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American Morning
Discussion, Breakdown of President Obama's Press Conference; Czech Prime Minister on Geithner's Plan; Lance Armstrong to Undergo Surgery
Aired March 25, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Hey, good morning. Thanks very much for being with us bright and early on this Wednesday, the 25th of March, and a lot to digest this morning following the press conference last night.
KIRAN CHETRY, CNN ANCHOR: Feels earlier for us since we stayed up to listen to the president and get a chance to look at it and weigh in this morning with a lot of our experts. A lot to cover so here are the big stories topping our agenda right now that we're going to be breaking down for you in the next 15 minutes.
President Obama heading to Capitol Hill today to defend his ambitious budget, not to Republicans but to skeptical Senate Democrats. The president using last night's news conference to sell his policies to improve the economy, and we're live at the White House with all the details on that for you.
And also, President Obama speaking out on the AIG executive bonus mess, telling our Ed Henry that it took him a couple of days to respond to the outrage because he likes to, "know what I'm talking about before I speak." It was a bit of a tense moment at last night's press conference and we'll play it for you coming up.
And they are the faces of the recession, millions unemployed fighting to make ends meet. So how did they react to the president's prime time pitch that the nation will recover? We'll hear from them in their own words.
ROBERTS: Well, this morning, despite a full plate of issues to deal with, including wars in Iraq and Afghanistan, it is clear that President Obama now has a laser-like focus on one issue, the economy, not surprising considering the president's agenda.
Right now, the White House preparing for a high-stakes sales pitch on Capitol Hill. In just a few hours time, the president will try to sell his $3.6 trillion budget not to Republicans but to Senate Democrats who are beginning to join the chorus of critics. And last night, President Obama took to the national stage to highlight what got us into this mess and drive home his solutions.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The most critical part of our strategy is to ensure that we do not return to an economic cycle of bubble and bust in this country. We know that an economy built on reckless speculation, inflated home prices and maxed out credit cards does not create lasting wealth. It creates the illusion of prosperity, and it's endangered us all.
The budget I submitted to Congress will build our economic recovery on a stronger foundation so that we don't face another crisis like this 10 or 20 years from now. We invest in renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil. We invest in our schools and our teachers, that our children have the skills they need to compete with any workers in the world. We invest in reform that will bring down the cost of health care for families, businesses, and our government.
(END VIDEO CLIP)
ROBERTS: CNN's Suzanne Malveaux is live at the White House for us this morning, early this Wednesday morning. And, Suzanne, what's the president's position going into these budget meetings today?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, obviously, John, it's going to be a very difficult sell to members of Congress. Even his own party questioning what some of his priorities are, whether or not this can actually get done.
Some of the things that we heard the president talked about that are non-negotiable, things that he is going into these meetings, he talked about health care reform, the fact that more Americans need to get health care and that he believes the cost is actually going to go down. There will be some cost savings.
He also talked about renewable sources of energy, a very controversial cap and trade policy when it comes to emissions -- global gas emissions. We'll see what happens there.
Another thing he talked about was education and education reform specifically actually dealing with adults and reeducating adults for some of these jobs that they hope will come back and then finally cutting the deficit.
All of this a part of the package. He's going to be talking about that, John, but one thing that is hotly debated, whether or not he's going to be able to keep his middle class tax cuts in place. We have already heard some prominent Democrats saying they don't believe that's possible.
ROBERTS: What about the president's mood last night, Suzanne. You know, we have seen three President Obamas. What? We saw one candidate Obama and then two President Obamas.
You know, during the campaign he was all sweetness and light and hope and soaring rhetoric. And then in his first primetime press conference, he was very pessimistic. And last night just kind of, you know, taking the middling ground, sort of like the, you know, somewhat positive but at the same time very cautious, trying to look like the steady hand in the tiller last night...
MALVEAUX: It kind of... ROBERTS: ... you know, almost sounding professorial at times.
MALVEAUX: It reminded me of the initial part of the campaign when they said he needed a little bit more pizzazz, excitement. He was very much like a professor. He is an academic when he used to talk quite a bit about those points, almost monkish, if you will.
We saw a president who obviously feels the weight of the job. You can tell, perhaps a little bit tired. He looked tired earlier in the day. He rallied here, but somebody who honestly it's not the kind of rock star rally candidate that we saw, but a president who is quite weighted by the reality of what he's doing now.
ROBERTS: Oh, he got a tough job on his hands. No question about that.
Suzanne Malveaux for us live at the White House this morning. Suzanne, thanks so much.
MALVEAUX: Sure, John.
CHETRY: And President Obama used his second prime time news conference to acknowledge the disgust that many felt over the millions in bonuses for AIG executives.
(BEGIN VIDEO CLIP)
OBAMA: There was a lot of outrage and finger pointing last week and much of it is understandable. I'm as angry as anybody about those bonuses that went to some of the very same individuals who brought our financial system to its knees, partly because it's yet another symptom of the culture that led us to this point.
(END VIDEO CLIP)
CHETRY: It all became clear though that that's all the president was willing to talk about when it came to AIG. When our own Ed Henry pressed the president about his handling of the bonuses, he got a little bit of testy response.
Here's the exchange.
(BEGIN VIDEO CLIP)
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Why did you wait? Why did you wait days to come out and express that outrage? It seems like the action was coming out of New York and the attorney general's office. It took you days to come public with Secretary Geithner and say look, we're outraged. Why did it take...
