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Penny Pritzker Rules Herself Out of Commerce Secretary Position; Congressional Leaders Address Stalled Auto Bailout Plan
Aired November 20, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
KYRA PHILLIPS, CNN ANCHOR (voice over): Help not wanted. Jobless lines were long to begin with, now they are longer. Is anyone hiring out there? We will find out.
Plus, black, gay and proud. He is coming out and reaching out across racial, social and cultural divides.
UNIDENTIFIED FEMALE: I don't really want to sacrifice glamour and the joy that I have from shopping.
PHILLIPS: Low cash and high fashion, a down economy doesn't mean you have to dress down. Lola Ogunnaike puts a spark in your wardrobe even if you don't have money to burn.
(END VIDEOTAPE)
PHILLIPS: Hello, everyone. I'm Kyra Phillips live in at CNN World Headquarters in Atlanta. And you're live in the CNN NEWSROOM.
Well, as we are hearing the announcements about those that will make up Barack Obama's Cabinet, we're getting word now that Penny Pritzker, one of his good friends, will not take the Commerce secretary position.
Don Lemon on the phone for us here in Atlanta to tell us more -- Don.
DON LEMON, CNN CORRESPONDENT: Hey, Kyra.
I spoke with Penny Pritzker and her spokesperson just a short time ago and she tells me that she is not a candidate, not a candidate, for that position that we have been reporting on, and that so many news organizations have been reporting on.
She is saying that she never submitted any information for the vetting process to even begin, and she said that while there were discussions, she says I was never formally offered that position. And that she has obligations in Chicago that make it very difficult for her to serve at this time. She talked about her business obligations, her family obligations, and she says she has a son going off to college in the fall. And her children and her family are very important to her, but all through the campaign, Barack Obama made it very clear to Penny Pritzker, and to anyone who was listening, that he thought she was a key player, that they shared the same values and he wanted her to be part of the administration. But she said that she, this point, cannot accept the position as Commerce secretary.
Now, whether in the future if there is some other position she can take, that remains to be seen. But at this point, Penny Pritzker says she will not accept that position and she was never a formal candidate. In formal talks, yes, but he never formally sat her down and said, do you want this position? But all along she knew that he wanted her to be at least part of the administration, Kyra.
PHILLIPS: Got it. Thanks for clearing it up.
Don Lemon, appreciate it.
LEMON: All right.
PHILLIPS: All right. Well, soon we will find out whether the Big Three U.S. automakers can find a plan B on Capitol Hill. That plant to lend $25 billion from the bank bailout to GM, Ford and Chrysler was a nonstarter. An alternative is due to be announced in the Senate any minute, and you will hear it live right here in the CNN NEWSROOM.
In the meanwhile, job losses are surging across the economy. Last week brought 542,000 new claims for unemployment benefits, a lot more than expected and the most since July of '92. If you don't have a job, it is hard to hold on to the house. For all of the talk about bailouts for struggling homeowners, all of the plans assume a regular income. Roughly half the mortgage defaults tracked by Freddie Mac are due to unemployment.
Now before news broke of a potential new type of car loan from Capitol Hill, the autoworkers union warned of a looming disaster.
(BEGIN VIDEO CLIP)
RON GETTELFINGER, PRESIDENT, UAW: Our fear is that if one of these companies goes over the cliff, that for sure it could take at least one of the others, if not both, with them, because of the way that the supply base is interlaced with the companies.
(END VIDEO CLIP)
PHILLIPS: All right. Let's get straight to Kate Bolduan in Washington.
Kate, what is in the works up there?
KATE BOLDUAN, CNN CORRESPONDENT: Well, what we are hearing up here is we are waiting for a press conference to start, Kyra. We are waiting to hear from the Democratic leaders. Now this is-we told you about it and broke here on CNN, and we heard that congressional Democratic leaders, they were behind closed doors for a meeting. They came out and said, OK, here is what we have got. They are now going -- they have agreed to -- I believe there are some live pictures.
We're waiting for them to come in right now. What they are going to announce, we are told from sources, is that they are going to come out and say, OK, what are you, the Big Three, going to do with the $25 billion if you get it? They say they want to see a detailed plan. If they get the detailed plan, they say it is likely that Congress will come back sometime in December to consider it.
What does this really all mean? Well, you can see here that the ball is clearly in the automakers' court. And there is also not a lot of goodwill toward the automakers on Capitol Hill. That was quite evident during the last couple of days of hearings on both the Senate and the House side. These lawmakers, they want answers. And they want assurances, as we heard over and over again, before they open up funds and give $25 billion to the automakers. They want to know what the taxpayers are going to be paying for.
But this also means, what we've been talking about all week, a long debate, about will they bail out, won't they bail out the auto industry? Well, now we hear that Congress will be going home for the Thanksgiving holiday without any vote on any auto legislation. But if they do get this plan, they say, they will likely come back before the end of the year to consider the matter again.
