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Anderson Cooper 360 Degrees
President Obama Pushes Economic Plan with Road Trip, News Conference
Aired February 09, 2009 - 23:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Coming up at the top of the hour, President Obama's first prime-time news conference at length, uncut, and the best political team on television going over it point by point. Looking at the economic plan he's pushing and digging deeper into how it affects all our bottom line. That and more when this special edition of 360 continues; we're live all through the next hour.
(COMMERCIAL BREAK)
COOPER: Good evening, again. Tonight: President Obama on the road and on national television explaining the need for a massive economic rescue package. The already massive bank bailout and in a broader sense the necessity for urgent government action to pull America's failing economy out of a tailspin.
He made his case in Elkhart, Indiana earlier this morning. He'll make it tomorrow in Ft. Myers, Florida. Tonight he spoke to the nation; his first prime time news conference. We'll go over it in- depth over the course of this next hour looking especially closely at the economic plan now heading for passage in the Senate; running the numbers and "Keeping them Honest."
But first, an extended portion of the news conference.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Last month our economy lost 598,000 jobs which is nearly the equivalent of losing every single job in the state of Maine. And if there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don't know where their next paycheck is coming from.
And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to 4 million jobs because that's what America needs most right now.
It is absolutely true that we can't depend on government alone to create jobs for economic growth. That is and must be the role of the private sector. But at this particular moment with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life.
It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs. And breaking that cycle is exactly what the plan that's moving through Congress is designed to do.
When passed, this plan will ensure that Americans who've lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. We'll also provide a $2,500 tax credit to folks who are struggling to pay the costs of their college tuition and $1,000 worth of badly-needed tax relief to working and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it. And that will help break the cycle and get our economy moving.
But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again. And it's only helped lead us to the crisis we face right now.
(END VIDEO CLIP)
COOPER: The president tonight.
More now on the plan he's promoting. And we're also going to be playing extended portions of his news conference all throughout this next hour. We really want to give as clear a sense as possible what the president was saying so you can make up your own mind at home whether or not you support the stimulus plan.
$838 billion that's in the latest Senate compromise version. No earmarks, according to Mr. Obama. An orgy of government spending according to South Carolina Republican Senator Lindsay Graham. Whatever you think of it, it's a work in progress evolving as it makes its way through Congress. There's a lot of negotiations ahead, tough negotiations.
A snapshot now and the "Raw Politics;" More than three quarters of a trillion dollars worth from Candy Crowley.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: The unemployment rate in Elkhart, Indiana, is over 15 percent and the president had done his home work.
OBAMA: I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart.
CROWLEY: An overpass for Elkhart is not specifically in the stimulus bill. The federal government will give out the money according to a formula, but mostly Governors will decide which projects get the federal money.
In all, the final stimulus package is likely to offer about $47 billion for everything from repairing and building roads and overpasses and rails to clean water facilities; money for so-called shovel ready projects.
DICK MOORE, ELKHART, INDIANA MAYOR: Send us the money. Send it right here to Elkhart, Indiana. We'll be held accountable for it. We don't mind that at all. And we'll put people to work and put them to work in our area.
CROWLEY: The federal government will also give billions more to states designed to keep social services intact and state workers in their jobs. And you can count on more cash unless you are among the wealthiest of Americans.
OBAMA: These steps will put more money in the pockets of those Americans who are most likely to spend it. And that will help break the cycle and get our economy moving.
CROWLEY: The broadest tax assist is a new two-year tax credit; $500 per worker with the amount diminishing for people with higher incomes. It would begin showing up in June paychecks with a reduction in withholding about $20 on average.
Hoping to spur two industries in a world of hurt, the Senate bill would give a first-time home buyer a $15,000 tax credit. It would also allow car buyers to deduct sales taxes and loan interest.
There are also billions for existing education programs from head start to student loans. For the down and out, unemployment benefits will be extended and increased. Anyone drawing unemployment will have access to or subsidies for health care insurance.
The idea is whether it's cement for highway projects, $25 more spent in the grocery store, or a new car, it creates or saves jobs. That's the idea.
OBAMA: I can't tell you with 100 percent certainty that every single item in this plan will work exactly as we hoped.
CROWLEY: But the administration expects most things will work. And the economy will grow again, sometime.
LAWRENCE SUMMERS, DIR. W.H. NATIONAL ECONOMIC COUNCIL: But I'm not going to hold out for you the prospect that it is imminent. Perhaps it will be towards the end of the year. Perhaps it will be early next year.
CROWLEY: When all is said and done, whatever comes out of Capitol Hill will be the biggest spending bill in the history of the country.
Candy Crowley, CNN, Washington.
(END VIDEOTAPE)
COOPER: There's no doubt about that.
Let's talk strategy now with our panelists: Alex Castellanos, a Republican strategist, Jamal Simmons, -- JAMAL SIMMONS, DEMOCRATIC STRATEGIST: The lone Democrat?
COOPER: The lone Democrat -- no we also have Paul Begala via satellite.
