Return to Transcripts main page

CNN Newsroom

Bailout Backlash Can Mean Dramatic Pay Cuts; Hospitals Limit Young Visitors; Kerry Wins Karzai's Heart

Aired October 22, 2009 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

TONY HARRIS, CNN ANCHOR: All right. Time now for your top-of- the-hour reset. I'm Tony Harris in the CNN NEWSROOM. It is 12:00 at the White House and the New York Stock Exchange.

High noon in the battle of Main Street versus Wall Street. The administration tells executives at bailed-out companies it is payback time. So, let's get started.

Bailout backlash could mean dramatic pay cuts for some top executives. They took billions of your tax dollars. Now the Obama administration wants to slash salaries for executives of the biggest bailed-out companies. Let's bring in White House correspondent Suzanne Malveaux and Susan Lisovicz -- there you go -- at the New York Stock Exchange.

And Suzanne, let me start with you.

What exactly is the Obama administration doing here? And then tell us why.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Sure, Tony.

Well, obviously, they're taking very aggressive action here. They're talking about the 25 top earners at seven companies, an average pay cut of about 50 percent or so. And if you take a look at the cash component alone, it is up to 90 percent.

Now, who are these folks that we are talking about? These are the top earners at Citigroup, Bank of America, AIG, GM, Chrysler, and their financing divisions of those two car companies.

Now, there are some limitations here, Tony. Not every -- this doesn't apply to everybody, and certainly it does not apply to the companies that essentially did not receive any federal bailout dollars, for instance. So, they're in the clear.

Secondly, there's some companies that have managed to pay off, pay back their loans, those federal dollars, so it doesn't apply for them either. And that was a big incentive for some to pay back that money.

And third, of course, it's still going to permit these multimillion-dollar pay packages.

The bottom line here, Tony, is that the White House is not interested in kind of broadly controlling executive pay. They simply want to target some of these companies they feel. That it would be justice for all these federal dollars going to them, that the taxpayers get something back.

HARRIS: Yes. Yes. OK, Suzanne. Appreciate that.

Let's turn to Susan now.

And Susan, hmm, what's the response from Wall Street?

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Well, it doesn't get more intrusive than the government telling you what you should be paying your employees. Multiple employees. So, this is not something that's very popular. Not a complete surprise, although I think that the -- some of the specifics that Suzanne just mentioned may be shocking.

Remember, this is just a very small group of companies. Seven companies, essentially wards of the state.

Meanwhile, you know, we've been talking about Goldman Sachs, which was forced to take TARP money, quickly paid it back. Last week, set aside nearly $17 billion for bonuses.

Now, I should mention that last year, Goldman slashed compensation after it reported its first quarterly loss. But John Mack, who is the CEO of a rival financial company, said last week, "I'm a capitalist. I think I know how to pay my employees. It should be left to us."

What might be best for these companies that are thriving and still paying handsomely, Tony, is to be proactive, and that is something that you and I talked about yesterday.

HARRIS: Absolutely.

LISOVICZ: A major Swiss company announced that it would tie overall compensation to long-term profitability at companies. Like one simple thing, for instance, it's extending the vesting percent on the company stock to four years from three. And this is something that was talked about at the G-20 summit last month.

So, we're talking -- we're not only talking about this issue here in the U.S., it's all over the world, Tony, because this was a worldwide crisis.

HARRIS: Absolutely.

Suzanne, one more for you.

What we really need are these big financial institutions to start lending to small businesses and consumers so consumers can do what consumers do.

Is the president working on more strategies, more schemes, more plans to make sure more of that happens? MALVEAUX: Well, certainly, Tony, that's an excellent point, because the president, he announced -- it was just yesterday -- two initiatives dealing with small businesses, essentially trying to make it easier for them to borrow money, to this spend money and to get credit.

HARRIS: Yes.

MALVEAUX: Because that has been a very big problem. Small businesses very much left out, if you will, of this whole recovery effort. So, they are, again, making a push for small businesses.

What does that mean, Tony? It means that the hope is these small businesses will go ahead and spend and start to create and save those jobs that everybody is talking about, because it's the job recovery that is really lagging behind here. Until those small businesses are able to hire again, a lot of folks are not going to feel the recovery. And so that's another prong to the approach here...

HARRIS: Absolutely.

MALVEAUX: .. that the White House is taking.

HARRIS: All right.

