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President Obama Announces Earmark Reform; When Big is Not Big Enough; Killing Spree at German School; Stop the Presses; Hurry Up and Fix It; Dealing with a Dictator; Adding Up the Numbers; Hybrid Hangover; Running for their Lives
Aired March 11, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Spend now, trim later. President Obama announces a plan to curb those pet projects known as earmarks. He is also signing a bill that critics say is chock full of them.
In remarks last hour, the president said the rules will be different moving forward.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The future demands that we operate in a different way than we have in the past. So let there be no 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.
(END VIDEO CLIP)
HARRIS: White House Correspond Suzanne Malveaux joins us live now.
And Suzanne, what is the president's plan going forward on earmarks?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Going forward, Tony, you actually heard him. He's going to be a lot tougher, and he's suggesting to Congress that they really reform their ways when it comes to these pet projects that are stuffed into the spending bills.
A couple things that he highlighted.
First, he talked about that they have to have legitimate and a worthy public purpose, those kinds of projects. Secondly, that members have to publicly display on their Web sites where these things are going, where they actually are. They also have to be subjected to a public hearing scrutiny, so we could see some hearings about the kinds of things that members of Congress, where they're putting your dollars and how they're spending it.
HARRIS: Yes.
MALVEAUX: And then finally, earmarks for for-profit companies subjective to competitive bidding. So it is not a no bid - no longer a no-bid process. All of those things kind of taken together to try to reform this process. And it's a process that as Senator Barack Obama was a part of. As a candidate he vowed to reform, now he's putting these guidelines out there.
HARRIS: So, Suzanne, the president met with his treasury secretary, shifting focus just a little bit with you, focusing on the upcoming G-20 summit in London. You know, there are real concerns that the meeting could produce nothing to help the markets if everyone isn't on the same page.
MALVEAUX: Well, absolutely. I mean, that's why you had the president earlier meeting with British Prime Minister Gordon Brown to try to get on the same page here.
Obviously, he met with Tim Geithner, his treasury secretary. Rare moments - they brought the cameras in after the economic daily brief to show that Geithner is going to be heading over to Europe, and he's going to be talking with the other finance ministers to come up with a plan, a solution here, to make sure that everybody is on the same page in terms of dealing with this economic crisis.
I want you to take a quick listen, Tony.
(BEGIN VIDEO CLIP)
OBAMA: 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's 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?
(END VIDEO CLIP)
MALVEAUX: It's a big question, Tony.
HARRIS: Yes.
MALVEAUX: They've got to figure all that out, because if they don't, it might mean that our economy is essentially stuck in the same place it is now if you're not dealing with some of these other countries. And a lot of countries now suffering through these recessions.
HARRIS: And there are a lot of emerging countries that need help as well. So a big topic. We're going to drill down on it a bit more.
Our White House Correspondent Suzanne Malveaux.
Suzanne, thank you. Thank you.
The ink is barely dry on the $787 billion stimulus plan, and already there is talk of a second shot in the arm maybe needed. It may be needed to jolt the economy out of its stupor.
House Speaker Nancy Pelosi says it's too soon to know the size and timing of a package, if it happens, but a lot, she says, will depend on jobs. She spoke after meeting with prominent economists.
(BEGIN VIDEO CLIP)
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: So I believe success breeds success. We start rolling with one million, two million, 2.5 million jobs, and that will cause an upward spiral of success and even more jobs created. But as has been said by the economists to us in that room, and Mark (ph) here, we have to keep the door open to see how this goes.
(END VIDEO CLIP)
HARRIS: Keep the door open.
You know, it has become close to impossible to keep up with all the spending our nation is talking about. It may be necessary, is necessary, to rescue the economy, but the CNN money team is managing to do for us
Our Josh Levs is here with that side of the story - Josh.
JOSH LEVS, CNN CORRESPONDENT: You sure you want to see this total, Tony?
HARRIS: I know it's ridiculous. And we can't even quantify, and we have nothing really to compare it to.
LEVS: Nothing.
HARRIS: It's just huge. And the size, it doesn't even make sense.
LEVS: I know. Get ready for this, it's a bumpy ride.
HARRIS: Yes.
LEVS: I'm going to show you what they've done. They keep updating this. This is a fantastic page.
Let's zoom in on the board. I want everyone to see.
It's called "Economy rescue: Adding up the dollars." It's actually a little easier if I use the cursor instead of my hand.
So check this out. I'm going to go to the totals. Keep in mind right here, officially the recession goes back to December 2007.
So you have projects since that time - remember when we got checks last year around tax time? Check it out, Tony. All these different projects, and there are the two totals - $11.6 trillion has been allocated in all these different projects so far, $2.3 trillion of that has been spent, Tony. So keep in mind, we don't know how much will ultimately be spent, but just how much our government has agreed to spend so far, that's the $11.6 trillion. And if you want even more specifics, check this out. They've done a great job here.
