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American Morning

President Announces Plans for Federal Spending Freeze; Many Haitians May Suffer From Post-Traumatic Stress Disorder; Haiti Starting Over in the Wake of the Quake; The Stimulus Project: Money Well Spent; A Look at a Hollywood Director's Passion to Help Haiti

Aired January 26, 2010 - 07:00   ET

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

(COMMERCIAL BREAK)

JOHN ROBERTS, CNN ANCHOR: A nation drowning in red ink and a White House under pressure. President Obama just a day before the state of the union set to announce a severe spending freeze. The big question this morning, will it have any effect on America's colossal debt?

Thanks for joining us for the Most News in the Morning on this Tuesday, the 26th of January. I'm John Roberts.

KIRAN CHETRY, CNN ANCHOR: And I'm Kiran Chetry. Glad you're with us. We have a lot of big stories we'll be telling you about in the next 15 minutes.

First, a plan to freeze spending coming from the White House. President Obama preparing to announce a three-year budget-cutting strategy during his state of the union address. It's set for tomorrow night.

He'll also be trying to reconnect with middle class Americans who believe he's left them behind. Suzanne Malveaux is breaking it down for us at the White House.

ROBERTS: And new video taken moments after the earth moved in Haiti, dazed and confused people on the streets, the scope of the disaster just unfolding. And today, two weeks later, millions of people are still shaken and will not go back inside. Dr. Sanjay Gupta is live in Port-au-Prince for us this morning, a city that's still in fear.

CHETRY: And all this week CNN is breaking down CNN is breaking down how $787 billion stimulus money is being spent. We're calling it "The Stimulus Project," and this morning we have uncovered your tax dollars going to keep food banks stocked with things like canned pork. But is that stimulating the economy? We're going to hear both sides of the debate.

ROBERTS: But first, it's like going on a diet after winning a pie-eating contest. That's how one Republican described the Obama administration's plan for a three-year freeze on federal spending. The announcement will come during tomorrow night's state of the union address. The president says he believes his idea to cut the budget will appeal to both parties.

(BEGIN VIDEOTAPE)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We're going to talk about how we can, first of all, focus on job creation and growth.

And I met with the Republicans, by the way, several weeks ago, and so I have their ideas. I know what they're proposing, and some of the things we proposed are some of the things that actually should get some strong bipartisan support.

You know, I would say that the one thing I'm clear about is that I'd rather be a really good one-term president than a mediocre two- term president. And I believe that.

(END VIDEO CLIP)

ROBERTS: Suzanne Malveaux is working her sources at the White House this morning, and she joins us now. When the White House says freeze in spending, it's very narrowly cast, isn't it?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You're right, John. And one of the things you hear the president talk about is really trying to be a good one-term president if he has to be. And that is about getting bipartisan support. It's really been a wake-up call for this president. That's why you hear him talking about, and he will talk about freezing discretionary spending.

It doesn't include homeland security, defense, or veterans affairs, but other items. They hope to in three years or so save about $250 billion.

It is a very controversial proposal, however, a lot of disagreements over whether or not this is the best approach. I want you to take a listen -- this is the former secretary of labor Robert Reich under the Clinton administration.

(BEGIN VIDEO CLIP)

ROBERT REICH, FORMER LABOR SECRETARY: I don't think it makes much sense, Larry, and I'll tell you why. The government under the circumstances we now face is the purchaser of last resort. Consumers are not buying. They're still scared, for good reason. Businesses are not investing very much. They don't want to invest if there are not consumers out there.

So government has got to spend. This is something a lot of people have difficulty understanding.

(END VIDEO CLIP)

MALVEAUX: John, he's not the only one who's complaining about this, saying it's a bad idea. There are some Republicans who have also said it doesn't go far enough when it comes to those spending freezes, those big, big items like Medicare, Medicaid, entitlement programs that are not necessarily being cut.

And there are some Democrats who are saying this goes too far. You'll have health care and education cut, things that they don't want to see on the chopping block.

What this does do, John, however, is moves this president closer to the right, and that is what he needs to do. He needs to attract those fiscally-conservative Democrats, independents, and some Republicans.

