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President Obama's Economic Push; Smell the Bacon; The Unlikely Victims of Mortgage Meltdown; Banishing the Blues; What to Cut; Iran: Going Nuclear; The Green Flash; Tiger Woods Ready to Play
Aired February 24, 2009 - 11:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Hello, everyone. I'm Tony Harris in the CNN NEWSROOM. Here are the headlines for Fat Tuesday, the 24th of February.
His first formal address before Congress as president. Can President Obama restore confidence and optimism in a battered economy?
Iran claims its first nuclear plant will get a test drive just hours from no. Will it get electricity or bombs.
The best golfer on the planet has returned to the PGA Tour. Tiger Woods' news conference live this hour. In the NEWSROOM.
All right. We've got a couple of hearings that we are watching right now. The flight crew of Flight 1549 is on Capitol Hill right now testifying, led by Captain Sullenberger.
And Ben Bernanke is also offering testimony on the Hill as well. He is trying to restore confidence and put a better face on the spending programs that are being outlined and will be outlined again, and sold again by the president in his news conference tonight. It really is all about the big sell from the Fed chief, Ben Bernanke.
The president tonight will try to convince Congress and the country that his economic plan will pull the nation out of recession.
Let's get right to our White House Correspondent Dan Lothian.
And, I said it last hour, and I think it bears repeating, the president has to be, A, a realist; B, an optimist; and that is a tough balancing act.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. You will see balls juggled up in the air, and it will be very difficult, but the president realizes that this is a critical address tonight not only to Congress, but to the American people. He has to lay out that there are some major challenges facing America, but also, he wants to be optimistic.
One of his senior advisers described it this way, saying that the president will be somewhat like a doctor, where a patient comes in and will be told, listen, this is a bad illness that you have, or you have this problem, but I also have this medication that will make you better. So he'll be the doctor president tonight, ,laying out that the economy is sick, but also coming up with a prescription in order to fix the economy. But the adviser also pointed out that, you know, what the president will ask the American people to do is to be patient, because this problem with the economy did not happen overnight, it took years, and it will take a long time to turn things around.
Take a listen.
(BEGIN VIDEO CLIP)
CHRISTINA ROMER, COUNCIL OF ECONOMIC ADVISERS: Economies are a little bit like supertankers. They don't turn on a dime, and you do keep going one direction. Even when you've shoved that rudder as hard as we are shoving it right now to switch direction, it will certainly take a number of months, and I think by being honest he's going to make them understand.
(END VIDEO CLIP)
LOTHIAN: And so, Tony, the president will also highlight his $787 billion stimulus package. He'll talk about how he believes it will work in getting people back to work, these 3.5 million jobs that will be saved or created. But again, will ask the American people to be patient -- Tony.
HARRIS: White House Correspondent Dan Lothian for us.
Dan, appreciate it. Thank you.
And of course, you can watch President Obama's address to Congress live right here on CNN. That's tonight at 9:00 Eastern. It will be followed by "ANDERSON COOPER 360," post-game, with the best political team on television, and a special edition of "LARRY KING LIVE" at midnight.
Right now, you and your Facebook friends can join in on special online coverage live at CNN.com. Join CNN's Christiane Amanpour as she discusses foreign policy and President Obama's first 100 days. It is happening now at CNN.com/live.
President Obama is about to unveil a budget for 2010. You might be surprised to learn the budget for 2009 isn't finished yet.
Democrats are moving ahead with a spending bill now, and you probably won't be surprised to learn it is fat with pork. Now, that puts a pork-chopping president in a potentially embarrassing spot.
I got through that.
Senior Congressional Correspondent Dana Bash joining me now.
And Dana, when we say pork-laden, we really mean it.
DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: I don't know how you got through that, Tony.
HARRIS: I'm not sure either.
BASH: That's pretty good.
Yes, what's going on here is, you're exactly right, President Obama obviously is coming up for this big address to a joint session of Congress tonight. And one of his themes yesterday, today, and certainly will be in the near future, is about fiscal responsibility.
But what is happening as he is speaking to Congress is they are still working on last year's budget, and it is specifically $410 billion in spending -- $410 billion in spending. And this is kind of a vestige of the fight that Democrats in Congress and President Bush had. That's one of the reasons why it wasn't done.
But you're exactly right, what is in here is still, we understand, billions of dollars still in those so-called earmarks or pet projects that lawmakers are asking for, for things back home. And there certainly are Republicans, and Democrats up here, frankly, but there are Republicans who are kind of watchdogs of this. And one of them was on the House floor railing against this concept, and specifically about the idea that nobody has been able to really look much at these earmarks.
Take a listen.
(BEGIN VIDEO CLIP)
REP. JEFF FLAKE (R), ARIZONA: I cannot come to the floor tomorrow, nor can any other member, and challenge any of these earmarks to look at relationship between earmarks, campaign contributions, or to simply say, is this a good use of federal spending?
(END VIDEO CLIP)
BASH: And there you heard Congressman Jeff Flake. And he and other members of Congress are going through, and we are certainly also going through, finding some examples of things that, you know, particularly in this day and age of crisis, economic crisis, and members of both parties saying that everybody needs to be careful about what they're spending, things that some people may be questioning whether or not it's the right thing to do. But again, I think it's important to emphasize, it is Democrats and Republicans who are asking for these pet projects to be sent back home, and it is from last year's budget, but still in there.