Suzanne Malveaux at the White House for us and Susan Lisovicz at the New York Stock Exchange.

Ladies, appreciate it. Thank you both.

LISOVICZ: Thank you.

HARRIS: And, of course, we want to hear from you on the dramatic pay cuts the administration is demanding. Is it a necessary government intervention in the private sector, or is it justifiable when corporations are subsidized by your tax dollars?

Do this: Just go to CNN.com/Tony and let us know what you think.

Fresh evidence today that employers are still reluctant to hire even though the economy is showing signs of improvement. The Labor Department says new jobless claims rose to 531,000 last week. That's more than expected.

On the other hand, the private forecast of economic activity rose in September for the sixth straight month. The conference board says the index of leading economic indicators rose one percent last month.

A program to help first-time homebuyers is under scrutiny on Capitol Hill. A House panel is looking into concerns about fraud in the program.

It gives homebuyers a tax credit of up to $8,000. Congress is considering whether to extend and expand the program. Officials say the tax credit has helped more than one million homebuyers, but the IRS is also investigating more than 100,000 questionable claims. (BEGIN VIDEO CLIP)

LINDA E. STIFF, IRS: The IRS recognizes that there is potential for both fraud and errors whenever a new refundable tax credit like the first-time homebuyers is enacted. As we began implementing this credit in the days after the Recovery Act legislation was passed, we identified different types of potential errors or fraudulent claims and matched our compliance program to those abuses. We are and we will continue to vigorously pursue those who filed fraudulent claims for the credit.

(END VIDEO CLIP)

HARRIS: Production of the swine flu vaccine is way behind. The government initially promised 120 million doses of the H1N1 vaccine by now, but only about 13 million have been delivered. Health officials say it's partly because of an antiquated vaccine production process that uses millions of chicken eggs.

Meantime, the swine flu is spreading, and fast. The Department of Education says H1N1 has forced 198 schools to close across 15 states. That is a huge jump from just a few days ago. On Monday, just over 2,200 kids were out of school due to the swine flu and its symptoms. By yesterday, it was more than 65,000.

Fears of spreading the H1N1 virus now prompting some hospitals to crack down on visitors, especially the little ones.

CNN's Ted Rowlands reports from Los Angeles.

(BEGIN VIDEOTAPE)

TED ROWLANDS, CNN CORRESPONDENT (voice-over): Five-year-old Jack and his 8-year-old brother Michael are waiting with Grandma on the front steps of Cedars-Sinai hospital while the rest of the family visits their aunt, who just gave birth to a baby boy.

H1N1 cases in Los Angeles County have shot up over the past two weeks. Many hospitals, including Cedars, are restricting children's visits, as a precaution.

UNIDENTIFIED FEMALE: And I think that's a good idea. It's the best for everyone.

ROWLANDS: Inside the hospital, there are plenty of antibacterial stations and reminders for people to wash their hands. The reason children aren't allowed, according to Dr. Rekha Murthy is simple. The evidence shows that with this virus they are the most vulnerable group, meaning the odds are higher they'll either get it here or spread it here.

DR. REKHA MURTHY, INFECTIOUS DISEASE DIVISION, CEDARS-SINAI MEDICAL CENTER: We're experiencing an epidemic that appears to be actually escalating in our community, and hospitals have to respond to that escalation until we know it's going to peak and reduce. ROWLANDS: Hospitals around the country have instituted similar investigation restrictions. The new policy at Cedars went into effect Monday, with security guards turning away children at hospital entrances.

JOHN SAIZA, SECURITY GUARD, CEDARS-SINAI MEDICAL CENTER: Hardly any problems at all. I think maybe 90 percent of everybody who has come through here are very understandable of what's going on.

ROWLANDS: Jack and Michael's new cousin scheduled to come home at the end of the week. Cedars and other hospitals say they are hoping that children will be welcomed back soon.

Ted Rowlands, CNN, Los Angeles.

(END VIDEOTAPE)

HARRIS: OK. Health officials repeatedly emphasize, as you know, swine flu, ,or H1N1, cannot be contracted by eating pork or pork products, but fears persist. And the swine flu label continues to hurt the nation's pork industry.

Hog farmers and producers are appearing before a House agriculture subcommittee. The hearing focuses on the economic conditions facing the pork industry.

What are your questions about the H1N1 flu? Next hour in the NEWSROOM, a doctor will join Kyra Phillips to answer your questions.

