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The President & the Bankers; Pakistan Holds 5 U.S. Terror Suspects; Green Jobs a Growth Industry

Aired December 14, 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: With Christmas closing in, thousands of Christians have joined a growing movement that encourages people to spend less and give more. Here's CNN's Christine Romans.

(BEGIN VIDEOTAPE)

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice-over): For Ken and Joanne Hawkins and their four kids, the family that prays together shops together.

JOANNE HAWKINS, ADVENT CONSPIRACY PARTICIPANT: Christmas has always been very chaotic, a lot of shopping, a lot of wrapping, and craziness and then January would come around and it would be this whole letdown.

ROMANS: But that's changing this year. The Hawkins family has joined a growing Christian movement that calls it self the advent conspiracy, a conspiracy that boils down to this -- conspire to give fewer more thoughtful gifts and put the savings toward a good cause. The recession has made the message resonate. This clip promoting the true meaning of Christmas has gone viral, more than a million views on youtube. Here in St. Louis, pastors gather for a briefing on how to join the advent conspiracy and get a pep talk from professional baseball player and devotee Albert Pujols (ph). More than 1,000 churches have signed on.

GREG HOLDER, CO-FOUNDER, ADVENT CONSPIRACY: We're seeing a variety of different church types, mega-churches, house churches, mainline established churches. It's crossing a variety of lines because we're remembering what we have in common and that's the story of Jesus and this longing that each of us has to make a difference.

ROMANS: The Hawkins pastor is hoping his parishioners will think before they buy.

FR. JONATHAN MITCHICAN, PASTOR, CHURCH OF THE HOLY COMFORTER: We're not saying, you know, don't buy anything, but spend less. Buy one less gift. Don't go into debt. Buy less, worship more.

ROMANS: The church has held seminars and make your own gift workshops, raised money through its annual bazaar. Sermons have focused on the movement's four tenets: worship fully, spend less, give more, love all. The Hawkins family is trying to do just that.

HAWKINS: It's not about things and the commercialism of Christmas. Not saying that we're not going to get any gifts, of course, we're going to get gifts. But we're going to spend less. We're going to really look at how we spend our money.

ROMANS: Of course, devout Christians every year decry the commercialism of their holiday. The question is, does the Advent Conspiracy still resonate once the recession is finally over?

Christine Romans, CNN.

(END VIDEOTAPE)

HARRIS: And time now for your top-of-the-hour reset.

I'm Tony Harris in the CNN NEWSROOM.

It is noon at the White House, where President Obama will speak soon, fresh out of a meeting with the nation's top bankers over at the Capitol. The Democrats' fragile 60-vote coalition on health care reform shows signs of cracking again.

And it is 9:00 a.m. in California, where an explosion of green jobs may help the state rebound. I will talk to Governor Schwarzenegger's top man on jobs.

Let's do this -- let's get started.

We expect to hear from President Obama in about 10 minutes. Right now, is he wrapping up an hour-long sit-down with a dozen of the nation's top bankers, some in person, some by video linkup. The president wants them to step up lending, to put some pep in the economic rebound.

Let's talk about all of this with Christine Romans, who will be joining us in just a minute. She will be joining us from the Time Warner Center in New York. And Stephanie Elam over at the New York Stock Exchange.

Stephanie, is this a real woodshed moment for the president? It seems to me, it doesn't need to be. I mean, the president has got some powerful arguments on his side. Small businesses, in some cases, not all, looking to expand the unemployment numbers, suggest that the bankers should help. And, oh, by the way, Americans helped you when you needed it.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, Tony. And also, when you take a look at it, on this particular issue, Obama also has the backing of the nation.

People really feel like the banks need to do better to help out these small businesses, to help out people, to help keep people in their homes. It obviously becomes more of an issue when you have an unemployment rate at 10 percent. Granted, it ticked down from month to month, but it's still really high.

So, there's some people who are saying, you know what? President Obama and the administration could have done more by holding back some of this TARP money or making it so that the banks had to hold on to the TARP money before they took it back, saying we're going to wait until things look healthier in the overall economy.

These guys on Wall Street, they've been doing really well this year. Since the March lows, the bank stocks have really come back, and you can see a nice little chart for them. But it hasn't been the same story for the people who are on Main Street, and that's the issue they want to tackle here.

Now, how much can be done in an hour-long meeting? I'm not exactly sure that you can come out and, you know, the birds are going to sing and we're all going to see rainbows after this.

HARRIS: Oh, that's nice.

ELAM: I'm sorry, but we're not going to see that. It won't be Disney here.

But if you take a look at this bar chart that we have up, you can see where the lending really got tight. And where banks were tightening their lending standards was the second quarter last year, and it didn't start to loosen until the second quarter of this year, but that's when we saw unemployment peaking. Still, while it's coming down, while some banks may not be tightening, they can still not be easing their lending stards, and that still makes it very difficult for those people who are trying to get back on their feet.

