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American Morning
Health Care Summit to Emphasize Reform, Expansion of Coverage; Secretary of State Clinton Warns Iran to Stop Meddling; Barbara Bush Recovering From Heart Surgery; White House Party Politics; Some New Additions at the White House; Struggling Homeowner Faces Outrage; Limbaugh Challenges Obama
Aired March 05, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Welcome. It's Thursday, March 5th. Glad you're with us on this AMERICAN MORNING.
JOHN ROBERTS, CNN ANCHOR: Good morning to you. Thanks for being with us. Lots to cover today and topping our agenda right now, up arrows at last.
We're monitoring overseas indexes right now and a few of them looking strong after a good day on Wall Street. So what's in store for your money today? Christine Romans has a look at that, as well as what you, our iReporters, are saying about the president's new housing plan.
Meantime at the White House, the president just hours away from announcing plans to overhaul the country's health care system. Critics, however, already digging in for a fight. So will the plan ever get off the ground? We'll check in with our Suzanne Malveaux. She's the only reporter that you'll see live at the White House this early in the morning.
And we're following a developing story. Secretary of State Hillary Clinton warning that Iran now poses a threat to Russia and Europe, and she is offering some surprising remarks. CNN's Jill Dougherty is traveling with the secretary and she'll join us live to break down why there is a great deal concern all across Europe this morning.
CHETRY: But first happening right now, new details on your money. World markets heading south, even after Wall Street snapped a painful five-day losing streak. The declines, though, not as bad as we've seen. Both Hong Kong and London down slightly, but Japan's Nikkei is actually up nearly two percent.
Here at home, the Dow surging 150 points yesterday. The rebound prompted in part by details of President Obama's plan to help nine million of you hold on to your homes. CNN's Christine Romans joins us now.
We're cheering that the Dow still not even in 8,000 territory, but we need something to be happy about.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Not in the five- day losing streak is something a lot of people needed because it's started to get pretty ugly there, didn't it, with the Dow moving lower? And, you know, people had been saying that the Dow then was below the levels it was when Alan Greenspan and his famous irrational exuberance speech back in the late 1990s, and that kind of caught a lot of people who have been watching the markets. I don't know, it kind of hurt.
But some people tell me they think they might be a little bit of irrational gloom in the markets here. And a few people say, no, the gloom is pretty rational. Actually, when you look at all the economic data, it's not going to be very pretty this week. So, you know, we're looking for futures to be a little bit lower right now. It means that we don't know if we're going to have two days of that upside, but at least it was a little pause in all the selling. And so, we'll take that while we can.
ROBERTS: Any good news is something that we'll take.
ROMANS: Oh, yes, absolutely.
ROBERTS: Yes.
The president's housing plan still has got a lot of people talking this morning, including our iReporters. And you can join in, grab your camera and send us a video. Just click the iReport icon on our Web site, CNN.com/am.
Here's where iReporter Patricia Lewis of Willow Grove, Pennsylvania, said after calling her mortgage servicer to see if she could qualify for some help under the Obama administration's new plan.
(BEGIN VIDEO CLIP)
PATRICIA LEWIS, CNN IREPORTER: He basically told me that they as a servicing company will not actually look at this until it trickles down to them, and it could take 60 to 90 days before they even decide if they're going to accept and join in with this plan. And they told me that this is basically the case for even Freddie and Fannie. So the fact of the matter remains that if you are unemployed and if you have a mortgage, you're going to face foreclosure, OK?
So let's get this right. I am totally fed up and I'm mad as hell and I can't take this anymore.
(END VIDEO CLIP)
ROBERTS: Christine, so what do you make of this? All day yesterday we were saying the president's plan kicks in today.
ROMANS: That's right.
ROBERTS: Call your mortgage servicer, get some help. This poor woman is saying, hey, 90 days before they even consider whether or not they're going to participate.
ROMANS: And the government was pointing out yesterday and we reported yesterday as well that government said look, your servicer is going to be inundated, that they're getting the guidelines today so be patient. They kept saying be patient. Call them. Look at hud.gov for the details and whether you qualify, but call them. Not everyone is going to qualify.
CHETRY: Right. We had her on before. She was an iReporter that filed last week as well.
ROMANS: Oh, really.
CHETRY: And she's been out of a job for a year, I believe or her family is and so that does make it tough...
ROMANS: That's right.
CHETRY: ... because even though she's in trouble she may not necessarily qualify under these programs.
ROMANS: How do you modify a loan to 31 percent of no income? That's the troubling part for trying to modify some of these loans. Participation is voluntary for the servicers. The government has said this all along.
It's up to them to do it but remember they're going to get cash incentives and borrowers -- you might get cash incentives too for paying your loan on time. So the idea here is that if you're giving cash to people to modify loans that that's going to help. And servicers have until the end of the year to join.
They're getting the details yesterday. The 60 to 90 days, I don't know who her servicer is, but I would tell Patricia, keep calling them, don't give up. Keep calling them and say, well, OK, if you're not going to join this loan modification what are you going to do for me? Because foreclosing on her is going to cost them more than trying to figure out some other way to work it out, I mean, in almost every other case.
If you want to keep your house, there's some things you need to do to prepare. For people who are like Patricia, in her case, there's a bunch of stuff you're going to need. Get it all together. Even if your servicer hasn't signed up yet, you're going to need your most recent income tax return, account balances on all your loans, a letter specifically and clearly describing your circumstances. Go to hud.gov. Get the whole list. It's called "Making Home Affordable." Look for that. "Making Home Affordable," that's the plan. Not everyone is going to qualify. Not everyone is going to qualify.
