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Bill Richardson is Introduced as Commerce Secretary Nominee; Big Three Beg Congress for Bail Loan

Aired December 03, 2008 - 11:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

TONY HARRIS, CNN ANCHOR: It is Wednesday, December 3rd, and here are the stop stories we're following for you in the NEWSROOM. The president-elect is getting ready to put another one-time rival on his payroll. Governor Bill Richardson joins team Obama.
Live this hour, the cost of the taxpayer bailout for the big three gets bigger. GM and Chrysler say they need loans by the end of the month or it may be the end of the road for them.

Crisis on campus, a new survey shows the cost of college is rapidly climbing out of reach for the American middle class.

Good morning everyone. I'm Tony Harris. And you're in the CNN NEWSROOM.

The men and women of team Obama, and this hour, a new member will be introduced. Let's see. Already there is a former rival, a Republican holdover, and a retired general. Now another adversary turned ally will join the team. President-elect Obama holds a news conference in about 40 minutes to introduce his pick for commerce secretary, New Mexico Governor Bill Richardson.

You'll recall Richardson ran for the Democratic presidential nomination before dropping out and endorsing Barack Obama. More now on the decision to pick Richardson for commerce secretary, senior political correspondent Candy Crowley live from Chicago.

Candy, good to see you.

CANDY CROWLEY, CNN SR. POLTICAL CORRESPONEDNT: Nice to see you.

HARRIS: Well, let's see here, Bill Richardson becomes the first Hispanic to be nominated to the Obama cabinet. But in years past, Candy, commerce has been seen as playing second fiddle to Treasury. Is this a big enough megaphone for a guy who likes a pretty big megaphone?

CROWLEY: Well, it will have to do for now. I don't think it's a big secret that Bill Richardson, who has some foreign policy experience, would have preferred the Department of State. But that went, of course, to a marquee name, Hillary Clinton.

So we can recall that Barack Obama was talking about his economic team earlier post the election and saying, look, I consider a lot of these departments, and there are many that still have not been announced, to be part of my economic team. So certainly Richardson brings a lot to the table. He was energy secretary in the Clinton era. He was also ambassador to the U.N. So he has some foreign policy experience.

So perhaps he can be helpful opening markets overseas. He has, as governor of New Mexico, also brought jobs to the state, mostly through tax cuts for businesses. So that has been his record. It's really interesting you mentioned his endorsement of Barack Obama at a time when Hillary Clinton was still in the race, and this is a man that you can count and put in the column of former Clinton insiders.

He was appointed to these roles, U.N. ambassador and energy secretary, during the Clinton years. The Clintons not all that happy that Richardson endorsed Obama at a time she was still in the race. Nonetheless, he has wanted to come back to Washington, to return to Washington and hopeful that this Commerce Department appointment does put him in part into this economic team that's going to try to revive the economy.

HARRIS: You know, Candy, just one quick one here. It seems that team Obama now, at this point, there are so many members on this team that wear or have worn multiple hats. I'm not quite sure how the cabinet meetings actually transpire. But is this a situation where team Obama will actually get an opportunity to speak from their various disciplines, regardless of what particular area of discussion is on the table?

CROWLEY: Well, I imagine certainly in the case of Bill Richardson, not a shy guy. I'm sure he would like to chime in on some of these foreign policy matters. But the fact of the matter is, when you look at this cabinet, we don't know how this is going to play out. We've had times when secretary of states, for instance, were kind of ancillary to foreign policy, when the national security chief inside the White House had the most power.

You just don't know who is going to emerge as a player, and sometimes we don't know even when they do, because a lot happens inside those cabinet rooms. But you're right, secretary of commerce is not considered one of those really high profile positions. But we will see what a Washington insider can do with it.

HARRIS: Our senior political correspondent Candy Crowley for us from Chicago. Candy, appreciate it. Good to see you, as always. Thank you.

Hillary Clinton earns high praise from a former British prime minister. Tony Blair says Clinton will be a strong secretary of state. Blair is now a Middle East envoy. He says Clinton and Obama's national security team will help move the peace process forward.

(BEGIN VIDEO CLIP)

TONY BLAIR, MIDDLE EAST ENVOY: The great thing about Hillary, because she has, in her own right, got every knowledge about this situation, and the rest of the president-elect's team, is that they're sufficiently familiar with this that, I think, you know, we're not going to be starting from day one, from square one, if you like. It will be building on what has happened and building with people who have got real knowledge and real expertise.

(END VIDEO CLIP)

HARRIS: Well, Blair says he sees a real chance for progress with the Obama team. Former President Bill Clinton says he will have very little to do with his wife's decisions as secretary of state.

In an exclusive interview with CNN in Hong Kong, Clinton talked about his approach to her new role.

