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Campbell Brown
President Obama Criticizes AIG Bonuses; White House Fires Back at Dick Cheney
Aired March 16, 2009 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: Hi there, everybody.
Fuming today at the White House over those AIG bonuses, fuming across the country, frankly. How could this have happened? And can the president stop it?
We start tonight with bullet point number one: President Obama's rage over the unbelievable bonuses being paid out by the insurance agent AIG. We have been told of course repeatedly if the financial giant is allowed to collapse, it could take all kinds of businesses down with it. So, taxpayers have been keeping AIG afloat.
But the president didn't hold back after the bonus bombshells became public.
Listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?
In the last six months, AIG has received substantial sums from the U.S. Treasury. And I have asked Secretary Geithner to use that leverage and pursue every single legal avenue to block these bonuses and make the American taxpayers whole.
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
BROWN: And he is not alone in the rage we're hearing from the White House, all of us wondering how this could happen.
So, we're going to break it down. We're going to introduce you to one man who had a huge role in how things at AIG got so messed up in the first place.
And bullet point number two tonight: the power to change as part of "The Road to Rescue," everything you need to know about to get through our country's financial crisis. We found people who are making changes to help fix the economy. And we will start with a man who is going into overtime to change the way business is done at a company you have grown up with. We will explain.
And bullet point number three: If the economy has you stressed out, trust me, you're not alone on this one either. We have got a fascinating look at what Americans are doing to cope. You might be doing it yourself.
And bullet point number four: the White House firing back at former Vice President Dick Cheney after he used an exclusive CNN interview to criticize some of President Obama's decisions. You will hear it all in tonight's "Political Daily Briefing."
But, first, we're going to go to that giant bonus package that is leaving so many people burned. The government has already spent more than $170 billion of your money trying to save AIG. So, when news of another round of executive bonuses broke, the company said it's legally bound to pay the money.
Today, President Obama made it clear the White House is looking for ways to stop this.
(BEGIN VIDEO CLIP)
OBAMA: What this situation also underscores is the need for overall financial regulatory reform. So we don't find ourselves in this position again. And for some form of resolution mechanism in dealing with troubled financial institutions so that we've got greater authority to protect American taxpayers and our financial system in cases such as this.
OBAMA: You know, we already have resolution authority -- excuse me, I'm choked up with anger here.
(LAUGHTER)
OBAMA: We always -- already have some of that resolution authority when it comes to a traditional bank. But when you start getting into AIGs and some of these other operations that have a whole bunch of different financial instruments, then we don't have all the regulatory power that we need. And this is something that I expect to work with Congress to deal with.
(END VIDEO CLIP)
BROWN: Well, the president certainly isn't the only one having a hard time swallowing the news.
Let's break it down now, why all of this is happening, with chief business correspondent Ali Velshi.
Ali, how is AIG possibly justifying this? Walk us through the argument they're making.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes. Well, the idea that they were paying $450 million to members of this particular division that got AIG in this mess in the first place, that's not new. What's new is the administration's stand on this whole thing.
Treasury Secretary Geithner phoned Ed Liddy, the new CEO of AIG -- he was brought in, Liddy was brought in to help get this company back on track -- and told him that he doesn't think this is acceptable. Liddy then wrote to the treasury secretary. And they're using two distinct arguments.
I'm going to present them to you both. One of them is a little more compelling than the other. The first one is that outside counsel has advised that these are legal, binding obligations by AIG and there are serious consequences, legal, as well business, consequences for not paying.
Now, that is something that AIG has told the government. And you would think that the government has done some research on this and realizes that there may not be a legal way out of this contract.
Now, that's something to discuss. But here's the second argument from AIG. You and I have discussed this one before, Campbell. This one is the one that is a little tougher to swallow.
Liddy writes to the secretary, the treasury secretary: "We cannot attract and retain the best and brightest talent to lead and staff the AIG business if employees believe that their compensation is subject to continued and arbitrary adjustment by the U.S. Treasury."
Two distinct points here. One is keeping good staff. Now, we might think, with everything that has gone on in the financial world, what are these people going to do if they leave AIG? Ed Liddy, the CEO of the company, I spoke to him, and he said that that's got something to do with the fact that this is a complicated business.
But the second part of what he said was interesting. And that part is about arbitrarily changing the rules. There's definitely some concern that maybe the government has to be careful when they tread in those waters, Campbell.
BROWN: Ali, though, they have got to have known the company was going to take a beating if they did this. Literally everyone is directing their anger at AIG.
And I just want to play -- this is Federal Reserve Chairman Ben Bernanke. This was on "60 Minutes" last night. Listen to what he said.
(BEGIN VIDEO CLIP, "60 MINUTES")
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Let me just first say that of all the events and all of the things we've done in the last eighteen months, the -- the -- the single one that makes me the angriest, that gives me the most angst, is the intervention with AIG. Here was a company that made all kinds of unconscionable bets. Then, when those bets went wrong, they had a situation -- we had a situation where the failure of that company would have brought down the financial system.
