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President Obama, Treasury Secretary Meet; Spend Now, Trim Later; Killing Spree at German School; President Addresses Earmarks
Aired March 11, 2009 - 10:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. I'm Tony Harris, and you are in the CNN NEWSROOM.
President Obama this hour announcing plans to put Congress on a reduced pork diet, but how is this for a bit of irony? The president is also ready to sign a major spending bill chock full of pet projects. The administration calls that leftover pork.
Live coverage of the president's remarks on reducing those so- called earmarks. That is expected in about 20 minutes.
We are going to drill down on earmarks and spending with White House Correspondent Suzanne Malveaux and executive editor Jim VandeHei of Politico.
First, let's start, because I believe -- with Suzanne Malveaux.
Suzanne, we'll talk to you in just a moment. We're just about to get a tape from the president and his treasury secretary, Tim Geithner, from earlier this morning.
Let's have a look.
(BEGIN VIDEOTAPE)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hello, everybody.
You got your thing all set up? All right.
Well, I just wanted to let you guys know that Secretary Geithner is going to be discussing our approach to the G-20 today. And this is going to be I think a critical meeting at an obviously critical time in the world's economy.
We've got two goals in the G-20. The first is to make sure that there is concerted action around the globe to jump-start the economy. The second goal is to make sure that we are moving forward on a regulatory reform agenda that ensures that we don't see these kinds of systemic risks and the potential for this kind of crisis again in the future.
Now, I think that the United States has actually taken a significant leap on a number of these steps that are required. That we've already passed the American Recovery and Reinvestment Act, we are doing a good job stimulating our economy here at home. We're moving forward in stabilizing the financial system through a whole host of steps that have already been taken, and a number of steps that we intend to take in the future to make sure that the financial system is solvent, that our banks are strong, and that we start lending again to businesses and consumers.
We also have already been in discussions with the relevant members of the congressional committees to talk about how we can move forward on a regulatory framework. You heard from the Federal Reserve chairman, Bernanke, yesterday about the need for us to revamp our regulations. That's not just something that we want to do domestically, but we ought to make sure that we're coordinating with the other G-20 countries.
A few other areas that haven't been discussed as much.
The United States is part of an integrated global economy. And so we have to not only think about what's happening here at home, but in order for us to grow businesses, create jobs here at home, we also have to be mindful about what's happening overseas.
And that's why at this G-20 meeting, one of the things that Secretary Geithner is going to be talking about is how can we make sure that emerging markets, developing countries that may be very hard hit as a consequence of the contracting economy, how do we make sure that they remain stable, that they can still purchase American goods? How do we make sure also that we are not falling into protectionist patterns, and that world trade is still something that countries support and embrace, as opposed to scaling back from?
So there are going to be a host of issues that we need to discuss. The job of Secretary Geithner is to lay the ground work, so that -- with other finance ministers from the other G-20 countries, so that when leaders of these various countries actually show up, we can go ahead and craft the kind of agreement that's going to be necessary not just for the stability of the financial system, but ultimately to make sure that we're creating jobs, and that businesses are reinvesting here in the United States.
We can do a really good job here at home with a whole host of policies, but if you continue to see deterioration in the world economy, that's going to set us back. And I think it's very important for the American people to understand that as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together.
Tim, anything you want to add?
TIMOTHY GEITHNER, TREASURY SECRETARY: Mr. President, I travel to Europe tomorrow night to meet with the G-20 finance ministers and central bank governors. We need to bring the world together to put in place a very substantial, sustained program of support for recovery and growth. And we want to bring together a new consensus, globally, on how to strengthen this global financial system so that crises like this never happens again. There has been a lot of talk and a lot of ideas over the last two years. There is time now for us to move together and to begin to act to put in place stronger (INAUDIBLE) reforms. A lot of good work has happened, but we need to now bring this together so that we're together as a world economy working together.
Everything we do in the United States will be more effective if we had the world improving (ph) with us. You know, we're the most productive economy in the world, the most productive workers in the world, but maybe markets (INAUDIBLE) expanding. And we have a lot of work to do, but I think we can make a lot of progress.
OBAMA: Good.
And just one last point I want to make. I've already had discussions with a number of world leaders on this these issues -- obviously, when Gordon Brown came to visit, when Prime Minister Aso of Japan came. We have already started laying the groundwork. We are starting to see a lot of coordination at various levels, both in terms of the financial regulators, as well as those who are shaping potential stimulus packages in their own countries. So I'm actually optimistic about the prospects.
Everybody understands that we're in this together. I think the G-20 countries are going to be seeking a lot of cooperation.
One of the messages that is consistently hammered home when I talk to foreign leaders is their recognition that a strong U.S. economy will help their economy. And so they're rooting for our success.
We've got to make sure that we're rooting for theirs, as well, because we've got a lot of exporters. Until just a few months ago, exports were actually one of the areas where we were still getting some lift in the economy.
That has now gone away. It has now banished, because purchasing power in many of these other countries, as well as credit in these other countries, has contracted. So we've got to spend some time thinking about how we're going to strengthen them as well, in order to make sure that ultimately, our plans here at home are successful.
All right?
Thank you, everybody.
(END VIDEOTAPE)
HARRIS: So a lot to sort of digest and work through this morning.
The president and his treasury secretary, Tim Geithner, there, essentially holding a meeting to talk about priorities for the upcoming EU summit, the financial summit in London, the financial summit in early April. The president there setting out a bit of a marker as to what the top priorities are for the United States heading into those talks. But a lot of controversy on the other side of the pond as to what the objectives for that summit should be.