HARRIS: It sure is in there.
You know what, Dana? Last hour we had pictures -- and maybe we can show them now -- of Illinois Senator Roland Burris returning to Washington after some difficult days, you would have to say, in Chicago recently, where he is being asked to resign virtually from all quarters.
Did he have anything to say? Did he address the question of whether or not he's going to resign? BASH: No, he has not addressed the question of whether or not he is going to resign. And we have something interesting, and that is that Roland Burris is going to meet with the number two Democrat in the Senate, actually the senior senator from his home state of Illinois. We just learned this later this afternoon.
It's been a very interesting dance that we have seen among the Democratic leadership in the Senate. You may well remember, they didn't want to seat Roland Burris in the first place.
HARRIS: Yes.
BASH: But they did after a lot of controversy. And they have been -- while we have had the governor of Illinois point blank saying that Roland Burris should resign because of a lot of different explanations for whether or not he was or was not involved in talking to members of former governor Rod Blagojevich's team, or even his brother, you know, and some of that so-called pay-for-play controversy...
HARRIS: Yes.
BASH: ... the Democrats in the Senate, their leadership, they have been very careful. They say that there is a process in place, there is a Senate Ethics Committee investigation going on, and they say that that is really where it stands right now.
It will be interesting to see what Senator Durbin says afterwards. But I'll tell you some political reality here, Tony.
HARRIS: Yes.
BASH: We have been talking about the fact that Democrats certainly have a big majority, but not necessarily enough votes to pass some of the major things they need. Roland Burris is one of those votes. So, the reality, the hard-core reality is, Democratic leaders, they're being careful not to anger him too much because, as hard as this is for him, as angry as they are at him -- and they are angry -- they still need his vote.
HARRIS: They need his vote, but he does not -- as you look at those pictures, he does not appear to me to be at the center of any of the real debates going on in Washington now over cuts and spending and what's going on in the real economy right now.
Dana Bash for us from Capitol Hill.
Dana, appreciate it. Thank you.
BASH: Thank you.
HARRIS: The credit crisis leads to stress tests for banks. They get started tomorrow. Will that lead to nationalization of big financials? Fed Chairman Ben Bernanke is taking questions about all of this right now from the Senate Banking Committee. The Obama administration has downplayed any government takeover of banks, but at the same time, the Fed has been acquiring large chunks of bank stock. Bernanke says the U.S. could pull out of recession at the end of the year. There are some ifs and buts.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: The actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability. And only if that is the case, in my view, there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.
(END VIDEO CLIP)
HARRIS: So one of the ironies of the financial crisis, even mortgage brokers fell victim to the housing meltdown.
Here's Senior Correspondent Allan Chernoff.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN SR. CORRESPONDENT (voice-over): Matt Swift and Matt Wallis both worked as mortgage brokers for American Home Mortgage. So when they bought their house about three years ago for $400,000, they knew what they were doing. They took out a fixed rate mortgage from Countrywide Financial that was well within their budget.
MATT SWIFT, FORMER MORTGAGE BROKER: This is our business. I've been doing it for a very long time, 13 years.
MATT WALLIS, FORMER MORTGAGE BROKER: We both did very well for ourselves. We had money left over, even after the down payment to do what we needed to do to make the house livable.
CHERNOFF: But when the mortgage market turned south, both men were laid off. Matt Swift was able to land a new job with Countrywide but within a few months he was let go again.
SWIFT: To date, you know, had other round of layoffs and so on. It was last in first out, I guess.
CHERNOFF: Their savings dwindled and their affordable house suddenly no longer was. Soon they fell behind on their mortgage.
SWIFT: We wound up about 11 months, you know, of unemployment. So that kind of did it in for us.
CHERNOFF: Before his foreclosure notice arrived, Matt Swift filed for personal bankruptcy in an effort to hold onto his home.
SWIFT: What that did was kind of throw a monkey wrench in the process. It kind of helped. It gave us time, much-needed time to, you know, find employment.
CHERNOFF: By last autumn, both Matt had landed jobs. Matt Wallis as a retail banker, Matt Swift in health care. Now they're trying to get their mortgage adjusted to an affordable level.
WALLIS: We have proved we can pay. We need -- but you know, we need them to do something. We need them to modify the mortgage for us.
CHERNOFF: But Countrywide, now part of Bank of America, offered a mortgage modification the two say that gives them no break. They'd have to spend nearly two-thirds of their combined income meeting their monthly obligations.
SWIFT: In my best day of loan underwriting and pressure from sales, I would never have been able to approve a loan like that, but yet, they sent that to us right away to hurry up and sign it.
(END VIDEOTAPE)
CHERNOFF: Countrywide says it can't comment on individual mortgage cases, but the lender tells CNN it will review the couple's financial situation again to see if it can lower their mortgage payment. Last week, Countrywide's parent, Bank of America, unveiled a moratorium on foreclosure sales, and the chief of Bank of America Mortgage says, "We want to ensure that any borrower who has sufficient income and the desire to sustain home ownership has the ability to do so -- Tony.
HARRIS: What a story. All right, Allan. Appreciate it.
Allan Chernoff in New York for us.
You know, Microsoft knows a public relations train wreck coming down the tracks when it sees one, so it is backpedaling. Last week, Microsoft told 25 laid-off workers their severances were overpaid, the company wanted the money back. Well, today, Microsoft says that was a mistake and it should have handled the situation in a more thoughtful way. No repayment necessary.
