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Toyota Recall Fix?; President Obama's Big Budget

Aired February 1, 2010 - 20:00   ET


CAMPBELL BROWN, CNN ANCHOR: Happy Monday, everybody.

Big news tonight on the Toyota recall affecting millions of Americans. And that's where we're going to start tonight's "Mash-Up." We are watching it all so you don't have to.

And our top story tonight is word from the top of Toyota. Help is on the way. The company announced today it has found a fix for the gas pedals in millions of recalled vehicles. Those parts are already on their way to dealers across the country. Toyota's president and CEO, Jim Lentz, broke the news in his damage control tour of the morning shows. Take a look.


JIM LENTZ, PRES., COO, TOYOTA MOTOR SALES USA: We understand the problem. We have the fix. And our dealers are ready to take care of customers later on this week.

This will be under control. This is a rare situation that takes place. So a customer that has a sensation that the pedal is slow in returning or that the pedal is not smooth in going down, that they should contact their dealer and get their vehicle in. There's nothing more important to us than the safety of our customers.

JOHN ROBERTS, CNN ANCHOR: Can you guarantee to people who had good faith in your company, bought your vehicles that if they bring it in for this fix, that's it, problem over?

LENTZ: Put it this way. I drive Toyota products. My family members drive Toyotas. My friends and neighbors drive Toyotas. And I wouldn't put loved ones in my product if I didn't believe that they were safe. Yes, they're safe cars.


BROWN: Now, Toyota says the fix will take just 30 minutes. They are going to start contacting customers this week to tell them where to bring their cars.

For those of you still confused, we are going to hopefully some have answers for you coming up a little bit later in the show.

President Obama unveiled a budget filled with red ink today. Yes, there were tax cuts. Yes, there were tax cuts. Yes, there was a spending freeze. But you thought -- but what else was there? Deficits as far as the eye could see. Take a look.


WOLF BLITZER, CNN ANCHOR: If President Obama gets his way, the U.S. government would spend more than $7 million a minute. It's another way of fathoming a $3.8 trillion budget.

BRIAN WILLIAMS, HOST, "NBC NIGHTLY NEWS": And another all-time record budget deficit, $1.6 trillion.

UNIDENTIFIED MALE: The budget would cut taxes for individuals, families and businesses, including a tax credit to encourage small business hiring. The cost of those tax cuts over the next 10 years, $300 billion. Gone are the Bush tax cuts for individuals making $200,000 a year or families making $250,000.

UNIDENTIFIED MALE: The president today blamed the Bush administration.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: When I first walked through the door, the deficit stood at $1.3 trillion. We simply cannot continue to spend as if deficits don't have consequences.

UNIDENTIFIED MALE: But Republicans say that's exactly what the president is doing, continuing a spending binge with $100 billion jobs bill to spur the economy.

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This budget is more of the same, more spending, more taxes, and more debt.


BROWN: And we're having some issues with our server, so we're going to straight right now to the "Punchline" and skip the rest of the "Mash-Up." We will try to get it for you a little bit later. This is of course courtesy of "Saturday Night Live," apparently Seth Meyers enjoying President Obama's Friday's session with House Republicans as much as we did. Take a look.


SETH MEYERS, ACTOR: On Friday, President Obama appeared before House Republicans in an historic televised Q&A and performed so well that afterwards GOP aides said that allowing the cameras to roll like that was a mistake.

Come on, Republicans, are you on such a Scott Brown high that you thought you could take down Barack Obama by debating him?


MEYERS: You realize debates are why he's president, right?


MEYERS: Seriously, all you guys do is complain about how Obama is all talk and then you invite him to a forum that's literally all talk.


MEYERS: That's like saying let's see how tough Aquaman is when we get him in the water.


MEYERS: I'm not saying you were outclassed, but the whole thing was like the scene in "Raiders of the Lost Ark" when the guy charged Indy with a sword and he just shot him.



BROWN: Seth Meyers, everybody. That is the "Mash-Up."

Apologies again for our technical issues. We are going to take this commercial break and figure them out.

When we come back, Toyota says it is sending steel bars to dealers to fix the gas pedals on recalled cars. We are going to tell what you options Toyota owners do have.

Plus, an ex-Marine insists the U.S. military poisoned a Caribbean island. A CNN special investigation reveals how many people are sick, although the military says it is not to blame -- that when we come back.


BROWN: If you own a Toyota, then by, you probably are totally confused by all of this recall news. Bottom line is what I think we all want to know. Is your car safe to drive? And we have some answers for you, hopefully, tonight.

Paul Ingrassia is the author of "Crash Course: The American Automobile Industry's Road from Glory to Disaster." Chris Woodyard is auto writer for "USA Today." He's also with us.

And, Chris, let me start with you.