Let's talk about this a bit -- changing gears here on the fly -- with our White House Correspondent Suzanne Malveaux, and you see Susan Lisovicz there, as well.
Let's begin with you, Suzanne.
First of all, the president clearly laying down a bit of a marker as to what the priorities are going to be from the United States' stand point for this summit next month. Priority number one, jump- starting the global economy, and the talk from this administration of a global stimulus package.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Absolutely right, Tony. And one of the things that the president is going to be doing later today, he is going to be signing that spending bill that was left over from last year, $410 billion.
The big debate, as you know, over those special projects, some consider pet projects that are stuffed into the spending by members of Congress, there is a big debate over that. And we heard from President Obama and candidate Obama, saying that he was going to reform the process.
I want to tell you, I just got some highlights here from a senior administration official about what he will be talking about in terms of reforming that process.
HARRIS: Oh, great.
MALVEAUX: I want to read it to you here. I just got it on my BlackBerry.
He is going to say that earmarks -- they're called earmarks, these pet projects -- must have legitimate and worthy public purpose. He will say that they must be aired on those members' Web sites in advance. He will also say that earmarks must be open to scrutiny, with members justifying their expense to the taxpayer; that earmarks for profit, private companies, should be evaluated with a higher level of scrutiny, and be subject to the same competitive bidding requirements as other federal contracts; that they must never be traded for political favors; that earmarks have to be evaluated and seen -- if earmarks are evaluated and seen to have no legitimate public purpose, then the administration will seek to eliminate it, and work with Congress to do so.
So that's just some of the things that you're going to hear from President Obama, not calling for a complete elimination of earmarks, per se...
HARRIS: I see.
MALVEAUX: ... but certainly trying to reform the process -- Tony.
HARRIS: OK. Our White House Correspondent Suzanne Malveaux for us.
Suzanne, appreciate it. Thank you.
Let's bring in Jim VandeHei from Politico.
Jim, good to see you. I apologize for totally whipping on your name just a moment ago. I just threw it right out of my head.
JIM VANDEHEI, POLITICO: That happens all the time. Don't worry about it.
HARRIS: No it shouldn't, Jim. Good to see you.
Hey, some of the notes that Suzanne just shared with us, the president now looking to totally eliminate this idea of earmarks. We understand that, but again, laying down some markers.
Is this a step in the right direction? It probably doesn't go as far as he would like to go.
VANDEHEI: I mean, to be blunt, this is such a sideshow. Yes, the earmark process has been abused in Congress, there's no doubt about it. It led to several scandals over the last couple of years. But you're talking about the tiniest fraction of the federal budget.
HARRIS: Yes. Two percent, maybe? Is that what we're up to, maybe, two percent, one to two percent?
VANDEHEI: Even less than that.
HARRIS: Yes.
VANDEHEI: And even in this last bill, you're still talking about a tiny fraction of the overall omnibus spending bill. Republicans have seized on it because they said they want to reform the process.
The truth is, everybody spends them. You talk about, well, they have to be worthy projects. Well, that's in the eye of the beholder. Every lawmaker who's bringing money home for their district thinks it's a worthy project.
And I got a kick out of the language that the Obama administration put out, because it's clear they're bowing to lawmakers who said there is no way that we're going to get rid of all earmarks, so they used some language. It says like you're going to crack down on it, and the truth is you're going to allow the process to continue, because lawmakers want and have a right to be able to spend money in their districts, have a say in how the federal budget is apportioned.
HARRIS: Well, here's what's interesting, Jim. When you mentioned the word "sideshow," I think what it means to a lot of folks is here is this sideshow that distracts us from the real work. And it seems to me that perhaps the real work in this case, in moving forward, would be to go through some other items in the omnibus bill, and find out if there is real savings available from slicing some of the spending that's represented in the rest of the bill. VANDEHEI: Right. And it also -- it obscures a much larger debate.
If you look at the budget blueprint that Obama put out a couple weeks ago, he talks about doubling the size of the federal debt to $23 trillion by 2019.
HARRIS: Yes.
VANDEHEI: Earmarks aren't going to do anything whatsoever to eliminate that gap. And they have to start looking at structural things that are harder to talk about for politicians, doing something to entitlement like Medicare, Social Security, cutting the Defense Department, not being as ambitious as they want to be on health care or energy.
HARRIS: Right. Right.
VANDEHEI: Those are the only areas where we spend enough money to have a meaningful effect on that. And so Republicans love the earmark thing. There's no doubt some of it's been abused. But I do think, like, there is much bigger issues right now, and I think that's what Obama and Democrats...
(CROSSTALK)
HARRIS: But does it make sense...
VANDEHEI: Continue.
HARRIS: No, Jim, I'm just -- does it make sense, however -- I understand that this is a sideshow, and maybe the earmarks make up one percent, two percent of the bill that we're talking about here. But does it make sense if some of other stuff is really, really difficult to go after, the low-hanging fruit? And if you've got all this money for -- what is this, swine, odor and manure management? I mean, come on.
VANDEHEI: Right.
HARRIS: All right, that might be worthy, but not now.
VANDEHEI: Right, there's no doubt. And sure, get rid of all the fruit that you think that you can trim off of the budget, because it's the only way you're going to be able to get where you want to get.
But even swine research, or whatever you want to hit on, I guarantee you that that lawmaker thinks that's a worthy project. And under the definition that Obama is going to put out today, that could easily fit inside of there. It is worthy. There is some university that wants to study that, can make some argument that it's good for jobs back in the district.
