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President Obama Sets Troop Withdrawal Date From Iraq; Stock Markets Lower
Aired February 27, 2009 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: President Obama and U.S. troops in Iraq -- today, he made good on a campaign promise and set the date for the combat mission to end in Iraq.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As a candidate for president, I made clear my support for a timeline of 16 months to carry out this drawdown, while pledging to consult closely with our military commanders upon taking office to ensure that we preserve the gains we've made and to protect our troops. These consultations are now complete, and I have chosen a timeline that will remove our combat brigades over the next 18 months.
So let me say this as plainly as I can: By August 31, 2010, our combat mission in Iraq will end.
(END VIDEO CLIP)
BLITZER: Bullet point number one: the combat mission over. Tens of thousands of troops will be coming home, but tens of thousands of other American troops will still remain in Iraq. So, is that really getting out of Iraq?
Tonight, a NO BIAS, NO BULL look at the plan President Obama is counting on to end a war that has already claimed more than 4,200 Americans.
Bullet point number two: your money. Another tough day on Wall Street -- the Dow nearly crashed below the 7000 mark, the president's ambitious budget plan doing little to spark investor confidence, at least for now. Tonight, we're going to help your confidence. Our team of experts is here to answer your questions about the president's budget and how it affects your tax dollars. Get ready to call us. We will put up the number in just a few minutes.
And bullet point number three: No secret, President Obama loves hoops. And, tonight, his hometown team, the Chicago Bulls, they are playing in Washington against, well, my hometown team. But, as always, we have details about life in the White House. And tonight that means a trip to the arena.
So, now let's take a closer look at the president's budget and how it affects Iraq and the Pentagon, bottom line, a lot of cuts, long-term, as all eyes focus in on August 1, 2010. If the president's schedule holds firm, that day will mark the beginning of the end of America's presence in Iraq.
Right now, more than 140,000 U.S. troops are still serving there. While most would leave, up to 50,000 troops could stay behind through the end of 2011, when the U.S. has already agreed to pull all its troops completely out. That's actually a date, by the way, that former President Bush and the Iraqis had agreed to and that President Obama intends to honor.
White House officials have not said how many troops would be rerouted to Afghanistan as part of the new buildup there, and all of this will happen as the Pentagon braces for belt-tightening.
(BEGIN VIDEO CLIP)
OBAMA: We cannot sustain indefinitely a commitment that has put a strain on our military and will cost the American people nearly a trillion dollars. America's men and women in uniform, so many of you, have fought, block by block, province by province, year after year, to give the Iraqis this chance to choose a better future. Now we must ask the Iraqi people to seize it.
(END VIDEO CLIP)
BLITZER: And there is an even bigger significance to the president's defense spending plan. It seems to be a direct attack on some 50 years of bigger and costlier and seemingly endless Pentagon programs.
For the Pentagon, it would be hardly business as usual.
We're breaking it all down tonight with chief business correspondent Ali Velshi and Pentagon correspondent Chris Lawrence.
Ali, first to you. There's a real shift here in priority in President Obama's budget, decreasing the defense budget to a certain degree, the president clearly taking U.S. economic policy in a different direction.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: What a massive shift, Wolf.
You have covered this for many years, and you understand that defense has really been an untouchable area for a long time and the defense budget has been growing. Well, look what is happening in the 2010 budget, $663.7 billion budget. We're talking about the 2010 budget, because that's the one that the president has unveiled his plans for.
Now, that's a small increase over the 2009 budget, 1.4 percent. But if you take a look at the amount of money that is being spent on overseas activities, on missions, it's going to be 4141,000 -- $141 billion -- I'm sorry -- vs. $130 billion in the 2010 budget.
So, there's a small decrease, if you see this, between 2009 and 2010. But this doesn't even tell the whole story, Wolf. The bottom line is over the course of 10 years that this White House has projected out, we are going to drop more than $1.4 trillion in defense spending. Now, right now, defense spending is about one-sixth of the budget pie.
And that's one of the only areas that the government has the ability to make some decisions, take some money out of that, and spend it on other programs that this administration feels are a greater priority than defense spending, Wolf. Those are programs like health, education, and alternative energy.
BLITZER: Yes.
All right, hold on for a second.
Chris, take a listen to the reaction that the president got earlier today at Camp Lejeune, North Carolina, when he discussed military pay raises. Listen to this.
(BEGIN VIDEO CLIP)
OBAMA: We will raise military pay and continue providing...
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
BLITZER: All right, Chris, give us a reality check. Doesn't the military usually get a pay increase?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, Wolf, they get a pay raise almost every year.
In fact, last year, they got a 3.9 percent pay raise. President Obama has budgeted a 2.9 percent increase. Now, to be fair, that is almost a full percentage point higher than what civilian federal workers are getting in this economy.
