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Mortgage Deals; Santa in the Red?; Tips on Surviving a Layoff
Aired December 17, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DON LEMON, CNN ANCHOR: It is Wednesday, December 17th in the CNN NEWSROOM. Here are the top stories we're following for you this hour.
There are more cabinet posts to fill in the Obama administration. And we will hear live from the president-elect this hour.
The nation's top bankers try to take the chill off home sales. The Fed takes steps that could push mortgage rates to historic lows.
Good morning everyone. I'm Don Lemon. Tony Harris is off today.
You're in the CNN NEWSROOM.
So, for the third straight day, the president-elect will fill seats in his cabinet. And you'll hear from him -- this nomination is live this hour, right here in the CNN NEWSROOM.
Barack Obama is set to tap a Senate colleague that led the Interior Department. He is Colorado's Senator, Ken Salazar. For agriculture, the choice is said to be former Iowa governor Tom Vilsack. He briefly ran against Obama for the Democratic nomination.
Obama reveals the nominations from Chicago later this hour. And you can watch it live right here on CNN at 11:45 Eastern.
But first, you know, we have a lot of economic news to report to you this morning. A mix of good and bad.
OPEC is considering a huge cut in oil production at its meeting today in an attempt to boost prices. Saudi Arabia says the cartel plans to slash two million barrels from daily production as of January 1st.
And borrowing money should be easier today after the Federal Reserve slashed its target short-term interest rate to nearly zero, down from 1 percent. The federal funds rate was already the lowest in 50 years. And Treasury Secretary Henry Paulson says he doesn't expect any more major financial institutions to fail amid the current credit crisis.
And more car trouble. Honda Motor Company is slashing its earnings forecast for 2008. The company says it's seeing auto sales slump worldwide with no prospect for recovery.
Meantime, the White House is still pondering aid to the auto industry. Instead of loans, Ford wants a $9 billion line of credit. Executive chairman Bill Ford talked with CNN's Larry King in his first interview since the bailout package failed in Congress.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": So why do you need the line of credit?
BILL FORD, EXECUTIVE CHAIRMAN, FORD: Well, we're saying we don't need it now. But we're saying if the global economy does not pick up, it would be basically a line of credit that we could draw upon.
But you know, Larry, it's interesting, because this slowdown now is happening in Europe, Asia and South America. And governments around the world are lining up to support their auto industries. So this is not just playing out in the U.S. This is playing out everywhere.
KING: What was the key turning point for you that sent this downward?
FORD: Well, as I said, we've made money in the first quarter, and we were well on our way.
KING: I know.
FORD: But it was a combination of two things. One was the spike in commodity prices, principally oil. And then also, most convincingly, the credit shock that took place.
Basically, as you know, credit stopped flowing in this country. Our customers couldn't get credit when they came in to buy cars. Banks were not lending. And so that really kind of chilled the entire industry down.
(END VIDEO CLIP)
LEMON: The carmaker has said it has enough money to last through 2009.
Well, more fallout today over the Wall Street fraud case. The chief of the Securities and Exchange Commission now blaming his agency for not aggressively looking into years of complaints against Bernard Madoff. He's a money manager accused of hustling big companies and small investors out of more than $50 billion.
In a written statement earlier, he said that -- the problems he's looking into the complaints against Madoff -- and he said, "I am greatly concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them."
Cox has ordered an internal investigation into what happened.
The Federal Reserve slashing its benchmark interest rate and buying up billions in mortgage debt. Aggressive moves intended to help revive home sales. It could sink mortgage rates to levels not seen since the early 1950s. Thirty-year fixed mortgage rates in the low 4s? One expert ventured rates may dip into the 3s.
Greg McBride is a senior financial analyst at bankrate.com.
Are those fantasy figures? First of all, thanks for joining us. Are those fantasy figures, sir?
GREG MCBRIDE, BANKRATE.COM: You know, that's really hard to say. I think a lot of that's dependent upon a rumored plan that the Treasury may put forth that would actually pump money through Fannie Mae and Freddie Mac to drive mortgage rates down even further.
Again, at this point, that's just rumor. Nothing is official there.
What we do know at this point is that the Federal Reserve, right before Thanksgiving, they announced a plan where they were going to pump $600 billion into mortgage-backed debt. Over the course of the next year or so, we immediately saw mortgage rates drop about three- quarters of a percentage point, and they've stayed at those low levels. So that much is already in the cards, and the outlook is that rates are going to stay low for some time, Don.
LEMON: All right. They're going to stay low. Then what is the average 30-year fixed rate today?