(BEGIN VIDEO CLIP)

BILL CLINTON, 42ND PRESIDENT OF THE UNITED STATES: I think my involvement will be what our involvement with each other's work has always been, that is, all the years I was a governor and president, I talked to her about everything. And I found her advice invaluable. And I'm sure that we'll talk about all this. I mean, I really care about a lot of these profound challenges that our country and the world are facing.

But the decisions will have to be ultimately the president-elect, Obama's decisions. I'll just try to be a helpful sounding board to her. But I don't think I will do anymore than that, unless he asks me to do something specific, which I'm neither looking for nor are close to.

(END VIDEO CLIP)

HARRIS: Clinton says he thinks his wife made the right decision in accepting the nomination.

A win for the Republican Party. Georgia's incumbent senator, Saxby Chambliss, has easily beaten his challenger, Democrat Jim Martin, in a run-off.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Senator Saxby Chambliss!

(CHEERING AND APPLAUSE)

(END VIDEO CLIP)

HARRIS: The Republican victory means Democrats won't get the 60- seat supermajority that would have made them immune from Senate filibusters. That leaves just one Senate race unresolved. In Minnesota, a recount is still going on in the race between Democrat Al Franken and Republican Senator Norm Coleman. The counting should be done by Friday. But challenges over disputed ballots and a possible court challenge could drag on into the new year.

(BEGIN VIDEO CLIP)

JACK QUAVIS, IREPORTER, BUFFALO, NEW YORK: How about the next 10 million Americans that purchase a new vehicle from one of the big three automakers gets their bailout from the government in the form of a $2,500 check towards the purchase of that new vehicle.

During a recession, I think that would kick start the economy quite well and put that $25 billion into the automakers' pockets.

(END VIDEO CLIP)

HARRIS: OK. There's a thought. Big three, big trouble. Automakers go back to Congress tomorrow to argue for taxpayer loans. The original $25 billion request has ballooned to $34 billion. CNN's Kate Bolduan is on Capitol Hill.

Kate, anyone waking up to this news this morning is probably saying, they want what now, $34 billion? What happened to the $25 billion? And what is the latest dire warning of collapse if the big three don't get this money?

KATE BOLDUAN, CNN CORRESPONDENT: Well, they're continuing to offer those dire warnings from the auto industry. Of course, that's where those warnings are coming from. But in terms of the $30 billion, this is larger than the original $25 billion request that was made. But the members of Congress going in -- when they sent the big three home saying, we need you to answer more questions, this was one of the questions that they actually had, which was, how much do you actually need?

So while this is a bigger number, and there probably isn't so much surprise that -- because they simply say they're being honest in the figure -- in the number that they're actually talking about here, Tony.

But we have learned -- CNN has learned from two congressional Democratic sources that while the big three executives will be here tomorrow, there are representatives from all three automakers on the Hill today having staff level meetings, kind of briefing the staffs of the key committees as well as leadership staff on these plans. So we see there are conversations and discussions that are going on already today.

Meanwhile, members of Congress are all reviewing and analyzing and taking a look at these proposals while there are some members of Congress on both sides of the aisle that are facing bailout fatigue following the financial industry bailout.

That being said, House Speaker Nancy Pelosi reiterated her position yesterday that letting the big three fail is not an option. Listen here.

(BEGIN VIDEO CLIP)

REP. NANCY PELOSI (D-CA), SPEAKER: There are certain standards that we want to see. We want to see a commitment to the future. We want to see a restructuring of their approach, that they have a new business model, a new business plan.

(END VIDEO CLIP) BOLDUAN: The big three will face the music once again in hearings, as you have mentioned, Tony, that begin tomorrow. As one top Senate Democratic aide tells me today, yes, members of Congress do have more questions, but the automakers are going to have to make a very persuasive case to the American public before Congress moves forward.

So there's a lot that's going to have to happen in the next couple of days before Congress heads into possibly taking action on legislation next week.

HARRIS: Well, I just got a little information in my ear here just a second ago that there is some new CNN polling number on public sentiment for a big three bailout. And our Bill Schneider is around the building somewhere. We'll get Bill up on that next hour right here in the NEWSROOM.

Kate, good to see you. Thank you.

BOLDUAN: Thank you.

HARRIS: Our chief business correspondent, Ali Velshi, is on the radio right now. Let's do that shot. There he is. We want to find out what his callers are talking about this morning. Ali, are you there? Are you in the middle of a call?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: I'm here. No. I was just talking to our viewers about the fact that the $25 billion bailout for automakers has become a $34 billion bailout when you add up what Ford wants and GM wants and Chrysler wants. I don't know if it's a good thing or a bad thing that they didn't sit together in Detroit before they came down, and said, guys, can we make that add up to $25 billion?