But, even if Congress bumps that up a bit, which they have done in the past, their raise, the military's raise, this year is likely to be not as high as it was last year.
BLITZER: All right, Chris, stand by. Ali, stand by.
We're getting new video tonight. The president explains his position on Iraq to PBS' Jim Lehrer.
Listen to this.
(BEGIN VIDEO CLIP)
OBAMA: Our goal in the region is to keep the American people safe. And I think that the more we can accomplish that through diplomacy and the more we can accomplish that by partnering with actors in the region, rather than simply applying U.S. military forces, the better off we're going to be.
(END VIDEO CLIP) BLITZER: So, winding down Iraq, what does it mean to U.S. interests in the Middle East.
Christiane Amanpour and Michael Ware, they're standing by to explain.
Plus, the government's money -- we're opening the phone lines right now so you can join us and talk to our experts. Here's the number, 1-877-NO-BULL-0. That's the same as 1-877-662-8550.
And President Obama rooting for his Chicago Bulls against my Washington Wizards. Is this going to get ugly? Stick around. You will see.
(COMMERCIAL BREAK)
BLITZER: Today, President Obama revealed for the first time the real timeline he has for ending the war in Iraq. But there was no banner reading "Mission Accomplished," instead, a sobering address from the commander in chief as he addressed the troops at Camp Lejeune.
(BEGIN VIDEO CLIP)
OBAMA: Let there be no doubt: Iraq is not yet secure, and there will be difficult days ahead. Violence will continue to be a part of life in Iraq.
As we carry out this drawdown, my highest priority will be the safety and security of our troops and civilians in Iraq. So we will proceed carefully, and I will consult closely with my military commanders on the ground and with the Iraqi government.
We will retain a transitional force to carry out three distinct functions: training, equipping, and advising Iraqi security forces, as long as they remain non-sectarian; conducting targeted counterterrorism missions; and protecting our ongoing civilian and military efforts within Iraq.
Every nation and every group must know, whether you wish America good or ill, that the end of the war in Iraq will enable a new era of American leadership and engagement in the Middle East. This does not lessen our commitment. We are going to be enhancing that commitment to bring about a better day in that region, and that era has just begun.
(END VIDEO CLIP)
BLITZER: A new era, the president says, but there's still a lot to do before then.
Let's talk about that with our chief international correspondent, Christiane Amanpour, CNN's Michael Ware, who has reported extensively from Iraq over these past several years. And, once again, we will bring back our Pentagon correspondent, Chris Lawrence. Chris, the administration is saying all combat troops will be out by the end of next summer, 2010. When will the first troops be coming home and what will the mission be for the troops that stay in Iraq after that August 2010 deadline?
LAWRENCE: Well, the first troops will start coming home at some point later this year.
And as to the president's three missions that he outlined, let's take a look at those. The first part of that mission is to train and advise the Iraqis. Well, that means we know from the Pentagon officials that some American troops will be embedding with those troops, which means they could be caught in conflict.
Two, protect U.S. civilians and assets, well, that could mean actually defending, say, a reconstruction team from attack. And, three, conducting counterterrorism missions. Even though the Iraqis will be in the lead on these missions, that still means American troops going after the terrorists to capture or kill them. Even though these may be not designated combat missions, all of these missions can involve combat.
BLITZER: Well, Chris, the generals, as you know, they had some concerns that they brought to the president's attention. What do you know about that?
LAWRENCE: Yes, the generals were very concerned about that initial 16-month proposal, because what they want to do is keep as many troops in Iraq as possible through the end of the year and get through those Iraqi elections.
They would not have been able to keep as many as they wanted. Now that they have got a little bit more time, what you will see is maybe a brigade or two leave later this year. But the majority of those troops will not leave until next year.
BLITZER: All right, stand by.
Michael, the president's clearly aware that there are major, major concerns about Iraqi's stability.
Listen to this.
(BEGIN VIDEO CLIP)
OBAMA: We cannot rid Iraq of every single individual who opposes America or sympathizes with our adversaries. We cannot police Iraq's streets indefinitely until they are completely safe, nor can we stay until Iraq's union is perfect.
(END VIDEO CLIP)
BLITZER: The president phoned the prime minister, Nouri al- Maliki, today, reportedly told him that the Iraqis -- al-Maliki saying the Iraqis are ready to take over.
Michael, you know this country. You know the stability there. Are they ready?
MICHAEL WARE, CNN CORRESPONDENT: Well, I think the prime minister is dreaming there.
I mean, if the Iraqis were to take over now, we would see a weak central government, Iraqi security forces that are not yet cohesive or entirely battle-ready. And it's almost certain that we would see ongoing sectarianism.