Today, Toyota announces that they have this fix for the recalled cars. Explain to us what it is, how long it's going to take to get the cars repaired.

CHRIS WOODYARD, "USA TODAY": Well, we're talking about 2.3 million cars.

And what they're going to do is, starting this weekend, they're going to bring those cars in and they're going to insert a little metal shim in the accelerator mechanism. And they're saying that is going to make it so that the pedal will spring back when it's depressed, so you won't have this problem of the potential of a runaway car anymore.

BROWN: OK. So, that sounds like a pretty simple little fix. And how long is it going to take? You go into the dealership and you're there for what?

WOODYARD: If you take your car in and if it's just that one thing that needs fixing, you're going to be in there for about a half- hour.

Now, they're also going to be doing a concurrent fix on their earlier problem, which was floor mats that slipped under the accelerator pedals. That one could take a little longer, maybe perhaps as long as a couple hours.

The problem is not going to be the time it takes to get this repair done.

BROWN: Right.

WOODYARD: The problem could be getting in there to get your appointment.

BROWN: Cause millions and millions of people are going to be trying to do this all at the same time this weekend presumably, yes?

WOODYARD: Well, more than two million. Now, a lot of those are not going to go in right away, but as they filter in, this is going to be a process that's going to take weeks.

BROWN: Chris -- let me bring you into this. You have looked at this. You have written about this. How does a company that's just, you know, known for its quality and has the kind of reputation that Toyota has, how did it let this happen?

PAUL INGRASSIA, AUTHOR, "CRASH COURSE": Well, it's basically a mystery.

But, on the other hand, Campbell, to be honest with you, hubris seems to be an occupational hazard of being successful in the car business. That's really what led to the bankruptcies of General Motors and Chrysler last year, and that is what I described in book "Crash Course."

On the other hand, Toyota has had years of unrivaled success. and they just tried to get too big too fast over the last decade. They used to have this practice of never building a new product in a new factory with a new work force all at the same time, too many variables for quality control.

BROWN: Right.

INGRASSIA: So they got way from that in their effort to overcome GM as the largest car company in the world. For example, in Texas, they started building a new full-sized pickup in a brand-new factory and a new work force, 2006.

And, sure enough, all these things took a toll.


BROWN: And quality starts to slip a little bit?

INGRASSIA: Yes, in 2005, they actually recalled more cars in America than they sold that year.

BROWN: And they have had complaints about the uncontrolled accelerations for a long time. Why did it take so long to deal with it?

INGRASSIA: Well, that's one of the mysteries here. It is unclear just when these things reach critical mass. There is a bit of a weird history to this whole sudden unintended acceleration problem.

About 25 years ago, the Audi was accused of having the problem and it turned out to be all bogus. There was a lot of hysteria about it. But there was no fault with the cars. So, it would be understandable if people were a little suspicious about these claims at the outset.

BROWN: All right, Chris, let me go back to you here. If I am driving -- I mean, this is a pretty basic question, but I feel like I should ask it. If I'm driving my Toyota, the accelerator gets stuck and the car does start to race, what are you supposed to do?

WOODYARD: You're supposed to be really careful.

BROWN: Well, yes, obviously. But beyond that?


WOODYARD: But, immediately, you know, you can step on the brake, but step on it in a steady way. Start -- immediately shift that car into neutral and then start getting over to the side of the road. Don't turn it off until you get it over to the side of the road.

BROWN: I also know you have been blogging about this. You're hearing from a lot of people online. If you have got a Toyota, you have got to be kind of on edge right now. What are you hearing from people?

WOODYARD: We're hearing a ton of angst from owners and we're hearing sort of a sense of vindication from those that have experienced this problem, but took their cars into dealers and weren't able to have it diagnosed.

There's a real debate going on right now, because this is a brand that, for 30 years, has been known for its quality and for its dependability. So, some owners are feeling a little bit like, you know, where is this Toyota that I have known for so long?

BROWN: Right. WOODYARD: Some people that love American cars and have seen such a bloodbath over their record for dependability are saying, our moment has come. This goes to show that no automaker is, you know, going to have a perfect record all the time.

BROWN: You agree with that, right?

INGRASSIA: Yes, Campbell, I think Chris is right. There's a lot of emotions cutting different ways on this. There are people say, hey, it's Detroit's chance now to really prove ourselves. There's people who are disappointed in Toyota. There's also loyal Toyota customers who say, gee, I really hope my company, the company I stayed with for so many years, sort of pulls through this.

The chances are, they will recover. They have enormous resources. And, you know, prior incidents like this, like the Firestone, Ford tire controversy on the Explorers about a decade ago...


INGRASSIA: ... that was pretty frightening too. There were congressional hearings, as there will be here. And so Toyota is going to take a few P.R. black eyes before this is all over.