The administration and this president admitted yesterday that that was part of the reason why the problem that health care reform was not passed. He didn't get bipartisan support. I want you to take a listen to what he said to Diane Sawyer.

(BEGIN VIDEO CLIP)

OBAMA: We had to make so many decisions quickly in a very difficult set of circumstances that after a while we started worrying more about getting the policy right than getting the process right.

(END VIDEO CLIP)

MALVEAUX: And, John, that is what the course correction is all about, this go-round. This president obviously in his state of the union is going to be appealing to middle class voters and also to Republicans as well as Democrats, saying he wants bipartisan support. He's got some serious proposals on the table that he hopes will garner both sides' support, John.

ROBERTS: The Bush administration tried to reduce the so-called non-security discretionary spending, but, as always, the White House proposes and the Congress disposes. We'll see where it goes. Suzanne Malveaux for us this morning, thanks.

MALVEAUX: Obviously, yes. Thanks, John.

CHETRY: Well, in Haiti this morning, it's two weeks after the earthquake hit, and hope is arriving literally by the boatload. It's called the barge of hope, loaded with food and water, medical supplies, generators, other supplies, probably the biggest single shipment of relief aid.

They say it's enough to fill 150 aircraft, all of it donated by the people of Puerto Rico.

ROBERTS: One essentially that is not on that boat though is shelter. Haiti's homeless are pleading for tents. Even the president has vowed to live in one. He's asked the world for 200,000 of them. The United Nations says up to a million people do not have any shelter.

CHETRY: A CNN exclusive. This is new video obtained by CNN taken just moments after the earthquake hit. It shows the buildings crumbling, dust rising, and the screams coming from both outside and inside the rubble.

It's a moment in time where no one really knows yet just how bad it will be or how many thousands of people are trapped or, in the worst case scenario, already dead.

And those are images that many terrified people have been carrying around in their heads for the past two weeks, many of them still afraid to take their first steps inside. Dr. Sanjay Gupta takes a look at a city still on edge this morning.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Rumor of a big wave sends thousands running to higher ground, many of them leaving behind the only possessions they recovered after the quake. These injured survivors beg doctors to leave them outside. They're too frightened to be inside.

DAVID WALTON, PARTNERS IN HEALTH: The Army Corps of Engineers has been here three times and has cleared several of these buildings, but every time there's an aftershock, all of our patients run outside. There's just so much trauma, both psychological and physical, no one wants to stay. Both staff and patients refuse to go into any buildings.

GUPTA (on camera): And here's another good example of exactly what we're talking about. This is a standing house but there's nobody living inside. And it's hard to overestimate the impact of all these aftershocks on someone's psyche.

They're so frightened, they don't want to be in there. They're worried their house could come tumbling down. So instead they live like this. The live in these tents, makeshift tents, because they simply want to be outside where they think it's safe.

How scared were you?

UNIDENTIFIED FEMALE (via translator): Very scared.

GUPTA: It's been two weeks now since the earthquake. Are you still scared?

GUPTA (voice-over): She says there's no one to help, and she has nightmares of another quake.

GUPTA (on camera): How many people are there like you out there? How many people in Port-au-Prince are going what you're going through?

UNIDENTIFIED FEMALE (via translator): Most people.

GUPTA: It is difficult to diagnose post-traumatic stress disorder less than a month after the quake, but we do know a few things. First of all, it is worse in people with some sort of preexisting mental illness, people who have endured the most trauma or seen the most horrific images. Best advice to them -- try and be with family, and also turn to your faith if you can. But it's difficult when even the churches have been destroyed.

GUPTA (voice-over): So what does work? Access to the basic necessities again -- clean water, food, and even what might be considered perks -- pillows, blankets, some sort of routine.

No doubt all of this is tough, and it is dangerous to generalize, but there's also simple evidence that it can work. Today this young boy built a kite out of a paper plate. Despite the odds, he gets it flying, bringing a smile to his face and ours for just a moment.

(END VIDEOTAPE)

GUPTA: As I said, you know, a lot of people not focusing on post-traumatic stress disorder as of yet. It may be a little bit early to be doing so.

We are hearing some of these aid organizations are starting to think about bringing psychologists down and to offer counseling, offer things like cognitive therapy, even exposure therapy. But again, this is something that will be weeks, months, perhaps even years in the making, Kiran.