(END VIDEO CLIP)
BROWN: And you hear this echoed over and over again. And, yet, they can really say to all of us with a straight face their hands are tied.
VELSHI: Well, I will tell you, what you heard the president say just before you came to me, he said two things. He says, I'm giving -- I'm asking the treasury secretary to use the leverage, the leverage that is contained in the fact that the government still has more money to give AIG as part of its arrangement. We're going to use that leverage to try and get this changed. And he said all legal means.
It's not clear what legal means the government has. But they're going to do something with the rest of the money that they give AIG to influence how it spends the money.
BROWN: Well, let's explore legal means.
First of all, just give me your general take, Jeff.
Jeff Toobin joining us, as I should have said, introduced you there, our chief legal analyst.
(CROSSTALK)
BROWN: What's your general take on this argument they're making that Ali just laid out?
JEFFREY TOOBIN, CNN SENIOR ANALYST: Total nonsense.
When you sign a contract, you have two choices. You can pay or you can litigate. Why aren't they litigating? AIG could have litigated, could have said, you know, we're not paying these bonuses. It's outrageous. We, AIG, think you don't deserve the money.
And then these people who lost billions and billions of dollars could have sued AIG and said, no, no, we need a bonus. I would defend that case. I would defend that case in a second.
So, that's ridiculous. The problem here is that when you give money to a financial services company, they give it to their employees. That's what they do. That's what banks do. So, that's -- that's what happened here, is that they didn't attach the right strings.
The Bush administration and the Obama administration were asleep at the switch. They just shoveled all this money out the door, but they didn't attach restrictions on how it could be spent.
BROWN: So, what are their options right now? Can they litigate?
TOOBIN: Well, not for the money that's already been given to the bankers in bonuses. I think that's out the door.
What they can do is, they can withhold some of the further money they're giving to them, sort of in punishment. But, come on, these bankers have still made off with all this money.
The problem -- and it's all well and good for Barack Obama to be all outraged today, but his people should have been -- thought of this before they gave billions of the tax people's -- taxpayers' money to AIG.
BROWN: And, to both of you, I don't really understand this. You can use that as leverage, giving, if they keep telling us, if we don't give them the money, they're going to collapse.
So, what leverage do we really have if the collapse of AIG is this calamity that we have been told?
VELSHI: Well, the collapse of AIG is not an option. So, that's not what it is.
But I think Jeff makes a point, that there's money to be had and AIG really does need that money. So, strings can be attached. And maybe the government can say the money that's going there has to be offset by some of this money. In other words, taxpayers have got to get this back first or something of that nature. There's some leverage that they do have.
TOOBIN: But that doesn't capture the real outrange, which is that these bankers, these insurance executives, who made such catastrophic decisions, are getting the taxpayers' money in bonuses. That money is out the door because the government screwed up.
BROWN: All right, guys, we have got to end it there. But we're going to be talking about this a lot more later in the show.
Jeff Toobin, Ali Velshi, appreciate it.
We're not done, as I said, with AIG. We're putting one former AIG executive in our rogues gallery tonight. He may the face of AIG's trouble.
Plus, believe it or not, there are people in corporate America who are actually getting it right. And, tonight, a man who has the power to change, and he happens to be running one of the best-known companies in American history. We will explain that.
All this week, "The Road to Rescue," a story so important, only the worldwide resources of CNN could bring it to you with in-depth reporting and analysis you deserve. That's all this week.
We will be right back.
(COMMERCIAL BREAK)
BROWN: As always, tonight, we're "Cutting Through The Bull," and, yes, AIG the topic. All this week, as part of CNN's focus on "The Road to Rescue," we're going to be naming names. We're going to introduce you this week to five new inductees to our rogues gallery.
And given today's news, our obvious first choice is the man that many say played a big role in bringing AIG to its knees, Joseph Cassano. He was once head of AIG's Financial Products unit. He left the company last March.
And if you want to find the epicenter of the earthquake that threatened to crumble the American economy, well, that fault line might just go through Cassano's office in London. It was Cassano who championed those now infamous credit default swaps as a way to jack up profits in a hurry. And, in so doing, he took a huge gamble, didn't worry about the odds. And, when the credit crisis hit, Cassano, AIG, and all of us ended up losing pretty big.
Now, no one disputes risk is often a part of doing business. But some suggest Cassano also employed this strategy in the shadows. Documents obtained by the House Committee on Oversight and Government Reform showed the company's auditor, PricewaterhouseCoopers, raised questions a year ago about transparency and complained about a lack of access to the Financial Products unit, which he ran.
Another auditor told the committee in a letter that he quit because Cassano wouldn't allow his input, allegedly saying that he would pollute the process.
Cassano bragged about those doing business with his company, and, yet, refused to name any of them. And because he was bringing in so much money, it appears, AIG let him operate this way.
Along with the secrets, Cassano and his superiors were either blind to the risk or simply refused to acknowledge it.
According to "The New York Times," barely a year before AIG's near collapse, Cassano said -- quote -- "It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions."