I'm going to zoom through it one more time. Let's zoom back in.
All of the bills that have kind of changed along the way, you know, the TARP, all the things we've been talking about, every time you see this color, they've broken it down for you. So you can see the specific allocations, the specific dollar decisions. And Tony, obviously it's a lot to piece through.
HARRIS: Look at you. You just hit the button and it just goes on and on and on.
LEVS: It keeps going and going and going.
And one thing I like to point to, just for one way to try to contextualize this, is what our national debt is in this country. Check this out here.
Our current public outstanding debt is $11 trillion. So with allocated more than the amount of our debt, $10.95 trillion right now. I know it's a ton. I also know it's lot of numbers to keep track of, can be hard to find.
HARRIS: Yes.
LEVS: I'm going to take everything I just showed you, post it on my Facebook page, Josh Levs CNN. You should be able to access that and look at it yourself, and just piece through these numbers and you can decide for yourself, how do you feel about where all that money's going?
HARRIS: I wonder if the best way to understand this is what is this number that we're spending as a percentage of gross domestic production, what our total output is as a nation? Maybe...
LEVS: I'll go look (ph) at that.
HARRIS: Why don't you stay with us. We're going to talk to Christine, and maybe we can do a little back-and-forth here.
LEVS: You've got it.
HARRIS: President Obama has said all along any stimulus package must be big.
All right. Let's bring in our Christine Romans here to talk about this for just a second. Christine is with our money team in New York.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I can answer your question, Tony.
HARRIS: Yes. Yes. Yes. Is that a way for us to help understand this number?
ROMANS: It's an incredibly important number, because you can't just look at the number. The number is a number, but it has to be - you look at the number in the context of the size of this economy, which is about $14 trillion. And when you start approaching the debt to GDP, that gets much bigger than this, and people start to get very concerned.
Right now we are on the road to the highest debt as relation to our economy since World War II. And the president and his team have acknowledged that and said that's why they're trying to cut the deficit in half over the next few years.
HARRIS: Where are we at, six percent, eight percent of GDP? Where are we now?
ROMANS: I think - gosh, I've got to check. I think we're knocking on six percent.
HARRIS: Someone on the team will send us an e-mail on that.
ROMANS: Yes. Yes.
But it's - you know, that number has been getting bigger and bigger, and the share has been getting bigger and bigger. And now they have to start figuring out how to bring it down, because when you start growing it to be such a big part of your overall economy, then you're talking about spending a lot of money to pay the interest on that debt, money that should be going other places. But what economists will tell you, Tony, is that we're in such a tough spot right here, that it doesn't matter.
HARRIS: Right.
ROMANS: I mean, the most important thing is getting the economy going. And from even last fall - you and I have talked about this - even last fall, there were economists saying we're not thinking big enough.
HARRIS: Yes.
ROMANS: We've got to think bigger than this. And that's why the stimulus part two is coming into play.
HARRIS: You know what is a little maddening? The other thing I've also heard is that you may spend all these billions, because the problem is so massive, and you may just have to brace yourself for the idea that you may waste billions in the process of trying to dig all of us out of this hole.
ROMANS: Yes. It's true. And they're talking about in the near term, they have to spend big money.
So Paul Krugman, in "The New York Times" this weekend - you know, he has a Nobel Prize for economics.
HARRIS: Yes.
ROMANS: He said that the media and politicians have been focusing on all this money that's being spent and that it's been the wrong focus to take, that we have to think bigger, that we are not doing enough yet.
HARRIS: Wow.
ROMANS: Several economists have been telling me this for months, that we could see more efforts, that this isn't the end. "When is this going to end?" people keep asking me.
HARRIS: Wow. So you're telling me economists are saying to you - Nancy Pelosi, just a moment ago, suggested that - after a conversation with economists - that a second stimulus package may be necessary, that $787 billion may not be enough.
ROMANS: She's saying what economists have been saying for months, that we have to - that it's such a big economy, we have to think very, very big numbers.
Look at it this way, too. Those economists are studying - for example, Japan in the '90s. Japan had I think 10 stimulus...
HARRIS: Yes.
ROMANS: ... 10 stimulus bills that were passed. Now, all together, I think they would total in today's dollars maybe $1.5 trillion. I have to check my math on it. But at least that's what some of the research that we were just looking at is showing.
So 10. They kept having to do it over and over again.
Clearly, we want to do this right in the outset and get it done right. But economists are saying you have to leave the door open for even more.
HARRIS: See, I think you make an important point here by giving us a bit of a history lesson, Christine, because the other thing that is happening right now, in real time, is that there are other economies around the world that are either in the process of implementing a stimulus package or are thinking about doing it. So it's just not - we can be as upset as we want to about the idea of all this spending, but it seems to be the way a number of the economies around the country are looking at getting out of this.