OBAMA: It took us a couple of days because I like to know what I'm talking about before I speak.
(END VIDEO CLIP)
CHETRY: All right, there you go. And again, that was Ed Henry asking why it seemed that a lot of the action when it came to the bonuses was actually coming out of the New York attorney general's office, not necessarily from the White House or Washington.
So one of the things that we also saw last night with the president walking a fine line between embracing the outrage that a lot of Americans feel toward big business right now and also standing up for those businesses.
Christine Romans is here "Minding Your Business." So you can appear out of touch with the anger.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Right.
CHETRY: But at the same time he's asking the businesses to join in this public/private partnership to help, you know, turn things around and get some of those toxic assets off of the books.
ROMANS: Right. The financial sector is the core of the whole problem here but at the same time he has to heal the financial sector so that helps Main Street. Kiran, you're absolutely right.
Good morning.
It's a difficult fine line for the president to walk. This exchange or this sound bite caught our ear. Take a listen.
(BEGIN VIDEO CLIP)
OBAMA: The days of outsized rewards and reckless speculation that puts us all at risk have to be over. At the same time, the rest of us can't afford to demonize every investor or entrepreneur who seeks to make a profit. That drive is what has always fueled our prosperity and it is what will ultimately get these banks lending and our economy moving once more.
(END VIDEO CLIP)
ROMANS: So the president chastising anyone in corporate America who thinks they can take taxpayer money to pay out bonuses and to enrich themselves at the same time they're trying to heal up the banks.
But it's also a lot of the rhetoric over the past couple of weeks has scared off some of these banks, scared off some of the private investors. They're concerned, alarmed by some of the tone that they were hearing coming out of Washington.
The president on Friday, Kiran, is going to sit down with CEOs for the second time now in just a couple of weeks. Bank CEOs talk about what kind of shared sacrifice we need here and how to look at the bigger picture because, of course, looking beyond short-term gains in his mind is something that will help the economy overall and then, of course, help their business.
CHETRY: Interesting, though, because a lot of bluster coming out of Washington but no bill punishing. ROMANS: That's right.
CHETRY: So maybe that's a good thing that some of this is taken care of. It appears people are giving those bonuses back.
ROMANS: Even if it's blustered, it catches the attention of some of these -- some of these private investors and banks, frankly, who say, why do we want to do business with the government if this is the kind of treatment we're going to get? But keep in mind the whole problem started with the banks and with the financial system, so they have to be careful about being too concerned about the alarm because they did bring it on themselves.
CHETRY: All right. Christine, thanks - John.
ROBERTS: This morning we're also hearing what you think of the president's economic progress report. Here are some of what iReporters and callers to our show hotline are saying about his primetime performance.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think Barack Obama did a very good job tonight, in answering all the questions that were given to him. He was honest, and he was up front. He did not have to beat around the Bush.
UNIDENTIFIED FEMALE: His responses to the questions are still way too long. Like after the first two sentences, I kind of zone out. I'm like, come on!
LYDIA, ST. LOUIS, MO: I think that the people need to give President Obama time to get this mess that accumulated over the eight years in check. He's only been in office for a little over 60 days. We need to give him time.
UNIDENTIFIED MALE: My question specifically to you, sir, is what will you do? What are your backup plans in the event that these policies that you've set in motion do not work and, in fact, cause runaway inflation?
(END VIDEO CLIP)
ROBERTS: Of course, we always want to hear from you. Send us an iReport or call our show hotline at 877-my-amfix.
President Obama insists that his economic moves are the right ones. He defends his budget as an essential element to rebuilding the economy. Part of the foundation is the administration's plan to buy up so-called toxic assets from troubled banks to get credit flowing again.
Our next guest says the way that the plan is written now is a big mistake. Economist Jeffrey Sachs, director of Columbia University's Earth Institute joins us this morning. Jeff, you've been pretty outspoken about this in the last few days. We've had a lot of e-mail exchanges on this. Why do you think this program is flawed? What's wrong with it?
JEFFREY SACHS, DIRECTOR, EARTH INSTITUTE AT COLUMBIA UNIVERSITY: I think it's basically too expensive for the taxpayers and those expenses are hidden from sight right now, but we need the administration to come forward and tell us what is this going to cost to the taxpayers. And when people see that, I think we're going to have to have a modification of the plan.
ROBERTS: You sent me a paper that you wrote and you said and I quote, "Geithner and Summers suspected they cannot go back to Congress for more bailout money and so are raiding the Federal Reserve, the Federal Deposit Insurance Corporation, and the remaining TARP funds hoping that there will be little public understanding and little or no congressional scrutiny. Even worse, this time there isn't even an attempt to claim that the taxpayer will get fair value for money."
That's a pretty dire look at what's going on there.
SACHS: What they're saying is that this is the private sector coming in. They're being awfully nice to the private sector but, in fact, 90 cents or more of every dollar that's going to be used comes from us, the taxpayer. And the way that the rules have been set, at least as announced till now, is that we're very likely going to overpay for those assets and then suffer large losses down the road on the books of the Federal Deposit Insurance Corporation, on the books of the fed, on the books of the treasury. That comes back to us.
So I'm saying, let's be transparent. Who's really going to be paying for this? Who is getting what benefits? Who's suffering what losses? Then I think we're going to see that this is too expensive the way that it's written now.
