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Obama Announces More Cabinet Appointments; Automakers Search for Cost Cutting Moves; Justice for Rwandan Genocide Victims?
Aired December 18, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: A new watch dog on Wall Street. This hour Barack Obama adds a new name to his inner circle. We'll have his news conference coming up live.
And assembly lines grind to a halt, and so do the holiday dreams of thousands of workers. Automakers launch drastic new measures to stay out of bankruptcy.
Good morning everybody, I'm Heidi Collins. Today, Thursday, December 18th. You're in the CNN NEWSROOM.
We get started with some new numbers on the economy. Initial claims for unemployment dipped last week, a bit more than expected. But the rate still hovers near a 26-year high. Credit card companies are jacking up rates. And federal regulators scrambling to ease the pain for many Americans. New rules to be unveiled a little bit later on today. And gas prices climbing again. The latest increase 0.3 of a cent. More importantly, it is the third straight day of climbs. Last week saw the end of nearly three months of steady declines.
Checking now, the big board. Trading day has been open for about 30 minutes or so. Dow Jones industrial average is down about five points at this time. Yesterday the whole day closed down about a hundred points when it was said and done. We'll continue to watch those numbers for you.
Meanwhile, crisis in the automotive industry. Chrysler now says it will close all of its North American manufacturing plants for at least one month beginning tomorrow. Ford also taking drastic measures to save money. Next month it will shut down ten of its plants for an extra week. CNN's Christine Romans is in New York now to break it all down for us.
So we had heard them say a couple of times now, certainly during the hearings for the bailout, that they really only had weeks to go before you know it would be the end. It seems to have come sooner.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, you know, and now they're saying that you know they've got to cut costs. And to cut costs they're going to stop making cars, for a month for Chrysler. They're going to completely cease production for a month. And for the folks who are on the line and the people that work for this company and then for all the companies whose parts and services feed into this company, after the shift on Friday, then they wait.
They wait for a full month. This is going to affect factories and towns across the country including some in Mexico and Toronto. Some 30 different locations will be shuttered apparently after Friday and then wait for some sort of rescue, wait for something else to help them as they go forward here.
The company is saying that the issue is declining sales, the issue is the fact that when people walk into the showrooms, walk into the dealers, they can't get the credit, too. There's a credit problem. Consumers are not getting car loans. And so that's something that Chrysler says is a really big problem here.
Ford in the best position of the three. Ford already had a couple week furlough that it usually has at this time. It's extending it by a week. Ford remember when it went to Congress said it the wanted the option to get a line of credit, an option to get a line of credit. They hoped they wouldn't have to use it, that it would be sort of a back stop. So Ford in the best position of the three. And then of course GM coming out. GM also said that it was going to idle about 30 percent of its manufacturing capacity in the first quarter of 2009.
GM coming out quite strongly, a spokesman saying that a "Wall Street Journal" report that GM and Chrysler were in merger talks again is completely false. The "Wall Street Journal" got that wrong. There are no merger talks right now. So you know, it's an industry that is on the ropes.
What is the White House going to do? Clearly, the pressure to do something. Dana Perino won't say what that is. She says all policy options are on the table, they're considering what would be appropriate. We are aware of their financial system, considering policy options to provide assistance. As we've said a disorderly collapse of the auto industry should be avoided.
I mean I think a lot of people agree to that. It's just what happens next. We don't know what's going to happen next.
COLLINS: Yes and how exactly it will all work. Certainly. All right. CNN's Christine Romans for us in New York this morning.
In fact, for thousands of auto workers, the extended shutdowns cast a large shadow on the holidays and of course beyond.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And I'd rather go to work. I've been there 17 years like I said and I believe I miss one day for having a stroke. And my father worked there 43 and a half years and only missed five days.
UNIDENTIFIED MALE: It will be hard. This will be hard on everyone. Wife is back to college. But she won't be able to continue to that because we won't have the money to send her. So I don't know where we go from here.
UNIDENTIFIED FEMALE: I'm just worried for him, you know, for the family. I've got a brother that's in college, and you know he's going to IU. So you know, they're trying to take care of that. And it's just scary.
(END VIDEO CLIP)
COLLINS: Rounding out the cost-cutting measures of the Big Three, General Motors is halting construction of a plant. It was to play a part in making the Volt, GM's electric vehicle.
In the airline industry merger talks are now off between Qantas and British Airways. In separate statements, the airline say they simply couldn't agree on key issues. British Airways is still in merger talks with the Spanish airline, Iberia.
The economy is job one for Barack Obama. And the president-elect laying the groundwork for a giant economic stimulus package. The price tag could reach $850 billion over two years. And it could be his first test of the new Congress. Democrats are preparing their own recovery bill. Obama's plan includes roads and bridges, and school building and making government buildings energy efficient. There also would be some form of tax relief.
A traffic cop for security. Is president-elect Obama set to choose another member of his team. The announcement expected in just about 30 minutes or so. CNN's Brianna Keilar is joining us live from Chicago this morning with more on this.
So she is currently CEO of Financial Industry Regulatory Authority. That's a mouthful.
BRIANNA KEILAR, CNN CORRESPONDENT: Yes, it sure is. This is Mary Shapiro. We're expecting her to be appointed or announced as Barack Obama's pick for the chairman of the Securities and Exchange Commission. And what she's in charge of right now, that mouthful that you just said, Heidi, it is the largest nongovernmental regulator of all securities that do business in the U.S.
You can see that she has some experience in regulation, kind of seen as a bit of a traffic cop, if you will, to come in and basically do some oversight on Wall Street and financial institutions. She was actually a former commissioner on the SEC. She would be replacing Christopher Cox, the current chairman of the SEC. He's been facing a whole lot of criticism, especially lately because of the alleged Ponzi scheme involving the former head of Nasdaq.
