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Obama, McCain, Bush Meet to Discuss Bailout
Aired September 25, 2008 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN ANCHOR (voice-over): Coming at you now -- you, the American people, sending a resounding no to President Bush's bailout. On Twitter, you are saying, not with my money. On Facebook, this is outrageous. Record I-Reports also coming in.
UNIDENTIFIED MALE: Seven hundred billion? Why didn't they make it $699 billion, and everybody would think they were getting a good deal without the sticker shock.
SANCHEZ: Republicans sending President Bush a similar message on our air.
UNIDENTIFIED MALE: The Paulson plan is dead on arrival.
SANCHEZ: Is our economy really hanging in the balance? Should the presidential debate be postponed?
A historic meeting -- Bush, Obama, McCain getting together at the White House during the next hour. And you will watch it and react to it live as it happens.
We begin right now.
(END VIDEOTAPE)
SANCHEZ: And hello again, everybody. And welcome here to the world headquarters of CNN. I'm Rick Sanchez.
All of this is going to be taking place within the next hour or so.
Roger, let's start by getting a shot of the White House if we possibly can. Let's put up that shot. This is where it is all going to be happening. This is where a historic meeting of sorts is going to be taking place, Barack Obama, John McCain, and the president of the United States, to see if they can come up with some kind of deal that they will probably announce, oh, some 50, 55 minutes from now.
As soon as we see them walking into the building, we are going to take that shot for you and let you see it. A lot of questions still on the table. One of them is, should there even be a debate on this Friday? I asked that question today of many of you. The responses have been immeasurable. I am going to share some of those with you in just a little bit. Also, we are now hearing that there are protests in the United States in 20 different cities. Organizations, grassroots organizations, have gotten together and decided that citizens are going to band together and tell the government they don't want this thing to happen. We have got some video that is going to be coming in places like New York, also Connecticut and in Minnesota.
I am understanding now that maybe Senator Dodd is speaking. Is that right? All right. Let's go ahead to take -- let's go ahead now to Christopher Dodd. He is speaking.
As you know, he is the chairman of the Banking Committee. Here we go.
(BEGIN VIDEO CLIP)
SEN. CHRISTOPHER DODD (D), CONNECTICUT: We have reached a fundamental agreement on a set of principles, one for the taxpayers, which is tremendously important. We are giving the secretary authority that he will need in order to act and the funding that he will need. And we also have dealt I think effectively with the issue of effective oversight, with homeownership preservation, as well as executive compensation.
(END VIDEO CLIP)
SANCHEZ: All right, that is what they said a little while ago, that in principle, congressional leaders have come to some kind of agreement or understanding. That does not mean it is a done deal.
Elaine Quijano is following things for us. There is that shot of the White House.
What are we going to be seeing over this next hour there at the White House with this historic meeting, Elaine?
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, you are absolutely right. Some fascinating pictures are going to be taking place here. We will be seeing them unfold.
First, let's set the stage for you. In about an hour or so, the two men who are vying really for President Bush's job are going to be sitting down in the West Wing, just steps away from the Oval Office in the White House Cabinet Room, where they will be hashing out, along with congressional leaders, the best approach really on how to tackle the nation's financial crisis.
Now, there have been a lot of questions about what really this meeting is supposed to achieve. White House Press Secretary Dana Perino also pushing back against the notion today that this is a political stunt, as some have charged.
We asked, is this a negotiating session? What will come out of this meeting? She essentially said, Rick, that she is not sure at the point. A lot of the fast-moving developments, as you know, are taking place on Capitol Hill. We should tell you that, on that statement agreement on -- quote, unquote -- "fundamental principles," White House Deputy Secretary Tony Fratto saying that the White House takes that as a good sign, but certainly they are going to have to take a look at the details, Treasury Secretary Henry Paulson and his team, to look over all of that.
So, a lot of fast-moving developments, but certainly a fascinating day to be here at the White House. The president, in addition to all of this, has had a host of world leaders coming in and out of the Oval Office today, so, a busy, busy day here.
SANCHEZ: Elaine Quijano is going to be following that story for us there at the White House.
We will go back to Elaine as soon as we get word that either John McCain or Barack Obama have arrived at the White House. As far as we know, when last we checked, they were still in transit.
In the meantime, to set the scene for how this developed, to give you a sense before we go to our congressional reporters of actually what is going on, I want you to see what happened after the president made his announcement about this $700 billion bailout plan, the reception that he got not only from the American people, but from Democrats and Republicans on Capitol Hill.
Watch this report. It crystallizes for you what type of reception he received. The story is by Christine Romans.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN CORRESPONDENT (voice-over): It's so much money, it's hard to comprehend. A monster Wall Street bailout. Some $700 billion. Think of it this way -- that's $2,333 for every single person in America. At the first public hearing aimed at understanding and solving the crisis, pushback from all sides.
SEN. MIKE ENZI (R), WYOMING: The Treasury and the Federal Reserve have asked to us cut them the biggest bailout check in history and that money will be handed out to the same banks that put us in the mess to begin with.
ROMANS: From Republicans who want government out of business and who detest the taxpayer bailout for Wall Street's bad behavior.
SEN. JIM BUNNING (R), KENTUCKY: This massive bailout is not a solution. It is a financial socialism and it's un-American.