ROMANS: And some even argue that we need to be more coordinated. And you heard the president talking about how we're all in this together, how it's a global situation. There are those who are saying we need a global stimulus, we need to think all together and time them and size them, and think together about this so that we can - everybody can get out a little bit earlier.
HARRIS: Well, I wanted to have you back a little later, but I think I just chewed up all of our time this time around.
ROMANS: OK.
HARRIS: Christine, good to see you. Thank you.
We are following two horrific shooting sprees - Alabama yesterday, Germany this morning.
Let's begin with the latest tragedy near the German city of Stuttgart.
Officials say a teen gunman killed 16 people before being shot dead by police. Most of the victims gunned down at a school.
Our Fred Pleitgen is live on the scene in the town of Winnenden.
And if you would, Frederik - first of all, good to see you. We talked to you on the phone last hour. Your shot is up. Good to have you on the air with us live.
If you would, give us the latest at this hour.
FREDERIK PLEITGEN, CNN CORRESPONDENT: Hi, Tony.
Yes, this shooting took place at that school building that you see right behind me over there. It's called the Albertville- Realschule here in Winnenden.
As you can see, there is still quite a bit going on outside that school. A lot of those people who say they are students at that school still standing outside that school. Some of the people who came there, of course, are also police. There is well over 100 police officers here on the scene right now.
And you can just see how badly people are grieving who are looking at this. Some people have tears in their eyes. A lot of people say they just simply cannot understand why this happened.
Let me just run you through what happened here during this school shooting, because we are getting somewhat of a clearer picture of how all of this went down.
The shooter went into the school at around 9:30 a.m. German time as classes were going on. The whole school was full of students, all the classes were going on.
He went into three classrooms and started shooting, seemingly randomly, at people in those classrooms. He killed three female teachers, also killed nine students as he was on that rampage inside the school.
He then left the school. The police are saying that it was about two minutes after he'd entered. And the whole thing didn't take very long that he was inside the school.
He then gunned down a person whom he saw outside of the school. He then hijacked a car which he drove to a town close to here, about 20 miles away from here, called Venglenen (ph), where he then ditched that car. He gunned down two further people there, and that's when the police finally caught up with him. There was a large gun battle outside a supermarket, where two police officers were wounded and the shooter himself was killed.
And of course the big question that people here are now asking is really why this happened. How could this happen? Why did this happen? Why did this person go on that rampage? And that seems to be something where no one can give any answers, at least not at this point in time - Tony.
HARRIS: OK, Frederik. We're going to let you go. We know you have to talk to our friends at over CNN International.
Frederik Pleitgen in the German town of Wennenden.
Good to see you, Frederik. Thank you.
In southern Alabama today, police are struggling to find out what ignited a gunman's murderous rampage. Eleven people died in the towns of Kinston, Samson and Geneva. The gunman is among the dead.
Police say Michael McLendon killed his mother at her home, then set the house on fire. Then drove to another house where police say he gunned down his grandparents and aunt and uncle.
Most other victims were apparently just random. Some shot as the gunman actually drove through the towns.
The close-knit communities, as you can understand, are filled with shock and grief. Last hour, police updated their investigation.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We just simply do not have a motive yet. And in subsequent interviews, again, second-tier interviews, we hope to find out more of that. But we just do not have a motive or what happened to start this. So we don't have that information yet.
(END VIDEO CLIP)
HARRIS: And CNN's Sean Callebs joining me now live from Samson in Alabama.
And Sean, a deputy who was working the case, boy, lost his wife and child in these killings. What is he saying about all of this?
SEAN CALLEBS, CNN CORRESPONDENT: Yes, that's extraordinarily agonizing. The deputy actually is still with some of his colleagues, sitting on the porch, trying to cope right across the way as best as possible.
Now, his wife and small child actually lost their lives right here on this porch behind me. He was actually answering the call.
He was on his way 12 miles from where we are to the town of Geneva when this call came out. And he had asked a friend to check on his family here, because he knew there had been a loss of life in Samson. And he told us - his friend said, "You better get your butt back here and find out."
HARRIS: Boy.
CALLEBS: And this is an officer who says he puts his life on the line every day. He's prepared to do that, but he cannot fathom why this happened.
(BEGIN VIDEO CLIP)
DEP. JOSH MYERS, GENEVA COUNTY SHERIFF'S DEPT.: She was a stay- at-home mom. We have three kids. She was a super mom. Our baby girl, Corin Gracie (ph), the sweetest thing in the world. I don't even know how to comprehend what's going on.
(END VIDEO CLIP)
CALLEBS: And he has another child, a 3-month-old daughter, who was wounded in the shooting. And she was taken to a Pensacola hospital.