So the idea here that she comes in with her regulatory emphasis. We also know from two Democratic officials, that there's going to be a couple other regulator roles we are expecting to be announced today. That includes Gary Gensler for the U.S. commodity futures trading commission and Dan Tarullo is a member of the fed board.
And we also have news of something that we're expecting tomorrow, that would be an announcement for the secretary of transportation, this is someone, representative Ray LaHood of Illinois. He's a Republican. So he would be the second Republican in Barack Obama's cabinet. This is someone who has been praised by Republicans and Democrats for reaching across the aisle. He does have some positions on transportation. He actually represents a district with a lot of farmland. So he's a proponent of ethanol production. He's dealt with Illinois's infrastructure improvements, airports, highways, that kind of thing. But he's also on the house appropriations committee, Heidi. So that means he's on this committee that deals with the purse strings of Congress, he sort of has an insight into the fiscal dimension of basically infrastructure improvements or maintaining transportation in the U.S.
COLLINS: OK. So checking the squares there for a couple more positions to be announced today and tomorrow. But I just wonder, surely this isn't over shadowing some of these cabinet picks. But it sounds like there are some people who are not very happy with President Obama's pick of Pastor Rick Warren. He's going to deliver the invocation at the inauguration.
KEILAR: Yes and for core Democratic constituency, this is very much over shadowing anything that is coming out of the Obama camp. Rick Warren, you may know him, he's a very popular evangelical pastor out of California. He wrote the best-selling book "The Purpose-driven life." And there are a lot of social liberals who were very upset because he was a big supporter of Proposition 8 that prop that just passed in California that bans same-sex marriage.
He's likened abortion to the holocaust or to genocide. So the Obama camp having to respond to some criticism here. A spokeswoman Linda Douglas actually saying the president-elect certainly disagrees with Warren when it comes to LGBT issues, lesbian-gay-bisexual- transgender issues. But it's always been a goal of his to be basically find some common ground.
So they're pointing towards areas where the ideologically overlap, like fighting poverty, fighting AIDS. But at the same time you can see Obama trying to keep good on his promise of basically post partisan politics, being very inclusive. But he's having to navigate a bit of a pitfall here because he's got a core constituency of the Democratic Party very upset, Heidi.
COLLINS: All right. CNN's Brianna Keilar coming to us from Chicago this morning.
Thank you, Brianna.
A reminder now that Obama news conference scheduled for 10:45 this morning. We of course will bring it to you live right here on CNN.
A pre-winter blast. Icy snow blankets much of the west. Snowplows looking overtime in Arizona. Look at it coming down in Seattle, outside of Seattle? That is wouldn't you know it's all heading east, too. By week's end we could see some major backups on runways and highways from Chicago to Boston.
Winter storm warnings already out for the upper mid west. And still a couple of days away from official winter. We just had to share this video, too, with you one more time. These drivers doing their best to get up that icy hill there right in the middle of Portland, Oregon. I-reporter Bob Cronk found them trying. Remember such a fast lane, share your images on weather in the making. All you have to do is go to I-report.com. I don't think anybody's made it up the hill ever. Look that guy got the closest.
Reynolds Wolf joining me now to talk a little bit more about this wintry weather, because you can't say winter just yet.
REYNOLDS WOLF, CNN METEOROLOGIST: No. Winter officially begins on December 21st. But you know, we have our numbers for winter. Mother nature is going to do her own thing. I mean we've already seen the weather that's been defined as winter especially in places like Las Vegas, Seattle, you were talking about seeing some snow flakes by the space needle. You happen to see a lot of snow up in the high elevations outside of say Seattle. Down near Pike's fish market, not so much. So that's certainly an interesting thing to see.
Something else that's interesting to see is to watch this storm system that doesn't appear to be much now over parts of Wichita and Norman, Oklahoma. That storm system expected to veer its way to the northeast. It's going to ramp up. And this could be a big not just snow maker, but potentially an ice maker causing headaches for millions of Americans. Now, this storm system right here, just a little pressure is going to tap into the moisture from the Gulf of Mexico that's going to pull its way to the north.
Right behind it you'll have a lot of cold air sliding in from the north. And right behind it, we're going to have a lot of air sliding in from the north. It's going to be over (INAUDIBLE) moisture falling through the lower levels of the atmosphere that's going to give us that wintry combination of rain, sleet and of course there's snow. The snow, sleet and ice really are the biggest concerns. The latest model shows this storm is moving a little bit slower than we originally anticipated.
It also appears to be moving a bit more to the north which means Chicago, although you could see anywhere from eight to 12 inches of snowfall, it does appear that ice may be a tremendous story for you as well.
It looks like by tomorrow morning especially along the Dan Ryan expressway, it's going to be bumper car city if you're not careful. So please by all means, really take your time getting into work here. If you have any travel plans leaving Midway or O'Hare, good luck to you tomorrow. Bring a great book. Plenty of patience, take your time, have good conversation with your neighbor. And of course, stay tuned to CNN. We'll give you the very latest.
The storm system is not only going to affect parts of the Midwest, the western great lakes. The storm is also going to move its way to the east, eventually affecting parts of, say, New York state. Take a look. You've got Ontario here, you got Lake Erie, two big bodies of water. The wind coming in from the northwest. That wind again interacting with that moisture on the lakes is going to give some lake-effect snowfall. Some places getting anywhere from six to 12 inches of snow, places like M Street in Syracuse, you're going to have that stack up. Near Finger Lake same story then back over to Boston, southward into Warwick, you could see some snow not just for tomorrow but into the rest of the weekend, possibly a nor'easter forming also off the coast which could bring additional snowfall to many areas that were just pummeled by that storm last weekend.
We'll show you another shot that we have. This takes you a little bit farther out to the west, Midwest in fact, St. Louis. We have live image for you, compliments of KMOV. Here is the sight looking to the west. Skies this time are overcast. And do we have that? There it is. You can see raindrops or some specs of something on the screen. I assume that would be just -- who knows what it is? But beyond that you can definitely see some clouds. You'll see more of that through the gate way city and eventually into Chicago as we mentioned.