HARRIS: Yes, I mean, there is a time for -- look, GM wants, what, $18 million of that pot -- $18 billion, I'm sorry.

VELSHI: Yes, $18 billion, yes.

HARRIS: Eighteen billion. Is it time for GM to really open up its books to an independent audit so we can make an independent assessment of the company's needs? Come on.

VELSHI: Well, look, I think you're going to see a standard applied to these auto bailouts that we didn't see for the $700 billion bailout. And so they're going to look at a lot of things. GM is in rough shape. And I think everybody shares the view. There was nothing rosy about GM's prediction. Not only do they need $18 billion, but they say they may have to lay off between 21,000 and 32,000 people just to make ends meet.

Ford says it might need $9 billion but may not even need to touch it. And we do know that Ford is comparatively the healthiest of the three. Chrysler is the problem in that they want $7 billion. And Chrysler is a completely private company. So there are the books that I really want to see. Because I don't know how Chrysler runs. HARRIS: Hey, some quarterly reports on cars and folks just not buying them, all of the big three down in sales numbers. When you look at these numbers, and we're talking about quarter over quarter, year over year now, I'm just -- can the big three, as they are known and constituted right now, can they be saved? Can they survive?

VELSHI: Well, let me tell you those numbers. Those numbers were down for every automaker. Those are U.S. sales numbers. So we're going to end 2008 selling just over 10 million cars in the United States. 2007, we sold more than 16. And by the way, for the eight years prior to 2007, we sold more than 16 million cars in United States.

So in fact, the automakers have a bit of an argument here that this isn't their mismanagement, this is the entire industry. And in fairness, Nissan, Honda, Toyota, all of them, took massive drops, because the people who...

(CROSSTALK)

HARRIS: But, Ali, if the market gets bad, if you can't sell cars in this market, the market says maybe one, two, or -- one or two of you go away.

VELSHI: I think that's a reality for some of them. They have to think about that, because if we're going to bail out the industry, we have to know that they're going to make a product that people are going to want to buy so that they're sustainable, and the bailout actually gets paid back. Otherwise what we're doing is we're keeping people employed.

And that's an important consideration in an economy where we've lost what's going to be 1.5 million jobs by the end of November -- by the end of December. What -- we have to do something about that. But are we dealing with the jobs issue or are we trying to keep American icons in place? And that is a question I know a lot of my callers have things to say about that.

HARRIS: Yes, I'll let you get back to your callers. Good to see you, Ali, thank you.

VELSHI: All right, Tony.

HARRIS: You know, we're waiting for a news conference out of Detroit. And here's the question, will the United Auto Workers union open contracts to a new round of concessions with the big three? We'll bring you that news conference live when it begins right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

(WEATHER REPORT)

HARRIS: Well, another sign of recession, a record number of people in Tennessee, nearly half a million, are now receiving food stamps. That's an increase of nearly 10 percent since January. Officials at Tennessee's Department of Human Services say they are seeing families that have never needed help before.

(BEGIN VIDEO CLIP)

KEVIN MEEKS, TENN. DEPT. OF HUMAN SERVICES: You come into our lobby in the morning and take a look at the lobby and you see folks that are just -- it's -- some of it is standing room only some days. It's elderly, it's able-bodied individuals that are able to work but can't work or can't find a job.

(END VIDEO CLIP)

HARRIS: Officials say they expect the demand to continue to rise. Meanwhile, a new report out today has bad news about college affordability in America, and it's getting worse. The report gives almost the entire country a failing grade here. Josh Levs joining me with more on that story.

That's not good news any way you slice it.

JOSH LEVS, CNN CORRESPONDENT: I get to be the bearer of good news every day when we look at the economy, don't I, Tony?

HARRIS: Yes.

LEVS: And this one -- I'll tell you, had actually some things that really surprised me. I'm going to tell you about it. It's kind of amazing. What it's called is it's the National Report Card on Higher Education. It's put out by this group here, measuringup2008higherweducation.org. I encourage you to check out all of it.

But there's a couple things that I specifically want you to see from it. Check this out. Affordability. See the Fs? Let's scroll down. Every single state, Tony, got an F for affordability except California, which got a C-minus. Scroll down a little more.

One more thing I want you to see. All of these blue arrows under affordability are pointing downward. That means in all states but two, it's getting worse. You just keep seeing down, down, down.

Now I've pulled down a couple of interesting figures from this report. Let's take a look at a graphic I've got for you here. After financial aid, Tony, after that, after aid, working and poor families are paying on average 40 percent of family income for a student to enroll in a public college, middle income, 25 percent. Upper income, 13 percent.