You can e-mail us at CNNnewsroom@CNN.com, or you can get in touch with us on our blog at CNN.com/Kyra. Or tweet us at KyraCNN.

The doctor will have answers for you next hour.

(COMMERCIAL BREAK)

HARRIS: Just within the last 30 minutes, the Justice Department announced a big drug bust. Agents have made 300 arrests in 19 states during the past two days. That's on top of 1,200 arrests and seizures totaling almost 12 tons of illegal drugs in the last four years.

It's all part of Project Coronado, an operation aimed at stopping a major Mexican drug trafficking operation known as La Familia.

(WEATHER REPORT)

HARRIS: Turning to the war in Afghanistan now.

Shortly after President Obama's morning briefing, he had a video conference with his ambassador to Afghanistan, Karl Eikenberry. The president is still weighing whether to send more troops to that war zone. The White House says the president could decide on troop levels before Afghanistan's November 7th runoff election.

Senator John Kerry played a key role in getting President Hamid Karzai to agree to the runoff vote. Our White House correspondent Dan Lothian explains.

(BEGIN VIDEOTAPE)

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT (voice-over): Senator John Kerry was on an unofficial visit to Kabul, Afghanistan, when he was officially drawn in to help clean up the disputed elections.

SEN. JOHN KERRY (D), MASSACHUSETTS: There were times when he was prepared to say, this isn't going anywhere, not to mention the fact that he believed very deeply, personally, that he had won the first round.

LOTHIAN: A source close to the discussions describes a flurry of down-to-the-wire negotiations, after U.S. Ambassador Karl Eikenberry told the senator a crisis was brewing. Friday, October 16, Senator Kerry makes an unplanned visit to the palace to meet with Afghan President Hamid Karzai. They talk for several hours. It's the start of nearly 20 hours spent trying to soften the Afghan leader.

KERRY: I think we ate lunch or dinner three times together with large groups. And then we broke into smaller groups. I spent many hours with him one-on-one, and then we had other sessions.

LOTHIAN: They meet again on Saturday and Sunday. And Kerry says he's in constant contact with Secretary of State Hillary Clinton and other U.S. officials. There's some progress, but no resolution.

On Monday, Senator Kerry visits Pakistan, then, instead of returning to Washington, heads back to Kabul to close the deal. Still working on some last-minute issues on Tuesday, President Karzai finally agrees to a runoff vote. In a phone call, President Obama congratulates him, and later commends his diplomatic team, including Senator Kerry.

OBAMA: Who was in the region traveling, and ended up working extensively with Ambassador Eikenberry, and was extraordinarily constructive and very helpful.

LOTHIAN: Experts say Senator Kerry's role was appropriate considering past overtures by key senators.

JAMES RUBIN, FORMER STATE DEPARTMENT SPOKESMAN: President Reagan asked Senator Lugar, as chairman of the Foreign Relations Committee, to push very hard on former President Marcos in the Philippines, in this case -- in that case, to step down.

LOTHIAN (on camera): Senator Kerry's approach was a personal appeal. In fact, a Democratic official says that the senator even recounted some of the tough decisions he had to make at the end of his 2004 presidential bid.

Dan Lothian, CNN, the White House.

(END VIDEOTAPE) HARRIS: I'm told the news anchor is supposed to be unflappable. Well, we're going to show you what happened when the flapping started.

(COMMERCIAL BREAK)

HARRIS: So, let's get you caught up on our top stories now.

A top Iranian lawmaker dismisses a plan coming out of this week's nuclear meeting in Vienna. It would have Tehran ship its uranium abroad for enrichment. And the remarks just a first reaction.

Bitter foes Israel and Iran attended an international conference on nuclear disarmament last month, but an Israeli official denies reports they held face-to-face talks on whether the Jewish state has atomic weapons.

And Virginia Tech taking no chances. An on-campus advisory tells students about a threat to the school community posted on YouTube. The school itself has not received any threats.

We will get another check of your top stories in 20 minutes.

The latest poll on the economy out this hour, and there is good news and some bad.

CNN Deputy Political Director Paul Steinhauser joins us now from Washington with the CNN/Opinion Research Corporation poll.

Paul, good to see you. Let's dive in here.

