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Lawmakers Criticize Release of Toxic Sludge; Rockets Hit Israel from Northern Lebanon as Cease-Fire Plan Debated in Egypt; Obama Gives Grim Assessment of Economy; Medical Experts Say Some Alternative Health Remedies OK for Kids
Aired January 08, 2009 - 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 busy morning of news today with a lot happening now. On Capitol Hill, lawmakers want to know, how did a Tennessee power plant release a flood of toxic sludge? What are the health risks, and how much will it cost to clean it all up? Well, former senator moves to the receiving end of the questions.
Tom Daschle is Barack Obama's pick to be the next secretary of health and human services. The questions he'll face will likely include the lobbying work done by his law firm.
And under the microscope, the nation's lousy economy. In fact, the chairman of the committee holding this hearing calls an absolute fiscal disaster. Lawmakers will seek expert guidance from the congressional budget office.
President-elect Barack Obama, a speech he probably doesn't want to give, and a message it will be tough for you to hear.
At the top of this hour, his grim assessment of the economy and dire warnings of what could it mean for all of us. CNN national political correspondent Jessica Yellin is joining us now with more details on all of this.
Well we heard that word "dire" yesterday, and now we are sort of using it ourselves in all of our introductions to this speech.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: Right. You've got the tone right, Heidi. It's kind of depressing. It's bleak. That is the president-elect's assessment of our current economic situation.
In this speech that's happening an hour from now, he'll draw a picture of just how bad he thinks it can get. In this speech, expect the president-elect to warn that we could reach 10 percent unemployment in this nation, and household income could plummet unless Congress passes his stimulus package fast. And what you'll hear from him really is a sales pitch for this big spending measure, which could reach $800 billion.
His message will be to reassure taxpayers that essentially this time around government spending will make a difference in real people's lives, not just on Wall Street. And he'll insist the money will be spent wisely. What you won't get are too many specifics on the details. I'm told, for example, that he will not reveal the final figure on how much he wants the stimulus to cost.
Part of the reason is his team is still in on going discussions with Congress about the size and terms of the package. But one thing the president-elect vows, Heidi, the money will not be doled out based on whose congressional district it's in. He says he'll establish a system to determine which projects are truly worthy of funding. Heidi.
COLLINS: So what do you think his goal is then today with this speech?
YELLIN: It's really to reach the American people and persuade folks who have been hearing that our budget deficit is more than a trillion dollars, to persuade everyone it's worth spending another $800 billion right now, and he's going to make the case why it's essential. So it's a sales pitch.
COLLINS: It's not up to them anymore, though, is it?
YELLIN: No, it's up to Congress. It's up to Congress but Congress isn't going to act unless they're feeling pressure from taxpayers, and so he's trying to reach the taxpayers.
COLLINS: Got you. All right. We'll be watching very closely. Obviously. Jessica Yellin, thank you.
The Obama transition is working with democrats in Congress to hammer out that stimulus bill. But here are some broader points for you to think about. It is expected to cost somewhere around $800 billion. The timeline for it to be signed into law has slipped now to mid-February, at the earliest.
And here are some of the things it will include. Tax cuts for businesses and middle-class workers. Money to help states dealing with their own financial crises. Federal help with Medicaid programs and other operating costs. And a huge share will go toward building infrastructure like roads and bridges that you just heard Jessica mentioned.
So remember, stay with us for live coverage of Barack Obama's speech on the economy scheduled for the top of the hour, 11:00 a.m. Eastern, 8:00 Pacific. And you can see it right here on CNN.
I want to take a moment now to check out the Dow Jones industrial average down double digits right now about 95 points or so. The trading day as you know has been open for about half an hour, and we'll continue to watch those numbers.
It's day 13 now of the Israeli military offensive in Gaza. Now northern Israel is being hit by rocket fire from southern Lebanon. At least two people have been hurt. Our reporter in Lebanon says Israel's longtime enemy, Hezbollah, apparently was not involved in the rocket fire. The Beirut government is condemning the attack and promising to investigate.
Meanwhile, Israeli diplomats arrived in Cairo, Egypt today for talks on ending the Gaza offensive. Egyptian media reports two Hamas representatives are in Cairo to "listen to the Egyptian plan." But large explosions and small-arms fire could still be heard in Gaza today.