SIMMONS: Oh, I'm sorry.
COOPER: And don't worry about it, he's got your back.
SIMMONS: All covered then.
COOPER: And Ed Rollins as well, a Republican strategist.
Paul Begala, let's start with you. We heard from Candy Crowley exactly what's in the bill. Did the president sell it tonight?
PAUL BEGALA, CNN POLITICAL CONTRIBUTOR: I think he did. I think that it was the smartest thing that he did was he kept referring to Middle America. He didn't speak Washington ease. He began this trying the inside game, he met in private with all the Senate Republicans. He met in private with all the House Republicans. He tried to cut deals, tried to accommodate.
Now he's playing the outside game. And I think he's much better at that. He's much more effective talking directly to American people. But note what he did not do, Anderson. He did not call on his supporters, of which there are about 60 million of them, to write or call Congress.
That's his final ace in the hole. And when he does that, we know that he's -- I think, they'll absolutely deluge the Congress. So he's still not going all out. And I think that's prudent. This guy is -- he's an old basketball player. And he understands when he's got to actually put it all out there in the fourth quarter. I don't think he views it as quite that desperate just yet.
But I like seeing him playing this outside game speaking for Middle America. Rather than playing the inside game which I think some of the Republicans are doing.
COOPER: Ed, if you're a Republican member of Congress watching this press conference tonight, what do you take away from them?
ED ROLLINS, REPUBLICAN STRATEGIST: Well, first of all, it's his. He claimed ownership. It's all his now. It's no longer Nancy Pelosi's, it's not the two Senators from Maine or Specter. He owns this package. And he's guaranteed the American public in a period of time that it's going to get better. He's going to be measured by that. And I think to a certain extent, we all wish him well.
COOPER: But from a -- just a strategic standpoint, are Republicans happy about that, that he's taken ownership?
ROLLINS: I think Republicans saw the line drawn today. And I think, whatever the rhetoric is, there's not going to be much cooperation now for the foreseeable future. SIMMONS: Well, he was always going to take ownership for this. The reality is, if this economy did not work out, the stimulus plan did not work out, Barack Obama was going to be the person who would face the ultimate price for that. And he just admitted what everybody already knows so we've got to put that in one context.
The other part of this is, he's not done yet. Tomorrow he's going to get on a plane and go to Ft. Myers. He's going to have a meeting with the blue dog coalition in the House. I'm hearing that he may actually do another event this week with another governor.
And then, you know, more outreach to other groups. This is going to keep going. He's going to keep talking to the American people and try to get them to continue the influence on their -- on their representatives.
Again, as Paul said, he didn't say write in yet. But this 76 approval rating, and believe me, people on the Hill have not ignored that 76.
COOPER: Can the president continue to say this is change?
ALEX CASTELLANOS, CNN POLITICAL CONTRIBUTOR: Well, you know, it's hard for him to continue to say that when he's doing more of what the previous guy did. There was just a -- it was a little bit hard for a lot of Republicans to take tonight to see that, "Hey, it's what I'll criticize you for but I'm going to do it myself."
And I think it's interesting to see that the most -- the guy who appeals for bipartisanship the most drew the sharpest partisan lines. I think we saw the beginning of the 2010 election here.
COOPER: We're going to have more from our panelists ahead. Also we're going to take a close look at what's in this new TARP spending that they're going to be talking about tomorrow, that Tim Geithner is going to have a press conference about tomorrow. We'll talk about that.
And also, other news, and not just the octuplets and the fires in Australia. There's also the accusations of domestic violence against rapper Chris Brown against his girlfriend, Rihanna, the singer. We'll have an update on that ahead.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: This notion that somehow I came in here just ginned up to spend $800 billion, that wasn't -- that wasn't how I envisioned my presidency beginning.
(END VIDEO CLIP)
COOPER: President Obama tonight, his first prime time news conference; the lions' share of questions focusing on the economy. President giving long detailed answers. He's on the road again tomorrow selling his economic stimulus plan.
Again, let's continue to talk strategy with our panel: Paul Begala, Jamal Simmons, Ed Rollins and Alex Castellanos.
Paul, President Obama was asked about what he took away from his foray into bipartisanship, trying to reach out to Republicans. Let's listen to what he said.
(BEGIN VIDEO CLIP)
OBAMA: Just in terms of the historic record here, the Republicans were brought in early and were consulted. You'll remember that when we initially introduced our frame work, they were pleasantly surprised and complimentary about the tax cuts that were presented in that frame work.
Those tax cuts are still in there. I mean, I suppose what I could have done is started off with no tax cuts, knowing that I was going to want some, and then let them take credit for all of them. And maybe that's the lesson I learned.
(END VIDEO CLIP)
COOPER: Paul, when you look back at the first couple of days of President Obama in Office and his team in Office, what was the mistake they made in terms of this stimulus?
BEGALA: Well, I think he just articulated it. You get the sense that Barack Obama was a kid that his mother didn't have to whip him twice for the same mistake. I mean, I think he did negotiate with himself.
