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President Announces His Budget Blueprint; "Snapshot Across America" Looks at Education in America; The First Lady's Fashion Statement
Aired February 26, 2009 - 09:55 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: ... families don't fall further behind because of mounting health care bills. And it is a direct result of the American Recovery and Reinvestment Act that I signed into law the other week -- a recovery plan that has only just begun to yield benefits for the American people.
But while we must add to our deficits in the short term to provide immediate relief to families and get our economy moving, it is only by restoring fiscal discipline over the long run that we can produce sustained growth and shared prosperity. And that is precisely the purpose of the budget I'm submitting to Congress today.
In keeping with my commitment to make our government more open and transparent, this budget is an honest accounting of where we are and where we intend to go. For too long, our budget has not told the whole truth about how precious tax dollars are spent. Large sums have been left off the books, including the true cost of fighting in Iraq and Afghanistan.
And that kind of dishonest accounting is not how you run your family budgets at home; it's not how your government should run its budgets, either. We need to be honest with ourselves about what costs are being racked up -- because that's how we'll come to grips with the hard choices that lie ahead. And there are some hard choices that lie ahead.
Just as a family has to make hard choices about where to spend and where to save, so do we, as a government. You know, there are times where you can afford to redecorate your house and there are times where you need to focus on rebuilding its foundation. Today, we have to focus on foundations. Having inherited a trillion-dollar deficit that will take a long time for us to close, we need to focus on what we need to move the economy forward, not on what's nice to have.
That's why, on Monday, I held a fiscal summit to come up with a plan to put us on a more sustainable path. And that is why, as we develop a full budget that will come out this spring, we're going to go through our books page by page, line by line, to eliminate waste and inefficiency. This is a process that will take some time, but in the last 30 days alone, we have already identified $2 trillion in deficit reductions that will help us cut our deficit in half by the end of my first term.
For example, Agriculture Secretary Vilsack is saving nearly $20 million with reforms to modernize programs and streamline bureaucracy. Interior Secretary Salazar will save nearly $200 million by stopping wasteful payments to clean up abandoned coal mines that just happen to have already been cleaned up. Education Secretary Duncan is set to save tens of millions dollars more by cutting an ineffective mentoring program for students, a program whose mission is being carried out by 100 other programs in 13 other agencies.
We've targeted almost $50 billion in savings by cracking down on overpayments of benefits and tax loopholes -- that is money going to businesses and people to which they are simply not entitled.
This is just the beginning of the cuts we're going to make. No part of my budget will be free from scrutiny or untouched by reform. We will end no-bid contracts that have wasted billions in Iraq and end tax breaks for corporations that ship jobs overseas. And we'll save billions of dollars by rolling back tax cuts for the wealthiest Americans while giving a middle-class tax cut to 95 percent of hardworking families. But we'll also have to do something more -- we will, each and every one of us, have to compromise on certain things we care about, but which we simply cannot afford right now. That's a sacrifice we're going to have to make.
Now, I know that this will not always sit well with the special interests and their lobbyists here in Washington, who think our budget and tax system is just fine as it is. No wonder -- it works for them. I don't think that we can continue on our current course. I work for the American people, and I'm determined to bring the change that the people voted for last November. And that means cutting what we don't need to pay for what we do.
Now, what I won't do -- as I mentioned at the Joint Session speech a couple of days ago -- what I won't do is sacrifice investments that will make America stronger, more competitive, and more prosperous in the 21st century. Investments that have been neglected for too long. These investments must be America's priorities, and that's what they will be when I sign this budget into law.
Because our future depends on our ability to break free from oil that's controlled by foreign dictators. We need to make clean, renewable energy the profitable kind of energy. That's why we'll be working with Congress on legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy. And to support this effort, we'll invest $15 billion a year for 10 years to develop technologies like wind power and solar power and to build more efficient cars and trucks right here in America.
It's investment that will put people back to work, make our nation more secure, and help us meet our obligation as good stewards of the earth we all inhabit. Because of crushing health care costs, and the fact that they drag down our economy, bankrupt our families and represent the fastest-growing part of our budget, we must make it a priority to give every single American quality, affordable health care.
That's why this budget builds on what we have already done over the last month to expand coverage for millions more children, to computerize health records to cut waste and reduce medical errors which save the by the way, not only tax dollars but lives. With this budget, we are making a historic commitment to comprehensive health care reform. It's a step that will not only make families healthier and companies more competitive, but over the long term, it will also help us bring down our deficit.
And because countries that out teach us today will out compete us tomorrow, we must make excellence the hallmark of an American education. That's why this budget supports the historic investment in education we made as part of the recovery plan by matching new resources, with new reform. We want to create incentives for better teacher performance, and pathways for advancement. We want to reward success in the classroom. And we'll invest in innovative initiatives that will help schools meet high standards and close achievement gaps, preparing students for the high-paying jobs of tomorrow, but also helping them fulfill their god-given potential.