And as we know, public colleges are generally less expensive than private colleges. And one of the reasons, Tony, is this, college tuition and fees have gone up 439 percent since 1982. And look at that, median family income has gone up 147 percent. So in short, you have college tuition and fees going up three times more than the mean income is in America. It's incredible.

HARRIS: Well, are these -- does this mean more students must be, what, turning to loan programs, huh, Josh? LEVS: They are. Let me quickly show you, I spoke with a student who is facing this. Let's look at what he said.

(BEGIN VIDEO CLIP)

ERIC HAHN, COLLEGE STUDENT: What's happening is students that don't have co-signers, such as myself, have to apply for private unsubsidized loans. And when it falls through, as in my case, you pretty much apply for other loans, you start settling for expensive debt, and in my case, you pull out your savings, you go and sell your stock and pay for your short-term expenses.

LEVS: And so, Tony, you know, he is someone who had to give up his loans at the last minute because they fell through. So basically what this study here is saying, it's getting worse, and it's contributing to an education gap between students in the U.S. and other countries.

Obviously that's something that long-term can hurt the U.S. economically even more.

HARRIS: And no real good news in the report it sounds.

LEVS: Nothing big enough to be talking about here, no.

HARRIS: All right. Josh, appreciate it. If folks need help, this is a competitiveness issue as well.

All right. Still to come. Struggling to make the mortgage payments, personal finance editor Gerri Willis tells you if a loan modification is right for you. And just another quick reminder here, we're awaiting a news conference from President-elect Barack Obama, it is scheduled to begin at 11:40 from Chicago. When it begins, we will of course take you there live.

(COMMERCIAL BREAK)

HARRIS: OK. Let's spend some time with personal finance editor Gerri Willis. And today's topic, modifying your mortgage to prevent foreclosure. I talked with FDIC Chairman Sheila Bair yesterday about her agency's program.

(BEGIN VIDEO CLIP)

SHEILA BAIR, CHMN., FDIC: Generally we use a debt-to-income ratio of 38 percent. We can go all the way down to 31 percent to get the loan payment down. We'll use, as you indicated, an interest rate reduction first, we'll go all the way down to 3 percent for the first five years. And there's a life of loan cap of the prime rate which is around 6 percent -- a little less than 6 percent now.

If we can't get you to an affordable payment that way, we'll extend the amortization, the loan period -- repayment period to 40 years. And then we'll also do some principal forbearance if we can't get you to an affordable payment with those first two measures. About 70 percent of the time, we can get to an affordable payment with an interest rate reduction. And it's available to anyone. We are not re-underwriting an individual and negotiating each loan. So your FICO, whatever, that really doesn't matter.

We're going to look at your -- we're going to verify your income, look at what your income is, and what you can afford, get your payment down to an affordable debt-to-income ratio and then, if you can verify your income, you'll get the modification.

(END VIDEO CLIP)

HARRIS: You know, there are other programs to change the terms of your mortgage to get a lower payment. Let's get to Gerri. She's in New York.

And, Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, Tony.

HARRIS: What's on the table right now?

WILLIS: Well, there are lots of programs on the table. As you mentioned, the FDIC plan has outlined his proposal on modifications. But there are others as well. The Federal Housing Finance Administration, this is the agency that oversees the mortgage giants Fannie Mae and Freddie Mac, last month they introduced a program that would apply to loans owned or guaranteed by Fannie or Freddie.

Now to qualify, borrowers must be 90 days or more behind on mortgage payments, and they have to demonstrate financial hardship. A number of banks have also announced their own programs, including Citigroup, Bank of America, JPMorgan Chase.

Now most of these mortgage modification programs cap payments through lower interest rates, longer repayment schedules, just what you were talking about, reductions in loan balances. So the FDIC program isn't out there for anybody but IndyMac clients right now. But there are other options.

HARRIS: If you're struggling with your mortgage, how do you get help immediately like today, like now?

WILLIS: OK. Pick up the telephone, call your lender's loan modification department, explain your situation. Now as you're doing this, you want to keep detailed records, who you talked to, phone numbers, send a letter outlining your situation by certified mail to customer service and the loss mitigation department. Make sure you investigate government programs, too.

Look, you could qualify to refinance into an FHA-insured mortgage, contact HOPE NOW, 888-995-HOPE for guidance. There are also counseling agencies out there to help you. Call the Department of Housing and Urban Development. They have counselors in local neighborhoods. Their phone number, 800-569-4287. These counselors may be able to help you if your lender won't talk to you, we know that happens out there. Make sure you check your mortgage paperwork. This is interesting. Make sure you check it, find out if there are any big mistakes, maybe your income or details that you didn't know that weren't disclosed to you.