MCBRIDE: Today, with zero points, an average 30-year fixed rate would be about 5.6 percent, which is not far removed from the all-time low of 5.25 percent back in 2003. So we're getting pretty close to those record low levels.
LEMON: All right. What should a person do who wants to buy a home? Or, a lot of people are thinking about refinancing as well with these low rates.
MCBRIDE: Well, when it comes to refinancing, what's attractive is getting out of an adjustable rate mortgage and locking in a fixed rate, on a fixed rate mortgage. The problem is that a lot of homeowners are upside down, meaning they owe more than their home is worth. And that's a barrier to getting that deal done.
The good news is, with the Federal Reserve having cut short-term rates as much as they did, a lot of those homeowners with adjustable rate mortgages won't have to worry about their payments going up anytime soon. So that buys them some valuable time.
But it's an attractive time to refinance into a fixed rate if you can. And for homebuyers, rates are going to stay low. So put yourself in the best financial position before you take the plunge into homeownership. Play down debt, boost your savings. Make sure your credit score is high as it can be.
LEMON: Rates are going to stay low. Going any lower though? Because if you're thinking about refinancing, you may want to hold off. They could go lower.
MCBRIDE: They could, but that's really hard to predict. And believe me, I try to predict it every week. It's very, very difficult.
You know, I think the outlook is very positive that rates will stay below the 6 percent mark. And we're going to continue to see volatility. The good news is the lows will be lower and the highs will also be lower.
Rates are going to continue to move around, and they're going to stay low. But banking on them going still lower and holding out, I'm not sure that that's -- I'm not sure that that's going to play out.
LEMON: All right, Greg. Thank you very much for that.
MCBRIDE: Thank you.
LEMON: All right. We have this just into the CNN NEWSROOM. OPEC countries will cut production by 4.2 million barrels a day. That is starting January 1st. Again, this is just in, OPEC will cut production.
We'll have more of that right here in the CNN NEWSROOM. But OPEC will cut production today.
(WEATHER REPORT)
LEMON: All right. So your kids' wish list is five pages long and you barely have enough to make ends meet. Here what Dr. Phil -- he has some suggestions on how to talk to your kids about these hard financial times.
(COMMERCIAL BREAK)
LEMON: Well, you know, for many, it's this year's holiday reality -- the budget stretched to the max. Even Santa has to tighten his belt. So how do you break it to the kids?
I asked Dr. Phil.
(BEGIN VIDEO CLIP)
LEMON: A lot of folks have been asking us, how do you talk to your kids about this economy? They're expecting so much during the holidays.
DR. PHIL MCGRAW, TALK SHOW HOST: Well, you know, I really do think we have created a generation of kids with entitlement issues. And I know it's tough out there for people right now, for everybody in America. And I hate that for all of us. But the point is, I think there's a silver lining to every cloud. And maybe this is a forced return to what Christmas is all about.
I think it's gotten too commercial. I think it's gotten too materialistic. I think we put too much pressure on ourselves to buy and do, when really the focus should be -- whatever it is for you, if it's a religious holiday for you, then focus on that. If it's a time of togetherness and sharing, then focus on that. But it's really not about all the commercialism of Christmas. So maybe that's the silver lining here.
(END VIDEO CLIP)
LEMON: Dr. Phil and his wife Robin.
And later this hour, Dr. Phil talks about what kids should give to their parents this holiday.
We keep hearing about how the economy is affecting everyone. Well, how about Santa? Our Josh Levs is taking a look at that.
Josh, Santa, I'm sure, tightening his financial belt as well. And it's a big belt.
(LAUGHTER)
JOSH LEVS, CNN CORRESPONDENT: That's what we expected to find. You know, we were checking this out, we thought we were going to see something like that. Well, here's what we did. We paid a visit to a mall, and we actually found, Don, that Santa and his cookie jar doing pretty much as well as ever.
(BEGIN VIDEOTAPE)
LEVS (voice-over): Every year he makes his appearances at malls across the U.S. And at a time when many people are cutting back, mall properties like this one in Atlanta feel Santa is a crucial part of their marketing strategy.
DEWAYNE HERBERT, MARKETING DIRECTOR, LENOX SQUARE MALL: Santa brings this experience that I think shoppers look for during the holiday season, and most of our malls have a Santa. And this particular Santa that we have at Lenox is very special. He's been around 12 or 13 years.
Customers and shoppers get accustomed to the Santa of their choice. And every year that's that holiday tradition.
LEVS: Little Peyton (ph) had her first photo with Santa, joining the Keroack family tradition.
RENEE KEROACK, MOTHER: We grew up here in Atlanta and have been coming to Santa at Lenox all my life. And I think, actually, my grandfather helped build this mall. So it's in the family.
