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Corporate Tax Crackdown; 1918 Flu Survivor Speaks; Job Seekers Get Plastic Surgery; Buffett: Out of the Quicksand; Sen. Specter Holds Town Hall: White House Briefing
Aired May 4, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MELISSA LONG, CNN ANCHOR: So many people on MySpace and Facebook linked in in other social networks, we're encouraged to talk about our lives which often include the workplace, but just who is looking over our shoulders? We want you to share your thoughts about your life, your work, your privacy. Go to cnn.com/newsroom and click on Tony's handsome picture. Yes, he's not here today, I'm in here for him. But I understand he's logging in despite being off for the day to hear from you. That is a dedicated journalist.
Corporate tax crackdown. President Obama unveiling a plan targeting tax loopholes for businesses and tax shelters for the wealthy. The plan which was unveiled last hour is already coming under fire from corporations. The president says it would end incentives for creating jobs overseas and close the loopholes for overseas tax havens. Now, the plan calls for hiring 800 new IRS employees. The administration says it will raise at least $210 billion over the next 10 years.
We have in-depth coverage of the president's tax reform plan from White House correspondent Suzanne Malveaux, Christine Romans and Susan Lisovicz, all of our CNN Money Team.
Ladies, thanks so much. Let's get to the specifics and the goals of the president's plan, we brought it to our viewers live just last hour.
And Suzanne, get to the nuts and bolts of this proposal.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: The nuts and bolts is this is something that he really promised in the campaign time and time again, he talked about these tax loopholes that have to be closed, essentially they are arguing it makes it much easier using the tax loopholes for those corporations, those companies to operate outside of the system here. It is completely legal, what they're doing, but they are avoiding U.S. taxes and it says that they're costing millions, rather billions and billions of dollars to U.S. taxpayers, so what is he promising to do?
Well, obviously he's talking about closing that loophole and also creating incentives here for companies to create jobs and do their business in the United States. I want you to take a listen to the main point.
(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm announcing a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the United States.
(END VIDEO CLIP)
MALVEAUX: So this is really going to be very tough to get through Congress. Already you've got about 200 opposition letters that have been sent to Congress, and the Government Accountability Office has a report out that says 83 out of the top 100 publicly traded companies have got tax havens that are overseas.
A lot of these businesses, corporations say that they don't believe it's going to create jobs here in the United States, that if it's more expensive for them to do business, they're going to pass those costs along to the consumers, that this is not going to make things better but clearly it's a campaign promise that the president vowed to keep, it is something that we don't know necessarily is going to come to fruition for quite some time, Melissa. LONG: Suzanne Malveaux live from what looks like soggy Washington today. Suzanne, thanks for your perspective.
And Suzanne was just mentioning it will be tough to get through Congress, 200-plus opposition letters already, businesses are pushing back against the president's plan.
Christine Romans of the CNN Money Team offers us more perspective on that and again the president saying it's a broken tax system and these are egregious examples of what is wrong with the tax code.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: And many of the people who are against this move will also say it's a broken tax system, they'd like to see the corporate tax rate decline and then fix this on top of that. I mean, they say just fixing this in isolation isn't going to do it.
Look what the U.S. Chamber of Commerce has said about what the consequences of this move would be, again this is the point of view of a consortium of business leaders and different kinds of companies. "This would hamper the global competitiveness of U.S. companies, impede growth in the U.S. economy and result in the loss of jobs at home."
They're saying that by having what is called deferral, there's several different tax things happening here but there is one in particular that would affect the multinationals. They say that it would throw up a hurdle that other countries don't throw up for their companies that are based in those countries, so they're saying that it puts them at a competitive disadvantage, and that it comes at a terrible time.
Others telling me that this looks more to them like a revenue grab. This is an administration that has to find ways to pay for a lot of expensive programs. And that this is part of scrubbing the books to find ways to-make some more money, you know, for the government. Because, obviously, the government is spending a lot more money than it gets, than it brings in.
But still, this is a fight now, shaping up to be a fight between corporate America and this administration. And so we'll have to see where it goes from here but this is a president as Suzanne pointed out on the campaign trail, he very specifically said again and again we would finally be ending the tax breaks for corporations that ship our jobs overseas. That's what he's talking about here.
LONG: Also about the tax havens, Obama saying in the news conference which we brought our viewers that he wants 1099 forms to document the cash that is overseas like we have already here in the U.S.
ROMANS: That's right. There are several different things happening there. One, on the point of this, of the taxes and taxing these companies that are doing business overseas and their overseas subsidiaries. One of the interesting provisions of this is that apparently companies are allowed to deduct expenses to support their overseas operations and programs, but they don't have pay taxes on the offshore profits so they can deduct the expenses.