PHILLIPS: All right. So, we're supposed to actually hear from the Dems. They're supposed to be coming up to the mics on the Hill. So, let us know, Kate, if you hear anything more about that. Thanks so much.
Hard times in Detroit, old news in Coventry, England. Automakers there know all about retooling after economic collapse. Their story is ahead in the CNN NEWSROOM.
On the labor front, the White House now says that President Bush will go along with extending the unemployment benefits. Before its lame-duck session adjourns the Senate will likely pass a bill to grant seven more weeks of benefits everywhere. And 13 more weeks in states with a jobless rate above 6 percent. That measure cleared the House last month.
First-time unemployment claims spiked to a 16-year high last week, so yes there are a lot of people looking for work. But there are also companies out there looking for workers. CNN's Dan Lothian has a few examples for us.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN CORRESPONDENT (voice over): Behind every dark cloud there is a silver lining. At Axsys Technologies in New Hampshire, they are hiring.
UNIDENTIFIED MALE: We added about 100 people. We expect to add at least another 50.
LOTHIAN: The company makes long-range surveillance equipment like infrared cameras. With government business booming, they are expanding into this 67,000-square-foot building.
UNIDENTIFIED MALE: The heightened demand for threat detection technology is one reason.
LOTHIAN: The disease that first festered on Wall Street has infected Main Street resulting in 1.2 million jobs lost so far this year. But if you are out there looking for work, the picture is not all bleak. At this pharmaceutical and bio-tech job and product fair near Boston, we found five companies actively looking for workers.
UNIDENTIFIED MALE: Anywhere form associate one, an hourly employee that would be a lab tech, out of say a community college, right up through a Ph.D. scientists or post-doctorate fellowships. It runs the gamut.
LOTHIAN: About 30 positions in the pharmaceutical group. And overall at Biogen Idic, about 100 positions waiting to be filled. So how is this industry adding while everyone else is on hold or subtracting?
UNIDENTIFIED FEMALE: What type of engineering?
LOTHIAN: In most cases they got the green light years ago to get labs up and running in order to test and produce new medications.
UNIDENTIFIED FEMALE: We still need to get this product up and running and on line so that we can make the product for patient consumption.
LOTHIAN: This is all good news for David Campanella, who is out of work and has been job hunting in this industry since August.
(on camera): How difficult in the climate to find work?
DAVID CAMPANELLA, JOB SEEKER: Yes, there were a couple of opportunities, and a couple of interviews, but nothing came from them.
LOTHIAN (voice over): He's hoping full-time work is around the corner, but knows competition for these jobs is fierce.
CAMPANELLA: You keep on meeting people who have just been laid off yourself, as yourself, so, you know they are out there looking as well.
(END VIDEOTAPE)
LOTHIAN: The market is certainly crowded, but one expert, Kyra, advises not to be afraid to look outside of your field. You have to really be creative. You might be surprised how skills that you learned in one industry can easily transfer to another, Kyra.
PHILLIPS: Well, we've to the holidays coming up, right? So a lot of retail jobs out there, we would hope?
LOTHIAN: That's right, but the market is not as healthy as it was in past years, but there are those retail jobs, it is seasonal, but this might be a good opportunity to create some income while you are hunting for the full-time job.
PHILLIPS: Dan Lothian with great advice. Thanks. Gloom and hope have moved the markets today. Stocks initially sold off after a terrible report on the labor market - that was released. But then there was a turn around thanks to the possibility of an auto bailout.
Susan Lisovicz, key word there, "possibility" of an auto bailout.
SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, just the hope that there could be some movement there was enough to move the overall stock market higher. It didn't hold and right now we are seeing an overall decline.
But the passage of this compromise -- this compromised loan for the Detroit's Big Three, Kyra, is no way a certainty. The fact is that Rick Wagoner, GM's CEO and chairman says we don't have the luxury of time. And the UAW President Ron Gettelfinger, today, saying, you know, reorganization and bankruptcies are something that you see with other businesses. And they come through it OK. It won't happen with automakers. It will result in a failure.
GM and Ford shares down more than 80 percent year-to-date; and in fact, at one point earlier in the session, Kyra, GM fell to a level that we have not seen on that stock since the Great Depression. Auto shares, in general, turned higher after word of a possible compromise package. But you see what's going on right now, the Dow is off 52 points; the Nasdaq, meanwhile, is down 5, Kyra.
PHILLIPS: At some point you wonder, when can you say we've actually hit the bottom of the market?
LISOVICZ: Well, you know, there are a lot of problems, obviously, in the economy. And one of the things that has been weighing on the market, of late, that is over the last few days is the uncertainty about the automakers because a failure -- or even a reorganization would probably result in more job losses. And, this, at a time when we know -- we have been telling you today about one of the reports about job market obviously continuing to lose jobs, more people filing for unemployment benefits.