LEVS: Cousin Henry gave Santa his list.
UNIDENTIFIED MALE: Spiderman, bike, rope and a gun.
SANTA CLAUS: It's the children. If you didn't like the children, you couldn't come in here and sit for 10 or 11 hours a day and talk. So the kids make it all fun.
LEVS: Of course, there is a practical benefit.
SANTA CLAUS: Santa works for cookies and milk and carrots for the reindeer.
LEVS: It's a bit more than that. According to one expert, Santa can make quite a few cookies, anywhere from minimum wage to $175 cookies an hour.
AL LEE, DR. SALARY: This is mostly driven by national photography companies who often provide the Santas to many different malls.
LEVS: Specialty companies like the Noerr Programs Corporation.
JUDY NOERR, PRESIDENT, NOERR PROGRAMS CORP.: We are a year-round operation. We have around 18 people during the year, full-time people, at our corporate headquarters. And then we gear up, practically overnight, to around 2,000 people for Christmas.
LEVS: She says her company hired a few more Santas than last year. How much each makes depends on a few factors.
NOERR: Some Santas, a lot of cookies. And some santas a few cookies. And it really -- a lot of it depends on the persona that the Santa has and how he builds his rapport with the people.
LEVS: From the smiles on the faces around him, it looks like Santa may be one person who won't have to tighten his belt this year.
(END VIDEOTAPE)
LEMON: Well, there must be some competition, Josh -- that was a cute little girl there, by the way -- to get to be a Santa who takes home a lot of cookies.
LEVS: Yes.
LEMON: What does an aspiring Santa need to know? And how do you know this?
LEVS: Well, I know this because I managed to find out from Dr. Salary. I didn't hear it from Santa himself. Buy I'm going to put this gingerly.
Let's put it this way -- Santa has a real beard, first of all. OK?
LEMON: OK.
LEVS: Because kids can know. They can figure out the difference.
Santa also has a real full face, OK? The real belly as we know him to have. No pillow under the shirt. Right?
He's also Santa 24/7, the whole holiday season. Santa, Don, does not get spotted being unSanta-like at a restaurant or anywhere.
LEMON: On a cell phone or on his BlackBerry. LEVS: Or worse, exactly. Nothing unSanta-like.
Also, a really good piece of advice from Dr. Salary there, have a great insurance plan. Because keep in mind these kids are going to be crawling on you, tugging at you, coughing and sneezing on you. Santa knows how to not get sick and remain jolly throughout the whole holiday season.
How is that, Don?
LEMON: OK. Can you do the ho ho ho for me? Come on.
LEVS: I'll work on it. I'll get back to you on that.
LEMON: Oh.
LEVS: Can you?
LEMON: When have you ever been squeamish?
All right, Josh. Thank you very much.
Well, we have some breaking news into the CNN NEWSROOM.
What you're looking at now is a school bus on its side. This is courtesy of our affiliate WTHR. Here's what we're hearing from media reports and also from our affiliate -- that a school bus in Indiana has crashed because of icy conditions. This is in the town of Frankton.
Now, according to those reports, a student on board said a car slid into the path of this bus, and then the vehicles -- other vehicles collided head on. The bus fell onto its side.
A junior at the school said about 40 students were on board the bus. No immediate information about the extent of the injuries here, but CNN will continue to work on that.
But this crash happened on a county road about 35 miles northeast of Indianapolis. Again, a school bus accident on its side because of the icy conditions.
We're trying to get more information on it, injuries, and what have you, near Frankton, Indiana, which is not far from northeast -- not far from Indianapolis. We'll continue to update you on this.
In the meantime, so many companies are handing out pink slips this time of year. Your personal finance editor, Gerri Willis, has top tips on surviving a layoff.
And we have a reminder for you. President-elect Barack Obama announces his latest cabinet appointments. So you see them getting ready there in the room -- live pictures -- just a second ago. You can watch live right here on CNN in about 20 minutes.
(COMMERCIAL BREAK) LEMON: All right. So you know how it goes. You lose your job. There goes your paycheck and, of course, your health insurance as well. But how do you pay the doctor?
Personal Finance Editor Gerri Willis is here with some information, some tips for us.
Gerri, you say move fast when you lose your coverage, right?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right. Well, yes. But there are options. That's the good news here.
Look, if you're laid off, Don, try to get on a working family member's plan through a process called special enrollment. This is the cheapest of the options, but you have to act quickly. Thirty days after you lose your eligibility for your coverage, that's your window. Act quickly -- Don.
LEMON: OK. But what about other options besides just move quickly? There has to be something beyond that, Gerri.