Now, none of that bodes well for American interests and indeed would amount to an embarrassment for the American mission, if that were to be their legacy.
I think Prime Minister Maliki's government needs a bit more time before it can fulfill that great statement. And let's remember, in terms of the president's statement today about withdrawing the troops, there's enormous symbolic importance to this.
But, in reality, it isn't that great a development. I mean, the Bush administration that started this war are the ones who had already signed the deal to end the war, surrendering America's war-fighting capability.
President Obama had 36 months to play with. It was merely up to him how many of those months he would need for the bulk of those forces. And we learned today that it's 19. So, really, this is just a calibration of something that we already knew -- Wolf.
BLITZER: Christiane, we know there are deep concerns here in Washington about Iran will do once the United States leaves.
What is the relationship right now, as best as you can tell, between Iraq and Iraq?
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Iran wants a stable Iraq. That's in Iran's interest. And while Iran has been on record over and over again as saying that it wants eventually to see U.S. troops out, it also doesn't want chaos on its border there.
And many people are saying that once the United States, if in fact President Obama pursues his desire for a new strategic relationship with Iran, then a very positive fallout from that could be health and stability in Iraq.
And, of course, U.S. generals are saying that the Iraqi forces, upon which the entire system will depend eventually, are not yet ready. There is a long way to go. And 2009 is going to be a really critical year in beefing up the Iraqi forces. Most of their problem is in logistics. And that's something that's really going to have to be beefed up.
BLITZER: Michael, there are millions, as you well know, millions of Iraqis who have fled the violence. They're now refugees, whether in Jordan, Syria, elsewhere. The president says he wants them to return home. Here's the two-pronged question: Will they, and what will the impact be?
WARE: Well, this will be the great test, won't it?
The Iraqis here will literally be voting with their feet. We have about four million displaced people either in Iraq or who have fled outside, primarily to Syria and Jordan. Now, whether those people, mostly Sunnis, but also a large number of Shias, are willing to return will be the litmus tests.
And should they do so, well, that will be a vote of confidence in the government and the situation. It's certainly much-needed by Iraq for these people to return. And let's not forget, anyone who had money, anyone who had education, anyone who had a profession left a long time ago.
Iraq needs its intellectual strength back. Let's hope they come back. But President Obama wishing it to be so doesn't necessarily mean that it will be -- Wolf.
BLITZER: Yes, good point.
Christiane, in Iraq, the president's withdrawing troops slower than he originally wanted. They're leaving more troops on the ground. A lot of Democrats aren't very happy about that.
In Afghanistan, he's sending 17,000 more troops there, instead of the 30,000 or so that some of the military commanders originally wanted. This more cautious approach, what does it say about the president and the situation in the region?
AMANPOUR: Well, surely, it says that the president is consulting with his commanders on the ground. And this is what they have come up with.
He has always said, we want a responsible end to this war. And, to be frank, Wolf, the difference between 16 months and 18 months, when you're talking about a massive logistic withdrawal of troops, is almost negligible.
And, also, as you know, Iraq and the United States have signed a contract whereby all U.S. troops have to be out by the end of August 2011. So, we're really playing with months here.
In terms of Afghanistan, that is where the big focus obviously of this administration is going to be. And, as you say, they have decided to send some 17,000 more troops, which should start arriving in the summer.
The question, though, is, what is the mission for these troops? From what we can gather, the mission will be at least in the short term to protect the elections, which are coming up towards the end of the summer in Afghanistan. But that's a very limited mission.
So, while the president says he wants to stop Afghanistan from ever returning as a safe haven for terrorism, there is also a huge amount of work to be done there that goes beyond the military. Most agree, wherever you go and whoever you talk to on the ground, this is not something that's going to be won militarily. And so there's a huge amount of diplomacy, development, and economic rebuilding to be done to make Afghanistan stable.
BLITZER: To be sure.
Christiane Amanpour, Michael Ware, Chris Lawrence, guys, thanks very much.
We have been digging into President Obama's new federal budget, more than $1.5 trillion in 2010. And we all want to know what it means for us, like this I-Reporter, Simon, in Florida.
(BEGIN VIDEO CLIP)
SIMON, ORLANDO, FLORIDA; It's very, very clear to most Americans that I speak to, at least, that one of the major, major problems with the American economy today is that there are no American consumers, or that there's way less American consumers. And one of the major reasons for that is that jobs have been outsourced overseas.
(END VIDEO CLIP)
BLITZER: Ali Velshi and a team of experts, they are ready to break down the numbers and take your calls.
This is the number, 1-877-NO-BULL-0. That's 1-877-662-8550.
And another first for the Obama White House -- the first lady, Michelle Obama's, official portrait was unveiled today. We will tell you which big-name designer designed her dress.