But they're not paying taxes on those offshore profits so it would end that. There's some other things they're trying to do and then you point out the tax havens for the very, very wealthy, we know that has been in the spotlight recently because UBS, the big Swiss bank, you know, the United States government is trying to get a list of 52,000 wealthy Americans who had put money in a tax shelter that the U.S. says it illegal. So that's wealthy Americans parking money someplace, that's a different part of this crackdown.
LONG: Christine Romans live for us in New York, thank you.
And also from New York CNN's Susan Lisovicz, again, corporate America may not like the president's tax reform plan, what is the reaction on Wall Street? And what's the reaction from big businesses today, Susan?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, it's no surprise what's happening, Melissa. President Obama made it clear in his budget proposal, and the U.S. Chamber of Commerce sent a letter with 200 companies opposing this measure a month ago.
Having said that, you know, this is a question of degree. We live in a global economy, and a lot of our iconic U.S. Companies, Disney, Coca-Cola, Caterpillar, Honeywell, Northrop Grumman, they derive a huge portion of their business from overseas. That's where the growth is. In fact, the U.S. Chamber of Commerce says 95 percent of the world's consumers live outside the U.S. So that's where they're going.
It's really a question of degree, transparency and whether this is, in fact, really exploiting this loophole, non-existent businesses that may take advantage of these offshore tax havens. You know, one veteran tax accountant I spoke to said really, you know, the laws exist, that they could go after these companies now that abuse it or individuals for that matter. It's just the enforcement. Now, President Obama said that there was going to be hundreds more new IRS employees who are going to crack down on this and if that is the case it's this accountant's viewpoint that in fact it would be fine, that you would be able to get this additional revenue. You asked for Wall Street's reaction, well, there's no reaction to that.
There is a huge rally going on, though, Melissa, I'm sure you noticed and that is in response to some surprising news from the housing market, pending home sales took a jump in March, of course, we have very low housing prices. Many homes are in foreclosure and we have very low mortgage rates, in fact, the current 30-year fixed under five percent. So you see a nice rally for the three major averages.
LONG: Some real opportunities for people if they want to get into the real estate market for the first time or maybe buy that second home they've always been dreaming of.
LISOVICZ: If you have the opportunity, it's a good time.
LONG: Susan Lisovicz live from Wall Street, Susan, thank you.
LISOVICZ: You're welcome.
LONG: Now you can follow the market rally, find out more what is going on behind the scenes, of course, on our Web site, check out cnnmoney.com for the very latest on your finances and the economy.
And perhaps you have tax reform questions. Logon to cnn.com/newsroom and click on Kyra's name and her picture and send your comments or questions and tune in at 1:00 p.m. Eastern Time as she gets you answers and the information you so desperately need today.
We could learn more about the administration's tax reform plan during a daily White House news briefing that's set to begin later in the hour and of course we'll bring it to you live here on CNN NEWSROOM.
Now, Mexico raising the one of swine flu victims while lowering the country's health alert level. Mexico's health minister is confirming another swine flu death in his country. 27 people have now died from the disease, all of them Mexican, including a toddler who died in the U.S. in Texas. Mexico's health chief also raising the number of confirmed illnesses in its country to 727.
What about in the U.S.? Officials confirming 226 swine flu cases across some 30 states and it was a short time ago the World Health Organization raised its swine flu figure to 1,025 cases and that is across 20 countries. The World Health Organization warning there are a lot of unknowns about H1N1.
Again in the U.S., the most confirmed cases have been found in the State of New York at the epicenter, St. Francis Prep School which is in Queens, New York. Students returned to school this morning after it was closed last week and sanitized. Now, while classes resume at St. Francis, other schools do remain closed because of the outbreak.
Susan Candiotti reports.
SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): It's good-bye to mask-wearing sanitation crews and hello to students at St. Francis Prep School in Queens.
After a top to bottom symptom scrubbing, hallways won't be empty anymore. At least 59 confirmed swine flu cases and two dozen more suspected gave the Queens high school the state's highest concentration of the virus.
DANA DEROSA, PARENT: What is scary for me, so close to my home and not knowing to what to expect.
CANDIOTTI: Dana DeRosa and her daughter live across the street. Fourteen year old Alyssa (ph) goes to a different school so far untouched by swine flu but when some classmates got sick, Alyssa's mom kept her daughter home and missed work to stay with her.
DEROSA: Just wasn't sure if the schools were doing everything they need to do for her health.
CANDIOTTI: Even unconfirmed cases of swine flu have prompted schools in at least 19 states to shut their doors as a precaution. In Southern California, some closings called an aggressive move to slow the spread, but some parents question it.
AL MONFORT, PARENT: I think there are precautions we need to be doing, but don't overreact. Because I think we're a little overreacting.
CANDIOTTI: In Texas, Ft. Worth schools are closed for two weeks. In Washington State, public officials ask employers to bear with parents who need unexpected time off to care for their children. Parents are frustrated.