He put a bunch of Republican ideas in his economic recovery plan. And he got very little for it.
If I might suggest the way to follow this through, Mr. President, it would be this. If our Republican friends are so deeply and principally opposed to federal spending after running up $5 trillion in debt, let them opt out. You know, both senators from South Carolina and the governor of South Carolina all say that they're against this.
Well, let's save the money. South Carolina gets $1.35 back from Washington already from every dollar it sends.
Or how about Mississippi? Both senators are opposed to it, the governor down there, Haley Barbour, is essentially running a welfare state. Mississippi gets $2 back for every dollar it sends to Washington. Well, we can just cut them off. Send the money where people want it.
If these people are so principally opposed to it, well, let's not shower them with federal money. Let's see the Republican governors turn that money down.
CASTELLANOS: Paul, that's a brilliant half a plan as long as we can get the other half of the plan which is those states shouldn't have to pay any federal taxes into it either. I mean, the other side though, is we --
BEGALA: They're getting tax cuts, Alex.
CASTELLANOS: No, they're not.
BEGALA: Hello they're getting tax cuts.
CASTELLANOS: No, they're now. They're getting one-time tax refunds. And by the way, it's I'm borrowing money from Jamal so he can loan me some money so I can spend it. But then I'm going to loan him money some money so he can spend it. This is all fake prosperity. That's why Republicans are --
BEGALA: Let them opt out, then, Alex. Let them opt out.
CASTELLANOS: As long as we can -- we can opt out from this --
BEGALA: Alex they're going to take this money and they can build their road and those schools and bridges.
CASTELLANOS: Paul can we opt out from the other half?
ROLLINS: Republicans would be happy with no tax cuts in this bill. This is a redistribution of money. This isn't real tax cuts. You're giving money back to people who haven't paid taxes. You're basically starting to take money from the payroll taxes that pay for social security when the social security is going to be shortened.
So people who don't pay in their social security are going to get social security. And what does that end up being? I just want to remind, I've got a long history. I've lived through something very similar to this.
We came in, in 1981. I was the White House political director. We had a big mess that Jimmy Carter left us. We tried to fix it. Unemployment went to 11 percent the week before the election. We won 33 seats in 1980. We lost 26 seats in 1982.
The game changes very dramatically. We came back and won 49 states which I hope is not the end game here. But at the end of the day --
COOPER: So from your standpoint what is the mistake that the Obama team made? Because they were talking about bipartisanship --
ROLLINS: Well, here's how we did it. We basically went to the Democrats, the House Democrats and we gave them ownership. They were guys who had their name, guys like Phil Gramm who then were Democrat.
We took members of the committee and let them basically come up with the bill. Danny Rostenkowski was very much the chairman of Ways and Means, was the principal architect of a lot of stuff that went on there.
COOPER: Jamal?
SIMMONS: Well again, I guess the Republicans have to figure out --
BEGALA: And Reagan got 61 House Democrats.
SIMMONS: The Republicans have going to figure out how far it is they're going to keep going around and saying no. Sooner or later they're going to have to dance with this president because the president is courting them a lot.
You could talk about -- Ed talks about having a mess to clean up. Paul Begala will remember this. When Bill Clinton came in office in 1993 he had a mess to clean up. He ended up passing his bill with only Democratic support. And that bill, that economic plan actually resulted in some of the best growth this country has ever seen.
COOPER: Well, let's listen to what the president said about reaching out to Republicans.
(BEGIN VIDEO CLIP)
OBAMA: When I made a series of overtures to the Republicans; going over to meet with both Republican caucuses; you know, putting three Republicans in my cabinet, something that is unprecedented; making sure that they were invited here to the White House to talk about the economic recovery plan, all those were not designed simply to get some short-term votes.
They were designed to try to build up some trust over time. And I think that as I continue to make these overtures over time, hopefully that will be reciprocated.
(END VIDEO CLIP)
COOPER: Alex, the American people certainly seem to be praising the president for the efforts that he made toward Republicans.
CASTELLANOS: And he's capitalizing on his goodwill to sell an unpopular plan; great looking bottle of wine, a little vinegar in it.
When you ask the American people do you really want what's in this plan, is there too much spending, they say yes. They say is it enough tax cuts, they say no. So it's the plan itself, it's the product that's the problem. The marketing, he's terrific. He's cashing in his political capital. But I can tell you what's going to happen in two years when the Democrats are on the ballot in 2010.
We saw beginnings of it tonight: they're going to have to go back to Congress for more spending, especially in those swing states because this thing is not going to be working. And they're also going to raise taxes on the top brackets to pretend to be fiscally responsible. More to come.
SIMMONS: What's the alternative, Alex? CASTELLANOS: The alternative is, the Republicans don't say no, by the way. There is just -- who spends the money? Are we going to stimulate this economy with government, with Washington spending and say they're doing such a great job or with people spending?
