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Auto Bailout Vote Possible Later Today; Illinois Governor Back at Work Despite Scandal; Fallout From Corruption Bust; Zimbabwe Horrors
Aired December 10, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And hello again, everyone. I'm Tony Harris, and you're in the CNN NEWSROOM.
Here are the headlines for Wednesday, December 10th.
GM and Chrysler crossing their fingers that $15 billion bailout loan may go to a vote today.
And down, but not out. Just a day after being charged with trying to sell Barack Obama's Senate seat, Illinois Governor Rod Blagojevich heads back to his office. What's next for the tainted politician?
And at the top this hour, congressional Democrats say they've reached a deal with the White House that could help save the failing auto industry. If so, a vote could come today.
Live now to Brianna Keilar on Capitol Hill.
Brianna, where are we in this process?
BRIANNA KEILAR, CNN CORRESPONDENT: Well, at this point, Democrat leaders say they have filed the bill, they've just filed this bill, that they've reached an agreement between congressional Democrats and the White House on this automaker bailout bill. So, potentially there could be a vote in the House today, Tony.
Now, to get this agreement, what happened was, Democrats basically had to capitulate on a provision they wanted which would have prevented automakers from suing states that put forth their own emissions standards. They had to drop that to get the White House on board. But keep in mind, this is not a done deal. It's not final. The White House says it has not seen this final legislation, and they obviously would need to look that over before they say, yes, we are on board.
But here's what we're expecting this to include: $15 billion in short- term loans to keep these automakers solvent through the first quarter of 2009. It would establish the position of a car czar, a person that the president would appoint to basically put forth guidelines to ensure that these automakers will be profitable in the future, but there could be another wrench in the works here, Tony.
Senate Republicans, they're not on board with this. There's a vocal number of them who say, you know, not so fast, and they haven't been in on these negotiations, as well, between the White House and Democrats. And, in fact, the White House sending over Chief of Staff Josh Bolten to meet with Senate Republicans during their lunch today to try to obviously woo some of them and bring them on board. But in the Senate at least, Majority Leader Harry Reid opening the possibility still that this could go into the weekend on the Senate side of things.
HARRIS: Wow. Well, Brianna, what about the House then? Are Republicans on board there?
KEILAR: No, they're not. A lot of them are not on board in the House. Now, some of them may be, obviously, if they have a lot of retailers or suppliers or obviously automakers in their district, but the difference, of course, Tony, is you only need a simple majority in the House to push things through.
HARRIS: That's right.
KEILAR: You need 60 votes in the Senate. Democrats would have to woo some of these Republicans because it's an equally divided Senate, and it's unclear if they can do that.
HARRIS: Is that press conference with Senate Republicans, is that still scheduled in about a half-hour or so?
KEILAR: Yes. We expecting that this hour.
These are Senate Republicans who obviously are going to be talking about some of the issues they have, spelling them out. One of the ones that they have spelled out is they just feel giving these automakers these short-term loans before you really put these viability standards in place, some of them say, you know, that's kind of money before these regulations, and they don't agree with that.
HARRIS: Got you.
KEILAR: And some just don't want -- they don't agree with the bailout in general.
HARRIS: In general, on principle.
All right. Brianna Keilar for us on Capitol Hill.
Brianna, appreciate it. Thank you.
Show us the money and the results. A congressional panel taking a critical look at the $700 billion financial rescue plan at a hearing right now on Capitol Hill. Members of the Financial Services Committee questioning how the Treasury Department is handling the financial rescue.
Within the last hour, bailout chief Neel Kashkari tried to address concerns that banks still aren't lending.
(BEGIN VIDEO CLIP)
NEEL KASHKARI, INTERIM ASST. TREASURY SECRETARY: We must remember that just over half the money allocated to the capital purchase program is out the door. Although we are executing at record speed, it will still take a few months to process all of the remaining applications. The money needs to get into the system before it can have the desired effect.
(END VIDEO CLIP)
HARRIS: Some committee members also questioning why money is not being spent to reduce foreclosures.
Ignoring calls to step down, Illinois Governor Rod Blagojevich back at work this morning, one day after being arrested and federal corruption charges.
Live now to our Susan Roesgen. She is in Chicago.
Susan, what are you hearing in Chicago? Anyone surprised that the governor showed up for work today?
SUSAN ROESGEN, CNN CORRESPONDENT: Yes, there is some, Tony. And if he showed up to work today, did his staff say, "Happy birthday, Governor, and shame on you"?
HARRIS: Yes.
ROESGEN: "Shame on you" is what we're hearing a lot of here. It is the governor's 52nd birthday, and neighbors in this area say that the family's nice, you know, and nothing wrong with him personally, but they have seen day after day after day in the local newspapers more and more allegations involving the governor in some sort of corruption charges, and then, of course, yesterday's complaint.