The concern about TARP, Treasury Secretary Hank Paulson, earlier this week saying that half of it is going to be reserved for President-Elect Obama, well, he doesn't take office until the new year. And questions about who is going to be the Treasury secretary at a very critical time. So a lot of questions and no answers. No definitive answers right now on those areas.
PHILLIPS: All right. Susan, thank you so much. >
Divine intervention in the mortgage mess. We will find out about a group of churches using the power of prayer and protest to try to save homes across America.
And should Barack Obama have less pomp at his inaugural ball considering the current economic circumstance? Some people say this is no time to party.
(COMMERCIAL BREAK)
PHILLIPS: Well, he didn't give up without a fight. Now is the time for embattled Senator Ted Stevens and we will hear what he said to the colleagues in the Senate this afternoon.
Straight to Harry Reid and the Dems are responding to the auto bailout back and forth.
(JOINED IN PROGRESS)
SEN. HARRY REID, (D) MAJORITY LEADER: ... We have worked hard this week to fashion a bipartisan consensus. No one has worked harder than the Senate side than senators from Michigan. They have a bipartisan agreement, but it is their agreement. Unfortunately, the sad reality is that no one has come up with a plan that can pass the House and Senate and get signed by President Bush. No matter how hard Senator Levin and the others have worked, and they have worked very, very hard.
The main reason is what we have all witnessed in congressional hearings this week. The executives of the auto companies have not been able to convince the Congress or the American people that this government bailout will be its last. In light of the importance of this issue to all of us, we have decided that the best way to proceed is to give the auto companies another opportunity to make their case.
Make their case to Congress, and to the American people. We are requesting that they submit a plan to Congress, through Chairman Frank and Chairman Dodd, no later than December 2. These two very able men will review the plan and if necessary hold hearings during the week of December 2 to fully vet the auto industry's proposal. We are prepared to come back into session the week of December 8 to help the auto industry, but only if they present a viable plan that gives us, the Congress, the confidence that the taxpayers and the autoworkers will be well served.
In the meantime, it is important we remind everyone that right now, or any time in the future, this administration has the authority with the money they have from TARP, or with the Federal Reserve to provide all of the resources with any strings attached to it they want to give these companies the help they need. The key is accountability and viability. That is what we are asking. That is not too much -- Madame Speaker.
REP. NANCY PELOSI, (D) SPEAKER OF THE HOUSE: Thank you very much, Mr. Leader.
I wish to associate myself with your remarks because I think you have clearly laid out what the challenge is to our economy, to this auto industry, and to Congress as we go forth. It is all about accountability and about viability. Until we can see a plan where the auto industry is held accountable and a plan for viability on how they go into the future; until we see the plan, until they show us the plan, we cannot show them the money. And that is really where we are with this.
I want to join the chairman in saluting those who have worked so hard on this, and add to that our Michigan delegation - (INAUDIBLE) from Toledo -- our Michigan delegation in the House of Representatives.
The auto industry is very important to our country. It is essential; its survival is essential to our maintaining our industrial and manufacturing base. That industrial base is essential to our national security. So for reasons of our national security, for reasons that relate to the financial -- the health of our financial community and for reasons that relate to the needs of our working, the workers who have been affected by this. It is essential that we see some restructuring, some path to viability from the industry.
As the Leader addressed that what that meant, in a timetable I know that Leader Hoyer will address that as well, so I won't go into that, again. But again, we reject those who are advocating bankruptcy for the industry. We reject that. But we do want to work together and I don't think we saw too much in the hearings of the past two days that gave us the confidence to act upon it legislatively.
Hopefully in another week or two, we will see a plan that can take us viably into the future, with accountability to the American people, before we spend another dollar of their tax dollars.
Thank you, Mr. Leader.
REID: Senator Dodd.
SEN. CHRIS DODD (D) CONNECTICUT: Leader, you have said it all. I will look forward to working with Barney and -- Frank, and we will plan on holding hearings in that week that you suggested, Leader, and Madame Speaker, and maybe we can do it together. I will talk to Barney on how to proceed. But clearly between now and then we'd like to hear the ideas. And if they make sense, and as they have met the criteria that the Leader and the Speaker have laid out, we'd like to move forward and be of assistance.
REID: We will be happy to take some questions.
(CROSSTALK)
QUESTION: I am a little confused, because Madame Speaker, you had endorsed the idea of helping out the automakers with the money from the financial bailout, $700-billion, so what is different about simply using this money or the Department of Energy money and replenishing it in January to help these guys out?
PELOSI: Well, it is different in this respect, the Department of Energy money is for a specific purpose. That is money that is the Advancement Manufacturing Technology Initiative on how we go into the future. Let's see what their plan is. And then we are not talking today about what money would be used, but we are talking today about the need for accountability and the need for viability. I don't think that -- I can only speak for the House -- for any of these plans --
REID: Today you can speak for the Senate, because (UNINTELLIGIBLE).
PELOSI: Well, to go forward with any of these plans until people see more accountability and the prospect of viability in the industry.