These must be the priorities reflected in our budget. From the end, the budget is more than simply numbers on a page. It is a measure of how well we are living up to our obligations to ourselves, and one another. It is a test for our commitment to making America what it was always meant to be. A place where all things are possible for all people. And that is a commitment we are making in this, my first budget, and it is a commitment I will work every day to uphold in the months and years ahead.
I want to thank all of you for being here, but I also want to give a special thanks to Peter Orszag, Rob Neighbors, they have been working tirelessly in getting this budget prepared, getting it out in a timely fashion. They're going to be doing more work in the weeks to come. And I am absolutely confident that as messy as this process can sometimes be, that we are going to be able to produce a budget that delivers for the American people. All right. Thank you.
HEIDI COLLINS, CNN ANCHOR: All right. So there we have President Barack Obama today talking about the budget for the fiscal year of 2010. Making many comments. Not a lot of detail, but certainly bringing about some of the issues that we have been talking about already this morning, because some of the plans, at least some of the moneys, I should say, had sort of been leaked this morning.
One of them that a lot of people are talking about already is this $634 billion reserve fund that he says is designed to overhaul the health care system in this country. We want to begin with our Ed Henry who is standing by in our Washington bureau now. So, Ed as we listen to the president sort of lay this out a little bit, at least the headlines of the budget, what do you think people are going to be most surprised about today?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: I think they're going to be most surprised, Heidi, about the depth of the problem. We're looking inside the budget with the CNN budget team right here in our Washington bureau, and when you look at the numbers, not just for now, but through 2019, it is staggering. We're going to be using some old tools like this calculator, to add it all up if we have to, but we're going to use some new tools.
John King was kind enough to lend us the magic wall at least for a couple of hours.
COLLINS: I love the magic wall.
HENRY: Take a look at this for example. This is inside the budget. Remember the other night the president told the American people we want to look forward, not backward. Well on page five of this budge, we'll take you inside. "Inheriting a legacy of misplaced priorities." This is a legacy we inherit. A legacy of mismanagement, misplaced priorities, missed opportunities and deep structural problems ignored for too long. It's a legacy of irresponsibility and it's our duty to change it.
What does that really mean? What are the numbers? Let's look at the depth of the problems. If you lose that for a second and you bring over the actual budget deficit numbers, these are the projections inside this budget and they are staggering. Let me make it a little bigger. As you can see, the budget is a work in progress. So is the magic wall for me.
Let me bring it around for you. OK. Let me bring it over here. Here we go. Budget deficit right here as a percentage of the Gross Domestic Product. You see it right up there. And it is $1.7 trillion. Let me tap that and start. It is right there. $1.7 trillion. That is in 2009, OK? $1.7 trillion.
Next year, $1.1 trillion. $912 billion. 581. $533 billion. $570 billion. $583 billion. 637. You get the idea. You go on and on and on. And the fact is that even as the President promised the American people, he's going to be cutting the deficit in half over the next few years. When you look beyond the next few years, the country is in such difficult shape, the government's balance sheet is so far off that that is why we are talking about not just spending cuts, but tax increases to try to raise revenue. So what we're going to be doing for the rest of the day -
COLLINS: But I think, Ed, if I may interject, I think that may be something that is confusing to some people, because doesn't history show that when you actually cut taxes that puts money - I mean, brings revenue to the country?
HENRY: That is going to be part of the clash of ideas between the two parties. The Republicans are going to say, look, if you cut taxes, you're actually going to bring in more revenue, because it's going to spur a lot of economic activity. You heard the president on Tuesday night, you heard him allude to it just a moment ago that he believes that the Bush years and the tax cuts actually did just the opposite. That less revenue came into the government. The spending was out of control.
COLLINS: But can't you just look at the numbers to discern? I mean, it doesn't seem that subjective, is it?
HENRY: The numbers show that it's off the charts. I mean we've got in 2009 a $1.7 trillion budget deficit. That's after several years of Bush tax cuts. But also, you just can't focus on the tax side. The spending side has blown out of control.
Under republican rule on Capitol Hill and now democratic rule, as well. I mean, you have been talking the last couple of days about this spending bill that they have just passed yesterday in the House, over $400 billion, some 9,000 earmarks. I mean, you start looking at this spending side of this. It's pretty intense. So what we're going to do the rest of the day is go page by page, line by line with the CNN budget team, and we're going to be giving you specifics for the next few hours on health care, on education, energy, and go beyond just the big picture numbers and tell you, how is it going to affect average people all around the country.
COLLINS: Terrific. We love it. And we love the magic wall. Ed Henry, thanks so much. Appreciate that. We want to get now to our Dana Bash, the battle lines over the budget plans are sort of being drawn out now from bailouts to health care reform. You can expect a lot of partisan bickering over how your money will be spent.
CNN congressional correspondent Dana Bash is joining us now by telephone. Dana, good morning.
VOICE OF DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Good morning, Heidi. I'm actually just outside the capitol. We are waiting for kind of a symbolic moment here, and that is when the president's budget director is actually going to physically hand this new budget summary to the chairman of both the House and Senate budget committees. We are just outside the - actually, the capitol, awaiting for that moment to happen.