ROBERTS: Good advice this morning. We'll stay on top of the story as well.
ROMANS: Sure.
ROBERTS: Don't forget to tune in on Friday night for the "CNN MONEY SUMMIT." Our good friend, Ali Velshi, and his team of financial all-stars are on the hunt for jobs. They're looking at who's hiring and who's firing. You don't want to miss it, Friday, 11:00 Eastern right here on CNN. CHETRY: And now to another big story we're following for you this morning. It's all about your health and your future.
President Obama holding a health care summit at the White House today, and it will emphasize his ultimate goal of reforming health care and also expanding coverage to all Americans. The summit will include some 150 lawmakers, doctors, health care professionals. It's the start of a major administration campaign to gain public support for overhauling the nation's health care system.
And Suzanne Malveaux is following it for us this morning. She's the only reporter live at the White House this early. So, you're talking about their big priorities today but also some of the criticism that's already cropping up.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You're absolutely right, Kiran. The economy is actually number one on everybody's mind. But you take a look at the number, the investment that this administration is making in health care reform, we're talking about $634 billion, billion dollars, and obviously it is a daunting number, it's a daunting task. But what is equally daunting is the number of people who don't have health care insurance. That's 46 million people.
So what this is all about is essentially trying to provide coverage for them and it really is jumpstarting this conversation. The administration aides I talked to say they realize they need to bring everybody to the table, even the critics, the detractors, that there's something for everybody in this plan so that's really what today is about, just the beginning of that process, Kiran.
CHETRY: The Clinton administration as we know famously tried for health care reform and did not succeed. So what are they -- are they learning any lessons from that to make a difference this time around?
MALVEAUX: They certainly are. I mean, if you take a look at the plan, this is actually something that has a little bit for everybody but there's going to also be sacrifice when it comes to doctors, hospitals and even patients. But the people who are part, on the front lines of that health care battle, Hillary Clinton and her team, most of those people are here in the Obama administration, one of them a chief of staff under Clinton, John Podesta. He is part of the transition team. He also heads his own advocacy group. He's been working on this issue since the Clinton days.
They've learned their lessons. They know they've got some sacrifice and that they're trying to bring all these sides together, Kiran.
CHETRY: All right. Suzanne Malveaux, we'll check in with you throughout the morning. Thanks so much.
And we also want to remind our viewers that President Obama is going to be making opening remarks at the White House forum on health reform, 1:00 Eastern. You can see it live on CNN as well as CNN.com. ROBERTS: We are following a developing story about a corner of the world posing a growing threat. This morning Secretary of State Hillary Clinton coming out with a strong warning that Iran's meddling in the Middle East and its support of terrorist groups poses serious concerns to both Russia and Europe. She made the remarks while heading to Brussels where she'll attend a NATO meeting.
CNN's Jill Dougherty is traveling with the secretary. She joins us now on the telephone.
And, Jill, according to the secretary here, let's get you to respond to this and give us some context and perspective. She said, "It is clear Iran intends to interfere in the internal affairs of the Mideast region and try to continue their efforts to fund terrorism whether it's Hezbollah or Hamas or other proxies."
Pretty strong words from the secretary there, Jill.
ON THE PHONE: JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: They are, John. And, you know, essentially what the secretary is saying is that Iran is trying to split the Palestinian leadership.
There are little (ph) two factions, as we know with the Palestinians, Hamas and the Palestinian Authority, and they are locked in a power struggle. The U.S. supports the Palestinian Authority, and its president, Mahmoud Abbas. In fact, Secretary Clinton just yesterday met with him in Ramallah on the West Bank. And don't forget that the U.S. also has pledged $900 million to Palestinian reconstruction that would go through Mahmoud Abbas.
Also, Clinton's comments came after Iran's supreme leader attacked and praised that second team, Hamas, which the U.S. considers a terrorist organization. And also Hamas is the organization that is really fighting in Gaza, so essentially it's messy. Don't try to split the Palestinians.
ROBERTS: You know, Jill, we also heard a couple of days ago about a letter that President Obama sent to President Medvedev of Russia talking about the missile defense program, suggesting that if Russia were to give some help on Iran or reigning its, you know, suspected nuclear ambitions that maybe that missile defense system wouldn't need to be put in Poland. Here's what the secretary about Poland and the Czech Republic related to the threat from Iran.
She said, "They recognize there is a real potential future threat. They understand that missiles could very well be in the hands of a regime like Iran's, which we know will use whatever advantage they have to intimidate as far as they think their voice can reach."
Is she really reaching out to Russia with that statement saying, hey, we got to get on board here? We have to counter this threat from Iran.
DOUGHERTY: Essentially, John, what the administration is saying is this missile defense system is not about Russia. We've been saying that for a long time. But what they are saying it's definitely about Iran and if Russia wanted to come on board and be part of it, they could. In fact, Secretary Clinton seemed to be indicating that she thinks that the Russians now accept that it's not about Russia, it's about Iran.
None of this is really new, I have to add, because, in fact (ph), this is all was going on during the Bush administration but what looks like maybe increasingly better relations with Russia, they might be able to bring Russia on board this common thread. And, John, just on Iran, you know, it sounds like we've got some good talk/bad talk going on because President Obama has offered to extend a hand if Iran unclenches its fist and suddenly Secretary Clinton has repeated that. But she seems a lot more skeptical about whether Iran would actually do that. The whole context, of course, is the administration is putting together its policy, this policy to (INAUDIBLE) on whether it's going to help we deal with Iran.