ROMANS: To Democrats who want more homeowner protections and like Senator Jon Tester who called for more times, deliberate what is the most important financial overhaul since the Great Depression.
SEN. JON TESTER (D), MONTANA: Why do we have one week to determine $700 billion that has to be appropriated or this country's financial systems go down the pipes?
ROMANS: And on the House floor, a burst of outrage at the Bush administration. REP. JIM MCDERMOTT (D), WASHINGTON: They used fear to go to war. They used fear to take away your civil rights and spy on you. And now they're using fear of financial collapse. And they are just trying to scare you into getting them to do whatever they want.
ROMANS: The Treasury Secretary is urging quick and clean passage of the bailout. Without it, he says, this is what's at stake.
HENRY PAULSON, TREASURY SECRETARY: The American family's financial well-being, the viability of businesses both small and large, and the very health of our economy.
ROMANS (on camera): There is no doubt this is a historic moment. This is the largest government intervention in the financial markets since the catastrophe of the Great Depression. And the Paulson bailout could push the national debt to levels not seen since the 1950s. That is when the United States was digging out after World War II.
Christine Romans, CNN, New York.
(END VIDEOTAPE)
SANCHEZ: So, that has been the congressional response all throughout.
There is another part to that story. How does Congress grapple with passing this, if they choose to, and then have to answer to their constituents?
John King has prepared a report on that. We're going to show you that coming up in just a little bit.
By the way, you are getting involved in this as well. Let's go to our Twitter board, if we presidency can. These are some of the responses that we have been getting from many of you.
This is from Wayofthelotus. This is: "I want to see the deal before I can say if I am happy about it. Right now, it is just a lot of political posturing."
This is response that we are getting from people who have just heard the news that some in Congress, at least the congressional leaders, are saying they have come up with some kind of compromise, although it is not etched in stone.
This one from Shabuti. It says: "This is being done, and we don't know who is getting what and how. If it is our money, don't we have a right to know?"
Let's go to our congressional correspondents now.
Let's start with Jessica Yellin. She has been following the Obama camp on Capitol Hill.
Jessica, let me turn things over to you, as well as Dana Bash, who is following the McCain camp on Capitol Hill.
Jessica, let me begin with you, though. Has there been any word today from Barack Obama on this particular subject?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Yes, Barack Obama spoke out about it in a meeting this morning when he was addressing the Clinton Global Initiative by satellite. He was still in Florida at the time, but he said that he feels that this is a situation that came about because of greed on Wall Street and irresponsibility in Washington.
He basically blamed politicians who were against regulation and refused to take a close look at these companies and how they were doing their business. And, you know, John McCain has been a fierce critic of regulation, so, indirectly...
(PHONE RINGING)
YELLIN: Excuse me -- taking aim at John McCain himself.
Always reporting and getting a reporting call.
Sorry, Rick.
(LAUGHTER)
YELLIN: Now, I can tell you, though, another issue that Barack Obama brought up was the question of this debate. And Barack Obama said there is absolutely no reason that this crisis on Wall Street should stop the two men from debating. Let's listen to what he had to say.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: Our election is in 40 days. Our economy is in crisis, and our nation is fighting two wars abroad. The American people deserve to hear directly from myself and Senator McCain about how we intend to lead our country. The times are too serious to put our campaign on hold, or to ignore the full range of issues that the next president will face.
(END VIDEO CLIP)
YELLIN: So they are essentially on the Obama side making the point that this has been a crisis for some time. There's really no reason it is more of a crisis at this moment. Legislation can't even be voted even if it's written tonight, Senate-side, can't be voted on until Saturday. So there is no need for the two men to be in town tomorrow -- Rick.
SANCHEZ: All right, thanks so much. Jessica Yellin, stand by. We are going to be getting back to you.
Let's go to Dana Bash now.
Dana, you have been following the McCain camp. And he got some rather interesting criticism from members of this Banking Committee. I think I have part of that here.
This is from Dodd and Schumer. They say: "Apart from his unproductive criticisms made from afar, we have heard nothing from Senator McCain on these critical issues. Now is certainly not the time for him to inject presidential politics into these delicate discussions."
That's the leaders of this particular hearing or this particular committee talking about John McCain. Did that smart?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, those are Democrats, certainly, who have been involved in the discussions. And that is the line across the board here on Capitol Hill from Democrats, saying, wait a minute, why are you here? It is not going to help. It's only going to hurt. They're accusing him of grandstanding, of trying to parachute in. You name it, they are saying it.
And you just gave a little bit of taste of what Democrats are saying.
I can give you kind of a little bit of color of what John McCain has actually been doing here. He is right where I am. I'm in the Senate Russell Building. And his office is just a floor below where we are now. You see him walking up the stairs there.
He has been here for about three hours, Rick, and he has not been involved in the actual negotiations that are going on, because they are and have been going on inside the Banking Committee. John McCain is not a member of the Banking Committee, so he has not been there. He has not had staff in the room.
However, what he has been doing has been talking to his fellow Republicans. Specifically, he went over to the House side and spoke with the House Republican leader, John Boehner, and some of the Republicans who have the most anxiety, basically, about this particular legislation.