Are people growing more optimistic or pessimistic when it comes to the economy?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Tony, I think the headline from our poll, one of them, at least, is Americans don't like the way the economy is right now. Take a look at these numbers. We just put them out in the last couple of minutes, Tony. This is from CNN and the Opinion Research Corporation.

We polled nationally across the country. Economic conditions, are they very good or poor right now in the country? And you can see Americans are split on that. Forty-two percent right now say that economic conditions are very poor.

Now, Tony, that is up, you can see, seven points...

HARRIS: Yes.

STEINHAUSER: ... from August. So, Americans, it seems, are getting a little more pessimistic.

Go to the next board as well, and you can see this as well. It makes the same point here. Economic conditions, you go all the way back, you can see, back in December, people were pretty sure that things were poor.

HARRIS: Yes.

STEINHAUSER: Check out the next number as well. Are economic conditions good in the country right now? Sixteen percent. That's down from August, Tony.

So, we're seeing a little more pessimism. Yes, sir.

HARRIS: Yes, absolutely.

Any positive signs in our new poll?

STEINHAUSER: Yes. Even though people are pessimistic about how things are right now, Tony, they are optimistic about how things will eventually turn out. Take a look at these numbers.

We asked about the economy and if we -- right now the economic conditions are good right now. You can see -- here it is, that's the one we're looking for.

Seventeen percent, Tony, say things are recovering in the country right now. You can tell, that's up five points from back in June. And only a third of Americans think we're still in a downturn, Tony. That's down from June. And about half the country thinks we have stabilized.

HARRIS: Got you.

How about this one -- do Americans think the president's policies such as the stimulus are work in ing?

STEINHAUSER: Americans appear to be split. That's what our poll suggests. And you can see right here from these numbers.

We asked about the president's plans. Are they helping make things better? Forty-three percent say yes. Another 13 percent say, do you know what? They're not making things better yet, but they will improve the economy down the road.

And 42 percent said, no, they're not helping at all, Tony. Americans are split.

Those numbers are pretty much unchanged from earlier this summer.

HARRIS: We are so split as a nation. My goodness.

What is this, Paul, about a rather sobering economic prediction from a top administration adviser, economic adviser?

STEINHAUSER: Interesting stuff from Christina Romer. She was just on Capitol Hill testifying. She's the chairwoman on the president's Council of Economic Advisers.

And the big question is the stimulus, of course. Is it helping? Will it continue to help?

Take a listen to Christina Romer. (BEGIN VIDEO CLIP)

CHRISTINA ROMER, CHAIRWOMAN, COUNCIL OF ECONOMIC ADVISERS: Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009. And by mid-2010, fiscal stimulus will likely be contributing little to further growth.

(END VIDEO CLIP)

STEINHAUSER: And that is the troubling news, I guess, for this administration, that it may not -- the stimulus may not contribute and help bring about more jobs next year. Because, as you know, Republicans are very critical of this White House, Tony. They're saying $787 billion for the stimulus, where are the jobs? So...

HARRIS: Wow. OK. Boy, we need to -- I've got questions about that statement.

Paul Steinhauser for us.

Paul, appreciate it. Thank you.

STEINHAUSER: Thank you.

HARRIS: Remember the Beatles' lyric, "I get by with a little help from my friends"? Take a look at this video.

The Oakland Raiders -- yes, yes -- and a little friend. You see the bird there walking down the field?

Now taking its position on the kick team. The Raiders playing Philadelphia on Sunday, and the Raiders beat the Eagles 13-9.

Get that bird a contract.

And if you've ever wondered if that cityscape behind some newscasters is live or a production trick, well, here's the answer. This anchor down under, oh, man. Apparently absolutely unaware of the insanely huge seagull right over his shoulder. Or maybe he knew and thought no one would notice if he ignored it.

All right. One senator wants to turn up the heat on the insurance companies when it comes to health care. I'm going to ask him how he plans to do it.

That's coming up next, right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Let's see, at this time of the day, you know, we like to remind you to go to CNNMoney.com if you want the latest news and analysis on all of the day's financial news. And let's do this, let's quickly get you to -- we've got Senator Leahy standing by -- to the big board, the New York Stock Exchange. The Dow, as you can see, is up 41 points, kind of a mixed day. The NASDAQ is down nine. We're following these numbers throughout the day with Susan Lisovicz right here in the CNN NEWSROOM.