And every lawmaker is trying to figure out...
HARRIS: I think you're right about that. Yes. VANDEHEI: But how do I deal with unemployment in my district? One way I can do that is taking my little sliver of the federal budget and throwing it to my folks back home. They're never going to surrender that, and Obama knows that, and he needs Congress to get anything done. So he is bowing to that pressure.
Everybody has said they want to change earmarks. They're not going to change the process. And I think that's why I got a kick out of the language that Obama is talking about, because I think he wanted to do something bigger, and he realized that, wait, I can't, because you know who won't let me? Pelosi, Reid, and Republicans who are griping about it. They do earmarks, too.
HARRIS: And it's not -- it's not pork if it's your project, if it's your potential job.
VANDEHEI: Right. And it's a worthy project.
HARRIS: But what everyone else brings up is pork, right?
VANDEHEI: Exactly.
HARRIS: Oh, man.
Well -- and maybe one last thought on this.
What would you say to folks around the country who seem to be up in arms about this? And you see John McCain railing against this on the floor of the Senate. What would you say to folks who hear someone like John McCain railing against earmarks, and then comes in and goes, yes, too much wasteful spending here!
VANDEHEI: Right. Again, like, I think it's good to get rid of wasteful spending, but people have to understand the complexities and the realities of budget. And that is, most of the money goes to entitlement programs and to defend spending.
And until you do big cuts there, you're not going to do anything to these annual deficits, you're not going to do anything to the federal debt. So I'm sure I'm going get a bunch of e-mails saying, "Well, they're not sideshows." I'm only saying...
(CROSSTALK)
HARRIS: I'm so happy you're getting the e-mails.
VANDEHEI: I'll reroute them to you.
HARRIS: All right.
Jim VandeHei from Politico.
VANDEHEI: Take care.
HARRIS: Jim, appreciate it. Thank you for your patience.
Let's see, Susan Lisovicz, is she there?
We've got to go to break, but I just want to apologize to Susan for just a moment.
Hey Susan, when we get back, we're going to talk to you about the president getting ready and setting the stage for the big summit coming up in a couple of weeks in London. But I've gone long as I usually do, mismanaging my time here. We'll come back to you in just a second.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: I'm here.
HARRIS: First a quick break.
You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: We are following two deadly shooting sprees, one in Alabama, the other in Germany.
Let's begin with the most recent tragedy near the German city of Stuttgart.
Officials say a teen gunman killed 16 people before being shot dead by police. And most of the victims gunned down at a school.
Our Fred Pleitgen is live just -- he actually just got to the scene of the town of Winnenden and joins us on the phone.
And Frederik, maybe the first update here is we're expecting to hear from the chancellor, the German chancellor, at some point this hour. But update us on the very latest on the investigation and what we know so far.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Sure, Tony.
I just got here to the scene in Winnenden here, in southwestern Germany, and let me just describe it for you for a moment here.
There's a lot of people here in front of this building -- a lot of police, also a lot of people who appear to be students of the school, some of them crying. I talked to one girl who was inside the school as the shooting was going on, and she said she just felt helpless as all of this was going on.
And just to update you on the facts, what happened, the German police department says, is that around 9:30 a.m. German time -- that's around 3:30 your time -- the gunman stormed into the school building, went into three classrooms and opened fire there. He killed three teachers in those three classrooms, and also six students as he went into that school.
He then left the school, shot another person outside of the school, then went on to hijack a car with a driver, and went for several miles. Then he kicked the driver out, kept driving to a town that's near here, another very small town, got out and shot another two people and killed them. And then finally, the police caught up with him in that little town, and there was a massive shootout outside a supermarket, which left the shooter dead and left two of the police officers who were on the scene severely injured, as well.
So this is a rampage, really, that was going on for several hours that unfolded here in the early hours here in Germany. He went into the school as classes were going on, opened fire on absolutely full classrooms, and 10 students in those classrooms did not survive. And neither did three teachers in those classrooms, Tony.
So a very, very sad day here in Germany. And I can tell you, outside the school here, people are absolutely shocked and in disbelief -- Tony.
HARRIS: OK. Frederik, just a couple of quick questions.
What time of day is it right now in Germany where you are?
PLEITGEN: Well, it's sort of the early afternoon hours in Germany right now.
HARRIS: Early afternoon.
PLEITGEN: It's 4:15 p.m. here. So this school shooting, again, at about 9:30 in the morning.
And really, we got the confirmation that the -- that the perpetrator had been caught up with and had been shot dead a little over an hour ago. So it really is something that unfolded for a very, very long time. There was a massive manhunt going on for this man, because he was still at large after having left the school for a while...
HARRIS: Got you.
PLEITGEN: ... involving helicopters and hundreds of police officers on the ground here -- Tony.
HARRIS: And one final quick one. Have all of the kids remaining in the school, have they been reunited with their parents?
PLEITGEN: Well, that's going on right now. There still are some kids who are outside the school.
The police and the authorities here, and also some of the people from the school, are getting that process going. That is going on. So most of them are.
Of course, some of the kids are still in hospital. There are seven people in all who were still in the -- in the school, who were wounded in this incident, who are now in the hospital. I'm not sure how many of those are children, how many of those are potentially teachers. So there are still some wounded in the hospital, and it's not sure when they can be reunited.
HARRIS: Yes.
PLEITGEN: But most of the people here at the school, about 1,000 students who go to this school, have been reyou wanted.