And what we are hearing from McCain's staff and also from House Republicans today is that there is still a lot of anger basically among House Republicans, and they are not there yet. So, what they say inside the McCain camp is that he is listening to his fellow Republicans about their concerns. That is part of what he is doing here today before he goes over to White House and expresses that to -- helps express that to the president.
SANCHEZ: Dana Bash, one of the best in the business -- thanks so much, Dana.
We're going to be checking in with both Dana and Jessica Yellin as the hour progresses, as we get close to what we are following, which is any moment now, we will see Barack Obama and John McCain walking into the White House.
Also, many of you want to know how we got into this thing in the first place and how it has affected you, not from a macro standpoint, from a micro standpoint, really finding out who was doing what to whom. We have got a report that illustrates that, perhaps like nothing you have ever seen before.
It is coming back on the other side of the break. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: And we welcome you back. I'm Rick Sanchez.
Get in touch with us, because, obviously, a lot of people already are.
A couple of things I want to get to as we get going there. There are protests now just sporadically starting up around the country. We have got video of one. Look at the size of this one. This is on Wall Street today. These are just average citizens, New Yorkers from all walks of life gathering near Bowling Green Park. You know where that is?
That is just -- if you have been to New York, that is where that bull is there on Wall Street. These are average American citizens, saying, we do not want this bill passed. We do not want to have to pay for what other greedy people, as you see on the sign, "Stop" -- quote -- are saying.
We understand there are protests like this now that are getting started in 20 different cities across the United States. We have reporters who are going to be gathering in places like Connecticut and Minnesota. In Connecticut, activists are going to be at the AIG company headquarters. In Minnesota, we understand they're going to be at the Federal Reserve Bank of Minneapolis.
As we get more video like that, we're going to be sharing it with you as well. Also, you have been contacting us on this story. And many of you are saying, you know what? We don't want the debates to be postponed. The consensus is that most people who have been reaching us today are saying just that.
Some have been saying, no, maybe we should, because this is so important, just a look at some of the Twitters that we have been getting on that. Let's go ahead and get that, Johnny, if we can over here.
This is Fair and Balanced writes to us: "No, this tactic is like the biggest 'dog ate my homework' in history. McCain wants to avoid an issue that he knows little about."
No better time for a debate," says Franke James. "Agree with Obama that U.S. president needs to be a multitasker."
All right, let's go back on camera now. I think we have got new details coming on this deal that some of these congressional leaders say they have come up with.
Dana Bash is following that for us.
Dana, what have you got?
BASH: Well, this actually comes to us by way of Kate Bolduan, who has been up here covering the ins and outs of this negotiation.
And here is what she has learned from two Democratic sources about the legislation or at least the proposal that they are going to put forward to the Treasury Department later this afternoon. And that is, it's the following, that the Congress would authorize $700 billion for this bailout, but it would be done through installments.
And what Kate Bolduan learned is that the first would be $250 billion, which would be available immediately, and there would be $100 billion after that if needed without further congressional approval. But the second half of these tranche (ph), basically, of the $700 billion, it would be $350 billion, that would not become available until later, and only if Congress would approve it.
So, it seems to be that these negotiators are trying to assuage some of the concerns of many lawmakers, Republicans and Democrats up here, about just cutting a check for $700 billion, obviously an unprecedented amount of money, and just sending it off without some kind of oversight. So, that is one of the ways, clearly, that they are proposing that they have more oversight by doing this in stages. So, that is what we're hearing right now that these Democrats are going to propose to Treasury later on this afternoon, Rick.
SANCHEZ: And, as any negotiator will tell you, the devil is in the details. Dana Bash trying to bring those details for us. As she turns them around, we will be bringing them to you.
Obviously, the thing that Americans want to know is, how it's going to affect me. That is the question you are asking, right? That is the question we are asking ourselves. We are all in this together. We are trying to get answers. As we do, we will share them with you.
And we are also going to be introducing you to some bankers who actually went before CNN cameras and are now saying, I feel guilty about what I did to people in trying to get them to take loans that they didn't really need. You're going to be surprised when you see this report.
We're going to have it for you in just a little bit. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back here to the world headquarters of CNN. I'm Rick Sanchez, having a conversation with many of you here on Facebook and MySpace and obviously Twitter.com. We will continue to follow some of the comments that are being made you by, thousands coming in just the last couple of days. Literally, thousands of people have been reaching us, talking about this $700 billion bailout deal.
But, first, I talked to you a little while ago about what micro means, getting to the essence of what people actually did to other people. You are about to watch this report that details how people at a specific bank are now saying they feel guilty because they essentially convinced other Americans that they needed to take credit out, that they needed to borrow, borrow, borrow, and they didn't really have the need, but they were pressed by their managers.
Here is this report by Deborah Feyerick.
(BEGIN VIDEOTAPE)
DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): Think of the movie "Boiler Room."
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You know, I didn't get to where I am today by losing my client's money.
(END VIDEO CLIP)
FEYERICK: But instead of stockbrokers, they are credit card account managers. And instead of pushing stocks, the product is cash.
UNIDENTIFIED FEMALE: I alone sold almost a quarter of a billion dollars.
FEYERICK: Kate Colombo (ph) in the blue coat spent four years as an account manager with credit card giant MBNA, which was bought by Bank of America in 2005. Kathy Ellingwood (ph) was there for a year and a half. She quit this summer.