Some experts say that by challenging the very validity of that loan, essentially threatening to sue, you can bring lenders to the negotiating table. Just make sure though that you can afford that new loan after the modification. If you can't afford to live in the home no matter what, you're not doing any favors by just getting a new loan.

HARRIS: Is there anything out there that homeowners should be on the lookout for as they head down this road, Gerri?

WILLIS: Let me tell you, Tony, mortgage delinquencies are going to double next year. And as we all struggle with this, there are more scams than ever promising to rescue homeowners from foreclosure. These are con artists. They're charging outrageous fees in exchange for making a few phone calls or completing paperwork that, hey, you could do yourself.

According to the Better Business Bureau, other people who aren't even close to foreclosure are being solicited by companies that are offering them to reduce the interest rate on their mortgage loan. Now these folks are being advised by these companies to stop making their mortgage payments, negotiate a lower interest rate. You can't do that.

Bottom line, never follow advice that tells you to stop paying your monthly mortgage. These are scam artists. Modifying a loan is a process that you can do for free.

HARRIS: Predators all over this industry.

WILLIS: It's crazy, Tony.

HARRIS: It's nuts.

WILLIS: Yes, use your common sense.

HARRIS: Yes, you're right.

WILLIS: You can avoid it. OK. If you have questions, send them to me at gerri@cnn.com. We love to hear from you and we want to hear your stories. If you're struggling with a mortgage, if you've encountered a scam artist, let us know.

HARRIS: Let's get some help out there. All right. Gerri, good to see you, as always. Thank you.

WILLIS: My pleasure.

HARRIS: And cnnmoney.com has some advice and answers to help you through this financial meltdown. Check out our special report "America's Money Crisis," that's at cnnmoney.com.

Another bomb found and defused in Mumbai. New developments in that terror attack, just ahead.

And live pictures now, President-elect Barack Obama to announce another team member in just minutes. The media gathering as you can see there in Chicago. And we will take you there live momentarily.

(COMMERCIAL BREAK)

HARRIS: Team Obama about to get a new member. We are standing by for a news conference by the president-elect from Chicago. He will add to the list that already includes a former rival, a Republican holdover and a retired general. Obama's expected to introduce his pick for commerce secretary, and that would be New Mexico governor, Bill Richardson.

And just a little bit of additional information on Bill Richardson. As you know, he is the governor of New Mexico, former Clinton energy secretary and former United Nations ambassador, a U.S. representative from 1983 until 1997, as you can see there. And endorsed -- Bill Richardson -- endorsed Barack Obama in March.

A little additional information, born, as you can see here, November of 1947, and a Bachelor of Arts degree from Tufts University, and also married.

Again, President-elect Barack Obama in Chicago today to introduce his new cabinet nominee. And when that begins, we will take you there for the announcement live. Expected to begin in the next two minutes or so.

All right. The terrorist captured in the Mumbai attack is spilling secrets today leading investigators to an unexploded bomb at a train station that was attacked in last week's siege. Authorities were able to diffuse the bomb. The lead investigator says the suspect has also revealed that militants spent the last three months training and planning in Pakistan.

The suspect is described as a 21-year-old Pakistani. We are told he and the other killers were hand-picked and trained at camps run by a Pakistan-based terror group allied with al Qaeda. India now threatening to consider all options to protect its territorial integrity if Pakistan refuses to hand over a group of wanted terrorist suspects.

In just a few minutes -- Nic Robertson is standing by for us.

And Nic, if you would, give us the very latest on the investigation and where things stand now. I'm just sort of curious as to whether or not India is sharing the information about this suspect with the intelligence officials in Pakistan.

NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: You know, I asked the police chief that here today in Mumbai, Tony. I said, look, what are you doing with the FBI? The FBI are here, we know they've been to a couple of sites. Are you sharing information?

And he said, well, that's what we hope to do. And he gave me the impression, and it was an impression, that he feels -- he's hoping that the FBI is going to share information with him. But that's the intention. That's what they hope to do.

They know if they pool their resources of information --

HARRIS: Hey, Nic -- Nic, I apologize for interrupting. Let's go to Chicago now.

(JOINED IN PROGRESS)

BARACK OBAMA (D), PRESIDENT-ELECT: ... Vice President-elect Biden and I begin the process of announcing our economic team. Today we're pleased to name another key member of this team, our nominee for secretary of commerce, my great friend, Governor Bill Richardson.

With each passing day the work our team has begun, developing plans to revive our economy, becomes more urgent. Earlier this week we learned that the U.S. economy has been in recession since December of 2007, and that our manufacturing output is at a 26-year low. Two stark reminders of the magnitude of the challenges we face. But while I know rebuilding our economy won't be easy, and it won't happen overnight, I also know this, that right now, somewhere in America a small business is at work with the next big idea, a scientist is on the cusp of the next big break through discovery, an entrepreneur is sketching plans for the start-up that will revolutionize an industry.