It's a big weather day. Tomorrow is going to be even bigger. Expect a lot of delays around the nation. We're going to keep you up to speed with all of it right here on CNN.
Let's send it back to you, Heidi.
COLLINS: All right. Great. Reynolds Wolf, thank you.
WOLF: You bet.
COLLINS: We've been getting almost daily cabinet announcements from Barack Obama. But the president-elect isn't done yet. A look at what jobs are left.
(COMMERCIAL BREAK)
COLLINS: All-inclusive. President-elect Barack Obama reaching in every direction to fill his cabinet. And he's not done yet. So joining us now with some more insight on all of this, Jim Vandehei. He's the executive director of politico.
Nice to see you again, Jim.
JIM VANDEHEI, CO-FOUNDER OF POLITICO.COM: Good to be here.
COLLINS: Here we are again. There's going to be a couple more announcements today and also tomorrow. Talk to us a little bit about what positions are left to fill now for the cabinet.
VANDEHEI: Well, there's not a lot. We have SEC, which will be Mary Sheridan which should be announced today. We have Ray LaHood for transportation. Ray LaHood is a congressman, a Republican congressman and the first Republican to go to the cabinet other than maybe Gates at defense who every one thinks is a Republican, but is not a self- declared Republican.
LaHood is interesting because it's sort of say this is my bow at bipartisanship. But the truth is in Congress, he was the Republican that irritated Republicans most because he was always belly aching about the performance of Republican leadership and Republican orthodoxy. So that won't soothe a lot of his Republican critics.
Then the other big one out there is labor. You know there's been frustration among a lot of the folks on the left that that was not part of the economic team. People felt like well labor should be front and center. You look at what's happening with the automakers and you look at what's happening with manufacturers and the economy, they want that to be front and center, and they want it to be somebody who has strong ties to the labor movement.
You know there's been talk about the Michigan governor, Jennifer Granholm being one of the top contenders for that. She says she's not interested. But clearly that's the type of person that labor movement would like to see in that position.
COLLINS: So what does this all come down to? I mean obviously you've covered politics for a long time. And when you are a president elect and you are batting around these names and then ultimately you make the announcement and then confirmation comes and all that, talk to us about what some of the challenges are.
VANDEHEI: Well, the challenge is -- and I think a lot of them have been met so far -- are getting the names out there and doing it in a way that doesn't generate much controversy. Obama has moved quicker than virtually any president in history to tell everybody who his cabinet picks are going to be. There's been virtually no scandal, no controversy involving any of them. The only position, attorney general, is the only area that you might see a very aggressive confirmation hearing. At least that's what we're hearing from Republicans so far.
And if you step back a little bit further and you look at this cabinet and say what does this tell us about Barack Obama? It tells us he likes to surround himself with pretty powerful personalities, you know, whether you're talking about the Commerce Department or State Department where you're going to have Hillary Clinton.
He's got these larger-than-life personalities who have national identity, have national following, and big ideas and have big egos. And I think what Obama is trying to do and trying to say is I'm going to move quick. I'm going to move fast, and I'm going to try to have smart people in different positions. And try to farm out some of the issues so I can focus mostly on the economy, Iraq and Afghanistan during that first hundred days and possibly during the entire four years.
COLLINS: Yes. And speaking of controversy, Jim, and also the military, I'm not sure if you saw the article in the "Washington Times" this morning. They're talking a little bit about Navy Secretary here, a guy who we're pretty familiar with here in the CNN NEWSROOM, Bill White. He is the president of the Intrepid Sea, Air and Space Museum. Apparently he's being backed by some -- this is what it says, top retired military leaders and Democrats in Congress.
VANDEHEI: Yes. For the navy job. And that would generate obviously I think a lot of cheer in the gay community which is very upset right now with the decision to have Rick Warren, the evangelical pastor from California do the invocation at the inaugural address. They feel like that sends a bad sign because he's been hostile to the gay rights movement and their agenda.
And I think what Obama, one of the things probably factoring in what they say the psychology of some of these picks is to try to figure out a way to mollify the different critics and the different factions of the Democratic Party without having to necessarily adjust policy, sort of the don't ask, don't tell policy which got Bill Clinton into some trouble during his first couple of weeks during the transition. He wants to shy away from that and maybe look more at personnel picks to be able to pacify it.
COLLINS: Yes. Do you think that's going to have anything to do with it, don't ask, don't tell though?
VANDEHEI: I don't know. I don't know if this pick is going to happen. I saw one story it was in the "Washington Times," the people that are apparently cheerleading for this include his local congressman and some retired military officials. Just because they're cheerleading for it doesn't mean that they -
COLLINS: Yes. Former Joints Chief of Staff Hugh Shelton.
VANDEHEI: That doesn't necessarily mean that you're going to get the post. You got to remember everybody in the military community right now is agitating for their person for all of these different posts. So it's just one person who obviously has a pretty influential following that's pushing them into the transition. But we do not have a signal yet from the Obama administration that yes he's at the very top of the list and likely to get the position.
COLLINS: All right. And we are watching all of it certainly today -- appointment, excuse me, announcement, not appointment, because we're not there yes.
VANDEHEI: Right.
COLLINS: Jim Vandehei, we sure do appreciate it.
VANDEHEI: Enjoy the day.
COLLINS: Thanks. You too.
And this reminder now, the Obama news conference is scheduled for 10:45 this morning. We of course are going bring it to you live right here on CNN.
A massacre of unspeakable proportions. More than half a million people killed in Rwanda. And now a conviction and life sentence.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) ERIC MOSE, INT'L. CRIMINAL TRIBUNAL FOR RWANDA: For the legal reasons given in the judgment, he's therefore responsible for the murder of the prime minister, the four opposition politicians, the ten peace keepers as well as the extensive military involvement in the killing of civilians during this period.