(COMMERCIAL BREAK)
BLITZER: We're learning more tonight about President Obama's record-setting $3.55 trillion dollar budget plan for 2010, the biggest budget in U.S. history.
Even with that almost unimaginable amount of money to spend, there are winners and losers. And as the president warned yesterday, there will be lots of hard choices ahead.
(BEGIN VIDEO CLIP)
OBAMA: Just as a family has to make hard choices about where to spend and where to save, so do we as a government. There are times where you can afford to redecorate your house, and there are times where you need to focus on rebuilding its foundation.
Today, we have to focus on foundations.
(END VIDEO CLIP)
BLITZER: So what exactly are the foundations for that $3.55 trillion budget?
Ali Velshi is back to break it down for us over at the wall.
Ali, where is all this money in this budget going?
VELSHI: Well, let me give you a sense of some areas that are gaining or taking part of.
This is $3.55 trillion. This is what it looks like. And, remember, Wolf, we're not pulling in that much money, so we're going to have a deficit of $1.7 trillion, a shortfall.
Let's take a look at some of the areas of priority. Transportation will be getting $72.5 billion in total out of this budget. About $5 billion of that will go for high-speed rail corridors. That's an effort to both be a little bit greener and enhance infrastructure. That's part of that infrastructure-building.
Education, $46.7 billion in total going into education in this budget. They're going to eliminate private lenders for student loans, increase Pell Grants to $5,500, and give more money to people who are having trouble getting through school to get through school.
In energy, this is not -- there's $26.3 billion in total going into this budget for energy. And some of that is for the stimulus for green energy. What hasn't happened yet, but is going to happen and it will be a big deal is a cap on U.S. carbon emissions. There will be a limit on how much companies can emit, and, if they want to emit more than that, they have to buy the right to do so from other companies that are not using that cap.
Agriculture, it's $26 billion in this budget. And one of the things you're going to see is subsidies being cut to the wealthiest farmers, farmers that have been receiving subsidies even though their crops of doing well, the price of their product has been high, and they may not need those subsidies.
There's sort of a whole other section worth $78.2 billion. But there were two things that caught my eye in here, particularly given the year that we have had. The SEC, the Securities and Exchange Commission, is getting a 13 percent boost in its budget. And the EPA is getting the largest budget in its history. It is a big part of this administration's push to do more for the environment.
So, those are just some of the areas that are getting some money out of this budget -- Wolf.
Ali, stay right there.
I want to bring in two more smart minds on the economy. Laura Tyson, a member of President Obama's Economic Recovery and Advisory Board, she's a professor at the University of California-Berkeley's Haas School of Business, Ben Stein, "The New York Times" business columnist, former presidential speechwriter, and co-author of a new book, "How to Ruin the United States of America." Ali is still going to be with us.
But let me start with Ben. Ben, what do you think? Are these new priorities as explained by the president a positive change?
BEN STEIN, FORMER NIXON SPEECHWRITER: Well, I don't think they are much of a change at all.
It's interesting that when Ali was going through those things, he omitted about 75 percent of the budget. I don't know what the other 95 percent is going for.
I don't really think that cap and trade works. They tried it in Europe. It didn't work very well. There are too many exemptions for established utilities and coal-fired plants. I question that whole idea.
I question whether a taxi driver in San Francisco or Berkeley should be being taxed to send the child of an orthodontist to graduate school in art history. I question the whole idea of transferring money from hardworking businessmen to students. I question that whole idea.
I question whether it will advance education to build solar panels attached to schools.
But, in general, I like the idea of a large deficit as a way of stimulating the economy.
BLITZER: All right, let me bring in Laura.
The cap-and-trade issue, which is designed to deal with global warming, put a tax, if you will, on some of those businesses out there that emit way too much carbon dioxide, what's right about that proposal that the president put forward?
LAURA TYSON, PROFESSOR, UNIVERSITY OF CALIFORNIA: Well, as you mentioned, Wolf, it actually won't take effect until 2012.
The European experience initially was not a great success, because they set the cap levels incorrectly. The Europeans themselves view the cap-and-trade system as a success now and indeed have made substantial progress.
Most economists absolutely agree that the only way -- the only way you can make credible movement on reducing carbon emissions is to change the price, to increase the price of carbon emissions. You can do that by a carbon tax. You can do it by cap and trade. They are analytically equivalent. If you get the cap right and you auction it, you are going to get the price right, and the government is going to get a lot of money from the auction.
(CROSSTALK)
BLITZER: Hold on one second. I want Ali to weigh in right away.
VELSHI: As Ben Stein said -- he's right -- I touched a very small part of the budget. But I have been doing this for a long time. We touched the rest of the budget. We pointed out very clearly that two-thirds of the budget is not things that this administration can do anything about.