HARRIS: Yes.

Christine Romans joining us now.

And Christine, how much can you get done in an hour-long meeting? What do you expect to come out of this, if it already wasn't baked into the cake and we'll get just some announcement of what was previously agreed to in about 10 minutes with the president?

ROMANS: ... curious about is what they can come out with? Can they come out with some sort of action plan that's going to make everybody happy, or is this political theater so the president can really kind of connect with the populist outrage and make the Wall Street banks look like bad guys?

Here's the issue, Tony, too, that you've got two populist themes that are running counter to each other. One, the American people are saying we want our money back. But when they give the money back, then we don't have the leverage, the government doesn't have the leverage anymore against those banks.

So, give us the money back, but lend, lend, lend. As Stephanie points out, quite rightly, some -- many say that if you still had the TARP money on the books, then you'd be able to lend more.

Look, they paid out $245 billion in TARP money to these guys -- I've got a little screen to show you -- and they've repaid about $116 billion so far. I mean, they're working pretty fast to try to give it back to the Treasury, and now we heard from Citi this morning that $20 billion is going to go back from Citi. We still have a large stake in Citi because we own a lot of the stock there. But, Tony, this thing is still, you know, the unintended consequences of just all of last year. It's going to play out for a long time.

ELAM: And the thing is, on top of it, you've got the stocks of these banks taking a bit of a hit because, basically, it's watering down the value of the stock because of the way they're going about paying this money back. They're willing to do that because they're focused, so much of it, it seems, because they want to keep the government out of their boardrooms when they're deciding on what their executives should be paid. Some of them -- in the case of Bank of America, who needed a new head of the bank by the end of the year, they said they're having difficulty filling that position because of the fact that they have all those restrictions.

HARRIS: OK. So, the president is in the room with the CEOs, and the American people are expecting him, I would imagine, to advocate for them. So, what's the president's push here? Is it look, you CEO, you have to help your clients restructure debt, in some cases, raise equity, make acquisitions, underwrite some bonds to cities and states so they can build schools, roads, hospitals? And through those projects, we get people back to work.

Is that essentially the pitch here?

ELAM: I think it's interesting...

ROMANS: You know, look, I think that he's going to sit in there and he's going to say, you guys are the smartest guys in the room, right? Or you think you are. Then come up with something. Fix it.

We've had months here we've been talking about trying to get this. Fix it, come up with something that we can sell to the American people and show that you do get it, that you get it, that brought us to the brink. You were bailed out by taxpayers. Now taxpayers want to see some return on that investment. They want to see the return on the investment and taxpayers so far haven't.

I think that he's going to really let them have it. Remember in the spring we're told that he said to them, "The only thing standing between you and the pitchforks from the public is me." So let's work together. And they really haven't. So I think we're going to see that kind of language again.

ELAM: And on top of it, President Obama said that when all this was going down, people were, like, this is government taking over banks, this is not exactly how it's supposed to be working in a free market. He promised that this would not be the case, that the banks would take back over their ownership. And that is happening.

So, he can say to the banks, listen, we held up our end of the bargain. Now you need to do your part to get out there and start lending.

Obviously, the banks got burned by lending to people too freely, perhaps. And at the same time, a lot of Americans were getting out and getting too much credit at the time. So, you've got this sort of balancing act that is happening here, Americans pulling back, and you also have banks who have been a little bit more stingy about loaning.

Both of those things are going to change though. They have to.

HARRIS: Let's see what we hear from the president in just a couple of minutes.

Ladies, appreciate it, as always. Thank you.

And you can hear directly from President Obama on the nation's financial recovery. He is expected to speak any time now. And, of course, we will bring you the president's remarks live, right here in the CNN NEWSROOM, scheduled -- if you're following -- scheduled for 12:10 p.m. Eastern Time.

Then I will talk to White House senior advisor Valerie Jarrett. Good get for us at 12:50 p.m. Eastern for the insider view of what really happened in the president's meeting with the bank CEOs this morning.

Checking the wire now.

At Mt. Hood in Oregon, crews are waiting for a break in the weather so that they can resume their fly-over search for two missing hikers. Officials say the threat from avalanches is too great to keep looking on foot. The hikers set off to climb the 11,000-foot peak Thursday, along with another man. The body was found Saturday.

Here's how a local chaplain described the hikers.

(BEGIN VIDEO CLIP)

DENNIS SIMONS, CHAPLAIN: They've known each other through Christian camps and churches, and they've climbed together before.

(END VIDEO CLIP)

HARRIS: Italian Prime Minister Silvio Berlusconi hit in the face by a flaying object at a political rally. Did you see that?