HARRIS: That's right.
Our Frederik Pleitgen in Winnenden, Germany, for us.
Frederik, appreciate it. Thank you.
"Not a tear left in me." A young sheriff's deputy describes losing his wife and baby in a shooting spree.
Eleven people were killed in southern Alabama in the towns of Kinston, Samson and Geneva. The gunman is among the dead.
Police are struggling to figure out what triggered the young man's rage. They say Michael McLendon killed his mother at her home, then drove to this house. There, police say he gunned down his grandparents and aunt and uncle as they sat on the front porch.
Most of the victims were apparently random. Some shot as the gunman drove through the towns.
The close-knit communities are in shock, as you can imagine. Residents say it's the kind of place where everybody is kin to almost everybody, and they know everybody else.
The mayor of Samson talked with CNN's "AMERICAN MORNING."
(BEGIN VIDEO CLIP)
MAYOR CLAY KING, SAMSON, ALABAMA: I personally know everyone that's involved, both the shooter and the victims. And that makes it more difficult to have to deal with.
KIRAN CHETRY, CNN ANCHOR: And Mayor King, you say you coached him, along with your own sons, in T-ball, in little league, and you would never have any idea that he could have done something like this. Is there any motive that people are talking about this morning?
KING? No, ma'am. At this time, I don't think anybody has any idea of what the motive is. And yes, I did. I coached the shooter's -- I coached him in both T-ball and in little league baseball, along with my two sons.
(END VIDEO CLIP)
HARRIS: CNN's Sean Callebs joins me live now from Samson, Alabama.
And Sean, before we take a step back and reset this horrible story, worth noting that we're expecting to learn, I would suspect, a bit more about the investigation later this hour. A couple of news conferences scheduled for about 11:30, 11:40 a.m. Eastern Time. SEAN CALLEBS, CNN CORRESPONDENT: Exactly. They're going to have one in the nearby town of Geneva. That is where a command center has been set up. We heard from the mayor earlier today, and like basically everybody else in this, he has no idea what could have triggered this violent rampage.
Now, secondly, we may find out a bit more about the investigation in Montgomery, which is quite a distance from here. The state Bureau of Investigation is going to hold its news conference, and hopefully we'll learn more about the suspected gunman, Michael McLendon, who authorities say took 10 lives before taking his own life yesterday.
HARRIS: And Sean, if I could, in the 9:00 a.m. Eastern hour -- I paused for a moment, because I believe we're inside the two-minute warning to hear comments from the president on earmark reform. But I want to get this question in.
In the 9:00 a.m. Eastern hour, a young sheriff deputy talked about his loss in this shooting spree, and it was heartbreaking.
CALLEBS: Yes, I'll try to keep the answer as short as I can. It was very difficult to watch.
This is an individual who came out, and he talked about putting his life on the line every day protecting this county. He said it's something he gladly does. He said he never thought it would be his family that would be gunned down, something he said he simply doesn't understand.
I heard at the top of your story he said he didn't have another tear to cry. He talked about that, how painful it was. He said he never met the gunman before, so there was no kind of ax to grind between the two.
And also, he talked about heavily armed, because he was actually at the site when McLendon took his own life. He had an AK-47, an M- 16, two pistols, and he also had a shotgun in his car. So this was an individual who left his home, clearly set on doing as much damage as possible.
(BEGIN VIDEO CLIP)
DEP. JOSH MYERS, GENEVA COUNTY SHERIFF'S DEPT.: I don't have a tear left in me. It still seems like I should be able to walk in the house and my wife should be there, and my baby girl should be in there climbing on me. I mean, I'm never in my life going to be able to fully understand it.
(END VIDEO CLIP)
CALLEBS: Well, we also talked with the young lady who actually lives right next door to where this shooting took place. And she summoned the courage in the middle of all of the gunfire to dart across the way and scooped up Josh Myers' 3-month-old daughter who had been wounded, the only person on that porch who was able to survive. She is still clearly traumatized by this whole event. But how she got that power, she's a licensed practical license. And boy, very fortunate for that little young girl, who's now in Pensacola. And one thing Josh Myers asks everybody to do is pray for his little girl.
HARRIS: All right, Sean. Appreciate it.
Let's get you to the president now.
(JOINED IN PROGRESS)
OBAMA: ... business is done in Washington and to build a government that works for the people by opening it up to the people. And that means restoring responsibility, transparency and accountability to actions that the government takes.
Working with the Congress over my first 50 days in office, we've made important progress toward that end. Working together, we passed an American Recovery and Reinvestment Act that's already putting people back to work, doing the work that America needs done. We did it without the customary congressional earmarks, the practice by which individual legislators insert projects of their choosing.
We're implementing the Recovery Act with an unprecedented level of aggressive oversight and transparency, including a Web site, recovery.gov, that allows every American to see how their tax dollars are spent and report on cases where the system is breaking down.
I also signed a directive that dramatically reforms our broken system of government contracting, reining in waste, abuse and inefficiency, saving the American taxpayers up to $40 billion each year in the process.
And I've laid out plans for a budget that begins to restore fiscal discipline, so we can bring down the $1.3 trillion budget deficit we've inherited, and pave the way for our long-term prosperity.
For the first time in many years, we've produced an honest budget that makes the hard choices required to cut our deficit in half by the end of my first term in office.
Now, yesterday Congress sent me the final part of last year's budget, a piece of legislation that rolls nine bills required to keep the government running into one, a piece of legislation that addresses the immediate concerns of the American people by making needed investments in line with our urgent national priorities.
