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Nation's Urban Transit Systems Are Mired In A Financial Industry Tax Dodge Scheme; U.S. Still Very Vulnerable To A Disastrous Cyber Terror Attack
Aired November 21, 2008 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Sweet mother of Pearl. Can you believe "Sweet Child of Mine" is more than 20 years old, Drew Griffin? Where does the time go?
Here is something even more unreal, besides the fact that they still dress like that, Guns N'Roses new release goes on sale
Sunday. It's called "Chinese Democracy" and seemed likely that China would be a democracy before Axl Rose ever finished it. It has been in the works for 14 years and Dr. Pepper was so sure that the album wouldn't make this year that the company promised a free soda for every American if it did. Well, starting Sunday for 24 hours, you can download a coupon for a free 20 ounce soda. The coupon is good through February.
And we are going to rock on to a little Axl Rose here as the next hour of CNN NEWSROOM starts right now.
And hello everyone, I'm Kyra Philips live in the CNN World Headquarters in Atlanta. You are live in the CNN NEWSROOM.
Never a good time to be out of work, or losing a home, but for millions of people in both categories, times just got a little better. President Bush signed a bill this morning that extends unemployment benefits for seven weeks, 13 in states with jobless rates of 6 percent or higher. And for their part, Fannie Mae and Freddie Mac are putting foreclosures on hold between next Wednesday and January 9th. That applies only to mortgages held or controlled by Fannie and Freddie.
Help for the Big Three automakers depends on the turn around plans they submit to Congress. Democratic leaders want to see proof by December 2nd that they won't be throwing good money after bad.
Well, buckle up now for a bad ride through a business scheme that went south when the economy went bust. Some of the country's biggest mass transit systems partnered up with banks and AIG in what, for a while, was a win-win proposition.
The winds shifted, so to speak. Drew Griffin, of the CNN Special Investigations Unit, here to tell us all about it. Well, it sounds like one of those unintended consequences, then, again, hey, I want my bailout. Everybody is needing is a bailout, let's join in.
DREW GRIIFFIN, CNN CORRESPONDENT: It is the little fine print, the little hidden clause in what is turning out to the be a good- sounding deal gone bad, but this is a deal by tax-supported public transit agencies. So, Kyra, guess who? Guess who is about to be taken for a ride? Yes, us, taxpayers.
(BEGIN VIDEOTAPE)
GRIFFIN (voice over): Transit agencies from New York to San Francisco are in a panic, trying to figure out how to survive a go-go financial scheme of the '90s that now threatens to derail their trains just as they are seeing record ridership.
BEVERLY SCOTT, AMERICAN PUBLIC TRANSPORT ASSN.: Thirty-one of the nation's largest transit systems, including my own MARTA, would be financially crippled in the coming months if nothing is done to resolve this crisis.
GRIFFIN: It is a crisis of their own making, deal-making that had transit agencies playing with the U.S. tax code. How? Just like a shell game. Public transit agencies that pay no taxes, started selling tax shelters to banks, that needed a tax break.
(On camera): It worked like this. Banks would buy rail cars from transit agencies like these at Metro in D.C. The banks would immediately lease the rail cars right back to the transit agencies, but now could depreciate the investment; accounting terminology for getting a huge tax break. And they'd split the tax break with the agency.
(voice over): The problem is to the IRS, it looked and smelled like a tax dodge.
UNIDENTIFIED FEMALE: It does look like that. I mean, to some extent that is why Congress made the ruling.
GRIFFIN: The first ruling banned U.S. banks from participating in the tax dodge. No problem. The transit agencies then went overseas. Metro, in D.C., sold some rail cars to a Belgium bank. Then in 2003, Congress killed the whole scheme. Which was fine for transit agencies, they still had long-term leases, and their share of the tax shelter was in their pockets.
But the banks got burned. They were leasing back railcars they now owned, but could no longer write off. Now the twist of unintended consequences, the deals were almost exclusively backed by the teetering insurance giant, and bailout beneficiary, AIG.
JOSEPH HENCHMAN, THE TAX FOUNDATION: A lot of the deals had a clause that said if AIG's credit rating ever dropped, then the banks would either, the transit agencies have to either find a new endorser or terminate the agreement and pay huge termination fees. Transit agencies went ahead to signed these agreements anyway fully knowing they would never fully be able to pay these termination fees. They thought they would never have to, but now they do.
GRIFFIN: And now the transit agencies say they need a bailout, too, just don't call it that. JOHN CATOE, GEN. MANAGER, WASHINGTON METRO: This is not a bailout request. This is not a request for a loan of money. This is a request of for federal government, in the process of working with various institutions to support public transit.
GRIFFIN: So they are heading to Capitol Hill with their hand out, hoping for hundreds millions of dollars in taxpayer money to cover what the IRS already called an abusive tax scheme. Joe Henchman with The Tax Foundation says, it would be a reward for a really bad deal.
HENCHMAN: If Congress and the administration want to spend more money on transit, they should do it through the appropriations process, not through the tax code.