CHETRY: There's just so much need, as you showed in that piece. Sanjay still in Port-au-Prince for us, thank you.

Also coming up at the bottom of the hour, U.N. special adviser Jeffrey Sachs will join us as the focus in Haiti turns away from the immediate needs like search and rescue to more long-term needs. We'll look at what it takes to rebuild the country.

ROBERTS: In the aftermath of the earthquake, so many people in Haiti are now asking the question, now what? We've got a particularly poignant example of that coming right up. It's 10 minutes after the hour.

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ROBERTS: It's 12 minutes after the hour now, and that means it's time for a quick check of what's new this morning.

The brother of Olympic figure skater Nancy Kerrigan has been charged with assaulting their 70-year-old father. Daniel Kerrigan died over the weekend at the family's Massachusetts home. Prosecutors say his son Mark grabbed him by the throat during argument about using the phone. The heart attack happened subsequently after that.

Mark Kerrigan has pleaded not guilty to the charges. Kerrigan's mother says her husband died of that massive heart attack. Authorities are still investigating the incident.

CHETRY: And there are some new road rules, or I guess we should say new penalties for drivers of big rigs -- no texting. You'd think that would be a no-brainer.

Transportation Secretary Ray LaHood is issuing new federal guidelines today, and effective immediately, commercial truck and bus drivers who text while driving could face civil or criminal penalties of more than $2,700. LaHood says it's an important step in reducing the danger of distracted drivers.

ROBERTS: And a royal firestorm, vacation pictures fueling mounting criticism of this morning of Royal Caribbean Cruise Lines for resuming service to Haiti just three days after the earthquake. Photos taken Friday show passengers enjoying fun in the sun just 100 miles north of the death and devastation.

Royal Caribbean points out that the ships are also carrying relief supplies. The company also promises to donate all of the revenue from the stops, plus an additional $1 million to the relief effort.

CHETRY: So with the search for survivors in Haiti over, recovery and rebuilding begins. But where do you start and how when you've lost everything? Ivan Watson follows a successful realtor and proud father who's now homeless and struggling in the face of an uncertain future.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT: Armed with a single hammer, Michele Clervil takes apart what's left of his house. He and his family are lucky to be alive. This is amazing. There were six people in this building and they all made it out alive without any injuries.

Nearly two weeks after the quake, the question hundreds of thousands of people like Michele are asking is, now what? So far he's salvaged a speaker and a couple of plastic buckets.

WATSON (on camera): He says he doesn't know what he's going to do tomorrow or the next week. Everything he owned was in this house and he doesn't see a future for Haiti right now.

WATSON (voice-over): Michele is a 53-year-old realtor who rented out rooms in the house he built 20 years ago to help pay for his kids' college education. Now he has no choice but to live here in this sprawling camp located on what used to be a golf course.

He gets lost in this maze of shelters, trying to find his family. Then he stumbles across his daughter, 17-year-old Saldomia. They take us to their new home, a makeshift tent which houses two families.

UNIDENTIFIED MALE: It's very hot, you know.

WATSON (on camera): Yes.

(voice-over): The air here is hot, fetid and flushed with mosquitoes. The only place to cook is in the corner.

SALDOMIA CLERVIL, 17 YEARS OLD: It's very difficult to see, but we're living here.

WATSON (on camera): Do you get sad here?

CLERVIL: What did you say?

WATSON: Sad?

CLERVIL: Very, very sad. Very. Very. I don't like it.

WATSON (voice-over): It's a blow to the pride of a father accustomed to being able to feed his family, hopeless and confused in a place with no future.

Ivan Watson, CNN, Port-au-Prince.

(END VIDEOTAPE)

CHETRY: So as you can see, ongoing humanitarian aid in Haiti is crucial. If you want to help, check out the dozens of reputable charities listed on CNN.com/impact.

It's now 16 minutes past the hour.

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CHETRY: Nineteen minutes past the hour. It means it's time for "Minding Your Business."

The Obama administration is pouring billions of stimulus dollars into programs to create jobs and health kick start the economy. But does the public buy what the White House is doing?