That's what nearly 99 percent of this legislation does, the nearly 99 percent that you probably haven't heard much about.
What you likely have heard about is that this bill does include earmarks.
Now, let me be clear. Done right, earmarks have -- have given legislators the opportunity to direct federal money to worthy projects that benefit people in their districts, and that's why I've opposed their outright elimination.
And I also find it ironic that some of those who rail most loudly against this bill because of earmarks actually inserted earmarks of their own and will tout them in their own states and their own districts.
But the fact is that on occasion earmarks have been used as a vehicle for waste and fraud and abuse. Projects have been inserted at the 11th hour without review, and sometimes without merit, in order to satisfy the political or personal agendas of a given legislator, rather than the public interest.
There are times where earmarks may be good on their own, but in the context of a tight budget might not be our highest priority.
So these practices hit their peak in the middle of this decade, when the number of earmarks had ballooned to more than 16,000, and played a part in a series of corruption cases.
In 2007, the new Democratic leadership in Congress began to address these abuses with a series of reforms that I was proud to have helped write. We eliminated anonymous earmarks and created new measures of transparency in the process, so Americans can better follow how their tax dollars are being spent.
These measures were combined with the most sweeping ethics reforms since Watergate. We banned gifts and meals, and made sure that lobbyists have to disclose who they're raising campaign money from and who in Congress they send it to.
So we've made progress. But, let's face it, we have to do more.
I am signing an imperfect omnibus bill because it's necessary for the ongoing functions of government and we have a lot more work to do. We can't have Congress bogged down at this critical juncture in our economic recovery. But I also view this as a departure point for more far-reaching change.
In my discussions with Congress, we have talked about the need for further reforms to ensure that the budget process inspires trust and confidence, instead of cynicism. So I believe as we move forward, we can come together around principles that prevent the abuse of earmarks.
These principles begin with a simple concept: earmarks must have a legitimate and worthy public purpose.
Earmarks that members do seek must be aired on those members' Web sites in advance, so the public and the press can examine them and judge their merits for themselves.
Each earmark must be open to scrutiny at public hearings, where members will have to justify their expense to the taxpayer.
Next, any earmark for a for-profit, private company, should be subject to the same competitive bidding requirements as other federal contracts.
The awarding of earmarks to private companies is the single-most corrupting element of this practice, as witnessed by some of the indictments and convictions that we've already seen.
Private companies differ from the public entities that Americans rely on every day, schools and police stations and fire departments. When somebody is allocating money to those public entities, there is some confidence that there is going to be a public purpose.
When they are given to private entities, you've got potential problems.
You know, when you give it to public companies -- public entities like fire departments, and if they are seeking taxpayer dollars, then I think all of us can feel some comfort that the state or municipality that's benefiting is doing so because it's going to trickle down and help the people in that community.
When they're private entities, then I believe they have to be evaluated with a higher level of scrutiny.
Furthermore, it should go without saying that an earmark must never be traded for political favors. And finally, if my administration evaluates an earmark and determines that it has no legitimate public purpose, then we will week to eliminate it. And we'll work with Congress to do so.
Now, I know there are members in both houses with good ideas on this matter. And just this morning, the House released a set of recommendations for reform that I think hold great promise. I congratulate them on that.
Now I'm calling on Congress to enact these reforms as the appropriations process moves forward this year. Neither I nor the American people will accept anything less.
It's important that we get this done to ensure that the budget process works better, the tax payers are protected and that we save billions of dollars that we so desperately need to right our economy and address our fiscal crisis.
Along with that reform, I expect future spending bills to be debated and voted on in an orderly way and sent to my desk without delay or obstruction so that we don't face another massive, last minute omnibus bill like this one.
I recognize that Congress has the power of the purse. As a former senator, I believe that individual members of Congress understand their districts best. And they should have the ability to respond to the needs of their communities. I don't quarrel with that.
But leadership requires setting an example and setting priorities. And the magnitude of the economic crisis we face requires responsibility on all our parts. The future demands that we operate in a different way than we have in the past.
So, let there be doubt: This piece of legislation must mark an end to the old way of doing business and the beginning of a new era of responsibility and accountability that the American people have every right to expect and demand.
If we're going to solve our economic crisis, if we're going to put Americans back to work, if we're going to make the investments required to build a foundation for our future growth, then we must restore the American people's faith that their government is working for them and that it's on their side.
That's the government I promise. That's the government I intend to leave.
Thank you very much, everybody.
HARRIS: All right, President Obama discussing some of his thoughts on earmark reform this morning. And plans to curb those pet projects known as earmarks. Ironically, the president also planning to sign a $410 billion spending bill that critics say is filled with pork barrel projects.
For more on all of this, White House Correspondent Suzanne Malveaux is back with us again. And let's also bring in Ryan Alexander. He is the president of Taxpayers for Common Sense. She is the - I can't, oh, my - hi, Ryan. Good to see you.
RYAN ALEXANDER, PRESIDENT, TAXPAYERS FOR COMMON SENSE: Hi.
HARRIS: Hi, Ryan.
All right. Let's start with Suzanne.
And Suzanne, this is a case where the president is going to really hold his nose and sign what he calls an imperfect bill, isn't he?
MALVEAUX: Absolutely right, Tony. It is an imperfect bill. It's a lot of earmarks that he is going to be signing off on.