We are told the weapon used was a small statue of Milan's cathedral, but it packed enough of a wallop to break the prime minister's nose and a couple of teeth. He's recovering in the hospital. Police say his attacker who was apprehended at the scene has a history of mental illness.

Militants target Afghan police officers, killing 16 in separate gun battles. The attack happened at checkpoints in the north and south. Gunmen hitting almost simultaneously just before dawn.

It is yet another sign of the security crisis gripping the country. This comes as the Joint Chiefs of Staff chairman, Admiral Mike Mullen, visits Afghanistan. He discussed the mission at a news conference in Kabul.

(BEGIN VIDEO CLIP)

ADM. MIKE MULLEN, CHAIRMAN, JOINT CHIEFS OF STAFF: The most important goal in this strategy is the elimination of the safe havens for al Qaeda and its extremist allies, and to ensure that Afghanistan does not provide a safe haven in the future. Part of that certainly is to capture, kill bin Laden and Zawahiri and his other compatriots.

(END VIDEO CLIP)

HARRIS: Mullen says he is concerned about the growing level of collusion between Afghan Taliban, al Qaeda and other extremists in Pakistan.

No deportation to the United States, no handover to the FBI. Five Americans suspected of plotting a terrorist attack won't be leaving Pakistan anytime soon after a court ruling today.

CNN's Arwa Damon joining us live from Islamabad.

And Arwa, good to see you.

Why was this court order issued?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Well, Tony, it's actually some very interesting circumstances surrounding that. Here's what happened.

An individual by the name of Khalid Khuasia (ph), who's a former Pakistani official who started up an organization to protect human rights in Pakistan decided to file a petition to the court. Now, under Pakistani law, is he able to do this if he perceives and any other individual perceives that an unlawful act took place. In this case, it's that the five who were detained did not appear in front of a court within 24 hours.

What makes this more interesting, though, is that this petition wasn't filed because there was any sort of unlawful behavior against them. That was just the excuse.

The end state is that this individual was concerned that the five would be deported back to the United States before Pakistani authorities could actually conclude their own investigation. So there is going to be a hearing on this on Thursday -- Tony.

HARRIS: And Arwa, what sort of cooperation is going on between the United States and Pakistan?

DAMON: Tony, there's been a fair level of cooperation. At least that's what we're hearing from Pakistani officials. They're saying that there's a joint investigation going on right now.

More importantly, though, they're saying that it was in fact the FBI that tipped them off that these five individuals had gone missing in the United States and that they could perhaps turn up in Pakistan. And that is what caused the Pakistanis to then place them on their radar, which led to the arrests of these five alleged terror suspects. And the Pakistanis are pointing to this as an example of how cooperation between the U.S. and Pakistan can lead to the breakup of these types of cells. As we have been hearing, Pakistan is very much at the center of this so-called war on terror. There's a lot of pressure on the government here to take harsher action against militants operating within its own borders, take harsher actions against the Afghan Taliban that is seeking safe haven here. And Pakistani officials are saying, look, if you give us the intelligence, we'll do it. But even more importantly, they're saying, look, if you want us to go after these guys, give us the technology, give us the drone technology. And they're saying that the arrests of these five is a clear-cut example of how cooperation between the two countries can help clamp down on terror -- Tony.

HARRIS: That's interesting. All right.

Arwa Damon for us in Islamabad, Pakistan.

Arwa, thank you.

The East and West Coasts taking a real beating from severe weather. We will show you the damage.

First, though, looking at Santa in a completely different way. We will show you just because. It's our "Random Moment" in 90 seconds.

(COMMERCIAL BREAK)

HARRIS: Yes, you bet your jingle bells Santa is coming to town. Check out our "Random Moment of the Day."

HARRIS: Oh yes. OK.

A crush of nearly naked Clauses bolted through Boston this weekend. All you needed was just a little sliver of a swimsuit topped off with a Santa hat.

It was the 10th annual Santa Speedo "Run. The chilly jog raised money -- hi. Good to see you -- raised money to send kids to camp next summer. Yes, when it's a lot warmer.

And that is our "Random Moment of the Day."

Why? Just because we can.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HARRIS: Let's get you caught up on our top stories now.

The three Americans being detained in Iran will stand trial, according to Iran's foreign minister. The state-run media isn't reporting when the trial will begin or what the exact charges are. Iran says the hikers had suspicious aims when they crossed over an unmarked border in July. Family members say it was a complete and total accident. Thailand is holding the crew of a plane loaded with weapons from North Korea. The plane was seized during a refueling stop in Bangkok on Saturday. The five men aboard were denied bail in court today.

NASA has launched a new high-tech telescope into space called the WISE. Scientists say it will help find undiscovered objects, including asteroids, that could crash into Earth. The telescope uses an infrared camera to detect light and heat.