ROBERTS: You know, we had the president's chief economic adviser, Christina Romer, on Monday, and you had sent me an e-mail about a minute before I interviewed her. And I put the question to her. You said this seems to be a nontransparent, unfair and unnecessary massive giveaway to the banks. She said that's just not right.
SACHS: Well, I think that what they've done is to say that we, the taxpayers, will come in with 90 cents or more per dollar of spending and then lend to the private investors in a way that they really can't lose. They get the upside but if these toxic assets turn out to be bad, then under the rules they've set the private investors default, we end up with the bad assets. So it seems to me that we're bearing a huge amount of risk off the balance sheets. That's what worries me.
ROBERTS: Now, you also told me that you've got a very easy fix to this whole thing. If they came to you and said, Jeff, what are your ideas for this, what would you tell them?
SACHS: I would say if you want to take fed or FDIC money as a loan, you pay us back at normal interest rate, whether those assets you're buying work out well or not. We don't give you a one-sided deal, where if the assets turn out on the good side, you keep the profit. If they turn out on the bad side, you just default on the loan back to us. You just pay us back.
We'll lend you the money. We'll create the liquidity, then these shares would be valued properly. The taxpayers wouldn't be in it, in a hidden way up to our necks. That's what I'm concerned about.
ROBERTS: Would anybody in the private sector buy that plan?
SACHS: Well, in the end, these assets are going to have to be taken off at low price. The shareholders of the banks are going to pay for the bad mistakes that were made. The question is, should the taxpayers bear the cost of the bank's bad mistakes? I don't think so.
ROBERTS: All right. Jeff Sachs, it's always great to see you. Thanks for coming in early this morning.
SACHS: Thank you.
ROBERTS: Kiran.
CHETRY: Well, the president was trying to talk directly to the American people. So how did he do? We're going to hear from the men and women behind the unemployment numbers in their own words.
Also, if you're trying to refinance your mortgages, anyone around at the bank to even answer your call? Gerri Willis has been dialing for answers. We're going to find out why some people have been left on hold.
It's 12 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning.
President Obama making the case that his ambitious economic plan is beginning to take root and during his news conference last night he offered some hope. And he also spoke of the sacrifices that millions of Americans have been making since this downturn began.
(BEGIN VIDEO CLIP)
OBAMA: I think folks are sacrificing left and right. You got a lot of parents who are cutting back on everything. I think that across the board, people are making adjustments large and small to accommodate the fact that we're in very difficult times right now.
(END VIDEO CLIP)
CHETRY: So how did those who've lost their jobs in this recession react to the president's answers? Jason Carroll was working late last night and he has that part of the story.
Jason, good morning.
JASON CARROLL, CNN CORRESPONDENT: Good morning to you.
CHETRY: We get them to move up those news conferences, right, to maybe 6:00 p.m.
CARROLL: Please! Please, so we can get some sleep. You know, I think it's always interesting when you hear from the pundits, but I think it's just as interesting when you get the immediate reaction from people, and that's what we got last night.
The group was made up from people from different backgrounds and professions. What they have in common, they're all unemployed. They also share very strong opinions on what they wanted to hear from the president.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: He's way too honest. You know, I feel like our economy is built a lot on perception.
CARROLL (voice-over): Josh Ikenstein (ph), he's 24, a former TV producer, out of work since December.
UNIDENTIFIED MALE: It reminds me of a guy who knocked into a cabinet and he's like on the floor trying to catch everything that's falling. That's kind of what he's doing right now.
UNIDENTIFIED FEMALE: Exuded confidence, and so that made me feel a little better.
CARROLL: Tracy Fisher, 41, former booker at a modeling agency, out of work for a year.
UNIDENTIFIED FEMALE: If he knew exactly what he could do like from point A to point B to point C or what have you, we'd all be working right now.
UNIDENTIFIED FEMALE: I think honesty is necessary at this point.
CARROLL: Gretchen Dechelles (ph), 33, worked at Saks Fifth Avenue, unemployed since January.
UNIDENTIFIED FEMALE: I think honesty is important and I think more people want to hear honesty because we're dealing with the reality. And this is our reality and we're living it. We don't have a job.
UNIDENTIFIED MALE: I'm all for honesty and I'm all for him telling us, you know, the truth about situations but I feel like he needed to inspire.
CARROLL: Dustin Diato (ph), 32, former Web site producer, he's been looking for work for a year.
UNIDENTIFIED MALE: He went on hope and change, and now, OK, give me some of that hope. You know, I mean, if that's going to be your slogan, like, then sell me some hope, you know.
UNIDENTIFIED FEMALE: But what kind of hope are you looking for? What kind of change...
UNIDENTIFIED MALE: OK, what I'm...
UNIDENTIFIED FEMALE: What is it you're looking for specifically?
UNIDENTIFIED MALE: He came up with all of these plans about, you know, well four years down the road and education and all that. OK, well, I don't have four years down the road. I have a few months down the road.
CARROLL: Adam Perlis (ph), former marketing associate and TV producer, unemployed since last September. Perlis says the president should have done more to inspire the business community.
UNIDENTIFIED MALE: I feel like he needs to instill in the companies, not just in the American people, that the companies should have more faith.
CARROLL (on camera): The three men at the table wanted more inspiration. The two women at the table said basically he's speaking in realistic terms and I understand that.