UNIDENTIFIED FEMALE: I guess I just have to stay home with my kids. It's really scary.
CANDIOTTI: In Milwaukee, Wisconsin, a tennis tournament went on as planned but other non-sport-related after school activities were canceled. Back in Queens, New York, Dana DeRosa is waiting nervously to see what happens next.
(on camera): Will you change anything about what you when you go back to school?
UNIDENTIFIED FEMALE: I'm going to start bringing hand sanitizer more now.
CANDIOTTI (voice-over): Students at St. Francis and other high schools likely to do the same. (on camera): While this New York City school has given itself a clean bill of health, it may be a few more weeks before others are ready to reopen, and when the end of the school year rapidly approaching, a lot of parents may be wondering will their schools be forced to shut their doors? Susan Candiotti, CNN, New York.
LONG: Over the weekend, wild weather slamming the south, causing all kinds of problems, and destruction. We're going to show you more of the damage.
LONG: Residents in the South are essentially standing guard today. Another round of severe weather could strike from the Mississippi coastline through the Carolinas. Over the weekend a falling tree killed a woman in Mississippi. Five other homes are damaged. The weather service is blaming straight line winds or a possible tornado.
And violent storms caused more damage as they marched into Alabama and Georgia, where 10,000 households lost power. Metro Atlanta, funnel clouds were spotted across the region. High winds in Tennessee also over the weekend but flooding is the bigger problem. A dozen people in one middle Tennessee county had to be evacuated from their homes by boat.
Now this weekend's severe weather collapsed the roof over the Dallas Cowboys' practice field and 12 people were hurt, three of them seriously.
Amazing video from Saturday's accident. The person in the worst shape seems to be Richard Behm, he is a scouting assistant for the team. Doctors say he broke his back and severed his spinal cord. Doctors say Behm is now permanently paralyzed from the waist down.
Now the Cowboys owner Jerry Jones has issued a statement about Rich Behm. He says and I directly quote, "To the Behm family we extend our love, comfort and the full support of every person and resource within the organization. Rich is a courageous member of our family and someone for whom we care deeply. We ask for all friends and fans of the Dallas Cowboys to join us in embracing him and his family with our thoughts and prayers at this very difficult time."
Let me bring in meteorologist Jacqui Jeras to help us better understand what kind of weather system caused all that damage in Dallas, something called a microburst.
LONG: European automaker Fiat has already rescued a piece of the troubled U.S. automaker Chrysler and now the company is eyeing another struggling American carmaker.
(COMMERCIAL BREAK) LONG: The Italian carmaker Fiat is on the road to creating a global automotive powerhouse. The company is in talks to buy a key part of General Motors' European operations while of course still in the process of taking over Chrysler.
Fred -- Fred Pleitgen, sorry about that, Fred, joins us live from Berlin, Germany. And of course the CEO of Fiat is actually in Berlin today for some important meetings.
FRED PLEITGEN, CNN CORRESPONDENT: Absolutely, Melissa. He's in talks with top level German government officials and the reason why he chose Germany is of course that GM in Europe has the bulk of its employees here in Germany.
Of course, Opel is the German wing of General Motors here in Europe and fiat is asking a bunch of German governments -- a bunch of European governments, I should say, and especially the German government for loan guarantees to foot the bill for taking over GM's European operations. But of course this whole thing could potentially be much bigger. You mentioned they were trying to create an automotive powerhouse that could be the second largest carmaker in the world.
And the way Fiat wants to do this, is they want to take Chrysler, they want to take Fiat's own car making operations, they also produce also agricultural goods, and they want to take GM Europe and merge all of that into one giant car company which could potentially have an output of between 6 million and 7 million cars per year, Melissa.
LONG: Now, Fred, Fiat itself is really only recently back on track and the CEO is really credited with bringing it back to where it is.
PLEITGEN: You're absolutely right. For a long time Fiat had a very bad reputation. If you remember when they tried to go into the American market there was a lot of trouble with reliability, also a lot of the cars not really doing very well with U.S. consumers. The same was the case in Europe for a very long time, Fiat was known as the sick man of Europe, producing cars people didn't really want.
All of that learned around in the past couple of years since Sergio Marchionne has taken over at the CEO of Fiat. The reliability has gotten a whole lot better and also the style of the cars seems to be boding better with consumers both here in Europe and in other parts of the world. So certainly this is a company that has orchestrated a turn-around in the past couple of years. However, one thing analysts say is the company has a lot of debt that it has to take care of. Melissa?
LONG: Fred Pleitgen live for us from Berlin, Germany. Fred, thank you.