BROWN: Well, they already have.


BROWN: The final question here, Chris, I guess if you lease a Toyota or you own one, can this give you an out? Can you take your car back to the dealer and say, you know what, I don't want this car anymore?

WOODYARD: I'm not so sure it's going to help you on a lease. But at this point, I think that Toyota is having such a P.R. nightmare over this that you might be able to really have some leverage that you normally wouldn't have. It is certainly worth a try.

BROWN: Yes. It's interesting to see how this is going to play out. I don't think it's over yet.

Chris Woodyard, as we mentioned, auto writer for "USA Today," and Paul Ingrassia, appreciate your time tonight. Thanks, guys.


BROWN: When we come back, were American missionaries trying to kidnap dozens of Haitian children? That's what Haiti's prime minister says. The missionaries say they only wanted the kids to have better lives. We're going to have a live report and try to sort this out coming up from Haiti in just a moment.


BROWN: Ten American missionaries are still being held in Haiti tonight. The government says they were trying to kidnap dozens of children. The missionaries say they had only good intentions and only wanted a better life for the children. Listen.

Apparently, we don't have that sound bite, but we are going to try to sort this out for you.

Karl Penhaul has been investigating this for us all day today. And he is joining us right now live from Haiti with more on this.

Karl, Haitian officials insist these kids have parents. You went to the village I know to check it all out. Explain to us what's going on here.

KARL PENHAUL, CNN CORRESPONDENT: Yes, well, let me just set it up for you. You didn't have that sound of Laura Silsby, who is the team leader of the American Baptist group.

What she was saying, though, was that they -- that she and other team members believed that all of the 33 babies and children they were taking were either orphans or had been abandoned by parents. And she strongly denied any role in child trafficking, which she described as a horrendous practice.

Now, today, we went to a mountain village, a farming community about an hour's drive away from Port-au-Prince. And that is where 21 of the 33 children come from. And what we found is that, in fact, most of these children have parents.

And it was the parents themselves that gave away their children. We were talking to two heads of families, a father (INAUDIBLE) and he said that he gave the Americans his 4- and 5-year-old daughters. And he said, the reason for that, he said after the earthquake, I simply could not care for them anymore. He said I, myself, with my own hands, put them on the bus. He said, I gave them a kiss goodbye and told them the last words to them, don't forget daddy.

He said, but the Americans came with a promise that these children would have schooling, that they would have a safe place in the Dominican Republic, they would have a swimming pool, and they would have soft toys. He said, I could never give that to my children here in Haiti.

And that was echoed by other Haitian families that we talked to as well, Campbell.

BROWN: But, Karl, you know, you mention the Americans denying that they were kidnapping the kids, but why would they think that they could remove these children from Haiti without official documents, without passports, and without permission from the government?

PENHAUL: On the best level and I have heard them described over the last few days by different people as naive.

I don't think naive even begins to describe what they were trying to do here. From what they have described to me -- and I have had two jailhouse interviews with the Americans now -- it was a very poorly planned mission. They clearly didn't know what they were doing, and they clearly didn't have any experience in handling homeless children, even less orphans.

They made no effort to really sort out whether these children had been abandoned or were, in fact, orphans. They made no effort to get official documentation or passports for the children.

I said to Laura Silsby, I said, did you go down to the social services ministry and try and get permission? She said, well, we went down. They were busy. We put the kids on the bus and we left.

Also, when I said, how did you choose the children that you were taking away, she said, well, when we came across into Haiti for the second time, we met a Haitian pastor at the border. We gave him a ride, and he took us to some places where we found these kids.

Essentially, what they did was scoop up children from their families, even though it was with the families' consent. And maybe what is worse, even worse, Campbell, is that this group of Americans had planned to come back on the 12th of February and take 70 more Haitian children.

BROWN: But, Karl, did they truly have any idea of what they were going to do with these children? You explained what they were telling these families, but it sounds like -- I mean, the whole thing sounds incredibly suspicious.

PENHAUL: To each of the families, they did give a little piece of paper with an e-mail address, with a telephone number, and a picture of the children's refuge or orphanage in the Dominican Republic.

Now, this orphanage is not ready yet. What they have in the Dominican Republic right now is a 45-bedroom motel that has been put on a long lease to them. And they still have to carry out the work converting this hotel or motel to a suitable place for an orphanage.

They have the best intentions and say, over the next six months, they will construct a purpose-built orphanage. But, again, the accommodation wasn't ready. But what they do say in their own defense is that time was of the essence here. They believed that Haitian babies would die on the streets if they didn't come along.