UNIDENTIFIED MALE: Sell it to me a little bit more than you're doing it. It made me feel as though you believe that we're all in this together as opposed to we're all miserable together.
UNIDENTIFIED FEMALE: I would love for him to be a cheerleader for me and say hey, you know what? Let's stick together, we can do it, rah, rah, rah, sis boom ba. The bottom line is and sad as it is to say, we're in a mess. Everybody knows it.
(END VIDEOTAPE)
CARROLL: At one point where everyone agreed when I asked if they thought the president will ultimately put more people back to work, despite all the criticism, they all said yes eventually.
In fact, Josh, one of the guys that you saw said "I think he will definitely try and do it." Ultimately, we'll have to wait and see.
CHETRY: A different perspective when you're the one out of work and counting the days and weeks until your unemployment benefits run out.
CARROLL: Exactly. You heard from the one guy there who's basically saying I don't have years to wait.
CHETRY: Right.
CARROLL: I've got months. That's how it is for a lot of people.
CHETRY: Good stuff, Jason. Thanks - John. ROBERTS: With the lowest mortgage rates since World War II, a lot of you tried to refinance this year and finding out the hardest part of getting a new mortgage may be getting someone at the bank to pick up the phone.
And Secretary of State Hillary Clinton traveling to the war next door. A look at what she wants to do to stop the violence from spilling over the border from Mexico.
It's 18 and a half minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning.
President Obama pulling no punches in his live press conference. He made it clear that the economy is in need of major surgery and asked all of us to be patient while those repairs are under way.
(BEGIN VIDEO CLIP)
OBAMA: This crisis didn't happen overnight, and it didn't result from any one action or decision. It took many years and many failures to lead us here, and it will take many months and many different solutions to lead us out. There are no quick fixes and there are no silver bullets.
We put in place a comprehensive strategy designed to attack this crisis on all fronts. It's a strategy to create jobs, to help responsible homeowners, to restart lending, and to grow our economy over the long-term.
(END VIDEO CLIP)
ROBERTS: And while the president asks for patience, we know that you have lots of money questions that need answers now and we're trying to help you out. Every day we're turning around the questions that you leave for us on our 877-my-amfix hotline, and we're putting them to members of our CNN money team.
So, let's listen to one of those calls right now.
(BEGIN VIDEO CLIP)
ALISON FULLER (ph), MARIETTA, GA: Alison Fuller (ph) calling from Marietta, Georgia.
I want to know if I've done a refinance on my first mortgage, do I -- can I do a turn around and do the same with the second mortgage?
(END VIDEO CLIP)
ROBERTS: So there's Alison this morning. Let's bring in our personal finance editor, Gerri Willis.
Refinancing for a second time, what's your advice? GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Absolutely. Well, she wants to refinance a second mortgage. Alison, yes, you can do it. You have to two-options.
You can either refi your second, whether it's a HELOC (ph) or a second mortgage, or you can get a whole new mortgage for the house, which you may want to think about because mortgage rates have fallen so dramatically lately. So devil in the details. If you have a HELOC, a home equity line of credit, check out the rate of interest right now because it may be lower than you think.
ROBERTS: Is it more difficult to refi your second mortgage than your first one with credit still being so tight?
WILLIS: It's difficult to do anything at all right now. But yes, it can be difficult to refi a second. You definitely going to have to make your case. The easier thing to do might be refinance the whole loan.
ROBERTS: Got you.
CHETRY: All right. Well, our next caller wants to start a business. Let's listen to his question.
(BEGIN VIDEO CLIP)
KENNETH, NEW YORK: Yes, my name is Kenneth from New York.
I'm calling, I have a talent, no job. I don't really need any help. I just want to start a business, and, but I don't have any credit either. What should I do?
(END VIDEO CLIP)
WILLIS: Well, OK, this is tough for Kenneth. You really got to think through how you can get better credit at this point, improve your credit score. In the meantime, you really need some advice on how to get that business started, right?
Go to sba.gov. They have something called the Service Corps of Retired Executives, SCORE. These are folks that will service your mentor, help you figure out how to start that business. You've already got the passion. You know what your talent is. You're halfway there. Now, it's just down to like figuring out exactly what your business is going to be, location, business licenses, all of that, and making sure you can get the money to do it. That's always critical.
And, of course, if he doesn't have good credit, this isn't a time where you can finance a business off of a credit card like you used to be able to do just a few years ago.
CHETRY: You need a partner who has some money that believes in your idea but has some money behind it.
WILLIS: Great idea. CHETRY: Good luck, Kenneth.
All right. Well, thanks, Gerri, by the way. We're going to be taking more calls and Gerri is also twittering. You're tweeting this morning, right?
WILLIS: I'm tweeting away and we're hearing from people already. So, yes.
ROBERTS: You can hear the birds in the background.
CHETRY: CNN.com/myamfix to find the link to twitter as well.
Well, the president's primetime sell defending his budget as inseparable from the economic recovery plan. So we're going to take a look at the president's performance in the budget battles ahead with two of the sharpest political minds on TV.
Also, first it was President Obama. Now, former Secretary of State Condoleezza Rice sits down with Jay Leno. She's speaking about the new administration. We're going to play some of her remarks for you.
It's 25 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. Almost half past the hour now, 28 after.
Checking our top stories, it's a race against time in Fargo, North Dakota. Residents are building a support wall to hold off the rising Red River and prevent a flood disaster.