Right now, across America, the finest products in the world are rolling off our assembly lines, and the proudest, most determined, most productive workers in the world are on the job. Some already in their second shift of the day, many putting in longer hours than ever before. After nearly two years of traveling across this country, meeting with workers, visiting businesses, large and small, I am more confident than ever that we have everything we need to renew our economy.

We've got the ingenuity, the technology, the skill and commitment. We just need to put it to work. It's time to not just address the immediate economic threats, but to start laying the groundwork for long-term prosperity, to help American businesses grow and thrive at home and expand our efforts to promote American enterprise around the world.

This work is the core mission of the secretary of commerce. And with his breadth and depth of experience in public life, Governor Richardson is uniquely suited for this role as a leading economic diplomat for America. During his time in state government and Congress and in two tours of duty in the cabinet, Bill has seen from just about every angle what makes our economy work and what keeps it from working better. As governor of New Mexico, Bill showed how government can act as a partner to support our businesses, helping to create 80,000 new jobs. And under his leadership, New Mexico saw the lowest unemployment rate in decades. As a former secretary of energy, Bill understands the steps we must take to build a new clean energy industry and create the green jobs of the 21st century, jobs that pay well and won't be outsourced, jobs that will help us end our dependence on foreign oil. And as a former ambassador to the United Nations, Bill brings both international stature and a deep understanding of today's global economy. He understands that the success of today's business in Detroit or Columbus often depends on whether it can sell products in places like Santiago or Shanghai. And he knows that America's reputation in the world is critical not just to our security, but to our prosperity. Excuse me -- that when the citizens of the world respect America's leadership, they are more likely to buy America's products.

To this crucial work of restoring America's international standing, Bill will bring a leadership style all his own. Bill has never been content to just learn from briefing books, never satisfied with only the official version of the story.

During his time in Congress, he held more than 2,500 town hall meetings so he could hear directly from constituents. He was a regular in the U.N. cafeteria mixing it up with U.N. employees over lunch. And during his 2002 campaign for record -- for governor, he actually broke a world record by shaking nearly 14,000 hands in just eight hours.

I've got to check that statistic.

All of this reflects a determination to reach out and understand where people are coming from, what they hope for and what he can do to help. This approach, I believe, has been the key to Bill's success as a negotiator and will be key to his work on the critical functions of the Commerce Department, from administering our census and monitoring our climate, to protecting our intellectual property and restoring our economic diplomacy.

In the end, Bill Richardson is a leader who shares my values. And he must -- he will be measured -- his progress the same way I do. Are we creating good jobs instead of losing them? Are incomes growing instead of shrinking? I know Bill will be an unyielding advocate for American business and American jobs, at home and around the world. And I look forward to working with him in the years ahead.

With that I'd like Bill to say a quick word.

GOV. BILL RICHARDSON (D), NEW MEXICO: Mr. President-elect, this is a great honor.

There are some who speak of a team of rivals, but I've never seen it that way. Past competitors, yes, but rivals implies something harder-edged and less forgiving. And in the worlds of diplomacy and commerce, you open markets and minds not with rivalry, but instead with partnership and innovation and hard work.

There's a vital role for the Department of Commerce in our economic recovery. The official role of the department is job creation, economic growth, sustainable development and improving living standards, the same goals of your economic plan, Mr. President- elect. The unique strengths of the department, and its talented public servants, make it the natural agency to serve as a programmatic nerve center in America's struggle to rejuvenate our economy. The catch phrases of your economic plan, investment, public-private partnerships, green jobs, technology, broadband, climate change and research, that is the Department of Commerce. Boosting commerce between states and nations is not just a path to solvency and growth, it's the only path.

With your leadership, Mr. President-elect, America will once again be a forefront of innovation, especially in the new frontier of energy independence and clean energy jobs. We will create technologies the world is seeking while creating millions of new jobs that can never be outsourced. We will revitalize our nation's historic strength in manufacturing while restoring our position of respect in the world.

And finally, let me say how proud I've been to serve as governor of the state that I love. New Mexico, I will never forget you and I will forever be grateful. And to Barbara, my wife, and the rest of my family, thank you.

(SPEAKING SPANISH)

And it will be a great honor to serve once again a president who recognizes that America's diverse heritage is its greatest strength.

Thank you.

OBAMA: All right. Let's see who we've got here.

The problem is -- do we have -- is it somewhere around here? Here we go. It was here, it was just hiding.

Andy, I was not going to call on you again.