ROBERTS: A lot of things to be watching in the future. Jill Dougherty for us this morning live from Geneva. Jill, thanks so much for the report.
CHETRY: And also developing this morning, former first lady Barbara Bush hospitalized after undergoing open heart surgery. Our CNN medical team is up and tracking the former first lady's condition.
Also what's promising to be the one of the biggest congressional photo ops this year, Brad Pitt comes to Washington. We'll tell you who he's meeting with and why.
It's 11 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. A live look at Washington, D.C. right now and the White House, where it's 28 degrees going up to a high of 48 later on today. It is going to be mostly sunny, but the weekend, at least the latter part of the weekend is supposed to be spectacular. So you got something to look forward to there.
A look now at some of the big stories around the capital this morning. Congressional Democrats finally getting their wish. Former White House political adviser Karl Rove and White House counsel Harriet Miers now agreeing to give depositions about the firing of nine U.S. attorneys. In the past, the two have refused to cooperate citing executive privilege.
President Obama nominating a Republican as the new head of FEMA. Craig Fugate has been the director of Florida's emergency management since 2001. The president vows that he is the right person for the job and "ensure that the failures of the past are never repeated." After being the emergency director in Florida, you'd think he'd know a thing or two about recovering from hurricanes.
And "The Curious Case of Benjamin Button" comes to Washington. Today, Brad Pitt will meet and pose for pictures with House Speaker Nancy Pelosi. The two will be discussing the ongoing project to build affordable housing for low-income families that Brad Pitt is championing in New Orleans -- Kiran.
CHETRY: Well, researching rats in San Francisco and poring over pig odor in Iowa, just two of an estimated 8,000 earmarks in the president's spending bill that add up to $7.7 billion of your money.
CNN's Joe Johns looks at why in a time of financial crisis and exploding deficits, earmarks is still the word.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): It's hard to sell mixed messages in this town. Just last week during the president's speech to Congress, he sounded like he'd turned a corner in the fight against pork barrel spending.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm proud that we passed a recovery plan free of earmarks, and I want to...
JOHNS: But some in the audience were saying, you got to be kidding me.
SEN. KAY BAILEY HUTCHISON (R), TEXAS: There was just a roar of laughter because there were earmarks.
JOHNS: And now, more comic relief, as the president hammers away at reducing wasteful spending and saving taxpayers money, his buddies over at the Capitol are hammering out a monster spending bill, loaded up with more than 8,000 earmarks worth nearly $8 billion.
According to Taxpayers for Common Sense, a group that monitors government spending, that includes about $1.6 million for pig odor research in Iowa. $143,000 for a Natural History Museum in Las Vegas, $238,000 for the Polynesian Voyaging Society in Hawaii, all in a bill that's supposed to just keep the government operating.
Many senators openly defend the earmarks because for one thing, they're a tiny fraction of the overall bill.
SEN. JAMES INHOFE (R), OKLAHOMA: The earmarks, if you total them up, are less than one percent of the $410 billion. So we're not talking about that huge amount.
JOHNS: Do you both have earmarks in the bill?
SEN. JOE LIEBERMAN (I), CONNECTICUT: Yes, good ones.
JOHNS: Good ones. Authorized ones?
LIEBERMAN: Not all of them, no. But they're good ones and I'd be prepared to stand up and defend them if somebody raised a point of order.
JOHNS (on camera): But critics say in a time of exploding deficits, Congress should be tightening up and many Republicans who, according to Taxpayers for Common Sense, control about 40 percent of the earmarks in the bill, are saying that if the president is so committed to rooting out wasteful spending, he'd veto this thing.
HUTCHISON: Oh, it's just not credible to say that we're against earmarks and then sign a bill that has earmarks.
JOHNS (voice-over): Truth is, the president probably can't afford to pick a fight right now with congressional Democrats who are getting about 60 percent of the earmarks. These are the guys who can either drag his massive agenda over the finish line or drag it down to defeat. So the White House and his defenders say this bill is just last year's unfinished business and next time, it will be different.
SEN. CLAIRE MCCASKILL (D), MISSOURI: The president's budget will take up in a couple of months. This is a leftover from last year.
JOHNS: But when it comes to earmarks, the tradition has been the more things change, the more they remain the same.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
CHETRY: And two Senate Democrats are also urging President Obama to veto the spending bill. Russ Feingold and Evan Bayh saying they're going to vote against it. Bayh said that those who vote in favor of this bill "jeopardize their credibility." And we have reached out to both of the senators to appear on AMERICAN MORNING if they like this morning.
ROBERTS: It would be interesting to hear from them this morning.
Developing story right now, former first lady Barbara Bush hospitalized in Texas after open heart surgery. We're getting new details on her condition and hearing directly from her doctor.
Elizabeth Cohen and the CNN medical team are up next to break it all down for us. It's coming up now on 18 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. Twenty-one minutes past the hour. Time to fast forward to some of the stories we'll be hearing about today on CNN.
What went wrong with insurance giant AIG? The Senate Banking Committee searches for answers in a hearing at 10:00 a.m. Eastern on Capitol Hill. Lawmakers will hear from witnesses on what led to the company's downfall and continued problems, even though the government has poured billions of taxpayer dollars into keeping it afloat.