(END VIDEOTAPE)
GRIFFIN: How much are we talking about, Kyra? For Atlanta? $390 million and D.C., $400 million. There are dozens and dozens of these agencies across - they are going to need to pay out hundreds and hundreds of millions of dollars in termination fees, and now they are asking us for that money.
PHILLIPS: You know, no surprises right now in the economy. Who even came up with this idea in the first place?
GRIFFIN: Classic, right? I'm in D.C., in a boardroom and I ask that question of all these transit -here's what they do -
(CROSSES ARMSACROSS CHEST, POINTING AWAY)
(LAUGHTER)
GRIFFIN: They say they were encouraged by the federal government, the federal transit agency, to jump into the deals as a way to get immediate income, immediate revenue to work on some private partnered, public partnership things. They all agree now, boy, it was a dumb idea.
PHILLIPS: Tell me exactly what it is they did?
(LAUGHTER)
PHILLIPS: So what happens?
GRIFFIN: It was like this.
PHILLIPS: So what happens if there is no bailout, and they go ahead and terminate these contracts?
GRIFFIN: Well, this is where it is serious. They have no money. They have no way to get the money. You know, like here in Atlanta, you cannot just go out and raise - immediately raise fees on MARTA. So, at a time when all of these people are riding MARTA, because the gas prices were so high -- and you know, ridership is up everywhere - they are going to have to cut services. That is all they can do. Cut service.
So, if you think, in New York, if you think those subways are jammed now, wait until they cut out a few more trains or the Metro in D.C. It is just one of those deals where you just like, Ugh, how did this happen?
(CROSSTALK)
GRIFFIN: In good times it happened, you know?
PHILLIPS: Yes.
GRIFFIN: Everybody was clicking.
PHILLIPS: Thanks, Drew.
Well, it seems that everyone has a handout wanting a piece of the $700 billion bailout pie, but what about homeowners? Where is their lifeline? CNN Personal Finance Expert Gerri Willis will take a look.
And the nation's top law enforcer is now back on the job after leaving Washington and a hospital there, just a couple of hours ago. Looking at this video, you would not have thought that anything was wrong with Attorney General Michael Mukasey. But this was Mukasey last night slurring his words just before collapsing during a speech at a Washington hotel. Justice Department now says the attorney general is fully recovered.
(BEGIN VIDEO CLIP)
GINA TALAMONA, SPOKESWOMAN, JUSTICE DEPT: The test results are in, everything looks great. The attorney general had a CT scan. It was normal. He had a clear MRI. They ruled out TIA, which is transient ischemic attack, which can be associated with stroke. He had a stress test. It was completely normal. The doctors said he is in good shape and basically that he beat the machine. He also had a stress echocardiogram, which was also completely normal. He been basically given a clean bill of health.
(END VIDEO CLIP)
PHILLIPS: Well, Mukasey echoed those words in a written statement to his staff. He said, "As you may heard, I collapsed briefly last night at the conclusion of a speech. All tests at the hospital have come back with good results, and I feel fine."
Well, we might be calling her madam secretary before long. We are getting new information today that Hillary Clinton is closer to a Cabinet nomination. Let's get straight to Jessica Yellin in Chicago, where President-Elect Barack Obama's team has set up shop -- Hey, Jessica.
JESSICA YELLIN, CNN CORRESPONDENT: Hey, Kyra.
Well, Barack Obama's aides tell us at CNN that she is on track, Senator Clinton, to be nominated for secretary of State sometime after Thanksgiving. What this means, according to an aide I have spoken with, is that Senator Clinton has cleared major hurdles in the vetting process. This after her husband, former President Bill Clinton made some significant concessions agreeing, for example, that if his wife should become secretary of State, he would be willing to remove himself from day-to-day responsibilities for his foundation, which has ties to donors around the world, countries, major governments, and it could potentially pose a conflict of interest.
So he is clearly done what he can to clear a way for her to accept this job. The big question is, does she want to accept it? That is what we don't know. Because just as we are learning this from the Obama team, we are hearing from aides on Capitol Hill that there is a new leadership position available to Senator Clinton, if she should choose to stay in the Senate. So a new expanded role in the Senate, one hand, secretary of State, possibly, on the other. Big choices for Senator Clinton and it does seem, at this point, the ball is in her court, Kyra.
PHILLIPS: All right. Well, we have reports that President-Elect Obama had his cell phone breached, so what is the latest on that?
YELLIN: The latest is that it was something that happened to his cell phone, he no longer uses. There does not seem to be a high degree of concern in the Obama transition team. They say some of these Verizon employees may have improperly looked at the phone numbers he has called in the past. They could have looked at, you know, copied down who he called. But this is no longer an active phone. They never listened into his calls or his voice mail, so at this point it sounds like an investigation happening inside Verizon to determine what went wrong there, but nothing broader than that. Still, not great.
PHILLIPS: Yes, nobody wants their privacy invaded like that. Jessica, thanks. Teaches us all a lesson.
Well, Barack Obama will have to deal with a very real, ongoing and potentially devastating threat when he takes office. Our Homeland Security Correspondent Jeanne Meserve sends a memo to the president- elect.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice-over): Mr. President, the White House you will soon occupy, the Pentagon, and virtually every agency of government, has come under cyber attack. The extent of the hacking may never be known. Experts, including the nation's top intelligent official, say you have to secure the country against this threat, and fast.