Thousands of volunteers have been sandbagging around the clock. The Red River is expected to crest on Friday as high as 40 feet. That's as much as -- it's more than twice flood stage. Huge problems there in the city of Fargo.
Secretary of State Hillary Clinton traveling to Mexico today. It's her third mission outside the United States. Clinton is expected to assure President Calderon of Mexico that the U.S. plans to crack down on weapons and money flowing south, and fueling the drug cartel's war with Mexico. And in a brand new CNN/Opinion Research Corporation poll released just minutes ago, 71 percent of Americans approve of the job that Secretary Clinton is doing.
And former Secretary of State Condoleezza Rice following in President Obama's footsteps. Last night, she dropped by "The Tonight Show with Jay Leno." Rice opted not to criticize the new administration.
(BEGIN VIDEO CLIP)
CONDOLEEZZA RICE, FORMER U.S. SECRETARY OF STATE: These are difficult questions and difficult issues. My view is, we got to do it our way. We did our best. We did some things well, some things not so well. Now, they get their chance.
And I agree with the president. We owe them our loyalty and our silence while they do it, because I know what it's like to have people chirping at you when they perhaps don't know what's going on inside. These are quality people.
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Right.
RICE: I know them. They love the country, and they won't make the same decisions perhaps that we did, but I believe they'll do what they think is best for the country. And I'll give my advice privately and keep it to myself.
(END VIDEO CLIP)
ROBERTS: Rice also not revealing who she voted for in the November election, only saying that the election was "special."
Louisiana Governor Bobby Jindal defending Republicans who say they want President Obama to fail. Last night while speaking to members of his own political party, Jindal said it's OK to want the president to fail if they think he is jeopardizing the country.
(BEGIN VIDEO CLIP)
GOV. BOBBY JINDAL (R), LOUISIANA: Make no mistake, anything other than an immediate a compliant why, no, sir, I don't want the president to fail is treated as some act of treason, civil disobedience or political obstructionism. This is political correctness run amuck.
(END VIDEO CLIP)
ROBERTS: Jindal also described the question, do you want the president to fail as "the latest gotcha game by the Democrats" -- Kiran.
CHETRY: All right. Thanks.
Well, one issue that dominated the president's primetime press conference was the economy. Of course, he sees the glass as half full and he's also defending his massive $3.6 trillion budget as critical to the nation's economic recovery.
(BEGIN VIDEO CLIP)
OBAMA: If we don't tackle energy, if we don't improve our education system, if we don't drive down the costs of health care, if we're not making serious investments in science and technology, and our infrastructure, then we won't grow.
(END VIDEO CLIP)
CHETRY: So did the president make a convincing case last night? Joining us now Patricia Murphy, columnist for the soon-to-be launched PoliticsDaily.com. She's in Washington. And also here with us John Avlon, the author of "Independent Nation," a columnist for TheDailyBeast.com.
Great to see both of you.
PATRICIA MURPHY, COLUMNIST, POLITICSDAILY.COM: Good morning.
CHETRY: Patricia, let's start with you. You're overall impression last night, what did you -- what stuck out to you about the president's demeanor and also the tone and what he said?
MURPHY: Well, I think his tone was appropriately somber. I think his demeanor again was appropriately somber. I think the most important part about last night was that he did it, was that he is now showing up to explain the finer points of the economy and to explain the finer points of the budget. I think the criticism he has gotten the last several weeks is that Tim Geithner was the face of the recovery. And Tim Geithner is not a salesman.
He was not moving markets in the right direction. He wasn't really moving voters in the right direction or Americans in the right direction. He wasn't inspiring confidence. And Obama knows now he needs to start selling his budget. He needs to be the face of this recovery. And I think that's the most important part of what he did last night.
CHETRY: John, do you think that he got specific? I mean, one of the things that some of the critics were saying is he didn't really, again, articulate, or yet articulate how he's going to pay for this.
JOHN AVLON, REGISTERED INDEPENDENT: Well, you know, he did lay out what the administration is approaching as a comprehensive plan for the economy. But how you pay for it is the problem they're running into. You know, there is a contradiction between the president's rhetoric of fiscal responsibility, his desire for deficit reduction and then this belief in liberal Keynesian investment on health care, education and energy, which he believes is necessary to the recovery.
So there's a tension there that hasn't been resolved. And some folks are saying, wait a second, how do we pay for all of this? Is this going to hurt and jeopardize long-term generational responsibility and deficit reduction?
CHETRY: You know, Patricia, yesterday marked day 64 of President Obama's administration. Some of my colleagues, especially in the political unit, have commented on how he looked a little bit tired. You know, is he battered by what some have called friendly-fire. You have Paul Krugman, you have Frank *, you have Senate Democrats coming out and criticizing some of the points about this economic recovery and the budget?
MURPHY: Well, he maybe looked a little bit tired. I don't know who wouldn't be tired after the last 64 days? I think we're all a little exhausted. But I have to say that friendly-fire has not yet begun for this president. I've talked to a lot of Senate Democrats about the budget coming forward, and several have said to me it's dead on arrival. It's not going to go forward the way he wants it to. It is too big. The numbers are huge. And the biggest question right now in terms of dollar amounts is what else -- are we going to have to spend on bank rescues, what else do we have to spend on AIG. He's got huge budget projections going forward, huge deficits going forward, and we really don't know how much it's going to cost to throw more money at those banks at AIG, that's the biggest problem.