At noon Eastern, Homeland Security chief Janet Napolitano as well as HUD Secretary Shaun Donovan getting a look at hurricane recovery efforts as they tour the gulf coast areas hit hard by Hurricanes Katrina and Rita. They'll be joined the president's choice to run FEMA, Craig Fugate.
And at noon Eastern, California Supreme Court begins hearing oral arguments on the challenge to Proposition 8. The state's voter approved to ban on gay marriage. Supporters of same-sex marriage held a protest march last night in San Francisco. Thousands are expected outside the courthouse today. A ruling is expected within 90 days.
And also stick around, because a little bit later we're going to be speaking to San Francisco Mayor Gavin Newsom about the continuing debate in his state, or in his city and state, of course. It's at 7:50 Eastern right here on AMERICAN MORNING -- John.
ROBERTS: Looking forward to all of that soon. Kiran, thanks.
Turning now to a developing story, former first lady Barbara Bush resting comfortably this morning after undergoing open heart surgery. Doctors at Methodist Hospital in Houston replaced a major valve in her heart. The operation was taken as a precautionary step after doctors found hardening of one part of Mrs. Bush's aorta last week. The 83- year-old former first lady was also experiencing some shortness of breath.
Last night the doctor who performed the surgery spoke to CNN's Larry King about Mrs. Bush's recovery.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": Would you say that barring any unforeseen complications she should do right well?
DR. GERALD LAWRIE, PHYSICIAN: Yes, she really should. She's a remarkable woman as you know, and tremendous strength of mindset and she woke up from the surgery joking with us, you know. I mean, that's not that common.
KING: Yes, that's her.
(END VIDEO CLIP)
ROBERTS: CNN's medical team is standing by to look at just how serious the surgery is. Let's go straight now to CNN's Elizabeth Cohen. She's live at the CNN headquarters this morning.
We're talking about the aortic valve here, and obviously that's a very, very serious medical condition but she seems to have come through it just fine.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's right. And actually some people might be surprised to hear that most people her age, age 83, do recover just fine as long as they don't have diabetes or kidney problems or something like that. She's expected to do quite well.
Let's talk a little bit about the aortic valve. That's the valve that they replaced. You can see it there on the right side of your screen.
It pumps blood out to the rest of the body, and it's -- when you're 83, there is wear and tear there, calcium deposits. It doesn't always work as well as it should. Her doctor, who was on Larry King last night, he estimates that 70 percent of people over age 70, John, are going to need to have their aortic valves replaced. She is expected to be discharged from the hospital in about seven to ten days.
ROBERTS: Do we know, Elizabeth, what type of valve they put in? Was it synthetic? Was it a pig valve? And typically, how long will this valve replacement last?
COHEN: It was indeed a pig valve, John, and her surgeon said that it's really a lifetime replacement, that this new generation of pig valves that they last a lifetime.
ROBERTS: All right. Elizabeth Cohen for us this morning. Elizabeth, thanks very much for that update.
COHEN: Thanks.
ROBERTS: Mrs. Bush's heart trouble isn't the only entry in her medical file. Here's more in an "AM Extra."
Back in 1989, Mrs. Bush was diagnosed with a thyroid condition called Graves Disease which can cause teary and bulging eyes and double vision. Interestingly enough, her husband, former President Bush, and the family dog Millie developed the same condition two years later. It's extremely rare for that to happen in such a short span of time. Because of that, the secret service actually tested the water at the White House and Camp David for substances known to cause thyroid problems. Those tests, though, came back negative.
CHETRY: 4.40 Well, the president unveils his plan to help millions in mortgage trouble, but will it help you hold on to your home? We have two of the best economic minds to look at what it means for your money and your future.
It's 25 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. A couple of stories making headlines now.
The makers of Budweiser seeing their profits go flat. Anheuser- Busch InBev reports its profit plunged 95 percent in the fourth quarter of 2008. The company blames the massive debt it assumed when taking over Anheuser-Busch last year along with lukewarm beer sales. Anheuser-Busch InBev is now the world's largest brewer.
And ten employees at a New Jersey insurance company office might not be working there much longer. They're not getting laid off. No, they just won the mega millions lottery jackpot. It was the only winning ticket sold in Tuesday's drawing. It's a $216 million prize.
John, of course, after Uncle Sam gets his chunk, it's about $105.5 million which they're splitting ten ways. Not too shabby.
ROBERTS: You know, yes, $10.5 million apiece, I'll take it.
CHETRY: Yes, exactly.
ROBERTS: You know, even after taxes, why not?
A reversal of fortune on Wall Street. Wow! How about that?
The Dow ending a painful five-session losing streak with a 150- point gain yesterday. Is it good news for your money, and will the president's mortgage rescue plan help you hold onto your home?
We've got lots of questions this morning. And our folks who got the answers, "Fortune" magazine reporter Katie Benner with us this morning and Lakshman Achuthan, managing director of the Economic Cycle Research Institute, back with us again this morning. So did Wall Street finally find something, Katie, to be confident about yesterday?
KATIE BENNER, WRITER & REPORTER, "FORTUNE" MAGAZINE: Well, I think to actually see stock fell off for so long naturally there's a little bit of a bump, but I don't think that anybody would say that it's time to be comfortable in the markets again.
ROBERTS: So this isn't a trend, Lakshman? I mean, what do you think?
LAKSHMAN ACHUTHAN, MANAGING EDITOR, ECRI FORECASTS: Well, no. One day is not a trend, not yet.
ROBERTS: Beginning of a trend? A hopeful first sign?
ACHUTHAN: Yes, they start that way.
ROBERTS: May see rumblings of an upswing? No?