"The Princess and the Frog" claimed the top spot at the box office this weekend, bringing in an estimated $25 million. The movie is Disney's first animated feature about an African-American princess.

CNN's Fredricka Whitfield has reaction from the premiere in Atlanta.

This is exactly the answer. You must kiss me.

Excuse me?

(BEGIN VIDEOTAPE)

(BEGIN VIDEO CLIP, "THE PRINCESS AND THE FROG")

UNIDENTIFIED VOICE ACTOR: This is exactly the answer! You must kiss me.

VOICE OF ANIKA NONI ROSE, ACTRESS: Excuse me?

(END VIDEO CLIP, "THE PRINCESS AND THE FROG")

FREDRICKA WHITFIELD, CNN CORRESPONDENT (voice-over): Disney's latest fairy-tale release, "The Princess and the Frog," has hundreds of little fair maidens flocking to theaters.

UNIDENTIFIED FEMALE: I just really wanted to see this movie so badly.

WHITFIELD: More than 400 kids and adults from this Brownie troop showed up for a special screening in Atlanta.

DESIREE ROBINSON-PHILLIPS, COORDINATOR/PARENT, BROWNIE GIRL SCOUTS: We have close to 500 African-American princesses, princes, mothers and some fathers here to celebrate a monumental moment in Disney history. More than 70 years it took to get us to this moment, and we're thankful for the fact that, finally, we have an African-American princess.

WHITFIELD: With the debut of Disney's first African-American princess, many parents, some even dressing for the occasion, are as excited as their children.

TISHA DESHIELDS, PARENT: I'm excited. You know, I'm excited to share it with my daughter, so that when she grows up, she'll always remember this time that she and mommy dressed up and were princesses for the day.

GENISE HUEY, PARENT: We're proud that Disney recognized the importance of having a black princess.

BERT THOMAS JR., PARENT: Something new that we need to see, something positive for our young girls as well as our young boys.

LAWANDA OBANNON, PARENT: I hope it is a sign of the times, and for such a company as Disney to go ahead and be the pioneer and starting something like this, I think it's great.

WHITFIELD: Images like this can be a boost for a child's self-esteem, says one clinical psychologist.

DR. LILY D. MCNAIR, CLINICAL PSYCHOLOGIST: The more we see positive images and depictions and portrayals of African-American girls and women, the more girls will see the possibilities for themselves in various arenas of life. Seeing images that look like you, it says to a little girl, "You, too, can do this. You are important enough that we're going to put images that look like you out there."

VOICE OF ROSE: Just one kiss.

WHITFIELD: But what do the kids think of the movie?

UNIDENTIFIED FEMALE: I thought it was very, very good. I liked when the princess kissed the frog.

UNIDENTIFIED FEMALE: Yes, I liked that part.

WHITFIELD: And while not everyone is caught in the magic of this Disney princess movie, many hope it is seen in a larger context.

MCNAIR: This is the first time African-American girls can see on the big screen, in a Disney movie, a princess who resembles them. And that's very powerful.

WHITFIELD: But for now, these girls are content to be little princesses, even if just for a day.

Fredricka Whitfield, CNN, Atlanta.

(END VIDEOTAPE)

HARRIS: Do these tough economic times have you looking for a job? For many of you the answer is clearly yes. Find out why you may want to go green.

(COMMERCIAL BREAK)

HARRIS: And before we get to David Crane in just a moment, I want to remind you again that President Obama is expected any moment now to actually make some remarks from the Diplomatic Reception Room of the White House after his meeting this morning with the CEOs of the top banks and financial institutions. And the president will obviously be talking about financial recovery, and his remarks expected in just a couple of minutes here.

We'll bring those remarks to you as soon as we see the president. Green and growing. Eco-friendly jobs are on the rise in some parts of the country, as you know, especially in California.

That's where we check in this morning with David Crane. He is a special adviser to Governor Schwarzenegger on jobs and economic growth.

Early where you are. Thanks for taking the time, David. Good to see you.

DAVID CRANE, OFFICE OF GOV. ARNOLD SCHWARZENEGGER: My pleasure.

HARRIS: You know, we're going to show some mapping here that clearly indicates that California is leading the way in the number of green jobs. And you're really showing some spectacular growth.

How is this happening, David? Explain this to us. What are you doing right?

CRANE: Well, it's really a result of two things.

One, our policies that Governor Schwarzenegger has put into place to harness capitalism in the private sector to go charging after what is really the largest market in the world, this $6 trillion energy market. As the world transforms into new forms of energy and new ways of saving energy, California is leading the way. And in so doing, creating a lot of jobs and improving the environment.

HARRIS: Well, let's talk about those jobs. We've got a lot of people, as you know, out of work in the country. So maybe there's plenty we can learn from what you're doing in California.