It's mandatory spending. They do need to think about that. That's Medicare. That's Social Security. That's a big albatross. There's interest payments in there. So, we do have to deal with that.
I'm really just citing examples of the fact that -- I have got to disagree with you, Ben. This is a monumental shift in government's priorities. This government's budget is the priorities that it believes it wants to undertake. And this government is doing exactly what it told voters it was going to do.
This is what the Obama administration said it would do. And the reductions in defense spending, the increases to education, the increases to health care, and the increases to alternative energy, even though education and alternative energy, we will see more of later, are definitely a fundamental shift. Wouldn't you agree? We don't see budgets that...
(CROSSTALK)
VELSHI: ... cut the defense out like that.
STEIN: Well, wait. You just asked me a question.
The answer, one, cap and trade, it creates another Enron situation, where there can be all kinds of slick maneuvers in trading these credits. I don't think we need anymore Enrons.
Two, the alternative energy has been tried over and over again in my beloved home state of California. It never works. The idea of penalizing fossil fuel producers is a bad idea. They're the ones we get most of our energy from. I don't know why we're penalizing them.
And, by the way, I just read in "The New York Times" -- on the "New York Times"' site that defense spending is going up 4 percent next year. So, I'm not quite sure what you mean by it's going down.
VELSHI: It's going up. But I indicated -- Ben, you're watching very selectively.
I indicated that it's going up in 2010, and then it's going down. There are precipitous decreases, particularly with that part of the budget that is going toward funding wars in Iraq and Afghanistan. It's going to be $1.4 trillion less over the course of 10 years.
(CROSSTALK)
BLITZER: Hold on, Ben.
I want everybody to stand by, because there's a lot to digest there, and we have a lot more to talk about.
What does all this mean for you? We have got your calls and questions that are coming in. Our experts are ready to offer some answers live when we come back.
Remember, you can call us right now at this number, 1-877-NO- BULL-0. That's 1-877-662-8550.
And forget about Jack Nicholson or Spike Lee. There's a real celebrity basketball fan in the seats tonight. That would be President Obama.
The president's night out -- he's over at the Wizards game. They're playing the Chicago Bulls.
Stick around. We will be right back.
(COMMERCIAL BREAK)
BLITZER: We're back with our economic experts, Laura Tyson, Ben Stein and Ali Velshi. We're also taking your calls. Remember, the number is 1-877-no-bull-0, or 1-877-662-8550. Let's get a question right now from Anne in Indianapolis.
QUESTION: Yes, I wanted to know what is President Obama going to do about the sinking stock market? It's gone down over a thousand points since he's been in office, and every time he gives a speech, it goes down even further.
I think investors just have no faith in him. We're taking a big hit. My friends are taking a big hit. My kids are taking a big hit, and what do we do?
BLITZER: All right, Laura, what about that? You've been advising the president.
LAURA DANDREA TYSON, PROFESSOR, U. OF COLUMBIA: Right. Well, I think we have to -- the president said in his speeches this week, you know, we've inherited an awful situation and the president with the Congress is trying to do several things. And we've passed a major stimulus package which will begin to take effect. It is already beginning to take effect. It will hit the economy strongly in the second and third quarter. That should help a lot.
We just introduced a new foreclosure relief policy to help people refinance their loans. And this doesn't -- it's not limited to just people who are in foreclosures, people who actually need to refinance their loans in order to keep them. We're working very hard on the financial stability situation and frankly, it is very complicated.
I don't want to indicate at all there are any easy answers. We have a global financial market crisis and global economic crisis going on. And sadly, sadly but truly, there are no quick fixes here.
BLITZER: All right.
TYSON: The budget, the 10-year budget is a 10-year budget, meant to show the shifting priorities of the economy long-term. For example, more investment in health to help Americans.
BLITZER: All right.
TYSON: More investment in education.
BLITZER: All right, let me bring Ali back in.
Ali, go over to the wall and explain to us how the president proposes we're going to be paying for all of this.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. And we're not going to be paying for all of it because the budget is so much bigger than the revenue we're taking in, there'll be a $1.7 trillion shortfall.
Ben Stein, I want you to pay close attention to this so you can see if I got this wrong. There are four things this government is doing in order to try and deal with this budget.
One, tax increases for couples earning $250,000 or more. President Obama had said when he was campaigning for president that 95 percent of working Americans are not going to see any tax increase, but a small percentage of the highest earners will, and he's coming through with that.
Number two, closing some corporate loopholes which will encourage companies to repatriate some of the money that they've made overseas.