Now, help for the troubled homeowners, what about them? This weekend in Chicago hundreds of people were participating in a free clinic to learn more about President Obama's program to help stave off foreclosures. Leslie Moore was one of them. (BEGIN VIDEO CLIP)
LESLIE MOORE, HOMEOWNER: When you're talking about a single parent, maintaining a home where I still have to do repairs, I also have an automobile that I need to get to work, and it began to be a problem. I feel like if they made it comfortable for me, which would probably, I would say $600, $700 in the range, where it's comfortable, where I can afford to pay it and not be stressed at the fact i got to pay this and can't pay that, then I'll be OK.
(END VIDEO CLIP)
LONG: Now, the participants received coaching from volunteers and practicing attorneys about how to apply for a mortgage modification and hopefully reduce their monthly payments. President Obama's mortgage relief plan is expected to help about 9 million families.
We're going to meet a woman who survived the 1918 flu pandemic, considered the mother of all influenzas and now at the age of 100, she is sharing her story of that harrowing time.
LONG: President Obama unveiling a plan to crack down on overseas tax havens for businesses. The plan targets companies that use legal loopholes to avoid billions of dollars in taxes.
(BEGIN VIDEO CLIP)
OBAMA: For years we've talked about ending tax breaks for companies that ship job overseas and giving tax breaks to companies that create jobs here in America. That's what our budget will finally do. We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits.
(END VIDEO CLIP)
LONG: Now, the president says the plan will encourage companies to create jobs in the United States, but the U.S. Chamber of Commerce says the plan will hurt corporations and result in job losses for American workers.
Joining us with some perspective on all this, Eamon Javers, a financial correspondent for Politico. He is with us from the North Lawn of the White House.
Eamon, thanks for your time. Appreciate it.
EAMON JAVERS, POLITICO FINANCIAL CORRESPONDENT: Hey, how are you?
LONG: Very good.
OK. President Obama calling it a broken tax system. JAVERS: Right.
LONG: Billions of dollars being lost. How big is this problem?
JAVERS: Well, what the president said today, alongside Treasury Secretary Timothy Geithner, is that this is about a $210 billion problem that if they put forward this package of loophole closures and other measures, including some legislation up on Capitol Hill, they can get about that much money back, which the president said will be used for deficit reduction and other things that the White House wants to do. Obviously, as you said, the Chamber of Commerce just put out a statement against this just a few minutes ago. So there's going to be some real resistance from the business community, which is going to brand this thing as a tax hike in effect.
LONG: OK. So, of course, the trickle-down because the president is saying that this will help American families, American taxpayers. But, of course, the corporations are pushing back saying, we're going to have to push on the costs.
JAVERS: Right. Exactly. And the president's argument is this is all about tax fairness. I mean he cited this classic case, there is a single building in the Cayman Islands which is the home allegedly to about 18,000 corporations. It can't possibly be true. But that there are a lot of tax dodges that are registered at that one address. And the president said, we're going to go after things like that where companies are unfairly doing an end run around the U.S. tax code.
But again, the companies, you know, they don't see it that way. One man's tax fairness is another man's tax hike and we're going to see a debate about this going forward of course.
LONG: There has been some 200 letters already sent to Congress, people who are in opposition to this reform. The president this morning, in his news conference, we broadcast it live here, said that the tax code with the incentives will create the opportunity for companies to create jobs rather than in Bangalore, India, but in Buffalo, New York.
LONG: So people, the general public would be anxious to hear about that, jobs being created here. But again the corporation's pushing back saying, that's not going to happen.
JAVERS: Yes, right. And the other thing that's going on here that's important to note is the politics of all this. I mean the White House is very sensitive to the idea that there is a difference in treatment between Wall Street and main street and all of these bailouts that have been going on and that Wall Street executives have been getting away with murder, according to some, particularly with the AIG bonuses. And this is an effort to really reassure main street Americans that, hey, look, we're going to go after these loopholes, we're going to go after these big guys, make sure they pay their fair share. So even as you are suffering through this economic decline, that same pain is being spread out equally throughout all sectors of American society. That's a really important political dynamic for the White House and they think it's a winning political play.
LONG: But we learned about these potential proposals on the campaign trail over the long campaign season. The president, this morning, calling them egregious examples of what is wrong with the tax code. But again, at this point, these are just proposals. And with the pressure on Congress, how likely are we to see this come to fruition?
JAVERS: Well, you can bet that the case (ph) street lobbyists here in Washington, just a couple blocks from here, are going to gear up into full gear for this one to fight this on Capitol Hill. There are a couple of these measures that they can do unilaterally from the White House directly, but some of it does needs new legislation to be passed on Capitol Hill.
And I've been talking to some of the opponents of this this morning and they are gearing up for battle here on this. They think this is going to be a big fight this year and they're going to resist it as best they can. The White House, again, though, is convinced that they've got the politics on their side of the argument and this is going to be a winner for President Obama.