WILLIS: Well, there is something more than special enrollment. There's also COBRA, which is a federally mandated program. It allows people who are laid off to continue their existing company coverage.
The trouble is you'll pay the full cost of the program. Check these numbers out. Instead of paying 75 percent of your premium -- and 25 percent is typical -- you'll pay the full 100 percent of the premium, plus administrative costs.
If you pay for employer-sponsored coverage, this is what you would typically pay. But those numbers go way up when you foot the bill for COBRA yourself. Almost $5,000 for an individual policy, and $13,000 for a family policy. Imagine paying that on an annual basis.
You get these benefits for about 18 months. But again, there are deadlines. You have 60 days to elect COBRA and 44 days to make the first premium.
LEMON: OK. So we know about unemployment, Gerri. What about other help from the state? Can the state help out in any way when it comes to health insurance?
WILLIS: You bet. Yes, well, there's Medicaid, which is a federal program, and SCHIP programs. These are for people who meet income guidelines.
The state insurance health care programs cover kids, and Medicaid covers adults. The Department of Labor has a toll-free number to employ benefits. This is the number you want if you have questions: 866-444-3272.
Benefit advisors are all over the country in about 60 locations. They can help.
The final option here, buying coverage in the individual market, your state insurance department can help you find insurers in the individual market in your state. This is also the most expensive option because you don't get the benefits of group pricing.
One word of warning really important for your viewers here, Don. If you go 63 days or more without insurance and then find a job, your new employer can refuse to cover you for a preexisting condition.
LEMON: Oh. That is good to know.
WILLIS: Right.
LEMON: OK. And I want viewers to get that number: 866-444-3272.
WILLIS: Yes.
LEMON: Gerri, we always appreciate your advice. Thank you very much.
WILLIS: My pleasure.
E-mail me at gerri@cnn.com if you have more questions on losing your jobs, on layoffs. Love to answer those questions right here every Friday.
LEMON: All right, Gerri. Thanks again.
And Gerri is not done, because this weekend you can get a guide on how to recover from this current financial crisis. Ali Velshi leads you down the path toward taking control of your finances and learning to grow your money. Don't miss "Gimme My Money Back" on CNN Saturday and Sunday night, 8:00 p.m. Eastern.
Hanging on for dear life. Literally. One survivor's story of being trapped on a gondola for hours.
(COMMERCIAL BREAK)
LEMON: We've been telling you this morning here on CNN that President-elect Barack Obama is about to fill two more seats on his cabinet table.
Live to Chicago now and our National Political Correspondent Jessica Yellin.
Jessica, yesterday it was Arne Duncan for education. Who is it today?
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Today it's two folks that the president-elect knows less well than he knew Arne Duncan. Tom Vilsack, the former two-term governor from Iowa, is going to be named his choice to run the Department of Agriculture. And Ken Salazar, Democratic Senator from Colorado, to run the Department of the Interior.
Both picks fill out the cabinet in different ways. Salazar will be the second Latino on the cabinet after Bill Richardson, who is going to the Commerce Department. And Vilsack is a former rival. He also ran for president in the Democratic primary against Barack Obama. So that makes four formal rivals that he has tapped to be in the White House, or in the administration, I should say, with him.
And both men are perceived as progressives, but centrists. Vilsack is a guy who has championed ethanol production in his state of Iowa. That will be a big issue, to fight over biofuels, which biofuel gets federal dollars. And so we'll look to see how much ethanol becomes an issue under his leadership at the Department of Agriculture.
Switching over to the Department of the Interior, Ken Salazar, a fifth generation Coloradoan, he's considered something of a centrist. He's a guy who, for example, favored offshore oil drilling, but also cleaning up mines in the state and working with environmental groups. Some of the more liberal groups are disappointed in this pick. He's perceived as somebody who can make compromises, get deals done. Both are men who will be seen as working with Barack Obama on his larger energy policy using our land, farming and environment to turn this nation into a green energy producer. Of course, Barack Obama after introducing the men and everyone making comments will take more questions from the press.
LEMON: Speaking of those questions, I'm glad you brought that up as we wait for him live, it's happening in just a little bit here. He has been bombarded with press conferences, at press conferences about this Rod Blagojevich scandal that's going on. But he has waived most of them off saying, I cannot talk about this. So today, if you ask the question you're probably not going to get anything from him?
YELLIN: That's right. You take the risk of not getting any answer if you ask about Blagojevich because he says he won't address it. I'm not sure how many questions he'll really get on that topic. It's almost at this point a question into the wind. He won't respond, he says, for at least a week. So far he's been calling on only three reporters at each press conference. It's very tightly controlled.