Using your garbage to cook your meals or just light up your house, it is today's "Energy Fix."
(COMMERCIAL BREAK)
HARRIS: A possible deal between the government and Citibank is prompting concerns about the nationalization of banks, but how would such a move change the rules of doing business?
CNN's Mary Snow takes a look.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT: (voice-over): It's a plan that could dramatically change the way one of the nation's largest banks operates. "The Wall Street Journal" reports that Citigroup is talking with regulators about the government taking as much as a 40 percent stake in the bank. Citigroup declined comment on the specific report, but said, "Citi's capital base is very strong. We continue to focus and make progress on reducing the assets on our balance sheet, reducing expenses and streamlining our business for future profitable growth."
White House Press Secretary Robert Gibbs would only say this...
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president believes that a privately held banking system, regulated by the federal government, is the best way to go about this.
SNOW: But the prospect of a large government stake has been stoking fears on Wall Street about the "N" word -- nationalization.
TED WEISBERG, FLOOR TRADER: This country is built on the free market system. And I think anything that threatens that is a threat not only to the -- to corporate America, but perhaps to our whole way of life.
SNOW: But economist Jeffrey Sachs says because of the massive amount of money Citigroup has lost, nationalization is inevitable.
JEFFREY SACHS, ECONOMIST: The federal government, one way or another, is going to end up owning a lot of it, maybe 100 percent of it.
SNOW: The government has already pumped $45 billion into Citigroup, worth nearly 8 percent of the bank. One corporate governance expert says the government getting more involved with the 40 percent stake is, in his words, dangerous.
CHARLES ELSON, UNIVERSITY OF DELAWARE: I think if you do this to the shareholders, no one will have confidence in invest in almost anything again, because it could happen anywhere. And the key to this system is private equity involvement.
SNOW: Some economists argue that shareholders have already lost out as the bank stock has plummeted, and nationalizing Citigroup would help the big picture.
SACHS: It's not that anyone is this with joy or pleasure. It's saying that facing the reality will help us get out of this mess more quickly.
SNOW (on camera): The question is, will this pave the way for other banks to have a much bigger government role? We could soon get a clearer picture of the health of the banks. Regulators on Wednesday will begin so-called stress tests. The goal is to see how stable banks are.
Mary Snow, CNN, New York.
(END VIDEOTAPE)
HARRIS: So let's do this -- let's talk about the prospects of nationalization with Thomas D. Boston -- Danny. He is a professor of economics and Georgia Tech right here in Atlanta.
Danny, good to see you again.
THOMAS "DANNY" BOSTON, PROFESSOR OF ECONOMICS, GEORGIA TECH: Thank you.
HARRIS: It's been a while, but you were really helpful to us in one of our "Class in Session" meetings, get-togethers, just a short time ago.
The idea of nationalizing some banks, last week Senate Finance Committee chair Chris Dodd said, "Some banks may need to be nationalized for a short time."
What do you think of the idea?
BOSTON: Well, I think what we really have going on is a hybrid between nationalizing and receivership.
HARRIS: Help me sort it out.
BOSTON: All right. Well, when you talk about nationalizing a bank or a financial institution, essentially there are two factors going on.
One is, there is the economic motive where you're taking control of the institution. And secondly, that's usually couched with a political motive, a la Venezuela.
HARRIS: OK. OK.
BOSTON: Now, we don't have that. We have a situation whereby the government is really stepping in to ensure the financial stability of the institutions. And once that happens, then they're going to phase out or disinvest.
HARRIS: Is that what we're talking about with these stress tests? Is that to figure out exactly what we need to do with some of these bigger institutions?
BOSTON: That's exactly what it is. What the stress test is, it's the link to transparency. And so it lets us know once and for all how liquid these banks are.
HARRIS: The lid is literally coming off these banks with these stress tests. So will we get an idea finally of how much trouble they're really in?
BOSTON: Well, we probably don't want to know that.
HARRIS: Yes. Yes. Yes.
BOSTON: But yes. Yes, this is a test. It's called tier one capital. This is a test that comes from international finance ministers that we are late to the game in applying.
HARRIS: That we should have been doing all along?
BOSTON: Absolutely.
HARRIS: Periodically. BOSTON: Yes, several years ago.
HARRIS: OK.
BOSTON: And if we had have done, we would not have been in the mess that we're in now. All right.
So what this test does is it looks at the actual assets, the common stock, the cash, the reserves of the institution, relative to all of its other assets, including bad assets.
HARRIS: Yes. Yes.
BOSTON: And there is a ratio that it has to meet. And if it meets that ratio, then we say fine. And if it doesn't meet that ratio, then we say trouble.
HARRIS: And we create scenarios, right, in this test?
BOSTON: Exactly.
HARRIS: What if, and what if, and what if? Can you stand the stress of these possible outcomes? Right?
BOSTON: That's exactly right.
HARRIS: Will wed -- do you believe, in terms of transparency, which has been promised by the administration, will we find out the results of these stress tests? Should we?
BOSTON: Absolutely. The tests will be applied first to the banks that have at least $100 billion in assets. That's about 25.
And of course we'll know that. We'll have to know that because the government will have to make a decision -- is it going to help these companies pass the stress test or is it not going to help them?
HARRIS: Whoa. OK.