And also, Tony, got to tell you that yesterday, you know, he was met as he woke up by two federal agents. Today, just a few minutes ago, what was here? But a Christmas tree. That was delivered here to the governor's mansion.
So people here are used to seeing just sort of a normal guy, a normal family, but do say what's happened is awful.
(BEGIN VIDEO CLIP)
MARY MALONE, NEIGHBOR: I walk my dog by his house several times a day. They're great neighbors, but I think what's happened is deplorable. And the citizens of Illinois deserve better. They deserve better in every governor, and I don't know why we can't seem to have honest government in Illinois.
SHERRY ROSENBLUM, NEIGHBOR: It's depressing to see all the cameras here for this reason. It should be for a good thing instead of a bad thing.
It should be because we just elected a president from here. And now to have this happen with the governor -- and, you know, we were enjoying something good about our city. We want our city to have a very positive image, and to have something like this happen makes it more -- more negative. And you don't want people to view us as that. (END VIDEO CLIP)
ROESGEN: And not a lot of love lost between the media and the governor, Tony. This is the front of today's "Chicago Sun-Times." Don't know if you can see it, but the governor apparently had his head, body partly covered by a coat.
HARRIS: Yes.
ROESGEN: You just see his eyeballs sticking out. And the headline, of course, "Shame."
And it isn't just the governor here who is really facing some serious charges. Look what the "Sun-Times" has to say about his wife Patricia: "Foul-Mouthed First Lady."
HARRIS: Wow.
ROESGEN: Because she was apparently heard on these wiretaps as well, from what we understand from federal agents, and she is portrayed in these wiretaps as sort of Lady Macbeth in the background, urging her husband to go on and get to the sticking point and do these things.
So they are both in a lot of hot water right now -- Tony.
HARRIS: It does have a kind of Shakespearean element to it. Doesn't it?
All right. Susan Roesgen for us in Chicago.
Susan, thank you.
You know, there are no accusations against Barack Obama in the alleged scheme to sell his Senate seat, but the Blagojevich scandal is an unwelcome distraction.
CNN's Elaine Quijano covering the Obama transition team in Chicago.
Good to see you, Elaine.
How is the president-elect responding to all this?
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, Tony, President- elect Barack Obama made it a point to address this story during a meeting that he had with former Vice President Al Gore yesterday to talk about climate change. At the end of that meeting, the president- elect was asked by a reporter whether he had any contact with or was aware at all of what was happening with his Senate seat?
Here's how he responded.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I had no contact with the governor or his office, and so we were not -- I was not aware of what was happening. And as I said, it's a sad day for Illinois. Beyond that, I don't think it's appropriate to comment.
(END VIDEO CLIP)
QUIJANO: Now, what he said there contradicts something that his senior adviser David Axelrod told a local TV reporter here in Chicago a couple of weeks ago, that Obama had had a conversation with Governor Blagojevich about his Senate seat. Late yesterday, David Axelrod released a written statement correcting his comment, saying, "I was mistaken when I told an interviewer last month that the president- elect had spoken directly to Governor Blagojevich about the Senate vacancy. They did not then or at any time discuss the subject."
Now, what is not clear yet, though, is who on the Obama team may have had a conversation with either the governor or somebody in the governor's office about this Senate vacancy. That's still very much an open question right now. But again, we need to emphasize here, what is clear is that the U.S. attorney in this case, Patrick Fitzgerald, has said that there are absolutely no allegations against the president-elect contained in that federal complaint filed yesterday -- Tony.
HARRIS: OK. Elaine, we've got some transition news. On a lighter, happier note for the Obama team, today the team is releasing details of its inauguration plans. What are we likely to see here?
QUIJANO: That's right. We've got a little bit of a thumbnail sketch to give you how things are proceeding and how things will proceed during the inauguration, and also around the inauguration.
We know there'll be a kickoff event welcoming everyone on Sunday, before the inauguration. And then Monday, there will be events commemorating Martin Luther King Jr. Day that the president-elect will take part in.
And, of course, Tuesday is the inauguration itself. You've got all of the festivities surrounding that, including the inaugural balls.
And then Wednesday, the president -- then president and then vice president will be attending a prayer service -- Tony.
HARRIS: Well, let me know if you run across my invitation in any of this. I've just been looking around. I haven't received it. It's clearly some kind of mistake.
QUIJANO: I'll keep an eye out. Sure.
HARRIS: Thanks, Elaine. Appreciate it.
Stormy weather and winter chill are making headlines today. Who's going to get the worst of it? We'll check weather in just a moment.
(COMMERCIAL BREAK)
HARRIS: Hey, very quickly, we want to get you some reaction to the automobile bailout loan bill that has been filed. And you see Senator Richard Shelby, who just a moment ago called the package a travesty. Let's listen in.