And imagine this - a neighbor actually right over there, heard the gunshot. She looked out the window. And when the suspect went out the back door, and then got his car and began to drive away, she came over this way, scooped the child up off the front porch, and hid between these two cars and was able to carry that young girl to safety.
Just simply - truly amazing.
HARRIS: Hey, Sean, what are we learning about the gunman, Michael McLendon?
CALLEBS: Everybody keeps trying to find that out, and you heard the officers in Montgomery leading this investigation, what was the motive? And that's the big source of frustration for people here in this area.
We know he worked for a while at Reliable Metal, a manufacturing plant where he took his own life. Was he a disgruntled employee? There is nothing that points to that right now.
Was there some kind of domestic issue that could have triggered this? They have no information on that as well.
But you heard about the secondary investigation. The D.A., the district attorney, was out here earlier talking to members of the media, as well as officers as well. And this is something they're going to continue to dig into. This community really needs some kind of answers to begin to put this all behind them.
HARRIS: All right.
Sean Callebs for us in Samson, Alabama.
Sean, thank you.
What would you say if billions in bank bailout money was being spent overseas? Some members of Congress want to know what's going on.
(COMMERCIAL BREAK)
HARRIS: Hey! Where's our bailout? Ours? That's what some young Americans are asking, especially those who voted for President Obama.
We got this iReport from David Seaman of New York.
(BEGIN VIDEO CLIP)
DAVID SEAMAN, IREPORTER: You have seen relief for homeowners. You have certainly seen some relief for Wall Street. But the government is ignoring us.
Everyone I've talked to my age, people in their 20s, and people in their early 30s, people right out of college, they can't find work, they're worried about high-interest credit card debt, and they're carrying these huge student loans that they're afraid of defaulting on. Where's our bailout? Because we're the future.
I understand that older voters have a lot of power and influence. I get that. They have the money, they've been around a long time. But we have a lot of influence, too.
(END VIDEO CLIP)
HARRIS: So, speaking of bailouts, a couple of other items we want to cycle through here quickly.
A hearing on Capitol Hill just went to recess. It is focused on the bailout of the financial industry. A House committee is hearing from interim treasury secretary - he is running the program, Neel Kashkari, and other officials. Lawmakers want to know how well the billions in bailout money is being managed.
OK. He is the president's money man, and he is the person Wall Street is banking on for a solution to the financial crisis. Treasury Secretary Timothy Geithner huddled with President Obama at the White House last hour.
In a PBS interviews with Charlie Rose, Geithner says the administration is close to unveiling a plan to deal with those bad assets on bank books.
(BEGIN VIDEO CLIP)
TIMOTHY GEITHNER, U.S. TREASURY SECRETARY: So what this plan will do is to make financing from the government available, alongside public and private capital, so that we can get these markets opened up again. The reason why these markets are not moving now is because there's no financing available, and no confidence in people's capacity to make judgments about ultimate losses.
(END VIDEO CLIP)
HARRIS: So Geithner predicts the plan will work, but he cautions, it will take time.
Right now three banks are under the gun for the way billions of dollars in TARP money was spent.
Special Investigations Unit Correspondent Abbie Boudreau is digging into it.
(BEGIN VIDEOTAPE)
ABBIE BOUDREAU, CNN CORRESPONDENT (voice-over): Citigroup, Bank of America, and JPMorgan Chase, combined, received tens of billions in emergency federal bailout money called TARP. Now Congress says billions of your tax dollars are going to other countries, and wants answers from the Treasury Department.
Congressman Dennis Kucinich says his subcommittee found $16 billion in what he calls questionable transactions from three major banks, including Citigroup, which made an $8 billion loan to a Dubai public sector entity in December; Bank of America, which in November invested $7 billion in the China Construction Bank Corporation; and JPMorgan Chase, which also, in November, invested $1 billion in India to expand what the bank called its global footprint.
REP. DENNIS KUCINICH (D), OHIO: We have auto plants closing, steel mills closing, factories everywhere are going out. We have people who are losing their homes, their jobs, their health care. We have people living in tents. And U.S. taxpayers' money is being shipped overseas.
BOUDREAU: Kucinich says he believes the money used for these investments was emergency federal money, though Citigroup specifically denies it, saying "... TARP capital is used only for lending and credit flow in the United States."
Bank of America tells CNN it had "... a pre-existing option to buy China Construction Bank shares, which we had always planned to exercise."
And JPMorgan Chase tells us they have no comment.
Still, lawmakers are not convinced that Treasury officials are closely examining the banks' books to see actual transactions and to determine just where the taxpayers' bailout money is going.
(on camera): Treasury Department officials tell CNN they've imposed new regulations that will require banks to explain how they will use the money. They say there will be strong oversight from the inspector general, and also tell us that a congressional panel is now in place.