Another twist in the fight over health care reform. Some democrats want to strip the insurance industry of its exemption from federal antitrust laws. Democratic senator, Patrick Leahy, of Vermont is chairman of the Senate Judiciary Committee and he joins me from Capitol Hill.

Senator, great to talk to you. Thanks for your time.

SEN. PATRICK LEAHY, JUDICIARY COMMITTEE CHAIRMAN, (D-VT): Good to be with you. Thank you.

HARRIS: Yes, I got to tell you, when we got word yesterday that you were interested in talking with us on this issue yesterday, of ending the antitrust exemption enjoyed now by health insurers, my response was, health insurers have antitrust exemption? What does that antitrust exemption mean for health insurance companies?

LEAHY: That means they can get together and fix the prices. They can cut out your choice. They can cut out competition. They can keep the prices high on your insurance. And I believe that's what they're doing.

You know, the thing is, most people, when they introduce legislation say, well, we just assumed they had to follow the same laws as a construction company, a car company and everybody else. And I say, "No, they've had this for over 40 years, this exemption." There's no reason for it. It is something they have spent millions of dollars lobbying for. They told me at the hearing, "Well, of course, we don't get together and price -- set prices." And I said, "Well, fine, then, you won't care if you have an antitrust exemption."

Basically I'm just saying they got to follow the same rules as anybody else, anybody else in business. Any other business in America has to follow the antitrust rules. I see no reason why we should make one exemption for one industry, especially when the consumers see their prices skyrocketing every year for their insurance costs.

HARRIS: Yes, well, Senator, some are saying that this is -- that this is the senate's effort to get tough, to fight back, in a really tough way with insurance companies, particularly after the release of the AHHIP Report. Any truth to that?

LEAHY: No, in fact, I first introduced this legislation, along with the republican leader of the Senate, a couple years ago. The particular legislation we're talking about now, I introduced weeks ago.

In fact, I noticed a hearing on it in the Senate Judiciary Committee well before their ad that they ran. I think it was probably an unfortunate coincidence for them because the hearing which might not have gotten that much attention otherwise got a great deal of attention. And that's why the absolute majority of letters I get or e-mails I get is in favor of it. We even had republicans voting for it in the House. HARRIS: Wow! All right, I'm just sort of curious. Look, clearly, you're smart in this area. How would -- the only reason to do this is that you believe that this amendment would create greater competition among insurance companies. How would it do that because everyone's interested in that?

LEAHY: Well, I think that they couldn't get together and set prices. They'd have to be more open, opaque. They'd have to say how they set their prices but also they couldn't get together to keep other companies out of a market. There would be more openness. You combine that with, say, something like public option, you're going to have a great deal of consumer choice and costs come down.

Every time you have consumer choices, costs come down. Every time you have something where somebody has basically a monopoly, costs go up. And as a former prosecutor, I've always felt everybody should follow the same laws, and there shouldn't be exceptions for certain classes of people.

HARRIS: You have mentioned the term of the year in this health care debate, "public option." Let's talk about the Senate health reform bill. Senator Reid said in your news conference yesterday, he was taking up the issue of the public option last night with the group crafting the final Senate bill. Have you spoken with Senator Reid today? Can you give us an update on last night's discussion? I would love to make some real news here.

LEAHY: No, I'm going to let -- as one newscaster once told me, "Can you commit some (ph) news for us?" I can't on that. I'm not in that meeting. If I was, I wouldn't talk about it. I'll leave that up to Harry Reid. But I do know that a lot of senators, myself included, feel we should have a public option.

HARRIS: Okay, now, take a look at our polling, because you mentioned something that seems to be in line with what we're hearing from the public. Our latest pollings shows 61 percent, you see it here, of Americans in favor of the public option.

But I'm curious as to how you see this playing out? The bills that are being worked on now, at the end of the day, are we going to end up with a final Senate bill that includes the public option or perhaps a public option trigger? What do you think?

LEAHY: I think we have to have a public option in the final bill. And it can be done in such a way that if you like the insurance you now have, keep the insurance you have. But if the public option has a better deal for you or a more affordable one, then go with that. That's what I want.

I want competition in this field. I want people to have a real choice. And I want especially young working families that are thinking they have to drop their insurance because they can't pay for it, to have something that they can afford.