LONG: Eamon Javers, thanks so much for joining us, live from the White House lawn.
JAVERS: Hey, thank you.
LONG: Appreciate it.
JAVERS: Thank you.
LONG: Well, we could learn more about the administration's tax reform plan during a White House daily briefing today. It's set to begin this hour. And, of course, we will bring you live coverage.
Also, new international numbers on the H1N1 flu outbreak. The World Health Organization says that there are now 1,025 confirmed cases. That is up from 985 reported just yesterday. What about the impact on the United States? Well, 226 confirmed cases in at least 30 states. There has been one death in Texas. That was a Mexican toddler in the U.S. to visit relatives in the state of Texas. A number of state health departments have also several suspected cases of this flu virus but they have yet to be confirmed by the Centers for Disease Control.
Well, Mexico is easing the restrictions that it put in place at the height of the outbreak. Over the weekend, people in public locations were being encouraged to wear masks and keep their hands clean. But today, the government lowering its health alert from high to elevated. It announced businesses closed last week, well, they could reopen now on Wednesday. Between 1918 and 1920 the so-called Spanish Flu, it killed 50 million people around the world, including an estimated 675,000 Americans. Now one survivor of the great flu pandemic sharing her story with Heidi McGuire of our CNN affiliate KUSA.
ROSE WORTH, 1918 FLU SURVIVOR: I can remember the day that my dad said he was going to call the doctor. Of course, we were in school.
HEIDI MCGUIRE, CNN CORRESPONDENT (voice-over): Rose Worth was just a child, but she knew exactly what the Spanish Flu was. For two years, she saw people around her getting sick. Then her own family in 1920.
WORTH: And the minute she said she had the flu, I just knew I was going to lose her.
MCGUIRE: Worth's mother, Elizabeth, was the first to get it. She can't recall how long her mother was sick, but she remembers exactly what she told her.
WORTH: Rosie, of course, Rosie, you're going to have to help daddy take care of the children. Those were her last words to me.
MCGUIRE: Worth was the oldest of four children. And what her mother didn't know was two days after her death, Worth's father would die, too, and then her baby sister.
WORTH: Must (ph) have been Lilly (ph), the one that died.
MCGUIRE: Worth remembers being sick, but she never thought much of dying.
WORTH: I don't remember worrying about it. I just remember being sick. And knowing that I'd lost my mother.
MCGUIRE: At 11 years old, worth survived the flu headlines labeled a killer.
WORTH: it was a killer, yes.
MCGUIRE: Now with the scare of another flu being compared with that in 1918, Worth says, like before, she's not worried about herself.
WORTH: About your family. You don't think about yourself any more. Not at 100 years.
MCGUIRE: Worth celebrated a century in January. She says she's had a full life. And surviving the flu was just part of it.
WORTH: I'm pretty tough, I consider myself. And life has made me tough.
LONG: A full life and, boy, does she look fabulous and have so much energy.
Now, would do you this? Would you get rid of wrinkles in hopes of finding work? A look at the pains that some are enduring to gain an edge in the current job market.
LONG: I don't need to tell you it's a tough job market right now. Everybody's looking for some kind of an edge. In some cases, that edge means plastic surgery.
CNN's Kara Finnstrom reports on some experienced workers who are banking on younger looks. (BEGIN VIDEOTAPE)
LINDA MASON, PLASTIC SURGERY PATIENT: I got the facelift from Dr. Simoni because I wanted to stay young in this very competitive market.
KARA FINNSTROM, CNN CORRESPONDENT (voice-over): Linda Mason is a commercial video producer in her 50s. She believes the nip/tuck she got several weeks ago will help her keep her job in today's tight job market.
MASON: Young kids at 20 years old are coming in and starting to take your job, you know. And a lot of times they're less experienced.
FINNSTROM: Mason may be part of a recession-born trend. The American Society of Plastic Surgeons says overall U.S. cosmetic surgeries were down 9 percent in 2008. But plastic surgeons, like Payman Simoni, are also reporting an uptick in patients who consider looking young a job necessity.
DR. PAYMAN SIMONI, SIMONI PLASTIC SURGERY: I have patients who will have excellent qualifications. Now they're realizing that they have to work on the way they look and on their appearance to be able to stay ahead. Only their skill doesn't cut it any more.
FINNSTROM: Some surgeons are catering to that clientele, advertising job fighter packages of cosmetic procedures. Simoni says he's changed how he does surgery to make it more affordable in this bad economy.
SIMONI: I do most of my procedures without anaesthesia, wide awake. I do my face lifts wide awake, which I created the Simoni lift. I did my eye lids wide awake. I do my liposuctions wide awake so patients did not pay for an -- do not need to pay for an anaesthesiologist. So the cost is down. Since I don't use anaesthesia, people go back to work faster.