CHETRY: Well, John, she mentioned AIG. And I want to ask you about. He's still enjoying pretty high approval ratings. 64 percent is the latest CNN Opinion Research Corporation Poll. But he's also dealing with this AIG bonus outrage. And it was a little bit of a testy moment last night when our Ed Henry asked him, why did it seemed to take this administration days to come out and expressed outrage about it. He said I want to know what I'm talking about before I speak, and sort of left it there. Was that the best move in your opinion? Should he have said something else?
AVLON: Well, you know, this president doesn't sweat, but he definitely was a little -- a little irritated by that line of questioning. I think, the president realizes the larger dynamics in play here. There is a deep populist anger surfacing in American politics that we haven't seen in a while. And unlike in the past, where it was either directed at big business or government -- big government, this time, it's directed at both big business and big government. That is a potentially combustible combination for any elected official. And so he realizes the forces that are at play here. All Democrats in particular should be on watch and every incumbent.
CHETRY: All right. Well, I want to thank both of you for being with us. John Avlon, Patricia Murphy, great to see you. Thanks.
MURPHY: Thanks, Kiran.
AVLON: Thank you.
CHETRY: John.
ROBERTS: And when he wasn't addressing the economy, President Obama was fielding questions from some nontraditional media outlets at his primetime press conference. We'll have reaction to that just ahead.
And Lance Armstrong will undergo surgery to fix a broken collarbone at 7:00 a.m. Central Time this morning. Hear why the cycling legend is not giving up on competitive racing.
It's 34 1/2 minutes after the hour.
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ROBERTS: Welcome back to the Most News in the Morning. It is now 37 1/2 minutes after the hour.
Let's fast forward to the stories that we'll be watching very closely today on CNN. This afternoon, President Obama makes the pitch for his $3.6 trillion budget to Senate Democrats. It's a tough sell, because a lot of top Democrats are worried the new budget could add $7 trillion to $9 trillion in new debt over the next few years.
The crew of the Space Shuttle Discovery is preparing to depart the International Space Station. Discovery is scheduled to undock from the station at 3:53 Eastern Time this afternoon. It will perform the traditional fly around of the station before heading home. Discovery will return to Earth on Saturday.
ROBERTS: And cycling legend Lance Armstrong is expected to undergo surgery at 7:00 Central Time on his broken right collarbone. Armstrong said in a Twitter post last night that the injury was more serious than doctors first thought. He says tests showed multiple pieces of broken bone. Armstrong crashed on Monday during a race in Spain. The seventh-time Tour de France winner plans to get back on the bike by May.
I guess, Kiran, all they do is they open him up, they put a plate in there, stabilize the bone, and he can get back to training within a week or two.
CHETRY: All they do. You're so funny. But the thing is he said, himself, this is a common injury. One of the most common injuries in cycling that I've avoided for years. You know, for years and years, and poor guy.
ROBERTS: Yes. Sanjay is going to be joining us next hour, by the way. He'll drop by to tell us more about this. He said, it's very common, and one thing is that clavicle is one of the quickest bones to heal in the human body. So he could be back in the bike very soon.
CHETRY: That's good news. That's good news.
Yes, all right. Well, thanks, John.
And the budget and the economy dominated by President Obama's primetime press conference. He did, though, address some other interesting topics. And it's worth noting, it was not just how he answer those questions, but who was asking them.
CNN's Jim Acosta has that part of the story from Washington.
He called on some of the papers and some of the news organizations outside of what many would consider the main stream. It's very interesting yesterday.
JIM ACOSTA, CNN CORRESPONDENT: That's right, Kiran. No questions from "The New York Times" or "The Washington Post." Very interesting to note. When the president was asked about the drug war in Mexico and homelessness, the questions didn't come from the mainstream media. And last night's news conference seems to indicate a trend for this president, reaching out to voters wherever they get their news.
A correspondent from Univision or if you prefer, Univision, asked the question, whether the drug cartel violence on the Mexican border posed a national security threat to the United States. And if so, would the White House consider sending troops to the border? President Obama did not directly answer either question.
(BEGIN VIDEO CLIP)
OBAMA: We are sending millions of dollars in additional equipment to provide more effective surveillance. We are providing hundreds of additional personnel that can help control the border, deal with customs issues. We are coordinating very effectively with the Mexican government and President Calderon, who has taken on an extraordinarily difficult task of dealing with these drug cartels that have gotten completely out of hand. We are going to continue to monitor the situation, and if the steps we've taken do not get the job done, then we will do more.
(END VIDEO CLIP)
ACOSTA: Now the plight of the poor was raised by a correspondent with "Ebony" magazine, who asked about tent cities of homeless people that are popping up around the country, some of the homeless, including children.
(BEGIN VIDEO CLIP)
OBAMA: I'm heartbroken that any child in America is homeless, and the most important thing that I can do on their behalf is to make sure their parents have a job.
(END VIDEO CLIP)
ACOSTA: President Obama took note of the fact that the homeless rate among veterans is higher than for non-veterans and it was spending on national defense and veterans care that came up in a question from a correspondent with the military newspaper "Stars and Stripes," who asked whether military programs were on the chopping block. The president said cutting waste in defense spending would be difficult for one key reason.
(BEGIN VIDEO CLIP)
OBAMA: Contractors are very good at dispersing the jobs and plants in the Defense Department widely, and so what we have to do is to go through this process very carefully, be more disciplined than we've been in the last several years.