(END VIDEO CLIP)
COLLINS: The charges laid out against the convicted mastermind of the 1994 massacre and genocide in Rwanda. More than a half million people died in the mass killings in Central Africa. CNN's chief international correspondent Christiane Amanpour has details on the case and conviction.
(BEGIN VIDEOTAPE)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: The verdict handed down against Col. Theoneste Bagosora and two of his henchmen marks the first time that those actually accused of organizing the genocide in Rwanda have been convicted and now sentenced. He has been sentenced to life imprisonment along with two others on charges of genocide, crimes against humanity and other war crimes. One other associate was acquitted.
Bagosora always denied the genocide claim although he did admit massacres had taken place. But the judge found that he was responsible in terms of command responsibility and actual responsibility for organizing the killing of the prime minister of Rwanda in 1994, of four opposition leaders, of 10 Belgian U.N. peacekeepers and then of the killings around road blocks, around Rwandan Kigali, the Rwandan capital and then on into the countryside and other provinces, a slaughter that lasted nearly 100 days and left 800,000 to one million Rwandans dead, mostly Tutsis and modern Hutus.
Right now there is another genocide going on in Darfur and elements of such going on in Congo. The United States, President- elect Barack Obama, has talked about ending genocide as a priority and as a challenge for his administration. Senior U.S. officials on a genocide prevention task force have recommended early warning systems and early preventative measures to stop these on going genocides and those in the future.
Here in New York in the United Nations, there is a policy called responsibility to protect. That's the legacy of the former Secretary General Kofi Annan. This enables nations to intervene in other countries where mass slaughters are going on or mass violations of human rights. This has not yet been enacted. And it does require countries to violate another serenity in order to protect their civilians. Many nations are hoping that now the responsibility to protect will become enshrined in international law.
Christiane Amanpour, CNN, New York.
(END VIDEOTAPE)
COLLINS: Help is on the way for people trying to decide how to choose a nursing home for a loved one. Next hour the government is set to release a five star nursing home rating system. Federal officials say the ratings are based on state inspections, staffing levels and quality measures. The industry complains the ranking system is poorly planned and prematurely implemented.
We are awaiting President-elect Barack Obama, another staff announcement just a few minutes away. We're going to bring it to you live just as soon as it begins.
(COMMERCIAL BREAK)
COLLINS: President-elect Barack Obama's news conference now just a few minutes away. And he's ready to name another member of his team. This time, at the SEC. National political correspondent, Jessica Yellin, is joining us now live from Chicago.
Hi there, Jessica.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Hey, Heidi.
That's right; Barack Obama is going to name Mary Schapiro to head the SEC. She currently runs something called the Financial Industry Regulatory Authority. That's the largest non-governmental authority that oversees the financial industry. And she is perceived as a reformer who will try to shake up the SEC.
As you know, these days the SEC is under intense scrutiny to for failing to catch Madoff in his massive fraud and for missing tips all along that there was some wrongdoing, some irregularities and perhaps a lack of oversight in the financial industry in general that's led to the current state of crisis in the economy. Obama is clearly using today's announcement to focus on what he plans to do to reform oversight of the financial industry.
He is naming, along with Schapiro, two other folks who are going to be involved in that world, a guy named Dan Tarullo to take one of the vacant seats on the Fed. And another person, Gary Gensler, to oversee the U.S. Commodities Trading Commission.
But expect him to truly emphasize a focus on reform into the future.
And Heidi, this leaves really two cabinet posts still to be announced. Transportation, we've already reported that will go to Republican representative, Ray LaHood from Illinois, showing Obama's bipartisan nature, and then labor, secretary of labor, still unknown -- Heidi.
COLLINS: All right. So obviously a lot going on there.
Typically we hear, at least history has shown, that most of the appointments, if not all, will be done before Christmas. So it looks like still on track for that, yes?
YELLIN: Yes. He leaves on vacation, though, on Saturday. So we've really got one day to see how much gets done before Christmas.
COLLINS: And also, not obviously a cabinet appointment, but a lot of people talking this morning about President-elect Obama's pick of Pastor Rick Warren who is going to deliver the invocation at the inauguration next month.
What are you hearing, Jessica?
YELLIN: Well, look, Rick Warren is beloved by many Americans, but also has enraged the gay and lesbian community because he's come out firmly against gay marriage. Obama has asked him to give the invocation. And it is an indication by the Obama team that they are trying to reach out to evangelicals, that they have a big tent philosophy.
He has named a lesbian to his inner circle, in the White House, and there might be more gay members of his cabinet or of his team. So he's trying to have a broad approach, he says. But there is quite considerable controversy over this choice of Warren to give his invocation.
COLLINS: Yes, all right. So we will continue to follow that angle as well. CNN's Jessica Yellin for us there in Chicago.
Waiting for that news conference, once again, just a few minutes away. Set to get started at 10:45, about 10 minutes or so. We'll bring it to you when it happens.
The recession rocks the Big Three. Chrysler is temporarily shutting down all U.S. production. And GM and Ford telling their employees to stay at home for an extended period of time. Susan Lisovicz is on the floor of the New York Stock Exchange with a look at what it means for the American auto industry.
Hi there, Susan. This is a big deal.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi.
Well I think, at the very least, it shows the increasing fragility of the Big Three. Normally the Big Three will shut down for about two weeks over the holidays. Chrysler now says it's going to expand that to at least a month. All production halted as you mentioned. That affects 30 plants and 46,000 workers will be affected. They will receive partial pay.
Imagine this. You sell a big ticket item and there's a deep recession. Add to that a credit crunch. That is really the woes here. Dealers have been saying they can't close the deal. And Chrysler is saying that the potential buyers in many cases can't get access to credit.
Ford, as you know, Heidi, has expanded its shutdown to three weeks. And GM last week said it's idling 20 plants during the first quarter -- Heidi.