Number three, and this is probably the one that concerns me most, banking on an economic recovery. Earlier this week, we heard Ben Bernanke, the Federal Reserve chairman, say that if all goes well, and all hasn't gone well for a very long time, if all goes well, we could see the end of the recession this year and we could move into recovery starting in 2010. That's a very, very big if.
And the last one and this is the one, Ben and Wolf, that I've been saying is the most important issue, and that is a massive shift away from defense spending by ending the war in Iraq, repatriating some of those troops and cutting $1.4 trillion out of our expenses over the course of 10 years.
BLITZER: Does that make sense to you, Ben?
STEIN: Well, we have lost $7.5 trillion of household wealth due to the stock market crash. A large part of that, not all of it, has been since Mr. Obama took office. This market and the people investing in it have no confidence in Mr. Obama.
Mr. Bernanke said we need to have a financial solution to the financial crisis. We need to shore up the banks. We need to show that we are not going to let this financial crisis overwhelm us.
It is not a problem of digging ditches and filling them back up against or putting solar panels on schools. It is a financial fix and mark to market, that's nonsense. That's killing ourselves, have guarantees for banks to encourage them to loan.
We have got to get a hand on this. Half measures availed us nothing. We're not doing anything anywhere near big enough.
BLITZER: All right. Hold on, guys, because we're going to take another quick break. Lots more to talk about with our team of economic experts. They're staying right here. They're getting ready to answer more of your questions. Remember the number, 1-877-no-bull- 0. Or 1-877-662-8550.
And in tonight's "Political Daily Briefing," John McCain is the latest politician to jump on the twitter bandwagon. By why is he tweeting? What is he tweeting about? Why is he tweeting?
All things coming up. Would it be pig odor research in Iowa? Stay with us.
(COMMERCIAL BREAK)
BROWN: We're back with our economy experts, Laura Tyson, Ben Stein and Ali Velshi. And we're taking your phone calls live over here on the president's budget.
Remember the number is 1-877-no-bull-0, or 1-877-662-8550. You could call us right now. We'll try to get your questions answered, but I want to find out what our experts think.
With a record budget deficit, a record deficit and the low, the dollar at historic lows right now, can President Obama make the numbers work?
Laura, let me go back to you and talk about investor confidence once again. The Dow Jones has lost as you know, about 50 percent of its value since its high back in 2007. It closed today, closing near 7,000. It was over 14,000. Have we reached rock bottom yet?
TYSON: You know, I don't think anyone knows the answer to that question, Wolf. I don't think any expert on any financial market in any government circle knows the answer to that question.
I would like to point out, though, that this process started in the last -- this process has a history which goes back to a total failure of regulation. And I think the person who underscored it most clearly was Alan Greenspan himself who said, you know, I made a mistake. Banks, financial institutions can't regulate themselves. When you go for self-regulation, they succumb to greed. They succumb to making decisions which are much too risky. They leverage themselves too much and we are now living with the aftermath of that, and it is a very painful adjustment.
And now, what's happened is because the credit markets essentially closed down last fall, literally closed down, and then we had to introduce some emergency resuscitation measures. But that credit market collapse created a recession and the recession and the concerns about a deeper recession are what's dragging the stock market down. It's not about what President Obama has said or not said. It is about the financial crisis that we inherited and the recession it has caused.
BLITZER: Right.
Let me move on to Ben, because there's a related question to what we just heard from Laura. There's a big conservative conference going on in Washington right now. Listening to the speeches, we're getting a clear idea of what their line of attack against President Obama will be. Listen to this.
(BEGIN VIDEO CLIP)
SEN. JIM DEMINT (R), SOUTH CAROLINA: Earlier this week, we heard the world's best salesman of socialism address the nation.
NEWT GINGRICH (R), FORMER HOUSE SPEAKER: I listened carefully to the president's speech that night. I think it is the boldest effort to create a European socialist model we have seen.
(END VIDEO CLIP)
BLITZER: All right, Ben. Is that kind of talk of socialism, is it fair? Is it accurate? Some say it's merely name calling.
STEIN: It's not fair and it's not accurate, and professor Tyson absolutely nailed it. This thing, this disaster we're in was started by total mismanagement under the Bush administration, especially under Secretary Paulson whose behavior was just, I would say, close to criminal in letting Lehman Brothers fail and letting this whole thing fall apart.
I don't question that at all, Professor Tyson. The blame rests mostly at the Bush administration's door. But for gosh sakes, let's get moving now and rescue the financial system. Let's have a big drawing the long bomb and get a major response out of President Obama.
BLITZER: All right. Ben, are you in favor of a return to much more aggressive government regulation?
STEIN: Absolutely. Much more aggressive. Look, Krugman -- Krugman suggested that we have trials of the people in the Bush administration responsible for this failure. And, you know, I think Krugman usually goes too far in that direction, but I think in this case trials are in order that the misconduct was so severe, trials are in order.