What kinds of jobs are being created in your state? Are we talking about jobs for grid engineers, architects, builders, maybe energy auditors? What specifically, kinds of jobs are you creating?

CRANE: All of those and more. It's like any other new sort of sector. You can have jobs for engineers and grid engineers, as you just described, and designers and accountants, and installers and every other function that accompanies a transformation of energy usage. So it runs the gamut from engineering to installation to administrative.

HARRIS: Good-paying jobs?

CRANE: Yes, good paying jobs. And, in fact, one of the interesting features is that manufacturing, which has been declining in the United States overall, manufacturing related jobs that have been added in this sector are roughly twice the -- they're being added in that sector at roughly twice the rate of manufacturing generally in the economy.

HARRIS: So let's talk about it a bit more. How much green technology is coming out of California. And beyond the design aspects, is that technology actually leading to manufacturing activity in your state? CRANE: The answer to both is yes. And think of it this way. We have people that are developing products, ranging from energy efficiency software -- you know, energy efficiency is one of the great ways to improve energy use while saving money and boosting profits. You have companies generating energy efficiency software, companies creating new ways of generating power, ranging from algae and other biofuels, to solar power, to wind power and more. And then manufacturing products, where manufacturing is required, manufacturing those products in California and elsewhere.

HARRIS: All right, David, make the case here that these green sector jobs are sustainable. I mean, will this sector build a new middle class for, you know, for my kids, for your kids?

CRANE: Well, we certainly think it's sustainable for two reasons. One is, just the size of the market. As I mentioned, the energy market is a $6 trillion market around the world. Anybody who thinks that that market isn't transforming is fooling themselves. Countries ranging from China and India to the United States are all changing the way that they use and create and store energy. So that's sustainable in terms of demand. And then you need the right government policies. And if you go back and look at U.S. policies in those regard historically, they haven't been very successful because governments kept changing their mind.

Instead, in California, what Governor Schwarzenegger has done is establish policies that create demand, long-term demand for these new technologies but without picking winners. So that leads to competition in the marketplace without governments saying you're going to use this form or that form and that produces a lot of activity and jobs.

HARRIS: You may have given a partial answer to my next question. To get real job growth, don't you have to keep the jobs you have in the existing energy sectors, be it oil, nuclear?

CRANE: No.

HARRIS: No?

CRANE: No. I mean, just look at California's economy over the last 30 years. We have the most diverse and creative and -- economy on the planet. And 30 years ago, the companies that dominated California were in the aerospace industry and other industries. Nobody 30 years ago could have told you that the new companies dominating California or exciting the world were companies named Google or FaceBook or Twitter or biotechnology companies like Genentech and others.

So we don't have to keep the same jobs that we had before. If that was the case, we'd be following the path of those states that tried to preserve traditional automobile manufacturing or going back 100 years ago to buggy whip manufacturing. You've got to let economies destroy old industries and create new industries for there to be growth. And that's what's happening in California and will continue to happen in California.

HARRIS: That's scary for a lot of the folks though.

CRANE: Well, sure, change is scary, but the lack of growth is even scarier. If you don't change, if you don't adapt to a new world, then you end up like those states that tried to hold on to their traditional jobs for decades.

HARRIS: Right.

CRANE: And the broadcast industry understands this very well. Change is in the nature . . .

HARRIS: Careful, careful.

CRANE: Of economies. And if you don't know where -- if you don't predict where economies are headed and don't act accordingly and don't create, then you'll fall behind. And if we don't do it, China and India will do it.

HARRIS: Yes. David, appreciate it. Thanks for your time this morning. David Crane with us.

CRANE: My pleasure.

HARRIS: Yes, my pleasure.

The president says banks are not lending enough to small businesses. Is he correct in that assessment? Cnnmoney.com's Poppy Harlow joining us now from New York.

Poppy, good to see you, first of all. These banks are, as you know, getting a lot of criticism for sitting on their TARP money. Is it justified?

POPPY HARLOW, CNNMONEY.COM: Yes. I think some is and some isn't. When you look at the numbers, and that's what we're going to do first for you, then we're going to let you hear from some of the heads of these banks, Tony. But when you look at consumer credit, it fell in October. That was the ninth straight monthly drop. You dig into the numbers a little bit more and what you see is that the 22 banks in this country that got the most TARP money, they cut their small business lending by a total of $10.5 billion when you look at from April to September of this year.

The reason that's so important, Tony, the man you were talking to just said it, small businesses creating jobs so important. You've got small businesses really as the life blood of our economy. They employ more than half of our entire population. For them to expand and grow, they need credit.