LEMON: Only three reporters, not the same three reporters, but only three reporters who they pick.
YELLIN: Correct.
LEMON: Thank you very much for that, Jessica, we'll be watching. Jessica will be at that press conference. Of course we will bring that to you in just minutes when President-elect Barack Obama announces his latest cabinet nominees. You can watch it live right here on CNN.
(BEGIN VIDEO CLIP)
YAMIR BHATT, CLEARWATER, FLORIDA: Second is look for the solution world-wise, not just look inside America on how to come out of what can we do inside America to get out of the economic problem. Look at what other countries or what other economics can balance this out? What trade we can do with other countries to improve the financial condition, because we need to focus on getting money in from outside, producing money has to be the most important criteria.
(END VIDEO CLIP)
LEMON: That from one of our i-Reporters via webcam. We'd like to hear what you have to say about the economy. Tell us how you're coping or how you'd go about fixing things. Send us your solutions at ireport.com.
For months now analysts have been predicting this holiday shopping season will be one of the worst in decades. But now a new report says things might not be as bad as expected. Is that a good sign? Is that a sign of hope? Susan Lisovicz at the New York Stock Exchange to explain, Susan. It may be a little bit better but I've been hearing that not a lot of people have been shopping. Am I wrong?
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Well, people are shopping, from my own anecdotal evidence, but they are --
LEMON: We knew you'd be shopping, Susan.
LISOVICZ: I have a big family, Don. You know what? There are a lot of discounts. So deals are getting done. But it comes at tremendous costs, there's no question profit margins will be hurt. But the one retailer that is attracting the masses the most is Wal- Mart, already the world's largest retailer in this recession the store's dominance cannot be underestimated. Consider this, a research firm says nearly 70 percent of all shoppers out this weekend were at Wal-Mart and had as many shoppers as JC Penney, Sears, Target and Toys "R" Us combined. That extraordinary domination could be enough to lift overall retail sales. America's Research Group now expects retail sales to fall 2.8 percent this holiday season instead of 3.5 percent drop it previously predicted. So not quite as bad.
LEMON: Ok. I would imagine that the higher-end stores are not doing quite as well. But discount, bargain shopping is probably doing well. I want to ask you this, Susan. We know how important this consumer spending is to the economy. This may be just a wee sign of live for the shopping season and for retailers?
LISOVICZ: Yes. We've seen this in good economies and bad that consumers increasingly play chicken with retailers right up until the final days before Christmas. The biggest crowds are probably not going to be seen until maybe this weekend. But the bottom line is that retail sales are still expected to drop the most important season for retailers. The fact that such an unusually large number of people, both low and high income, are shopping at Wal-Mart shows we're still holding on to our purse strings. 70 percent of shoppers say they'll stay within their budget this year. That's the most in six years. Concerns about the economy have been pulling down stocks all year. Certainly that is the case today as well. We've got a terrible report from Morgan Stanley, a big financial company, showed it lost more than $2 billion in one quarter, three months. The Dow right now down 125 points. Of course, we had a huge surge yesterday on the back of that fed decision. The NASDAQ Composite is off 22. Each of them about 1.5 percent to the downside, Don. Back to you.
LEMON: All right, Susan. Thank you very much for that.
We want to go now to Chicago where the person and the people I should say who will be in charge of fixing this economy, some of them are about to gather for a news conference where Barack Obama, the president-elect, is expected in a news conference in just a few minutes to announce his nominee for interior secretary. We expect that to be Senator Ken Salazar, democrat from Colorado. Also reporting that Iowa Governor Tom Vilsack will be his selection for agriculture secretary. He will take some questions and if you heard our Jessica Yellin, he's usually been taking about three questions from three reporters each day, three different reporters. They pick them beforehand and then Mr. Obama will call on them and they will take questions. The questions usually in the beginning have to do with the scandal that's been happening in Chicago with the Illinois Governor Rod Blagojevich. Some people are making their way to the podium now. Barack Obama has waived them off every time. Today he's about to make that announcement right now. Let's listen in.
(JOINED IN PROGRESS)
SEN. BARACK OBAMA, (D-IL) PRESIDENT-ELECT: Earlier this week I announced key members of the team that will help us seek new forms of energy to build a new economy, to enhance our security and to leave our children a planet that is safer and cleaner. Today I am extraordinarily pleased to announce two other key advisors and members of this team. Governor Tom Vilsack as secretary of agriculture and my dear friend from the senate, Senator Ken Salazar, as secretary of the interior. Together they will serve as guardians of the American landscape on which the health of our economy and the well-being of our families so heavily depend.