COLLINS: Is this the beginning of the end? I know -- I feel like I ask you that all of the time. But will these plants have an opportunity to reopen?
LISOVICZ: Well, we know that Chrysler is saying at least a month, at least a month. And that is big.
I think it's safe to say that if the Big Three survive, they may be in a very different form. These are just extraordinary times that we're looking at. And when you think about GM that -- the circumstances are such that it's delaying construction of a plant tied to its new electric car, the Volt. And the volt was the kind of vehicle that's supposed to turn GM's fortunes around.
It's gotten to that point, Heidi. And it's very difficult. Obviously we're still looking for word from Washington whether, in fact, money from the TARP program will be used to help give them temporary assistance. There's still time in this year. But we do know that GM and Chrysler in particular are running low on cash.
And you're seeing it reflected. Investors continuing to pressure those stocks. GM is the biggest Dow 30 loser, its shares are down 5 percent. Ford not far behind, its shares are down 4.5 percent. Chrysler is private as you know.
Right now the Dow is on the plus side, but it is a very quiet day, Heidi. Up just 12 points. The Nasdaq is up four points.
And oil continues to slide. Right now it's down more than $1.50, under $39 a barrel, despite OPEC's cut. That is the kind of thing that would help support oil prices. Down, continuing its decline, Heidi, because of the global decline in demand for oil.
COLLINS: All right. Well we continue to watch all of it once again on this Thursday.
One more day, Susan, for the final full week of trading before the year is through? Fingers crossed.
LISOVICZ: Yes, what a year it has been.
COLLINS: Yes, no kidding. I'm exhausted.
All right, Susan, thank you.
If you are drowning in credit card debt, a bit of relief may be on the way. This afternoon the Federal Reserve expected to approve new rules making it harder for credit card companies to hike those interest rates. They're still lining up by the thousands. But the number of Americans filing for state unemployment benefits for the first time has fallen. Labor department figures show 554,000 people filed last week, that's down 21,000 from the week before.
Many who are out of work look to their state to help tide them over. But what happens when the state is running out of money to help you?
CNN's Mary Snow looks at who is feeling the pinch.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT: As jobs disappear at rates not seen in decades and unemployment lines grow, there's less money to go around. Now, states are running out of funds to pay jobless benefits.
JEANNE MEJEUR, NATL. CONF. OF STATE LEGISLATURES: This is the perfect storm, higher claims and less money.
SNOW: Michigan, home to the struggling auto industry, is essentially broke when it comes to its fund to pay unemployment checks. Its jobless rate is 9.6 percent, well above the national average. Michigan is now borrowing from the federal government to pay out its unemployment benefits.
Indiana is in the same boat. And the National Association of State Workforce Agencies says the list of states with unemployment trust funds, about to become insolvent, is growing quickly.
INGRID EVANS, NATIONAL ASSN. OF STATE WORKFORCE AGENCIES: Right now, there's approximately 30 states that have trust funds that are in jeopardy of being completely empty for the most part.
SNOW: And that is expected to happen within six months, even less time for New York and Ohio.
One economist says while this isn't unusual in a recession, states will have to replenish those funds through --
DAVID WYSS, CHIEF ECONOMIST, STANDARD AND POOR'S: Higher taxes. You've got to have higher tax rates. Those payroll taxes are going to be going up.
SNOW: It's already happening in Michigan. Starting in January, payroll taxes are going up for thousands of businesses. It amounts to roughly $67 per worker. One policy analyst says it's one option to raise more revenue.
And while it's a tough environment to hike taxes, it's seen as a better choice than the alternative.
MEJEUR: They could consider cutting benefits, or restricting eligibility in some way. But that's a harsh choice when things are so tough.
SNOW (on camera): Ohio and New York expect to run out of state unemployment funds within weeks, forcing them to be next in line to borrow money from the federal government.
Mary Snow, CNN, New York.
(END VIDEOTAPE)
COLLINS: Quickly want to get this information out to you now coming into the CNN NEWSROOM. The leading voice of the American conservative movement, Paul Weybridge has died. He, as you may know, was the founder of the Heritage Foundation. I'm looking at some of the information now on their Web site, which clearly states how much he will be missed. 66 years old -- apparently it happened around 1:00 this morning. His son does continue to work at the Heritage Foundation. But we will continue to follow that story for you as well.
Once again, a leading voice of the American conservative movement, Paul Weybridge, has died.
President-elect Barack Obama just moments away now, set to name another member of his team with a focus on finances. We're going to take you there live just as soon as it gets under way.
(COMMERCIAL BREAK)
COLLINS: This is what's heading your way if you live in the upper Midwest or parts of the northeast. And just in time for the start of the holidays, huh? That means travel, though, could be pretty dicey on the roads and the runways as well. Reynolds Wolf is tracking all of it for us.
That's a lot of snow.
REYNOLDS WOLF, AMS METEOROLOGIST: Yes, it is. And you know, the final weekend leading into the holiday, people want to get out, they want to get those last-minute presents and whatnot. They need great weather, and it looks like it's not going to be in the cards for many places around the country.
(WEATHER REPORT)
WOLF: That's the latest. Heidi, let's throw it back to you.
COLLINS: Boy, all right. A lot to be following there.
Reynolds, thanks so much.
WOLF: You bet.
COLLINS: A deer not frozen in the headlights but rather slowly freezing on a Minnesota lake. She was stranded there and facing certain death with wind chills hitting 30 below. Enter a rescuer armed with some rope and a whole lot of patience. He snagged a leg and pulled the doe to shore where she scampered off.
Electric cars may be the future, but the advanced batteries they need are pretty hard to come by in the United States, at least so far. Stephanie Elam has our Energy Fix now from New York this morning.
STEPHANIE ELAM, CNN CORRESPONDENT: Hi, Heidi.