(JOINED IN PROGRESS)
SEN. RICHARD SHELBY (R), ALABAMA: But this proposal that I've seen thus far will not do it. And I intend to talk to the American people about it from the Senate floor.
SEN. JOHN ENSIGN (R), NEVADA: First of all, we all understand that the American economy is hurting, and the auto industry is hurting right along with that. We -- you know, I'm in a state where there's probably no worse as far as economy is concerned. We're seeing across the board not only our auto dealerships are having trouble selling cars. Obviously, we lead the country in the rate of foreclosures.
There's a lot of bad things happening in the economy and we're concerned about people's jobs. But we also have to be concerned about the taxpayers' money.
And to take billions of dollars to bail out the auto companies when the forced restructuring is not in place to make sure that they come out healthy at the other end, where they can compete with the Japanese, the Japanese that are building cars in America, the Germans that are building cars in America, if we don't have the forced restructuring plans in place, many of us don't believe that American car companies will come out of this in a competitive position. And the taxpayers' money will be wasted at that point, and it will take a lot more money. So up front -- and I think this is pretty obvious -- when GM, Ford, Chrysler, their management teams have not been able to run their companies, obviously, very well, how does anybody expect some car czar or some politician to be able to make the decisions that are right from a business standpoint for these car companies?
We have restructuring experts in the United States. Chapter 11 reorganization, many companies have done that before. This is certainly an option for the auto companies if the government can guarantee the warrants.
That's been the biggest argument from the auto companies, is nobody's going to buy our cars if we're in reorganization plans. But if the government is there -- and you can buy third-party warrantees, you can do all kinds of things -- but if the government is there with a full faith and credit to guarantee these warranties, that takes away the argument from the auto companies. And then in a reorganization, the companies can come out leaner, more efficient, and literally hundreds of thousands of jobs can be saved in the United States, and make us have a stronger manufacturing base going into the future for the United States of America.
SEN. TOM COBURN (R), OKLAHOMA: I'd just say, I think our goal ought to be to do what is in the best long-term interest of the American people, as well as the auto companies. And what is written as of now will not achieve that.
You know, it's interesting that in 2007, GM sold 9.37 million cars worldwide. Toyota, that same year, sold 9.37 million cars worldwide. GM lost $38.7 billion. Toyota made $17.7 billion. Therein lies the problem. And what we are about to do is to solve a short-term problem...
HARRIS: Well, as you can see and hear for yourself -- you don't need me to explain it -- Senate Republicans not happy with the legislation, the bill that has been filed now to provide a bridge loan to the big three automakers.
We will take this issue up with Peter Morici from the University of Maryland -- he's an economist there -- in just a couple of minutes.
But coming up in just a moment, colorful politics, a Chicago tradition, to say the least. Where do the latest alleged exploits of the Illinois governor fit into all of this?
We're back in a moment.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: You know, a day after being charged with trying to sell Obama's Senate seat to the highest bidder, Illinois's governor headed back to his office today. So what's the real fallout from this corruption bust?
Joining me is Ray Long.
Ray, good to see you.
RAY LONG, "CHICAGO TRIBUNE" STATEHOUSE CORRESPONDENT: Good to see you, Tony.
HARRIS: Ray has been reporting on Illinois politics for "The Chicago Tribune" for more than 25 years. Now the paper's statehouse correspondent. And Chicago affiliate CLTV's Carlos Hernandez Gomez. Carlos, you may recall, was with us yesterday.
Ray, let me start with you. A day after, maybe a moment to breathe and take this all in. What are you thinking today?
LONG: Well, I'm glad you started out with the weather forecast as the lead-in, because this has been a political tornado in Illinois.
HARRIS: Nice. Nice. Nice.
What, well are your thoughts? I mean, come on. A day after this, have you seen anything like this covering Chicago and Illinois politics? Come on.
LONG: Well, there have been many, many issues here in Illinois politics, and many, many things have happened over the years. But this is one of the most breathtaking examples of just outright brazenness that is alleged in what we saw yesterday, when U.S. attorney Patrick Fitzgerald passed out these affidavits.
HARRIS: Yes.
Well, Carlos, let me bring you in. What are your thoughts sort of a day after, the day after that extraordinary news conference yesterday at about this hour? What are your thoughts?
CARLOS HERNANDEZ GOMEZ, CLTV: Well, my pal Ray hit me on the head. I mean, I don't think any of us are surprised the feds went after Rod Blagojevich. He's been on their radar for years.
His top fund-raiser just went to prison. Serious allegations have been trickling out for a long time.
What shocks all of us is the brazenness and vulgarity that's contained in that nearly 80-page criminal complaint. I mean, that's what we're all scratching our heads on.