QUESTION: (OFF MIC)
PELOSI: Well, I don't think -- well, the White House won't sign that. And I don't think it will pass the Senate.
QUESTION: Mr. Leader?
REID: Yes.
QUESTION: Doesn't this sound a little bit like what Congress did back in September when Secretary Paulson propounded this $700 billion, so he could send this up for proposal, and here you are asking the automobile industry to send up their proposal to (OFF MIC) Isn't this a little dangerous given to what happened?
REID: Well, I frankly don't understand what you mean, but I will try to be better informed, and I will see what I can do.
When they came to us with the problems with the financial sector we responded and we responded very quickly. That is now going forward. They have spent about $250 billion of the $700 billion, and we hope it is headed in the right direction. We have been told it is, as slow as it is.
Now, what we have said to the automobile industry is that we need you to be part of what we are doing here. We think it would send a terrible message to the workers where, you know, we all can throw all of the barbs of the three people who fly down here in their corporate jets, but we are concerned not about them, we're concerned about the hundreds of thousands, and millions of people involved in the automobile industry who want these jobs and need these jobs and we want them to have the jobs.
We want them to work as we have indicated and come up with a proposal that we can get through here on December 8. Remember, one of the things that we will be looking at, of course, and we will let those who are working on coming up with a proposal, we don't know how much money they need for the so-called bailout. That is one of the things that I have to come up with. Because now it has been very elusive as to what that is. But the model used by Secretary Paulson is hopefully not what we are doing here, but it is a variation of it. We just want to make sure there is accountability and viability -- and we don't have that yet. We don't need to go through a bunch of votes here that fail. We think that the American workers are too important to let this fail. We want to help. But we can only help if they are willing to help themselves.
QUESTION: Madame Speaker, what do you say to the voters of Michigan? Earlier today, (INAUDIBLE) was dumped of the chairman of the Energy Committee, and now the auto bailout that is being worked out by the senators from Michigan has been put on ice. Do you still have their interest at heart, the voters of Michigan, given everything that has happened today?
PELOSI: Well, not only the voters of Michigan, but the people of Michigan, and the people of our country. We are trying to have a viable auto industry. We recognize how important that industry is to our financial community, as well as to our military, and our national security. So we are there to have it be viable. It is not on the road to viability now. These two issues I think are separate. The House of representatives worked its will in terms of who would be chairman of the committee, but that, that is one subject. This is another subject.
Let me just say one thing that Harry was speaking about. This is about taking us to a path of positive viability and accountability. We are not on that path right now. But it just keeps getting more and more. I will say this, when last we met with the CEOS, the three CEOs, which was what, a week ago? The week before, they had called us and said we want to talk to you about supporting a merger within the industry. So, I said, well come in and see us. By the time they came in to see us, they then were talking about -- no, we are not really talk about that now. We are talking about the liquidity. We need an infusion of cash, so that we can get through the next while.
Then we put together some challenges, proposals, that said we can only put forth money if we know at the end of the day that we are on a path to viability and accountability for this money. So now when they have come in, we have not gotten that clarity of what this path is. We are saying, OK, we know you must be working on this. Have it for us in the next week and a half. The chairman of the committee, Mr. Chairman Dodd and Chairman Frank will take it up before their committee, and then it -we will see what Congress - how Congress will work its will.
But this is about - this is about sustaining the industry. It is our response to those who say let them go. Let them go and then deal with it after that. No, we are saying that this is an important industry in our country. And we intend to save it. We can only do so if we work together and the auto industry has to come up with its plan for innovation, accountability and viability.
QUESTION: Madame Speaker --
(CROSSTALK)
REID: OK, let's have one at a time here, folks. Yes?
QUESTION: Mr. Leader, how is this not, kind of, Congress avoiding your responsibility to find compromise? And so instead be kicking the can down the road and saying it is up to the auto industry --
REID: Well, I say just the opposite. The markets are -- the stock markets, the credit markets are having a lot of difficulty. What kind of message do we send to the American people by having a bunch of failed votes here? We do not have the votes. What happened here in Washington this week has not been good for the auto industry. I know it was not planned, but these guys flying in their big corporate jets does not send a good message to people in searchlight, Nevada, or Las Vegas or Reno, or any other place in this country.
We want them to get their act together. We want them to come up with something. We are here to help. We are not against the auto industry. We want to help those people keep those jobs. Yes, we are kicking the can down the road, because it will give us the opportunity to do something positive, but that will only happen if they get their act together.
PELOSI: Yes, but we have a responsibility to the taxpayer to make sure that the dollars that we spent are well invested. They have to show us the plan. Mr. Hoyer?
REP. STENY HOYER, (D) MAJORITY LEADER: I just wanted to add, I said to the Speaker, this is an opportunity for us to build consensus and instill confidence. It is a demonstration that we intend to keep working on this matter, because we believe it is critical. We are going to be working on it next week, and the week after. The automobile companies will be working next week. And we expect the administration to be working as well.