ACHUTHAN: We may see rumblings, well, there's things going on globally. You know, there's -- China was whispering about spending a whole bunch more money and things like that can get people going. And as we were saying, you know, you don't always go in a straight line down. Some of the biggest rallies come inside bear markets.
ROBERTS: Right.
ACHUTHAN: That's a fact. So it could be that.
ROBERTS: And then there's also something called the dead cat bounce.
BENNER: Sure.
ACHUTHAN: Poor cut. My wife gets upset when I use that phrase, by the way.
ROBERTS: So, you're not looking forward to any sort of continuation of this?
ACHUTHAN: Not yet. I think it's a little premature to say that we're off to the races.
ROBERTS: All right. So the housing plan kicked in yesterday. We heard that, you know, it might be helping some people. There are others who are still looking to get some help. But, Katie, after looking at the broad brush strokes of this plan, do you think that it will slow the fall in the housing market?
BENNER: Well, I think it will slow the decline in housing prices, but I think at the end of the day housing prices do need to fall. So what the administration is trying to do is create a balance between prices naturally having to go down because they did go so far up over, you know, the historic average price.
ROBERTS: Yes. But I think they're down 40 percent.
BENNER: Exactly, so they just want to slow the decline and this should help.
ROBERTS: Right. Now, of course, to pay for this health care plan and we'll be talking about this later on this morning, too, the administration had a plan to limit the amount of deductions that people in higher income brackets could take on mortgage interest. They'd be capping the highest income earners at what somebody in the 28 percent bracket will be able to make.
What we hear from looking at Tim Geithner's testimony yesterday on Capitol Hill, that maybe they are rethinking that idea. What do you think? Would capping mortgage interest deduction in this housing market be a bad idea?
ACHUTHAN: Well, look, they're rethinking everything every day, practically. And because the problem keeps getting worse and worse. And so, I think this is certainly on the table. They're looking for all kinds of ways to make a fork on this decline.
And what you have -- you see a recession. There's a garden variety recession, which is you have sales go down, production falls, jobs fall and then sales fall. That's garden variety.
We have a jungle variety recession because that vicious cycle has expanded, so that when you lose jobs, home foreclosures skyrocket, home prices fall. This is a big problem, because when home prices fall, you get the vicious cycle of the toxic assets and these banks mushrooming. And remember, there's the other bailout plan for the banks that seems to always take more and more hundreds of billions of dollars. It will never catch up unless that home price decline slows or starts to slow down a bit, and that's the big problem.
ROBERTS: We're looking at this big swirling morass, too. The fed came out yesterday with its big book economic forecast to which it said for this year, poor, with a significant pickup not expected before late 2009 or early 2010.
So Katie, do people need a survival plan for the next year, at least? BENNER: Yes, I think that the fed is really starting to manage expectations, and I think that they're correct. So instead of wondering again and again, will things turn around tomorrow t is time for people to say, to be realistic of the fact that we are in a recession and it's time to really start thinking about your job, about what's important about saving and about recreating a life with reduce means.
ROBERTS: So, quickly, Lakshman, what's the survival plan for the next year for the average American?
ACHUTHAN: Oh, you're buttoning down the hatches and you are pulling in so-called discretionary spending. Stuff that you could put off that you don't absolutely need to purchase today, everybody's putting off. And at some point, that pent-up demand, you know, because you really do want that new gadget or that new thing, will all of the sudden be an avalanche that will cause the recovery, but we don't see it happening yet.
ROBERTS: So the pulling back may actually help slow the economy, but that pent up demand may accelerate the recovery.
(CROSSTALK)
BENNER: We can't do recovery without people having money.
ROBERTS: Your lips to God's ears.
Lakshman, thanks. And Katie, good to see you this morning. Thanks so much - Kiran.
CHETRY: All right. Thanks, guys. Well, President Obama mixing business with pleasure at the White House. Wait until you see what the cameras caught the White House chief of staff doing before the president's entrance. We've got the video and we'll show it to you.
Also, a big surprise at the White House for first daughters, Sasha and Malia. It's not what you're thinking. Probably not the doggy yet, but we'll show you.
Thirty-three minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. It's 36 minutes past the hour. Time to fast forward to some of the stories that you'll be hearing about on CNN later today.
11:00 Eastern, Michael Jackson announces he's making a comeback at a news conference in London. He's expected to perform at least ten concerts in London this year. He reportedly got paid $10 million. Jackson is also holding an auction of belongings from the Neverland Ranch.
R&B singer Chris brown has a date in a Los Angeles courtroom today. The 19-year-old arrested on suspicion of making criminal threats after he allegedly assaulted his girlfriend, singer Rihanna. It's unclear if Brown will be charged with the crime. Brown and Rihanna are reportedly back together.
And at 10:00 Eastern, the House Armed Services Committee holds a hearing on trying to combat piracy on the high seas. The commander of the U.S. Naval Forces Central Command will be among those testifying.
And that's a look at what's going on a little bit later today.
You have an interesting story coming up. What do you do when you go to a party and your name cards on a table, you don't want to sit there, would you change it.
ROBERTS: How many people have done that? When you go to a dinner party, and they got the little name tags all laid out there, and you look and you say...
CHETRY: I don't know anyone.
ROBERTS: ... I don't want to sit beside this person. Maybe I'm guilty. I've done it. I did it at a big industry place one night, but we're not the only ones.
Party politics in play at the White House last night. President Obama hosting a bipartisan dinner in the East Room for congressional committee chair members. But before the president arrived, the cameras caught a few candid moments.