And at that point, that's when we get to the whole discussion about what the federal government does and how much of a stake.
Is there a scenario where we see the FDIC model? It's one thing to talk about sort of taking over small banks.
BOSTON: Sure.
HARRIS: Come on -- Citibank?
BOSTON: Right. That's a big bank.
HARRIS: Bank of America?
BOSTON: Big bank.
HARRIS: Is there a scenario in your mind where you could see, as a result of a stress test, the federal government, the FDIC stepping in to take over a bank the size of Citi? A bank that is too large to fail?
BOSTON: It would have to. And this is why -- because capitalization of Citibank now is only $10 billion.
Well, the government has already invested about $45 billion in Citibank in preferred stock. And so, in order for it to pass the stress test, the preferred stock has to be converted to common stock.
HARRIS: Yes.
BOSTON: When it converts to the common stock, that means that it becomes the largest shareholder in Citibank. So there's no way around that. The question is whether it wants to do that at 40 percent or 80 percent or whatever.
HARRIS: Whoa.
BOSTON: But it will have to do that in order for Citibank to pass the test.
HARRIS: So in order to pass?
BOSTON: Right.
HARRIS: So how much trouble is Citi in? And is, in your opinion, the government on the verge of, through an FDIC action, taking over Citi and maybe selling assets?
BOSTON: Well, no. No, it's not going to do that.
HARRIS: OK.
BOSTON: I think one is that we cannot allow Citi to go under. I mean, that would put such a stress on the FDIC and such a stress on confidence in the economy as a whole...
HARRIS: I see. I see.
BOSTON: ... that it can't happen.
HARRIS: Yes.
BOSTON: The idea is that they will step in, give it their capital that it takes to become liquid, and begin making loans, an then over time phase out.
HARRIS: And even if the FDIC took over one of these big banks, my ATM card would work. It would still work.
BOSTON: Absolutely.
HARRIS: Danny, great to see you.
BOSTON: My pleasure. HARRIS: Thanks for your time.
BOSTON: All right. Thank you.
HARRIS: You have so many questions about the economy and your bank account. The CNN help desk has the answers.
(COMMERCIAL BREAK)
HARRIS: The average American throws away one ton of garbage a year, but instead of it all going into landfills, some is being used to create energy.
CNNMoney.com's Poppy Harlow has our "Energy Fix" from New York.
Good to see you, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey there, Tony.
Yes, there are 87 plants in this country currently that turn trash into electricity, believe it or not. They do it by burning it. And Covanta Energy, that company owns 35 of those plants. We visited one just a few weeks ago out on Long Island.
(BEGIN VIDEO CLIP)
STEVE BOSSOTTI, REGIONAL OPS. MANAGER, COVANTA: This is actually where we begin the process of converting something that people throw out every day, municipal solid waste, into clean, renewable energy. This particular facility takes a little over 900,000 tons of MSW annually and provides energy for 70,000 homes on a continuous basis.
(END VIDEO CLIP)
HARLOW: All right. Here's how it works, folks.
The trucks, they dump the garbage into these giant pits. From there, big cranes -- check out that claw there. They pick it up, they dump it into boilers, where it is incinerated. That creates steam, which, of course, turns giant turbines creating electricity.
And that's all that's left in the end, that ash right there. That's transported to landfills, but it takes up a lot less space than the heaps of trash that would be there otherwise.
But some environmentalists argue, listen, we're concerned about the mercury and the other toxic emissions from this burning process. Covanta though says, listen, modern technology means a much cleaner burn.
(BEGIN VIDEO CLIP)
PAUL GILMAN, CHIEF SUSTAINABILITY OFFICER, COVANTA: These boilers are not the boilers of incinerators of yesterday. And the other thing is very advanced pollution control technology. Probably as much investment in the pollution control technology as there is in the boilers and the steam turbine that makes the electricity.
(END VIDEO CLIP)
HARLOW: All right. Well, Covanta Energy says every ton of garbage that it burns offsets one ton of greenhouse gas since it replaces electricity produced by fossil fuels and less methane- producing trash that ultimately ends up in these landfills.
But again, Tony, not everyone agrees. Environmentalists say a lot of that trash could have been recycled, but instead it's burned. They also say the EPA emission standards have not changed since the '90s and that they have to be upgraded, Tony. But it was so cool to be there and to see this actually happening.
HARRIS: Yes. Well, and that leads to a question. The idea of a cleaner burn, does that cut down on the smell, perhaps? How bad was it?
HARLOW: It was not bad.
HARRIS: It wasn't?
HARLOW: That's what everyone asks. It wasn't bad.
They somehow controlled the air flow. And believe it or not...
HARRIS: Yes.
HARLOW: ... there are actually condominiums right across the street from this plant. There's a Home Depot right across the street, a big strip mall. So it's kind of right in the middle of the town. No one seems to mind the smell.
HARRIS: I wonder what's happening with home values.
HARLOW: Yes, right.
HARRIS: All right, Poppy. Good to see you. Thank you.
HARLOW: You too.
HARRIS: Real problems, real answers. We are tackling the money concerns keeping you up at night.
CNN's Gerri Willis is at the help desk.
(BEGIN VIDEOTAPE)
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: We want to get you answers to your financial questions. Let's get straight to the help desk.