Both work here at this customer call center in Belfast, Maine. They never worked together but their stories are similar.
UNIDENTIFIED FEMALE: Every customer that calls in is a mark. It's a great, big count.
FEYERICK: Kate and Kathy say customers would call in with a basic question about interest rates or fees. Once on the phone, they were instructed to entice customers to take cash advances, sometimes up to the max, whether they could afford it or not. UNIDENTIFIED FEMALE: I would say 90 percent of the time this is the response. People were pragmatic. They would say, I don't need $100,000.
UNIDENTIFIED FEMALE: Right. Right.
UNIDENTIFIED FEMALE: You know, and we would find a way to convince them that they did need the money.
FEYERICK: What is the trigger word?
UNIDENTIFIED FEMALE: I'm in financial difficulty. I can't make my payments.
UNIDENTIFIED FEMALE: Or I have a son I sent off to college or my car is not running.
FEYERICK: Colombo says that some people even asked about a $50,000 cash advance for a down payment on a house. That's illegal. But the women tell us they were trained to get around it, saying -- UNIDENTIFIED FEMALE: What I can do is I can deposit some money into your checking account. And once the funds are there, it's yours to do with as you please.
FEYERICK: Bank of America tells CNN "only customers in good standing and with good payment history are able to access cash up to the available credit line." Colombo and Ellingwood say they had customer payment histories on their computer screens and were told to sell hard to everyone. Then they would speed through intricate disclosure notices which included how a zero or low-interest rate could convert to as much as 28 percent if a payment was late, even a day.
UNIDENTIFIED FEMALE: There was this one old man, he was in his 90s, and he had all of this available credit. And I don't remember how much but a lot. Maybe $100,000 in credit. I have got my manager to my right screaming at me, "Colombo, you need to sell! You need to sell! You need to sell!"
FEYERICK: Bank of America calls its terms clear and transparent. But lending watchdog Jim Cavin (ph) says the hard-sell tactics which he's seen from various credit card companies border on predatory.
UNIDENTIFIED MALE: We haven't identified any illegal practices. What we've seen are practices that are highly unethical.
FEYERICK: The two women say their conversations were monitored, and the more they sold the bigger their salary.
UNIDENTIFIED FEMALE: And if you didn't do it, you have to yank off the phone.
UNIDENTIFIED FEMALE: You get reprimanded.
FEYERICK: Bank of America calls the allegations by the former employees incorrect and tells us, "Our call center associates are focused on serving customer financial needs and responding to questions about their accounts."
But performance reviews for Colombo, which she provided CNN, tell a slightly different story about the sell tactics. She is told by supervisors to be more aggressive, "You cannot sell what you don't offer." In another, "Understand the importance of selling at the highest possible rate and not offering or soliciting reductions to rates that are not necessary."
UNIDENTIFIED FEMALE: Everybody on that level knew what we were doing. We were being told to do what we did.
FEYERICK (on camera): Do you feel guilty?
UNIDENTIFIED FEMALE: Yes.
FEYERICK: About what you did?
UNIDENTIFIED FEMALE: Without question. UNIDENTIFIED FEMALE: Absolutely.
UNIDENTIFIED FEMALE: Without question.
FEYERICK: Americans for Fairness in Lending says it wants the Senate to ensure consumers are protected from what it describes as the deceptive practices of many of the same financial institutions likely to benefit from the $700 billion bailout.
The credit card bill of rights passed the House earlier this week, but is opposed by the banking industry and the White House, which says it would lead to less access to credit and higher interest rates for consumers. For its part, Bank of America would not talk about individual cases, but says it has nothing to gain by extending credit to people who do not have the ability to pay back.
Deborah Feyerick, CNN, New York.
(END VIDEOTAPE)
SANCHEZ: So, obviously, the imperative question that comes out of that is, did our government get us into this situation by telling Americans, borrow, borrow, borrow? We are going to be talking about that with an expert who is going to be joining us in just a little bit.
As we go to break, Johnny, be good. Give me that shot over there. Give me that big Twitter board right there.
That is JCutz, who writes to us. He says: "Rick, I hope Congress is really focusing on long-term solutions and not anything just to pass this election."
Waiting on Barack Obama and Senator McCain at the White House. We will put up that pic when we come back as well. Stay with us. We have got the news as it happens.
(COMMERCIAL BREAK)
SANCHEZ: All right. Welcome back. There you see some of our digs as we turn things around for you.
Roger, do me a favor. Give me a shot of the White House, if you can, once again. This is where it is all going to be taking place. This is what we are all kind of barreling toward here, a historic meeting between the president of the United States, I guess I need to say the present president of the United States, trying to toil with this economic crisis, but in enlisting the supports of two men, Barack Obama and Senator John McCain, who may or may not cancel their debate on Friday in Mississippi to make sure that this happens, more on that in just a little bit, the Mississippi part anyway and the part about the debate.
In the meantime, what I need to tell you about is I know that you have a lot of questions. Should we do this? Is it good for me? Why do I have to pay for all these millionaires who seemed to have overspent and gotten people to overborrow, as you just watched in that report?
We have got a guy now who can answer some of those questions. His name is Jordan Goodman. He is in fact America's money answers man. And he joins us to hopefully answer some of our questions.