It is symbolic, because as you saw Ed Henry showing you on the wall, and I have one in my hand also, we got copies of it. But I think, you know, to the point you were just making, Heidi, with Ed, this is going to be what we are going to be hearing, and we already are hearing, in terms of the difference. I mean, you want to know how much the difference between having a President Obama and President Bush. I mean, it doesn't really get more stark than what he is doing with regard to these taxes and raising taxes for the wealthiest Americans.
And you also mentioned, Heidi, with Ed, the argument that we are definitely already hearing from republicans, and we are hearing about it for the past several weeks, that they believe the worst thing you can do, the worst thing you can do in a time of recession is raise taxes, because they believe that that hurts small businesses, and it will just be a bad thing for the economy.
So there is no question that it's going to be the biggest battle. However, there are other things that are going to be philosophical divide, as well. Health care is one example. Everybody cheered the other night when the president talked about the need for health care reform. Republicans and democrats. But when you get into the nitty- gritty in how the health care system is going to be reformed, regardless of its cost, that is the way -- that is a major philosophical divide. Because you have Republicans, and even some democrats, who say, you know, making it much more geared towards the government and less towards the marketplace is the wrong way to go.
Big picture, we are waiting for this symbolic handoff here at the Capitol. But you know, the president has an outline, but it's important to remember that it is in the United States' congress where they actually write this. And it is going to be one of the first real tests and not just of the problems that are possible issues with republicans.
A test of how he can get his fellow democrats who ran Congress to really buckle down and do the things that he wants to do, particularly, Heidi, as we were talking about earlier, on that issue of spending and finding ways to cut spending so he can reduce the deficit as he wants to.
COLLINS: All right. Our congressional correspondent, Dana Bash, standing there waiting for it all to be handed over to the proper authorities, if you will. Dana, appreciate that.
So let's talk a little bit more about health care now. How does it fit into the new budget exactly? CNN senior medical correspondent Elizabeth Cohen is joining me now to talk a little bit more about that. I don't know if we really know, too many details.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: No, we don't know completely. But if you look at what Barack Obama said he was going to do while campaigning, he said and I'm holding here his position paper on health care reform, he said we'll provide affordable, comprehensive, and portable health coverage for every American.
COLLINS: What's that?
COHEN: That is a portable.
COLLINS: A tall order.
COHEN: Portable means that if you and I left CNN, we could take our insurance with us to another company. Or even if we didn't work for anyone. That's a tall order. You got 47 million uninsured Americans and more at every moment. So let's take a look at some of the specifics on how he plans on doing that.
First of all, he plans on insuring all children. Starting there. And this is actually - I'm sorry, this is who is going to pay for it, because this, of course, is a huge question. We're talking hundreds of millions of dollars. How do you insure all these people? He says, wealthy seniors will pay more for their medicines. Because right now, a homeless person and a Rockefeller, they get the same Medicare benefits and some people say, wait a minute, why should a Rockefeller be getting benefits from the government?
COLLINS: Yes, so obviously, you know, most of the country is much closer to here. I mean, we're not talking about the extremes, the homeless versus the Rockefeller, right? I mean, we're talking about - and what is the cut-off? 170,000?
COHEN: 170,000. So he says if you make more than $170,000, we think you ought to be paying more for your prescription drugs than someone who is homeless.
COLLINS: Here is the disconnect, and I think a lot of questions that we're going to hear today because we're hearing a lot of people talking about all of this today, throughout the morning. That $170,000, in one part of the country because of the cost of living is a whole different chunk of money than it would be in a different part. So it seems like wealthy is such a sort of subjective term.
COHEN: You know, as Hillary Clinton learned when you do health care reform, you make people mad. There is no way around it. This is going to be painful. And I'm sure there is some senior citizen out there watching this now who says, well, I make 180,000 but really I don't have enough money to pay for my medicine. So you are right. There are some people who are going to say, wait a minute, I'm over that limit, but I need help too. I'm sure he'll be hearing from them.
COLLINS: Yes. All right. So what else do we have in there? What else do we need to explain?
COHEN: OK. Let's talk a little bit more about how he plans on paying for this, in addition to what we just talked about. The other way thing that he's going to do is he's going to increase taxes for everybody, not just senior citizens, but for all Americans who make more than $250,000, by sort of changing around how the tax structure works.
COLLINS: Right.
COHEN: So again, I'm sure he's going to hear from some folks who make $251,000 that this is a problem.
COLLINS: Yes, and when we talk about insurance, because you talk about that very large number 47 million people who are uninsured.
COHEN: Yes.
COLLINS: It seems like is it possible, or will there be somewhere down the road a way to go in before we talk about, you know, raising taxes and making people who have more than $170,000 as seniors, pay for more drugs? I mean, should we be looking at the insurance system?