HARRIS: And at the end of the day, can you get 60 votes for a final Senate bill that includes a public option? LEAHY: Well, you know, when I first came to the Senate, you only needed 51 votes to pass something. And I would hope that eventually we would have it. It's kind of difficult when every single Republican up to date, virtually every single Republican, said, "Well, we're not going to vote for any health care plan." I don't think that's responsible. If they've got a better plan, bring it up. Let us vote it up or down.

But finally we should have something we can vote on. The American people can be represented. They could hear -- have their voices heard. That's what I hear in Vermont and that's what I truly believe.

Senator Leahy, thanks for your time. We appreciate it. Thank you.

LEAHY: Glad to be with you.

HARRIS: I got to tell you, we reached out to Republicans to get their thoughts on where we are right now with health care reform. None was available.

The White House is preparing to make a big push on health care reform. Once we see a final legislative proposal, it is asking senior advisors to hit the road and some stops may not be too friendly.

"The Hill" newspaper reports Nancy-Ann Deparle will speak at a forum hosted by the New Republic. Deparle is the director of the White House Office of Health Reform. Christina Romer, who chairs the president's Council of Economic Advisors, will speak to the Center for American Progress, and senior white house adviser, Valerie Jarrett, attends an AARP event in Las Vegas.

One member of Congress calls the battle over health care reform the Super Bowl of lobbying. More than 3,000 people are registered to lobby about health care. The health care sector has spent $263 million this year lobbying Congress to change and for changes to reform plans. That is according to the Nonpartisan Center for Responsive Politics.

We are breaking down this whole executive pay cut proposal with Stephanie Elam from Cnnmoney.com. She is just ahead in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: All right, let's get you caught up on our top stories now. A threat posted on YouTube prompted Virginia Tech to send out an on-campus advisory this morning. Investigators believe the threat may have come from overseas. The video contains poorly written English and university officials say they've received no direct threats.

Iran's official news agency reports an Iranian lawmaker is rejecting a proposal aimed at easing the nation's nuclear standoff. The internationally backed proposal would require Tehran to ship its uranium abroad for enrichment. Tehran is expected to officially decide by tomorrow whether to approve the plan.

In Greece, the Olympic flame was officially lit for next year's games in Vancouver. The lighting sets off the torch relay. After eight days in Greece, the torch goes to Canada, crisscrossing the country for 106 days until the games begin in February.

Low-rider crime fighters challenging Latino stereotypes.

(COMMERCIAL BREAK)

HARRIS: Voices of "LATINOS IN AMERICA," the CNN special is working to shatter stereotypes about Latinos. CNN special correspondent, Soledad O'Brien reports on some guys who look like gangbangers but are quite the opposite.

(BEGIN VIDEOTAPE)

SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT (voice-over): Hector Avilla is the vice president of Together.

HECTOR AVILA, VICE PRESIDENT, TOGETHER CAR CLUB: Okay, make sure you can see the lens to the left can see you.

O'BRIEN: A low-rider car club that looks more like a casting call for gangbangers.

(on camera): Are there people who see you guys at a competition, Together Car Club from Los Angeles and think gangbangers?

AVILA: Yes, we get that stereotyping. I mean, you know, we have its cover. You know what I'm saying. We're bald. We're tattooed and all that stuff. But I mean that's one of our rules in our club, is that there's no gang affiliation in the club.

O'BRIEN (voice-over): Hector is the fourth generation of a hardcore L.A. gang.

AVILA: And this is my oldest one right here.

O'BRIEN (on camera): Hi, I'm Soledad, how are you?

(voice-over): But he chose not to follow in his family's footsteps.

O'BRIEN (on camera): Oh, someone loves Daddy.

AVILA: Yes.

O'BRIEN (voice-over): He makes sure members keep club priorities straight, cars, family.

UNIDENTIFIED FEMALE: We do support him 100 percent.

O'BRIEN: ....community.

(on camera): The Mayor's Certificate of Appreciation. (voice-over): In that order.

(on camera): Hi, Johnny, Soledad. How are you?

JOHNNY: How are you doing?

O'BRIEN: Pleasure, nice to meet you. Your car's beautiful. I like the sparkles.

JOHNNY: Oh, thank you.

O'BRIEN (voice-over): The cars are like works of art. Paint jobs can run $5,000 more.

(on camera): That's a big stereo system.

JOHNNY: Yes.

O'BRIEN (voice-over): Trunks are transformed into stereos, coolers, even theaters. And what really makes these low riders dance, hydraulics.