We all knew the feds were coming after him. We had no idea that he would allegedly make those comments when he knew the feds were watching him. And that's perhaps the most surprising part of all of this, that he would, after knowing the feds were on to him, that he would attempt to try and sell Barack Obama's Senate seat.
HARRIS: All right, Ray. Why is he working today? I mean, come on.
Stubbornness? I don't know what to call it, really. But he cannot think he can still be effective. Can he?
LONG: Well, you know, you have to look into that complaint that Carlos was talking about there. In that complaint, he was saying that he thought maybe he could appoint himself to the U.S. Senate.
HARRIS: Yes.
LONG: And then maybe in 2016, he will have rehabilitated his image so that he could run for the United States of America's presidency. Now, that one's a little bit hard to figure out, especially when we know what we have seen today.
HARRIS: What about -- and Carlos, what about -- I'm trying to move this forward. It sounded like you wanted to make a comment on that. Did you?
GOMEZ: Well, the oddness of it is that Rod Blagojevich really thought he was going to run for president. Many years ago he had been talking about his.
As a matter of fact, in the trial of Tony Rezko, his fund-raiser, one of the witnesses talked about how Blagojevich bragged it was easier to run for president as a governor rather than as a senator, because a governor can give out contracts to help speed fund-raising. So you can hear, reading that affidavit, hearing his resentment towards Barack Obama, because when Barack Obama was elected to the U.S. Senate, Blagojevich, essentially back in '04, went to the back of the line as far as Illinois folks with national aspirations.
HARRIS: Well, and Ray, let me cut to the chase here. Do you believe he should step down? And if he doesn't step down, should the Illinois legislature begin proceedings to impeach him?
LONG: Well, let me just say this -- the Senate and the House are coming in next week, and they plan to pass legislation that would set up a special election to replace Barack Obama's U.S. Senate seat.
HARRIS: To fill that seat, sure.
LONG: To fill the seat, right. And so they've already taken steps.
Now, they've also talked about some impeachment possibilities here. Now, I'm going to still be covering that, so I'm going to cop out on you there on whether or he should step down.
HARRIS: OK.
Carlos, you want to take a stab at that? What do you think, should he step down? And if he doesn't, should the statehouse there begin impeachment proceedings?
GOMEZ: Well, I just talked to several lawmakers this morning, and they are ready to institute impeachment proceedings. I mean, they believe that -- in Illinois -- the history, no one does anything about corruption. We always wait for the U.S. attorney to do it. And I think some lawmakers feel like it's their duty to try and stop the governor from any other damage he might do.
I mean, Illinois government has been dysfunctional for a long time. And much of that is Rod Blagojevich and his inability to work with the legislature, and his, quite frankly, distraction with this federal investigation.
HARRIS: One final thought here. And Ray, let me go to you on this one.
Can you explain to us -- Lynn Sweet took a stab at this last hour -- the shakedown -- the shakedown mentality that seems to be part and parcel of doing business in Illinois?
LONG: Well, it seems that a lot of people in Illinois just view the government as their own personal business. They view the campaign funds as their own personal kitty, and this is kind of an extension of that.
And if I give you something, even if it's the public's money, then I ought to get something in return. There ought to be a trade. And that's where you get into this whole idea of pay to play. These are the allegations against Rod Blagojevich, and these are the questions that people of this state have today.
HARRIS: Yes. OK.
Ray, appreciate it.
Carlos, thank you as well. Thanks for your time today.
LONG: Thank you, Tony. HARRIS: When we come back, we're going to take to you Africa. The people of Zimbabwe are dying. Will the world do anything to stop it?
(COMMERCIAL BREAK)
HARRIS: Well, we have been waiting for a statement. Didn't know exactly the scope of it, but we now have a statement from President- elect Barack Obama.
He is calling for the Illinois governor to resign. Obama spokesman Robert Gibbs says the president-elect agrees with other prominent politicians in Illinois and elsewhere that -- quoting now -- "Under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois." The statement goes on to say that Gibbs believes that Obama believes the Illinois legislature should consider a special election to fill the seat, reporting that just a couple moments ago.
Gibbs says, "The hope is to put a process in place to select a new senator who will have the trust and confidence of the people of Illinois." But the topper here, the breaking development, President- elect Barack Obama is calling for the Illinois governor to resign. This according to The Associated Press, quoting Obama spokesman Robert Gibbs, who says the president-elect agrees with other prominent politicians in Illinois and elsewhere that -- quoting again -- "Under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois."
More on this story. Our Elaine Quijano is working her sources in Chicago to get additional reporting on this, and we will bring that to you as soon as we have it.
You know, it was once known at Africa's bread basket. Now Zimbabwe is literally starving, overcome by cholera and an economic meltdown.
Reporter Jon Miller went there. We're going to show you what he found. But I have to warn you, the scope of the human tragedy is very graphic.