That's unacceptable, as so many were depending on AIG to remain strong and smart about what it was doing.
Today, when President Obama spoke of recklessness and greed leading to the downfall of the financial behemoth, one can't help but wonder if he had Joseph Cassano on his mind. Well, he's certainly on ours, as we welcome him to the gallery.
And, by the way, we did try to reach Cassano for a response. And we have not heard back.
Well, I know I have more questions about the AIG debacle. I'm guessing you do, too, including what would happen if the government simply stops giving them money.
We will talk about that when we come back. (COMMERCIAL BREAK)
BROWN: Everywhere you turn today, people so angry over these AIG bonuses. Check out some of the I-Reports you have sent in. We're getting a ton of them. Take a look.
(BEGIN VIDEO CLIP)
ZACHARY PRATHER, I-REPORTER: Don't these people get it? Don't they understand that the average middle-class, if there is such a thing anymore, taxpayers are tired, broke, and hungry, that we're at the end of our rope, fed up with these policies of rewarding those who have put us in this mess.
JIM MORRISON, I-REPORTER: The remedy for breach of contract is usually a lawsuit. Find me a jury of American taxpayers that are going to side with an AIG executive who is suing over his $2 million bonus. Good luck.
(END VIDEO CLIP)
BROWN: And they aren't alone. President Obama ripping AIG tonight, as he tries to steer clear of this growing political storm.
Let me bring in Andy Serwer. He's the editor of "Fortune" magazine. Its latest issue has just hit the newsstands. In Chicago, CNN political analyst Roland Martin joining us tonight as well, and, from Washington, senior political analyst Gloria Borger with us, as always.
Thanks, guys.
Andy, let me start with you on this.
The claim is, they're on life support. They're desperate. They need taxpayer help to survive. And then they give out all these bonuses. Doesn't that sort of undermine the argument that...
ANDY SERWER, MANAGING EDITOR, "FORTUNE": Yes.
I mean, can we really afford to give AIG any more money? I say not if we don't have more oversight. The fact that they're just throwing this hundreds of millions of dollars of bonuses at us and then the fact that it's news to the administration, that's just ridiculous.
It is true that there's $2 trillion of derivatives on its books and that can wreak financial havoc in our financial system. But still these guys have...
(CROSSTALK)
SERWER: ... too long.
BROWN: Just stop right there -- meaning that we do have to keep them afloat. There is no choice. SERWER: Right. It's not keeping them afloat so much -- we shouldn't think of it that way -- as protecting our financial system from collapse.
That's a better way to think of it. But it's hard to swallow this stuff. It's crazy. And it shouldn't happen again.
BROWN: Roland, let me bring you in this.
And we keep -- as Andy just said, it shouldn't happen again, but we keep seeing this happen again, the government doling out money without any means of holding people accountable. When does it stop?
ROLAND MARTIN, CNN CONTRIBUTOR: Frankly, it's not going to stop.
In your opening segment, what did Ali say? He said allowing them to fail is out of the question. And, so, Congress is operating from this viewpoint, as well as the White House, that we have to do everything possible to keep them afloat.
You have Republicans who are saying, Senator Shelby and others, who are saying, look, let these folks fail. The problem is the word fear. We're absolutely afraid of what is going to happen if we allow them to fail.
So, therefore, the opposite effect is simply to keep giving money. And that's the problem.
BROWN: Gloria, let's talk about the political ramifications of this, because President Obama's approval ratings overall still very high.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes.
BROWN: But there's this new CNN poll out. It shows 52 percent disapprove of how he is handling the problems facing the banks.
How big a problem is that for the White House overall?
BORGER: Well, right now, they have a very popular president who is more popular than some of his policies.
Folks are very upset about the original bank bailouts. And now I think the administration -- and I spoke to a couple of senior advisers today -- they understand that they have a political problem here, because they have to look like they're in charge, because, otherwise, you get to a tipping point where the public begins to believe that you're part of the problem. And they don't want that to happen, because you know what?
They may have to go back to the Congress, Campbell, at some point in the future and ask for more money. So, they have to have accountability and transparency and regulation, or they're not going to get it, because -- I agree with Andy -- they look kind of clueless now when it comes to these bonuses. BROWN: So, in light of what's happened here, Andy, we have got the president, who's going to outline his plan for the banks next week. What does he need to say, what do you expect him to say, in the context of what's happened?
SERWER: Well, the bottom line here is the phrase has to be never again. We can't let it happen again. It's massively complicated, but you can break it down into two components.
One, they have to limit the amount of leverage or borrowing by these financial institutions. And, two, they have to limit the amount of derivatives, those complicated financial instruments, on their books. There have to have be limits on those two. And that will go a long way towards mitigating this kind of thing happening again. Maybe a central regulator is needed. Maybe not. But you have got to focus on those two points.
BROWN: Roland, just in terms of the bigger picture, you get -- you feel it, this growing sense of populist rage out there. Does that threaten the president's overall agenda? How does he harness that emotion?