MIKE MCCONNELL, DIRECTOR, NAT'L INTELLIGENCE: The United States is the most vulnerable nation on Earth to cyber attack, the most vulnerable. It is a simple reason. We are the most dependent.
MESERVE: Cyber attacks could halt transportation, freeze finances, and knock out water, sewer and most frighteningly, electricity. SCOTT BORG, U.S. CYBER CONSEQUENCES UNIT: If you shutdown the electric power for a third of the country for three months, this causes tens of thousands of people to die. It causes major social dislocations. It is just a level of damage that we have only talked about before when we have been discussing limited nuclear exchanges.
MESERVE: The U.S. must now launch a cyber race, experts say, training top-notch cyber talent in our graduate schools, encouraging development of more security computer software and hardware and enlisting in the fight, businesses who control so many of the country's critical computer systems.
SAMI SAYDJARI, CYBER DEFENSE AGENCY: We need to recruit the private sector folks as part of what I will call a cyber militia, to be standing ready to defend our country against strategic attack.
MESERVE: Financial incentives and regulation should be used as tools many experts say, to motivate businesses to protect critical infrastructure and intellectual property. The risk of doing nothing, they say, is too high.
(On camera): The web is a global phenomenon and experts say international cooperation on cyber security is a must. Experts also say there has to be a coordinated approach across the U.S. government and the one place with the authority and the clout to lead the effort and get results is the White House.
Jeanne Meserve, CNN, Washington.
(END VIDEOTAPE)
PHILLIPS: What happened in Dallas 45 years ago is in black and white for most of us, and told second or third hand, but for one man, we are going to talk with, it is a vivid memory, personal and in color.
And in these tough economic times, one of our viewers writes, "I am concerned about grandson's Coverdell fund and my granddaughter's college funds. I see both of those dropping. What should I do? Straight ahead we will hear what personal finance analyst Suze Orman has to say about that.
(COMMERCIAL BREAK)
PHILLIPS: Well, it was really a lot of our -- asking a lot of his congregation, a solid week of spousal sex, and almost six days down and one to go. We will check in with Pastor Ed Young on the great sex-periment.
(COMMERCIAL BREAK)
PHILLIPS: I'll do anything to play that song live here, on CNN. Now a story that we have been following passionately for a week. A Texas pastor who challenged married church members to, well, you know, get to know each other biblically, seven days in a row. And as you can imagine, it wasn't too hard to convince the congregation. (BEGIN VIDEO CLIP)
LIN JOHNSON, CHURCH MEMBER: In fact 12:01, we have already started practicing.
JAY JOHNSON, CHURCH MEMBER: Because the Bible said so, OK?
KIM BROWN, CHURCH MEMBER: I think it is a great idea and I think that he has touched on this before, but not at this depth, but he has touched on this before and thinks that this is very, very important.
(END VIDEO CLIP)
PHILLIPS: All right. So, today is day six. Let's go ahead and check in with Pastor Ed Young and, of course, his beautiful wife, Lisa. They join us live from New York -- Great to see you both.
LISA YOUNG, PASTOR ED YOUNG'S WIFE: Thank you, Kyra.
ED YOUNG, SR. PASTOR, FELLOWSHIP CHURCH: Joy to see you, too.
PHILLIPS: Let's just -- just for the second, just for those who are maybe just tuning in, and haven't heard about this. Which I would be surprised if they have not by now. Pastor Young, tell me why you thought that this idea would help your parishioners?
E. YOUNG: Well, the Bible talks so much about sex and the church has been quiet about a subject that God was not quiet about. So our goal in the Seven-Day Sex Challenge was to really fortify marriages, because when you do that, you build families. So really our heart beats for the marriages. And what happens inside the bedroom affects what happens outside the bedroom. So that is why we did it.
PHILLIPS: So, Lisa, when your husband went before the congregation and did this, did you come home and say, uh-oh? What were you thinking, honey?
L. YOUNG: Well, Kyra, I hate to take responsibility for this, but I was in the pediatrician's office and found a magazine. And I did ask permission to take the magazine, because it dealt with this subject matter that Ed was - he was in this series of talks. And I said, do you mind if I take this? So, I showed it to him. And that is where he found the idea for the seven-day challenge. So I am for it.
PHILLIPS: Oh, very good.
L. YOUNG: And you know what, though, on a serious note, I am very thrilled, because I know the potential that so many married couples have, and that a lot of there are a lot of misnomers and misconceptions of God's view of sex, and for them to realize the importance of doing it, but doing it God's way.
PHILLIPS: No, you are absolutely right. You make a really good point. I know you have received a lot of e-mails. I do have more questions for you two, but really -- I want to get to these e-mails, because you have been getting tons of them about how this has affected church members.
This one written to you, it says: "The seven-day challenge has caused us to reach for some creative and original ways to connect physically, very reminiscent of when we were first married. We decided to divide up the days and each take responsibility for planning that day's sexual connection. We are now looking forward to each day to something special."