Do you have more faith in people or Washington? Our plan is the people plan. Your plan is the Washington plan.
COOPER: We've got to go.
CASTELLANOS: Good luck, you won.
COOPER: We're going to have more from our panel ahead. We're live throughout this entire hour.
We'll also take a look at how the president spent the day in Elkhart, Indiana. What he saw there, and what he said there and what he heard there from the people of that hard-hit community.
Also ahead, Republican resistance to the president's plan and where this plan goes from here. It's not over yet. It's not a done deal. There's negotiation between the House and the Senate versions. John King will go to the magic wall to show us where all -- where they are and who they are.
And the wildfires in Australia; the prime minister calling it a case of mass murder -- deliberately set. Who done it? We'll look into it ahead.
Stay tuned.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: I took a trip to Elkhart, Indiana, today. Elkhart's a place that has lost jobs faster than anywhere else in America. In one year the unemployment rate went from 4.7 percent to 15.3 percent.
(END VIDEO CLIP)
COOPER: That's 15.3 percent for the county. The city itself has an unemployment rate of 18 percent. Today the residents of Elkhart heard from the president. So what did they think of his recovery plan?
Randi Kaye takes us "Up Close."
(BEGIN VIDEOTAPE)
RANDI KAYE, CNN CORRESPONDENT: President Barack Obama selling the stimulus in the RV capital of the world or at least what used to be.
OBAMA: Folks here in Elkhart and all across America need help right now. They can't afford to keep waiting for folks in Washington to get this done.
KAYE: Elkhart, Indiana. About two hours east of Chicago. Once known for its recreational vehicle business is now better known for something else -- unemployment. Just one year ago, fewer than five percent were unemployed in the county. Now it's more than 15 percent.
The city alone is nearing 18 percent unemployment. That's one in five out of work.
MOORE: Supposedly the most economically depressed city in the United States. That's not a title we like very well, but it's a matter of fact.
KAYE: The problem in this community of 52,000? Higher fuel prices and the credit crunch drove RV sales down. Businesses are struggling, shutting their doors, shedding workers by the thousands.
OBAMA: We've got the best workers right here in Elkhart who are willing to put in hard time and do whatever it takes to make sure a company succeeds. But they've got to have a chance.
KAYE: A chance to overcome a drop in tax revenues and a rise in foreclosures. Unemployment offices are packed. Food pantries are empty. Food stamps are in high demand.
GREG HALLING, EDITOR, THE ELKHART TRUTH: Everybody knows someone who's lost a job, who's worried about losing a job. You can't escape it.
ED NEUFELDT, UNEMPLOYED ELKHART RESIDENT: What happens when my unemployment benefits run out?
KAYE: Like Ed Neufeldt, a father of seven who lost his job at an RV plant here in September, 1,400 others did, too, when Monaco Coach closed his doors.
He may not have a paying job but he had an important one today.
NEUFELDT: I'd just like to say, man, what -- to pick an unemployed RV worker to introduce the president of the United States, wow.
KAYE: Like many here, Neufeldt didn't vote for Barack Obama...
OBAMA: Hi. We'd love to have your vote.
KAYE: ... who was the first presidential candidate to campaign here in 40 years. Mr. Obama got just 44 percent of the vote. But residents are on board now. They know what's at stake.
HALLING: This is a community of fighters. These are people who want to work. This is a community of people who don't want hand outs. They want jobs.
KAYE: They don't want much, they say. Like so many towns across the country, Elkhart just wants its broken community fixed. Randi Kaye, CNN, New York.
(END VIDEOTAPE)
COOPER: Yes and they sure do.
We're taking a closer look at the stimulus package that's coming up. John King joins us at the magic wall to show us why some lawmakers just aren't buying it.
Also tonight: saving the banks again. President Obama's new bailout plan for banks -- is it a $350 billion gamble? We're "Keeping them Honest."
And the music industry shocker, superstar Chris Brown charged with allegedly assaulting his girlfriend, the singer Rihanna. Late developments and new details ahead.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: You have some people, very sincere, who philosophically just think that government has no business interfering in the marketplace. And, in fact, there are several who suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.
(END VIDEO CLIP)
COOPER: Not exactly a subtle dig at his critics. President Obama tonight basically saying to save the economy, you have to spend money and a lot of it. Some Republicans on Capitol Hill are wary of the rescue proposal to say the least. They don't see how Mr. Obama's promises are going to lead to millions of jobs.
Let's head to John King at the map. What can we tell here?
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: All right, Anderson. Let's just show our viewers.
Many of them remember this, red and blue from the campaign; blue -- Obama states; red -- McCain states. This is what President Obama is thinking about now. The gold states and the yellow states, those are your top ten unemployment states in the country.
The highest rate, Michigan, for example, is 10.6 percent. You see it right there. That's the highest unemployment rate in the country -- 10.6 percent. We'll get rid of that. Come back out to the map.
The president will be down in Florida tomorrow. If you look at the state of Florida, you have an unemployment rate of 8.1 percent; feeling the pain of this recession.