They say they were answering God's will. They very much saw themselves on a mission from Jesus, but, of course, what the Haitian authorities say is, whoa, hold on a minute, because if you go around scooping up kids, this is where kids could get into schemes, selling kids for adoption, for cash, or, even worse, the kids could end up in the hands of child pornography rings or child abuse rings, Campbell.

BROWN: And that is what's so horrifying about this.

Karl, very quickly, are these Americans -- they're going to be held there, presumably, until there's some sort of trial. And you have got to wonder if the Haitian government is equipped to even handle this sort of investigation and prosecution. PENHAUL: They had been due to come before a judge today. That didn't go ahead. It now seems that the Americans may come before a judge tomorrow.

The Haitian government is open to the possibility that the Americans could be taken to the U.S. to face trial because they admit that the Haitian justice system has collapsed, along with other things within the earthquake.

But, of course, all of it depends on the investigation. If there's a U.S. trial, they won't have all the facts and evidence at their disposition. But, again, the Haitian prime minister told me personally yesterday that he was going to fully investigate.

And I can tell you that we know, CNN knows much more about this case right now than the Haitian prime minister. I told him some details yesterday. He said, oh, I wasn't aware of that. How did you know that?

And, today, when we went up to this village of Kalabas (ph), where 21 of the 33 children came from, so far, no government official has been up there, no government official has been up there. No government official has been up there to ask the parents what went on, what in the world went on here in this case, Campbell.

BROWN: Karl, well, that certainly doesn't bode well for these children.

Karl Penhaul with this story for us tonight -- Karl, many thanks. Appreciate it.

More than 7,000 people on a small Caribbean island are suing the U.S. government. They say our military poisoned them with weapons tests. The military says it is not to blame. We have a special investigation that begins for you in just a moment.


BROWN: And now a CNN special investigation, an island paradise turned toxic, where, today, thousands of Americans have cancer and other crippling diseases.

The people living there blame the U.S. military, because, for decades, it used part of their island for weapons testing. The military says there is no link. It's happening on the island of Vieques, six miles off Puerto Rico.

Abbie Boudreau of CNN's Special Investigations Unit has the story.


ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT: (voice-over): Nearly 40 years ago on this tiny, remote, American island of Vieques off the coast of Puerto Rico, a young U.S. Marine was stationed as a security guard.

HERMOGENES MARRERO, FORMER U.S. MARINE: I arrive on the island on the 3rd of July, 1970. I was 17-and-a-half years old.

BOUDREAU: At age 57, this is the Sergeant Hermogenes Marrero now. He has had colon cancer twice. He is nearly blind and needs an oxygen tank. He has Lou Gehrig's disease, crippling back problems and sometimes needs a wheelchair.

MARRERO: This is where we lived. This is the actual camp site.

BOUDREAU: Sergeant Marrero says he has been sick ever since he was stationed on the island.

(on camera): During that period of time, did you ever think something is really wrong with this picture?

MARRERO: Yes, sure, all the time, all the time, because I used to get sick. I used to get sick. You know, I would go out there to the firing range and sometimes I would start bleeding automatically from my nose. I said, my God, why am a bleeding? I come back, and maybe I'm vomiting now. I used to get diarrhea, pains in my stomach all the time, headaches, I mean, tremendous headaches. My vision, it used to get blurry.

BOUDREAU: So, what was over there?

(voice-over): Today, this decorated former Marine is the star witness in a multibillion-dollar lawsuit. More than 7,000 residents of this Caribbean island, about 75 percent of the people here, are suing the U.S. government. They say what the U.S. military did here made them sick.

For nearly six decades, beginning right after World War II, the American island of Vieques was one of the Navy's largest firing ranges and weapons testing sites.

(on camera): Can you give just us a really detailed picture of what it was like when they would use this island as a training ground?

MARRERO: Inside the base, you could feel the ground, the ground moving. You can hear the concussions. You could feel it. If you're on the range, you could feel it in your chest. It would rain, actually rain bombs. And this would go on seven days a week.

JOHN EAVES JR., ATTORNEY FOR VIEQUES RESIDENTS: The people need the truth to understand what is happening to their bodies.

BOUDREAU (voice-over): John Eaves Jr. is the attorney in the lawsuit.

EAVES: One of the biggest problems we have is that we don't believe that the military has fully come clean with all the chemicals and the agents that have been used on this island. Like, depleted uranium was denied, and then they admitted it.

BOUDREAU: After years of controversy and protests, the Navy left Vieques Island in 2003. Today, much of the base is demolished, and what's left largely overgrown.

DR. JOHN WARGO, YALE PROFESSOR: In my experience in dealing with hazardous sites and toxic substances, Vieques is likely to be one of the most contaminated sites in the world.

BOUDREAU: Dr. John Wargo is a Yale professor who studies the effects of toxic exposures on human health. He believes people on the island are sick because of the Navy's bombing range.