So let's take a look at these banks. Three of the bank CEOs meeting with the president today, what they're doing on the lending front. Look first at Ken Lewis of Bank of America. He is in that meeting with the president right now. Bank of America got $45 million in TARP money from the government. It paid it back last week, but their small business lending, Tony, is down 5 percent from April to September. A similar story with Jamie Dimon at JP Morgan Chase. They paid back their $25 billion in TARP money. Their small business lending fell 2.5 percent in that six month period.

And then look at Wells Fargo. This is very important. This is actually the country's biggest small -- lender to small businesses essentially. John Stumpf, the CEO there. They got $25 billion in TARP money. They have not paid it back and their small business lending is down nearly 4 percent. So with Wells Fargo, the president could have a little more leverage here, Tony, talking about, hey, you really need to up the lending. You're still holding on to taxpayer dollars.

But it's critical to note the president doesn't have that same leverage over the banks that have paid back this TRAP money, Tony. That's very important to recognize.

HARRIS: Yes, but when you think about it, Poppy, isn't it -- yes, absolutely. At 2 percent, a 2 percent decrease in small business lending, 4 percent for another bank. I mean, that is significant. That is a lot of innovation, a lot of small businesses who are being placed on the sidelines here, not able to grow their businesses or sustain their businesses.

Now the president is also urging these banking execs to curb compensation. That seems to be a pretty tall order, isn't it.

HARLOW: Yes. That's critical. But the banks here are getting a little bit of a mixed message I think from the administration. They're saying you've paid back your TARP money. We want you to lend more. But wait, Treasury saying, we want you to have a strong capital cushion. Make sure you have enough capital reserves so that we don't see another potential failure of the system.

So they're dealing with some hard issues here and a lot of different rules coming from the administration. I will say, it's a complicated issue when it comes to compensation because if you paid back TARP money, you can pay your employees whatever you want. So we asked some of the top bank CEOs a little earlier this fall what they thought about compensation given the entire financial collapse. Take a quick listen to them.

(BEGIN VIDEO CLIP)

JOHN MACK, CEO, MORGAN STANLEY: The mistakes we made were in the way we rewarded people. Too many of our companies in this business reward people on a very short-term basis.

LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: We're going to have to get the compensation system more aligned. And, of course, whatever system we had in place, which I thought was pretty good, we're going to tighten up. So if you ask me what I -- if I'm going to change it, would I have changed it earlier had I had this kind of wisdom that I have now, of course I would have.

JAMIE DIMON, CEO, JP MORGAN CHASE: I've always said of our compensation, it should be fair, it should be reasonable, it should be -- look everyone in the eye and say, you're being treated fairly.

MACK: Compensation is really difficult. And as long as people are unemployed, as long as people have troubles keeping their home, I don't think there's anything Wall Street can do to put that at ease.

(END VIDEO CLIP)

HARLOW: All right. And, Tony, I think he said it well. Nothing that Wall Street can do to put people's minds at ease when they don't have jobs and they're losing their homes. We're updating this story, of course, waiting for the president's comments. We'll give you all the latest right here. "Can OBama bully the bankers," one of our top stories today on cnnmoney.com.

Tony.

HARRIS: All right, Poppy, good to see you. Thank you.

Houston's mayoral race was so close, the city held a runoff over the weekend. The results are now in and they are historic. We will hear from the city's first openly gay mayor. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: And the president now from the Diplomatic Reception Room.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But also for the economy to discuss where we've been, what we expect of them going forward, and how we can work together to accelerate economic recovery.

Our nation's banks play and have always played a crucial role in our national economy, from providing loans for homes and cars and colleges, to supplying the capital that allows entrepreneurs to turn ideas into products and businesses to grow, to helping people save for a rainy day and a secure retirement. So it's clear that each of us has a stake in ensuring the strength and the vitality of the financial system. And that's why one year ago, when many of these institutions were on the verge of collapse, a predicament largely of their own making, oftentimes because they failed to manage risk properly, we took difficult and, frankly, unpopular steps to pull them back from the brink. Steps that were necessary not just to save our financial system, but to save our economy as a whole.

Today, due to the timely loans from the American people, our financial system has stabilized, the stock market has sprung back to life, our economy is growing and our banks are once again recording profits. A year ago, many doubted that we would ever recover these investments, but we've managed this program well.

This morning, another major bank announced that it would be repaying taxpayers in full. And when they do, we'll have collected 60 percent of the money owed, with interest. We expect other institutions to follow suit and we are determined to recover every last dime for the American taxpayer.

So my main message in today's meeting was very simple, that America's banks received extraordinary assistance from American taxpayers to rebuild their industry. And now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy. That starts with finding ways to help credit-worthy small and medium sized businesses get the loans that they need to open their doors, grow their operations and create new jobs.

This is something I hear about from business owners and entrepreneurs across America. That despite their best efforts, they're unable to get loans. At the same time, I've been hearing from bankers that they're willing to lend but face a shortage of credit worthy individuals and businesses.