Again, come back out and let's just look across the country. Come over here to California, the nation's largest state and you have 9.3 percent unemployment. One reason, the Republican governor of California, Arnold Schwarzenegger wants some of this money.
So when you look at this map, the gold states are the highest unemployment. The lighter shade of purple, that is in the middle. The darker shade, the bluish purple, those are the lowest unemployment states. You would think, how could -- with such an unemployment problem across the country, how can so many Republicans say no to the president's stimulus bill?
Let's just pick a state that will come out here. This is the state of Kentucky -- unemployment rate, 7.8 percent. That's no small number; 7.8 percent. Yet, how can they in this state, both Republican senators don't like the president's plan.
That's why we want to remind you of this. John McCain carried the state. Kentucky is a conservative state. They don't like big government spending. They can afford, those Republican senators think, to say no.
Same with the state of Tennessee; John McCain carried the state. That's why it's red across the board. We'll come back to the demographics. It's in the middle when it comes to unemployment rate, somewhere right in here; 7.9 percent, you see there. And yet both Republican senators think they can say no because they believe they have a very conservative state. That's why it's so red. They can say no to the President of the United States.
One more quick look at this. We'll get rid of Kentucky, we'll get rid of this here. Who lives here? This is where John McCain lives; the president's opponent in the last election. He promised to work with the president and he said he will continue to do that but he doesn't like this plan. He says it's not true bipartisan ship.
Again, Arizona is in the middle when it comes to unemployment. If we look at the range of the states, lowest unemployment rate is 3.4 percent, the highest 10.6 percent. Arizona is roughly in the middle. And yet it has two Republican senators but again, a conservative state. They believe politically it is safe for them despite that high unemployment number, Anderson, to say no.
COOPER: All right. Battle lines are drawn.
John King, thanks.
President Obama warning the crisis will turn into a catastrophe if the bill isn't passed. The question -- is he right or is this just political rhetoric?
We're digging deeper with this gang: Gloria Borger, Pamela Gentry, David Gergen, Ali Velshi.
David, we've talked a lot about the president's efforts at bipartisanship tonight. And it's interesting, you talk to Republicans they say, "Look, he wasn't really making bipartisan efforts." You talk to Democrats they say, "Look, he bent over backwards." Could he have done more to get Republicans on board?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think one of the lessons that the White House is likely to draw from this, Anderson, is that when they went to the House of Representatives originally, they gave essentially the leadership of this bill to the chairman of the committee there. He's been there for a long, long time and let him basically write a lot of it. Republicans felt shut out of that process.
The White House, in effect, I think turned over the content to the leadership of the House Democrats. Many of whom want to do things that they think Barack Obama really believes in. Some of them actually now feel used in this process or they're a little angry about it.
But even so, I think in the future what the White House is likely to do is to bring Republicans and Democrats to the table early on to sit down and work out the principles of something like health care reform and not just simply turn it over to a Democratic chairman and then hope to draw Republicans. I do think that's one of the lessons.
I think Barack Obama is also, again, earning points with the American people to try to change the discourse in Washington, make it more civil. One of the things that's been interesting tonight as I look at your blog site, the AC360 blog site which is attracting lots and lots of people. They were saying, first of all, they love John King being back at the Magic Board.
They're also saying they enjoyed how civil and intelligent and respectful they thought Barack Obama was tonight. In contrast to what their memories, perhaps, faulty of the Bush years. I think it's working for him in that sense and helping to change the tone.
COOPER: You can join the conversation on the blog that David mentioned happening now at ac360.com.
Ali, this project that Tim Geithner is going to discuss tomorrow --
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.
COOPER: Explain exactly what it is, how much -- is this just -- it's the other part of the $350 billion TARP money that he's going to be talking about. Is that the total sum of the package he's talking about or are they going to be adding hundreds of billions to it as well?
VELSHI: Well, I think they're going to stick with that $350 billion. The issue is -- this is the $350 billion of the $700 billion -- the issue is that there's a feeling, I think, amongst people the first $350 billion wasn't spent as effectively as it could have been. There's an impression out there that most of the banks didn't lend that money. That's what we thought would happen.
In fact, some banks did. It's just that a lot of banks didn't. They used it to acquire other banks or they used it to horde money. That's basically the strongest argument for government spending in the stimulus bill, not TARP. And that is that tax cuts, while a lot of people really hold dear to the fact that tax cuts are the way to solve an economy like this, here's the problem, Anderson.
If nobody can borrow money effectively and nobody has saved money effectively, you take the money that you save on taxes and you may not go out and spend it in a way that creates economic activity. Right now, most companies, half of all American major companies have a low credit rating. They have to spend somewhere in double digits to borrow money. Most Americans don't have a savings rate and can't get available credit.