Here you can see Treasury secretary Tim Geithner and White House Chief of Staff Rahm Emanuel mixing up the name cards and rearranging the assigned seating at their table. And Geithner also probably not too amused that the White House misspelled his last name on the name card!
CHETRY: Where's the "h"?
ROBERTS: Where's the "h"? Where the "h" is the "h"? Here's the correct spelling of Geithner's last name with the "h." There it is.
COLLINS: Beautiful job, CNN.
ROBERTS: Hilarious.
From formal political shindigs to stars that celebrations, the Obamas certainly have been busy transforming the people's house into a very exciting party spot, with the name changing and all.
Here's CNN's Erica Hill.
(BEGIN VIDEOTAPE)
ERICA HILL, CNN CORRESPONDENT (voice-over): Change has come to Washington, and this change doesn't shy away from a good party.
B. OBAMA: This is a pretty big house so we get lonely. So -- and it's hard for me to move around out there sometimes, so I got to bring the world to me.
HILL: In just six weeks, the Obamas have hosted everyone from school kids to Stevie Wonder, and they're just getting started.
CYNTHIA GORDY, WASHINGTON CORRESPONDENT, "ESSENCE" MAGAZINE: From day one the president and first lady have adopted a sort of open door policy for the White House. I mean, literally on the first day, their first day in the White House, they had an open house for hundreds of regular citizens.
HILL: The Obamas have pledged their White House will be a more inclusive, open one.
MICHELLE OBAMA, FIRST LADY: Walk around, touch some stuff. Just don't break anything.
HILL: Making White House social secretary Desiree Rogers a very busy and popular woman.
DESIREE ROGERS, WHITE HOUSE SOCIAL SECRETARY: They've been great sports at all these events and really, you know, have extended themselves to make people feel welcomed.
HILL: Among those events a concert for nearly 200 D.C. school children to commemorate Black History Month. An award ceremony and tribute for Stevie Wonder, one of the Obamas' favorite singers.
And at the dinner they hosted for the nation's governors, as if Earth, Wind, and Fire, wasn't enough, the Obamas had the chairs taken away after dinner, forcing people to mingle and maybe even dance.
ROGERS: I think that our focus is really on making certain that everything we do is really reflective of them, as opposed to looking backwards. I think we're going to make this one our own.
AMY ARGETSINGER, WASHINGTON POST COLUMNIST: To have this youthful vibe, the kids are younger. They're younger. Their friends are younger. Their friends are more diverse. You're going to have the potential for a lot of pretty good parties.
HILL: And America will be watching.
Erica Hill, CNN, New York.
(END VIDEOTAPE)
ROBERTS: And there is a new addition to the White House this morning. But it's not what you're thinking. No puppy yet. Instead, it's a pretty cool playscape. Well, they both begin with "P" right?
It's from South Dakota. Both swings, slide, even a climbing wall. It was delivered while First Daughters Sasha and Malia were at school yesterday. Came home to find that in the back yard. We're told it's already a big hit. The girls played on the set for almost an hour in chilly weather yesterday.
CHETRY: Pretty cool.
ROBERTS: Very nice.
CHETRY: All right. Love it.
ROBERTS: Do you think the president put that together himself?
CHETRY: Oh, I'm sure -- just right between meetings and...
ROBERTS: I put together my daughter's playscape.
CHETRY: You did?
ROBERTS: Yes.
CHETRY: Good for you. I can barely get that darned play kitchen together.
ROBERTS: That was some years ago now, though. I don't know if I could still do it.
CHETRY: And how cool, I just have to say, I mean, you're the president of the United States and the first lady. You can invite anyone you want. I love Stevie Wonder. Let's have a big party and have him over.
ROBERTS: Who's going to say no?
CHETRY: Exactly. Must be nice. So, in between all the hard work, you get to have a little bit of fun as well.
ROBERTS: It's good. It's nice to see.
CHETRY: Well, CNN is taking you to the front lines of the housing crisis, introduce you to a lot of families struggling to hold onto their homes. Some of those families now facing a backlash that they never saw coming. CNN's Jim Acosta is following one moving story from Washington for us. He has that in just a minute.
Forty-one minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Forty-four minutes now after the hour. This morning, the programs are in place to help you if you're struggling to pay your mortgage, and for millions of Americans it can't come soon enough. For months, we've been hearing the painful stories of how it's getting harder to own and hold on to a home and the outrage from some who say they're paying for someone else's problem.
Well, this morning, we're following up with one woman whose story we brought you. It unleashed an unexpected public backlash. And CNN's Jim Acosta joins us now live from Washington this morning.
And, Jim, certain sectors, that doesn't seem to be a whole lot of sympathy out there. JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT: No, John, there is not, you're right. And a few weeks ago, we profiled a school bus driver facing foreclosure on her $800,000 house. After our story aired, the homeowner, Minta Garcia, found herself on the receiving end of America's bailout outrage.
(BEGIN VIDEOTAPE)
MINTA GARCIA, HOMEOWNER: We're going to lose the house. We're going to lose everything.
ACOSTA: You think you're going to lose everything?
GARCIA: Yes.
ACOSTA: When we introduced you to school bus driver Minta Garcia, she told us her bank was threatening to foreclose on her $800,000 home in suburban Washington. She could no longer afford the house which is now worth less than her mortgage.
How much was the house when you bought it?
GARCIA: Eight hundred.
ACOSTA: $800,000. And how much is the house worth?