The rockets fell near the city of Nahariya in northern Israel. Nahariya is a popular tourist town on the Mediterranean coast, just south of the Lebanese border.
And CNN's Paula Hancocks is following those developments along the border of Israel and Gaza and joining us now live from there. The sound of the unmanned drones there behind you, Paula?
PAULA HANCOCKS, CNN CORRESPONDENT: Well, Heidi, just a few seconds ago, we also heard two loud explosions, and we're still hearing intermittent heavy machine gunfire. So certainly, the lull is very much over. But even during that three-hour lull, it was barely a lull.
We heard explosions at the beginning of the three hours. We saw three rockets head overhead in the opposite direction. So incredibly difficult for those humanitarian aid groups on the ground to try and give the 1.5 million residents of Gaza the humanitarian assistance that they desperately need. We're also hearing from one U.N. works and rights agency spokesperson, this is the U.N. aid agency in Gaza, that one of its truck drivers was killed, and two injured this morning when they were actually trying to distribute aid.
Now, the Israeli defense forces say they are checking this report at this moment. But earlier that they had evacuated two injured Palestinians and brought them into Israel. Heidi.
COLLINS: All right. Our CNN's Paula Hancocks there in the thick of it all right there on the Gaza and Israel border. We're going to continue to follow the story, obviously, here on CNN.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Backward -- water all over the road. I can't get out of the car.
(END VIDEO CLIP)
COLLINS: Wow, that's Washington State, where people had to be rescued from rising flood waters, rain and melting snow are causing widespread flooding, mudslides and avalanches in the area. Voluntary evacuations recommended for some 25,000 people near the Tacoma area.
Flooding has led highway officials to close several of the streets and highway. And transportation officials say Interstate 5 could actually be closed for four days.
Moving to the southeast now, heavy rain causing flooding, road closures and power outages in the Atlanta area. People are dealing with a double whammy. First rain caused creeks to overflow, and then when the rain stopped, high winds knocked down trees and power lines. Thousands of people also lost electricity. But Georgia Power says most of it is back on this morning. Boy, really a mess in several different places across the country -- Rob.
(WEATHER REPORT)
COLLINS: Racing wind and leaping fires. Three wind-driven wildfires moved across Boulder County grasslands yesterday, of course in Colorado we're talking about here. At least one building was destroyed, and people living within one mile of each fire were told to leave. No injuries were immediately reported.
Anger over a police shooting spills on to the streets. Protests turn violent after an unarmed man is killed while lying face-down.
(COMMERCIAL BREAK)
COLLINS: Let me give you a live look now inside the first of President-elect Barack Obama's cabinet confirmation hearings. hwe are looking at Senator Bob Dole there and the nomination for health and human services secretary, Tom Daschle there on the right. So want to let you know that opening gavel came down just a little while ago. We are keeping our eye on that throughout the day here. However long this confirmation hearing may take.
A warmer welcome for Roland Burris. Senate Democrats now backing off their earlier disapproval. Burris met with Majority Leader Harry Reid yesterday, and Reid now says the decision to seat Burris is really up to the Illinois Supreme Court.
President-elect Barack Obama is pushing for a quick resolution. Senate Democrats are asking for a sworn statement from Burris saying he made no offers to Rod Blagojevich in exchange for the senate's appointment.
Roland Burris will be back in Illinois today, scheduled to appear in front of an Illinois house panel, considering impeachment for Governor Rod Blagojevich. And CNN's Susan Roesgen is joining us now live from Chicago. A busy day for Roland Burris, is it?
SUSAN ROESGEN, CNN CORRESPONDENT: Absolutely, and for a lot of politicians in this state today. In fact, as you mentioned, the House impeachment committee that is looking at Governor Blagojevich, whether or not this state should impeach the governor, wants Roland Burris to come before that panel today at 3:00 local to talk to the panel about why Governor Blagojevich might have given him this appointment.
Was there any kind of pay to play in this? Was there any money exchanged at all Specifically, they're going to be looking at $20,000 or roughly $20,000 campaign donation, Heidi, that Burris made to the governor's political campaign. Not a lot of money. Not necessarily unusual. Not necessarily anything in there that was quid pro quo.