But everybody in some ways is - has a part in all of this. He met with House Speaker Nancy Pelosi, as well as the Senate Majority Leader Harry Reid for breakfast this morning. And Pelosi's office released a statement announcing what they say are going to be their own reforms when it comes to earmarks. Just one of them: when a member submits a request for an earmark, they're going to go to the appropriate executive branch and be given 20 days to review whether this earmark is eligible to receive funds.
So these are the kind of things that the democrats are trying to prove here. That they are trying to be responsible, transparent.
I want you to also take a listen too, Tony, to a republican congressman, the way he is framing this debate. (BEGIN VIDEO CLIP)
REP. JEFF FLAKE (R), ARIZONA: President Obama is expected to announce major earmark reforms as a sign of an omnibus spending bill with 9,000 earmarks. This gives voice to Saint Augustine's lament, give me sobriety, but not yet. But Mr. Speaker, it's still a good thing and it's still long overdue. And we still shouldn't have to look to the president to save us from ourselves. This earmark problem is our problem.
(END VIDEO CLIP)
MALVEAUX: So Tony, when you take a look at the spending bill, lots of earmarks, republicans and democrats alike stuffed a lot of their own pet projects - you would call it pet projects, some would call it legitimate projects - into that bill. So everybody is trying to come clean here, if you will, on this day.
HARRIS: Yes, and it sounds like the president is suggesting some ways to move forward here, if you want earmarks, you have to put them on your website, and you have to open them up to scrutiny. Also, hold public hearings on your - on your earmarks, so that you can defend the projects that you were putting forward.
MALVEAUX: And it really is part of his whole broader theme, if you will, from the administration that he's going to be holding people accountable, that they're going to be transparent. He is really trying to reach a lot of Americans who feel very anxious about where all this money is going, how it's being spent, and whether or not it's being wasted.
HARRIS: All right. Our White House Correspondent Suzanne Malveaux for us. Suzanne, appreciate it. Thank you.
Once again, let's bring in Ryan Alexander, president of Taxpayers for Common Sense.
And Ryan, you know, we were talking to Jim VandeHei, just a bit earlier today - in this hour, as a matter of fact. And he suggested, this is just one big crazy sideshow that distracts everyone from the real work that needs to be done with this economy and real spending programs that need to be scrutinized. After all, this is one, maybe two percent of this omnibus spending bill.
Is he right in saying that, Ryan? That this is a sideshow?
ALEXANDER: To a certain extent, yes. But listening to what Representative Flake was saying, it's a sideshow of Congress's own making. To the extent that it's a distraction from getting done the most important business that the country faces, it's a distraction for Congress. Those 9,000 earmarks take their time. And they asked for a lot more than 9,000. Nobody is getting everything they requested.
So we think, procedurally, it is a real problem. It's a distraction from the most important business that Congress needs to be spending its time on. HARRIS: And what about the low-hanging fruit here, that argument. That, you know what, there may be bigger issues out there, those are very difficult issues, let's take care of - look, if you're trying to get your household finances in order, they always tell you to sort of take care of the small bills first and take care of the low-hanging fruit first. And maybe the low-hanging fruit here is some of the earmarks that we're talking about here. For example, this idea of, you know, I don't know how much - what is this swine odor and manure management, the one that's been talked about so much, $1.8 million. It's low-hanging fruit, get rid of it, it may be a worthy project, but not right now.
ALEXANDER: Well, absolutely. In these extraordinary times, we can't afford to waste one single dollar. And, you know, the $7.7 billion in earmarks in this bill, some of them may not be wasted. Some of those may be for worthy projects. But we don't know that. And some of the reforms the president just talked about, and what the House had proposed, give us more information. That's good news.
HARRIS: Yes, and Ryan, here is the thing. Am I correct here, I did some reading this morning, there was a piece from our Jeanne Sahadi from CNNmoney.com that suggested if you removed the earmarks, it wouldn't change the size of the bill. Is that correct?
ALEXANDER: That's right. Earmarks don't - eliminating earmarks doesn't reduce the top line.
HARRIS: Wait a minute. Really?
ALEXANDER: Right. But that said, the money doesn't necessarily go to these projects that have been identified. It would go through the regular spending process, so potentially be competitively bid. We wouldn't have the black hole of how this decision was made. It would go through the ordinary process through the agency, and hopefully, it would have some oversight.
One thing we'd like to see the president do is make sure that he is strengthening the current spending system, so that we have more competitive bidding throughout the government. So that we have where there is a formula-based spending process that it's robust, we know why decisions get made. The more - the stronger and more transparent the spending systems are at the agency level, the less incentive there is for members of Congress to earmark.
HARRIS: Well, Ryan, take a listen to candidate Obama during the campaign season on earmark reform, the now famous sound bite. And let's see if it squares with what he is saying today, all right?
ALEXANDER: Sure.
(BEGIN VIDEO CLIP)
OBAMA: The truth is, our earmark system, what's called pork barrel spending, in Washington is fraught with abuse. It badly needs reform. I pledge to splash earmarks more than half when I'm president of the United States of America. (END VIDEO CLIP)
HARRIS: OK, what do you think? Does it square with what you heard just minutes ago?
ALEXANDER: Well he certainly softened what he was talking about in terms of abuse. What he just said right now was, there have certainly been instances of abuse, which makes is it sound a little less systemic than how he was talking about it in the campaign. You know, we think instances of abuse are way too many. I mean, people have gone to prison over earmarks. So that is serious abuse. And our recommendation is that they, you know, they cut it in half every year for the next five years. So we would like to see more aggressive targets. But he still has time to cut it in half in his first term.