BLITZER: He's referring to Paul Krugman, the "New York Times" columnist, the Nobel Prize winner for Economics.
All right, guys. Thanks very much. Laura Tyson, Ben Stein, Ali Velshi, good, good discussion.
Sarah Palin and the next generation of the GOP. What do the voters say so far about who should lead the Republican Party in 2012? Plus, the straight talker, tweeting. John McCain and more in our "Political Daily Briefing."
And we go inside the White House for the story behind the first lady, Michelle Obama's official portrait. (COMMERCIAL BREAK)
BLITZER: Tonight a California mayor is on his way out while a Senate veteran is getting into the latest technology. It's all in our "Political Daily Briefing."
Erica Hill is joining us right now. Erica, what happened with that California mayor apparently resigning in disgrace over an e-mail?
ERICA HILL, CNN CORRESPONDENT: In fact, he is. Those (ph) telling me this mayor, Dean Grose, sent this e-mail to a small group of friends. He didn't mean to offend anyone. But tonight it turns out, much more than that small group have seen the e-mail. In fact, many American have seen the message. The mayor has heard their response loud and clear now saying he plans to resign at Monday's city council meeting.
Now the issue here is a doctored White House picture. Here is it right here with a watermelon patch you see on the front lawn. It came in an e-mail with the subject line, "No Easter egg hunt this year."
Dean Grose claims he wasn't aware of the racial stereotypes linking African-Americans and watermelons and said he didn't mean to offend anyone. The Southern California city of 12,000, though, issued its own statement distancing itself from the mayor.
BLITZER: Speaking of e-mail, Erica, and all things on the Internet, it sounds like Senator John McCain right now embracing twitter?
HILL: Yes, he is. The spiffy (ph) format really seems to be a perfect fit for his straight talk. Today's tweets include his list of the top ten porkiest projects in the omnibus spending bill. And there were a few that we just couldn't resist sharing with you.
Number eight, $200,000: tattoo removal violence outreach program to help gang members or others shed visible signs of their past. Really, tweets the senator?
Number six on his list -- $1 million for Mormon cricket control in Utah. He goes on to ask, "Is that the species of cricket or a game played by the Brits?" And coming in at number one, 1.7 million for pig odor research in Iowa.
I have to admit they're really entertaining tweets. I highly recommend signing up for them.
BLITZER: All right, good idea. He may not have to worry. As you know, Erica, about how all that sits with the voters in Iowa in 2012. Some other Republicans might and Republicans are already talking about who the GOP nominee could be in the next presidential election -- Erica.
HILL: Of course, they are. I mean, we're well on the road to 2012, right, Wolf? Senator McCain's running mate it turns out, when you talk about 2012, really holding her own. There's a new CNN/Opinion Research poll out today which finds 29 percent of Republicans were most likely to support Sarah Palin as their candidate. Now, respondents were actually given five options.
Coming in a close second, former Arkansas Governor Mike Huckabee with 26 percent. Twenty-one percent picked former Massachusetts Governor Mitt Romney and in a distant fifth place with nine percent, Louisiana Governor Bobby Jindal. Someone else actually came in fourth, Wolf. They managed to take 10 percent.
The poll we should point out here was taken before Jindal gave the Republican response to President Obama's address on Tuesday night. But what gets really interesting here is when you break it down by sex, women give Governor Palin a 10-point edge over Huckabee.
The poll, by the way, comes as conservatives are gathering in Washington for the Conservative Political Action Conference. Attendees there are going to take their own straw poll this weekend for the next GOP presidential nomination. Those results we're told should be released tomorrow.
BLITZER: All right. We'll find out, of course, right here on CNN.
Erica, thanks very much.
Paying for extras on an airplane, now, that's nothing new these days. But if one airline puts a coin slot in the restroom, that's going too far, isn't it? You're going to find out which one might be doing that.
Also, he's off to see the Wizards lose. If he has his way, the commander in chief, the NBA's first fan, at least tonight, he's at the game. The Wizards and the Bulls right here in Washington.
(COMMERCIAL BREAK)
BLITZER: Gary Tuchman has "The Briefing" tonight -- Gary.
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Hi, Wolf. Listen to what Nobel Peace Prize laureate Elie Wiesel wants for Bernie Madoff.
(BEGIN VIDEO CLIP)
ELIE WIESEL, NOBEL PEACE PRIZE LAUREATE: I would like him to be in a solitary cell with a screen. And on that screen, for at least five years of his life, every day and every night, there should be pictures of his victims, one after the other after the other. Always saying, "Look, look what you have done to this poor lady."