But looking at that, they'll also be talking about state contracts worth about $300,000 that Burris's consulting firm won from the state. They want to find out if that was in any way tied to his appointment. So that's what they're going to be looking at, but this house panel, Heidi, I watched the session yesterday, and they were looking at the governor's hiring practices. Again, they're trying to decide whether or not to try to actually proceed with impeachment. And in one case, the governor's office had hired an interpreter for the deaf, Heidi, who didn't know sign language.
COLLINS: OK.
ROESGEN: So they've got a lot on their plate to look at. And today, again, they just want to specifically focus in on Roland Burris and his senate appointment, and everyone, of course, will be watching, I think not only here locally, but nationally, to try to make sure that he's as clean as can be, as politicians can be in general before they actually seat him.
And they're still waiting for that signature from the state attorney general here, and the Supreme Court in Illinois is sometime today, maybe tomorrow, who knows, going to make some kind of decision on whether or not to force Jesse White, the state attorney general, to sign certification to Roland Burris to actually be seated.
COLLINS: All right. Well, it is quite a story. Susan Roesgen, sure do appreciate it. Thank you.
Florida's delegate dispute in court today. Federal appeals court will hear claims the national and state Democratic Party overstepped their bounds when it stripped the state of delegates. You remember this story.
Florida lost the delegate as punishment for holding an early primary. Delegates were reinstated in time for the Democratic National Convention. The plaintiff's attorney says the court still needs to rule, because the law was never changed and the issue could come up again.
In Florida now, two hearings are set today for Casey Anthony. She is the Orlando woman charged with killing her two-year-old daughter. The first hearing involves a defamation lawsuit. It was filed by a woman who says Anthony falsely identified her as a person who took Caylee Anthony.
You may recall, Caylee went missing in June. Her remains were not found until last month. In the second hearing today, Anthony's attorney will argue prosecutors should turn over evidence from Caylee's autopsy.
Protesters take out their anger on a police car in Oakland, California. The demonstration is over a police shooting that began peacefully, but a splinter group marched downtown confronting police.
The protest followed a New Year's Day shooting on a train station platform. A transit police officer is accused of shooting an unarmed man while he was lying face-down. That shooting victim, 22-year-old Oscar Grant, was remembered at a funeral yesterday. More than 1,000 people gathered at a Hayward, California church.
(BEGIN VIDEO CLIP) LITA GOMEZ, FAMILY FRIEND: And I want to challenge every young man here today. Let's keep Oscar's memory going. Make changes in your life, the changes that he was making, and becoming a better man.
(END VIDEO CLIP)
COLLINS: The officer accused in the shooting resigned yesterday before he was to be interviewed by investigators. And that allows him to exercise his Fifth Amendment right against self-incrimination if he so chooses.
Health care in focus. Former Senator Tom Daschle back on Capitol Hill today. Some live pictures for you. The first of the cabinet confirmation hearings getting underway just a few moments ago.
(COMMERCIAL BREAK)
COLLINS: Some information regarding the situation in the Middle East we want to get out to you just as soon as it came into the CNN NEWSROOM here. We are understanding that the U.N., their main humanitarian aid group in Gaza, has now suspended its activities in the Palestinian territory. We are learning this from the U.N. relief and works agency. The spokesman there, Chris Gunas said that those aid workers are going to be suspending their work because a truck driver with the group was killed by an Israeli tank shell that happened near the area's crossing.
You heard us reporting on this a little bit early today. Again, according to the chief spokesman, Chris Gunas, said the agency is going to suspend its activities until the Israeli military can guarantee the safety of its staff. So, not good news for the humanitarian aid in the Middle East. We'll continue to follow that story for you, of course, right here on CNN.
COLLINS: Putting the transition in motion. The first cabinet confirmation hearing under way this morning. In the seat right now is senate veteran Tom Daschle. That's not him. President-elect Barack Obama's choice for secretary of health and human services.
CNN senior Congressional correspondent Dana Bash is joining us live on Capitol Hill this morning. So Dana, should we expect this to be an easy confirmation?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: I think probably. You know, Tom Daschle, you just mentioned it, he's part of the club. And he is one of many senators or former senators that are going to be going through the confirmation process to be in Barack Obama's cabinet. And, you know, just the scene that you see this morning, you see Tom Daschle, who served here for about a quarter century, in 10 of those years, he was a democratic leader.