Lynnette Khalfani-Cox is a personal finance author. Ryan Mack is the president of Optimum Capital Management. And Paul LaMonica is with CNNMoney. The first question comes from Derek in Maryland, who says, "I'm a medical records clerk who is about to become unemployed. I have been working in the medical field for 25 years. This is the only job I'm comfortable with."
"My wife and I each make about $40,000 a year with three kids. What should I do? I only have a high school education with some college."
Lynette, what do you suggest?
LYNNETTE KHALFANI-COX, PERSONAL FINANCE EXPERT: Well, the first thing is, since he knows he's about to be unemployed, take advantage of everything your employer has to offer before you go out the door. Get the best possible package you can get, try to get them to pay for your health care benefits as long as possible. If they offer job training, resume services, anything to bolster your skills, do take advantage of all of those.
WILLIS: All right.
Hank from Kansas asks, "I've made my how payments on time every month, plus pay extra towards principal. I've lost my job and taken a roommate to help. Will I be able to refinance under this pay or do I need to find a low-paying job quickly, even though I'll make more in unemployment?"
Ryan, what do you think?
RYAN MACK, PRESIDENT, OPTIMUM CAPITAL MANAGEMENT: Well, they definitely -- they want to assist you in this process. However, you know, if you don't have a job, you don't have an income to report.
You want to make sure under this new plan that 38 percent of your -- they're going to try to get you at least 38 percent assistance, and then 31 percent subsidized by the government. But if you don't have a job, if you don't have any income, you've got to get some employment and get some income quickly.
WILLIS: Yes, absolutely right. And one of those details that wasn't discussed very much. Thanks for that.
Amy asks, "I'm trying to cut costs in our budget everywhere. One item I wanted to cut out was my gym membership. They won't let me out of my contract though. I tried talking to a supervisor, but they told me the same thing. Do you have any recommendations?"
Paul?
PAUL LAMONICA, EDITOR-AT-LARGE, CNNMONEY.COM: Yes. I think from personal experience, most gym contracts tend to be one year, maybe two at most. So hopefully if you can't get out of it, it's only going to be a couple more months that you're stuck paying this. But a lot of gym contracts do have penalties that you can pay to get out of the contract.
WILLIS: All right.
LAMONICA: So it might be an up-front hit, but it will save you in the long run.
WILLIS: OK. Great answer.
The help desk is all about getting you answers. Send me an e- mail to gerri@cnn.com, or log on to cnn.com/helpdesk to see more of our financial solutions. And that help desk is everywhere. Make sure to check out the latest issue of "Money" magazine on newsstands now.
(END VIDEOTAPE)
HARRIS: And have you heard? States looking for revenue may repeal their blue laws. For some, liquor on Sunday is just sinful.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
LARRY KING, CNN'S "LARRY KING LIVE": (INAUDIBLE) the private sector get us into it?
ARI FLEISCHER, FORMER BUSH WHITE HOUSE PRESS SECRETARY: Well, sure they did, Larry, but the private sector, combined with Fannie Mae and Freddie Mac and some terrible decisions that people in the government made to have people take out loans they couldn't afford to repay. All of the above. But when we get to be a country where only the government can solve our nation's private sector economic problems, the government is too big and too powerful. It's the private sector that can pull us out of it.
(END VIDEO CLIP)
TONY HARRIS, CNN ANCHOR: Big government or big business? It could be a while before we find out if those who broke it will be able to fix it. Let's get to the New York Stock Exchange right now. Just past three hours into the trading day. And as you can see, the Dow up 64 points, but -- oh, 59. But that is off session highs for the day. The Nasdaq in positive territory as well, up 16 points. We'll follow the numbers throughout the day for you in the CNN NEWSROOM.
The bad economy might help banish the blues. I'm talking here about blue laws that force liquor stores to lock their doors on Sunday. More now from Louise Schiavone.
(BEGIN VIDEOTAPE)
LOUISE SCHIAVONE, CNN CORRESPONDENT (voice-over): The last vestiges of prohibition, partial or complete bans on alcohol sales on Sunday, are alive and well in roughly a dozen states. But now in the search for new revenues, some lawmakers say there's no time like the present for change and fresh funds.
SETH HARP, (R) GEORGIA STATE SENATE: We have had testimony from various grocers, convenience stores and things of that sort, and those individuals have told us that they lose a tremendous amount of business to South Carolina, North Carolina, Tennessee, Alabama and Florida.
SCHIAVONE: Georgia, Indiana and Connecticut prohibit any retail sale of alcohol on Sunday. Fifteen states ban only liquor sales. The Sunday sales debate is on in virtually every cash-strapped state where blue laws still exist. In Georgia, action is expected soon on a proposal to let communities decide whether or not they want to sell alcoholic beverages on Sunday. Georgians we speak to agree.
UNIDENTIFIED MALE: I think it's a great idea. I think it's probably a little outdated law. And I think the most important point on that is the revenue it's going to generate for the state.
UNIDENTIFIED MALE: You can sell it Monday through Saturday, why not Sunday?
UNIDENTIFIED MALE: As a practicing Christian myself, I don't think the government should be in the business of determining what day is the Sabbath.
SCHIAVONE: Conservative religious groups, though, say the last thing society needs, especially in stressful economic times, is another day to sell liquor.
JIM BECK, GEORGIA CHRISTIAN COALITION: I know that the media loves to, you know, make folks on this side of the issue look like Bible thumpers that want to impose their will. Just because something consistent with values expressed in one religion doesn't make it bad policy.