One of the great blessings bestowed upon us as Americans is the bounty of our natural environment, from the mountains and parks where we go hiking to the rivers and streams where we go fishing, to the forests and fields where the proud tradition of hunting is passed on through the generations. But our wide open spaces are not only a blessing to be enjoyed, they're the foundations of a brighter future. How we harness our natural resources from the farm lands of Iowa to the springs of Colorado will speak not only to our quality of life, but to our economic growth and our energy future.
It is time for a new kind of leadership in Washington that's committed to using our lands in a responsible way to benefit all of our families. That means ensuring that even as we are promoting development where it makes sense, we are also fulfilling our obligation to protect our natural resources. It means ensuring that we are using our farm lands not only to strengthen our agricultural economy but to grow advanced biofuels that will help make the United States energy independent. It means ensuring that the policies being shaped at the departments of agriculture and interior are designed to serve not big agribusiness or Washington influence peddlers, but family farmers and the American people.
That's the kind of leadership embodied by Ken Salazar and Tom Vilsack. Ken will bring to the department of interior an abiding commitment to this land that we love. His family has farmed and ranched the same land in Colorado for five generations. As a senator from the great state of Colorado, he has been a champion for farmers, ranchers in rural communities, from building a clean energy economy to setting aside 250,000 acres of Rocky Mountain National Park as wilderness. Before serving in the United States Senate Ken was attorney general in Colorado where he worked on a number of land, water and environmental issues. As a water lawyer for a decade, Ken was also chosen to lead Colorado's department of natural resources. In that role he promoted responsible water management, balanced use of our energy resources and built one of the most successful land conservation efforts in our nation.
Few are better equipped to meet the energy and natural resource challenges we face in the 21st century. Among the many responsibilities Ken will bear as our next secretary of the interior, is helping ensure that we finally live up to the treaty obligations that are owed to the first Americans. We need more than just a government-to-government relationship we need a nation-to-nation relationship. Ken and I will work together to make sure that tribal nations have a voice in this administration. One of Ken's critical roles as well is going to be working with our energy team to make sure that we are using our natural resources in a sustainable way and developing the kind of energy independence that is so vital to our economy.
To lead a department of agriculture that helps unlock the potential of a 21st century agricultural economy, I can think of no one better than Tom Vilsack. As governor of one of our most abundant farm states, he led with vision, promoting biotech to strengthen our farmers and fostering an agricultural economy of the future that not only grows the food we eat, but the energy that we use. Tom understands that the solution to our energy crisis will be found not in oil fields abroad, but in our farm fields here at home. That's the kind of leader I want in my cabinet. As our next secretary of agriculture Tom will not only help ensure that rural America has a true partner in implementing the farm bill and pursuing agricultural research, but that Washington is looking out for everyone, from the small family farms that are feeding our communities, to the large farms that are feeding the world.
When President Lincoln established the Department of Agriculture nearly a century and a half ago, he called it the people's department, it was meant to serve the interests of those who lived off the land. And I know it will be the people's department once more when Tom is at the helm. With the appointments I announced earlier in the week and with those I'm announcing today, I am confident that we have the team that we need to make the rural agenda America's agenda, to create millions of new green jobs, to free our nation from its dependence on oil and to help preserve this planet for our children. In the end, that's not only the responsibility of all Americans, it is our obligation as stewards of God's earth. With that, what I'd like to do is first introduce my great friend Senator Ken Salazar.
SEN. KEN SALAZAR (D-CO), INTERIOR SECRETARY NOMINEE: I am humbled and honored to be nominated by President-elect Barack Obama to serve as secretary of interior. My story in America began more than 400 years ago when my ancestors settled the city of Santa Fe, New Mexico. They named that city the city of holy faith. As my family struggled for survival across 12 generations in both of those states, their faith in humanity was something that kept them sustained over the years. And it was the bedrock that made them what they are today. Today, as I stand here, I see their faith, I see their faith shining brightly on Barack Obama. I know Barack Obama as a champion for change, and I am grateful for his confidence in me. I look forward to serving as a strong voice in his administration, for the west and for the nation.
As a nominee to be secretary of the interior, I will do all I can to help reduce America's dependence on foreign oil. I look forward to working directly with President-elect Obama as an integral part of his team as we take the moon shot on energy independence. The energy imperative will create jobs here in America, protect our national security and confront the dangers of global warming. I look forward to helping build our clean energy economy, modernize our interstate electrical grid and ensure that we are making wise use of our conventional natural resources including coal, oil and gas. I look forward to protecting our national parks, public lands and open spaces and America's farm and ranch lands. I look forward to restoring our nation's rivers and working to confront our water supply challenges, and I look forward to helping address the challenges faced by our Native American communities all across this nation.