Now, Pastor Young, that is what everybody wants. You know, when you hit the seven-year itch, or whatever it is, I mean everybody wants to go back to that first day where, whew! The wedding day and how wonderful it was.
E. YOUNG: That is right. And you know, so often we concentrate so much on our feelings that we forget about the commitment, because marriage is a commitment. Also, it should be a commitment of creativity. And when you talk about romance, you have to talk about creativity, so that the guys, the husbands, we have to be creative. And when we are creative that even leads to more creativity in all aspects of life, especially in the bedroom. Because I know when Lisa and I started this seven-day challenge, we were like, OK, seven days, that is awesome, but after the fourth or fifth day -
L. YOUNG: We didn't want seven days of monotony.
E. YOUNG: That's right.
(LAUGHTER)
L. YOUNG: Well, I am glad some other couples dealt with the same issues.
E. YOUNG: I think believers should have the most creative sex. I really strongly believe that.
PHILLIPS: All right, you also had a number of revelations. Some pretty heart-wrenching things came forward, too. This e-mail was pretty powerful. One of your members says, "Just a year ago I struggled with using pornography instead of the sacred gift that God has given us, my wife and me. For those who can't see sex beyond a physical need, you just don't know what you are missing. Removing my lustful distractions allows me and my wife to worship God in a way in which we never have."
And, you know, that is one of the temptations. And I am sure you would say, it is the Devil that tempts other people to sleep with other people, because things do get monotonous or boring, or they look to other ways to find excitement when things just seem routine after a number of years.
E. YOUNG: Exactly. I think that the terrible thing about pornography is that it turns humans into animals. And we look at people as objects, as parts, as opposed to seeing our spouse and having our spouse be the standard of beauty. Lisa and I have seen so many marriages that have been devastated by pornography. Yet when creativity and romance and some decisions have been made to stay away from that, and to funnel, and to think about your spouse in a creative way, that is when the things go to a whole other level.
PHILLIPS: Here is a great one. A member says, "We were on the brink of divorce and now we are on our third day of sex-periment, received flowers Monday at work. I am falling in love with my husband again, and he is honoring and loving me as Christ loves the church."
You know, Lisa, as females I think that we struggle to still be beautiful, especially after having children, and you know, you don't ever want your man to stray. And that is a big challenge, you know, how does your faith and exercises like this, you know, within the church, kind of take it to a different level?
L. YOUNG: Well no, doubt sex is such a great gift from God and so we just encourage couples to see it that way. I know a lot of women struggle with self-image and self-esteem, but God has created one of us, uniquely with our own beauty. And believe that when men love their wives, when husbands love their wives in such a sacrificial way, the women feel that beauty. They feel that love and their self-esteem is improved by that.
That just pours in richly and deeply into their physical relationship. It is a struggle for many women to not think of sex as a duty, but as a privilege with their spouse. And when you see it that way, when you look forward to it, and when you are excited and enthusiastic about it, that again translates into every area of your life, not just that physical part of marriage, but the emotional and the relational and the spiritual side.
PHILLIPS: I hope you guys have a terrific weekend. What are you going to do tonight, Pastor Young?
(LAUGHTER)
Your wife is looking pretty hot?
E. YOUNG: Well, I will be creative.
L. YOUNG: It will be creative.
PHILLIPS: Outstanding. I hope you have a creative weekend and a fabulous time at church Sunday and we'd love to know how you got more responses than we were able to read. Great to meet you both. You are a beautiful couple.
L. YOUNG: Thank you, Kyra.
E. YOUNG: Thank you very much.
PHILLIPS: All right. This is just for you as we go to break.
ISSAC HAYES, SINGING: Trying to hold back these feelings.
(COMMERCIAL BREAK)
PHILLIPS: Well, tough financial times from coast-to-coast, and earlier one of our CNN viewers, a grandma in Albuquerque, actually, had this question for personal finance analyst Suze Orman on CNN's "Larry King Live."
She said: "I am concerned about my grandson's Coverdell fund and my granddaughter's college funds. I see both of those dropping. What should I do?"
(BEGIN VIDEO CLIP)
SUZE ORMAN, HOST, CNBC'S SUZE ORMAN SHOW: The big mistake that many parents and grandparents are making is that they are not moving their college funds out of the stock market in time for when their kids are going to be going to school. Remember my rule of thumb, money that should not be in the market is money that you need within five, possibly even, 10 years. So if your children are of the age where they are going to be going to school in the next year, next two years, three years, you have already lost a significant part of that, but that was never money that should have been in the market at this point in time.
(END VIDEO CLIP)
PHILLIPS: Well, we have more financial advice from Suze Orman coming up right here in the CNN NEWSROOM.
Well, with the Big Three nearly out of gas and the economy driving off a cliff, it's an interesting time to be holding a car show. Still, it's full speed ahead in Los Angeles and CNN's Ted Rowlands is there, at the Los Angeles auto show. Now first he was in a - well, let's see if he showed us that Mustang once again.