MARTIN: Well, first of all, I think what the American people have to see, that, frankly, Wall Street is being put in check.
And, so, it's very interesting how everybody else is operating by a set of rules, in terms of what you can and cannot do. If you file for bankruptcy, the judge says, you know, you can't buy this, you can't buy this. You must report everything.
It's seeming as if these folks are being allowed to do whatever they want to do and get federal funds. And so I think they have to communicate. that, yes, not only are we sitting here being and transparent, but we're going to penalize them to say this is not going to happen again.
That is not the problem. Congress can stand here and cry all they want to. But, in the original bailout, they did not put the right protections in, Republicans and Democrats. So, they can't sit around and say, well, it's a shame this is going on. They had the power to do it. They didn't. Now they have to for any level of trust.
BROWN: All right.
BORGER: And, you know, Campbell...
BROWN: Quickly, Gloria.
BORGER: ... this isn't really -- this isn't really a new populism. It's really nearly unanimous out there with the American public, except for maybe some bankers on Wall Street.
And I think President Obama can take some advantage of that, because he has got to be on their side in this.
BROWN: All right.
Gloria, Roland, Andy, many thanks. Appreciate it.
Still a lot to talk about tonight, the money meltdown's physical toll, some people turning to pills for relief. You will hear from one of them when we come back.
(COMMERCIAL BREAK)
BROWN: All this week, we're bringing you "The Road to Rescue: A CNN Survival Guide."
As we head down that road, we're taking a NO BIAS, NO BULL look at the giants of the business world who have the power to bring about real change, change to their industry and to the way America does business.
Tonight's candidate comes from the automotive industry, not where you would expect to find many answers these days. He's Ford president and CEO Alan Mulally.
Chief business correspondent Ali Velshi is back to make the case.
And, Ali, you have got to make a case here, because...
VELSHI: Yes.
BROWN: ... I'm sort of going, an automaker is your first choice?
(LAUGHTER)
VELSHI: Well, I'm sure a number of our viewers are.
But here's the thing. The auto industry, as we have learned over the last year, is so crucial to the manufacturing industry. And the manufacturing industry is what the base -- the industrial base of this country was built on.
So, we have to talk about the auto industry, not about the mistakes it's made, but about people -- all week, we're going to talk about people who are in a position to influence change and maybe help us out of this mess. And that's why we're talking about Alan Mulally at Ford.
BROWN: But wasn't he there with the other auto execs asking for bailout funds from Uncle Sam?
VELSHI: He sure was. He was one of those who got his knuckles rapped for taking a private jet to D.C.
But the bottom line is, Ford didn't take any of those government funds. Ford is in the best financial position of the three U.S. automakers. And that's in part because of tough decisions that were taken starting in 2006.
That's the year that Alan Mulally joined the company. Mulally joined Ford from Boeing, where he started his career as an engineer all the way back in 1969. He worked his way up to president of Boeing's commercial airplane division. Now, he had turned that unit around. And he was asked to do the same at Ford.
(BEGIN VIDEOTAPE)
ALAN MULALLY, CEO, FORD MOTOR COMPANY: We took a point of view that we're going to focus on the Ford brand worldwide. We divested all the non-core assets that would take our time and attention away from Ford. So, we have a laser focus on Ford now.
VELSHI (voice-over): Instead of trying to be everything to everybody, Mulally got rid of brands like Jaguar and Land Rover. Now he's tried to sell Volvo.
PETER VALDES-DAPENA, CNNMONEY.COM: What he's doing is making Ford more like Toyota than the other companies. He's making it much simpler.
VELSHI: But, even as a smaller, simpler company, Ford still had to tackle its reputation for shoddy quality. That became Mulally's job one.
MULALLY: The commitment we made was that, every year, the most important thing we do is that we improve the quality of our vehicles. And we have been on that path for four or five years now. And we're now equal to or better than the best in the world as far as our quality.
VELSHI: Higher quality meant making changes, and that cost money. Mulally raised the money that the company needed by proving that he could keep costs in line and keep Ford competitive with non- U.S. carmakers. Ford managed the avoid the damaging UAW strikes that hit both GM and Chrysler in 2007.
MULALLY: We went to the financial institutions early, over two years ago, to borrow the money that was needed to fund this transformation. So, we have the financing to be able to get through this.
VALDES-DAPENA: He took out a lot of debt, a lot of loans, and used a lot of Ford assets as collateral. At the time, people thought, wow, that seems like a panic move. But, as the credit crisis started and auto sales started to go down, it seemed like a genius move.
(END VIDEOTAPE)
VELSHI: Now, that genius move paid major dividends during this current crisis, because, basically, what has happened is, Mulally and Ford took the tough decisions earlier than the other car companies were forced to.
Now, all of those improvements in Ford quality, which are measurable, still a tough sell to the buying audience, as you know.
BROWN: All right, Ali Velshi for us tonight -- look forward to seeing who else you have for the rest of the week.