We will come back to this at a time when hopefully we will have built a consensus and Senator Reid and Speaker Pelosi and the rest of the leaders will be able to forge the votes to take positive action.
REP. BARNEY FRANK (D), CHMN. HOUSE FINANCIAL SERVICES : Can I say - it is clear to me that in the minds of the media Congress can operate at one of two speeds, either way too slow or much too fast. If we were to pass this right away, I can write the stories for tomorrow. In a rush, barely examined commitment of many, many more taxpayer dollars, Congress today, leapt into an abyss. Well, here are the facts.
UNIDENTIFIED MALE: He is writing it down, Barney.
(LAUGHTER)
FRANK: I waive copyright.
Here is the context. We put through a bill committing $700 billion of taxpayers' money, at risk, although we hope to recover it. The context is this, there is widespread dissatisfaction, not just in the Congress, but the country in what is perceived to be a failure of the recipients of those funds to carry out the intent that the Congress had. There is a sense that we did not do a good enough job of safeguarding the use of those funds, of providing prevention against abuse. And you could not get, I believe, through either the House of Congress today, what some people might think was a repeat.
That is why we need to take time. Because you already have a great deal of skepticism on the part of the part of the public, and on the part of the Congress, and in much of the media that we acted too quickly and didn't do enough to anticipate problems. I think it is very important that we move here. We had a hearing yesterday. The Democrats were on the whole very supportive, but given this context, it has to be done in a careful way. And two weeks can not be the critical difference. So to avoid the problems that we now face and to deal with the skepticism, the deep skepticism about doing these things, it is essential that we take the time to make sure we have anticipated the kind of problems that many people think arose because we gave too much discretion the last time.
REID: OK, we have a question here.
QUESTION: How are you going to find viability for the automakers given their concerns about revealing confidential plans, how much --
REID: We are not here solving a math problem. But we are here solving an economic problem that faces our country. We are going to use our experience, and that is why, we, the speaker and I, wanted to make sure that the people who have been involved in this longer than anyone else, that is Dodd and Frank, are going to be instrumental in coming up with the program that is viable, and there is accountability there. So we are not going to be here today with exactitude. We are here telling the American people that we have joined hands to do what we can to help the auto industry, but we can only do that if they help themselves.
UNIDENTIFIED MALE: Thank you, everybody.
PHILLIPS: OK, after all of that, bottom line, no decision has been reached about the bailout for autoworkers. After the hearings and everything that has been brought forward from the three execs of the three big auto dealers, they are just not convinced that they should give government money to help these businesses at this point.
You heard Nancy Pelosi, and she said, show us the plan, and we will show you the money. What will that plan be? Well, that is a good question. They are going to have to go back to the drawing board, and come back for more hearings, come back for more discussion. The three autoworker execs are going to have to state their new plan. And then we'll see what happens. So meanwhile, what does Obama's team take on, or what do they have to say now about the auto bailout and what we just heard? Ed Henry joining us live from Chicago.
Were you able to get feedback that quickly, Ed?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, no, Kyra.
I mean, they are watching it along with us. But I can tell you it is being watched very closely by the transition team for President- Elect Barack Obama, every development on this. Because as you know in his recent meeting with the President Bush at the White House, Barack Obama raised this issue directly, of a bailout for the auto industry.
I think the headline out of this is the fact that the Democratic leaders, after looking like it was stalled -- or failed, if you will - are now suggesting that they will come back later this year and give the auto industry $25 billion if, and it is a big caveat, as you said, they show the Congress the plan, and the word we heard over and over again and the buzzword from Nancy Pelosi and others was viability.
That the auto industry has to show they are not getting a blank check and are going to come back three or six months and say we need another bailout. They have to show that they have a long-term plan to innovate, as they said, introduce more green cars, the so-called green cars, to move them into a whole new generation of vehicles. And what is fascinating about that is that very word "viability" has been actually used repeatedly by the Bush administration, which has sort of been at loggerheads with the Democratic leaders about how to move forward on helping the auto industry.
But Treasury Secretary Henry Paulson has been saying for a while that there needs to be viability. You can't just hand out this money. That is what is really the push and pull that is going on here. Is the fact that there is fatigue all around the country about one bailout after another, essentially blank checks everywhere. But in this case, with the auto industry, the stakes are so high because there's anywhere from 3 to 5 million jobs at stake depending on the which expert you talk to. Not just in the factories, but among the car dealers, among the parts suppliers, et cetera.
So, these leaders on the Hill are under great pressure to do something, not just from their constituents in states like Michigan, but also from the president-elect here in Chicago who is saying he'd like to do something when he takes office in January, but the transition team here in Chicago is worried that General Motors, or one of the other auto companies, will go bankrupt before January 20th of next year, unless there is a bailout now in the short-term, Kyra.
PHILLIPS: All right. Ed Henry, we'll be following it. Thanks so much.