Look, let's cut right to the chase.
JORDAN GOODMAN, FINANCIAL EXPERT: Sure.
SANCHEZ: Americans looking at you and me right now want to know, do we really need to do this, and why do I have to pay for it, when it was not my screw-up? Your answer to them is what?
GOODMAN: First of all, the answer is, yes, we have to do it, because the markets were seizing up without it.
And, clearly, the stock market is up today, feeling this is going to go to happen. Had it not happened, clearly, the markets would have fallen very sharply. When you have the head of the Fed and the head of the Treasury Department saying, it's this or we fall off the precipice, I think we actually have to do it.
SANCHEZ: Well, what about those people who say, market be damned; look, I'm not an investor; I'm just an average guy out there with a $20,000 or $30,000 job, doing the best I can, and why should I have to pay? What is -- $700 billion comes out per citizen something like $2,300.
GOODMAN: That's right.
SANCHEZ: That is a lot of money for somebody like that, Jordan.
GOODMAN: It is. It is. It's going to be on their kids and grandkids. There was no other lender of last resort. And the U.S. government is the one to do it.
We have bailed out all kinds of people. We bailed out Fannie Mae and Freddie Mac. We bailed out AIG. We bailed out Bear Stearns. Now what happened, Rick, is when we didn't bail out Lehman Brothers that is when the market went into the free fall. You had money market funds not paying back on the dollar. So, I think that was an example of what could happen if we didn't have this bill.
SANCHEZ: You know there are people out there who disagree with you?
GOODMAN: Absolutely.
SANCHEZ: I've heard and read a couple of them today who are telling citizens go out there, protest, revolt, this is not a good idea.
GOODMAN: They are.
SANCHEZ: Why are you right, and why are they wrong?
GOODMAN: Because I think we actually saw what would have happened. I think they should have bailed out Lehman Brothers. I'm not saying this is a great thing to happen, but I'm saying you had to do it. We have the evidence. They had a chance of bailing out Lehman Brothers, the government stepped away and said let the private market will take care of it. The private market did not take care of it. And the end result is Lehman Brothers when under. The markets immediately seized up. A week ago, last Thursday, the markets were almost about to come to a complete financial halt. That is what happened.
SANCHEZ: But you keep referring to the market this, and the market that. Talk to me on a micro level and talk to me about my groceries. What is going to happen to me and the average American if we don't pass this thing? Forget the market for a while.
GOODMAN: OK, if we don't pass it the credit crunch, which is already intense, is going to get more intense. It is very hard for people to get mortgages, credit cards, small business loans. And that is going to be even more intense.
You see, these banks have huge amounts of bad loans, which the idea is to take these bad loans off of their balance sheets, one way or the other, give them money that they can start lending and making the economy working better. That is the theory of how this $700 billion will be used, to kind of get the system going again. Without that, the credit crunch intensifies, and not only here but around the world, and at a certain point, you cannot bring it back. You can't revive a dead horse, you might say, and that is what the people are worried about. And that not happening.
SANCHEZ: And one final thing. My producer is getting on me to finish this. But I have a question I have to ask you.
GOODMAN: Sure.
SANCHEZ: How do we know that these credit companies are not giving credit, because they are saying, I'm not going to do anything until I know I have this $700 billion in my pocket. So in the meantime, I am just going to put it off. How do we know they are not doing that?
GOODMAN: Well, that is a concern. Because say this thing goes through, the banks do get their money. They may just put it in Treasury bills, they may not lend it out because they are too scared. There is going to be a lot of pressure on them to get that money back out in the economy and make it move. Because otherwise, the credit crunch continues and it doesn't really help anything. You have had this huge taxpayer bailout, but it really hasn't helped. That is what I think a lot of people in Congress are worried about. Are you going to come back to us for more than $700 billion?
SANCHEZ: Right.
GOODMAN: And keep this thing moving without really solving the problem. It does not solve the underlying problem, Rick, of the housing market going down. You know, the cause of this in the first place. That report you just had about how much people got way over their heads in debt.
SANCHEZ: Right.
GOODMAN: That is the underlying problem. That is the underlying problem. That is not going away. We had the largest bubble in human history, from 2003 to 2006 and now we are in the hangover period. It is not as fun as stirring the party.
SANCHEZ: No. You are absolutely right. And you know, we are all kind of looking at each other and saying, why didn't anyone warn me? Why didn't anybody see this?
GOODMAN: During the party, everybody has a great time.
SANCHEZ: Yes, yes.
GOODMAN: Nobody wants to take away the punch bowl away, right?
SANCHEZ: You are right. You are right, especially when there is good stuff in it.
GOODMAN: Right.
SANCHEZ: Jordan Goodman, thanks. You have probably been to a few of those parties, yourself.
GOODMAN: Absolutely.
SANCHEZ: Jordan Goodman. Thanks so much for joining us. We really appreciate it.
GOODMAN: All right. Thank you, Rick.
SANCHEZ: Really, good analysis. You know what we are going to try to do, I know there is different opinions on this. And we will try to bring you different perspectives. There are other people out there who have a different perspective or different take on his. And we will effort to get that for you.