Abbie Boudreau, CNN, Atlanta (END VIDEOTAPE)
You know, it may be the final hours of freedom for accused swindler Bernard Madoff. He is expected to plead guilty tomorrow to 11 criminal charges in the biggest investment scam in U.S. history.
Madoff is accused of defrauding billions of dollars from retirees, charities, school trusts and even Holocaust survivors. Some of his investors will be allowed to speak at his plea hearing. The man once known as the "Wizard of Wall Street" may face a sentence of up to 150 years in prison. He is 70 years old.
The head of the Securities and Exchange Commission is trying to get more money for her agency. Chairwoman Mary Schapiro is answering questions today for House lawmakers. Schapiro says it would be unwise for the SEC to pull back during what she called perilous times.
The agency which polices financial markets has been sharply criticized for lax oversight. For example, SEC investigators missed the Bernard Madoff investment scam even though they had many warnings.
A lot of people in the Midwest are trying to keep water out of their homes today. How far will it spread?
(COMMERCIAL BREAK)
HARRIS: You know, I guess we all knew these tarmac delays were bad, but how about 1,232? Man - 1,232 tarmac delays!
The advocacy group FlyersRights counted that many at U.S. airports over 2008. The longest, Delta Flight 1201 from Atlanta to Oregon, stuck on the tarmac for 10 hours last January. No food, no water or temperature control.
FlyersRights says Delta had the most delays of three hours or more. For that, it got the group's When You Were on the Ground They Treat You Like Dirt Award. U.S. Airways won the Nausea Award for having the most overflowing toilets.
Looking pretty good for tonight's launch of the space shuttle. Look at these pictures.
Are these live pictures or just from a short time ago?
OK. A short time ago.
If all goes as planned, Discovery will arrive at the space station on Friday. Its seven-man crew will deliver another set of solar wings for the International Space Station. The mission includes four space walks. That's on the schedule.
Our crews are in place. And you can watch the launch right live, right here on CNN. That's tonight, 9:20 Eastern Time.
(WEATHER REPORT) HARRIS: All right. We are all checking our bank balances and wondering when these recovery plans will start working. Does the president's team have an answer to that question?
(COMMERCIAL BREAK)
HARRIS: OK. Newspaper presses all across the country are in danger of stopping for good. Last month we told you about Denver's "Rocky Mountain News" closing its doors. And now Seattle's oldest newspaper may follow suit. Susan Lisovicz is at the New York Stock Exchange with details.
And then, of course, Susan, I have an extra question for you.
SUSAN LISOVICZ, CNN CORRESPONDENT: Value-added. We love value- added hits (ph), Tony.
Workers at the "Seattle Post Intelligencer" have already been told that they may lose their jobs, possibly as soon as next week. Hearst, the paper's owner, said back in January that if it didn't find a buyer for the "Seattle PI" in 60 days, the paper would be shut down or continue as an online publication only. Well, that deadline passed yesterday. Hearst says it hasn't made a final decision about what to do, but workers are already preparing for the worst. It's on its website, the "Seattle PI," is asking readers to share memories of a 146-year-old publication - Tony.
HARRIS: Well, you have to wonder if the community daily is sort of - the big city daily has run its course here. Does the idea of a daily newspaper, Susan, really have a future?
LISOVICZ: Well, I mean, it's a question that's been asked for some time. But when you talk about the recession that we're seeing right now with what it's done to the ad industry, there are some changes and painful cutbacks. If it is to continue, the future of the "San Francisco Chronicle," for instance, in doubt. Employees have agreed to contract concessions to help save the paper.
In Michigan, "The Detroit News and Free Press" recently cut back home delivery to just three days a week. Papers in New York, Philly, Miami, other cities, are in danger and the "Madison Capital Times" in Wisconsin went online only. A lot of the problems again really tied to what is their lifeblood, the ad market, and competition from the Internet. So it's a two - it's a double-barreled blow, that's for sure.
We have better news on Wall Street. We're seeing some gains, which is good after the explosive rally we saw yesterday. Dow right now is up just 9 points, but at least we're going in a positive direction. The Nasdaq is up nine as well.
Tony, go ahead.
HARRIS: Hey, you know, Susan, value-added. Value-added. Ding, ding, ding, ding. We saw the explosive growth - well, the explosive earnings yesterday and what happened with the stocks and investors really jumping into the market full force yesterday. I'm just sort of wondering, it was based on the guidance that Citi's CEO passed along to employees. So I suppose the question is, is there anyone that you're talking to suggesting that the government oversight we've been involved with Citi now for some time now, that it is actually focusing the management of a company like Citi a little better, and perhaps we're seeing some better results from Citi because big brother is looking over its shoulder?
LISOVICZ: Well, I think that's . . .