When it comes to producing next generation batteries for electric cars, U.S. companies are playing catchup with their Asian rivals. Both GM and Ford are planning to roll out plug-in cars, like the Chevy Volt, in 2010. But there's very limited capacity in this country to make the lithium ion batteries those cars will need. Now, 15 American companies are joining forces with one of the nation's largest laboratories to help change that around. Their new alliance, which includes 3M and Johnson Controls, plans to ask the Obama administration for $1 billion in federal aid to build an advanced battery plant. And there's no question, the United States is way behind here.
The "Wall Street Journal" reports China is building more than four dozen advanced battery factories. But there's not a single one in the United States, Heidi.
COLLINS: Really? I didn't know that. All right, well the technology obviously important if you're going to have one of these cars, yes?
ELAM: Oh, yes. It definitely could be a game changer here.
Alliance members believe this technology could eventually be as important as oil is today and we'll be trading dependency on foreign oil for foreign batteries if we don't get in the game.
Plus, with the U.S. economy in a recession like we are now making next generation batteries domestically could mean new manufacturing jobs, creating a domestic supply chain. President-elect Barack Obama says he wants to create five million new jobs in the next 10 years by investing $15 billion a year in clean energy technology. A home-grown advanced battery industry would certainly fit in with those plans.
Of course if you need another fix, you can always check out CNNMoney.com to get some more info like this -- Heidi.
COLLINS: All right, Stephanie Elam with our Energy Fix for us from New York this morning.
Stephanie, thank you for that.
And a quick reminder now, we are awaiting a news conference from President-elect Barack Obama. Expected any minute now. We are getting a live shot in. We see the people that we are going to be talking about very, very shortly.
And there he is now, President-elect Obama announcing some more cabinet positions. Let's listen.
(JOINED IN PROGRESS)
BARACK OBAMA (D), PRESIDENT-ELECT: ... Now crafting a 21st century economic recovery plan that will create 2.5 million jobs.
But as I said throughout the campaign, what will be just as important to our long-term economic stability is a 21st century regulatory framework to ensure that a crisis like this can never happen again.
Today, I'm pleased to announce two individuals who will be leading that effort, Mary Schapiro as the chairman -- chairwoman of the Securities and Exchange Commission, and Gary Gensler as the chairman of the Commodity Futures Trading Commission. I'm also pleased to announce that Dan Tarullo will be bringing his years of expertise on regulatory and banking reform to the Federal Reserve board as one of its new governors.
In the last few days the alleged scandal at Madoff Investment Securities has reminded us yet again of how badly reform is needed when it comes to the rules and regulations that govern our markets. Charities that invested in Madoff could end up losing savings on which millions depend, a massive fraud that was made possible in part because the regulators who were assigned to oversee Wall Street dropped the ball.
And if the financial crisis has taught us anything, it's that this failure of oversight and accountability doesn't just harm individuals involved. It has the potential to devastate our entire economy. That's a failure we can't afford.
Financial regulatory reform will be one of the top legislative priorities of my administration. And as a symbol of how important I view this reform, I'm announcing these appointments months earlier than previous administrations have.
These individuals will help put in place new common-sense rules of the road that will protect investors, consumers and our entire economy from fraud and manipulation by an irresponsible few. These rules will reward the industriousness and entrepreneurial spirit that's always been the engine of prosperity, and crack down on the culture of greed and scheming that's lead us to this day of reckoning.
Instead of allowing interests to put their thumbs on the economic scales and CEOs run off with excessive golden parachutes, we're going to ensure openness, accountability and transparency in our markets so that people can trust the value of the financial products they're buying.
And instead of appointing people with disdain for regulation, I will ensure that our regulatory agencies are lead by individuals who are ready and willing to enforce the laws.
These are the -- precisely the reasons why I chose the outstanding public servants who are with me today.
Mary Schapiro currently serves as the chief executive officer of the Financial Industry Regulatory Authority, the largest regulator for all securities firms that do business with the United States. Before that, she served as an SEC commissioner and as chairwoman of the Commodities Future Trading Commission. Mary's known as a regulator who's both smart and tough; so much so that she's been criticized by the same industry insiders who we need to get tough on. For years, she's used her position to educate investors about market risks, warned seniors and employers about retirement scams and called for increased regulation of mortgage brokers long before the current housing crisis hit.
I know that Mary will provide the new ideas, new reforms and new spirit of accountability that the SEC desperately needs, so that fraud like the Madoff scandal doesn't happen again.
To chair the Commodities Futures Trading Commission, I've chosen Gary Gensler, who brings a wealth of expertise from both the public and private sectors to this position.
In addition to serving as undersecretary of treasury during the Clinton administration and as a senior adviser to the Senate Banking Committee, Gary also gained a deep knowledge of our financial institutions during his decade as a partner at Goldman Sachs.
As the new chairman of a commission charged with regulating some of the unsound practices and excessive leverage that helped cause this crisis, I know he will restore sound judgment and strict oversight to our markets.
Along with Mary, treasury secretary designee Tim Geithner and others, Gary will also serve as a key member of the team that will reform our outdated financial regulations.
I'm also announcing Dan Tarullo, one of my trusted economic advisers, as a new governor of the Federal Reserve Board.
The Federal Reserve's monetary policy function will continue to be critical in navigating us through these trying economic times. But as many of you know, the Fed -- the Federal Reserve also serves as a vital regulator.
Dan will bring a lifetime experience to the Fed in economic policy and financial regulation. A professor of law at Georgetown, Dan previously served as a senior economic adviser in the Clinton administration, where he coordinated economic policy and served as President Clinton's personal representative to multiple G-8 summits.
His academic and policy work on financial regulation has anticipated some of the problems we've observed. And he has generated important ideas for how we should move forward. I have no doubt that his knowledge, experience and independence will make him a valuable addition to the Federal Reserve at this critical time.