(END VIDEO CLIP)
TUCHMAN: That's so sad. Wiesel's Foundation for Humanity lost $15 million in investment with the accused Ponzi swinder, and a holocaust survivor lost his life savings. Madoff has a court date next month in New York. Bravery behind the wheel caught on camera in California. A trucker was sleeping in his big rig and awoke to find the trailer on fire. Instead of bailing, he started it up and drove out of the truck stop away from the gas pumps, possibly preventing a catastrophe. No one was hurt. The fire is being called suspicious.
The last ever edition of "The Rocky Mountain News" is a best seller today in Denver. The headline, "Goodbye Colorado". After almost 150 years, the bad economy and the Internet help put the paper out of business.
Meanwhile today, the American Society of Newspaper Editors canceled its convention for the first time since World War II because of the economy.
And talk about a no frills airline, the CEO of Ireland's Ryanair is floating the idea of charging passengers to use the bathroom. That's right. He says it's true.
He says putting a coin slot on the lavatory door could help lower ticket cost. No word on what would happen if 30,000 feet of passengers don't have exact change.
A very humane proposal. Wolf, what do you think Jack Cafferty would say about this?
BLITZER: I'd say he'd be very upset and I don't blame him. Stupid idea. If you ask me, get the money somewhere else.
All right. Gary, thanks very much.
Tonight on "LARRY KING LIVE," Dr. Phil takes your calls about the mother of those California octuplets. "LARRY KING LIVE" right at the top of the hour.
They both know a thing or two about deficits right now. We're talking about President Obama and his favorite team, the Chicago Bulls. We're going to have details on what you didn't see before the big game tonight.
(COMMERCIAL BREAK)
BLITZER: Here's a very happy President Obama just a little while ago arriving in Washington's Verizon Center for the Wizards-Bulls NBA game. He shook hands with fans before taking his seat courtside and was soon joined by a young fan.
Right now, he's watching from a private box, rooting not for the home team, but for his home team. That would be the Bulls. He's a die-hard Bulls fan.
Tonight we begin a new series on NO BIAS, NO BULL, "Inside the White House." And joining me right now to kick it off is Dayo Olopade, Washington reporter for the online magazine, "The Root."
Dayo, I could have been at the game tonight, but work comes first, of course. I understand President Obama has been spending a lot of time with his favorite team recently, hasn't he?
DAYO OLOPADE, "THE ROOT": That's right. The president actually invited the Chicago Bulls over to the White House yesterday where they got, I'm told, a full tour of the entire residence and were thrilled to do so. They took a picture with him in the Oval Office and presented him with a jersey that quite obviously had the appropriate number 44 for Barack Obama, 44th president.
And the whole team apparently loved it. But I really think they might have been mutually star struck. As you can see, the president loves basketball.
BLITZER: He certainly does, and you can see the jersey, the 44, the number 44 they gave him in the White House. The president's a tall guy, but there's some other taller guys there.
Let's talk a little bit about what I understand you got some details of how the president and the first lady are hoping to bring some new faces to the White House.
OLOPADE: That's right. I think you have seen divided loyalties tonight. He's got an old team and a new team, and he's there with some Chicago friends. But the president really has made a point of engaging not just with the politics of Washington, but the city of Washington. And he campaigned on transparency and they're really trying to do a good job of bringing the city of Washington there.
I attended an event in the East Room with Michelle Obama where she spoke to children, D.C. middle schoolers about Black History Month and they attended a concert. The social secretary's office has said they'd like to do much more of that, whether it's lectures, or concerts, conversations with the president. And Michelle Obama repeatedly called the White House the people's house.
BLITZER: Yes. Well, it is.
Look at this, Dayo, the official portrait of the first lady released by the White House. It says a lot about some of the thoughts that she's having, certainly the image that's portrayed here. What do you think?
OLOPADE: Well, first things first, the dress is Michael Kors, it's fabulous. She looks great.
I think America and the world is really still trying to figure out what kind of woman, what kind of first lady Michelle Obama is, the same woman who is comfortable going to all the government agencies and talking about policy as well as sitting down with women at Howard University to talk about work, life balance. I think this picture really exemplifies so you can be both stylish and smart.
BLITZER: I think you're right. Dayo, thanks very much.
OLOPADE: No problem.
BLITZER: We'll take a quick break. We'll be right back. (COMMERCIAL BREAK)
BLITZER: We're always looking for your iReports, so let us know what's on your mind. This is what you could do. You can send them to ireport.com/Campbell, or just go to CNN.com and follow the iReport link.
That's all the time we have right now. Have a great weekend. I'll see you back here on CNN tomorrow night, 6:00 p.m. Eastern, the Saturday edition of "THE SITUATION ROOM," of course, only here on CNN.
I'm Wolf Blitzer in Washington.
"LARRY KING LIVE" starts right now.