Now, no one wants banks making the kinds of risky loans that got us into this situation in the first place. And it's true that regulators are requiring them to hold more of their capital as a hedge against the kind of problems that we saw last year. But given the difficulty business people are having as lending has declined, and given the exceptional assistance banks received to get them through a difficult time, we expect them to explore every responsible way to help get our economy moving again.

And I heard from these executives that they are engaging in various programs like second look programs, hiring more folks, raising their target goals in terms of lending, all of which sounded positive, but we expect some results because I'm getting too many letters from small businesses who explain that they are credit worthy and banks that they've had a long-term relationship with are still having problems giving them loans. We think that's something that can be fixed and so I urged these institutions here today to go back and take a third and fourth look about how they are operating when it comes to small business and medium sized business lending.

We also discussed the need to pass meaningful financial reform that will protect American consumers from exploitation and American -- the American economy from another financial crisis of the kind which we just came out of. I noted the resistance of many of the financial sectors to these reforms. The industry has lobbied vigorously against some of them -- some of these reforms on Capitol Hill.

So I made it clear that it is both in the country's interest and ultimately in the financial industry's interest to have updated rules of the road to prevent abuse and excess. Short-term gains are of little value to our banks if they lead to long-term chaos in the economy. And I made very clear that I have no intention of letting their lobbyists thwart reforms necessary to protect the American people. If they wish to fight common sense consumer protections, that's a fight I'm more than willing to have.

The way I see it, having recovered with the help of the American government and the American taxpayer, our banks now have a greater obligation to the goal of a wider recovery, a more stable system, and more broadly shared prosperity. So I urged them to work with us in Congress to finish the job of reforming our financial system, to bring transparency and accountability to the financial markets, to ensure that the failure of one bank or financial institution won't spread throughout the entire system and to help protect consumers from misleading and dishonest practices with products like credit and debit cards with mortgages and auto and payday loans.

Now, I should note that around the table all the financial industry executives said they supported financial regulatory reform. The problem is, there's a big gap between what I'm hearing here in the White House and the activities of lobbyists on behalf of these institutions or associations of which they're a member up on Capitol Hill. I urged them to close that gap and they assured me that they would make every effort to do so.

In the end, my interest isn't in vilifying any one person or institution or industry. It's not to dictate to them or micro manage their compensation practices. To ensure that consumers and -- my job is to ensure that consumers and the larger economy are protected from risky speculation and predatory practices, that credit is flowing, that businesses can grow, and jobs are once again being created at the pace we need.

Some of the banks and financial institutions have taken small but positive steps to improve lending to small and medium-sized businesses, as I indicated. They've begun reworking mortgages that are now under water because of declining home values and they have acknowledge that much more needs to be done going forward.

Many have begun to follow our lead in shifting from paying huge cash bonuses, to awarding long-term stock, which will encourage more prudent decision making. But as I indicated in this meeting, they certainly could be doing more on this front, as well.

And these efforts reflect a recognition ultimately that the fate of our financial institutions is tied to the fate of our economy and our country. And these institutions can't endure if workers don't have jobs and businesses can't grow and consumers don't have money to spend. Ultimately, in this country, we rise and fall together. Banks and small businesses, consumers and large corporations, and we have a shared interest in working together to ensure a lasting recovery that will benefit all of us and not just some of us.

I called today's meeting with this in mind and I told the group that I look forward to continued engagement and progress in the months and years ahead.

Thank you very much.

HARRIS: All right, and there you have it, President Obama recapping his meetings with the CEOs of top financial industry banks and other players in the industry this morning. The president asking that the banks take a new look at their lending practices and the bankers promising to do just that. We'll see where it goes from here.

Let's take a quick break. You're in the CNN NEWSROOM.

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HARRIS: Got to tell you, Houston made history over the weekend, becoming the largest city in America to elect an openly gay mayor. Annise Parker dropped in on the CNN NEWSROOM this morning to reflect on her win.

(BEGIN VIDEO CLIP)

ANNISE PARKER, HOUSTON MAYOR-ELECT: The city of Houston is going to change with me as mayor because I face a very different set of circumstances than previous mayors. And it's a new city. But the fact of my sexual orientation has never particularly impressed Houstonians and I don't think that that had anything to do with who voted for me in this election.

(END VIDEO CLIP)

HARRIS: OK. Still, Mayor-elect Parker says her election shows Houston's diversity and may help change perceptions of the nation's fourth largest city.

Let's get a check of the big board in just a second. But first of all, at this time, we'd like to remind you to get the latest financial news and analysis, if you need it, here's the place to go, one-stop shopping right here at cnnmoney.com.