He was introduced by a very prominent Republican, the Republican leader for a couple of years while Daschle was a Democratic leader. That is Bob Dole. So that just gives you a sense of the kind of bipartisan nature that you're talking about here with somebody like Tom Daschle. However, we are also talking about a very crucial policy issue that he is going to be taking on, and that is health-care reform.
And as much as these senators like him and will likely almost surely nominate -- or excuse me, appoint him or confirm him to be HHS secretary, there will be some really interesting discussions about the differences on health care reform. The fact that Barack Obama and Tom Daschle want to have in place a public health system, and that is something that most Republicans say is a no-go.
The other interesting thing to look for is whether or not anybody will question the fact that Tom Daschle has been working for a lobbying firm. He is not a registered lobbyists but has been working for a lobbying firm. And you well know, Heidi, that Barack Obama has drawn some bright lines about lobbyists anywhere near his administration.
COLLINS: Yes, I think it's going to be a pretty interesting discussion on both of those fronts, certainly. And the issue of health care in the forefront of a lot of people's minds, certainly right now. And one of them would be Senator Ted Kennedy himself, the chairman of the committee holding this hearing today.
BASH: It really is important to note how remarkable that is, Heidi. Ted Kennedy is chairing the very first hearing since he was diagnosed with brain cancer. That was, if you can believe it, nine months ago, back in May. And if you talk to anybody around him, they will tell you that part of the reason he has kept going, and he has been determined to stay in his job is to focus on the issue of health care reform. You know everybody thinks of Ted Kennedy as a staunch liberal.
But the reality is, if you look at his record, he probably has one of the best at reaching across the aisle and reaching compromise on really important issues before this country, whether it's education or Medicare. And he says he is absolutely determined to deal with health care reform. And obviously, he now, as opposed to the past eight years, has somebody in the White House he can deal with who has a like mind on this issue.
COLLINS: Yes, it's going to be really interesting. Just so people know, we're getting some live pictures there. Just a moment ago, we saw Tom Daschle's family there sitting behind him. And once again, Senator Ted Kennedy there. Dana, sure do appreciate that. Thanks.
BASH: No problem.
COLLINS: Many adults use alternative medicines. But are those non-traditional treatments safe for kids? In this week's "Empowered Patient," senior medical correspondent Elizabeth Cohen has some tips on what works.
(BEGIN VIDEOTAPE)
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: So many of us these days are using alternative medicine whether it's a chiropractor or herbs or vitamins. But many parents have wondered, is alternative medicine safe for my child? Well, I asked some experts about this, and they said that some alternative medicine really shouldn't be used by kids, but that there are some approaches that have been shown to be safe and effective in various studies.
So let's take a look at three approaches that these doctors recommend. First of all, if your baby has colic, which is miserable for the baby and for the parents, chamomile tea sometimes work. You make it and then you cool it down. Also, fish oil for asthma or eczema, omega three fatty acids or anti-inflammatories.
Also teens these days, a lot of teens are on antidepressants. Sometimes the herb Saint John's worth can work, as well. Now the key here is finding a pediatrician to help you wade through all this. That can be hard to do, There aren't many doctors who know much about alternative medicine.
But in our column this week, we give you two Web sites where you can put in your city and it will lead you to pediatricians in your area who know something about alternative and complimentary medicine. You can find that column, it's up right now on cnnhealth.com.
COLLINS: President Bush is focusing everything on education. Today, he will visit an elementary school in Philadelphia. Next hour, where he'll talk about his No Child Left Behind school program. The policy was enacted in 2001. The White House says since then, test scores have risen, accountability has increased, and the gap between white and minority students has narrowed. Some critics say the program never reached its potential because of under funding.
Sobering words, stern warnings were awaiting Barack Obama's speech on the economy. It's coming up at the top of the hour. We're going to give you a preview of what he'll have to say.
(COMMERCIAL BREAK)
COLLINS: Your money, his priority. At the top of the hour, President-elect Barack Obama delivers what he calls a major speech on the nation's economy. The bottom line is bleak. And he will hammer that home with dire warnings of what's ahead. CNN's senior White House correspondent Ed Henry joins us now with a preview. Oh, goody. It sounds just terrible, but it's something obviously, Ed that we have to talk about and have to be informed on.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Absolutely, Heidi. And what the president-elect is trying to do is to play off those dire warnings to try and set the stage for the American people to take notice to the fact that the economy, the financial crisis, has worsened since he was elected in recent weeks, that economists are forecasting it could get a lot worse without dramatic action. All that to try to set this stage for dramatic action as soon as he takes office and to try to put some pressure on Congress to start moving on his recovery plan.