Right now, 2:30 Eastern time. Here are some of the stories we're working on in the CNN NEWSROOM.
The stock market seesawing after yesterday's plunge below 8000. Awful weekly (ph) unemployment numbers sent things lower this morning. Right now, Dow Industrials down 108 points.
The United Nations finding the crisis in Congo so urgent it is boosting its peacekeeping force there by 3,000 troops. A resolution passed the security council today in a unanimous vote, 17,000 peacekeepers are already in Congo, the largest U.N. force in the world.
And no mistrial for the Atlanta courthouse shooter. Brian Nichols' defense team asked for one because prosecutors didn't give them a transcript of a threatening phone call. The judge said he is disappointed with prosecutors, but denied the motion.
(COMMERCIAL BREAK)
PHILLIPS: Well, can divine intervention (ph) stop the foreclosure crisis? Some churches are using the power of prayer to press the U.S. government to help embattled homeowners. Christine Romans will bring us that story in just a moment.
But first, hey, these guys have an idea. Four U.S. senators say they know what they can do to help the industry bailout. They've got their own plan. Let's listen in. Carl Levin at the mics. (JOINED IN PROGRESS)
QUESTION: Senator, can I ask you a quick question?
SEN. CARL LEVIN (D), MICHIGAN: No, no. Sorry, we are waiting to -- for everybody to settle down and then we're going to do it.
Are you all set?
We have reached an agreement on a bipartisan approach to provide bridge loans of up to $25 billion to the auto industry. Auto industries around the world, including China and Europe, are requesting loans from their governments because of the dramatic decline of the global economy and the drastic reduction in car purchases and the availability of credit. Our proposition is not only bipartisan, it is a hybrid proposal, combining provisions from many sources.
We incorporate Leader Reid's provisions on strong taxpayer protections, including stock warrants for our government, provisions restricting executive compensation, including bonuses and golden parachutes, and provisions requiring long-term plans for financial viability. Suppliers are also made eligible for the loans. I repeat, our provision requires the long-term plans for financial viability to be presented with the application for the loans.
The language of Chairman Barney Frank, of the House Financial Services Committee, was heavily utilized, including retention of Section 136's environmental standards, such as the 25 percent improvement in fuel economy and tier two emissions standards. His oversight board membership approach is also included.
The White House opposed the use of any of the $700 billion already appropriated stabilization fund, and the majority leader said yesterday that there were not enough votes in the Senate to pass an amendment using those funds. We cannot allow the issue of which source of already appropriated funds will be used for the essential purpose of preventing this economy from sliding into a depression, which is a real possibility if one or more of the domestic auto companies goes under -- given the impact of the auto industry on millions of jobs and suppliers that are in most of our states and on all of our communities which have Big Three auto dealers -- we cannot allow that issue to prevent us from doing what needs to be done, which is to provide these loans promptly to the domestic automobile industry.
So we have agreed that the only alternative which can prevent those disastrous results is for the funding stream to come from the -- to come for the loans from the Section 136 appropriation, which is an appropriation which we have already made. However, the structure of Section 136 is preserved for the balance of its appropriation, not utilized for the loans, and Section 136's environmental standards, including strengthened fuel economy and emissions standards, are also preserved.
Also, loan repayments will be used to replenish Section 136, as well as any proceeds from the sale of company stock that is owned by the government. Another change which is made is the Department of Commerce will be the lead agency under this proposal.
Now, let me just quickly comment on what you have just heard. Obviously, we are disappointed that we are not going to act today. We heard yesterday there weren't the votes for using the $700, or any portion of the $700 billion stabilization fund. That is what the majority leader concluded yesterday. We believe there is at least a reasonable chance that if this proposal of ours -- this is a Levin, Bond, Stabenow, Voinovich, Specter, Brown et. al bipartisan amendment -- we believe that there is a reasonable chance that if this were put to a vote today, or tomorrow, that it could get the 60 votes necessary. However, the decision has been made by the leaders to bring us back on December 8th, after there have been some hearings on the plan.
Under our proposal, the plan, or plans of the various companies, were going to be presented to the agency which is going to be administering these loans, the Department of Commerce. And they would determine whether or not the required plan would ensure the financial viability of the applicant. It would be the agency which would make the decision as to whether or not the plan submitted, with the application for loans, was a plan which, if implemented, would lead to the financial viability of the company.
That was something which we said had to be presented to the agency. But the leaders have decided today that the plans, instead, will be presented to the Congress. So the Congress presumably, the week of December 8th, would make that decision as to whether or not those plans were adequate or not. That is taking on a huge responsibility for the Congress to look at details of plans and reach conclusions about whether or not those plans, if successfully implemented, would lead to financial viability. But that is what the leaders decided.
What we decided, in our bipartisan proposal, is that the best approach would be for the agency to look at those plans and make a determination before the loan was provided, that the successful implementation of the plan would lead to financial viability. It is a very significant difference. That was not our conclusion. We need speed. This is a very, very important moment.