TED ROWLANDS, CNN CORRESPONDENT: Yes, Kyra, look at this baby, a 2010 Mustang unveiled here at the car show. Normally, we would be talking about it, but the bottom line is that the economy has put a huge black cloud over this car show, as you mentioned. And it really is a bizarre celebration, if you will.
This is the time when the manufacturers come out and they throw parties, they unveil the new cars like this one and everybody oohs and aahs about it. And people dream about buying one or when are they going to be available? Well, there is this strange undercurrent of doom with the Big Three looking for cash on Capitol Hill. And yet, the show sort of is still going on. So there is this enthusiasm, but it is definitely tapered down.
GM is not participating at the same level as normal. Ford does have a very large display and you talk to Ford representatives and they say, yes, we know, we get it. But if we don't put out new products when things do turn around, we will be in trouble, and we won't be selling those products. The bottom line is that the industry is very well aware that last year is horrible and next year might be just as bad.
PHILLIPS: Well, you want to buy a Rolls Royce, maybe a Bentley? Well, in Hong Kong these days, guess what? They're cheap.
(COMMERCIAL BREAK) PHILLIPS, CNN NEWS ANCHOR: Word coming in now out of Savannah, Georgia. Apparently the Savannah State University is on lockdown and the SWAT Team is on the scene. A shooting has taken place. We have been able to confirm that. It happened at the University Commons right there on campus. It happened about 2:00 p.m. eastern time. It was about 32 minutes ago. A spokesperson from Savannah State University confirmed there was a shooting that happened on campus and police are investigating, Savannah police.
Apparently one student has been transported to a local hospital. Meanwhile, the university is on lockdown and nobody has been able to leave. Wherever you were at the time this happened, students, teachers, whomever, they have not been able to leave. One biology professor, apparently, made a comment saying, we have locked all of the doors inside of the classrooms and are keeping the students inside until we hear that everything is OK.
Don't know if that gunman, or female possibly, gunwoman is on the loose still, but the SWAT Team is on the scene along with other members of the Savannah Police Department, and the university is on lockdown. We are following this for you. We will bring you more as we get information.
Meanwhile, on Wall Street today, stocks are trying to rally, but over the past two days the market has lost more than $1 trillion in value. And now there are concerns that another big bank is in trouble.
Susan Lisovicz is at the New York Stock Exchange with all of the details there -- Hi, Susan.
SUAN LISOVICZ, CNN NEWS CORRESPONDETN: Hi, Kyra. Well, it is pretty quiet here right now. Give it time. We have not gone into the final hour of trading yet, this -- you know, that the market is not rallying right now. That is not good obviously after the losses that we have seen this week, the Dow plunging more, it's lost about 1000 points since last Friday, and what we've seen in the last two days for the Dow with the biggest drop since the crash of '87.
The market is not sinking. Maybe we are trying to find a new bottom. But in any case, we are close to where we ended yesterday with the Dow industrials right now down nine points at 7543. Last Friday, closed at 8500. The nasal composite is down 7.5 shares or about 0.5 percent.
Citigroup shares are not quiet. They are down 25 percent. Reports say Citigroup management told employees they will not break up the company. This came after a "Wall Street Journal" report that Citi would consider a sale after a board meeting today -- Kyra?
PHILLIPS: Well, Citigroup is one of the banks getting billions of dollars from the government. Hasn't that helped at all?
LISOVICZ: No, it hasn't. And it has raised money on its own. That was $25 billion. It raised another $50 billion trying to prop up the company. One of the problems right now is the tremendous loss in the market price. It is under $4 today. Once it is goes below $5, then automatically that pressures the stock, because mutual funds will simply dump it. This is a stock trading at $57 less than two years ago. So Citi needs to raise more money.
Yesterday, we are hearing from its biggest private investor, Saudi Prince Alaweed. Clearly, did not reassure the market. It's one of the biggest casualties of the subprime mess. It has racked up about $25 million in losses over the past year. and as one analyst put it earlier this week when it announced 50,000 job cuts, the market pushed that stock lower that day, even after it said that it was really taking a strong medicine. One analyst said the patient announced it had cancer year ago. It is only starting to take the chemo now.
So there is a lack of faith now in what the company is doing to respond to the crisis. It is one of the biggest casualties, Kyra, and we are watching it closely.
PHILLIPS: All right, Susan, it sounds good. Thanks.
Earlier, we mentioned that foreclosure holiday announced by Fannie Mae and Freddie Mac. That's hardly a long-term solution. So where the homeowners turn to get out of the possible foreclosures? Well, not the $700 billion bank bailout, at least not yet.
CNN's Gerri Willis joins me with the homeowner help that is and is not available -- Hey, Gerri.
GERRI WILLIES, CNN NEWS CORRESPONDENT: Yes, good to see you, Kyra. You nailed it on the head, TARP. That is a big load of dough that the government is raising for our tax dollars, some $700 billion worth, which is not going to help homeowners. Let's take a look at where that money is going.
Susan Lisovicz just mentioned Citigroup. There is $250 billion all told to banks across the country. These are banks that are still paying shareholders dividends. These are banks that are using some of the money to buy up other banks. $40 billion the AIG. Is that going to homeowners? No. $60 billion left over to spend unearmarked. $350 for the next Congress to spend.