WARGO: Contamination results from the longevity of the bombing, the shelling, the strafing, and many different compounds are released, including lead and mercury and cadmium, as well as flame retardants, fuels, and many of these were released in great intensity.

BOUDREAU: These images recorded five years ago by University of Georgia scientists show the former bombing range and surrounding waters strewn with unexploded ordnance. According to the UGA scientists, many of those bombs continue to corrode, leeching out carcinogens.

The Environmental Protection Agency in 2005 designated parts of Vieques a Superfund toxic site, requiring the Navy to begin cleanup. The Navy identified many thousands of unexploded munitions and set about blowing them up, outraging islanders who fear more toxic chemicals will be released.

The U.S. government's response to the islanders' lawsuit is to claim sovereign immunity, that residents have no right to sue the government. And the government also disputes that the Navy's activities on Vieques made islanders ill, citing a 2003 government study that found no links.

(on camera): So, do you think this island made you sick?

MARRERO: Of course, it did. I got sick here on the island. My bones hurt, respiratory problems, vomiting, intestinal disorders.

UNIDENTIFIED MALE: Do you swear to testify the truth and nothing but the truth?

BOUDREAU (voice-over): Sergeant Marrero is not one of the plaintiffs but was questioned for this sworn deposition. He testified the weapons used on the island included chemical insecticides, depleted uranium, napalm and agent orange.

MARRERO: Agent orange is simply potent, and we used to store it in the hazardous material area. It was used in Vieques as a defense line.

BOUDREAU: The military has never acknowledged a link between Sergeant Marrero's illnesses and his time at Vieques.

MARRERO: This is American territory. The people who live here are Americans. And how do you do something in your own backyard? And you hurt someone, you have to take care of that person. And the government is just not doing anything about it. (END VIDEOTAPE)

BOUDREAU: We asked the U.S. Department of Justice and the Navy for comments but neither wanted to talk to us about the islanders' lawsuit -- Campbell.

CAMPBELL BROWN, CNN ANCHOR: And, Abbie, you said more than 7,000 people on the island are suing. It's hard to imagine, it's not a big island, that that many people are sick.

BOUDREAU: I mean, that's the hard part about all of this. We went for a walk with this woman in this neighborhood that she lives in. And she would point out from house to house to house, this person here has cancer, this person in this house over here died from cancer. And then there were houses that were actually boarded up.

I said why are these houses boarded up? And she said well, these people actually had to leave their house and get off the island to find help because there's not great health care facilities on the island. So these people actually had to leave to find doctors who could help them with their illnesses.

BROWN: Wow. So what happens now? You said the CDC plans a new investigation?

BOUDREAU: Yes, they are. They're planning a new investigation. They want to find out if the contamination on this island is actually causing people to get sick. That's the point here. And so really what they want to do is to try to find out if there is a link. And in the past, they have studied this and they found out that there was no link.

But many, many scientists said well, we disagree with that, and that's why there's going to be a new study. But what's interesting here, Campbell, is that many of these people say well, I don't care if the government finds a link or if they don't find a link because we know. We are convinced that this made us sick. And so they said they're going to keep fighting until someone helps them.

BROWN: And you're going to have more on this too. We should tell everybody, tomorrow night, Abbie has the story of a woman whose two daughters have cancer. Her 16-year-old had half her stomach removed and the 14-year-old has bone cancer, but again the military says it is not to blame. Our special investigation, "Poisoned Paradise," continues tomorrow night. Abbie will be back here. Thanks so much, Abbie.

And when we come back, Donald Trump tells me what he thinks of President Obama, of the job market, of where the next big investment opportunities are. And we've got the video everybody who watched last night's Grammys is talking about. Pink. Did you see this? It's crazy.


BROWN: Tonight's newsmaker is Donald Trump, who has plenty to say about bonuses and Wall Street excess. We also talked about when the economy will get better and the stimulus. Take a listen.


DONALD TRUMP, BUSINESS MOGUL: I really believe you had to do what they did. So, I would say, yes, the stimulus has worked in the sense --

BROWN: To Stop the bleeding, at least?

TRUMP: In the sense that we are not in the great depression. Has it worked in the more modified sense? I don't really think so because the economy is not doing well. It's not doing well at all. Unemployment is going up. The stock market goes up but other than the stock market, what's doing well?

BROWN: This is looking into your crystal ball, obviously, but where do you think we're going to be a year from now?

TRUMP: I think we're going to be sort of in a similar position. I don't see unemployment getting a lot worse. I don't see it getting a lot better. It comes back to the banks loaning all of the money that they're making. If they don't loan the money, you're not going to have an economy that's going to be good or robust.