GARCIA: Oh, right now, it's like $675,000 on the market.
ACOSTA: Since then she's become the target of bloggers who say she's the poster child of America's housing crisis.
You feel attacked?
GARCIA: Yes, of course. I never thought they're going to, you know, write those nasty comments.
UNIDENTIFIED MALE: Craig from Jackson on 1390 a.m.
ACOSTA: Her story even spread to talk radio on West Tennessee's 1390 a.m. Callers showed no mercy, blaming Garcia and her bank almost equally.
UNIDENTIFIED MALE: We should not have to bail that kind of irresponsibility out. I mean, that's not our job.
MIKE SLATER, TALK RADIO HOST: The people who are most upset about these are very self-reliant people and they don't automatically turn to the government to help them get out of their problems.
ACOSTA: Talk radio hosts are staging Boston tea party-style rallies across the country, protesting the nation's bailouts for banks and homeowners.
UNIDENTIFIED FEMALE: You're spending money we don't have on social programs we don't need. ACOSTA: Garcia says she and her husband are construction workers, simply want their bank to lower the interest rate on their mortgage, so they can try to make their payments.
So if people say, oh, Minta, you were irresponsible.
GARCIA: They say that because they don't know. I never asked for people to pay my mortgage or pay, you know, my vehicle or something.
TIMOTHY GEITHNER, TREASURY SECRETARY: This plan will help homeowners meet their mortgage obligations.
ACOSTA: She's waiting to find out if she qualifies for the president's housing plan.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: And I know it's frustrating. But, boy, at the end of the day, you know, you got to think, how are we going to dig out of this?
ACOSTA: CNN personal finance guru Gerri Willis cautions allowing troubled homeowners to go down in flames could leave everybody burned.
WILLIS: You know how this is. You get one foreclosure in a neighborhood and all the prices near that property start going down. You get two, the prices go down further, faster. It affects us all.
(END VIDEOTAPE)
ACOSTA: Now, the White House insists its housing plan does not bail out irresponsible home buyers. In order to get help, homeowners have to meet certain requirements to show they can't afford to stay in their houses, a process Minta Garcia will have to begin to right away, John. And having said all that, there are some people out there who pay their mortgages on time who aren't convinced.
ROBERTS: All right. Jim Acosta for us this morning. Jim, thanks so much. Appreciate it.
ACOSTA: You bet.
ROBERTS: Forty-seven minutes now after the hour.
CHETRY: Rock star painters. Who would think?
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: So as Ringo like, help, I need someone.
(END VIDEO CLIP)
CHETRY: Musicians with paint. The pictures may surprise you -- ahead on the Most News in the Morning.
(COMMERCIAL BREAK) CHETRY: Welcome back to the Most News in the Morning. Sex, drugs and rock 'n' roll and watercolors? Well, they may rock it out on stage whether they're down time. So if your favorite musicians are actually trading their guitar picks for paint brushes.
Lola Ogunnaike shows us their "B" side.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Turn it up.
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT (voice-over): Lynyrd Skynyrd drummer Michael Cartellone has been banging the skin since he was nine, but he's been painting since he was four.
MICHAEL CARTELLONE, LYNYRD SKYNYRD DRUMMER: I'd been working on this painting for probably the past four months.
OGUNNAIKE: Cartellone is rarely without his paint. He even takes small canvasses on the road, and when he trades his sticks for brushes, it's equal parts meditation and therapy.
(on camera): You think of rockers, you think sex, drugs and rock and roll...
CARTELLONE: Yes, they do that.
OGUNNAIKE: I don't think of you with a canvas in your room slowly but surely working on a piece.
CARTELLONE: It's a few hours during the day where I can recharge because then that night, it's going to go back to the, you know, kick boxing with drum sticks that I do for a living.
OGUNNAIKE (voice-over): Cartellone isn't alone. Musicians like Ringo Starr and Ronnie Wood of the Rolling Stones also know how to move the paint.
The walls of the Pop International Gallery in downtown Manhattan are covered with artwork by rockers.
(on camera): How much does something like this sell for?
JEFF JAFFE, CO-OWNER, POP INTERNATIONAL GALLERY: Ronnie Wood has a huge following of collectors -- serious collectors who buy his work. And paintings of his go for hundreds and hundreds of thousands of dollars.
OGUNNAIKE: Do you know if any of these artists paint to their music? So is Ringo like "Help, I need someone."
(MUSIC PLAYING)
JAFFE: I didn't specifically ask Ringo that question, but I did ask Ronnie Wood.
OGUNNAIKE: What did he say?
JAFFE: He listens to classical music.
(MUSIC PLAYING)
OGUNNAIKE: Paul Stanley of Kiss painted his face for nearly 35 years. He picked up art in high school but he was no Picasso.
PAUL STANLEY, FRONTMAN, "KISS": I probably would have a statue upfront because I have the dubious distinction of having failed art there.
That's right. I got this (INAUDIBLE)
When I paint it, it's almost like going on a trip without a road map. I really have no idea where I'm going, which makes the trip that much more exciting.
OGUNNAIKE: What about critics who may say oh, well, he's getting all this notoriety because he's in Lynyrd Skynyrd.
CARTALLONE: Well, I would say I could not be more proud of being Lynyrd Skynyrd, and I'm absolutely using that to open doors with my art. Why not?
(END VIDEOTAPE)
CHETRY: You know, it really makes you think. I mean, if you're musically inclined and you have that talent, does it just spread to the other talents as well? Because that's some gorgeous art.