HARRIS: Is that a stretch?
LISOVICZ: Well, I mean, I think that the losses from the bubble that we saw tied to the housing and credit market is just enormous. And, frankly, I don't think we're through it yet. Two months is encouraging, but, you know, there's a lot of concern that, you know, we started with the housing market and we're going to continue with other type of credit and loans. Like, for instance, credit cards.
So I don't know if anybody's saying we're out of the woods, but it was very encouraging. I don't think that memo was something that was leaked to the press by accident. I think everybody wants to share that. But I think that we've got a ways to go. It would be the sense.
But, you know, if you start to see - if you start to see more signs of this, Tony, I mean I think that you're going to see more rallies. Maybe not 6 percent rallies in one day, but there's no question that investors are really focused on what's happening in the financial market, not only here, but globally. And that's what we talked about in the last hour with Tim Geithner going early in advance of the G-20 summit.
HARRIS: Good stuff, Susan. Thank you.
LISOVICZ: You're welcome.
HARRIS: We have a line on some jobs for you. Take a look at this line. More than 1,000 people stood in the rain at this job fair in Independence, Ohio. Trouble is, not all of them were registered and many were turned away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It took me two-and-a-half hours to get here and I live about seven miles away. And then I stood in the rain for an hour.
UNIDENTIFIED FEMALE: It's really been truly an emotional experience knowing that so many people are out seeking jobs. It's a reality check.
(END VIDEO CLIP)
HARRIS: Ohio's unemployment rate is hovering around 9 percent. Nervous about the economy? So are your representatives. Even Democrats are getting a little antsy here, demanding the Obama administration deliver a fix. Our Jim Acosta reports.
(BEGIN VIDEOTAPE)
JIM ACOSTA, CNN CORRESPONDENT (voice-over): With the White House comparing the nation's economy to a house on fire, some congressional Democrats are asking, where's the fire truck? One New Hampshire congresswoman said as much to Treasury Secretary Tim Geithner on Capitol Hill.
(on camera): And you said what?
REP. CAROL SHEA-PORTER (D), NEW HAMPSHIRE: I said hurry, please hurry, because people are waiting and they are hurting and they need the help now.
OBAMA: This afternoon I met with members of my economic team . . .
ACOSTA (voice-over): She's one of a growing number of nervous Democrats, on edge or at odds with some of the Obama administration's plans on the economy. Some are taking aim at the president's budget proposal that would curb popular tax deductions for wealthier Americans.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't think ultimately the criticism is surprising. That certainly happens and is all a part of the process.
ACOSTA: As House Speaker Nancy Pelosi urged Democrats to stay on message . . .
REP. NANCY PELOSI (D), SPEAKER OF THE HOUSE: Word of the day is the word that is important to our economy every day, and that word is confidence.
ACOSTA: She said top economists told her a second stimulus package may be necessary.
PELOSI: We have to keep the door open to see how this goes.
ACOSTA: Budget hawks in her party don't like the sound of that.
(on camera): Are the votes there for that right now do you think?
REP. EARL POMEROY (D) NORTH DAKOTA: I mean if we were to take a vote this afternoon on a stimulus package, it would probably fail. If they want substantial, more public funds committed, they're going to have to go out there and explain precisely how this is going to work.
ACOSTA (voice-over): Democrat Carol Shea-Porter says she's simply passing on the message she's getting at town meetings back home. A message that's also aimed at some in the media. UNIDENTIFIED MALE: President Obama, are you listening?
JIM CRAMER, NBC/CNBC ANALYST: Whatever money you may need for the next five years, please, take it out of the stock market right now.
ACOSTA: Who she accuses of fueling the flames.
(on camera): Is that having an effect?
SHEA-PORTER: Yes. It's terrifying people. Before people were very optimistic and their leaders were optimistic. Then we hit a spell here where we're hearing a lot of media . . .
ACOSTA: So called experts.
SHEA-PORTER: Media people who are frightening without necessarily giving both sides.
ACOSTA: For now, the White House says it has no plans for another stimulus, arguing its agenda needs time to work. The fire is not out yet.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
HARRIS: Well, just pay attention to our money team, would you please?
Still to come, the U.S. is being accused of preparing a military invasion. Now where's that coming from?
(COMMERCIAL BREAK)
HARRIS: New evidence the financial crisis is putting a choke hold on economies around the world. China now reporting its exports plunged almost 26 percent from last year to about $65 billion. It is the sharpest decline reported by the government since it began keeping records back in the 1990s. The country's imports are also down considerably. Officials plan to pump half a trillion dollars into the economy to stimulate growth.