(END VIDEO CLIP)
ACOSTA: Now the president took question from niche reporters at his first conference, when he called on a correspondent from the "Huffington Post." That correspondent was not called on this time, but a reporter from the influential website Politico was. Now political observers say this is a savvy way for the president to sell his message to Americans by going over the heads of the mainstream news media. And, Kiran, some critics have said this is a little bit like when President Bush said in his administration that he liked to go beyond the filter of the mainstream media, the MSM as we're called sometimes.
CHETRY: Sure. You know, it's also interesting because "The New York Times" did not have the press conference above the fold this morning, and you noted that they didn't get called on. It was just interesting.
ACOSTA: That's right, yes.
CHETRY: I don't think it had anything to do with that, but...
ACOSTA: And a reporter from "The Washington Times" was. That was the only newspaper reporter who was called on during that entire press conference last night, a sign of the times. The times, they are changing - Kiran.
CHETRY: It's true. Jim Acosta for us this morning. Thanks.
ACOSTA: You bet.
ROBERTS: It's 42 minutes after the hour.
We're getting lots of reaction to the president's budget, and getting some from overseas as well. The Czech prime minister, who now holds the rotating presidency of the European Union, says all that spending will put the world on, quote, "the road to hell." We'll talk more about that coming up.
It's now 43 minutes after the hour.
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ROBERTS: Just in to CNN, some remarkable, if you will, reaction to the president's budget and spending plans and the TARP funds and as well the toxic asset recovery plan. The president of the European Union, the Czech prime minister, saying that that would put the world on "the road to hell."
Our Christine Romans here is with us now to talk more about this.
And Christine, some very strong language there coming from the Czech prime minister.
ROMANS: You're absolutely right, John.
And we're even checking the translations. First we thought it was "road to ruin." Checking the translation again, it looks like "road to hell."
Sharp criticism in the European parliament from the person who holds the European Union presidency, the Czech prime minister, about the efforts Timothy Geithner and President Obama to try to stabilize and, in fact, rescue the American economy. He's saying that these huge financial injections in the economy are, quote "road to hell", a repetition of the mistakes that led to the 1930's crisis in the U.S., adding that panic in the European Union may be spreading because of some of these measures.
So, he's concerned about these measures. I think concerned was the light euphemism to use on that and, clearly, some of our partners and friends in Europe not exactly as optimistic as we've been hearing out of Washington.
CHETRY: And why would he make those comments publicly? I mean, clearly, it's going to spark reaction. Why wouldn't this be a conversation, perhaps, behind closed doors? The administration has certainly indicated they're willing to hear, you know, and want to hear from people who don't necessarily agree.
ROMANS: There's economics and there's politics.
CHETRY: Right.
ROMANS: And I know more about economics than I do about politics. So, I can't guess why he would want to say these things in public, or if he indeed has already reached out to the United States. This is the head of this G20 heads of states meeting that would be next Thursday. The finance ministers have already met.
I mean, there are a lot of people with their own national interests that play here. Let's keep in mind as well. Also, it should be noted our international desk is wanting to make sure that we note that he's the prime minister of the Czech Republic and his own government has collapsed after losing a parliamentary no confidence vote.
So, we don't know how his own politics might be playing in this as well. But "the road to hell is paved by good intentions." Isn't that the old saying?
(CROSSTALK)
ROBERTS: A lot of it is for domestic consumption. Of course, a lot of people would point out, what has the European Union done to help try to stimulate the economy?
ROMANS: The president has a big job to try to get everybody on board here. Our own bankers, our own Wall Street, our own public and then there's the international. We all need cooperation, and he has said that. We got into it together, we're going to get out of it together.
ROBERTS: Christine, thanks so much.
CHETRY: All right. Well, we're going to take a quick break. Back in a moment. Forty-eight minutes past the hour.
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ROBERTS: Welcome back to the Most News in the Morning. A live look at Atlanta this morning, from our friends at WSB. Fifty-seven degrees there right now, going up to a high of just 61, but rain is going to stick around most of the day. That could cause some delays at the airport. So call ahead if you're flying into or out of Atlanta today but, of course, after last year's drought, they still need all of the rain that they can get there.
Well, the top of the news right now at CNN.com, most popular -- Order in the Court, when a suspect starts attacking a woman who testified against him, the judge in the case leaps into action, clearing the bench and tackling the suspect. I guess you could call him judge judo.
Also, when the economy gets tough, the tough get noodles. With budgets tightening all over, instant noodle companies reporting a major surge in business. I mean, when you can get 10 packs for $1.00, it's easy to see why. Ramen noodles not just for college kids at 3:00 a.m. anymore.
And check this one out to good genes. This little guy is not even 2-years-old yet, but he's sinking shots just like the pros. His parents say he plays pool on his mini table for about two or three hours a day. Not really a surprise that he's a snooker prodigy or an eight-ball prodigy. His parents first date was at a pool hall.
CHETRY: Very cute. Such focus for a 2-year-old.
ROBERTS: He's got it down.
CHETRY: It's a story that caught our eyes. Medical students in England are learning not just with books but also with virtual reality computers. CNN's Becky Anderson has details for us in this "Edge of Discovery" report.
(BEGIN VIDEOTAPE)
BECKY ANDERSON, CNN INTERNATIONAL CORRESPONDENT (voice-over): This is Imperial College London in real life. And this is Imperial College London in second life, an online community located in the virtual world. These medical students are checking on patients in this online hospital's respiratory ward.