The government is the only organization that can raise the money and at relatively low interest rates in order to spend it. That's why the spending part of this stimulus bill may be very important. You've got to do that in the stimulus. Then you've got to take this TARP, $350 billion, Anderson, the second half of TARP, and distribute it to banks in a way that actually causes that money to be distributed to individuals and small businesses. Then you get lending going again. And then you start to see the economy turn around.
COOPER: Let's hope for that. Let's take a look though at what the president said about it. He basically did acknowledge some room for cuts, perhaps in the stimulus. Let's take a look.
(BEGIN VIDEO CLIP)
OBAMA: Although there is some programs in there that I think are good policy, some of them aren't job creators. I think it's perfectly legitimate to say that those programs should be out of this particular recovery package and we can deal with them later.
But when they start characterizing this as pork without acknowledging that there are no earmarks in this package -- something, again, that was pretty rare over the last eight years -- then you get a feeling that maybe we're playing politics instead of actually trying to solve problems for the American people.
(END VIDEO CLIP)
COOPER: Gloria, the Senate votes on the stimulus bill tomorrow.
Just a few hours from now, almost today -- on Tuesday.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right.
COOPER: Then it goes to -- basically there has to be negotiation between the House version and the Senate version. How is that -- what's that going to look like? Is that going to be --
BORGER: A mess.
COOPER: A mess.
BORGER: Well, you're going to have -- you're going to have House Democrats who were very much opposed to the cuts that were made in the Senate. And they're going to say, why are you holding our bill hostage to three Republican senators? We won the election. We have the majority of the house. And you really shouldn't be -- you shouldn't be able to do that.
And so at a certain point, the president is going to have to call his own Democrats together and say, "This is what we can do and this is what we can't do because we all need to get this bill done. It is in our own self-interest."
And so I think he's going to have to meet with the House Speaker, Nancy Pelosi, who is very opposed to these cuts made by Republicans in the senate, the three who signed on to this package. He's going to have to say to her, "OK, let's make a list because you can't lose those Republicans."
COOPER: And Pamela Gentry, to Ed Rollins's point which he made earlier, that even though this was a bill which started being written by House Democrats, this now has become the president's stimulus bill.
PAMELA GENTRY, SENIOR POLITICAL ANALYST, BET.COM: It's definitely his bill. Like we said, these three Republicans are just in there to get this little bitty piece passed. But he's got -- now he's carrying the burden on his back.
I think the largest part of the stimulus package that he's going to have to force this through, making sure that there's money that gets to these small businesses. Because the small businesses, there were several I spoke to in the last couple days. Their whole thing is that I don't care about really any tax relief because I don't have any income. If I don't have income, tax relief is only going to take me so far.
VELSHI: That's right.
COOPER: Ali talked about it a little bit earlier, with all the talk coming out about this new TARP, we're going to take a closer look at that, "Keeping Them Honest."
Plus, more from President Obama's news conference tonight: we're playing big chunks of it. We'll keep doing that over the next 20 minutes or so, letting you make up your own mind about how you think the president did and what you think about the stimulus plan.
Also other news -- Australia's prime minister calling the worst wildfires in that country's history a case of mass murder; more than 170 are now dead. The latest when "360" continues.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: The credit crisis is real. And it's not over. We averted catastrophe by passing the TARP legislation. But, as I said before, because of the lack of clarity and consistency in how it was applied, a lack of oversight in how the money went out, we didn't get as big of a bang for the buck as we should have.
My immediate task is making sure that the second half of that money, $350 billion, is spent properly.
(END VIDEO CLIP)
COOPER: That is the $350 billion question. How is it going to be spent? We may have a good idea tomorrow when Treasury Secretary Timothy Geithner announces the latest bailout plan.
Tonight, the president promised there will be transparency and accountability. But will all that money actually go to where it's needed? We're going to keep them honest. Here's Joe Johns.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT: Hold on to your wallet. They're rolling out part two of bailout for the banks. It's called TARP: the Troubled Asset Relief Program which under President Bush was widely criticized, to put it mildly. Because no one knows what happened to that first $350 billion of your money.
Granted, it almost certainly avoided a complete financial meltdown. Problem is Congressional watchdogs revealed that treasury shelled out $78 billion more for bank assets than they were worth which we didn't find out about until, well, last week.
ELIZABETH WARREN, TARP CONGRESSIONAL OVERSIGHT PANEL: Taxpayers frankly need to be outraged because treasury needs the message loud and clear. And the message is, "You tell us the truth. You describe what it is that you're doing. And then we can participate in that decision making process."
JOHNS: An Obama administration official tells us the new financial stability plan should open up the flow of credit, leverage private capital and impose new conditions on the money.
Doug Elliott of the Brookings Institution says those conditions will be tough.
DOUGLAS ELLIOTT, BROOKINGS INSTITUTION: Clearly the mood of the public and Congress says that there needs to be that kind of accountability.
JOHNS: The government says to expect something new, too -- a plan to get banks to sell and private investors to buy those bad loans undermining confidence in the financial system.
The idea? Treasury would guarantee a bottom price for these toxic assets to make sure they can sell. And if the assets turn around and make money, the buyer keeps the gain.