In fact, we have an excerpt from the speech that he's going to be delivering here at George Mason University in Virginia. At one point he says, quote, "If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall a trillion dollars short of its full capacity, which translates into more than $12,000 in lost income for a family of four."
So you can see, he's trying to say, look, this is an emergency situation. But I think Republican critics on the Hill are going to start saying, what about the price tag for this? The fact that we now have a $1.2 trillion budget deficit. The president-elect is talking about piling on top of that a $775 billion economic recovery plan, as he calls it. They're wondering how he's going to pay for all this.
But they're also wondering about what he's going to do long-term. Yesterday at that press conference, you heard the president-elect asked about Social Security and Medicare. All the economists you talk to say that if you want to deal with these problems, the fiscal situation long-term, you have to start cutting into those entitlement programs, dealing with those long-term issues.
The president-elect sort of punted yesterday and said, wait until my first budget comes out in February. But also we're told, he's not planning to give any details today, really, about his stimulus plan. Instead, still just talking in broad principles.
So, I think a the lot of people are going to be pressing beyond this speech for what are the details of this recovery plan in the short-term, and is what are the details long-term about trying to turn around not just the economy, but the long-term, very bleak budget outlook that we now have, Heidi.
COLLINS: And remind us if you would, because it's been some time now, exactly who he is talking with about his -- this plan, and his advisers who have weighed in very seriously about what could be happening, both short-term and long-term.
HENRY: Well, the head of the National Economic Council, Larry Summers, the former treasury secretary, is going to be at the speech today. He's a key adviser to the president-elect, as you know. Tim Geitner is the outgoing head of New York Fed. He's expected, if confirmed by the new Senate, to be the new treasury secretary. He's also going to be here. They have been working behind the scenes, really, trying to hammer out the details, if you will, of this recovery plan.
Now, we're told by transition officials that one of the reasons why they haven't gotten into too much specificity so far is that in their words, they don't want to dictate to the new Congress exactly what to do. That's one way to put it.
Another way to put it would be, they're a little concerned, perhaps, about putting too much detail out there just yet. Because they know that people on the Hill are going to start pushing back, they're going to want to make changes, and that critics, once you put out a detailed document, will start firing away at controversial provisions that might start going down. And it will look publicly as if the president-elect is losing some political clout, if he has to start changing the plan dramatically. So I think what they're trying to do, when you look at the political situation behind the scenes, is to lay out broad principles here, and let Congress sort of do the heavy lifting on the details of it. But I can tell you, there are a the lot of lawmakers pressing for these details on the plan.
Because they want to get going. There is a long process to go. And if the president-elect still wants to get it done by the end of January or early February, he's got to get that plan up to the Hill, Heidi.
COLLINS: Yes, the political mathematics behind it all. All right. CNN's Ed Henry as you see him in the room there. Ed, we'll check back with you a little bit later on. Thanks.
And one key element of Obama's recovery plan is his proposed stimulus package. If approved by Congress, it will include tax cuts and hundreds of billions of dollars to build roads and bridges. What's not exactly clear, as we've heard, the estimated cost.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT-ELECT OF THE UNITED STATES: We've seen ranges from $800 to $1.3 trillion. And our attitude was that, given the legislative process, if we start towards the low end of that, we'll see how it develops. We are concerned --
UNIDENTIFIED MALE: So it's going to get bigger.
OBAMA: Well, we don't know yet. But what we are concerned about is making sure that the money is spent wisely.
(END VIDEO CLIP)
COLLINS: Obama and the Democratic leaders in Congress had hoped to have the stimulus bill approved by the time he was inaugurated. That time line has slid, though, to the middle of next month at the earliest.
The stimulus plan. It is your money, and the Obama transition team wants to assure you they will not waste it. CNN national political correspondent Jessica Yellin joining us now with more details on this. How do we get a guarantee on that, Jessica?
YELLIN: There are no guarantees in Washington, Heidi. We all know that. The president-elect at the very least has made it clear that he is concerned about the nation's deficit, which will top a trillion dollars this year.