For over two centuries, our market has created a prosperity that is the envy of the world, and rewarded the innovators and risk-takers who made America a beacon of science, technology and discovery. But the American economy has worked in large part because we've guided the market's invisible hand with a higher principle: that America prospers when all Americans can prosper.
That principle is why we put in place common sense rules of the road to regulate our market. And it's why we need to restore and renew those rules today so that every American, from Wall Street to Main Street, can have the chance to prosper once more.
I have great faith and confidence in the ability of the team I have announced to make this possible. And with that, I'd like Mary to step up and say a few words.
MARY SCHAPIRO, SECURITIES AND EXCHANGE COMMISSION CHAIRWOMAN DESIGNATE: Thank you so much, Mr. President-elect. I'm honored and humbled to be considered for this position.
As the events for the past year, even the past week have shown us, this is a perilous time for investors. Americans are looking to policymakers and regulators to restore stability and trust to our financial markets.
As someone who has spent my entire career focused on investor protection, I'm looking forward to leading an agency, the Securities and Exchange Commission, whose mission is so critical to the future economic health of our country.
Obviously, there is much work to be done there, and I'm committed to leading an agency whose primary mission must always be to protect investors.
But as you have said, Mr. President-elect, the current financial market crisis requires an aggressive, systemic response. Modernizing America's financial regulatory system demands that federal agencies work collaboratively, aggressively and creatively to meet head on the realities of today's complex marketplace.
I look forward to working with Tim Geithner, Larry Summers, Paul Volcker, Gary Gensler, and Dan Tarullo, and the rest of the economic team to help you put in place a regulatory structure that protects all investors.
Investor trust is the lifeblood of our financial markets. The only way to restore the trust that has been lost is through effective, thoughtful reform of our regulatory structure and the consistent and robust enforcement of our financial regulations and this will be my top priority.
In closing, I'd like to thank my husband, Chaz (ph) and my two daughters, Molly (ph) and Anna, for the support and strength they give me every day.
I truly believe there is no higher calling then public service and I'm proud to be able to serve investors, my country, and our new president in the days ahead.
Thank you.
GARY GENSLER, COMMODITY FUTURES TRADING COMMISSION CHMN. DESIGNATE: I wish to thank you, President-elect Obama, Vice President- elect Biden for this great honor to serve our nation as Chairman of the Commodities Futures Trading Commission. Subject to Senate confirmation, I'm thrilled to join the great economic team the president-elect is assembling.
In these times of significant challenges, the work we do together to restore our economy and reform the financial system is of such importance. And I'm honored not only to serve as CFTC chair but to have been asked to play a senior role, along with Mary and others, to help reform our regulatory system.
The CFTC plays an essential role in our financial system, promoting and ensuring integrity of markets, and protecting the public from fraud and manipulation.
The trading of futures and options helps reduce risk and promote growth for farmers and the commodities sector. It helps make mortgages and credit more available for homeowners and businesses.
On a personal note, I want to thank my three daughters, Anna, Lee (ph) and Isabel (ph), for all their love and support. No doubt they will sacrifice much to allow me to serve and take this honor once again. I only wish that their mom, Francesca, could be here with us today. I know that she would have really been excited to meet you, sir, and the honor to see this country led by you.
Once again, I look forward to working with the president-elect and the great economic team he's assembled in the future, helping the American people.
DANIEL TARULLO, FEDERAL RESERVE BOARD OF GOVERNORS SEAT NOMINEE: Thank you, Mr. President-elect for the confidence you've shown in me by announcing your intent to nominate me to serve on the Board of Governors of the Federal Reserve.
As we're all aware, our country faces financial and economic challenges of a greater magnitude than we've seen for decades. The Federal Reserve Board is, of course, the nation's central bank with responsibility for setting monetary policy. But, as you noted, it also plays key roles in responding to the current economic situation and in financial regulation.
If confirmed by the Senate, I look forward to working with Chairman Bernanke, the other members of the Board in the Open Market Committee, and the outstanding staff at the Federal Reserve in helping to steer the economy through these difficult times, and in adjusting regulatory and supervisory practices so as to maintain a stable and efficient financial system.
Thank you.
OBAMA: OK.
QUESTION: Thank you, Mr. President-elect.
Do you think it's necessary for Congress to approve the second $350 billion installment of the financial rescue package to aid the autoworkers before early next year?
OBAMA: I think it's important that the Treasury, the Fed and all of us do whatever's required to make sure that our financial system is stable and secure.
The Fed has not come -- the Treasury has not come forward with a formal request for the second part of the TARP. At the point where the Treasury comes forward, I would expect that they would provide a clear justification for why they need additional dollars and how they intend to use it.
But I think that -- the bottom line, from my perspective, is that we cannot afford a collapse of our financial system. Main Street can't afford it. It's not just a few bankers on Wall Street that have a stake in our financial system. Obviously, if small businesses and large businesses can't get credit, then we're going to have problems.
And think that my top priority, in addition to an economic recovery plan that helps to spur demand and create new jobs -- my second priority, which is reflected by this team here today, is to make sure that not only are we strengthening our financial system and the flow of credit in the short term, but we're also creating the kind of regulatory structure that prevents the broad, systemic risks that we've been seeing over the long term.
QUESTION: (OFF-MIKE) would you then urge the Treasury Department to ask for that second installment?
OBAMA: My economic team has been in conversations with them.
Obviously, they've got a lot on their plate. It's not just the financial system that they're focused on at this moment. We've still got the auto industry and how that's going to be deal with.
I have not seen the data or been subject to all the material that they may have before them in terms of what kinds of risks might be coming up between now and the time that I take office. At the point where they give us some signal that they think this is necessary, then we would evaluate it.
OK?
QUESTION: (OFF-MIKE)
OBAMA: You are.
QUESTION: Thank you, sir.
OBAMA: OK.
(LAUGHTER)
QUESTION: Good morning, sir.