(BEGIN VIDEOTAPE)
JONATHAN MILLER, CNN CORRESPONDENT (voice-over): You really know a country's in trouble when a $10 million bank note gets dumped in the rubbish and then gets ignored by those scavenging for scraps of food in the stinking refuse. You really know a country's in trouble when you see children filling water bottles in a street-side sewer, even when everyone knows about the cholera epidemic. And most heartbreakingly, you really know a country's in trouble when you see pictures like this: A two-year-old baby boy suffering organ malfunction and extreme symptoms of severe malnutrition.
President Robert Mugabe, defiant, unmoved, now accused of condemning his people to death. Death by torture, death by hunger and death by disease. The rhetoric ratcheting up now, a growing clamor of voices, albeit from mostly western leaders, saying, enough. Mugabe must go. With 42 days left in the White House, George W. Bush release a statement to this effect. Nothing on camera, just a few lines saying, the time had come and urging African leaders to join the chorus calling for an end to what the president branded Mugabe's tyranny. No word at all from Barack Obama yet, though.
As the crisis in Zimbabwe continues to deepen, the most outspoken comment from an African leader has come from the Kenyan prime minister, who's called for military intervention. The former U.N. secretary general, Kofi Annan, said today that Zimbabwe was rapidly becoming a full-blown, failed state. Total chaos is how the U.N. described the cholera crisis today. Officially, it's put the number of cases at close to 14,000 with nearly 600 dead. But we've been told again and again that these numbers are grossly conservative.
Other projections cited by Channel 4 News 10 days ago that infections could hit 60,000 with a kill rate of one in 10 now being cited by U.N. agencies, too. The disease, which is treatable and preventible, continues to spread and to kill in neighboring South Africa. The hospital in the border town of Mussina (ph), which wen we visited last week was overwhelmed, was visited today by South Africa's health minister, who recognizes the gravity of the situation.
BARBARA HOGAN, SOUTH AFRICAN HEALTH MINISTER: We've got to accept that there is a major health crisis in Zimbabwe. And I am very encouraged by the way the people of Mussina have stood together under very difficult circumstance and are helping the people of Zimbabwe.
UNIDENTIFIED MALE: Pretoria, though, still unwilling to put pressure on Robert Mugabe to step down, to ferstol (ph) his country's return to year zero.
DR. AYANDA NTSALUBA, SOUTH AFRICAN FOREIGN AFFAIRS DEPT.: And if there's any pressure on President Robert Mugabe and the (INAUDIBLE) is the pressure for them to move with greater speed to make sure that there's a successful implementation of the (INAUDIBLE) which were find (ph) on September 15th so that an inclusive government can be established.
UNIDENTIFIED MALE: But for Zimbabweans, that agreement is dead in the infected water. In the very hotel in which it was signed, the man many blame, along with Mugabe, for the national catastrophe, was promoting his new book about his casino economy.
GOV. GIDEON GONG, RESERVE BANK OF ZIMBABWE: I'm supposed to be the worst governor that this country has ever had. I'm supposed to be one governor who deserves nothing but brick beds.
UNIDENTIFIED MALE: Out in the real world, Zimbabweans live in limbo between life and death. In the countryside, they now survive on wild berries and their government continues to blame everyone but themselves for this crisis.
(END VIDEOTAPE)
TONY HARRIS, CNN ANCHOR: OK. If you would like to help, just go cnn.com/impact and find out what you can do to impact your world. And maybe help alleviate some of this suffering.
You know, when he been waiting for a more expansive statement from the president-elect on the scandal in the Illinois governor's office, and now we have it. The Associated Press having had a conversation with Obama spokesman Robert Gibbs. Robert Gibbs saying that President- elect Barack Obama agrees with other prominent politicians in Illinois and elsewhere that "under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois." And President-elect Barack Obama is calling for the Illinois governor to resign. The latest statement from President- elect Barack Obama through his spokesman Robert Gibbs.
Needless to say, this scandal providing plenty of material for cartoonists who are feasting on this scandal. We will show you some of the reaction that has been catching our eye in just a minute.
(COMMERCIAL BREAK)
HARRIS: And very quickly we want to get to our Ed Henry. He is in Washington. He has the news that President-elect Barack Obama is calling for the Illinois governor to resign.
And, Ed, we had been looking for something a little more expansive than what we received from the president-elect yesterday, and now we have it.
ED HENRY, CNN CORRESPONDENT: That's right. In fact, just in the last few moments, we've now gotten it from the Obama transition team. These are essentially quotes from Robert Gibbs', spokesman for the transition, the incoming White House press secretary.
He got some written questions from the Associated Press. That's what you were initially reporting. CNN has now confirmed those quotes. We have that from the transition on the record when asked whether or not the president-elect believes the governor of Illinois should resign. Robert Gibbs is saying, "yes, the president-elect agrees with Lieutenant Governor Quinn and many others. And under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois."
