tonight. Clooney has been trying to bring attention to the atrocities there for years. He just came back from neighboring Chad, where he was visiting some of the millions forced from their homes across the border.
And Stevie Wonder will perform at the Library of Congress tonight at 7:00 Eastern. He is being honored at the White House on Wednesday. The president himself will present him with the Library's Gershwin Award for popular song.
The day before Fat Tuesday, almost as crazy as the finale in New Orleans. Festivities kick off at 10:00 a.m. today. There are two big parades uptown, the Proteus parade which is 6:15 Eastern time. Then the star-studded Orpheus parade after sundown. Joan Rivers and Jim Belushi are expected to ride this year. And that means it's time now to talk to Rob Marciano for the weather. Hey, Rob.
ROB MARCIANO, CNN, METEOROLOGIST: What kind of segue is that? You're saying that I'm Mr. Mardi Gras or something.
ROMANS: I'm saying it's time to party, so let's go to Rob.
MARCIANO: I like your attitude. All right. Forty-three degrees right now in New Orleans. And you know, not bad. It's not going to rain today and tomorrow, but as they wrap up the Mardi Gras season but it certainly will be chilly. Right now, it's 26 degrees in Atlanta and 28 in New York. A little topsy-turvy here.
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CHETRY (voice-over): The new face of food stamps. You may be surprised.
UNIDENTIFIED MALE: Everybody is hurt. Not just the lower-class people.
CHETRY: Supermarket secret. Who the state feeds now.
UNIDENTIFIED FEMALE: It's never enough. By the third week of the month, I'm completely out.
CHETRY: Plus, legendary oil man T. Boone Pickens, he is talking stimulus, gas prices and he's here on AMERICAN MORNING live. You're watching the Most News in the Morning.
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CHETRY: Welcome back to AMERICAN MORNING. Fifty-five minutes after the hour. Alternative energy is a major centerpiece of President Obama's plan to kick-start the economy.
And right now some of the biggest names in energy, science and politics are gathering in Washington for the second annual National Clean Energy Policy Summit. And legendary oil man turned clean energy advocate T. Boone Pickens is one of the participants and he joins us live this morning from Washington. Thanks so much for being with us this morning.
T. BOONE PICKENS, CREATOR PICKENSPLAN.COM: Thank you. Good to be here.
CHETRY: So, this energy forum is being held as the country, of course, as we all know, is grappling with one of the worst economic crisis we've seen in decades. How do you convince people that now is the time to focus on alternative energy and green technology when we seem to have a lot of more pressing immediate issues?
PICKENS: Well, you say immediate issues. This is one that's not going to go away until we solve it. And our problem here is that we're importing almost 70 percent of our oil and a lot of that comes from people that are not friendly to the United States.
This has to be fixed. We've gone 40 years without an energy plan and I think President Obama is intent on having a plan and it does bring in green. It does bring in alternative and it does bring in natural gas. Natural gas is the only resource we have in America that can actually reduce the dependency on foreign oil. And we want that natural gas to go to the heavy-duty vehicles, the 18-wheelers. We'll use wind and solar and that will generate power for us, but wind and solar will not run an 18-wheeler, only natural gas. CHETRY: It's interesting. Because you've -- we've had you on the show many times. You've traveled around talking about the Pickens plan and you guys have hit a speed bump, I guess you can say, because of the difficult financial times right now, right? You're delaying your massive wind project for now and you said it was partially because of a drop in natural gas prices. But also a tightening credit market, what is the status right now of your big plan and your own endeavors to try to get this wind farm up?
PICKENS: Well, we're going get the wind farm up. We don't start receiving turbines until 2011 so we do have a couple of years to get the credit markets straightened out and that all is going to happen because we are going to use wind and we are going to use solar. Those are resources that the country has and we must use them.
CHETRY: President Obama stimulus plan seeks to invest about $80 billion, $79 billion in energy provisions like weatherization programs, also updating the power grid and tax cuts for wind energy and also training workers for the so-called green jobs.
Now, these are provisions that were highly criticized by some saying that they weren't truly stimulative. What do you say to that?
PICKENS: Well, there is no question that the conservation is big on the list. When you start to look at energy problems for America, we can save and we can do more. We can you know, winterize homes and all, which we haven't done enough of that. So that's going to all happen. So the conservation is big. We're also going to use our own resources. That's the key to it.
We have to use the resources we have in America and quit importing the oil at the level we are, because last year, it cost us about $500 billion to import oil. That doesn't have to happen. We can cut that in half rather easily within five years, it could happen. And that is going create a lot of jobs right there. When you keep $250 billion at home and we're using it for our own resources, you know we're creating jobs there.
CHETRY: Gas dropping for eight straight days, it's now below $2 a gallon in most states across the country. In your mind, is that temporary? We shouldn't be lulled by that?
PICKENS: It is temporary. You're going to see oil prices by the end of the year will be at $75. And that's going to happen. You know, OPEC has already told us that's going to happen. So listen to what they tell us. Because they have to have money and they are going to cut back on their production and they are going to raise the price of oil. It's all going to happen just like it has in the past. We were at $147 a barrel last July and within two years, you'll be back at $147 a barrel.
CHETRY: T. Boone Pickens this morning, founder and chairman of BP Capital Management. Thanks so much for joining us this morning.
PICKENS: Sure. Thank you.