COHEN: Right. Well, exactly. That's what I mean, When we talk health care reform, he's talking about overhauling many, many different things. And so, for example, there's people who are caught in the middle right now. They don't have health insurance, but they're not poor enough for Medicaid. So he is proposing a system that would somehow jump in and cover those people. There are people with jobs -
COLLINS: What if they don't want it?
COHEN: What if they don't want insurance? I've never met anyone who doesn't want health insurance -
COLLINS: Really?
COHEN: At a reasonable cost. At a reasonable cost and that's the key. Because right now. Here's a good example. Right now, if you have a preexisting condition, and let's say your employer doesn't give you insurance -
COLLINS: Right.
COHEN: And you've got a pre-existing condition, and you want to go out there and buy your own health insurance, good luck. It is really hard to say to an insurance company, oh I have breast cancer, would you insure me?
COLLINS: Yes.
COHEN: That is really tough. So that's one of the problems he wants to address.
COLLINS: Very good. All right. Elizabeth Cohen, sure do appreciate that. Thank you.
And this story as well, today. Is FEMA ready for the next big disaster. Our special investigations unit is on the case, an exclusive report with some unsettling new information.
Plus, education and the budget. Where does higher learning fit in? It's today's snapshot across America.
(COMMERCIAL BREAK)
COLLINS: More than three years after Hurricane Katrina, the Federal Emergency Management Agency is under fire again. A new report says FEMA doesn't have adequate housing plan if another disaster strikes. Special investigations unit correspondent Abbie Boudreau is here now with her exclusive report.
Boy, that's the last thing that they need. But this is something we have been talking about for a while, sort of always having to be ahead of something like mother nature.
ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: you think so, right? But we obtained a 300-page report being released later today. The Senate subcommittee on disaster recovery spent nine months investigating FEMA's performance after Katrina and concludes the agency still comes up short.
After the 2005 hurricane, FEMA acknowledged it needed to do a much better job in responding to the next disaster, but the report shows the agency still does not have a comprehensive disaster housing plan. It says that there still isn't a network of state and local shelters, few programs to help the low income and disabled, and no clear plan on how much the agency would have to rely, again, on trailers to house hurricane victims. Louisiana Senator Mary Landrieu says it's time those needs are met.
(BEGIN VIDEO CLIP)
SEN. MARY LANDRIEU (D), LOUISIANA: Another storm strikes, we're basically in the same position that we were before Katrina and Rita. So you know, this new administration, this new Homeland Security Administration, and the new HUD is basically going to have to start from scratch.
(END VIDEO CLIP)
BOUDREAU: The subcommittee is making a number of recommendations, including setting up a program for a pair of rental properties and putting in place the national housing plan to be administered by HUD, and telling FEMA to provide specific costs to all available housing options. A FEMA spokesman tells us the agency couldn't comment because they haven't seen the report yet. He referred us to FEMA's national housing strategy released last month. That addresses the housing needs of disaster victims.
COLLINS: And I remember, obviously, you did a great story on sort of the failure, if you will, of FEMA and being able to deliver some of these household items. They had actually been collected but then not given out.
BOUDREAU: They just sat in the warehouses.
COLLINS: Is there any confidence whatsoever in Congress, in how things could possibly get better?
BOUDREAU: That's I mean, I talked to some senators, and they say that they have basically zero confidence in FEMA at this point, and they're just hoping that the new administration will bring some sort of positive change, like we hear so much of.
But at the same time, you know, they're just - anybody who thought that three-and-a-half years have passed, and the government was out there, you know, trying to figure out exactly all of the problems and trying to fix all of the problems before the next hurricane were to strike -
COLLINS: Right.
BOUDREAU: According to Senator Landrieu, according to this new report that, did not just happen.
COLLINS: I was surprised the president did not mention Katrina in his address in the first joint session of Congress. We didn't hear a word about Katrina.
BOUDREAU: No. We heard about Kansas, but we did not hear about Katrina.
COLLINS: All right. BOUDREAU: A lot happening out there.
COLLINS: You will stay on top of it and we will have you here. We'll keep everybody updated. Sure do appreciate it. Abbie Boudreau of our special investigations unit. Thank you.
Taking a hard look at education now. Parents, teachers and students forced to make tough decisions inside and outside the classroom. Their stories in today's snapshot across America.
(COMMERCIAL BREAK)
COLLINS: Spending cuts can also mean job cuts. A hard pill to swallow in the face of the struggling economy. CNN Pentagon correspondent Chris Lawrence looks at one program on the edge.
(BEGIN VIDEOTAPE)
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT (voice-over): Is this jet President Obama's latest weapon in the fight against unemployment? He has to decide whether to keep building more F-22 Raptors or shut the line down.
YESENIA PEREZ, WORKS ON F22: It's pretty scary. You know, to think that your whole life, your daily bread, you know, can be just relying on somebody's decision.
LAWRENCE: Yesenia Perez helps build parts for the F-22 in Florida. She'll likely lose her job if production stops. But each F- 22 costs around $143 million to build. Paid for with your tax dollars. So critics are asking, could that money be better spent?