And we should mention again, all this week, CNN's worldwide reach is letting us show you the around-the-globe ripple effects of the economic crisis in China. The government is implementing its own version of a stimulus plan. And a struggling American car company is reaping the rewards. Check this out.
(BEGIN VIDEOTAPE)
JOHN VAUSE, CNN CORRESPONDENT: I'm John Vause in Beijing, where the government is trying to keep this economy going with a massive stimulus package, almost 600 billion U.S. dollars, part of that plan, a cut in sales tax on small cars, and vehicle subsidies to farmers. That led to a surge in new car sales last month.
And General Motors in China believes that may mean another good year. For the past four years, GM has been the number-one-selling vehicle brand in this country.
(END VIDEOTAPE)
BROWN: All right.
And coming up, for some people, the stress isn't just what's happening now, but what may happen next.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: My worst fear is that I have to find myself -- wake up and find myself in the position where I have got 30 days left of money, and then what?
(END VIDEO CLIP)
BROWN: So, how is he coping? The way more and more Americans are, with the help of pills. Tonight, we're looking into this ripple effect of the economic mess.
And the president also talking about what the government is doing to help small businesses. We have got a panel of money experts here to take your questions when we come back.
(COMMERCIAL BREAK)
BROWN: And the president also talking about what the government is doing to help small businesses. We've got a panel of money experts here to take your questions when we come back.
(COMMERCIAL BREAK)
BROWN: President Obama is on a mission to convince you the economy is rebounding, but our new CNN/Opinion Research poll shows you are not sold yet. Only 38 percent of Americans say they are very confident their employer won't lay off any workers in the next six months. A year ago that figure was 55 percent. A lot has changed in a year and to help you get the answers you need now, we're going global with unprecedented reporting on every aspect of the money meltdown. The "Road to Rescue" airs all week on CNN.
Anderson Cooper is hitting five cities in five days to see how Americans are coping in these economic tough times. And tonight, he's in L.A. to find out how stimulus money could help solve the city's gang problem -- Anderson.
ANDERSON COOPER, CNN ANCHOR, "AC 360": Yes, Campbell, it's interesting. We're traveling all this week all across the United States, literally on the road to recovery trying to see how cities are going to be using this federal stimulus money.
Los Angeles hopes to get what the mayor calls his fair share, their fair share in this city, a couple billion dollars' worth. They're going to use it to create green jobs at the port (ph), a lot of they'll use both in creating green jobs and also trying to help reduce pollution. But also a couple million dollars of that federal stimulus money, they hope, will go toward gang prevention in some hard-hit communities. Take a look.
(BEGIN VIDEOTAPE)
COOPER (voice-over): Gregory Thomas is the co-founder of a local gang prevention group called Kush, stimulus money he hopes to create after school and job training programs and hire dozens of gang outreach workers.
(on camera): If you have more money, you would hire more people to go out and try to work with gangs, get people out of gangs?
GREGORY THOMAS, KUSH: Absolutely. Not just get them out of but also intervene in high-risk gang situations where gang members are most likely to shoot and kill.
COOPER (voice-over): Gang violence has dropped in Los Angeles in the last few years but remains a major problem. The Los Angeles mayor's office estimates there are some 400 gangs in and around the city. That's about 40,000 gang members. Last year, they estimate nearly half of all homicides were gang related.
(END VIDEOTAPE)
COOPER: We'll have more on that tonight on "360," the complete report. Also tomorrow, Campbell, we'll be New Orleans and Detroit, New York, and ending the week up in Miami. A full week of traveling all across the United States.
BROWN: All right, Anderson Cooper for us tonight. And we should mention Anderson on the road, as he said, all week all on "AC 360," 10:00. We'll see you then.
No surprise, a lot of us losing sleep these days. But now, unemployed Americans struggling with stress, are turning to a solution they never would have considered before -- popping pills to cope. And Randi Kaye is here with more on that troubling part of the ripple effect -- Randi.
RANDI KAYE, CNN CORRESPONDENT: Campbell, the numbers really say it all. The American Psychological Association says eight out of ten Americans are stressed out because of the economy. That's a lot of people. And because stress can lead to anxiety and insomnia, a lot of Americans aren't sleeping very well these days so they're turning to prescription drugs to help.
(BEGIN VIDEOTAPE)
KAYE (voice-over): Until last June when this New Jersey father of four was laid off, he thought he was set.
THOM KRAUSS, STRESSED OUT FROM JOB LOSS: I kind of lived the dream. I had the money in the bank. Everything is paid for.
KAYE: Now Thom Krauss, an Ivy League-educated investment banker who worked on Wall Street for 10 years, is so stressed out he can't sleep.
KRAUSS: I get up at 2:00, looking at the clock. And then you're like, OK, 2:00 turns into 4:00.
KAYE: What keeps Thom up at night?
KRAUSS: I will run out of money in probably 11 months.
KAYE: Tom is trying to find a job. He got severance, but not enough for all his expenses. His house in the suburbs, an apartment in New York City, and his ex-wife's house.