The leaders have taken on a major responsibility in two ways. One, in delaying this a week or two, and also in putting Congress in the position, instead of the agency, to make a determination relative to the plan as to whether or not its successful implementation would indeed lead to financial viability. So on the one hand --
PHILLIPS: All right. Now we are seeing some type of plan. The Democrats came forward and said, look, we want you, the auto executives of the Big Three, to come back with another plan, then we'll think about giving you money. Now you are hearing from six senators, Carl Levin there from Michigan, obviously he knows cars very well in that state, and they're saying, hey, we've got an idea. We've got a bipartisan, hybrid proposal, bridge loans up to $25 billion to the auto industry, but of course that's going to come with a lot of provisions, mainly no more bonuses and golden parachutes for the big dollar executives.
Ali Velshi is joining us now live from New York with more on this presser. While everybody is -- we're hearing no, we don't have a deal here, toss it back to you, Big Three, there and come back again. But now we have six senators, Ali, saying, well we've got an idea here, let's try this.
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: Yes, I am not sure the six senators are going to carry all that much weight.
What Carl Levin is suggesting is that this doesn't become part of T.A.R.P., the $700 billion program, it actually is part of a bill that was passed in September offering $25 billion in loans to the auto industry if they were to retool to become specifically more fuel efficient. And there were specific strings tied to it.
The car makers, while they appreciate that, have not been interested in doing that because, particularly in GM's case, it is hemorrhaging money and can't really afford to use the money to retool. They -- the CEO of GM said yesterday, worst case scenario is they're going to bleed about $5 billion a month. So what Carl Levin is talking about is using that program, and maybe doing something.
What Reid and Pelosi are talking about might be more interesting to most people. And that is, let us know exactly what you are using it for. What they did is they spent the last two days, the CEOs, in Washington, explaining how dire the situation would be if they didn't get the bailout money. What you didn't hear enough detail about is exactly what these companies will look like if they get the bailout money. Will there be more jobs loss? Will there be more plants closing? Will they be profitable? What will actually happen?
So I think what they are saying is come back to us with a very specific plan as to how you would use this money. We got burned by the bailout a little bit in terms of people getting money and using it, like Citigroup has, for purposes that were not really intended in the initial discussion, and they don't want to get burned again.
So it sounded fairly reasonable the way they put it, Kyra.
PHILLIPS: OK. Well we'll see what happens. Ali Velshi live from New York.
Ali, thanks so much.
VELSHI: OK.
PHILLIPS: Quick break. More from the NEWSROOM straight ahead.
(COMMERCIAL BREAK)
PHILLIPS: Well, it has prompted passionate protests and now a ballot measure outlawing same-sex marriage will be reviewed by a California Supreme Court. Voters approved Proposition 8, which defines marriage as being between a man and woman. San Francisco's mayor told CNN's Anderson Cooper that he welcomes the review by the courts.
(BEGIN VIDEO CLIP)
MAYOR GAVIN NEWSOM, SAN FRANCISCO: If we were having this conversation in 1967, we would have had a U.S. Supreme Court, the loving court, that unanimously decided to get rid of all of those laws in the remaining 16 states that denied interracial marriage. If we had gone to the voters, almost every public opinion poll showed that the overwhelming majority of voters would have overturned that court decision.
The question is, is that appropriate?
(END VIDEO CLIP)
PHILLIPS: CNN exit polls of voters in California reveal a racial divide on the issue. Take a look this -- 70 percent of black voters that we surveyed voted in favor of outlawing same-sex marriages, that is compared to 53 percent of Latinos and 51 percent for whites and Asians.
Well, my next guest says there is a racial divide when it comes to gay issues.
Jason Bartlett is a Connecticut state representative who came out of the closet earlier this year. He is also deputy director of the Black Justice Coalition.
And Jason, you know, let me ask you to just start with the difference between black and white culture and how you see it views being gay?
JASON BARTLETT (D), CONNECTICUT STATE HOUSE: Well, I think the difference is surrounded by how as African-Americans we have kind of been conditioned in this country, and through our own history. We have the African-American church, the black church, which has been our beacon of hope and our political leadership throughout the years. And many of the black pastors are still extremely conservative and still condition people that marriage is Adam and Eve and not Adam and Steve and that whole way of thinking, defining it around procreation.
And it is a civil right. In Connecticut, we have legalized same- sex marriage, and we have said that not to allow it, or to allow civil unions, is pernicious discrimination. And so it is a civil right. We should start there intellectually, that same-sex marriage is a civil right.
The history of African-Americans with civil rights is a unique history, and clearly, it is not the same, but many of the tenets of fighting oppression, that is the same. The oppression that I have as a gay person is a different kind of oppression that I have as an African-American, but oppression is oppression. And we really need to have equal justice for everybody and treat everybody the same.
PHILLIPS: OK. So you're not saying that you're comparing the civil rights movement in the 50s to what is happening now for gay rights?