OGUNNAIKE: It is gorgeous. And, you know, what they say, they are creative people.
CHETRY: Right.
OGUNNAIKE: And however, it manifest itself, it manifest itself. So sometimes they decided like, look, I want to paint and they go for it. And they have the time, when they're in their hotel rooms, rather than trashing their hotel rooms, they're in there painting, especially Mr. Cartellone.
He's in there, and some of his Lynyrd Skynyrd's band mates come in and critique his work, which I thought was really funny.
CHETRY: But it's lucrative as well. As you said -- as you showed us, hundreds of thousands of dollars some of these paintings.
OGUNNAIKE: Those little -- those little pads of his snapshots from his life on the road, Cartellone's work, those pieces sell for $10,000 each. He doesn't need the money, but, hey, it's a great side gig, isn't it?
CHETRY: Not bad, sure is. Lola, thanks so much.
OGUNNAIKE: Thank you. CHETRY: It's 53 minutes after the hour. Oinker awards. Pork packed inside spending bills. What's a president to do?
(BEGIN VIDEO CLIP)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: Twelve million dollars for a tick removal program that didn't work.
UNIDENTIFIED MALE: It's important for the president to stand up and say I will not tolerate race fraud and abuse.
(END VIDEO CLIP)
CHETRY: Cricket control, pig odor removal. It's your money. You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: Well, if you felt that the Sarah Palin/Joe Biden debate was big, picture this, Rush Limbaugh and Barack Obama going head-to- head? It seems far-fetched. That's not stopping the conservative talk show host from throwing down the gauntlet with an offer to our president. Listen to this.
(BEGIN VIDEO CLIP)
RUSH LIMBAUGH, CONSERVATIVE RADIO TALK SHOW HOST: But I have an idea. If these guys are so impressed with themselves, and if they are so sure of their correctness, why doesn't President Obama come on my show? I am offering President Obama to come on this program without staffers, without a teleprompter, without note cards to debate me on the issues.
(END VIDEO CLIP)
CHETRY: Well, there's been quite a fuss over Limbaugh these days. And now accusations are flying that this is actually exactly what the White House wants.
Our Carol Costello is live in Washington now where the gloves are clearly coming off. Can you picture that? You'd watch it. You'd listen.
CAROL COSTELLO, CNN CORRESPONDENT: I can't see the president rushing to be on Rush Limbaugh's show, I'm just saying.
But, you know, Kiran, ever since the chair of the RNC apologized for criticizing Rush Limbaugh, Democrats have been getting louder in their assertion a talk show host leads the Republican Party and it's a fever pitch now.
(BEGIN VIDEOTAPE)
COSTELLO (voice-over): Behold, the liberal attack ad from Americans Unite for Change designed to anoint Rush Limbaugh as king of the Republicans. UNIDENTIFIED ANNOUNCER: Who is the leader Republicans hailed as a hero last weekend? Was it Sarah Palin?
SARAH PALIN (R), ALASKA: Nope, nope, nope.
UNIDENTIFIED ANNOUNCER: Then who? Not Rush Limbaugh?
LIMBAUGH: Yes, yes, yes.
COSTELLO: Limbaugh used the ad and more to accuse the White House of orchestrating a campaign to destroy him, pointing a finger directly at President Obama's Chief-of-Staff Rahm Emanuel. Emanuel along with Democratic strategists and CNN contributors James Carville and Paul Begala have talked about Limbaugh as the leading voice of the Republican Party.
But Begala told us Democrats never came up with an official Limbaugh strategy. It just happened organically. Although, John Avlon of the "Daily Beast" said, however, it happened, it was a master stroke.
JOHN AVLON, REGISTERED INDEPENDENT: Choose your enemies wisely because they will define you. And there's no question the Obama administration has chosen their enemy wisely and wanting to bait Rush Limbaugh seem like the face of the Republican Party.
COSTELLO: The Democratic congressional campaign committee jumped on the informal strategy, too, designing a Website urging visitors to create an "I'm sorry" letter to the great leader of Republican Party on behalf of Republicans who dared disagree with Limbaugh. The GOP wasn't happy.
UNIDENTIFIED MALE: This is nothing more than a distraction created by the administration to take people's attention away from the fact that they're trying to raise taxes and grow the size of government.
COSTELLO: And some wonder if the president's right-hand man really is orchestrating that distraction. Is he undermining President Obama's promise to reach across the aisle? Democrats say no, insisting Republicans are writing their own partisan script. UNIDENTIFIED FEMALE: Rush Limbaugh is doing that all by himself, and doesn't really seem to need help. Every time he opens his mouth and talks about his desire to see Barack Obama fail, and then defends his reasoning for wanting him to fail, he does that job for us.
(END VIDEOTAPE)
COSTELLO: Now a senior administration official says stories about a Limbaugh strategy are ridiculous. In Politico, a story claims that top White House officials, including Rahm Emanuel, the chief-of- staff, are part of this effort. And that a senior White House aide is helping to guide this Limbaugh strategy. In addition to calling the story ridiculous, that official gave a stronger denial when asked if it was true; the official responded, no. - Kiran. CHETRY: There you go. Rush Limbaugh, meanwhile, is eating it all up. He loves it. He's laughing. I don't know if some of the other Republican leaders are.
COSTELLO: Actually -- actually, on his show, he thanked everyone for increasing the stature he already has.
CHETRY: He did. Yes, he did. All right, Carol Costello, great to see you this morning. Thanks.
COSTELLO: Sure.