KRAUSS: It's easy to see why I might not sleep at night when I see a $25,000 to $35,000 burn rate every month.
KAYE: Plus, with four children, he thought he had college covered.
What is your greatest fear?
KRAUSS: My worst fear is that I have to wake up and find myself in a position where I've got 30 days left of money.
KAYE: Thom tried therapy, but that got two pricey. So even though he'd never taken prescription pills before, he asked his doctor for the sleep aid, Ambien. That helped for a while. Now, he takes Xanax to relax instead.
(on camera): Do you think the economy has turned this country into a pill-popping nation?
KRAUSS: Oh, I would -- I know this is just my case and I'm not a pill popper. I can't imagine what's going on for people who are a little bit more liberal than I am about that. KAYE: In fact, a recent poll by the National Sleep Foundation found one-third of all Americans are losing sleep over the state of the economy and their personal finances. That means more prescriptions for sleeping pills. One health care company that tracks this stuff says doctors wrote more than 56 million prescriptions last year, a seven percent increase from the year before.
(voice-over): This doctor says in his practice, he's seen a 30 percent increase in patients who believe a pill is the answer.
DR. NABEEL FARAH, SLEEP DISORDER SPECIALIST: What I'm even seeing is younger and younger patients coming in to see me, young professionals in their early 20s who are having difficulty with keeping their jobs or being stable.
KAYE: Dr. Nabeel Farah says stress messes with the body's natural rhythm. It puts the brakes on relaxation. Thom says he doesn't like taking pills but admits he'll probably keep taking them as long as he can afford them or until he finds a job.
(END VIDEOTAPE)
BROWN: So, Randi, besides taking pills, is there anything else he's doing to try to relieve the stress?
KAYE: He's looking hard for a job and he has seriously cut back on spending. They don't eat out anymore. They don't go to the movies. They play in the back yard more, which Thom says is actually kind of nice.
They don't take their family vacations to Africa like they did anymore, and he's planning to pull his kids out of camp this summer. That cost him about $15,000 for his four kids and no hockey in the fall for his boys which will save him about $10,000 or $20,000. So these are real lifestyle changes but he says, Campbell, that his kids get it. They understand. They don't want to see dad struggle.
BROWN: Yes, absolutely. All right. Randi Kaye for us tonight. Randi, thanks.
It had been the feel-good story of the year. The "Miracle on the Hudson.' You will not believe who is suing US Airways. We'll tell you when we come back.
(COMMERCIAL BREAK)
BROWN: Later this week, President Obama will do something no other sitting president has done. That's ahead. But first, Joe Johns joining us with "The Briefing" -- Joe.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, it's the picture his Ponzi scheme victims have been waiting for. Bernard Madoff in his mug shot taken after his guilty plea last week in the $65 billion Wall Street investment scam. He faces 150 years in prison when he's sentenced in June. Today, federal prosecutors went after Madoff's fortune. His $7 million Manhattan condo, four boats and a $39,000 Steinway piano are among his assets targeted for seizure.
Health concerns for the wife of former vice president Dick Cheney. Lynne Cheney was taken to a Philadelphia emergency room this afternoon. A Cheney family spokeswoman tells CNN that Lynne Cheney fainted in her hotel room and is undergoing tests at the hospital, but she is doing well.
The ferry company that helped save passengers from the US Airways jet that went down in the Hudson River are now threatening to sue. New York Waterways says it paid workers overtime while suspending passenger service for two days after the incident and it could go bankrupt.
The recession has claimed another newspaper. After 146 years, the "Seattle Post-Intelligencer" will print its final edition tomorrow. Its owner, the Hearst Corporation, says the paper lost $14 million last year.
Sign of the times, Campbell.
BROWN: Indeed. Joe Johns for us tonight. Joe, thanks.
And to everybody out there, you've been sending us your questions, your iReports on the economy. Since we believe knowledge is power, the more information you have, the more power you will have over your family's future. We've got some of the best money minds in the business here with the answers to your questions coming up.
Also, Dick Cheney took a shot at President Obama here on CNN yesterday. Today, the White House fired right back. You'll hear the whole thing next.
(COMMERCIAL BREAK)
BROWN: Larry King is back tonight with the always outspoken Judge Judy. Larry, what are the two of you going to talk about?
LARRY KING, HOST, "LARRY KING LIVE": I'm back, Campbell. It's good to be back.
Judge Judy as you said is here tonight, and she is talking about what we're all talking about, the economy. We'll talk about Bernie Madoff and domestic abuse for starters. Plus, she's going to reveal her favorite thing on her MySpace page.
Judge Judy will take your calls for the hour next on "LARRY KING LIVE," Campbell.
BROWN: And happy, happy to see you, Larry. We'll be watching.
KING: Thank you.
BROWN: See you the top of the hour. So how do small businesses stay afloat when they can't get the money they need? We're going to put that question to some of the best money minds in the business when we come back.