By the way, there is a take that seems to be a consensus for many Americans, red staters, in particular, who are saying I don't want to do this. I don't want my money to go into this. John King went to Montana and found people like that including the governor of Montana. You are going to be impressed by this report. We have it for you on the backside, also, Roger, let's take them out with that shot of the White House, just to remind them what we are waiting for. That is Barack Obama, John McCain and President Bush, historic meeting, we are all over it.
(COMMERCIAL BREAK)
SANCHEZ: We welcome you back. It is 36 minutes after the hour now. I'm Rick Sanchez here at the World Headquarters of CNN.
Obviously, there is an awful lot going on. The American economy is at stake here, as Congress, not only the president of the United States, as we get that shot up again of the White House, but the two candidates for presidency of the United States. They are going to be having an historic meeting in a little while.
As you expect, we here at CNN are all over this. Our congressional correspondents are on it, our White House correspondents are standing by. As soon as we get the first inkling that the meeting is about to take place, we will be taking you there. We will probably be able to show you the arrivals of both McCain and Barack Obama as well.
Meanwhile, many of you are talking to us about this debate. Angry that it is being canceled. Let's go over to our board, if we can. There it is.
Let's start with my MySpace page. "The debate not only should, but must go on as scheduled." Ole Miss, referring to the University of Mississippi, spent $5 million preparing for this debate and it would a complete insult and a waste of time and those hard-earned dollars that could have been used for student scholarships or any number of things."
Now, let's go over to my Facebook page.
Let's go to post number 24: "McCain is actually trying to do his job as much as he wants to be president, he is a U.S. senator. He needs to do as Biden and Obama, get back to Washington and do the job that they were originally elected for."
So that person believes that in fact, John McCain is doing the right thing by postponing or trying to postpone the debates.
Let's go with 22, post number 22, right there: "So he wants to postpone a 90-minute debate to solve our financial crisis. If they could not make it happen in the past eight years, 90 minutes will not make a difference." That is from UnchiCampbell (ph), who is there on my Facebook space.
So the question is should this debate be canceled? Right now, it seems to be up in the air. Let's go to our own Preston on Politics, who is following this. He is joining us from Mississippi, Ole Miss, to be exact, as they call it down there, to hopefully give us some news.
What do you know, Mark?
MARK PRESTON, CNN POLITICAL EDITOR: Well, Rick, let me just show you what people here in Mississippi woke up to here this morning. This is one of the area newspaper, Rick, this is "The Commercial Appeal" out of Memphis. Debate On Hold?, big question mark. And even in this hour, right now, Rick, we don't know if it is going to happen.
John McCain is still waiting to find out what the plan is and if it fits his criteria for him to come here to Mississippi. Of course, our congressional correspondents, our White House correspondents are following that very quickly. I will tell you here in Mississippi, though, Rick, they are still moving forward. Everything is moving very quickly. They are trying to get ready. They expect this to happen. In fact, the governor of Mississippi just said a few hours ago, Rick, he expects the debate to occur tomorrow night.
SANCHEZ: Mark Preston, following things there for us. Obviously, if there is any change, let us know. We will be getting back to you.
A lot of news going on so we will be getting back to Washington in just a little bit. A couple of things to catch you up on. Obviously this report I told you about, filed by John King, which is really a great way of finding out what is in the heart of many Americans, as they look at the problem. Many of them quite frankly are real angry about this. You will see it in this report. Also we'll go back to our congressional correspondents in just a little bit.
Stay with us. It is all happening. And we have you covered.
I'm Rick Sanchez. We will be right back.
(COMMERCIAL BREAK)
SANCHEZ: We welcome you back. I'm Rick Sanchez here in the World Headquarters of CNN.
We understand there is some kind of compromise between congressional leaders. But we mentioned this before, obviously, you know, the devil is going to be in the details of something like this. Let's talk details again. Dana Bash is following the story, she may have more information to share on what exactly they have come to terms with, or on.
Dana, what can you share?
BASH: Well, they are basically where we talked last, which is essentially that the Democratic leaders, who are involved in this and some of the Republicans who were in the room inside of the Banking Committee negotiations this morning have come up with a general idea of what they are going to present to folks at the Treasury Department later this afternoon.
Which is, you know, you have this big $700-billion price tag. They have all said, basically, we are not just going to cut one check at a time, in one large chunk, if you will. And they are going to give it to the Treasury Department in stages. The first stage will be $350 billion and then they would basically approve more down road. That is the gist of where they are.
I just talked to a senior Republican senator, who is involved in this, who that they -he gave me the sense they are close. They definitely feel like they are close to a deal. However, I will tell you that part of what John McCain has been doing up here today is talking to House Republicans, because they feel -- many of them feel -- that this is just a bad idea regardless of how the money is put forward. That just big picture, in terms of the philosophy here, that the idea of the government spending this much money to bailout Wall Street, as one House Republican just told me, is a bad idea. And it is something that many of the House Republicans simply will not support.
So what McCain was doing up here wasn't -- he wasn't involved in these negotiations and the deal. That is not what he could do, frankly, because he is not on this committee. What he was doing was is talking to the people in his party about ways to come up with to make this more palpable to them, if that is even possible, Rick.
SANCHEZ: That is the real catch 22, here. I mean, even if these congressional leaders come forward -- all right. We are getting some of the pictures now of Barack Obama arriving at the White House. We had learned moments ago, that he was in transit. We are being told by my producers here that he is behind that tree. So he is -- so you are not able to see him in that picture.