All right. Let's start with Julianna Goldman of Bloomberg, who was one of the originals, by the way. She was there every step of the way during this campaign.

JULIANNA GOLDMAN, BLOOMBERG: Thank you, Mr. President-elect.

G.M. and Chrysler say that they will be out of cash by the end of the month. One possible short-term fix is to modify the existing $25 billion federal loan program to retool plants. Would you support that? And will you also ask Speaker Pelosi to support using these funds, if necessary, to avoid a G.M. bankruptcy?

OBAMA: Well, there are going to be hearings over the next two days. And I want to wait and see specifically what's said during those hearings.

I think Congress did the right thing when the Big Three automakers came before them a couple of weeks ago. They were not offering a clear plan for viability over the long term. And I think Congress was right to say that the taxpayers expect and deserve better than that before they are stepping up to the plate for any kind of bailout.

It appears, based on reports that we've seen, that this time out, the executives from these automakers are putting forward a more serious set of plans. I don't want to comment on them before I have actually heard and seen what they're putting forward. But I'm glad that they recognize the expectations of Congress, certainly my expectations, that we should maintain a viable auto industry. But we should also make sure that any government assistance that's provided is designed for a -- is based on realistic assessments of what the auto market is going to be and a realistic plan for how we're going to make these companies viable over the long term.

With respect to T.A.R.P. versus 136 money, at this point I'm more interested in seeing whether or not there's a sound plan there, and then I'll be in discussions and listening about where the best sources of money are. But I think it's premature to get into that issue.

All right. Vincente (ph)?

QUESTION: Thank you, Mr. President-elect.

What do you think about the articles like the one today in the "New York Times" that say, or mention, that the announcement of Bill Richardson for secretary of commerce is somehow the consolation prize for Latinos and Hispanic politicians and groups that are calling Latinos to be included in your cabinet, since many were expecting or hoping that Bill Richardson was going to be secretary of state?

OBAMA: Well, commerce secretary is a pretty good job. It's a member of my key economic team that is going to be dealing with the most significant issue that America faces right now, and that is how do we put people back to work and rejuvenate the economy.

Bill Richardson has been selected because he is the best person for that job and is going to be outstanding in helping me strategize on how do we rebuild America, how do we get businesses moving, how do we export effectively, how do we open up new markets for American products and services. His mixture of diplomatic experience, hands-on experience as a governor, experience in the cabinet, experience in Congress, means that he is going to be a key strategist on all the issues that we work on.

And so the -- so I think the notion that somehow the commerce secretary is not going to be central to everything we do is fundamentally mistaken.

With respect to Latino cabinet members, I've appointed about half of my cabinet so far. And I think that when people look back and see the entire slate, what they will say is, not only in terms of my cabinet, but in terms of my White House staff, I think people are going to say this is one of the most diverse cabinets and White House staffs of all time. But more importantly, they're going to say these are all people of outstanding qualifications and excellence. So one of the strong beliefs that I've always held, and has proven to be correct throughout my career, is that there's no contradiction between diversity and excellence. I'm looking for the best people first and foremost to serve the American people. It just so happens that Bill Richardson is one of those people.

OK. Wendell (ph), where -- there you are.

How are you?

QUESTION: (OFF MIC) I'm just fine, sir. Thank you for calling on me.

Secretary Paulson has indicated that the initial tranche, initial half of the $700 billion Troubled Asset Relief Program that he's able to spend without asking Congress is almost gone, down to about $15 billion. I wonder if you are concerned that he may be well into the second half of that before you are sworn in, sir? And if I also may ask the governor, what happened to the beard, sir?

OBAMA: I'm going to answer this question about the beard. I think it was a mistake for him to get rid of it. I thought that whole western, rugged look was really working for him. For some reason -- maybe because it was scratchy when he kissed his wife, he was forced to get rid of it. But we're deeply disappointed with the loss of the beard.

With respect to T.A.R.P., until Secretary Paulson indicates publicly that he's drawing down the second tranche, the second half of the T.A.R.P. money, it would be speculation on my part to suggest that that money's going to be used up. Understand that in order for that second half to be released, it is necessary to notify Congress and Congress has the ability to block it.

I will say that my team has been reviewing very carefully how the T.A.R.P. program has proceeded. One of my central principles when I first examined the T.A.R.P. proposal was to insist that there was going to be strong oversight. The GAO report has now come out. We're seeing some areas where we can be doing better in making sure that this money is not going to CEO compensation, that it's protecting taxpayers and that the taxpayers are going to get their money back, that it's effective in shoring up our financial markets.

And so what I can assure you is that my team is very active in reviewing what's already been done to ensure that when we hit the ground running on January 20th, that any taxpayer money is going to be properly spent.