SCHIAVONE: There's also this. Economists at MIT and the University of Notre Dame found last spring that repealing blue laws restricting Sunday commerce led to a decline in church attendance and donations.
But advocates of getting rid of remaining restrictions on Sunday alcohol sales say, why not let hard working men and women who bring home the bacon during the week bring home a bottle of wine on a Sunday and deliver some revenues to cash-strapped states at the same time.
Louise Schiavone for CNN, Washington.
(END VIDEOTAPE)
HARRIS: How can our government start saving money? President Obama will be announcing plans to try to cut the deficit. We want to hear from you. What should we cut from this budget? Josh Levs is here with some of your responses.
What are you hearing, Josh?
JOSH LEVS, CNN CORRESPONDENT: We've been getting responses all morning long, Tony. So many. I think this is the most I've seen in a long time. And I'll tell everybody what's going on. Zoom in on the board for a second.
This is part of what's going on today with cnn.com/live hooking up with FaceBook. You know, you can watch the special programming while you sign in to FaceBook over here. Interact with everyone or your friends.
So we posed a question on my FaceBook page this morning, joshlevscnn, and we're asking you all day long, "what should be pulled from the budget?"
Tony, a few answers right here. Christopher writes, "I think we should cut back on tax breaks and subsidies to companies such as Exxon Mobil."
Who's next. Darrell Lewis. "Total campaign funding reform. Total public campaign financing. The nationwide savings from the lobbying industry alone would save billions."
Let's get in a couple more here. Laurel, "what about cutting back on our failed war on drugs? It's a multi million dollar effort."
And we got time for one more. "It might be easier to look at what we can begin producing ourselves." That's from Michael.
We got a graphic for you here. I can show you how you can weigh in. If you're a part of FaceBook, it's really easy. Just search joshlevscnn. And, Tony, we know not everybody is on FaceBook. Some people would rather e-mail us. That's cnnnewsroom@cnn.com. And I'll quickly show you a couple answers we got on e-mail and then I'll get back to, Tony.
Let's go back in one more time. Joyce writes, "stop both wars immediately, bring all troops home."
And Beth says, "cut the tax cuts. This pandering doesn't work. I just lost my job, so I don't have a paycheck to get less taxes taken out."
Obviously lots of strong responses, Tony. We'll see what we hear, Tony -- we'll see what we hear?
HARRIS: Yes.
LEVS: We'll see what the president has to say tonight. We're going to follow up on this in the coming days, see how people feel about the president's plan to cut that deficit in half.
HARRIS: All right, Josh, appreciate it. Thank you, Sir.
LEVS: Thanks, Tony.
HARRIS: Iran says it need the energy. Some wonder if it's all about weapons. Iran's nuclear policy, next in the NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: A satellite launch gone bad. By the looks of this video, everything seemed to go well at liftoff. But NASA says the global warming satellite it tried to launch this morning crashed into the ocean near Antarctica just three minutes later. The $273 million satellite would have monitored greenhouse gases in the earth's atmosphere.
Iran, a step closer to nuclear power and possibly nuclear weapons? Well, that's the concern amid new reports that Iran's nuclear plant at Bushehr will conduct comprehensive testing tomorrow. Details now from Reza Sayah in the Iranian capital, Tehran.
(BEGIN VIDEOTAPE)
REZA SAYAH, CNN CORRESPONDENT, (voice-over): If history is any indication, Iran's test run of its first nuclear power plant is going to trigger two very different reactions. The Iranian government and many Iranians are going to celebrate what they call their peaceful nuclear program. But to many critic in the west, it will be more evidence Iran is pursuing a nuclear bomb. Analysts here, like Seyed Mohammad Marandi, say that is to be expected.
SEYED MOHAMMAD MARANDI, ANALYST: I think the headline will be very negative, but that is understandable because anything in Iran is perceived to be negative in the west.
SAYAH: Those different reactions often leave many confused. To clear up some of the confusion, let's tell you exactly what this test run means and where things stand.
The pilot run of the Bushehr power plant means Iran is one step closer to producing electricity with nuclear power. But Iran has among the world's largest reserves of oil and natural gas. The west wonders why it would need nuclear energy. Tehran says nuclear power will free up more of its oil to export and that's more money for the economy.
So what's the big deal? Thirty other countries have nuclear power. Why are some alarmed about Iran?
They're worried because enriched uranium, the fuel used in power plants, can also be used to make bombs. Ever since the Islamic revolution, the U.S., some of its western allies and Israel haven't trusted Iran. They see the regime here as a radical one, intent on spreading its brand of Islam.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The international community cannot have confidence that this program is exclusively of a peaceful nature. It does underscore the urgency with which the international community must work together to address these enrichment activities.
SAYAH: So does this power plant mean Iran is closer to making a bomb? That depend on who you ask.
Tehran says no, because nuclear bombs are against the teachings of Islam.
HASSAN QASHQAVI, FOREIGN MINISTRY SPOKESMAN: Based on their religion, as a religious country, and value of human (ph), that is, we totally rejected all kinds of using of this WMD weapon of mass destruction.
SAYAH: Tehran has also agreed to be monitored by the U.N.'s nuclear watchdog. The IAEA says its cameras and inspections haven't found evidence of Iran working towards a bomb, but Washington and western powers have not been convinced. They have imposed three rounds of economic sanctions.