But the point being made, and the point that Dana and I were about to embark on is this, just because the congressional leaders say they have come up with some kind of deal, doesn't mean that all the other Congress members -- who have to vote on this -- will go for it. And there is Barack Obama on the BlackBerry, as he goes behind those trees, arriving at the White House for this historic meeting with John McCain and George Bush.
Because, as you will see, in a moment in this John King report that we have been telling you about, a lot of these congressmen have to go back to their districts, and they are not willing to face their constituents, if in fact, they do what the constituents do not want them to do. This is where it gets more tangled.
Let's go to break. We will come back in just a little bit. Obviously, this thing is starting to brew. We will have it for you. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: All right. We welcome you back. I'm Rick Sanchez.
And we have pictures of both candidates now arriving. There you see Barack Obama, on the right, with the BlackBerry in his ear. There you see John McCain coming out of his car now, arriving at the White House for this historic meeting with the current president of the United States.
Let's go to the White House. Tony Fratto, now available, he is a White House spokesperson, who joins us.
Tony is the president inviting these men because he feels he has a credibility issue here with the American people, almost like he has gone to well so many times that he needs somebody else to stand by him to get the American people to do something for him?
TONY FRATTO, WHITE HOUSE DEPUTY PRESS SECRETARY: Rick, Rick, I think what -- the president invited Senator Obama and Senator McCain to be here, because of their sincere interest in solving this problem, along with the leaders in Congress. The president has been very appreciative and thankful for the work of the leaders in Congress to deal with this in a bi-partisan way. It is the only way we are going to be able to solve this problem. And these are the two standard bearers for the Democratic and Republican Party and they have sincere interest in it and they can bring together the bi-partisan agreement together.
SANCHEZ: But, you know, but there are people out there who are saying, if this White House had been a little bit more mindful of the store, we wouldn't be in this situation. Let's hearken back to something that happened back in 2004. This is the president of the United States, talking about how easy it was for people to be able to get credit and buy houses. Let's roll that.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In changing times in order to bring stability in people's lives we must encourage an ownership society in America. One of the great statistics of the recent times has been the homeownership rate in America is at an all- time high. Think about that. The minority ownership gap in America is closing. More and more of our fellow citizens are opening up the door of their home and saying, welcome to my house. Over the next four years we will expand homeownership in America.
(END VIDEO CLIP)
SANCHEZ: Tony, has welcome to my house turned into welcome my mess?
FRATTO: Well, we have, Rick, we have expanded the homeownership for low-income people and minorities. And that is something that should not be forgotten here. What you seem to have forgotten is the fact that if you go back to 2004 and even before that, the president was also advocating for reform of Fannie Mae and Freddie Mac, the two major housing agencies. And I think if you do a full look back at that time period, you will see that the president had been calling for a strong regulator to prevent the kind of abuses that we saw.
But of course, you will not find anyone, from any party, out there who is not interested in expanding homeownership in the country.
SANCHEZ: How about that sense that we're getting from congressmen who have been going before our cameras, and every other network's cameras, and saying that if the president thinks that we are going to do this - or he is going to do this without our consent and without our taking a real good look at it, he has another thing coming. There is almost seems to be a sense that they have been run roughshod in the past. Is that sentiment being taken care of, or --
FRATTO: Rick --
SANCHEZ: Go ahead.
FRATTO: Yes, Rick, I think members of Congress have raised some very legitimate and serious questions about the proposal that we brought forward. The proposal we brought forward was very technical in nature to deal with fixing the problem. Lots of members of Congress have raised the questions; we have listened to those questions. A lot of people have been focused on points of disagreement and what we have been trying to do this week is try to resolve those points of disagreement and come to an agreement. And it seems like we are making progress in that and we're hearing about a little bit more progress today.
SANCHEZ: Tony Fratto, tough guy, taking tough questions. And we appreciate it on behalf of the American people. I know these are difficult times, Tony.
FRATTO: Good to be with you, Rick.
SANCHEZ: Thanks so much. Likewise.
All right, we are going to come back in just a little bit. Check on what is going on, both in the White House, getting details again from our congressional correspondents. And of course, we'll try and see if we can turn that report -- oh, and I'm being told now we're are going to be joined by Senator Schumer in a little bit. Let's get to the break real quick so we can have time to do that on the way back.
We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: All right. As I mentioned, we've got Chuck Schumer standing by. Senator Chuck Schumer, of New York, is going to be joining us.
Senator, thanks so much for being with us.
SEN. CHARLES SCHUMER,(D) NEW YORK: Thank you, Rick.
SANCHEZ: I want to put something up for our viewers, by the way. This is a quote, a tandem quote, so to speak, from you and Christopher Dodd. If you got that, Rog, put it up. I'm going to read it to the viewers here.
"During these discussions, we have received significant cooperation and constructive feedback from the other side of the aisle, with one notable exception. Part from his unproductive criticisms made from afar, we have heard nothing from Senator McCain on these critical issues. Now is certainly not the time for him to go on and make his presence known."
That's what you and Christopher Dodd put out in this joint statement. Can you amplify on that for a little bit for us?