(COMMERCIAL BREAK)
BROWN: With big banks in the dog house, President Obama today outlined his plan to build up small businesses. Now, apparently, about 99.7 percent of all businesses in this country are considered small. Any company employing 500 or fewer employees, many of them rely on credit, obviously. And the president spoke today about his plans to get it flowing again. Take a listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Small business. Our recovery in the present and our prosperity in the future depend on the success of America's small businesses and entrepreneurs. And that's why my administration has already taken aggressive action on their behalf. My recovery plan, as already been noted, raises the guarantees on SBA loans to 90 percent and eliminates costly fees for borrowers and lenders that can be too costly in a recession. These changes are being implemented now.
(END VIDEO CLIP)
BROWN: In an effort to unfreeze credit for small businesses, the Treasury Department will begin buying $15 billion worth of securities that are linked to small business loans. And we gathered some of the best money minds around to answer your questions about the president's plans for the economy and a whole lot more.
Back with me now, our own Ali Velshi, along with personal finance expert, Lynette Khalfani-Cox. She's the author of a number of books including "Zero Debt." Also Roben Farzad, who is senior writer and columnist for "BusinessWeek" magazine.
Welcome, everybody.
ROBEN FARZAD, "BUSINESSWEEK" MAGAZINE: Nice to be here.
BROWN: I want to play for all of you an iReport, this is from a small business owner out in San Diego, and get your reaction to it. Listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE, IREPORTER, SAN DIEGO, CALIFORNIA: What really affected us is that we can't get a loan. All of the money dried up and all these changes that Washington is making is not really trickling down to the businessmen.
(END VIDEO CLIP)
BROWN: So, Lynette, I mean, given what we just heard from the president, do you think businesses -- I mean, banks, rather, are going to start lending to small businesses?
LYNETTE KHALFANI-COX, "THE MONEY COACH": I think they will, but only if they're forced to do so, frankly, because we've seen this in the consumer markets where lending has dried up for people who are getting mortgages, car loans, student loans, et cetera. And we're also seeing it, of course, now in the business markets. There are going to have to be some strict regulation, some details put out to make these banks, you know, to force them to be able to loan in order to get some of that money.
BROWN: So based on what the president said, do you see that happening or you --
KHALFANI-COX: I think it's going to take time. I mean, this is a new, you know, initiative that he's trying to encourage them by saying, look, we'll give loan guarantees. And that's one good thing because the banks know if we -- if someone defaults on a loan, the government will back us up.
BROWN: What about you, Roben? Are you with her on this?
FARZAD: I'm not so optimistic on this because the point of -- inflection point is when the banks feel the kind of invigorating part of the opportunity of loaning money and making a killing on the upside, out ways downside of making more stupid loans. By the way, they made trillions of dollars of stupid loans in the past couple of years. That will be the tipping point.
I think there are many other shoes to drop -- credit cards, auto loans. A lot of people out there, very credible voices are saying we haven't seen the worst part of the credit crisis yet.
BROWN: Ali?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, look, there's an increase. The fact is when big businesses need money, they can go to investment banks and they can make big deals. That dried up back in September and October, but that is starting to loosen up.
Small businesses don't have those options, right? It's either personally financed or you go to the bank and you get a small business loan. We know that tightened up and that hasn't loosened up substantially yet. So something needs to kick start that. It's some combination of what Lynette says, encouraging banks to be able to give small businesses loans but they still remain big risks and banks are a little risk averse right now.
BROWN: I want everybody to listen. And this is taking us to a little more big picture here, but to all of you to listen to Federal Reserve Chairman Ben Bernanke. This is last night in "60 Minutes," another comment he made that we thought was pretty amazing. Take a listen.
(BEGIN VIDEO CLIP)
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: And I do think that we will get it stabilized and we'll see the recession coming to an end, probably this year. We'll see recovery beginning next year, and it will pick up steam over time.
(END VIDEO CLIP)
BROWN: So --
KHALFANI-COX: His mouth to God's ear, OK.
BROWN: We shall see.
KHALFANI-COX: I'll pray right along this.
BROWN: But, yes.
KHALFANI-COX: And hope that it will, you know, we will see stabilization. But I think that's an optimistic viewpoint. You know, I'm not one to throw all the cold water on it, but I think we've got a lot of work here to do with three major markets, with the housing market, with the stock market, and obviously with the jobs market. That's going to take some time to turn around.
BROWN: Ali, what did you think when you heard him last night?
VELSHI: I think what Lynette said is absolutely right. Let me show you how you'll know if we're actually getting out of this, so we can all hope that Ben Bernanke is right. But the three things that Lynette just said, and, Lynette, I didn't set you up for this, but are exactly the three things that we're going to know about if we're coming out of this recession.
First of all, the stock market. The fact is the stock market typically -- and this is not a typical year, but the stock market is typically ahead of everything else. So you'll see that stock markets start to move and that will give you some sense that we're probably within six months of a recovery.
The next thing is spending. Whether it's businesses or individuals, one thing we know is throughout this recession, people have been hoarding their cash to wait till they get to the other side. There is always another side, but we don't save much money. We depend on credit and we've been storing that money. So if people start spending again, we'll know it's OK.