He says even in light of that, it's still worth spending at least $800 billion on this stimulus package, because he insists it is possible to Dole out that money without waste.
(BEGIN VIDEOTAPE)
YELLIN (voice-over): On the economy, no happy talk from the incoming president.
OBAMA: We have an economic situation that is dire.
YELLIN: He's trying to build public support for a stimulus that could cost as much as $800 billion. But don't worry about waste. He promises discipline.
OBAMA: We must scour this budget, line by line, eliminating what we don't need or what doesn't work.
YELLIN: He named a spending watchdog. Nancy Killefer will take the new role of chief performance officer. She'll decide which programs are worth funding over the long-term. But the stimulus is a different story. To work, that money has to go out the door fast. Even supporters say that leads to waste.
REBECCA BLANK, SENIOR FELLOW, BROOKINGS INSTITUTION: You know, whenever you try to spend a lot of money fast, you know, some of it is going to be spent in ways that you might not put it there if you were being a little bit more thoughtful and taking a lit bit more time.
YELLIN: Possible examples from this list of ready-to-go projects come filed by the nation's mayors, a $20 million minor league baseball museum, a polar bear exhibit, $500,000 environmentally friendly golf courses in Dayton, Ohio. The mayors insist projects like these will jump-start the economy.
UNIDENTIFIED MALE: We must invest where we get the greatest return.
YELLIN: And some economists say a little bit of waste is worth it if it gets the economy back on its feet.
BLANK: If the objective is money spent in the economy that's going to create demand and buy services from businesses and stimulate consumer spending, it probably matters a little less that those are the most thoughtful projects.
(END VIDEOTAPE)
YELLIN: One plan under consideration, Heidi, would be to allow federal agencies and not local politicians to decide which projects should be funded. But that's going to be decided by Congress. The folks on Capitol Hill will have to agree to how this money is doled out, so anyone who has a point of view should contact their representative.
COLLINS: Yes. I bet a lot of them will. All right, Jessica Yellin, sure do appreciate that. Thank you.
Stay with us for live coverage of Barack Obama's speech on the economy. It's scheduled for the top of the hour, 11 a.m. Eastern, 8 Pacific. And you can see it here on CNN. Also, a reminder now that the president-elect's entire economy speech will be replayed for you at 2 p.m. Eastern right here on CNN. So we will hear from the president-elect in less than a half an hour. And on Capitol Hill, lawmakers are looking for answers of their own. The Senate Budget Committee holding a hearing at this hour. Their focus, the record national deficit, the federal budget and a look to the economy ahead.
We have new signs this morning of just why president-elect Obama is pushing for a massive stimulus package. Susan Lisovicz is on the floor of the New York Stock Exchange now with details of the latest economic news. Hi there, Susan.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hi, Heidi. Well we're talking about retail sales for the month of December. That is a critical month. Typically, the single most profitable month for the retail industry.
Having said that, profits were elusive. Let's examine Wal-Mart. Wal-Mart's sales were up just 1.7 percent. Wal-Mart had been the standout during this recession. So if estimates fell short, and one analyst says that when Wal-Mart suffers like this, it shows that the consumer is truly tapped out.
Limited Brands, Gap, for instance, showed double-digit percentage drops. Wal-Mart, J. Crew, Gap, Limited Brands, all cut their quarterly earnings forecast. And we're seeing those shares down anywhere from between 4 and 8 percent. And we're seeing the selloff extend from yesterday, which was the worst selloff we saw in a month. Right now, the Dow is down 70 points. The Nasdaq is down just 2 -- Heidi.
COLLINS: All right, Susan. We're going to continue to follow those numbers no matter what happens to them, of course. Sure do appreciate it. Susan Lisovicz for us today. Thanks.
Reviving the ailing economy. President-elect Barack Obama's speech just minutes away.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: The approach that we've taken is not just to talk to the usual suspects, but talk to people that traditionally don't agree with me. And when you've got Ronald Reagan's former economic advisers, or John McCain's former economic advisers, or George Bush's former economic advisers giving you similar advice to what advisers to Bill Clinton or Jimmy Carter are giving you, then you have a sense that across the political spectrum, there's some consensus.