There's a new CNN/Opinion Research poll just out finding that 12 percent feel the stimulus has improved the economy. Forty-six percent saying it has stabilized conditions. Twenty-two percent saying it had no effect, and 19 percent of people polled say it made things worse.

Well, all this week, CNN is your stimulus watchdog.

ROBERTS: We've got a team of producers and reporters breaking down where the money is going and if it's having an impact. Our Christine Romans is live on our magic wall this morning.

And, Christine, you're looking at millions going into making canned pork.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Pork. Pork in the stimulus bill. This is real pork. This is pork people are actually eating, you guys.

Let me show you how the food breaks down here. We know it's going to obvious things like fixing roads, saving teachers' jobs, but it's also helping put food on the plates of struggling Americans, millions of struggling Americans. Biggest single outlay, $19.6 billion for food stamps over the next five years. Next, we've got $100 million to update school lunch equipment. That means your little Junior or Jane could very well be benefiting from stimulus money indirectly at the school cafeteria. And finally, $100 million for food banks.

Some of the biggest names in the food industry got bug cash contracts to stock food banks across the country. So we followed that money, your money, from the treasury to the plates of struggling Americans.

(BEGIN VIDEOTAPE)

ROBERT CARLUCCI, FOOD BANK CLIENT: Thank you so much.

ROMANS (voice-over): Robert Carlucci never thought he'd carry home his groceries in a box from a food pantry. This single father of two from rural Franklin, North Carolina, lost his job as a carpenter more than a year ago. And now, like 18 million other unemployed Americans, he struggles to make ends meet.

CARLUCCI: I can't believe I'm here. I mean, I'm the one that's usually donating around Thanksgiving time and Christmas time. And now here I am, I'm needing that. And it was just surreal.

ROMANS: Carlucci's dinners are now paid for in part with $100 million of stimulus money, awarded by the government to food companies you've heard of like Del Monte, Jennie-O and Tyson to make food for overburdened food banks. But the biggest influx of cash went to little known Lakeside Foods, one of Wisconsin's largest companies. It received more than $21 million to make, among other things, canned pork.

Lakeside declined to talk to CNN, so we went to their factory in Plainview, Minnesota, to find out how employees feel about the lucrative contract.

STEVE KOHN, LAKESIDE FOODS EMPLOYEE: It's great. It helps the company out a lot.

JEROME DEFRANG, LAKESIDE FOODS EMPLOYEE: I heard they received some money but I didn't have an idea of how much it was.

ROMANS: It was enough, according to our government sources, to create 52 new jobs. Overall, the Department of Agriculture tells CNN the entire $100 million for food companies created 195 jobs. For Kitty Schaller, head of the Manna Food Bank in Asheville, North Carolina, her priority is feeding people.

KITTY SCHALLER, MANNA FOOD BANK: It is not a waste of taxpayer money. The economic stimulus package has helped us to provide for the most basic needs for people who are truly in need.

ROMANS (on camera): Her food bank gladly took that canned pork, where demand is up 40 percent. So did thousands of other food banks across the country. But is this stimulus?

ROBERT RECTOR, HERITAGE FOUNDATION: This is clearly a type of welfare. It's a welfare expansion.

ROMANS (voice-over): Robert Rector, a senior fellow at the conservative think tank the Heritage Foundation, approves of using federal money for food banks. But he argues the entire stimulus bill merely expands welfare.

RECTOR: It does help support people who've lost their jobs and that's a good thing, but it's not going to put more jobs back into the economy.

ROMANS: Steven Kyle, a professor of economics at Cornell disagrees, saying there's also a ripple effect.

STEVEN KYLE, ECONOMIST, CORNELL UNIV.: Sure it's stimulating the economy. That food is produced here in the United States. That stimulates the U.S. economy. Those farmers then end up with more money, and they turn around and buy more equipment, hire more laborers, maybe they buy themselves a new Caterpillar tractor. Who knows?

CARLUCCI: I'm barely making it.

ROMANS: As for Robert Carlucci, the stimulus bill may not have given him a job, but it did give him and his daughters, Samantha and Alison, from going hungry.

CARLUCCI: My kids have to eat. We all have to eat.

(END VIDEOTAPE)

ROMANS: And that's the point of all of these billions of dollars really overall to somehow feed American families. $100 million of the stimulus dollars for food companies helped create 195 jobs. That's according to the Department of Agriculture.