FINNSTROM: Emily Fowlkes, a 52-year-old graphic designer, also underwent the knife, getting a face lift and eye lid surgery she says to stay competitive. EMILY FOWLKES, PLASTIC SURGERY PATIENT: I wanted that refreshed look because I felt like things were starting to droop and I am competing with a lot of younger women in the same field.
FINNSTROM: USC sociology professor Dr. Julie Albright says she isn't surprised by any of this.
JULIE ALBRIGHT, USC LECTURER: Well, there is an age-ism in the job market, certainly. And when the crunch comes and the competition increases, people want that little edge. And this is one way, through plastic surgery, to get that edge on the competition.
FINNSTROM: Tough to quantify how many women might seek that edge through plastic surgery, but the American Society for Plastic Surgeons recently conducted a survey of 750 women and found about 13 percent would consider it.
Kara Finnstrom for CNN, Hollywood.
LONG: A refreshed look and without anaesthesia. That's tough.
Let's see, it's lunch hour on Wall Street. Let's check on the Dow, the Nasdaq, the S&P. Stocks surging this morning. The Dow up above 8,300. Up 150 points, treading at 8,362. You can follow the markets online at cnnmoney.com.
You can also follow this story as well. Billionaire Warren Buffett thinking the U.S. economy is out of the quicksand. He spoke to shareholders at his company's annual meeting over the weekend and he spoke as well to cnnmoney.com's Poppy Harlow.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT (voice-over): Reassuring words on the state of the global economy coming from Omaha, Nebraska.
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: It isn't Pearl Harbor any more.
HARLOW: But Warren Buffett cautions, the economy remains in peril and a time line for recovery remains vague.
BUFFETT: Our economy, back in September, was like finding a friend of yours in quicksand up to his chest and he was going down. And we threw a rope out, he ties it around himself, you hook it to a car and you yank him out. Now you're probably are going to dislocate a couple of shoulders, but, I mean, you can't do it without some pain involved. But the important thing was to get out of the quicksand. And we got out of the quicksand.
HARLOW: This tell it like it is candor is why 35,000 shareholders gathered in Omaha, Nebraska, for the Berkshire Hathaway annual meeting Saturday. Buffett answered any and all questions. UNIDENTIFIED MALE: I want to hear really what he sees in the -- and what's going to happen to his companies, what's actually they're doing to help their companies do better.
UNIDENTIFIED FEMALE: I want to know when he thinks the real estate market's going to recover. If we've seen the bottom.
HARLOW: Buffett sounded off on these issues and others, while giving the current administration credit for its efforts to revive the economy.
BUFFETT: We're doing the right thing. And I tip my hat to the administration.
HARLOW (on camera): To be sure, like most publically traded companies, Buffett's Berkshire Hathaway has taken a hit. A shares of Berkshire, the parent company of everything from Dairy Queen to Geico, have fallen 31 percent from a year ago. But, still, the world turns to Warren Buffett for his wisdom, which he delivers with his typically Midwestern whit.
BUFFETT: We were all in a party. It was kind of like Cinderella at the ball. I mean it was a lot of fun.
I got the real thing here. What else have we got? Well, I like this the best.
HARLOW (voice-over): He may be called the "Oracle of Omaha," but even Buffett admits he can't predict the future. He says the greatest risk beyond the horizon remains the one we cannot see.
Poppy Harlow, cnnmoney.com, Omaha, Nebraska.
LONG: Intrigued by what you've heard? You can watch all of Poppy Harlow's interview with Warren Buffett on our website. Go any time, 24/7, to cnnmoney.com.
Now a Republican or a Democrat. It doesn't really matter. All politicians answer to the voters. Senator Arlen Specter is doing just that today.
LONG: Fair to say it's the most famous wardrobe malfunction in history. You know what I'm talking about. That Janet Jackson incident now heading back for even more legal review. The Supreme Court has ordered a federal appeals court to re-examine its ruling in favor of CBS. Last year the network successfully fought a $550,000 fine for that breast bearing incident. That was during the 2004 Super Bowl. Well, the Supreme Court wants an appeals court now to consider reinstating the fine because of the claim that the half-second shot was fleeting may no longer be a valid legal argument.
Former Democratic Presidential Candidate John Edwards is being investigated for his campaign spending. Investigators are looking into a $100,000 payment to this woman, Rielle Hunter. Edwards' public action committee paid her production company that money for filming during the months leading up to last year's presidential campaign. Edwards has admitted to having an affair with Hunter. He says he is cooperating with the investigators. The former presidential candidate's wife, Elizabeth, as you know, is terminally ill. She has a memoir out this month that talks about her husband's affair.
Arlen Specter, the Senate's newest Democrat, is explaining now his decision to leave the Republican Party behind. He's explaining to his home state voters today. Senior congressional correspondent Dana Bash joins me now live from Hershey, Pennsylvania.