SCHUMER: Yes, Senator McCain has not been part of this at all. Not only has he not shown up in Washington since April, he admitted a few days ago he hadn't even read the president's three-page plan. And all of a sudden, unbeknownst to anybody, he decides he's coming here for a photo op at the White House to try and convince people he's involved.
SANCHEZ: So has Obama been checking in though?
SCHUMER: Yes, Obama, I've talked to Obama two or three times about the substance of this issue in the last week. Now, maybe, you know, Senator McCain wouldn't call me, a Democrat, but I don't think he's called any of the Republicans either. I asked a few and they said no.
So the bottom line is, I think Senator McCain's campaign was in trouble, and they just decided to sort of change the signals with this photo op. The problem is, it gets in the way. We think everything was moving along well and all of a sudden now, for instance, Congressman Boehner, who had always been one of the strongest advocates for the plan, is saying oh, he's not on board. The theory is that maybe he wants to let McCain -- quote, unquote -- deliver the House Republicans. When you play games like that, things get messed up.
SANCHEZ: You think politics are being played here. Let me ask you about the specifics of this because that's what a lot of Americans want to know, as well. Senator, is there - how close do we look like having a deal here? We heard that statement you guys put out at the beginning of this newscast, but we're not quite sure what you mean have come up with some kind of compromise.
SCHUMER: Here's what happened.
SANCHEZ: What is it?
SCHUMER: A group of Democrats and Republicans from the House and Senate, the leaders of the Banking Committee, Chairman Dodd, Chairman Frank, the ranking Republican, Spencer Bacchus, in the House, three senators, two of whom from the Banking Committee including Bob Bennett the second ranking, we all got together and we said we need to make improvements in the president's plan and we agreed on some significant improvements.
Does this mean we have a deal? No, because the Treasury hasn't signed off on any of these and we'll see what they do. Again, the worry is because of the theatrics going on at the White House, that what they normally would have done, they won't do now, in an effort to salvage the McCain campaign.
SANCHEZ: Theatrics, interesting word choice.
SCHUMER: Yes.
SANCHEZ: Thanks so much. Senator of New York for joining us with your candid perspective on this.
Let's take a break -- or do you want to go to Wolf Blitzer right now? Let's go to Wolf Blitzer and find out what's going on in Washington.
Need I ask, Wolf?
WOLF BLITZER, CNN ANCHOR: You know what's going on, a lot of excitement, Rick. We're only minutes away from that historic moment. The president of the United States meeting with the two men who hope to replace him. It is the first time I can remember when something like this is going on and it's only the latest in the extraordinary events taking place surrounding this massive bank bailout.
We'll have all angles of this big breaking story covered for you from the White House to the Capitol Hill, to the campaign trail, even at the debate site in Oxford, Mississippi. Today in "THE SITUATION ROOM," everything you need to know live as it happens. We're covering it from all the angles.
Rick, that's coming up at the top of the hour.
SANCHEZ: The good, always is. Wolf Blitzer, my thanks.
John King's reported on what's really going on in America red and blue states.
Stay with us. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: How hard is it going to be for congressional leaders to go back to their districts and explain to their constituents why they voted for this deal? Watch this report by John King.
(BEGIN VIDEOTAPE)
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT (voice over): Montana is a long way from Wall Street and Washington, geographically and culturally. The talk of a big bailout there, is the source of outrage here.
GOV. BRIAN SCHWEITZER,(D) MONTANA: They say, my God, this looks like a condition where the powerful are going to give money to the rich. What's new?
KING: Democratic Governor Brian Schweitzer calls it a classic case of Washington disconnect from the real world.
SCHWEITZER: People say, now, wait a minute. My stock portfolio has gone down. I lost 15, 20 percent . My value is down to zero and they're going to bail out the big banks. What gives here?
KING: Out here, what gives is a sudden and dramatic shift in public opinion. The more people hear about the $700 billion plan, the more they're trying to block it.
SUZANNE STUDER, CONGRESSIONAL STAFFER: Calling to protest, well, you know, I've heard a lot of those. So, let me just get this written down.
KING: At the Helena office of Republican Congressman Denny Rehberg,
STUDER: Against the bailout.
KING: Suzanne Studer says she's never seen anything like it, a flood of calls, and ample evidence of why consensus in Congress is so hard to come by.
STUDER: What are you saying is it? Basically just hit the bottom and then start again?
KING: Dozens, the past two days, and not one in favor of the bailout.
STUDER: I've got one, think about it.
KING: Montana's senators give similar accounts of overwhelming opposition and concern Congress is in too much of a rush.
(on camera): You're a governor. You understand sometimes you've got to the make decisions that drive you crazy, but you've got to do it. Is this something you think they have to do, despite that feeling on the street, or is this something where they need to say whoa, time out, let's take a little more time.
SCHWEITZER: Ask a few questions. If we're going to bail these coyotes out, well, then how about we have an equity position. Why wouldn't the taxpayer make a little money if they do turn around? Instead of just shoveling that money out the door and have them pay themselves now, big golden parachutes again.
KING: All this in the closing weeks of a fiercely contested presidential campaign. A pointed reminder most members of Congress face the voters, too. And in a time of --
(END VIDEOTAPE)
SANCHEZ: All right, 4:00 -- here now, Wolf Blitzer.