And a great update from Robert now. We just learned that after being out of work for 13 long months, he got a new job. He's a carpenter, we told you. He'll be building log cabins.

ROBERTS: That's great.

CHETRY: That's great.

ROBERTS: How long do these jobs last?

ROMANS: Some of these jobs, frankly, are only lasting half, you know, half a year, or a few weeks. These big food jobs, we just don't know how long those jobs last because these companies wouldn't talk to us, John and Kiran. They did not want to talk about these big cash contracts they got from stimulus. They just didn't want to.

ROBERTS: All right. Great, great story, though. Thanks, Christine.

Tomorrow on AMERICAN MORNING, can a $5.5 million resort town restoration project be a good use of stimulus aid? Find out why one woman is grateful that the government is spending the money.

And coming up tonight on "CAMPBELL BROWN" at 8:00, is the stimulus working for average Americans? An exclusive interview with the man that President Obama picked to oversee the stimulus plan. And then later at 10:00, "AC 360" investigates why stimulus money is being wasted on unnecessary road signs. "The Stimulus Project," all this week, only on CNN, and at CNN.com/stimulus.

Twenty-five minutes now after the hour.

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ROBERTS: Twenty-seven minutes after the hour. The top stories just a couple of minutes away now. But first, an "A.M. Original," something that you'll see only on AMERICAN MORNING.

CHETRY: Dozens of Hollywood stars have been moved by the devastation in Haiti, but for one famous director, helping the people isn't just a calling, it's a passion. Our Alina Cho is here with that story for us this morning.

Hey, Alina.

ALINA CHO, CNN CORRESPONDENT: Hey, there. Good morning guys.

You know, we're talking about Jonathan Demme, the Academy Award- winning director. He's best known for blockbusters like "Silence of the Lambs" and "Philadelphia" but did you know that he has also made not one, but two documentaries on Haiti? Projects he calls labors of love. He's been to the country several times and two weeks after the quake, he says he is still stunned.

(BEGIN VIDEOTAPE)

CHO (voice-over): Jonathan Demme has had a love affair with Haiti for more than 20 years. So when he heard about the earthquake, he wanted to help.

JONATHAN DEMME, ACADEMY AWARD-WINNING DIRECTOR: I almost went last weekend. I got my shots. I've got to get on a plane, I'm going to go down, I'm going to help. What am I going to do?

CHO: The Academy Award-winning director's passion for Haiti came first through art, walking by a gallery in the mid-1980s.

DEMME: I was really kind of overwhelmed with the creativity of these paintings, the excitement of the music, and I thought, wow. Haiti. This is very interesting. I bought a painting.

CHO: That eventually led him on a trip to Haiti to find more paintings. What he discovered was a country full of people as vibrant as their art. It was 1986.

DEMME: It was an extraordinary moment in Haitian history, because Jean-Claude Duvalier, the dictator for life, had been overthrown by a popular revolt. And I was so excited about the -- about this kind of this fervor for democracy.

CHO: So Demme made two documentaries on Haiti for the rest of the world to see what he saw as the Haitian spirit, including "The Agronomist," a story about Haiti's most famous journalist, founder of Radio Haiti International.

(SPEAKING IN FOREIGN LANGUAGE)

JEAN DOMINIQUE, JOURNALIST, RADIO HAITI INTERNATIONAL: (SPEAKING IN FOREIGN LANGUAGE)

CHO: Jean Dominique, a man who fought and gave his life in the pursuit of democracy.

DOMINIQUE: Risky business. Because every information, even about the garbage in the street, was seen by the power as opposition.

DEMME: And he was brilliant at the microphone. And I thought, well, I can see why this guy is so popular. And in fact, I would love to cast him in a movie.

DOMINIQUE: I am sure now that things will be better.

CHO: While Demme reels at scenes of sheer devastation from Haiti, he also sees what he says is their true character.

DEMME: The resiliency of the Haitian people are going to keep them going, going to keep the country going. And, you know, I still absurdly have this great belief that it's just not over for the Haitians.

CHO (on camera): Even in the midst of this tragedy, every night on the streets people are singing.

DEMME: Yes.