Yet, none of this -- none of this is going right into the hands of homeowners. This is where all this trouble started, as you know. This is what set the whole problem in motion in the first place. These people are still in trouble, still under water. They still need help. We will have probably as many as three million people go into foreclosure this year. Last year it was 2.2 million. And we may have as many next year as well. This is a very serious problem -- Kyra?
PHILLIPS: Well, haven't we had other bailout programs and some of those have been successful, right?
WILLIS: Well, you know, it depends on who you talk to. This is a hotly debated topic. First of all, you should know that the folks at Hope Now, the private group of bankers who got together to rewrite loans, they say they have helped some 2.3 million homeowners. But when you talk to other people, you have heard a different story. As a matter of fact, Sheila Bair, who heads the FDIC, which is one of the nation's biggest regulators, says the track record is not that positive. Some 4 percent of mortgages that are seriously delinquent were rewritten month-to-month, just 4 percent. That is not a high hit rate, Kyra.
There is a lot of frustration out there for people who want to see things change. It is -- really what is it going to take to get the economy turning around is some solution for homeowners out there. Think about that. 4 percent of seriously delinquent mortgages are changed, rewritten, the terms made different each month. The other 96 percent, what are those people going to do? Well, you can guess.
PHILLIPS: Yes?
WILLIS: They go into the -- they lose their homes.
PHILLIPS: There's no other option. It is gone, right? How much is this going to help homeowners?
WILLIS: Which program, the Hope Now or the Help for Homeowners?
PHILLIPS: Yes.
WILLIS: Hope Now, $2.3 million, those are their numbers. We are still waiting to see if Help for Homeowners is going to help any people at all. That program just got under way. Congress passed that money last summer. And we have not seen numbers yet from them. But I think the consensus from most of the people who are advocates for housing, yet to get serious traction on this problem, particularly another three million people in foreclosure next year -- Kyra?
PHILLIPS: All right. Gerri Willis, thank you so much.
In these tough economic times, the big question for millions of Americans, should you put the max into your 401K? We will hear what personal finance editor, Suze Orman, has to say about that.
And the assassination of JFK is the stuff of news stories, History Channel documentaries, Oliver Stone movies for a lot of us. But for one young doctor working at Parkland Hospital, 45 years ago tomorrow, it was the day that history came to him. Dr. Salyer was a resident when a mortally wounded President Kennedy was rush into the emergency room.
Dr. Kenneth Salyer joins me now live from Dallas.
It must have been a strange -- I don't know how you describe this day. You don't want to say anniversary, that's a time to celebrate, and it is one of the worst times in our history. How does it feel when you think about what happened today 45 years ago?
DR. KENNETH SALYER, CHAIRMAN, WORLD CRANOFACIAL FOUNDATION: Well, it was a certainly a momentous moment in history and certainly I didn't know I would be a part of it when I got up that morning just like any other day. But I ended up with my hero in my hands and trying to save his life. He had a lethal injury, but at the same time, he was agonal, and we did everything we could.
PHILLIPS: Doctor, if you don't mind, take me back to that moment on November 22, 1963. What did it feel like? What do you remember seeing? What was the -- just kind of the energy in the emergency room -- what do you remember?
SALYER: The energy was up high. Everybody was attentive. I was the third physician in the room. We were doing our job that we had been trained to do. We were going through everything.
He had a sucking (ph) wound of his neck and a large wound of his head. We proceeded to try to get an airway. And we started undressing him. He had a large brace on his back. We were working on that. We completely did everything we could to try to bring him around.
PHILLIPS: When you saw him initially, and when you started working on him, did you think there was hope that he would make it? Or did you pretty much know that this was going to be a miracle if you could save him?
SALYER: I really, at the moment, I first saw him, I knew that this was a major injury. It was like with the right side of his skull off. But at the same time, you don't know until you try to resuscitate him. So I couldn't say at this very moment yes or no.
PHILLIPS: There is another moment that I know you will never forget and that was making eye contact with Jacqueline Kennedy. Tell me about that moment, and what happened.
SALYER: Jacqueline was in the room the entire time, and she was over in the far right-hand corner, and I was at the right-hand side of our president. And she -- on two or three occasions, we would make eye contact. After we pronounced him and everybody was leaving the room and most everyone had left the room, she came over, leaned over his chest and actually did a ring ceremony where she took his ring off and put it on her hand. It was quite a moving moment.
PHILLIPS: Wow. And how did that impact you? Was it more, trying to save his life or was it when he had passed and you saw that final moment with his wife above him taking his ring?
SALYER: Well, I think that, at that moment, I was numb. After trying to save his life, after pronouncing him, we were simply -- I was numb and I was standing there, and it hadn't even -- the whole thing had not hit me as to exactly what has happened. But we had lost our hero. And in looking back, I think it has made a big impact on my life, because I dedicated myself to helping others. I knew the thin line between life and death at that very moment when my hero, our hero, our country's hero was brought down.