HARRIS: Ryan Alexander is the president of Taxpayers for Common Sense. Ryan, thanks for your time. Appreciate it.
ALEXANER: Thanks for having me.
HARRIS: OK, many of you have been asking us, who decides what counts as an earmark, or what many people call pork? The answer is not as simple as it may sound. Our Josh Levs is here to explain.
Yes, one person's earmark is another person's stimulus program.
JOSH LEVS, CNN CORRESPONDNET: Another person's job, right?
HARRIS: Yes.
LEVS: There's a few things to look at, based on that. What's been going on this hour, right? Big news on that front, Tony. Let me tell you a couple things at the top. It is true what President Obama says about the earmarks in this bill being a tiny little portion. But let me just tell you, the big picture, we hear from people here all the time, right? We're hearing from Americans that everyone's talking about. What do Americans think. They're not so concerned about the size that is in the budget as the culture of Washington, Tony. And that's where this comes in. How does it work, how do they jump on these things?
So, what I've got up here, is something you mentioned earlier, this is great from cnnmoney.com, "Earmarks: Myth and reality," they're doing a great job here.
HARRIS: Yes, it's a good piece.
LEVS: Yes, I pulled up the graphic for you because I want you to see a key quote that should help everyone get a sense of what we're talking about. "Most typically, an earmark is defined as a slice of the money allocated to an agency that a lawmaker or president has requested to be set aside for a specific project."
So it's about the process, not the spending.
And let's go to the next one, which is another point that helps drive home how it actually works, why that would even happen. "Earmarks are not additional spending," like you were just saying. This is how it works, "they're a portion of the total amount lawmakers have agreed to spend for a given year."
So you have that huge budget. Congress agrees to spend a certain amount. Then, lawmakers pounce.
Now, President Obama also said earlier, Tony, that many of the people who have complained most vocally are the ones who also do have their own earmarks in the bill. What their argument is, what they say is, they would agree to a law that stops earmarks all together, but if there isn't one, why should they pay their price in the meantime? Why shouldn't their district, their state, get some money? So that's why it keeps going on.
HARRIS: Will you go through some of the earmarks, getting the most attention?
LEVS: Yes. I'll tell you about a few of them. In fact, we'll go to a graphic here. You just talked about the...
HARRIS: The swine odor.
LEVS: Yes. People are enjoying that one.
Look, now, look after this one. Sorry, the next one, guys.
So what we're going to go through a few of the examples that we have in this spending bill.
That was it. That was it.
Now, Senator John McCain, who is one of the most vocal people complaining about it.
HARRIS: Absolutely. Absolutely.
LEVS: He talks about that, he talks about cricket control in one of the areas. So, you know, that's how it plays out.
But let's zoom back in here. I want you to see this. A lot of people don't realize, they actually have a website where they're already listing all four of these and it's right here. It's part of the Office of Management and Budget. Earmarks, they list them right here, Tony and you can get lots of information. Here is one that people talk about a lot, sustainable energy projects in Las Vegas was on that list that we just showed you.
HARRIS: Let's put the list back up.
LEVS: Yes, let's put the list back up. These are things you can actually read about on the White House website.
HARRIS: Honey bee factory in Texas.
LEVS: Honey bee factory in Texas. Pig odor research in Iowa. A million bucks for cricket control in Utah. Close to a million for those sustainable energy projects.
So the idea here is, they might be worthy projects. Maybe you go through the process...
HARRIS: And every lawmaker who has asked for an earmark can defend that earmark.
LEVS: They're going to have to, apparently, if this new system actually happens. So the earmarks will still exist, right, still have the big budget. People still pounce for money. But now there are additional steps, which could skip where the process currently is, could change the culture of earmarks in Washington.
HARRIS: All right, Josh, thank you. Good stuff.
Report card time for President Obama and our iReporters are handing out the grades.
(COMMERCIAL BREAK)
HARRIS: Spend now, trim later. Is that any way to run a government? Why don't we take a trip to CNN.com's iReport desk and check in with our guy down there. One of the people helping us run the iReport operation, Tyson Wheatley, "Tyson's Corner."
Tyson, what do you have for us? I know we're getting to a report card here in a minute, right? On the president.
TYSON WHEATLEY, CNN.COM PRODUCER: Yes. Yes, that's right. But first we're going to start with, what else? This massive spending bill passed through Senate and, of course, we just heard remarks from the President about earmarks...
HARRIS: He's going to hold his nose, yet sign it.
WHEATLEY: That's right. You know, we wanted to sort of get at this question about so-called pork barrel spending. And we're sort of thinking, you know what? Are people going to be outraged over this? It's got a negative connotation, obviously. And so, we put that question out there to the iReport community and you know what? We didn't really hear outrage, rather we heard some support.
And I'm going to share just a couple responses with you, and let's go ahead and start with Tiamiyu Oladipo - sorry about that, dude. He's a doctor at South Carolina. And he told me this morning that he is so tired of hearing people compare pork spending to government corruption. He grew up in Nigeria and he says, you know, what I know about corruption and this isn't it. He says pork spending, when properly supervised, is necessary to support American communities.
Let's listen to what he had had to say.
(BEGIN VIDEO CLIP)
TIAMIYU OLADIPO, CNN IREPORTER: If we're spending billions of dollars in places like Iraq and Afghanistan, I don't see anything wrong at all. Nothing wrong at all if we pass that money to the communities.