Some damage control on tap today between the U.S. and Chinese diplomats over a confrontation at sea. China's foreign minister is in Washington. His visit with Secretary of State Hillary Clinton was planned well before Sunday's incident in which five Chinese ships surrounded a U.S. surveillance ship in the South China Sea. Washington formally protested the Chinese ships acted recklessly. Beijing says the U.S. broke international law by being there. Clinton and her Chinese counterpart will have to try to keep the confrontation from damaging their future dealings.
Perhaps an even more difficult task for the Obama administration is how to handle North Korea. Our Zain Verjee reports on the communist nation's latest threats as the U.S. and South Korea play war games.
(BEGIN VIDEOTAPE)
ZAIN VERJEE, CNN CORRESPONDENT (voice-over): These war games are triggering a real war threat. North Korea's accusing the U.S. and South Korea of planning to invade.
ROBERT WOOD, STATE DEPARTMENT ACTING SPOKESMAN: The U.S. ROK (ph) exercised are not a threat to the North.
VERJEE: The official North Korean news agency called the South "puppets in a frenzy" and says North Korea's one million man army is on alert. The military hotline (ph) to Seoul cuts (ph) in protest. The border, first shut, now open. The U.S. top diplomat have said North Korea is looking for an advantage.
HILLARY CLINTON, U.S. SECRETARY OF STATE: It uses, you know, provocative words and threatened actions to try to get attention in order to, you know, make a deal in some way. You know, food and fuel and other kinds of assets.
VERJEE: Some analysts say Kim Jong-il is angry the South Korean leader is not courting him as others have in the past. So the North has ripped up non-aggression pact and refused to guarantee the safety of South Korean airliners in the North's airspace. Fueling the fire, North Korea's preparations for what it called a satellite launch. The U.S. says that's a disguise for a test on a long-range missile that might have the ability to hit Alaska and the U.S. West Coast. North Korea warns any attempt to shoot it down will be an act of war.
The chairman of Joint Chiefs, Michael Mullen, says there's been no decision on what the U.S. would do if North Korea launches.
Zain Verjee, CNN, Washington.
(END VIDEOTAPE)
HARRIS: Now that gas prices have dropped, would you really consider buying a hybrid? A lot of car companies are betting big bucks that you might.
(COMMERCIAL BREAK)
HARRIS: So you recall just a couple of minutes ago - let's do this on two show. We had Josh here. We were - and you were helping us sort of tally up all the spending we were talking about here. All the stimulus. The bill (ph) - it goes on and on and on.
JOSH LEVS, CNN CORRESPONDENT: Right. It is massive.
HARRIS: Right. And we were trying to figure out a way to explain it that made any kind of sense to folks watching this - all of this spending from home.
LEVS: That's right. HARRIS: And we were trying to figure if the best way to appreciate this was as a percentage of Gross Domestic Product, right?
LEVS: And don't let it be said that Tony doesn't get the answers to his questions, right? He wanted to know.
HARRIS: And so the question was, how much . . .
LEVS: Right, the deficit of the Gross Domestic Product.
HARRIS: Right.
LEVS: What percentage are we talking about. Thanks to folks at CNN Money's Jeanne Sahadi, I have it for you here. I'm going to tell you. The administration estimates the deficit for fiscal year 2009 will reach $1.75 trillion. And, Tony, that's 12 percent of our Gross Domestic Product.
HARRIS: Twelve percent.
LEVS: And it's the highest since World War II.
HARRIS: You are awesome.
LEVS: And it could keep going bigger and bigger and bigger. I don't have fancy graphics for you. We just got it. But, still, you can hear (ph) 12 percent, you know that's big.
HARRIS: Rock the animation for "Energy Fix," please.
LEVS: Let's rock it.
HARRIS: You know, there are more hybrid car options now than ever before. But with gas prices far below where they were last year, consumers may have lost their appetite for pricey hybrids. And they are a bit pricey. Cnnmoney.com's Poppy Harlow has our "Energy Fix."
Poppy, I've got to tell you, I visited a dealership over the weekend. Just sort of getting a feel for the price on these things. And I was talking about . . .
POPPY HARLOW, CNNMONEY.COM: Yes, what did you find?
HARRIS: Yes, I was talking to a Toyota dealer and I was looking for a Camry hybrid, $35,000, $36,000. I don't think so, Poppy.
HARLOW: Yes, it's a lot.
HARRIS: Yes.
HARLOW: My 1996 Camry, by the way, is still running. So they do last.
HARRIS: Love it. Love it.
HARLOW: They do last a long time. I'm not joking about that one.
But let's talk about the gas prices first so people have a real picture here of what's going on. What we hear from the Energy Department now is that gas prices are average at $1.96 this year. And right now they're pretty much right there. They're going to peak at about $2.02 a gallon in August. That's less than half of the record high that we saw last summer, which was $4.11 a gallon.
HARRIS: Right.