O'BRIEN (on camera): That was awesome!

(voice-over): This year, Together's annual car show raised $3,000 for a local anti-gang program.

UNIDENTIFIED FEMALE: Together cars really came through for the city.

GRACIE GALLEGOS, FMR. MAYOR OF PICO RIVERA, CALIFORNIA: So, here you have the group that was pointed at. They were blamed for gang affiliation, gang association and for trouble. They came back, and they're proving, let's go beyond those stereotypes. You know, we're not only trying to send the message that that's not who we are, but we are saying we're going to help keep kids out of gangs.

(END OF VIDEOTAPE)

O'BRIEN: This is part of a story where we'll so you Pico Rivera, California. Pico Rivera is a town that really turned its story around, had some gang problems and was able not only to knock out the gang problems, knock out the crime and really make that city turn around, partly because of folks like Hector Avilla, who have two passions, cars, and mentoring kids --Tony.

HARRIS: Yes. Hey, Soledad, are there any other anti-gang initiatives the car club is involved?

O'BRIEN: Absolutely, yeah. They literally, beyond just raising money for a scholarship that will go to a young person every single year, thousands and thousands of dollars in scholarship money, also just literally hands-on mentor kids. I mean I think a lot of their power is that look at us, you know. We have, some of us, a history.

I mean, as you heard from Hector, you know, his family roots go back into gang culture. So he has a lot of credibility with some of the young kids. And in that part of town, gangs can be a serious problem, so they made great inroads.

HARRIS: Boy, you climbed into one of the cars and the next thing you know you look like you were at an amusement park.

O'BRIEN: Isn't that great?

HARRIS: Yes, it was great stuff.

O'BRIEN: You can get whiplash from that, seriously.

HARRIS: Oh, that was good stuff. All right, Soledad, can't wait for tonight. Thank you.

O'BRIEN: Thanks.

HARRIS: And tonight, an all new "LATINO IN AMERICA," our groundbreaking look at how Latinos are changing America continues. The finale of "LATINO IN AMERICA" airs tonight at 9:00 p.m. Eastern. And this will also be simulcast in Spanish on CNN en Espanol.

Okay, so the outrage about executive pay has reached a tipping point, especially when it comes to companies that received huge bailouts from taxpayers. So, now the government is doing something about it. The Obama administration will have the final say on some of those huge pay packages. Stephanie Elam has the breakdown from New York.

Stephanie, do we know which companies we are talking about here?

STEPHANIE ELAM, CNNMONEY.COM CORRESPONDENT: Yes, we do, Tony. We're basically talking about seven companies that are going to be affected: Citigroup, AIG, Bank of America, GM, Chrysler, and the finance arms of the two automakers as well.

Now, all told, they've taken $350 billion in bailout money. That's why the government is putting these new payrolls in place. The rules will affect the 25 highest-paid executives at these companies.

We're expecting an official announcement next hour, but here's what we know right now. Annual salaries will be slashed by 90 percent, nine, zero percent on average. For someone who was making $2 million, his or her salary could fall to $200,000. Total compensation, including stocks, bonuses, perks, could fall 50 percent on average.

Now, other reports say that perks that cost more than $25,000 will need government approval. This could affect things like country club memberships, those private planes and company cars. The government is also likely to split up the CEO and chairman roles, the idea being to create more of a check-and-balance system. A lot of people have been calling for that a long time -- Tony.

HARRIS: Yes, you know, these new pay restrictions, Stephanie, don't apply obviously to all Wall Street firms. So, how is that going to change the dynamic, the culture, there on Wall Street?

ELAM: Well, that's what a lot of people are concerned about. It's not going to be a level playing field. Salaries at the companies affected by the new rules will probably be capped at $500,000 or less. But the new pay rules don't affect Goldman Sachs. They don't affect Morgan Stanley and others.

They have billions set aside for pay and bonuses. And some say the high pay is actually needed to bring in and actually retain top talent. So, we'll be watching to see if workers at Citi, Bank of America and AIG actually jump ship.

But the other side is there are many who just may be looking for jobs and may not be available to find them since they're just not available. So, some of these affected workers may actually have to just stay put -- Tony.

HARRIS: Okay, Stephanie, appreciate it. Thank you.

And we asked you earlier what you thought about this executive pay-cut proposal. Is it justified? Here's some of what you're saying to us.