DANIELLE BRYAN, PROJECT ON GOVERNMENT OVERSIGHT: I think it's crazy to be making national defense decisions based on jobs programs.
LAWRENCE: And here's the catch. Al Qaeda doesn't have jets. And we're not fighting China or Russia right now. So the Raptor's a fighter jet without a fight. We asked the jet's manufacturer, Lockheed Martin.
Has the F-22 ever actually fired a shot in battle?
LARRY LAWSON, LOCKHEED MARTIN: No, we have not. The Air force has not employed the F-22 in an operational theater yet.
LAWRENCE: Thing is, the Pentagon already has or is building about 190 Raptors. And the defense secretary says he doesn't need more.
UNIDENTIFIED MALE: I think it's something along the lines of 183 is reasonable.
LAWRENCE: But nearly half of Congress wants more. CNN has obtained letters signed by hundreds of Republicans and Democrats, urging President Obama to keep building the Raptors. SEN. JAMES INHOFE (R), OKLAHOMA: If you want our kids that we send off to battle to have the best equipment, then we need to have the F-22s.
LAWRENCE: They argue, more jets are needed to maintain America's air dominance. And help the economy.
UNIDENTIFIED MALE: We're looking at somewhere around 100,000 jobs that are going to be lost all across the country.
LAWRENCE: But would that many people really lose their jobs? Keeping them honest, we did our own math. A recent economic study by the University of Massachusetts found $1 billion of military spending generates 8,000 to 9,000 jobs. So if you spent $3 to $4 billion a year on the F-22, you get maximum, 36,000 jobs. That's a lot of people. But far less than what they claim.
LAWRENCE (on-camera): Especially when you consider this. Some of these plants like Northrup Grumman tell us, a lot of their workers would get moved over to other projects, not fired.
LAWRENCE (voice-over): Lockheed Martin says no one can predict who will be America's enemies in 20 to 30 years.
UNIDENTIFIED MALE: It's not about today. It's about decades from now.
LAWRENCE: But the president is fighting an economic war now. And in the battle for creating jobs, economists found education, mass transit and infrastructure all generate far more fire power than military spending. Chris Lawrence, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Higher education getting out of reach. While public school teachers face shortages of supplies, the recession is hitting all aspects of education. We will meet four people facing tough choices, and check in with a former secretary of education.
(COMMERCIAL BREAK)
COLLINS: The importance of education. Just a few moments ago, we heard President Obama laying out some of his priorities, saying there will be investment in innovative initiatives to get our schools to reach higher standards. He also wants incentives for better teacher performance, and to help students reach their potential.
Well, these tough times are making for tough choices in the area of education. Teachers are dealing with state budget problems, while students and their parents deal with hard decisions on their futures. We want to share their stories with you. It's a "Snapshot Across America."
Joining me this morning, from New York is Jacqueline Hanna, the mother of a graduating senior; Rebecca Tobias, who is getting ready to graduate from high school; and then in Atlanta, John Krafka is the father of two college-age students; also, Monica Herring is a teacher in the Atlanta public school system.
Let's begin with you, Jacqueline. Now, I know you have two sons in high school, but obviously that means if you so choose, college is next. And one of them is getting ready to graduate. Tell us a little bit about your story and your concern.
JACQUELINE HANNA, MOTHER OF GRADUATING SENIOR: Well, my oldest son, Christopher, is a senior at Uniondale High School, and he was accepted at SUNY at Delhi, and, you know, we're all very excited about him going off to college. He had actually preferred some other colleges, but the tuition was a little steep, so we steed decided to go with the SUNY school at this time. But I think that he'll do well at this school.
COLLINS: I'm sorry, just remind us what the SUNY school is, for those who don't live up there.
HANNA: Yes, SUNY at Delhi, which is in Delhi, New York, Upstate New York, and he wants to major in physical education.
COLLINS: OK. So how is this different than what you had had really envisioned for your son?
HANNA: Well, we had looked at some other private schools, but the tuition was just too steep. And again, you know, Christopher played sports for a long time, and this will be the first time he is actually attending a college where he's not going to be able to play football, because this was a SUNY school that accepted him. So, although he was a little disappointed, I still think he's very excited about, you know, continuing his education.
COLLINS: All right. Very good. We sure do appreciate that.
HANNA: Thank you.
COLLINS: Also, school budgets are shrinking, of course, because of shortfalls in the state budgets. Well, that is making things pretty darn tough on teachers, as well. Monica Veiga-Herring teaches in the Atlanta public school system and joins us now. Tell me what the main challenge is that you face as a teacher.
MONICA VEIGA-HERRING, TEACHER: Well, we're concerned, because we are seeing that counties all around us are cutting teacher salaries and cutting teaching admissions. So, we're pretty worried that, you know, we're next on the line. So, everybody's been a little scared about that.
Also, we've been having to deal with budget cuts with -- having to do with field trips. That budget has been cut. Also, we're dealing with schools that are consolidating here in Atlanta to help meet some of those budget challenges. We're concerned -- I have friends who were educators who haven't received contracts yet. They don't know if they have a position next year or not.