The Obama administration has yet to say whether it plans to stick with the Bush administration's demand for Iran to stop enriching uranium. For now, enrichment continues here in Iran and so does Iran's nuclear program. Officials say if all goes as planned, Bushehr will be up and running by late 2009.
Reza Sayah, CNN, Tehran.
(END VIDEOTAPE)
HARRIS: It is lighting up the sky. And you can see it tonight. We've got details on the newest, coolest, baddest comet.
(COMMERCIAL BREAK)
HARRIS: Want to get you to Chad Myers is in the severe weather center.
And, Chad, the coolest thing, I'm told, is in the sky. Oh, look at this.
CHAD MYERS, CNN METEOROLOGIST: Yes.
HARRIS: Hey, do you have the information on this? Because I've got some here on this comet Lulin, correct?
MYERS: Well, it got really close to the earth yesterday.
HARRIS: Yes.
MYERS: You know, I mean, still millions and millions and millions of miles away.
HARRIS: About 38 million.
MYERS: Yes. But it looks like kind after fuzzy little dot to the naked eye. And you've got to be away from the city to see the fuzzy dot. If you had a nice pair of binoculars, you could actually get a little bit of a view.
This is probably somewhere, I'm thinking, 100 power. That's a pretty good shot.
HARRIS: That's pretty good, yes.
MYERS: Yes. If you can get me a shot on iReport.com, I guarantee you to get that on for you tomorrow.
HARRIS: It looks like it has two tails there.
MYERS: It does. It's kind of going away. It's rotating the wrong way around the sun, that's why it's kind of looking -- going to look weird to you. But just look for a fuzzy dot out near Saturn. And you say, well where the heck is that? Well as the days go on, this thing's going to get farther away.
This is from skyandtelescope.com. If you want to know anything about this comet, go to skyandtelescope.com. It is going to be near Saturn and Regulus (ph) here and it's going to travel on up toward and away, in a sense, and I say to the north, it's going to travel away from Saturn.
Keep it up to date. Keep looking at it. If can you get me some pictures, I would love to see them. The best places will be in the east, high pressure, lots of sunshine, clear skies. The worst place is through the Midwest. Not a chance of seeing this in the Northwest. If you're on a big hill top above the clouds, maybe. But you'd have to be 12,000, 13,000, 14,000 feet to do that.
There's going to be a lot of snow out here, Tony. Two to three feet of snow through the Sierra, on top of two to three feet they had last week. But this is a good, good powder base. Again, we've ran out of snow for a while. We didn't give these ski resorts a lot of snow for months. But now we're really getting to it. And this is going to be good, good news for the ski resorts coming through the end of spring and into spring break for sure.
A couple more things I want to talk to you about. How much snow could you see? It could be enough to slow you down. Everywhere that there's this purple here, there's the Cascades here, I mean all the way down there, you could see a foot or two. And that could be right through the passes. Make sure you have all those things. The 4-wheel drive and the chains that they always ask you to take if you're going to be traveling through the passes in the Pacific Northwest.
Here is Seattle. You stay rainy, of course. Although you've had your share of snow this year for sure. This is not a snow event for you.
New York City, you warm up. On Thursday, all the way up to 52. Same thing for D.C., about 62. A little bit farther to the south, in Atlanta, is going to be real pretty. Chicago you get some freezing rain on Thursday.
Tony.
HARRIS: Awesome stuff. All right. And send in those i-reports. Let's talk about it tomorrow. Let's see some of those pictures. MYERS: Absolutely. Love it.
HARRIS: Thank you. Thanks, Chad.
MYERS: You bet.
HARRIS: Oh, you got to love this. It is fat Tuesday and that means New Orleans is celebrating letting the good times roll for Mardi Gras. This is the Krewe of Zulu. They toss painted coconuts to the crowd. City tour official say there is no indication the recession has hit turnout. Good news there. Mardi Gras is usually worth about $1 billion in business -- wow -- to New Orleans.
Fast food in a pancake pan. The annual Parliamentary Pancake Charity Race in London today. It pairs British lawmakers against members of the media. Oh, man. All the money raised goes to help brain injury survivors. And good wheels there.
How can our government start saving money. President Obama will be announcing plans tonight to cut the deficit. We want to hear from you. What should we cut from the budget? Josh Levs is back.
You getting a spike in e-mail traffic there, Josh?
LEVS: Every time we say it on the air, we get hundred almost instantaneously. It is amazing. I'm going to use the time to share as many as possible.
First of all, this is why we're doing it. Cnn.com/live hooking up with FaceBook throughout the day today. You can weigh in on the right as you watch. Meanwhile, my FaceBook page is part of this. We are asking you, "what should be pulled from the budget?" Here are some of the responses.
Arika writes, "one major thing we can cut from our national budget," check this out, Tony, "the delivery of mail."
HARRIS: Nice.
LEVS: That's interesting.
HARRIS: OK.
LEVS: Nikolas says "one suggestion that has a ton of support from the majority of United States citizens, crackdown on illegal immigration."
Let's get two more. Melissa says, "since many companies are cutting back on pay/hours, all the politicians should take cuts as well."
And finally, we'll read this from Megan. "The U.S. should cut back on research projects such as cloning and technology. They are things the country can live without."
If you want to weigh in, this conversation is going to keep going. If you're on FaceBook, just search joshlevscnn and you have the chance to take part in that discussion. We'll continue to bring you more right here, Tony.