And again, Lynette, thank you for teeing this up for me. But the housing market. Once we see people starting to buy some of those houses, the price of housing starts to stabilize and buyers start moving into that market, those are the three signals that you'll have that this thing is coming to an end.
Remember, the one thing that worries us all is jobs. Job are what you call a lagging indicator. We will not see jobs recover first. Jobs recover long after everything else does. So you'll still continue to see job losses but hopefully these other things will offset them and then you'll start to see companies hiring again.
BROWN: Let me try to get in one more iReport. This is from San Antonio, Texas. Take a listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE, IREPORTER, SAN ANTONIO, TEXAS: In the United States, this is one of the few places left on the planet where losing your job means losing your health care coverage. And that becomes tantamount to people losing their homes, going bankrupt, and it just creates social chaos in itself.
(END VIDEO CLIP)
BROWN: So, Roben, you know, the president has been working very hard to link health care with the economy and our current situation. How much are they interconnected, I guess for a lot of people?
FARZAD: It's inextricably linked but, unfortunately, I think we only have the budget and we only have the political willpower at this point to deal with the crisis head on. We saw with Bill and Hillary Clinton in '93 and '94 that this is almost a third rail of policy attacking the health care conundrum head on.
Now, that's something that if he comes out of this, if we can parlay this into growth again, we have a leveling tendency that everybody has been laid so low that this is one of those times in generational history that we realize, yes, you can do without health insurance.
You're tied to your job for better or for worse. You lose your entire livelihood if you're thrown out on the street and COBRA is prohibitively expensive. So, let's take one thing one step at a time.
KHALFANI-COX: With 47 million Americans lacking health care coverage, we can see why this could lead to bankruptcies and other things. Harvard studies have shown that 50 percent of all bankruptcies are, in fact, linked to medical bills. So this is a huge issue.
BROWN: All right. Guys, we got to end it there. But to Roben, Lynette and Ali, as always, thanks very much. Appreciate it.
FARZAD: Thank you, Campbell.
BROWN: The White House fires back at former vice president Dick Cheney after he used an exclusive CNN interview to criticize President Obama. That coming up next.
(COMMERCIAL BREAK)
BROWN: Majority of Americans are pretty happy with the way President Obama is handling his job. According to the latest CNN/Opinion Research poll, the president's approval rating at 64 percent. But that 64 percent would definitely not include former vice president Dick Cheney. Tom Foreman has got that story in the "Political Daily Briefing" -- Tom?
TOM FOREMAN, CNN CORRESPONDENT: Yes, Campbell, not so much a fan, it seems. It turns out that on CNN's "STATE OF THE UNION" yesterday, Cheney contended that the U.S. is less safe because of President Obama's new policies on terror suspects and interrogation tactics. Take a listen.
(BEGIN VIDEO CLIP)
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Do you believe the president of the United States has made Americans less safe?
DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: I do. I think those programs were absolutely essential to the success we enjoyed of being able to collect the intelligence that let us defeat all further attempts to launch attacks against the United States since 9/11. That's a great success story.
It was done legally. It was done in accordance with our constitutional practices and principles. President Obama campaigned against it all across the country. And now he's making some choices that, in my mind, will, in fact, raise the risk to the American people of another attack.
(END VIDEO CLIP)
FOREMAN: Now the former vice president really hasn't wavered off that line in some time. And when asked to respond to these latest comments today, White House Press Secretary Robert Gibbs used the opportunity to take a pretty harsh shot at Mr. Cheney and the Bush administration by saying this --
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, I guess Rush Limbaugh was busy. So they trotted out the next most popular member of -- of the Republican cabal.
(END VIDEO CLIP)
FOREMAN: Gibbs did back down slightly a little bit later by saying, "I hope my sarcasm didn't mask the seriousness of the answer."
And, Campbell, I'm not sure exactly what that means. I don't know if that made it more serious or less serious.
BROWN: Well, speaking of seriousness, I guess it will be interesting to see how serious this interview is. The president is scheduled to appear on Jay Leno later this week. And given the current economic climate, could be interesting? I guess.
FOREMAN: I don't know. It seems like it might be a risky call. The White House announced today the president will make a rare appearance on the show Thursday as part of his trip through Southern California. It is rare because no other sitting president has ever been a guest on a late-night talk show before. Mr. Obama appeared last on Leno while campaigning in 2007.
A White House official says the president will try as best he can to keep the focus on substantive economic issues which is, you know, Campbell, is what the late night shows are all known for.
BROWN: Absolutely. I didn't know he was the only sitting president to have done it. I guess I'm just used to the candidates...
(CROSSTALK)
FOREMAN: A lot of --
BROWN: ... when they're campaigning.
FOREMAN: Not one person (ph).
BROWN: All right. Tom Foreman for us tonight. Thanks, Tom.
That's it for us. Tomorrow all this week "Road to Rescue." Keep an eye on it.
"LARRY KING LIVE" starts right now.