JIM MORRISON, CNN IREPORTER: We send elected officials to Congress to spend our money on important things that we need. That's what they're there for, to make these decisions. If there's a problem with what they spend this money on, the answer is to elect different elected officials and to change the process.
(END VIDEO CLIP)
WHEATLEY: OK. So those are two responses.
HARRIS: Yes.
WHEATLEY: And, you know what? We're going to switch gears for just a minute.
HARRIS: OK.
WHAEATLEY: You mentioned the report card. You know, Obama has spent 50 days in office, and "THE SITUATION ROOM WITH WOLF BLITZER" yesterday wanted iReporters to weigh in on this and to give the president a grade for his first 50 days. And we got some really fantastic responses, and check out this one from Sal Steels from Denver, Colorado, who breaks down Obama's grade with this report card.
(BEGIN VIDEO CLIP
SAL STEELS, CNN IREPORTER: Hi. I voted for President Obama, and here's my report card for his first 50 days in office.
His handling of the economy, C.
Iraq, B.
Afghanistan, A.
Overall leadership, C.
Total score? B minus.
However, with ideas like talking with the Taliban or another stimulus package, I could quickly see this score going down to a D, as in disaster.
Just my two cents.
(END VIDEO CLIP)
WHEATLEY: All right. So we know - we want to know what you think about President Obama. What great would you give him? This is a great opportunity to weigh in at ireport.com.
HARRIS: Get him in front of a Skype camera, will you please? We've got questions for that young man. WHEATLEY: That was good, right?
HARRIS: Yes, yes, that's good.
All right, Tyson.
WHEATLEY: And you know what? Be sure to check out "THE SITUATION ROOM" today, cause there's going to be many more great responses used on the air. Who knows, you might see yours.
HARRIS: Oh, please. All right, Tyson, appreciate it. Thank you.
WHEATLEY: Take care.
HARRIS: A warning to other nations from the Oval Office. Susan Lisovicz has details.
(COMMERCIAL BREAK)
HARRIS: President Obama and Treasury Secretary Timothy Geithner huddled in the Oval Office today, then sent out a warning other nations must take aggressive action or the global recession will continue. Our Susan Lisovicz is at the New York Stock Exchange with details.
And we're roll all of this conversation into a market check with you, Susan, if you don't mind. But here's the thing - the president and the British prime minister, Gordon Brown, and their surrogates, a bit at odds here, aren't they, Susan, over the focus of the upcoming G-20 summit? The president wants the focus to be on this idea of everyone pitching in together and creating a global stimulus package, while the British prime minister is talking about reforms to the financial system and regulation.
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, and that's perhaps why Treasury Secretary Geithner said this morning, while meeting with reporters, that he is going off to Europe early in advance of this G- 20 meeting, which is early next month. Both of them saying it's a critical meeting at a critical time.
Yes, they do want a coordinated effort. There is no question that this crisis has driven home the fact that this is a global economic system and many of the industrialized nations are hurt by a situation that started right here in the U.S. with the subprime housing market. Geithner said that what he's really hoping for is to lay the groundwork at this early meeting, which he will be meeting later this week, for - so that an agreement can be reached when the summit gets underway next month.
(BEGIN VIDEO CLIP)
GEITHNER: We need to bring the world together to put in place a very substantial, sustained program of support for recovery and growth. And we want to bring together a new consensus, globally, on how to strengthen this global financial system so that crises like this never happens again.
(END VIDEO CLIP)
LISOVICZ: Right. So the treasury secretary meeting just privately and perhaps they can iron out some of those differences that you were talking about, Tony, in advance of a much bigger meeting. But make no mistake about it, G-20 is important. It represents 85 percent of the world output.
In the meantime, can I mention the market?
HARRIS: Absolutely. Sure, please.
LISOVICZ: Well, it is rare, very rare, this year to see back-to- back gains. But we are seeing that. Now granted, we're off the highs of the session but we're coming off the best gains of the year. Some traders telling me that as long as we don't get crushed today, it would be a victory. The Dow actually went over the 7,000 level earlier in the session. Certainly flirting with that level right now. The Nasdaq meanwhile is up about one percent, Tony.
HARRIS: Boy, yesterday was something! Man, what a ride! I was sick on my butt, but it was something to watch. You guys really did a good job of that. You really did. What a ride. Thanks, Susan.
LISOVICZ: Well, you know, Tony, historically, rallies in a bear market can be pretty big. So don't get too excited just yet. We need to see more of a pattern here.
HARRIS: The bear market bounce? Is that how you were describing it?
LISOVICZ: It could be a head fake. It could be a one-day wonder. It could be a lot of things. We'd like to see more of them. They don't need to be six percent in one day. Generally going higher would be good.
HARRIS: We'll see you next hour. Thanks, Susan.
Surviving Starbucks, business is perking up at a local coffee shop.
(COMMERCIAL BREAK)
HARRIS: Business is suddenly booming at The Daily Grind in Stillwater, Minnesota. The owner of the coffee shop dripping with success after super competitor Starbucks moves out of the neighborhood.
(BEGIN VIDEO CLIP)
MEGAN KIESTER, OWNER, THE DAILY GRIND: We had an awesome following. And those people are, by far, I can't even thank them enough for how much they supported us, especially right when I bought the place. If the economy was a lot better, it would have been a little bit more joyful in the whole process of losing them. But those employees over there were really, really nice people.
(END VIDEO CLIP)
HARRIS: And three years ago, The Daily Grind was the new bean on the block. Today, it stands alone.