(END VIDEO CLIP)
COLLINS: President-elect Barack Obama discussing his transition team's search for all views on the nation's economy. The economy is again his topic in a live speech scheduled for the top of the hour, just about 15 minutes away or so. You can see it live right here on CNN. The president-elect says fixing the economy will take dramatic and quick action. So, here to talk a little bit more about it, our chief business correspondent, Ali Velshi, and Christine Romans in New York.
Hey there, guys. So, I'm sure you've seen the "Washington Post" headline today that says, "Obama Warns of Dire Consequences without Stimulus." So truly, if some sort of stimulus plan isn't passed, is that really what we're looking at?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yeah, I don't think there's a lot of people who are thinking that a stimulus plan of some sort isn't necessary or won't pass. There was some talk about that a few months ago that we can't continue to spend this money. I think most people are on board. The issue now, doesn't it, become how effectively you can spend the money.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: How. How big and how bold is the question everyone is asking. Even people who don't normally like to go out and spend a lot of money, money that you don't have, they're saying that the alternative is just much, much worse. So the question is how big it's going to be, and what's it going to look like?
And I think one of the things the economists are telling me is they think the reason there are scant details, specific details about what they're going to do is because there's going to be a lot of fighting about how to do it. And it's got to be a lot of money, it's got to go quickly into the economy and there are all kinds of issues to -- how to make sure that you're growing American jobs so the money isn't just going to --
VELSHI: Well, you can also say -- let's say you want to build bridges or fix roads and things like that, Heidi. The bottom line is, you have to do it in a way that is effective. You decide you want to fix roads, it doesn't help if you start the project two years from now. So the money's got to be effective. It's got to be fairly targeted.
And yes, you're right. We thought we would have a bill by the time Obama takes office on January 20th. That's clearly not going to be the case. We saw with the auto bailout, it took weeks to get that worked out.
COLLINS: Everybody says, when you're talking about money this big, if you will, there are a lot of opinions on it. People get nervous, and it requires discussion, usually, whether we want to or not. So when we talk about a time frame, we're hearing what, now, mid-February?
ROMANS: Yes. I think so. I think at this point, there's going to be a the lot of argument once it comes out. And keep in mind, we -- this is a lot of money. I mean, we have just -- apart from the $700 billion Wall Street bailout, I mean, this is an incredible amount of money to be spending here.
VELSHI: We say trillions more often than we ever did before. The average American now is familiar with the word "trillion."
ROMANS: And I'm going to tell you something, there are a lot of very reasonable people, economists who have seen it all who are losing sleep over the situation we're in right now, and how this stimulus has to be done right and targeted properly, and big enough to make a difference in the economy, Heidi. And then in a couple years, you've got to figure out how to turn around and undo it so you don't keep running these trillion-dollar deficits, because that is unsustainable.
COLLINS: Yes. I don't know, take all the money back they gave out? I don't know.
ROMANS: No.
COLLINS: I mean, you have to think about long-term.
VELSHI: The idea is that people are doing well. If you can keep them in their jobs or get them back into their jobs, and businesses can start to do well, then everybody with an income, whether it's corporate or personal, pays income taxes. Those income taxes then replenish the federal coffers.
That's the thinking. That's the hope, that you don't do this just to keep things going, you do this so that it actually turns around. But that requires forecasting and saying, how many years down the road will the deficit start to trim? Then they'll come to zero, then we'll have surpluses hopefully and start to pay off the federal debt, which as you know is almost $11 trillion, and growing at this rate by more than a trillion dollars a year.
ROMANS: When you look at all of the promises our government has made, the money it has already spent and promised to spend, all families owe $184,000 per family.
COLLINS: Yikes.
ROMANS: So, now we're throwing more trillions on top of that. On top of that...
COLLINS: Absolutely.
ROMANS: ... that has to be paid for sometime.
COLLINS: Absolutely. We can't just forget that it's been out there like that. We sure do appreciate the analysis you guys have. Of course, we're going to talk with you a again a little bit later on.
And then you mentioned those jobs, too, Ali. Obviously, there's another jobs report coming out tomorrow that we don't expect to be super terrific, either. So we're wondering how this plan will look after all of that is announced.
So again, Christine Romans, Ali Velshi. Thank you. We are again looking at the live picture there of the podium where President-elect Barack Obama will deliver what he and his aides are calling a major economic speech. Going to be happening at 11:00 this morning, about ten minutes away or so. So we, of course, will stay on top of that for you and bring it to you live just as soon as it happens.