Jackie in Florida says, "Yes, why should they take home millions while we support them?

Matthew disagrees. He says, "Government should stay out of business. There should have been no bailout and there should be no pay cuts. Let's not become Soviet Russia!"

Michael in Texas says, "These executives robbed their own firms. Don't just give them pay cuts, give them prison time!" Wow!

All right, CNN is shining a spotlight this week on the FBI's most-wanted fugitives. Last hour, we showed you who they are. Now Josh is back to tell us how many have actually been caught over the years -- Josh.

JOSH LEVS, CNN CORRESPONDENT: Yes, in fact, CNN hooked up with the FBI this week on Campbell Brown's show. They've been announcing some of the latest additions to that FBI's 10 most wanted fugitives list. We heard from them earlier this week.

Here's what I'll do now. I'm going to show you some of the major facts about this, including what you said, Tony, how many have been actually caught. Let's go straight to that because this is really striking to me. The FBI has a pretty good track record.

Now, it goes back to 1950. So, in total, over that time, there have been now close to 500, a total of 494 people ever on the list. And check out in the next screen, how many have actually been located, 463. So really close to all of them, 152 as a direct result of the public's help.

I was also interested in this from the FBI, how many have been women over the years. Out of all those nearly 500, only eight have been women. So, you know, it's a tiny, little fraction right there.

And one more thing they point to that shows how the FBI most wanted list has changed with U.S. priorities over time and changed with the history. Look at that, in the 1950's, it was generally robbers, criminals, thieves.

In the 1960s, it moved to what the FBI calls revolutionaries, a lot of people inside the United States who were taking actions against government property and that kind of thing.

In the 1970s, Tony, that's when it moved to what it's kind of been ever since. Most of the people on the list ever since then have been allegedly involved in organized crime or believed linked to organized crime, also linked to terrorism. And that brings us up to today when you have, as I showed you last hour, Osama bin Laden. But also many people who are believed to be linked to drug activity and murders along with it or in some cases, organized crime as well. So that's continued ever since then -- Tony.

HARRIS: Josh, appreciate it. Thank you, sir.

The pharmacy is getting creative in dealing with the H1N1 vaccine shortage.

(COMMERCIAL BREAK)

HARRIS: With swine flu cases on the rise and treatment in short supply, pharmacies are doing their part to deal with the shortage. CNN's Kitty Pilgrim shows us how.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In this Walgreens drugstore in New York, the pharmacist is stretching the supply of liquid Tamiflu by what is called compounding, breaking open capsules and mixing the contents with liquid.

UNIDENTIFIED PHARMACIST: The manufacturer let us know back in September that there was not going to be enough of the liquid suspension to go around. So, we were very proactive, get out to the pharmacists and got a recipe from the manufacturer to be able to make an extemporaneous compound.

PILGRIM: The CDC announced this week major pharmacies, like Walgreens and Wal-Mart, are doing this and other pharmacies should also.

DR. ANNE SCHUCHAT, CENTERS FOR DISEASE CONTROL & PREVENTION: We do encourage pharmacies to be able to do compounding so that our pediatric supplies will stretch as far as possible.

PILGRIM: Liquid Tamiflu used to treat swine flu is in short supply. Roche, the Swiss manufacturer, says it has ramped up production in the U.S. since the pandemic broke out last spring and will be producing 400 million doses of Tamiflu next year. And that's made it 20 percent of production will be inside the United States. Roche, today, says it intentionally shifted its production away from Tamiflu liquid making capsules instead because capsules provide 25 times the dosage in the same amount of time it takes to make one dose of the liquid for a child.

So, now it's up to pharmacists to make the drug usable for infants by compounding.

EDITH ROSATO, NATIONAL ASSOC. OF CHAIN DRUG STORES: The pediatric suspension is usually dispensed for infants or for children that cannot swallow tablets, and also for adults that can't swallow tablets. So, it's used pretty frequently.

PILGRIM: Liquid Tamiflu is now in such short supply the FDA, in July and again in October, issued emergency measures to extend some lots of Tamiflu for use beyond their expiration dates on the package.

So, for example, one lot of Tamiflu due to expire May 31, 2005 can now be used until February 28, 2010.

Kitty Pilgrim, CNN.

(END VIDEOTAPE)

HARRIS: And we are pushing forward right now with the next hour of CNN NEWSROOM with Kyra Phillips from New York City.