One last component of that, that I think has to be emphasized, and I've said this before, we've got to start helping homeowners in a serious way to prevent foreclosures. The deteriorating assets in the financial markets are rooted in the deterioration of people being able to pay their mortgages and stay in their homes. And if we help Main Street, ultimately we're going to help Wall Street. So that's an area that I'm particularly interested in.

All right? OK. Thanks, guys.

HARRIS: And there you have it. President-elect Barack Obama announcing his pick for commerce secretary, New Mexico governor, Bill Richardson. And while keeping an eye on the census, protecting intellectual property, the traditional jobs of the Commerce Department, the president-elect clearly values Bill Richardson as an economic diplomat. He sees Richardson as someone who can help open and expand markets, he sees commerce as a jobs engine, and a department that will lead the transformation to green jobs. Bill Richardson becomes the first Hispanic to be nominated to the Obama cabinet. And nice to hear some of his remarks in Spanish.

Senior political correspondent Candy Crowley joining me now.

And Candy, I wondered with you earlier if commerce was a big enough megaphone for a guy who likes a big megaphone. It sounds like the governor will be taking on a pretty thick portfolio.

CANDY CROWLEY, CNN SR. POLITICAL CORRESPONDENT: Certainly both the president-elect and the Commerce Department secretary nominee went out of their way to describe it as such. Again, this is something we're going see as it plays out.

But certainly with the economy front and center -- and certainly the president-elect was correct that Bill Richardson has a number of skills that he brings to the table for the No. 1 issue. And that is jobs creation. He's been overseas, he's been a U.N. diplomat, he can help open markets overseas for U.S. products. He has been the governor of New Mexico where he did create jobs. And certainly what we know is that jobs, 2.5 million of them, is what the president-elect wants to create here.

So obviously, by giving Bill Richardson a solo press conference here with this announcement, there was a great attempt here to say, this is not a consolation prize. People knew that Richardson wanted to be secretary of state. So it seems they went out of their way to say, listen, this is an important job, and he is bringing the right resume to this job to help us create those jobs that are needed.

HARRIS: And Candy, do you anticipate any confirmation issues with Bill Richardson?

CROWLEY: Well listen, there are some business dealings that have been brought into question certainly by reporters that he has had. And he has a record. And any time you have a lengthy record, which began as a congressman, there are going to be questions.

But again, this is a group that has pretty well vetted a lot of these people before they've made these announcements. They have been up on the Hill certainly checking in with a number of leaders. So I think it's pretty safe to say that we have yet to see someone who won't be confirmed, but it doesn't mean that there won't be some pretty interesting confirmation hearings.

HARRIS: Our senior political correspondent, Candy Crowley with us from Chicago. Candy, good to see you. Thank you.

Big Three auto companies now want even more of your money. The story, we will outline and detail it for you right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: The Big Three automakers begging Congress for a bailout. First -- well they called it a bridge loan. First G.M., Ford and Chrysler asked for $25 billion. Now they want even more.

Susan Lisovicz is on the floor of the New York Stock Exchange with details and a look at what else the companies are planning.

Hello, Susan. So they want more money now?

SUSAN LISOVICZ, CNN CORRESPONDENT: 36 percent more, Tony.

The Big Three now asking for $34 billion. And they say that they deserve it in the sense that they are making big and painful changes. CEOs, of course, taking $1 salaries, they are speeding up hybrid development and they're selling corporate jets.

G.M. will cut up to 31,000 jobs over the next few years, and it's going to lighten the load. It may sell its Pontiac and Saturn brands. Chrysler, meanwhile, is considering a partnership or merger of some kind.

So some big changes, Tony.

HARRIS: But here's my question -- last month it was $25 billion, now it's $30 some-odd, four, some-odd billion. Why the increase, Susan?

LISOVICZ: In two weeks.

HARRIS: Yes.

LISOVICZ: Well, because if you remember, Congress sent them packing. They wanted details. They wanted details to get them to say, yes, you can get the money.

So they're retooling plants, getting rid of brands. All of this costs money. In fact, the situation is so dire, that G.M. says it needs $4 billion just to avoid bankruptcy, and Ford needs a bailout as a backstop in case G.M. and Chrysler fail.

Chrysler and G.M. have previously warned of bankruptcy by January. That is looming.

Investors, meanwhile, well they are looking past some weak economic reports and some ominous signs of what we're going to get in the jobs report on Friday. The Dow Industrials have turned positive, up 135 points, or 1.5 percent. The Nasdaq is up 2.25 percent. The Dow had been down 185 points. So we had a nice reversal of fortune mid- way through the session -- almost mid-way through the session, Tony.

HARRIS: Not bad.

All right, Susan, see you later this hour. Thank you.