Finally, I look forward to electing or to investing in America's young people by implementing President-elect Obama's vision for youth programs across America. I want to thank first and foremost my entire family, especially my wife Hope and daughters Melinda and Andrea, without their courage and unwavering support I would not be here today. I want to thank my late father Henry and my mother Emma as a soldier and public servant in World War II they both instilled in me the values that enabled me and all of my siblings to live the American dream. I want to thank my seven brothers and sisters and all of my family because they have always inspired me to reach for the stars.
I want to thank the five million people of the state of Colorado who gave me the privilege of serving as their chief law enforcement officer and as their attorney general and as their United States senator. I look forward to serving Colorado, the west and the nation in this new capacity. I will work hard to make the people of the state of Colorado and this country proud. Finally, I want to thank the members of the United States Senate for their dedication and for their friendship. I have been honored and blessed to serve with them, democrats and republicans alike. To my wonderful staff of the United States Senate, thank you for your loyalty and your dedication to excellence. I again thank my good friend President-elect Barack Obama, and I look forward to serving as a member of his team. Thank you.
TOM VILSACK, AGRICULTURE SECRETARY NOMINEE: Thank you, Mr. President-elect for the confidence you've placed in me. I am truly honored and I look forward to the challenge. You articulated a compelling vision for the department of agriculture. It must be about the work of improving profitability for farmers and ranchers and expanding opportunities in the rural communities in which they live. It must aggressively promote policies and programs that support sustainable practices, to conserve and preserve our precious natural resources, our land, our water and our forests. It must work in concert with other federal departments, state and local governments and the private sector to promote American leadership in response to global climate change. And it must place nutrition at the center of all food assistance programs administered by the department.
It must be innovative and creative in all its work during a time of economic anxiety and limited resources. Yes, Mr. President-elect you have challenged the department. And the hard working and dedicated people who work in that department will meet that challenge. As a small-town lawyer, I had the responsibility of helping farm families during tough economic times. I know these people. America's farmers and ranchers deserve a secretary of agriculture that respects them for the contribution they make to all of us every day. I hope to be that secretary. I look forward to working with congressional leaders who share the president-elect's vision of bringing hope to rural America, of being good stewards of our natural resources, of providing American leadership on climate change and making America a nation truly dedicated to health and nutrition. Again, Mr. President, thank you very much.
OBAMA: Ok, let's start with Cynthia Bowers, CBS. How are you, Cynthia? Good to see you, Cynthia.
QUESTION: I have a question. You ran on a platform of transparency. How difficult is all this having to wait to release your inquiry business when the American people expect transparency?
OBAMA: Well, it's a little bit frustrating. There's been a lot of speculation in the press that I would love to correct immediately. We are abiding by the request of the U.S. attorney's office but it's not going to be that long. By next week you guys will have the answers to all your questions.
Tom Beaumont, where is Tom, my old friend from "Des Moines Register." How are you, Tom?
QUESTION: I was wondering what's has happened in the month since Governor Vilsack was led to believe that he would not be the choice for secretary of agriculture?
OBAMA: I don't know who led him to believe that. Whoever did obviously was misinformed because here he stands. Let me make a broader point. These two gentlemen are as accomplished a pair of public servants as we have in America. When it comes to Ken, I don't know anybody who has got a better set of qualifications for serving as interior secretary. He comes from a state that is as beautiful as any in the country, a western state that understands the importance of natural resources. He has been at the forefront in that state as the head of the department of natural resources, as an attorney general and as a senator in making sure that we are balancing the imperatives of development and our energy needs with sustainability in the desire to pass on this extraordinary treasure of our land to the next generation.
And one of the qualities that I so admire in Ken is his ability to listen and to bring all parties together. When I was campaigning out west, one of the things you've heard again and again was state and local officials, farmers, ranchers, feeling that the Washington bureaucracy didn't hear what was taking place. Native American tribes felt that they had no access. And to have somebody like Ken in this position who is going to be able to I think communicate the concern of Washington -- of our administration to people who are seeing what's happening on the ground, that will make an extraordinary difference. He also in the Senate has been one of our key leaders on energy independence. And so having him involved in helping us craft the bold new energy economy that I'm looking for is going to be tremendous.