ELLIOTT: If you have private investors making the pricing decisions and using their own money, and then the government participating alongside, that's a much cleaner way of doing it. JOHNS: The Obama administration also plans on committing at least $50 billion to help homeowners avoid foreclosure which was supposed to happen the first time around.
ELLIOTT: $50 billion to $100 billion would have a real leverage effect because what you're talking about doing is using that money to fund interest rate reductions or reductions in principal or payments to the mortgage servicers.
JOHNS: All that said, you haven't heard the last of TARP. Analysts say it's likely there will be a need for even more money later this year.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
COOPER: Even more money.
Coming up, President Obama's first prime-time press conference. How did he do? Our panel weighs in. More on the new TARP.
Also, singer Chris Brown was a no-show at last night's Grammy Awards. So was his girlfriend. Both were supposed to perform. Now we have a better idea why. Brown is facing a felony charge.
Also, our first look at the octuplets and the fallout there bringing on mom a storm of criticism even from the octuplets' grandmother, who says it's unconscionable what her daughter did.
The latest coming up.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
TOM FOREMAN, CNN CORRESPONDENT: Wave power, water power, wind power. The stimulus bill before the Senate would invest $39 billion in clean American energy and the nuclear industry hopes to cash in. Although as a candidate Barack Obama was cautious about nuclear power, now the industry is touting its safety record and growth.
In the past year, the Nuclear Energy Institute says nuclear plants have created 15,000 jobs. And the government has received enough applications for new plants to expand our nuclear capacity by 25 percent. Of course, there are plenty of other alternative fuel industries and financial analysts say new investors attracted by that additional government spending could make all of them greener.
(END VIDEO CLIP)
COOPER: Tom Foreman with a look at the $838 billion stimulus bill; $39 billion will go to green investments. Let's talk strategy now about what's going to happen in the days and the weeks ahead with our panel. Joined again by Paul Begala, Alex Castellanos, Jamal Simmons and Ed Rollins as well. Paul, take us behind the scenes now. What happens tomorrow -- on Tuesday, the senate votes on the stimulus bill. Assuming it's passed. They apparently have the votes now. It's going to pass in the senate. It goes to be negotiated between the House and the Senate. Take us behind the scenes of that. How does that work?
BEGALA: Civics textbooks say that the House and the Senate each appoint conferees, leading members of credibility on the issue, likely to be the chairman of the house appropriations committee, David Obey who John King mentioned earlier. Other luminaries like that on the Hill. And they get together and work out the difference.
COOPER: That's with the civics textbook but what about -- Rahm Emanuel is not in a civics textbook, I don't think.
BEGALA: That's right. Thank goodness. In fact, there's a couple of things that are different about this. Sometimes in these conference committees, they're allowed to put in stuff that wasn't in either version. That won't be allowed this time, it's in the rules.
The more important point you raise was rights. I think President Obama and his very able and aggressive chief of staff, Rahm Emanuel, will have a much heavier hand in this. I do not think that this will simply be a Congressional action. I think that this will be in concert.
In fact, when they cut the deal in the senate, when Harry Reid, the senate majority leader cut the deal, he cut it with the active cooperation of President Obama and Rahm Emanuel. Rahm, in fact, went to the Hill to meet with some of the senators on this. So I think, that's what will different.
This will not simply be the two chambers or even the two parties; it will be the two political branches of government even. That makes it a little more complex but it makes it more likely to be successful.
COOEPR: Ed Rollins, behind the scenes, how much of this is horse trading and how much of this is bare-knuckle politics.
ROLLINS: Well, the critical thing here is he has to get a bill and he has to keep Susan Collins in the game. If Susan Collins walks --
COOPER: The Republican senator.
ROLLINS: Republican senator, then the other two will walk and they won't have a deal. The truth of the matter is there's lots of other things they can throw stimulus into or spend money. I think they just have to keep her happy and so whoever's in the room, Rahm or whoever else, they got to make sure that at the end of the day, she is happy.
CASTELLANOS: And there's a way, I think, that Democrats can be expected to do that. And that is say, Democratic House you want spending, how about spending down the road. We're going to come back, we're going to revisit education, we'll revisit all of that spending. ROLLINS: The highway bill.
CASTELLANOS: The highway bill, all of that. But for right now, I need the senate votes. I can't jeopardize them by opening this up to more pork in the House. Let's get this done this week. I think you'll see the president do exactly that.
COOPER: How tough do you think House Democrats are going to be?
SIMMONS: Well, you know, I'm hearing from some of the leadership aides on Capitol Hill that what they're going to do is have a leadership conference so what you'll have is probably have the speaker, probably have the majority leader, probably have some committee chairs in there but not have a lot of rank and file. So they'll be able to control what happens in this deal. And I would bet you, some of this is already going to be put together before they ever sit down in the room.