COLLINS: Well, you have been a teacher for something like ten years. What is it that's different right now? I mean, is this a crisis?
VEIGA-HERRING: Yes, it definitely is. I mean, as an educator, I've always had to go -- come out of my own pocket to pay, but it gets uncomfortable when I have to continuously ask parents to donate supplies, things like pencils, ink cartridges and things like that for my classroom.
COLLINS: Some parents aren't paying and donating them. You yourself are paying for some of your supplies in your own classroom. All right, Monica, we sure do appreciate that snapshot.
And obviously, students are also facing some tough choices. Can they afford to go to the college of their choice, or do they actually have to scale back on their expectations? We've already heard a little bit about this. But let's go straight to the source. Rebecca Tobias is facing that actual decision right now. She's getting ready to graduate from Half Hollow Hills High School West. It's in Dix Hills, New York.
So, Rebecca, are you nervous? Have you changed your plan in any way?
REBECCA TOBIAS, HIGH SCHOOL SENIOR: Yes, I was always hoping to go to Clark University, which is one of the best psychology schools in the state -- in the country. But unfortunately because of cost reasons, I might have to go to a SUNY school.
COLLINS: OK, so, and how do you feel about that?
TOBIAS: Well, SUNY schools are great, but I've always been interested in psychology, and I would really appreciate being able to go to a school that was known for it. I've taken tough courses. I took AP Psychology at my school and loved it, and would be sad to not be able to go to the school that I wanted because of the economy.
COLLINS: So, you've basically been planning for this part of your life your whole life, or at least most of your life, where you could understand the ramifications of saving and going on to college for your future career world. What do you see in your future now?
TOBIAS: Well, I'm not really sure. Yes, as you said, I've been preparing for a long time. I mean, my parents were putting money away. But by now, my college account is worth less than half of what it was when I started my junior year, so I'm not really sure where I'm going to be able to go after college. I don't want to graduate with a lot of loans and then not be able to make it to graduate school.
COLLINS: Understood. All right, Rebecca, thank you.
And now, double the anxiety of paying for college. We've got a dad. John Krafka is the father of two college-age students. And, John, you are paying some money big-time right now. Tell us your story.
JOHN KRAFKA, FATHER OF TWO COLLEGE-AGE STUDENTS: Well, it could be worse. Fortunately, my wife and I's two kids, their first choice for college was a school here in the state of Georgia, an in-state school. And they were both accepted. University of Georgia.
And it could have been a lot worse. If they had not gotten into their school of choice, they would have been looking at out-of-state tuition, across the state border. And, but in spite of that, the fact is that we've got a lot of expenses with room and board and apartment leases and the various book expenses. And so, we're having to borrow from the money that we would have put into our retirement plan.
COLLINS: Yes. And that is obviously an issue that brings up many other questions. It's really something that no parent wants to do. First of all, say, you know, what I know you want to go to that school, but we flat-out can't afford it, or tell them you can go there, but you're going to have to pay for it later after you get your first job.
KRAFKA: Right. A lot of kids are having to work in college. I work at a university here in Atlanta, and we see a lot of kids who are working their way through college and having to make some of those tough choices about where they live, you know, how many years do they want to live at home versus living in the traditional dorm or college rooming experience.
COLLINS: Yes, there is nothing worse than having to live with mom and dad while going to college. That's for sure. All right, John.
KRAFKA: I agree.
COLLINS: I'm kidding. All right, we sure do appreciate your story, as well. I also want to thank our other guests for sharing their stories with us today. Jacqueline Hanna, Rebecca Tobias and Monica Veiga-Herring. Thanks, everybody.
So, improving education and making college more affordable. The president is certainly talking about it, and so are we, with former Education Secretary Bill Bennett in a moment.
(COMMERCIAL BREAK)
COLLINS: Let's keep talking about education now today. President Obama says that college education is crucial, if America is to remain competitive in the world. But too many students are going to college and then not graduating. So, how can we change all of that?
Here to talk about it is CNN contributor and former Education Secretary Bill Bennett. He also hosts the national radio talk show, "Morning in America."
And I bet on your show, Bill, you've been talking about this, as well. As we listened to the four people that we checked in with, some parents, an actual student and a teacher, what really stands out to you as something that Americans are really challenging with in the face of education?
WILLIAM BENNETT, FORMER EDUCATION SECRETARY: Well, you know, as you talk to actual human beings, as you say, Heidi, good for you, you see the effects of the economic downturn are felt by everybody. And you can't insulate education from those general effects.
But, you know, I often think when you have perspective and you look at other countries, you look at history, what Americans regard as serious problems, a lot of other people would regard as maybe not so terrible. Look, I take seriously cutbacks, and maybe people don't get their first choices, but just to go through that, that mother of the young man who's going to college, not playing football, going to a school that doesn't have football, but he got in. He's going to major in phys ed, and my guess is he'll probably get some kind of help.