BROWN: Where are the bright spots, though? Are there any bright spots? I mean, you look at this as Donald Trump, the great entrepreneur. If you're trying to game out, where opportunity exists, where is it?

TRUMP: Well, I think the bright spots are for people like me that are buying a lot of things. I'm buying a lot of things. I think I'm making wonderful deals. I'll let you know about in five years. Who knows?

But I will say that this is a great time to buy. So, in terms of bright spot, if you're looking for a house, it's a great time to buy. If you're looking to do certain things, it's a great time. Amazing. I've never seen anything like it.

The problem is a lot of people don't have the cash to buy.

BROWN: Right.

TRUMP: So, therefore, lots of bad things happen and deals don't happen. But this is, right now -- if you're set up where you have cash, this is a great time to buy.

BROWN: What about -- you mentioned unemployment. You know, there are a lot of people out there in the job market right now. I mean, where do you see growth opportunities there?

TRUMP: Well, unemployment is over 10 percent, and some people are saying, really, the real number is 18 percent, which is pretty scary when you think of it. Now you're getting into depression-type numbers. Unemployment does not look like it's getting better any time soon. Until money gets freed up, you're going to have tremendous unemployment. Something has to be done to free up the money.

BROWN: So, what can you do? I mean, if you were in the president's shoes right now, and you didn't have to worry about Congress and you could say, I, you know, designate or require the banks to do a, b or c, what would the -- is there an be easy fix here?

TRUMP: Well, you have to give the banks incentive to lend. Now then you get into a very complex situation. Are they lending on good projects? Because we've been there where they've lent on lots of bad things.

BROWN: Right.

TRUMP: But you have to give the banks incentive to lend. And you know, all the years I've watched bankers get huge commissions on deals that were just done. They should get the commissions five years later on deals that were just done and worked as opposed to that just didn't work. I mean they were getting -- they were making deals that they probably even thought were bad deals, just to pick up a commission. And half of them picked up these huge commissions, and then left and went to another bank. So, you have to create incentives for the banks and the lending institutions to do what their name is, to lend.

BROWN: Are we headed, do you think, if nothing is done right down the same path where we can see the mistakes repeated by these big banks?

TRUMP: I think that people have memories, not very long memories. So at least in the near term, that's not going to be happening. I think that the banks are scrutinizing and the problem isn't that they're turning down great deals because they just don't want to lend.

Now I don't know if that's a balance sheet problem, if that's -- they're just hoarding cash for whatever reason, but the banks are looking at great deals, deals that absolutely work and they're not lending. They have to lend.

BROWN: Where do you come down on the bonuses? A huge source of outrage for so many people right now.

TRUMP: It is such a tricky problem, Campbell.

BROWN: Explain why.

TRUMP: Because talented people, really talented people have also made some incredible deals for their institutions. And when you pay an athlete, when you pay, you know, people in the entertainment business tremendous amounts of money, well, a really talented banker or business person is every bit as talented as some of these people. You don't see it as easily. You don't see them stand up and sing a song and not to place, you know, have everyone go crazy or hit the big home run, but they're equally as talented, if not more so. So it's very tough to say that we're going to limit. Now, I will say this. In the old days, which is a couple of years ago, which isn't so old, bankers were paid tremendous bonuses for bad deals. I really think if you could get that money back or if a deal turns bad, if an institution loses a lot of money, take it away from them. Don't pay them. Take it away, something. There is a formula some place, but it's a very, very slippery slope. And it's very, very tricky.

BROWN: It seems like that's the culture of Wall Street, is that nobody really cares what the end result is. It's just the commission you get off of making the deal. Can you even change that culture?

TRUMP: It's a very hard culture to change. And it's very hard to put artificial stimuli. It's very hard to say to somebody you can't make what you might be able to make if you go to another country, if you go to another bank, if you go to another place. It's a very, very tough thing. I mean, you could talk about the honor system at West Point, they have the honor system. It's wonderful. But I'm not so sure the honor system works very well on Wall Street.

BROWN: What do you think of Tim Geithner, the treasury secretary? He's come under a fair amount of criticism for being too cozy with Wall Street, as some people believe.

TRUMP: Well, I don't know if the word is cozy. I mean, I think Tim Geithner has done a good job. I think that the whole group has really done a good job when you -- look at what's happened. I mean, at least we have an economy. You wouldn't have had an economy had they not come up with some very drastic steps two years ago.

BROWN: A little broader, a little more big picture? What about his boss? Not just on the economy, but overall, what do you think of the president's first year?

TRUMP: Well, I think the expectations were so high that people are now disappointed. But you have to see what's going to happen from now. And I think right now, he's at the edge. It's going to go one way or another.

Health care, he pulled back. He said now, you know, we have to give Massachusetts their vote, which was a very smart thing for him to say. But that may kill his health care plan. Boy, he has devoted an entire year and all of his capital to this one particular situation that a lot of people don't want.