Dana, with the senator's message that we've been hearing, what kind of a reception has he been getting?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, where we are right now, where he held his first town hell as a Democrat, Melissa, at the Hershey Medical Center, he definitely got a pretty good reception because one of the hallmarks he likes to talk about of his nearly 30 years in the Senate has been the fact that he has been able to bring home the bacon.
And what has been very interesting, at least at this first town hall, we're beginning to see the argument that he is making for why he believes Pennsylvania should keep him in the Senate and that is because of the fact that he's been there for 30 years. And he talks about all of the money, the millions and millions of dollars, that he has brought back. And he was saying, point-blank, that because of my seniority, I can continue that. Other people couldn't do that.
But, Melissa, he also got one question from somebody in the audience who is a Republican and did not like the fact that he voted for the stimulus bill. And, of course, it was because of that vote that Arlen Specter says that he dropped in the polls among Republicans. And that was one of the main reasons why he switched parties. So listen to this exchange.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (INAUDIBLE) that you would be more supportive of your constituents and not sign the part of the bill that was (INAUDIBLE) -- not sign the stimulus bill that was (INAUDIBLE). What part (ph) of you (ph) did not want to go into (ph) that. So do you feel that this is more self-serving for you (INAUDIBLE) Democrat or (INAUDIBLE) Republican, you're trying to build more support?
SEN. ARLEN SPECTER, (D) PENNSYLVANIA: Were you in favor or for the stimulus package?
UNIDENTIFIED MALE: I was against the stimulus package.
SPECTER: I don't expect people to agree with me on every road. As a matter of fact, on some of those 10,000 votes, I don't agree with them any more myself. But to take one vote and say you're not appropriate to represent the party I thought was pretty surprising. (END VIDEO CLIP)
BASH: Now, Melissa, there is a brand-new poll out this morning from Quinnipiac University that does show Arlen Specter the Democrat beating the Republican that he probably would have lost to in the Republican primary by about 20 points. So it looks like he definitely made the right decision, if that is the had to had match-up in the 2010 election.
But there is something that could be a potential, potential problem for him, and that is if the Republican former governor, Tom Ridge, jumps into the Senate race that he has not closed the door to doing, according to a Republican source I talked to. He -- Tom Ridge is just three points behind Arlen Specter. It's basically neck and neck. I asked Arlen Specter if he's worried about that and he made the point of saying that in that poll it does show Arlen Specter ahead just a little bit, but he grasped onto the fact that he is definitely still beating Tom Ridge.
LONG: That would be a terrific political story for a 2010 match- up for sure.
BASH: It sure would.
LONG: Dana Bash live for us in Hershey, Pennsylvania.
BASH: Thank you.
LONG: Waiting for a White House news briefing to get started momentarily. The microphone is set. The journalists in the room. We'll bring it to you live momentarily.
LONG: As promised, Robert Gibbs, White House press secretary, at the microphone right now. Bound to get a lot of questions about the tax proposal.
(JOINED IN PROGRESS)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: A letter released April 30th -- so this was last week - to Chairman Baucus and Ranking Member Grassley, applauding their leadership as the Finance Committee continues to work in a bipartisan fashion toward the shared goal of enacting meaningful health care reform legislation this year.
They outlined a series of principles, including promoting primary care and prevention, realigning incentives to promote high quality care, increasing transparency to empower patients and providers, and reducing waste, fraud and abuse.
So we will make that all available to you as a good start and progress on health care reform.
And, with that...
QUESTION: Thank you, Robert. Two -- two topics, please.
Back to the Supreme Court, there's been a lot of talk as the nomination process begins that the president's nominee should either be a woman or someone who's Hispanic.
To what degree -- what's the president's message to those who -- who want that to be the case?
GIBBS: Well, I think the president, obviously, is going to take the time to look at all of those that are qualified to find the most qualified person in his estimation, whether it's a he or a she; to find somebody -- as the president described in this room on Friday, somebody that respects precedent, tradition and rule of law, but also understands that decisions have to be made using common sense and understanding people's everyday lives.
I think that's most of all what he's looking for in a nominee.
I know he's made some calls today to -- I don't have read-outs on these yet, but I will get them -- in discussing the upcoming pick with Senator Hatch and Senator Specter.
QUESTION: So to the question of, in the context of diversity, gender and ethnicity, how important are those factors?
GIBBS: Well, look, I think the president described that there should be a diversity of experience. I am sure he will look at candidates for diversity in background.
But again, I think the president is looking for somebody with a record of excellence, somebody with a record of integrity, somebody who understands the rule of law, and somebody who understands how being a judge affects Americans' everyday lives.
QUESTION: I also wanted to ask quickly about the health issue.