Secondly, the other big question, of course, should there be a special election. On questions if it will be a tainted appointee if the governor appoints a replacement. Robert Gibbs saying, "the president- elect believes that the general assembly should consider the issue and put in place a process to select a new senator that will have the trust and confidence of the people of Illinois."
So on those two questions now we have, from the president-elect spokesman, Robert Gibbs, on the record. Number one, the president- elect believes that Rod Blagojevich, the governor of Illinois, should resign. And, secondly, the president-elect of the United States believes there should now be a special election in Illinois to fill his old seat in the United States Senate, rather than having Rod Blagojevich, who's still, obviously, right now, as you've been reporting, has the power to appoint Barack Obama's successor.
HARRIS: That's right.
HENRY: The other interesting thing that's going on behind the scenes. There's been a lot of speculation the last couple of days, we've been picking up information, that the president-elect was likely to unveil potentially other cabinet appoints, perhaps his energy team, for example. Because you'll remember yesterday, as all this was blowing up, he was actually meeting with Al Gore, the former vice president. Climate change, of course, his big issue.
And so we were expecting after that Gore meeting that later this week there would be an announcement of the energy team, the energy secretary and others. But we're now hearing maybe that might be off, might be pushed back because, perhaps, you know, that they don't want to be in the spotlight right now. I mean a lot of people wondering whether or not the president-elect would want to put himself out there again this week, as we saw him yesterday, and face more questions about this whole controversy. It's sort of the last thing that the president-elect wants to be drawn into right now.
Tony.
HARRIS: And I think that's the real question here. It is -- what's your view of it? Is it a distraction? From the people that you've talked to, and you talked to Robert Gibbs, is it a distraction right now to have this story exploding all over the country? Here we are 41 days from the inauguration.
HENRY: Of course it's a distraction. I mean, obviously, if you talk to the Obama transition team, they say it's not. They're moving forward. And they're telling the truth on the fact that they are moving forward. I mean they do have a transition to deal with. They're putting a government together. They have to get ready for that inaugural. And then the first 100 day, of course. And they're moving forward on economic issues. As you mentioned, energy. I've been talking to a lot of transitions aides who are saying they're already starting to figure out what they're going to do on energy, what they're going to do on health care reform. They've got a robust agenda.
But on the other happened, this is clearly a distraction. This is something that now the media is talking about. People in Illinois are talking about. The president-elect has now been put in the position of having to answer whether or not he believes the governor should resign. This is the last thing he wants to be talking about.
So is it a distraction? Yes. But will it overshadow the transition, will it overshadow the transfer to power? I think that's unlikely because, as you know, at this point, there's no evidence that the president-elect knew about any of this other stuff that's going on. We've got to be careful to report that. There's no evidence that either Barack Obama himself or his aides were aware of wrongdoing, were involved in wrongdoing. But nevertheless, it's still a distraction.
Tony. HARRIS: And is there any -- do you have anything on the notion that, perhaps, because the president-elect has asked for Blagojevich to step down, that he will, in fact, heed that and actually step down?
HENRY: Well, we don't know the answer yet. But I think if I were a guessing man, I would say it's highly unlikely that Rod Blagojevich is going to listen to anything but himself. I mean based on what we believe to be on these tapes, what the, you know, U.S. attorney and prosecutor had laid out yesterday, he's obviously got a lot of issues to deal with. He's keeping his own counsel. I think, obviously, the president-elect puts a lot more pressure on him now, because it's not just the lieutenant governor or someone like that.
But, on the other hand, he is obviously in a world of pain right now. And I'm not sure that anyone is going to influence him at this point. He's dealing with his own situation. It puts more pressure on him. But, you know, guessing what Rod Blagojevich is going to do, anyone could try to figure that out.
Tony.
HARRIS: Hey, and, Ed, for folks who are just joining us right now, why don't you recap the reporting as you know it right now. The president-elect calling for the Illinois governor to resign.
HENRY: Bottom line is Robs Gibbs, a spokesman for the transition team, incoming White House press secretary, is now saying on the record that, number one, the president-elect of the United States believes that Rod Blagojevich, the Illinois governor, should resign now. Should step down. That was a question that a lot of people were wondering about. So that is now on the record. And, secondly, the president-elect believes there should be a special election in Illinois to fill his U.S. Senate seat, the one that he vacated just a few weeks ago.
And so, obviously, those are the two big pieces of information. Where we go from here, as you know, anyone's guess.
HARRIS: Ed Henry, appreciate it. Nice job. Thanks, Ed.
HENRY: Thank you.
HARRIS: Let's get a look at the big board, New York Stock Exchange right now. I know that we are off. You'll see the numbers in just a second. I know that we are off session highs. Very near triple digit territory. Plus 98. Up 98 points. Just past three hours into the trading day.