I really like him. We'll have to see how he does. On a personal basis, I like him. I think that it's going to be a very -- right now, he's at that tipping point. It's going to go one way or the other. It's going to be very interesting to see what happens.


BROWN: Donald Trump, everybody.

And when we come back, Pink at the Grammys.


BROWN: Still ahead, President Obama's budget guy tries to explain the record deficits. But first, more must-see news happening now. HLN's Mike Galanos here with tonight's "Download."

Hey, Mike.

MIKE GALANOS, HLN PRIME NEWS: Hi, Campbell. First off, the mayor of Juarez, Mexico, says the death count has now reached 16 after a gunman stormed into a party in the border city. Many of the victims are teenagers.

Now Juarez is located right over the border from El Paso, Texas. Drug wars have made it one of the deadliest places in the world. There have already been 230 killings since the beginning of the year. That's just one month.

Well, the International Civil Rights Center and Museum opened today in Greensboro, North Carolina. It is the very same Woolworth building where 50 years ago a sit-in helped spark the civil rights movement. On February 1st, 1964, black students refused to leave the store's "whites only" lunch counter. The sit-in soon spread in nine states and that Greensboro store was desegregated shortly after that.

Well, actor Rip Torn was arraigned today on charges of breaking into a bank near his home in Connecticut. He posted a $100,000 bond. Allegedly, the actor was drunk, had a revolver, and his attorney says the 78-year-old will check himself into an alcohol treatment center.

Finally this, Campbell, you talked about this from the Grammys last night. Pop star Pink putting on a show. Let's check it out again. Why don't you check out there.

She sang her song "Glitter in the Air" in the air, flying above the stage, twirling around, the water dripping. Some of the celebrities said they got wet, but loved it. Just held up there by that thin piece of cloth. And MTV readers, readers, that is, voted the best performance of the night. No Grammys, but a showstopper there. And there's the water pick.

BROWN: It was mind blowing.

GALANOS: Yes, it is.

BROWN: And I thought it was unbelievable.

GALANOS: Yes, when I watched this it's like singing upside down in the air, no net? She said no net. It's not fun with the net.

BROWN: No net, no clothes.

GALANOS: Yes, no clothes. Thank you, the obvious.

BROWN: All right. Mike Galanos for us. Mike, thanks very much.

GALANOS: Thanks, Campbell. BROWN: LARRY KING LIVE" starts in just a few minutes. Larry, what do you have for us tonight?

LARRY KING, HOST, "LARRY KING LIVE": They do it in every performance of Peter Pan. She swings around and sings.

BROWN: It's amazing.


BROWN: I was in awe.

KING: It's amazing.

BROWN: I thought she was incredible.

KING: It's six days away, but already people are taking sides over the Super Bowl ads. A controversy regarding two sponsors in particular. We'll show you the one that didn't make the cut.

The latest on alleged child trafficking in Haiti, and is it all a big misunderstanding there? And the Grammy moment that stole the show, all next on "LARRY KING LIVE," Campbell.

BROWN: All right, Larry. We'll see you in a few minutes.

Up next, President Obama's record-breaking budget and record deficit. One Republican calls it fiscal insanity. The man behind the plan, White House Budget Director Peter Orszag, explains where all the money is going, when we come back.


BROWN: President Obama rolled out his new budget today, $3.8 trillion in spending with the biggest deficit in our nation's history, $1.56 trillion. The president's plan eventually leads to smaller deficits but only after more spending upfront in hopes of ending the recession in double-digit unemployment. I asked White House Budget Director Peter Orszag about the $100 billion that would be spent right away on a jobs bill. Is it enough? Take a listen.


PETER ORSZAG, WHITE HOUSE BUDGET DIRECTOR: Well, we think that's a very good start. One of the things that's happening is that even though economic growth has returned we went from the economy collapsing by more than five percent at the end of 2008 to growing by more than five percent at the end of 2009. Job growth has lagged behind, and that's why we have this $100 billion job creation package, including a new jobs and wages tax credit intended to spur hiring among small businesses.

BROWN: So, unemployment though still at 10 percent. When are we going to see that number go down, do you think?

ORSZAG: Well, it's going to start to come down but the unemployment rate remains elevated and that's one reason, again, why we're putting forward this $100 billion package, to try to get it down faster than otherwise would be the case. But, look, it's going to take time, unfortunately.

BROWN: You want, I understand, just to talk about the deficit reduction here. You guys want to create a bipartisan commission to come up with deficit reduction solutions by December and then present them to Congress. Why do you need a commission to do that?