HARRIS: And more at cnn.com/live, correct?
LEVS: All day long. All day long through tonight.
HARRIS: Thank you, Josh.
LEVS: Thanks.
HARRIS: Your home, your money, your life. The CNN Money team is going online to help you solve some problems. It's in the next hour of the CNN NEWSROOM.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
TIGER WOODS: And it feels great to be back out and get back out here in the competitive environment again. And it feels really good.
(END VIDEO CLIP)
HARRIS: How about it? It is what golf fans have been waiting for, Tiger Woods back in the game, announcing his return to the links with a simple message on his website that said "I am now ready to play." CNN's Rafer Weigel is here from the "Morning Express with Robin Meade."
Good show.
RAFER WEIGEL, CNN SPORTS: Thank you.
HARRIS: You guys rock.
WEIGEL: Thank you. So do you.
HARRIS: Appreciate it.
WEIGEL: All right.
HARRIS: Tiger's back, huh? WEIGEL: It's exciting. Do that again.
HARRIS: A reason to watch weekend television again. The last time we saw him, he was on one leg basically.
WEIGEL: Yes. In arguably one of the most dramatic moments in golf history when he'd rock (INAUDIBLE) on one leg and he was wincing in pain on every shot. So what now? He's going to come back and just mop the floor with everybody.
HARRIS: So and what was -- talk us through the injury because this was a pretty serious injury for any athlete.
WEIGEL: Right. And this was actually the biggest injury he's ever suffered.
HARRIS: Right.
WEIGEL: A torn ACL and MCL. A double stress fracture. I mean Ernie Els had the exact same injury and he said it took him a year and a half to get back to form.
HARRIS: And Ernie's not the same player.
WEIGEL: Right. Right.
HARRIS: I mean, you know, he's a great player. He's one of the best in the world, obviously, but he is not the same player he was before the injury. Would you agree with that?
WEIGEL: Absolutely. I would agree with that. But Tiger is the one telling us he's better than ever. He's the one saying that his leg is stronger. His caddie says he's better now. Some of his closest friends. So, I mean, I guess we've got to take him at his word. But we'll see tomorrow.
HARRIS: So eight months, right, since the last time he played a competitive round.
WEIGEL: Right.
HARRIS: Look, you're the sport guy, I'm not. What are you expecting tomorrow? This is match play. Anything can happen.
WEIGEL: Right.
HARRIS: Under the best of circumstances in match play, what are you expecting out of him? What do you want to see?
WEIGEL: Well, I think the match play is actually ideal for him to come back because you're talking about playing one guy one on one. You're not playing the entire field like you would in a tournament. So let's say he messes up a hole, he can still recover and beat that guy.
HARRIS: Yes.
WEIGEL: He's won this tournament three times already. So he's already got a psychological advantage. The downside is, it's a lot of golf. You're talking seven rounds, five days.
HARRIS: All right. Let's dip in a little bit. Mark (ph), is he still talking, answering question.
All right. Let's dip in for just a minute. Tiger Woods.
UNIDENTIFIED MALE: Secondly, can you just kind of talk about the state of the PGA tour and what you've seen in your time away and sponsors that have left and things that are going on and what level of concern you have over that?
WOODS: Well, the tour's obviously feeling it, just like any other part of business. You know, I think it is very important for all of us to understand that, how important the sponsors are to our sport. And we have to acknowledge that. You know, it's one of those times where we may be losing a few tournaments and a lot of tournaments are coming up on their contract years and this is a very important year going forward for us. And, you know, hopefully people will support us in what we're trying to do in the PGA tour because I think it's a great opportunity for people to come out and sponsor this event and our sport. But hopefully, you know, everything will be OK on the PGA Tour.
HARRIS: Look, the game -- the man's back, OK. The man that has been driving revenue in the sport for 10, 11 years now.
WEIGEL: Right. Thirteen.
HARRIS: Thirteen. OK, 13 years. But he is acknowledging he's been following the news. He knows that the economy is bad and it is impacting the sport. But here's the question, Rafer, how important is this man, his return, to the game? How important is this moment?
WEIGEL: I'll give you a number, 50 percent. That's how much ratings have been down when he has not been playing in tournaments. Attendance down 30 percent since he hasn't been playing. So now that he is back in, I think you're going to see a lot more excitement. And I think, you know, before he went down last year, before he lost the Masters, there was talk about the Grand Slam and would he win the Grand Slam. That talk is back now.
HARRIS: The Masters. Isn't this event . . .
WEIGEL: No.
HARRIS: Isn't it what is really all about?
WEIGEL: Right.
HARRIS: He is trying to get his game in some kind of shape for the Masters.
WEIGEL: Right. The first of the four majors.
HARRIS: Coming up in April.
WEIGEL: April.
HARRIS: Augusta. We love Georgia in April.
WEIGEL: Nice to see you.
HARRIS: Great to see you. Thank you so much. And, again, Tiger, the Accenture match play, starting play tomorrow.
WEIGEL: He tees off at 2:02 against Brendan Jones of Australia.
HARRIS: Who?
WEIGEL: Exactly. I'm sorry, Brendan. But, you know, Brendan will make it into the history books as the first guy Tiger beat coming back after (INAUDIBLE).
HARRIS: There you go. We've got to go. CNN NEWSROOM continues right now with Kyra Phillips.