QUESTION: I have a question about Pastor Rick Warren. He holds a number of social views that are at odds with your own views and with those of some of your very strong supporters.
OBAMA: Right.
QUESTION: I'm wondering what went into your decision to choose him for this prominent role as you embark on your own presidency, at a time when you're dotting every "i" and crossing every "t" to send some important signals.
OBAMA: Well, let me start by talking about my own views. I think that it is no secret that I am a fierce advocate for equality for gay and lesbian Americans. It is something that I have been consistent on, and I intend to continue to be consistent on during my presidency. What I've also said is that it is important for America to come together, even though we may have disagreements on certain social issues.
And I would note that a couple of years ago, I was invited to Rick Warren's church to speak, despite his awareness that I held views that were entirely contrary to his when it came to gay and lesbian rights, when it came to issues like abortion. Nevertheless, I had an opportunity to speak.
And that dialogue, I think, is part of what my campaign's been all about: That we're not going to agree on every single issue, but what we have to do is to be able to create an atmosphere when we -- where we can disagree without being disagreeable and then focus on those things that we hold in common as Americans.
So, Rick Warren has been invited to speak. Dr. Joseph Lowery, who has deeply contrasting views to Rick Warren on a whole host of issues, is also speaking.
During the course of the entire inaugural festivities, there are going to be a wide range of viewpoints that are presented. And that's how it should be, because that's what America is about. That's part of the magic of this country is that we are diverse and noisy and opinionated.
OBAMA: And so, you know, that's the spirit in which, you know, we have put together what I think will be a terrific inauguration. And that's, hopefully, going to be a spirit that carries over into my administration.
QUESTION: Thank you, sir. You suggest that you're outraged by the Madoff scandal. This year, we also saw a meltdown on Wall Street and a crisis in the mortgage industry...
OBAMA: Right.
QUESTION: ... which both Congress and our regulatory industries missed.
OBAMA: Right.
QUESTION: So do you plan to overhaul the SEC? Was Congress asleep at the switch? And what specific steps will you take to restore the American people's confidence in the government's not just ability but willingness to regulate the financial industry?
OBAMA: Well, it's a great question. We have been asleep at the switch. Not just some of the regulatory agencies, but some of the congressional committees that might have been taking a look at this stuff. We have not been as aggressive. And we've had a White House that started with the premise that deregulation was always good.
And so, what I said during the campaign, I meant. We are going to have to greatly strengthen our regulatory apparatus, and update it from what worked for a 20th century financial system, so that it works in a 21st century financial system.
Now, this will be one of my earliest initiatives. And we will be releasing a very detailed plan on how we think that regulatory upgrade will take place.
It's premature for me to give you all the details at this point. That's part of the reason that I've got all these experts working with me is so that we can help design it.
I can -- I can tell you that just in principle for us to, for example, focus narrowly on bank regulation when huge amounts of money in the financial system are sloshing around outside of banks, that's a problem.
OBAMA: Those are systemic risks that have to be dealt with.
I know one of the things that Mary and I have spoken about is the fact that the SEC has a role in protecting investors, but you also have the issue of how do you make sure that these financial institutions are operating in a way that encourages solvency? And sometimes those -- those missions can be contradictory.
And so, the need to potentially consolidate some of the regulatory agencies that are out there, to streamline them, to make clear who's got what mission so that things aren't falling through the cracks, those are all going to be part of the review that we do over the next several weeks. So that, as part of my economic recovery plan, A, we're going to be focusing on jobs and getting businesses back on their feet, but, B, we're also going to be focusing on updating this financial system, and, C, we're going to be focusing on the budget, to make sure that even as -- in the short term, we deal with the potentially $1 trillion-plus deficit that we're going to be inheriting and we are trying to jumpstart the economy, that we're also in the medium and long term looking at how we can get on a path of fiscal responsibility and sustainability.
(CROSSTALK)
OBAMA: Where's Sylvester (ph)? Ebony.
There you go. Good to see you.
QUESTION: I'd like to piggyback on that question. It seems that there is a crisis in confidence among the American people in government and our financial institutions. What do you plan to do in your administration to -- to work on that?
OBAMA: Well, I think the American people right now are feeling frustrated that there's not a lot of adult supervision out there. Whether it's in the political world or the financial world, there's a sense that anything -- anything has been going on; that whatever's good for me, I do.
And part of what we've tried to talk about during the course of this campaign is a restoration of a sense of responsibility; that all of us have responsibilities to operate honorably, to ensure honesty and transparency in our institutions; that we are advocating not just for ourselves but what's good for the country; that we are operating not just out of greed but operating out of the sense of the common good.
And what I hope my administration can accomplish is, through very specific actions, show the American people that we are serious about the business of helping American families, putting people back to work, making sure the economy grows, making sure that some of the shenanigans that have been taking place on Wall Street no longer occur, making sure that we're changing our politics so that people have a sense of restored trust in government, that we are competent, that we do what we say we're going to do.
Now, that doesn't mean we're not going to make mistakes. It doesn't mean that there aren't going to be times where people vehemently disagree with what we do. And one of the things that I hope is that the American people will find when we make a mistake, we're willing to fess up to it and change.
That's the kind of approach I think the people are looking for. And we're going to work as hard as we can to restore that sense of trust in our institutions.
But government is not going to be able to do it alone. And so, in the context of the financial markets, for example, there needs to be a shift in ethics on Wall Street.
And, you know, we can have the best regulators in the world, but everybody from CEOs to shareholders to investors are going to have to be asking themselves, "Not only is this profitable, not only whether this will boost my bonus, but is it right? Does it conform to some higher standards in terms of how we operate?"
And -- and that's the kind of approach that I think is going to -- that's what our grandparents and our parents, you know, embraced, and what allowed us to create the country that we have, and it now falls to us and this generation to make sure that we continue those best traditions instead of some of the worst.
OK. Thanks guys.