HARLOW: And by our back of the envelope calculations, that means the average driver will spend about $1,500 less on gas over the course of the year. Now, you could guess that if that means lower gas prices coupled with a recession, what we saw as a result of that was a 29 percent decline in hybrid sales last month.
And although that's not as bad as the hit the overall car market has taken, Tony, there is a huge supply - and oversupply actually - of these hybrids right now at the dealerships. I don't know if you noticed that, but what we've heard from the CEO . . .
HARRIS: Oh, yes.
HARLOW: Yes, of Auto Nation, that's the biggest dealership in the country, he estimates there are about 600,000 hybrids sitting on his lots alone across the country. The value also of used hybrids has fallen about 2 percent since last summer, Tony. So before you buy that expensive new hybrid, take a look at what it's going to be worth.
HARRIS: Not me. Not me. Not this kid. No way. So here's the crazy irony of all of this. So there are fewer people who are actually buying the hybrids now, just as the carmakers are ramping up production.
HARLOW: That's exactly right. There are 20 new models available for 2009 in terms of hybrids. More are coming. Ford says it's doubling its hybrid production this year. Of course, there's the Ford Fusion. Also the Mercury Milan.
Just yesterday Honda announced the pricing for its hybrid Insight. It's going to be below $20,000. We're talking about the new models that are going to hit showroom floors next month. That is roughly $2,200 less than this Toyota Prius. That could be key because if these prices can come down enough to entice buyers, people may be willing to get them despite gas prices. And Honda says it's already had 18,000 orders for the Insight. That is triple what it expected. Twenty grand better than 35,000.
HARRIS: Get the pricing right. Get the pricing right and you can probably move more of these.
All right, Poppy, great to see you. Thank you.
HARLOW: You're welcome.
HARRIS: You know, there's a new story for many of the Mexicans rushing across the border into the United States these days. And it is a story prompted by fear.
(COMMERCIAL BREAK)
HARRIS: They were reporters, business people and every day citizens in Mexico. Then they angered the drug traffickers. Now they're running for their lives and seeking asylum in the United States.
CNN's Ed Lavandera has their story.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): From a tiny restaurant in El Paso, Texas, Jorge Aguirre and Emilio Gutierrez (ph) agreed to meet with us, two Mexican reporters in hiding. They say their articles criticizing Mexican government officials were met with death threats.
EMILIO GUTIERREZ, MEXICAN JOURNALIST: (SPEAKING FOREIGN LANGUAGE)
LAVANDERA: The fear never ends, Emilio told me. I had become a source of frustration for them.
Aguirre runs a Web site called lapolaka.com. He was on his way to a friend's funeral last November in Juarez, a fellow reporter who was assassinated, when his cell phone rang.
JORGE AGUIRRE, MEXICAN JOURNALIST: (SPEAKING FOREIGN LANGUAGE)
LAVANDERA: They called and told me I was next, Jorge says. I went into shock. I thought I was going to die right there on the street corner.
Aguirre says he knows where the threat came from. He rushed his family into El Paso and hasn't been home since. Gutierrez has already requested asylum. Both men say politicians controlled by drug traffickers want them killed. Mexican government officials have denied this.
GUTIERREZ: (SPEAKING FOREIGN LANGUAGE)
LAVANDERA: If I go back, they will kill me, he says.
(on camera): The number of Mexican citizens asking for asylum in the U.S. because they fear the violence in their home country has been going up. In 2003, there were 54 cases. That number jumped to 312 last year.
But asylum isn't a sure bet. Less than half of those cases were approved last year. Applicants must show they're being persecuted for social or political reasons. There are business owners, even law enforcement agents, including three Mexican police chiefs who refused the bribes of drug cartels. One of those worked in the small town of Palomas, on the border with New Mexico.
SHERIFF RAYMOND COBOS, LUNA COUNTY, N.M.: It's pretty hard to fight that type of a situation by yourself.
LAVANDERA: Sheriff Raymond Cobos knew the Palomas chief. He heard the chief was denied asylum and is hiding somewhere in Mexico.
COBOS: If I was interested in surviving and living another day and taking care of my family and protecting my family, I would have to give up my post because I wouldn't have anybody else to rely on.
LAVANDERA: And now we have learned the American attorney for the two Mexican reporters says he's being threatened for taking their case, saying he's been followed on the U.S. side.
(on camera): Do you view this as a threat on your life?
CARLOS SPECTOR, IMMIGRATION ATTORNEY: Yes, I've taken it very seriously. I've grown up in Mexico. I've lived in Mexico. I lived on the border my entire life. I know how they function. It was clearly a threat that if I don't stop, something will happen.
LAVANDERA (voice-over): Another reason for Emilio Gutierrez and Jorge Aguirre to to remain hiding.
Ed Lavandera, CNN, El Paso.
(END VIDEOTAPE)