ORSZAG: Well, I think that the answer is that to get -- first, we have $1.2 trillion in deficit reduction that we put forward but we think to get the rest of the way there to a sustainable fiscal course, we need bipartisan buy-in and bipartisan solution and that's what the fiscal commission is intended to do.

BROWN: But we have -- we've been down this path before. I think when people hear bipartisan commission, they think delay and they think bureaucracy, and they think Washington, yet again, stalling something into oblivion without ever actually making the tough decisions.

ORSZAG: Well, again, look back at the history. For example, the Greenspan Commission in the early 1980s fashioned a bipartisan solution to address a problem at that time, which was the looming insolvency of social security. This can work but it depends on both sides stepping forward together and putting forward solutions.

I mean, for example, Representative Ryan, who's the ranking member on the House Budget Committee, has put forward a proposal, Republican budget proposal that's worthy of some discussion. We need more ideas like that, and they should be funneled into the commission.

BROWN: But if the commission is so important, I guess, why didn't you launch it last year? I mean, why does it feel like the White House is just now sort of acknowledging that the deficit is a massive problem?

ORSZAG: I think we did acknowledge it in the past. Again, there was a pre-existing deficit that was there when the president stepped into office. We think that this is the best way forward and we hope that members of Congress will step forward with ideas just like some of the ideas we have in our budget.

BROWN: Bottom line something for me. Just over the past year, what mistakes do you think you have learned in the budget-making process and how are you guys trying to do things differently now?

ORSZAG: Well, we've tried some things that didn't work so well and other things that did. For example, we put forward proposals to eliminate some defense programs, like the F-22, we were successful in that. One of the things we've done is going back through the budget to look for additional savings, additional proposals and actually about half of the programs that we're now putting forward to terminate or reduce are new this year with the additional time that we've had to go back through the budget and reexamine things carefully.

BROWN: You mentioned success on the F-22. What didn't work? What was one of the mistakes that you've learned from?

ORSZAG: Well, you know, clearly, we would have preferred to have health reform legislation already done by now. And there are other things that one can look back and say, you know, we wish the course had been somewhat different. But we are where we are and we need to move forward.


BROWN: White House Budget Director Peter Orszag.

"LARRY KING LIVE" starts in just a few minutes, as we told you. And coming up, tonight's "Guilty Pleasure," the video we just can't resist. Washington's newest senator inspiring nude action figures.


BROWN: "LARRY KING LIVE" starts in just a few moments. But first, from Cosmo to Congress, Jeanne Moos has tonight's "Guilty Pleasure."


JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): Technically, he's still only a senator-elect but already he's been anointed Senator hunk daddy, sexy hunk.

SALLY QUINN, STAFF WRITER, "WASHINGTON POST": First of all, Scott Brown is a hunk.

MOOS: "Washington Post" writer Sally Quinn is just saying what others are thinking, the hunk factor. Anatomy is destiny. And Scott Brown's anatomy is already fodder for "Saturday Night Live" with Brown played by the star of "Mad Men."

JON HAMM, AS SCOTT BROWN: I'm looking forward to working closely with you.

MOOS: Seducing Democrats like House Speaker Nancy Pelosi.

UNIDENTIFIED MALE: I want to introduce something to the floor. It's called your panties.

MOOS: But Senator-elect Brown didn't get his panties in a twist over "SNL." "It was great," he told the "Boston Herald." "I think he's a little bit better dancer than I am." That Cosmo centerfold from his law school days is what turned him into a hunk of burning senator- elect.

BARBARA WALTERS, HOST: Are you worried that this can make you a little bit of a joke?

SCOTT BROWN (R), MASSACHUSETTS SENATOR-ELECT: No. I was 22 years old. Do I regret doing that? No. Because if I hadn't done that, I never would have been sitting here with you.

MOOS: Would he have been sitting on Jay Leno's show, impersonating the guy in one of his favorite movies.





SCOTT BROWN (R), MASSACHUSETTS SENATOR-ELECT: Adrian, Adrian, we did it. I did it.


MOOS: He did it all right. Maybe Congressman Barney Frank's imagination on "SNL."


UNIDENTIFIED MALE: You worried about a filibuster? Because I'm about to filibust out of these jeans today.


MOOS: He even got into the head of the Senate's oldest member. Admirers have put his image to music.

MUSIC: I believe in miracles, you sexy thing.

MOOS (on camera): What's next? A nude action figure of the guy?

(voice-over): Well, actually, yes. has rushed out the anatomically correct Cosmo man. And the real Scott Brown will be happy to hear that for $34.95, it comes with fig leaf included.

(on camera): And talk about a politician with animal magnetism, the Web site Urlesque found an uncanny resemblance between the senator-elect and a come hither kangaroo.

Jeanne Moos, CNN, New York.


BROWN: And that's it for us. "LARRY KING LIVE" starts right now.