I know Friday is a pretty good deadline. They're truly trying to get this bill done by Friday so they can go on recess for President's Day. So, you know, Barack Obama is doing a good job by talking directly to the American people, keeping that part of his base activated and we were just sort of talking a little earlier, more people will have seen tonight than saw Bill Clinton when he gave her first press conference at prime time because CNN and PBS were the only ones to carried it.
COOPER: There's another partisan -- perhaps partisan battle looming that has nothing to do with it which is interesting. Patrick Leahy has a proposal for possibly investigating the Bush administration officials. The president was asked about that tonight. Let's listen.
(BEGIN VIDEO CLIP)
OBAMA: I haven't seen the proposal, so I don't want to express opinion on something I haven't seen. What I have said is that my administration is going to operate in a way that leaves no doubt that we do not torture, that we abide by the Geneva Conventions and that we observe our traditions of rule of law and due process as we are vigorously going after terrorists that can do us harm.
My view is also that nobody is above the law, and if there are clear instances of wrongdoing that people should be prosecuted just like any ordinary citizen.
(END VIDEO CLIP)
COOPER: Ed, what do you make of that answer?
ROLLINS: Great answer but the bottom line is this is now his administration and the people, in all likelihood, who'll be prosecuted are not George Bush and Dick Cheney. They're gone. They made it very clear -- Cheney did that these people were under the orders of the president. This is his CIA, if there's any torture going on, if you want to tear that place apart, you start prosecuting some of these people who basically questioned terrorists.
CASTELLANOS: This is a typical Barack Obama here; a little something for everybody. If you want to hear we're going to go after the Bush administration, you heard no one's above the law. Or if you want to hear, no, we're going to have a nice bipartisan Congress that's going to achieve a lot, then you heard on focus on moving forward. What is he going to do? We still don't know.
SIMMONS: There's a clear political calculus here. There are a lot of people on the left who are really anxious about trying to get some accountability here. But I think most of the people in the country really care more about getting jobs, getting the economy back stimulated. I don't see the administration going along with a witch hunt of the Bush administration.
COOPER: Paul Begala, do you agree with that?
BEGALA: Well, what you're going to see -- there's a division of labor just as there are division of branches. Congress has oversight responsibility. In the main, Congress does not have prosecutorial power.
But it looks like Congress -- you saw the story from Senator Leahy today, I talked to others who want to look at other aspects of the past. What they say is this, the president wants to move forward. He seems to have less of a retribution streak in him than almost any politician I've come across. I think it's good for the country.
At the same time, you can't really move forward unless you can learn from the mistakes of the past. And so, I think, Congress is going to want to get to the facts here. That's not a witch hunter prosecution but it's a truth and reconciliation process.
COOPER: We're going to have to leave it there. I want to thank our panelists for staying up late with us. We're going to -- we also want to give you a sense of what else is happening around the world.
Randi Kaye has a quick update in the "360 News and Business Bulletin" -- Randi.
KAYE: Hi again, Anderson.
A new survey suggests raises will be much scarcer this year than last. A full quarter of employers say they've already frozen workers' salaries for 2009. Another 20 percent are considering freezing pay. A year ago, 5 percent of companies planned to suspend raises.
Australia's prime ministers is calling the worst wildfires in his country's history a case of mass murder. Four hundred blazes have incinerated entire towns, killing at least 170 people leaving 5,000 survivors homeless. Police suspect arson in some of those fires. R&B singer, Chris Brown, who was a no-show at last night's Grammy Awards is facing a felony assault charge. Sources tell CNN the alleged victim is his girlfriend, the singer Rihanna, who canceled her performance at the Grammys. Brown turned himself in last night and was released on bond.
And meet the octuplets finally. This morning on NBC's "Today Show," Nadya Suleman showed off her eight newborns, yes, eight, who are still in a neonatal hospital in California. Suleman who had six other children says it was her dream to have a large family. The grandmother of the octuplets had harsh words for her daughter saying she has no means to support 14 boys and girls.
And, Anderson, I know you're counting, that's 14 boys and girls, Nadya, the mother and grandparents all living in that three-bedroom home in California.
COOPER: And the grandmother is saying that this woman has given them no support for the six kids she already has. It's quite unbelievable.
Now, time of our "Beat 360" winners: our daily challenge to viewers to come up with a caption better than the one that we come up with for a photo that we put on our blog everyday.
Tonight's picture: President Obama at today's town hall meeting in Elkhart, Indiana; kind of listening to his ear there. Our staff winner tonight is Gary Tuchman whose caption: "Could this be a subliminal indication that the left wing has the president's ear and the right wing doesn't."
Our viewer winner is Casey with the caption: "President Obama struggles to hear average American voices over the whining and begging from Wall Street.
KAYE: Oh, very nice.
COOPER: Casey, your "Beat 360" T-shirt is on the way.
That does it for 360. Thanks very much for watching.
Right now, we want to bring you the president's news conference in its entirety. We'll see you tomorrow night on 360 at 10:00 p.m. Eastern. Thanks for watching.