Congressional Democrats say they've reached an agreement with the White House on a bailout loan for the auto companies, and a vote could come today. Joining us to talk about helping the auto industry and the country's overall financial crisis, economist Peter Morici, professor of international business at the University of Maryland.
Peter, good to see you again. Good to talk to you.
PETER MORICI, ECONOMIST: Nice to be with you.
HARRIS: Hey, so, Peter, so the bill has been filed. The Senate Republicans, as maybe you saw just a couple of moments ago, are promising to fight it. Senator Richard Shelby calling it a travesty. What is your view of this bill, $15 billion instead of the $34 billion, the best that could be done? Should it pass, in your view?
MORICI: Well, I don't think it should pass, in my view. I think it's not a good bill. This czar will not have the powers of a bankruptcy judge. Therefore, he will not be able to make the changes happen that needs to happen. He'll really be a mediator. If they don't succeed, then he'll throw them into bankruptcy court. At that point there would be chaos because it would not be well-conceived.
HARRIS: Well, Peter, here's the language. The president would appoint a so-called car czar to be in charge of the process. That person would set the terms for the bailout loans and oversee the restructuring of the auto -- what does all of this mean? What would the czar -- what is this?
MORICI: What the czar has to do is what a bankruptcy judge has to do. And that is get the creditors to reorganize the company's debt, get the management to streamline itself a bit -- but there really aren't as many problems there as people say -- and get a new labor agreement, which is very, very difficult. In bankruptcy, the judge can't aggregate the existing labor agreement if the union doesn't negotiate in good faith. Not so here.
HARRIS: Well, let me ask you this. This comes from John Inson (ph) just a moment ago from that. If the auto execs, virtually a quote here, if the auto execs are unable to run their company, why would a car czar run the companies any better?
MORICI: Absolutely. Look at the history of British steel, British coal, British involvement in the automobile industry. What we want to do here is relive the '50s and '60s. I've always maintained all along that Barack Obama and Nancy Pelosi are fundamentally European statists (ph) and they would like to . . .
HARRIS: What does that mean? What does that mean?
MORICI: Well, basically, they would like to run this place the way the French run France. You know, a very status oriented, private capitalist system. And that's not going to work here. Trust me, it's not going to work. This is the first step down the long path of European industrial policy. If I were George Bush, I would want Barack Obama's handprints on this deal so that he gets the pail when it doesn't work.
HARRIS: Well, wait a minute. Peter, the clock is running here. We've got auto companies talking about, they can't last through the end of the month. This money only gets them to March, theoretically. Something has to happen here, doesn't it? Or do you not believe that these car companies are telling the truth when they say they're going to collapse in a matter of months? MORICI: They are going to run -- well, two out of three are going to run out of money. Ford's got enough cash for a while. There is such a thing calmed Chapter 11 reorganization.
HARRIS: Oh, you have been touting that. Tell everyone why you believe that that is perhaps the way to go here.
MORICI: Well, in Chapter 11 reorganization, you get debtor in possession financing. It gives you an opportunity to reorganize your debt and so forth. But you have a judge. That if the union isn't reasonable, the creditors that aren't reasonable or the management's not reasonable, can basically enforce agreement. He can put them in place. Or you can aggregate (ph) existing labor contracts. That's what you need. You need an arbiter here.
HARRIS: OK. Got you.
The Republican senators who were against that, do they have an obligation to either, a, come up with another plan, or, b, state clearly for the record, Chapter 11 is what process we endorse?
MORICI: They have no obligation whatsoever. Nancy Pelosi . . .
HARRIS: They have no obligation.
MORICI: Now let me explain. Nancy Pelosi has committed Hillary and Bill's error. Remember Bill and Hillary with health care reform, leaving out the doctor, leaving the people they view as problems out? Here Nancy and company excluded the Republicans from the discussion. Now she wants their support? Good night. If you exclude me from a discussion, I don't have to vote for a bill.
HARRIS: You are a piece of work. Peter, thanks for your time again.
MORICI: Take care.
HARRIS: We'll see you again soon.
Cartoons and your e-mails on the Blagojevich scandal in just a moment.
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HARRIS: Well, of course, corruption can be found in politics anywhere. Today we're asking you if you trust your elected officials. Josh Levs is tracking your e-mails for us.
Ninety-five percent of folks no loving a politician today. Particularly the day after.
JOSH LEVS, CNN CORRESPONDENT: Even more because I've read way more than 100, and I think I've only seen two slightly (INAUDIBLE).
HARRIS: Even more. Oh, man. OK.
LEVS: People are really upset. And what we did here in asking you this question was opened the flood gates. We're hearing a lot of people really upset about elected officials in general.
Let's zoom in on the board. I want to show you some of the e-mails we grabbed and threw up here.