Mexican officials are saying that the swine flu, H1N1 epidemic is waning. Global health officials are saying that countries shouldn't let their guard down. What's the level of concern at the White House about the flu right now? Is it as high as it was last week?
GIBBS: Well, I think the White House continues to be vigilant in preparing for whatever we see as a result of the H1N1 flu virus. The president continues to get updates several times a day from homeland security council. The advice the president and others gave last week about being vigilant in your individual responsibilities and staying home if you're sick continue to be important.
We -- certainly, you're always hopeful that what you might plan for never comes to fruition, but I think the key is understanding and planning for any outcome and being ready to address it. And I think that's the -- those are the steps that this administration to date has taken and will continue to take in order to prepare. QUESTION: I have a question about the Supreme Court, just to follow up on Ben's question, but then I also have a question about the offshore tax announcement the president made.
On Supreme Court, can you give us an update on where things stand with the process? When is he going to be ready to start interviewing people? What is he doing now to prepare for the process and lay the groundwork?
GIBBS: You know, basically, the process is as I outlined it Friday. The process has begun -- and began -- some time ago to go through prospective and potential candidates; to begin to review the history and the background and their experience.
But I don't have any specific timeline, as I said on Friday, for when that might happen, except to say that this is something the president believes must be done before the court starts its work again in October, which means we're on a fairly tight timeline to probably get something done before Congress gets out of town in August.
And on the announcement made today about international tax policies, several big corporations are lined up against this - the deferral provision -- Pfizer, Oracle, Microsoft and trade associations like the Chamber of Commerce, Business Roundtable. And I'm just wondering how you're going to overcome that opposition, and if you think this faces a big fight in Congress.
GIBBS: Well, I don't think change is ever easy. And I think whenever you're taking on some bigger interests, that mountain gets a little bit steeper.
But the president strongly believes in the policy that he outlined -- the steps that we have to take to close tax loopholes and ensure some fairness in this process -- is the right policy for America, and the right policy for American business.
By closing these loopholes and replacing these tax advantages with fairness, using the -- a portion of the money that's recouped to make -- or to fund the research and development and experimentation tax credit for the next 10 years, is an important investment for American business.
You know, since 1981, the R&D tax credit has expired on 13 separate occasions. So providing business with some certainty for research and development we think is important.
And, as the president said throughout the campaign, we have -- our tax code has an incentive that provides -- an incentive that rewards companies that are investing overseas at the expense of investing here in America.
We know we're going to take on some tough interests in that, but the president believes this is a fight we should have and one that we can win.
QUESTION: Can you respond to their criticism that these policies would make them less competitive?
They point out that in a lot of countries, you don't pay taxes on overseas earnings, you only pay taxes on what you earned domestically. And so, that puts them at a disadvantage, because they're paying taxes twice.
GIBBS: Well, I -- I think if you look at and compare the huge tax benefits that they get in this country for -- for deferral, the huge benefits that they get for accelerated depreciation, I think it's important that -- that the American people and businesses understand that this is fairness, not something that will put them at a competitive disadvantage.
QUESTION: Thanks, Robert.
The situation in Pakistan seems to be getting worse and worse, and the president obviously has some important meetings this week with the presidents of Afghanistan and Pakistan. What does he hope to get at this critical stage from these meetings?
GIBBS: Well, as you know, the president, throughout the campaign, for much of the past two years, has discussed the fact that we have neglected this region of the world, and particularly we have not focused our resources enough on the challenges that are presented by these two countries and in these two countries.
The president ordered at the beginning of his administration a review of our policy, and instituted the beginning of regular trilateral meetings to ensure that there were open lines of communication between the Afghan government, the Pakistani government and the American government about where -- where we can coordinate our efforts to make a better difference.
GIBBS: This is the second such meeting.
The president, I think, as you said, is concerned about the situation. You've seen administration officials talk about their concern.
So this is an opportunity to discuss with them the process and open up those lines of communication, because we want a strong relationship with each of these two countries, we want an understanding that not just the United States faces security concerns, but each individual government has security concerns about extremists in the area. And this is the beginning of a long process to coordinate our strategy.
QUESTION: Quick question on the Boston Globe, today the news that they may have 30 to 60 days to live.
What's the White House's thinking on the newspaper industry right now and whether or not it may need a bailout, since there are a lot of jobs at stake, just as with the auto industry? A lot of people talking about the impact on communities like Boston, Seattle, places that are losing newspapers.
GIBBS: Yes. I mean, I have not...
QUESTION: How do you evaluate all that?
GIBBS: I have not asked specifically about assistance, I don't think. I think that might be a bit of a tricky area to get into, given the differing roles.
Obviously, the president believes there has to be a strong free press. I think there's a certain concern and a certain sadness when you see cities losing their newspapers or regions of the country losing their newspapers.