Tom Vilsack has been a leader among governors when it comes to clean energy, when it comes to agriculture. Obviously if you don't know agriculture you're not going to be the governor of Iowa and one of the things that has struck me about Tom though is as fiercely protective of family farms and the farm economy as he has been, he's also been forward-looking in thinking about you know, how can we move towards cellulosic(ph) ethanol, how can we harness wind and solar power to give a boost to our rural economies. And part of the reason that Iowa during the midst of some very difficult economic times has more than held its own is because of the terrific work that Tom did when he was governor. So together I think this team is going to do outstanding work. I am very, very excited about their prospects. Karen Crummy, "Denver Post." Hi, Karen. You can stand up so I can see you.
QUESTION: Yes, sir. You've said that you had envisioned an expanded role for your secretary of interior. Can you give me an idea of what you mean by that, what the priorities are, the first couple priorities, and also whether or not there's a role for commercial drilling on federal land.
OBAMA: Well, you know, over the last eight years I think we've had an interior department that was deeply troubled. There was an editorial today in the "New York Times" that I think pointed out that the interior department too often has been seen as an appendage of commercial interests as opposed to a place where the values and interests of the American people are served. And part of what I want to put an end to is an interior department that sees its job as simply sitting back waiting for whoever has most access in Washington to extract what they want. I want a proactive vision of getting out, talking to people, talking to farmers, talking to ranchers, being at the cutting edge of environmental and energy policy.
So that commercial interests are just one group among many groups that are being listened to and being brought together to craft the kind of policies that we want to see. Now, one of the things that Ken and I talked about before this appointment was the importance of the interior secretary in the overall energy discussions that we're going to have. Now, Ken has experience on a lot of the issues that we're going to confront both with respect to traditional energy sources and fossil fuels as well as renewable energy. So if there's going to be a debate about oil shale, I want Ken at the table, because he can help sort through what are legitimate claims about, you know, how productive that approach might be, versus the kind of environmental degradation that is possible if we don't do it carefully. If I'm having a debate about wind power with my various, the various members of my energy team, having somebody like Ken at the table who can say, here's our experience in Colorado. Here's what we're seeing. Here's how we can drive down unit costs. Here's what we do to set up an electricity grid that will be able to get the power from wind farms to population centers that use it. That's going to be extraordinarily important. So, you know, I want a more proactive interior department. I also want an interior department that, very frankly, cleans up its act. There have been too many problems. Too much -- too much emphasis on big-time lobbyists in Washington and not enough emphasis on what's good for the American people, and that's going to change under Ken Salazar. OK? Thank you very much, everybody.
LEMON: President-elect Barack Obama making two important announcements today. You heard him say he wants a more proactive interior department. Interesting part is going to be alternative fuels, it's going to be drilling. Making the statement, Barack Obama did, in this, that these people, including him, they were the stewards of God's earth and they wanted to make sure that our natural environments are not only for us to enjoy but it will be important in finding, in making us less dependent on foreign oil. So there's going to be some controversy there I'm sure about drilling, also about disturbing some of the natural environments in the U.S. We shall see over the next couple of months exactly what's happened. Again, Barack Obama announcing Ken Salazar as his pick for interior secretary and Tom Vilsack as agriculture secretary.
Also just one question I have to add about the controversy, from CBS asking -- CBS basically said that he campaigned on the platform of transparency and during this whole Blagojevich scandal in Chicago, that he's not doing much talking, not answering many questions about it, but he did say he was doing it on the wishes of the U.S. attorney and that within the next couple of weeks, everything will be answered and he'll be able to be more transparent. Those are his words.
Let's move on now to talk about the Federal Reserve cuts interest rates. Find out what relief it could bring to homeowners in the next hour of the CNN NEWSROOM in just a couple of minutes.
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LEMON: Scary moments at the Whistler Ski Resort near Vancouver, Canada. A lift suspension tower suddenly snapped in two yesterday that sent a pair of cable cars crashing to the ground and left about 50 other riders at the mercy of the wind for hours. There were no serious injuries but officials are investigating the cause. Earlier this morning, CNN's Don Riddle talked with one couple onboard the lift at the time of the accident.
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DON RIDDLE, CNN CORRESPONDENT: Did your car actually fall at all when the tower collapsed?
CYNTHIA JENNINGS, TRAPPED ON GONDOLA: We didn't fall. We swung quite a bit. We were just a couple of cars up from the ones that really were moving about and dropping, but our perspective at the time was that we thought each car was coming off the cable, one by one, because they were swinging so violently and we thought it was going to be our car next. So we swung quite a bit, but we didn't drop too much. We just violently stopped with the emergency brake.
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LEMON: The ski resort will be the Alpine skiing venue for the 2010 winter Olympics.
Hello everyone, I'm Don Lemon in the CNN NEWSROOM. Tony Harris is off this week. Here are your headlines from CNN this Wednesday, the 17th day of December.