UNIDENTIFIED FEMALE: Don't talk to each other here in the physical world.
ANDERSON: Students training in the hospital ward have digital characters called avatars. Once inside, they act just like real doctors in a real hospital, washing their hands before seeing patients and checking x-rays.
UNIDENTIFIED MALE: Then you can order the tests. I just want you to pull together nicely.
ANDERSON: This program takes medical training to another dimension quite literally. PROF. MARTYN PARTRIDGE, IMPERIAL COLLEGE LONDON: This sort of research is vital if we're going to make sure that our doctors are trained as you and I want them to be.
ANDERSON: For now, it's not part of the official curriculum. And the program isn't meant to replace face-to-face training with real patients, but it does offer an interesting diversion on the road to a medical career.
JIEXIN ZHENG, MEDICAL STUDENTS: I hope that it's like playing a game and less like learning.
ANDERSON: Becky Anderson, CNN, London.
(END VIDEOTAPE)
ROBERTS: Shot of hope.
(BEGIN VIDEO CLIP)
OBAMA: We're beginning to see signs of progress.
(END VIDEO CLIP)
ROBERTS: But can we afford the president's plan? Nobody asks tougher questions than this team.
(BEGIN VIDEO CLIP)
HENRY: Do you worry, though, that your daughters, not to mention the next president, will be inheriting an even bigger fiscal mess if the spending goes out of control?
OBAMA: Of course, I do, Ed.
WILLIAM BENNETT, CNN CONTRIBUTOR: The press is in love with Barack Obama. Not tonight. He went through a murderous rogue.
(END VIDEO CLIP)
ROBERTS: This morning, Bill Bennett live.
Insight, analysis, and the CNN money team.
(BEGIN VIDEO CLIP)
OBAMA: A better day will come.
(END VIDEO CLIP)
ROBERTS: The best morning after coverage anywhere, here on the Most News in the Morning.
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CHETRY: Welcome back to the Most News in the Morning. President Obama facing some tough questions from the White House press corps last night. He's known for being calm and collected. He did seem to get a bit irritated by our own Ed Henry, though.
Let's listen.
(BEGIN VIDEO CLIP)
HENRY: Why did you wait days to come out and express that outrage? It seemed like the action was coming out of New York and the attorney general's office. It took you days to come public with Secretary Geithner and say, look, we're outraged. Why did it take so long?
OBAMA: It took us a couple of days because I like to know what I'm talking about before I speak. All right?
(END VIDEO CLIP)
CHETRY: Well, joining me now CNN political contributor and host of the national radio show "Morning in America" Bill Bennett. Started to fall asleep watching you last night not because of anything you said, just because of the hour. And now you're early with us again. So, we appreciate it. Good to see you. What did you think of that exchange...
BENNETT: Well, thanks, Kiran.
CHETRY: What did you think of the exchange between Ed Henry and the president about the AIG bonus outrage? You sort of said, why did it seem this administration was a little bit slow to express that outrage?
BENNETT: That was notable for a couple of reasons. First of all, I thought it was a tough press conference for the president. I know conservatives like to say that, you know, mainstream media is having a love affair with the president, not last night. You know, it was a kind of murderous rouge. I thought that, Kiran, from Chip Reid to Jake Tapper and then Ed Henry.
That was, of course, the real shot he got. He got the president's goat. The president lost his temper a little bit with Ed. I don't know if Ed's going to get invited to a state dinner or not. But the question was a good one and the answer was disingenuous. The president said I wanted to know what I was talking about. If you'll remember, when he did first speak about the bonuses, what the president said was it's outrageous, we're going to do everything we can to stop it, how did this happen.
The reason that it's disingenuous is it was his administration, his Treasury Department in cahoots with Chris Dodd, that formulated this plan that allowed for the bonuses. But I thought he had a rough evening, and I think the honeymoon is over. And I think conservatives, by the way, who say that the, you know, the press is just in bed with the president on all things, it's just not right. He's getting questioning now not only from conservatives, Republicans but from the punditry, you know, in the center and on the left, and look, 16 Senate Democrats have challenged him on the budget.
CHETRY: All right. I want to get to that in a second. But he also responded to some Republican criticism of the budget as well, saying that Republicans have a short memory. He says, listen, I inherited a $1.3 trillion yearly deficit. How much longer will the "I inherited" line and not saying excuse, but just sort of explanation for why they're also in deficit spending. How much longer will that fly with the average person?
BENNETT: Last night was it, I think. I mean, I don't know. You never know on these things, but I noticed when, you know, 9/11 hit, everybody said George Bush, it happened on his watch, and so people didn't give him the grace of saying, well, this thing was building for years. I don't think it lasts very much longer. And whatever deficits you're talking about during the Bush year, they are dwarfed by the deficits that the Congressional Budget Office projects for Barack Obama's budget.
So, you know, yes, he inherited a serious set of problems, but it looks, by independent assessments, that he's about to make them a lot worse in a financial bottom line accounting way.
CHETRY: All right. Well, he did note that he has a slightly rosier outlook than the Congressional Budget Office, but that they're not that far away. So, we certainly can't know for sure until we start seeing some of this in action. But great to talk to you this morning. Bill Bennett, thanks so much for being with us.
BENNETT: Thanks, Kiran.