BARTLETT: No. I think you know, it's a different kind of discrimination, it's a different kind of oppression. Certainly, you know, we've had the right wingers use Mike Huckabee just was on a show and said that, well, you know, they haven't -- gay people have not been bashed in the skull or had to ensure fire hose.
Well, it's a very different experience and you can't compare the two. What we want to do is we want to look at the rationale between the arguments and we want to look at are we discriminating against gay people in this country? Sure. Do we have hate crimes against gay folk? Yes.
PHILLIPS: Jason, let me for a minute bring it back to the black issue. Because you have been quoted saying several things that triggered this whole segment idea which I find very interesting.
Just about sort of the, you call it the "DL," the down low. And it's all the black men that live quote, unquote "straight lives." They're married. But they are gay. And -- but they don't want to come out of the closet.
Explain this "DL" culture to me and how big is it. And why is it that way? I mean, you of all people are such a role model to the black community. I mean, you've come out, you've been re-elected. You're a parent. So, explain this mentality to me.
BARTLETT: Well, I'm also the only open state representative in the country, which you know s a kind of a shame, that's out and gay and black. And it took me 41 years to come out.
So, that's you know, in some ways a long time to actually be able to say, you know, I'm gay, and I'm black and kind of deal with that. So, it's -- there's a lot of folks, a lot of men that I know that just can't tell their parents, cannot tell their family. And some unfortunately live a double life. Get married, have kids and turn 30, 40, 50 years old and decide they're gay and they're finally going to recognize that. And others will stay in the closet forever and be with a woman and still what we call creep, go out to have sex with a man.
So, that's a conversation that just really started a couple of years ago that we began to have. And it's a conversation that we need to have more of. You know, the high incidents of AIDS and HIV in our community is also disproportional. And it's because as a community, we haven't had this conversation.
Within the church, we haven't had this conversation, we haven't affirmed to people so that we can talk intelligently, so that we can protect ourselves with HIV so that we can, you know, deal with the various issues and allow people to come out and feel comfortable within our own communities. So that, you know, and once we do that, we can begin to have a new discussion and begin to recognize that same-sex marriage is a civil right and do something about AIDS and homelessness with the youth and all of the other issues. PHILLIPS: And real quickly, because we've got to go, But, I just want to get your quick insight, Now Barack Obama, first African- American president. You know, the black community is -- was in tears that night saying, OK, you know, it's finally happened. He's a role model.
What do you think for the black gay culture? Could Barack Obama becoming president affect that as well?
BARTLETT: Well, I hope so. It remains to be seen. We had a serious incident over the course of the campaign where Donnie McClurkin, who's formerly gay --
PHILLIPS: The gospel singer, right?
BARTLETT: Yes.
PHILLIPS: I've interviewed him before. Yes.
BARTLETT: He kind of was gay, and then he's not gay and went thorough this whole you know, change. And there is a whole incident and all of the black churches were coming together in a gospel concert and Barack Obama had to choose, you know, am I going to affirming for African-American gays, am I going to remain quiet because some in the black church want me to. And so there was a kind of incident.
And my hope is is that he is going to be the most affirming president on LGBT issues. And my hope is, is that he's going to look back at a person like Bayard Ruston, who helped Martin Luther King organize the 1963 march in Washington, and affirm the black community, change the conversation, change the construct of how we speak about these issues.
Recognize that same-sex marriage is a civil right and he has a way to go on that. And it's important that he does because the right wing uses President Obama -- elect Obama's words against same-sex marriage and to some extent, against the gay community. So, it's very important how he eventually falls on many of the issues. But I'm extremely hopeful and I'm very proud that he's going to be leading it.
PHILLIPS: And we'll be seeing what the courts do with regard to overturning Prop 8, as well. Jason Bartlett, representative from Connecticut. Thank you for joining me.
BARTLETT: Thank you.
PHILLIPS: We're going to take a quick break. We'll be right back.
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PHILLIPS: Rahm Emanuel, the President-elect's right-hand man meeting with the Republicans today. Let's take a listen. He's saying, hey, it's all about being bipartisan.
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RAHM EMANUEL, CHIEF OF STAFF FOR PRESIDENT-ELECT OBAMA: So we had a very, very good meeting. It was -- lasted about a half an hour. But it dealt with the subjects and the challenges that are facing the country. We then went around and discussed different topics. I'm now going to have a meeting, individual meetings with the members of the House Republican leadership.
Since I was named, I also have been reaching out and I've had about 20-plus phone calls with members of the Republican conference, individuals who called who I know to congratulate or just to discuss different issues, ideas that they have. And this is all an attempt because, as President-elect Obama has repeatedly said, the challenges for the country are large. The problems we face of a serious magnitude. That there is enough area and enough goodwill for ideas from both parties to solve those challenges.
(END VIDEO CLIP)
PHILLIPS: I'll see you back here tomorrow. Rick Sanchez takes the baton from here.