PHILLIPS: Wow. And I know you have done a lot of amazing things, and not always paid for it too. You've done some incredible surgeries. I have always wanted to ask you this as well. There have been so many theories out there, Doctor, about how he died and how many shooters there were and all these various movies that have been made about it. Do you feel sure, 100 percent, of how he died? Was it one man?
SALYER: I absolutely do not feel sure 100 percent. He had two injuries, one in the neck and one of the head. It could have happened from Lee Harvey Oswald or could have happened from a conspiracy. But basically, it could have happened from one shooter.
PHILLIPS: Wow. Do you have a theory?
SALYER: I don't have a theory.
PHILLIPS: Interesting. From this point forward, is this something, as the anniversaries do come around, is it something that you do like to think about and remember and take a moment of silence each year that it happens?
SALYER: Absolutely. It's a moment in history when we lost I think one of our major great presidents. And it was a sad moment at that time for everyone. I know Dallas has always been associated with this. I think that we have gotten over that now. But still, it is a very, very moving, very tragic time. And yet, we also look at a time for now for enthusiasm with a new president and a new light.
PHILLIPS: I bet he makes you think of Kennedy in many ways.
SAYLER: It does in many ways.
PHILLIPS: Dr. Kenneth Salyer, always a pleasure to interview you. Thank you so much for your time.
SAYLER: Thank you. Nice to see you.
(COMMERCIAL BREAK)
PHILLIPS: Well, it is a paradox of the economic meltdown. The harder it is to be rich, the easier it is to look rich. Ever dream of owning a Rolls? Well, we have a dealer in Hong Kong whose lot is overflowing with six-figure cars now selling in the five figures, even the low five figures, because the original owners could not afford to drive them. And the dealer cannot afford to keep them.
(BEGIN VIDEO CLIP)
HUGH RIMINGTON, CNN NEWS CORRESPONDENT: You take an offer of just about $15,000 or $16,000 U.S. dollars for this car?
UNIDENTIFIED HONG KONG CAR DEALER: Yes, because I need the cash.
(END VIDEO CLIP)
PHILLIPS: Well, this is Hugh Rimington, who still didn't manage to make a deal, by the way. He also found a luxury apartment selling for $1 million less than the owners paid six months ago. So tough times all around. How do you protect your future? a big concern for many Americans is their 401K.
Personal finance analyst, Suze Orman, talked about that with CNN's Larry King.
(BEGIN VIDEO CLIP)
LARRY KING, CNN ANCHOR: Should people continue to put the max into 401K's?
SUZE ORMAN, CNBC PERSONAL FINANCE ANALSYT & HOST, "SUZE ORMAN SHOW": No. I have always said that I would only be putting up to the point up to the match if your 401K matches. You put in one dollar, they would give you 50 cents. After that, I would not be putting money into the 401K. If they don't match, I would not put money into the 401K, because a Roth IRA will give you access to more types of investments. Remember, in a 401K, you only have mutual funds to invest in and maybe your employer's stock.
(END VIDEO CLIP)
PHILLIPS: Well, Suze Orman will be a guest in the "Situation Room" with Wolf Blitzer at 4:00 p.m. eastern time. You can send your questions about your money to i-report.com/situationroom.
(COMMERCIAL BREAK)
PHILLIPS: Live pictures out of Savannah, Georgia, where we have been following a breaking news story. This is the Savannah State University. It is on lockdown. Apparently, there was a shooting on campus. Someone has been transported to a local hospital. The SWAT Team is on the scene. We are working as many details as possible. We will bring you more when we get it.
(COMMERCIAL BREAK)
PHILLIPS: Well, neckties have been around almost as long as necks. It's an essential part of men's businesswear, or are they? Well, our own John Roberts caused a bit of a stir by leaving his tie at home, and the folks at "American Morning" were swamped with e- mails, and some positive and some not so positive. So what is a fashion-forward guy to do?
Here is CNN's Lola Ogunnaike.
(BEGIN VIDEOTAPE)
DAVID WATSON, ASSISTANT GENERAL MANAGER, BROOK'S BROTHERS: Well, if you do wear a tie, you can know that you're pretty much always going to be correct.
I have one of our newer striped ties on today.
LOLA OGUNNAIKE, CNN NEWS CORRESPONDENT: That is lovely.
SIMON DOONAN, CRATIVE DIRECTOR, BARNEY'S: A tie is transformative. It can take a slob and turn them into a confident employable person. I think that whole super casual, casual Friday thing is very last century, darling. I'm sorry.
OGUNNAIKE (on camera): John Roberts without tie. John Roberts with tie.
WATSON: Well, I have to be honest, he looks great in both pictures. However, this sort of looks more afternoon kind of matinee idol to me in that picture. Here obviously, he looks much more serious. And he is really working it nicely here. He has a great fashion color there.
OGUNNAIKE: Are ties comfortable?
KEITH MERRELL, CHIEF FINANCIAL OFFICER, GENOSYS: They are. But they are about the only way I can accessorize. You know a white shirt and coat. and ties are like women's shoes to me. It allows me to be able to be different.
OGUNNAIKE: How many ties do you own?
MERRELL: I probably have 200.