"You must be kidding. We live in a day and age when corruption's the rule rather than the exception." That's from Max Millender.
Here. "I will, as of 1-20-09, when we get a fresh start." Saying he will trust his elected officials then. That's James.
How about here. "Many people continue to vote for unqualified or downright unethical politicians just because they fly a party flag. If Americans voted more on issues and how their representatives actually represent their constituents' practical interests, our government would function much better." Thanks, Greg Vaughn, Orlando, Florida.
Time for a couple more. There's one positive, Tony. Here it is. "Yes, I trust my elected leaders."
HARRIS: Well, thank you for finding that one.
LEVS: Needle in the haystack. Let's get to one more, Tony, because this is kind of positive, too. "I have spent much of my life working for elected officials and the vast majority are honest and hardworking. The problem remains a system where we rely on private campaign contributions, causing people to behave irrationally when it comes to the pressures to fund a viable campaign." That's from Michael Colbruno, Oakland, California.
Now let's show you guys the question. I think we have a graphic here that will summarizes it for you. It's at cnnnewsroom@cnn.com or ireport.com, do you tryst your elected leaders? Include your name and your city.
And, then, actually, let's zoom back in on the screen here. Check this out. This is ireport.com. This is now the top assignment they've got going for the day.
And, Tony, just to lighten things up a little bit. Politicalcartoons.com filled with cartoons today.
HARRIS: Oh, we love Political Cartoons.
LEVS: All sorts of ones focusing on him. I'm going to show you one from a guy who's very popular around here on Political Cartoons before we go. Mike Lokovich (ph). Check his out. All right. He's linking this to the economy. So you've got the FBI saying, "governor, you can't sell Obama's Senate seat." Blagojevich, "sheesh, this retailing season really is bleak."
Let us know what you think about all this. If you trust your elected leaders. Write to us at ireport.com or you can e-mail at cnnnewsroom@cnn.com.
Tony, you can see the kinds of responses we've got. We're going to keep following them. We'll share more tomorrow.
HARRIS: That would be great. All right, Josh, appreciate it. Thank you, sir.
LEVS: You got it. Thanks.
HARRIS: Are hybrids and electric cars really the answer for saving America's auto industry?
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HARRIS: As Congress and the White House reach a bailout deal on a bailout loan, automakers are promising more hybrid and electric cars. But are they really the answer to the industry's problems? Cnnmoney.com's Poppy Harlow has our "Energy Fix" from New York.
Hi, Poppy.
POPPY HARLOW, CNNMONEY.COM: Hey there, Tony.
Yes, lots of debate in Washington today. Lots of debate about the future of these carmakers. A lot of buzz about green cars. The real problem is, they're not going to save Detroit anytime soon. For starters, they're high-tech zero emission. That means they cost millions upon millions of dollars to development. That's at a time when cash is running shorts.
Now keep this in mind. GM's electric plug-in, that's called a Chevy Volt, it's set to debut in 2010. But GM says this car won't be profitable for at least a decade, mainly because the battery it runs on costs so much to make.
Falling gas prices, they are complicating matters as well, pushing demand for hybrids sharply lower. Take a look at those figures. When we look at the month of November, sales for hybrids fell 50 percent from a year ago. They now stand at 2005 levels. Hybrids, of course, are more expensive, Tony. That is not a good thing to be in a recession, right?
HARRIS: Yes, yes, that's true. But what about the long-term view here? Aren't energy-efficient cars the key to Detroit's survival?
HARLOW: That's what the heads of GM, Chrysler and Ford say. That's what the auto experts we talked to say. But they don't help the bottom line right away. People say if we don't go forward with it and if they do develop these, it will close the door in terms of leaving Detroit really behind the curve yet again. Some lawmakers certainly agree with that argument. Here's one.
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REP. EDWARD MARKEY, (D) CHMN., SELECT CMTE. ON ENERGY INDEPENDENCE: A business model premise on bigger cars, wider highways and more oil is a failed equation. Any recovery of these companies will require more than just fresh cash. It will require a change of culture.
(END VIDEO CLIP)
HARLOW: It certainly would. That was his talking just yesterday. Now the change could be a while in the coming. We just heard that a provision in the bailout legislation that was just submitted would have blocked automakers from suing states with tougher emission standards than the federal government has. That stipulation, Tony, has now been dropped. A change in culture may be further away than we think.
Tony.
HARRIS: Yes, yes. Good point there.
All right, Poppy, good to see you. Thank you.
HARLOW: You're welcome.
HARRIS: Boy, just an out and out rockin day for us in the CNN NEWSROOM. Thanks for joining us. CNN NEWSROOM continues with Kyra Phillips from New York City after a quick break.
Have a great show, Kyra.
KYRA PHILLIPS, CNN ANCHOR: Thanks, Tony.
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