The young lady who can't go to Clark, she has to go to SUNY, she said. SUNY's fine, and I'll be the psychology department at SUNY is just fine. The dad there in Georgia, his two kids are going to the University of Georgia, life is good in Athens, Georgia, as you know, Heidi.
As for the teacher, you know, cutbacks are there. But there are other things we can do in education to make our dollars go further and produce better results.
COLLINS: All right. So as a former secretary of education...
Right.
... and I know that you're going to be meeting with the current secretary of education, Arne Duncan -- actually, he's asked for some of your advice in all of this -- what is the biggest issue? What is the scariest thing that we do need to be focusing on and take very seriously?
BENNETT: Accountability in higher education and elementary and secondary. In higher education, my sympathy is with the consumer. You know, Congress is going to give a lot more money for Pell grants, for student aid and to universities.
But look and watch what happens. I will bet you, as soon as that money kicks in, you know what the universities will do? They'll raise tuition again. And we keep chasing this. We tried to put in a system where you couldn't raise tuition more than something over the rate of inflation.
COLLINS: So, put a cap on it.
BENNETT: Put a cap on it, because these guys know, no matter how high you raise the tuition, the demand is inelastic. People will still want their kids to go to college. So, get these colleges and universities to cut costs and stop raising costs, and you can stop with the duplication of programs in a lot of ways.
You know, when we have professors on and they say they do six hours, people say, well, that's a decent day. That's not a day. That's a week. So, you can get more efficiencies in higher ed.
COLLINS: Hey, I want to have you listen. I'm sure you watched the president's address to the joint session of Congress.
BENNETT: Yes.
COLLINS: I'd like to have you listen to something regarding dropping out of high school and also the goal for college graduation. Let's listen.
(BEGIN VIDEO CLIP)
OBAMA: And dropping out of high school is no longer an option. It's not just quitting on yourself. It's quitting on your country. And this country needs and values the talents of every American.
That's why we will support, we will provide the support necessary for all young Americans to complete college and meet a new goal. By 2020, America will once again have the highest proportion of college graduates in the world. .
(END VIDEO CLIP)
COLLINS: All right. So Bill, I don't know what he meant about letting down your country if you are unable to finish high school. However, when he talks about this goal in 2020, how realistic is that, and what is the detail? What is it paying for? What is that support he's talking about?
BENNETT: Look, I'm generally in favor of education. Life is a race between education and catastrophe, H.G. Wells said. But I don't agree with what the president said. There are some people who drop out of high school and join the military and make very good lives for themselves...
COLLINS: My father-in-law.
BENNETT: ... and serve their country very, very well. In general, you should maximize your educational opportunities. But I don't want to diminish the contributions of people who didn't finish high school. Many of them have done fine.
However, as a parent, as an educator, you want people to go as far as they possibly can. Dropout rate's about 30 percent, 30, 33 percent, and that's too high. And I think the key to responding to it is more effective education early on.
The bigger key, is, of course, parents. It has a lot to do with parents and their effect and the message they send to their children. The noted educator, Bob Keeshan, do you know who he is?
COLLINS: I do.
BENNETT: Yes, Captain Kangaroo. Dr. Kangaroo for the purposes of this discussion. He said a lot of kids drop out of kindergarten, it just takes ten years before they act on it. There are things we can do. And that means good and effective education. Reward good teachers. The research, Heidi, is overwhelming, the difference good teachers make, positively, and the difference bad teachers make negatively.
COLLINS: Yes. And, you know, the president spoke about that, too. Unfortunately, we are out of time. But I will say verbatim what he said, which is, in the end, there is no program or policy that can substitute for a mother or father who will attend these parent-teacher conferences or help with homework after dinner or turn off the TV, put away the video games and read to their child. And there are books out there by you that some people could be looking at.
BENNETT: Not every teacher is a parent, but every parent is a teacher, the indispensable teacher.
COLLINS: True. CNN analyst and former Secretary of Education Bill Bennett. Nice to see you. Thank you, Bill.
BENNETT: Thank you, Heidi.
COLLINS: In southern Australia, deadly wildfires are still ravaging the countryside, and now there is fear it might get worse. Hundred-degree temperatures, high winds and lightning could rekindle the nightmare. More than 200 people were killed in those fires. Search teams are still looking for the missing.
(WEATHER REPORT)
COLLINS: Michelle Obama all the buzz. Her style, her fashion and now her arms. The talk of the town, all across the country, from fashion sense to decision-making. Michelle Obama is the first lady in chief.
CNN's Joe Johns explains.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT (voice-over): If you're looking to see that seemingly never-ending mini obsession with everything Obama, please note the dress the first lady wore to the president's speech to Congress. Until now in Washington, when people talked about bearing arms, there was a pretty good chance the topic had to do with gun control.
But with Michelle Obama showing a liking for the sleeveless look, even in winter, the magazines, the fashion writers and the blogs quickly began zeroing in on how bearing arms hazard a whole new meaning inside the Beltway. "People" magazine put her on the cover sleeveless.