Let's swing to the big board now. Better than three hours into the trading day. Almost three and a half hours into the trading day. And the Dow is in positive territory, up 39 points. Nasdaq, at last check, up 20. And we're following these numbers throughout the day with Stephanie Elam for you right here in the NEWSROOM.

Tom Smallwood of Saginaw, Michigan, was laid off from General Motors almost a year ago. He seized on the opportunity to chase a dream. And, boy, did it ever pay off. Smallwood has won the Professional Bowlers Association championship yesterday in Texas, upsetting the reigning player of the year. With it, he gets a $50,000 first prize and a chance to continue his new PBA tour career. Way to go.

He is fresh from his Heisman Trophy win and talking in the CNN NEWSROOM. Alabama sophomore running back Mark Ingram named college football's top player. The closest vote in Heisman history and the first Heisman for the Crimson Tide. Ingram, the can-do man on team that will play for the National Championship next month.

(BEGIN VIDEO CLIP)

MARK INGRAM, 2009 HEISMAN TROPHY WINNER: The struggle that sometimes me and my family had, just to know that I could do this for them was real special to me and all the years of hard work. Extra time in the summer working out, running bleachers when everybody else was playing video games, to know that that all paid off is real special to me. And just my father not being there, he's there in my heart and he's there in my spirit and I love him to death and that's all that matters.

(END VIDEO CLIP)

HARRIS: Ingram's father, who is also named Mark, played for the 1991 Super Bowl Champion New York Giants. The elder Ingram will be sentenced soon for bank fraud and money laundering. All right, some severe weather all over the country. East and west. There's the man once again, Chad Myers, to give us a wrap on it.

Good to see you, Chad.

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HARRIS: On shaky ground. Is the latest Democratic health care compromise doomed?

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HARRIS: On Capitol Hill, lawmakers are trying to salvage the latest health care compromise effort. Democrats were hoping to get the bill through the Senate before Christmas. Our Jim Acosta reports on where things stand right now.

JIM ACOSTA, CNN CORRESPONDENT: Tony, the health care reform compromise, worked out by liberal and conservative Democrats, is in trouble. And it's not just the usual party holdouts who are having second thoughts. Even one pretty reliable supporter of President Obama is warning Democratic leaders may have to come up with something else.

(BEGIN VIDEOTAPE)

SEN. HARRY REID (D), MAJORITY LEADER: A basic right for all, not just . . .

ACOSTA (voice-over): Just days after Democrats thought they were closing in on a compromise to pass health care reform in the Senate, the party's delicate coalition of 60 votes started cracking once again.

SEN. CLAIRE MCCASKILL (D) MISSOURI: I have to be assured that this is going to bring down the deficit and it's going to bring down health care costs for most Missouri families.

UNIDENTIFIED MALE: And if it doesn't?

MCCASKILL: Well, then we are going to have to go back to the drawing board.

ACOSTA: Back to the drawing board after a group of 10 liberal and conservative Democrats agreed to strip the public option out of the Senate bill and add a provision allowing 55 to 64-year-old Americans to buy into the Medicare program for seniors. But before the non- partisan Congressional Budget Office could weigh in on the costs of the so-called Medicare buy-in, the grumbling had begun.

SEN. JOE LIEBERMAN (I), CONNECTICUT: I think what's -- this Medicare buy-in is frankly another way to try to get to a single payer, government-controlled health care system. And I and Senator Nelson think that would be bad for our country and for the people of our country. ACOSTA: Even party loyalists are skeptical. A letter signed by some of the most liberal senators in Washington, including names like Leahy and Feingold, objects to the Medicare buy-in because of the program's lower reimbursement rates for doctors. Add to that Republican complaints that Medicare is going bankrupt.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Yes, Medicare, of course, is already unsustainable. It's going broke in seven years. And the bill itself, the core bill, purports to cut Medicare by half a trillion dollars. Then if you expand Medicare and put even more people on it, you make it even more unsustainable.

ACOSTA: What do Democrats want this holiday season? Try more votes in the Senate.

SEN. JAY ROCKEFELLER (D), WEST VIRGINIA: The reason it's so difficult is because every single Democrat and independent has to vote for it. You see? Because the Republicans are withholdings all of their votes.

ACOSTA: And getting those votes will come at a price.

LIEBERMAN: It's frankly time to start subtracting some things that don't belong there. And if we did that, I think this week we could get more than 60 votes, including some Republicans. and that's what it ought to be.

(END VIDEOTAPE)

ACOSTA: Question for Democrats may come down to this, can they live with a bill without a public option and without a Medicare expansion? Republicans are still betting they won't.

Tony.

HARRIS: Jim, appreciate it. Thank you.

Time to push forward now with the next hour of CNN NEWSROOM with Kyra Phillips.

KYRA PHILLIPS, CNN ANCHOR: Tony, great to see you.