OGUNNAIKE: 200 ties?
MERRELL: Well, actually, I just bought one, so I have 201.
UNIDENTIFIED MALE: My son goes out to buy a tie and feels perfectly dressed up without it, with a suit coat and without tie and just a casual shirt.
OGUNNAIKE: The first time you saw your son leave the house without a tie, did you think, were you thinking, what are you doing kid?
UNIDENTIFIED MALE: No, I was just happy to see him in a jacket, or just seem him leave. Either way was perfect.
OGUNNAIKE: Now, let's find a tie that matches my dress.
UNIDENTIFIED MALE: OK, I have one in mind.
OGUNNAIKE: Oh. I am feeling very presidential.
UNIDENTIFIED MALE: And you look fantastic.
OGUNNAIKE: Thank you, sir.
What are the rules for not wearing a tie?
UNIDENTIFIED MALE: Nice suit. Nice suit, dress nice, accessorize properly and leave the tie at home.
OGUNNAIKE: What advice would you give to our anchorman, John Roberts, for not wearing a tie?
UNIDENTIFIED MALE: Good for you, John. Keep it up.
(END VIDEOTAPE)
PHILLIPS: So we wondered what John Roberts thinks about this, so we decided to hologram him into one of the control rooms and we actually were able to do that. There he is. John, can you hear me OK?
JOHN ROBERTS, CNN ANCHOR: Hi, Kyra, how are you?
PHILLIPS: So, tell me, what are you wearing?
ROBERTS: Right now, I am wearing a shirt, a pair of jeans, a CNN jacket, being the good company boy that I am. And then that's about it.
PHILLIPS: So what exactly have you decided to do with all of your ties?
ROBERTS: Well, here is the thing is you can never satisfy anyone when it comes to a tie. You know, sometimes people will complain that the tie is too thin or the knot is not big enough or you need to have a different collar. And you try to satisfy people by tying the tie in a different way. And sometimes they appreciate it and sometimes they don't. So just I decided the other day, I had had enough of the trying to keep up with the Joneses sort of thing and just ditched the tie, undid the top button, and it was kind of liberating to not have to really, you know, deal with convention. And it just kind of made me feel more relaxed in the morning. And I was getting complaints, but nobody told me that my tie was too thin or my knot was too small.
PHILLIPS: Well, you have been inspiring a lot of men around the company. I don't know exactly what our president thinks yet, but I know that T.J., who is filling in for Rick Sanchez this hour, has been inspired.
T.J., was it John Roberts that made the influence on you?
T.J. HOLMES, CNN ANCHOR: Well, John Roberts has been setting the standard in this industry for many, many years. And we will just take this as one more that we have to follow John's example.
But, Kyra, I heard you as soon as you got and the phone there. Is that how you talk to everybody on the phone? That is the first question to the guys, hey, what are you wearing? Is that how you start your conversations on the phone?
PHILLIPS: Well, I am just looking for interesting conversations, that's all.
HOLMES: There are other ways to get it, Kyra.
ROBERTS: Well, I think it was the conversation with the minister earlier this hour that set her off.
PHILLIPS: Well, exactly the sex experiment got me into a whole mindset.
HOLMES: You should have spent more time on that segment, I thought, but a job well done there.
ROBERTS: I can tell you one thing though, Kyra, is yesterday when I ditched the tie for the first time, our president, one of the senior vice presidents and our head of sales all came in without ties on. And I said, "Did I inspire you?" And they all said, yes, we thought we would go with that today. So, the more men we can -- you know, it is kind of like, remember Kramer. And I'm out there and loving it. That is the way we are.
PHILLIPS: T.J., I appreciate the words of advice. John Roberts, thank you. Keep the tie off. Love it. T.J., you look hot.
HOLMES: OK, do I need to go with the tie or no tie?
PHILLIPS: I say no tie today.
HOLMES: Well, I don't know if I can get away with it.
PHILLIPS: What do you say, Angie Massy, no tie? Your E.P. makes the final call back there.
HOLMES: Can we do it, Angie, tie or no tie?
ANGIE MASSY, CNN EXECUTIVE PRODUCER: We will think about it.
PHILLIPS: OK. We'll think about it.
HOLMES: She is going to think about it. OK.
HOLMES: We will see you at the top of the hour. We have good stuff coming up. We are talking about greed. And corporate CEOs, are they are taking the golden parachutes and things like that. And I have a guy coming up who is going to say that greed is a good thing. We all need to listen up, because we are a bit greedy according to this guy.
One more thing, the situation with Morman (ph) Driver, the father of NFL player Donald Driver, who was allegedly beaten by a couple of police officers, and developments on that story. His condition has been upgraded in the hospital. His family is speaking out. And the police officers are taken off of patrol duty. All of that coming up next hour. Rick Sanchez, I am trying to keep the seat warm. He has a big shoe and chair to fill, as you know.
PHILLIPS: And no tie. T.J. Homes, we'll be watching the next hour. You will be taking it away in two minutes.
HOLMES: All right. See you.
PHILLIPS: All right, bye.
We'll see you back here on Monday.
(COMMERCIAL BREAK)