BETSY GLEICK, EXECUTIVE EDITOR, "PEOPLE" MAGAZINE: There's been a lot of talk in the last day or so about her arms and how great they look, and you can tell she works out.
JOHNS: There's also a development in the extensively covered search for a presidential first dog. Michelle Obama is leaning toward a rescued Portuguese water dog, which happens to be the breed of two of the highest-profile political pooches in Washington. GLEICK: That's right. This is not their final, final decision. It's a dog that they're leaning towards. They really like it. Not too big, not too small. And they've also chosen a date. This dog is coming in April. America, get ready. And she's having some really entertaining conversation with the little girls about what to name the puppy.
JOHNS: The kids suggested names like Frank and Moose, but the first lady vetoed both. Not lost in all of this is a pretty simple question. Just how is the first family adjusting? In an interview with "People," the first lady described what happened during a dinnertime one night at the White House.
GLEICK: She was talking about a dinnertime ritual the family has, which is "roses and thorns," and the family goes around the table, and they talk about their day, and they talk about a rose of the day and a thorn of the day. And Malia turned to President Obama and said, you know, Daddy, your job is kind of a thorny job. And what she was saying, Mrs. Obama was saying that by comparison, her job is mostly roses.
JOHNS: Joe Johns, CNN, New York.
(END VIDEOTAPE)
COLLINS: Grim new numbers for General Motors. Staggering losses, dwindling reserves. Is the nation's largest automaker running on empty?
(COMMERCIAL BREAK)
COLLINS: Just in case you missed it, a little while ago, about an hour ago now, President Obama did make some remarks and comments on the budget for the fiscal year of 2010. We are learning from the White House that you can go ahead and check that out if you want in about ten minutes from now. It's going to be online.
You can see the entire budget overview. That address is www.omb.gov. Again, www.omb.gov if you want to check it out.
General Motors is running on empty. The nation's biggest automaker posted another huge loss. Susan Lisovicz is at the New York Stock Exchange with the numbers. And, yes, they are some big numbers, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi. That's right. GM continues to bleed. The automaker lost $9.6 billion over the final three months of last year. That's more than $100 million a day. This was a period, remember, that included a $4 billion loan from the U.S. government.
Company is just burning through cash and in need of more aid to meet its operating needs. GM says it expects auditors to question the company's ability to remain viable. For all of last year, the numbers, of course, worse. GM lost nearly $31 billion. GM's biggest weak spot right here at home, where losses in the north American market tripled.
But GM sales, half of them come from overseas, and that's a problem, too. Just a year ago, GM could rely on positive numbers coming out of Asia, Latin America, Africa, the Middle East, but now those regions are losing money as the recession circles the globe. GM's shares right now are flat at $2.55. That's better than where it closed on Friday, below $2. And at levels we had seen in the 1930s.
Also better, hey, the stock market. We're seeing a nice bounceback following yesterday's tepid sell-off. The Dow right now up 107 points, or 1.5 percent. The Nasdaq and the S&P 500 also up by at least 1 percent, Heidi.
COLLINS: One percent, OK, we'll take what we can get. The government, though, as everybody knows, helped GM last year. Are they going to do it again?
LISOVICZ: Well, there's another road show in Washington today, Heidi. GM executives are there, making the case for more funds. They're meeting with President Obama's auto task force. It's going to be a tough sell. GM already got $13 billion in taxpayer money. It says it needs $16 billion more and fast. The company's working to cut costs as well by closing more plants offering another round of buyouts and cutting nearly 50,000 jobs globally -- Heidi.
COLLINS: Yikes. All right, Susan Lisovicz, thank you. We'll check back later on throughout the day here.
You've heard of a hanging judge, right? Well, how about a frying judge's wife? A robber's plot doesn't exactly pan out.
(COMMERCIAL BREAK)
COLLINS: The sky is falling. That's what one Dallas family may have thought after a 6-pound chunk of metal crashed through their roof yesterday.
(BEGIN VIDEO CLIP)
ROSALINA PEREZ, HOMEOWNER (through intepreter): She says she's glad because nobody was in the house at that moment. And it almost landed on my bed. She went upstairs to see what else had happened upstairs, to see if the roof had fallen or something.
(END VIDEO CLIP)
COLLINS: Police still don't know what the metal is or where it came from, and they say there were no other reports of falling metal in the area.
A judge's wife had her own sentence for an intruder.
(BEGIN VIDEO CLIP)
ELLEN BASINSKI, FOUGHT OFF INTRUDER: And I came back like this, and I whacked him! And he came up and looked at me like, lady, why did you do that? And I hit him again.
(END VIDEO CLIP)
COLLINS: Seventy-year-old Ellen Basinski says four teenagers broke into her house and tried to rob her. After she smacked one, all four of them ran away. Minutes later, they were arrested. Basinski seemed most upset that one of the boys was a neighborhood kid who had shoveled snow for her.
I'm Heidi Collins. Join us again tomorrow morning. For now, CNN NEWSROOM continues with Tony Harris.