(COMMERCIAL BREAK)
COLLINS: The economy. Layoffs, foreclosures, and a lot of anxiety for many of us, including the next president of the United States.
Just a few minutes from now, Barack Obama is going to be confronting this crisis in a speech that you will see here live.
And CNN's senior White House correspondent, Ed Henry, is joining us now from George Mason University there in the room with a preview.
So, Ed, everybody is wondering, what are we really going to learn from this speech today?
HENRY: Well, that's the key question, Heidi. What we know so far about the president-elect's plan and why it really matters for people watching at home right now is that part of this $775 billion economic recovery plan will include a tax cut in the neighborhood of about $300 billion.
For individual families, that could mean a significant little bit of money for them, as they struggle to pay their bills. $500 for individuals, $1,000 dollars for families. But the key question is, which families are going to benefit from that?
As a candidate, Barack Obama said families earning $200,000 or less would get a tax cut like that. We've been pressing transition aids in recent days. Does that cap still work, or is it going to be lower or is it going higher for people making $250,000 or less or 300,000 or less. And they just won't say. And that's one of the things that Barack Obama will be fronting in the days ahead, is people wanting him to show his hand and get some details on the table about exactly what this is going to cost, and exactly how much it's going to benefit people.
We're not getting those details from this speech today. Instead what aids are saying is it's going to be sort of a big picture speech, where he's going to talk about the crisis, how bad he believes it is, and why he wants dramatic action. So more of a sales pitch.
And if I step out of the way, you can see who he is making this pitch to, as well. There are some mayors and governors here. You can see Governor Tim Kaine of Virginia, a close ally of Barack Obama. In fact, later today, he will be with Barack Obama at the Democratic National Committee headquarters. Because he's going to take over as the chairman of the Democratic party.
To his left is Congressman Jim Moran, a Democratic Congressman. We saw Michael Bloomberg, the Independent mayor of New York. And as I step back in, I just wanted to give you an idea of who is actually here.
We saw Jennifer Granholm, the Democratic governor of Michigan. So, he's trying to reach out to mayors, to governors, members of Congress, to also, frankly, put a little pressure on the United States' Congress to say there needs to be dramatic action very early in the new president's administration, in his term. And so he is reaching out to the American people with this speech. But also trying to put a little pressure on those lawmakers to say we need to get moving on this package, Heidi.
COLLINS: Yes, and I just wonder, Ed, if there is any indication at this point of him sort of mentioning in this speech as well what we can expect next. When we can expect to hear some of the exact details of this plan.
HENRY: Well, I can tell you, we've got a little bit of new information from his staff, which is that they're now saying that they expect to have something on paper to send up to Capitol Hill by the end of this week. So obviously the week is almost over. So he's sort of setting the table today with this speech on Thursday.
And then they expect that probably tomorrow they'd send up something more specific. Now, I want to caution that about a week ago, we were hearing from Democratic officials that they were likely to start sending something up January 1st, January 2. That sort of passed. Now here we are at the end of the first week in January, first full week, and they're finally saying, look, we're going to get it up there this week.
Lawmakers up there, especially their Democratic allies in private, I'm told, are really starting to press the Obama transition team, saying, if you want this to get done, you've got to get us a plan. Because obviously the more delay there is, the longer it takes to get it through all of the processes of Capitol Hill.
And originally, some Democrats were hoping maybe Barack Obama would sign this during inaugural week, to really send a dramatic statement. Instead, even Barack Obama himself is now saying, maybe late January, maybe early February.
So, again, the longer they wait, that clock is ticking legislatively, so they've got to get moving on it, Heidi.
COLLINS: Yes, well, I knew if I asked, you would have the answers.
CNN's Ed Henry for us there...
HENRY: I try to give them to you.
COLLINS: ... live in the room where the speech is going to take place, George Mason University, Fairfax, Virginia.
It is a message meant for you, so we are awaiting President-elect Barack Obama and his speech on the economy. Going to take a quick break here. Right back in a moment.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) OBAMA: Right now, given the sensitivities of the market, I've got to pay some attention to market psychology. Because part of what we have right now is such a loss of trust in both the marketplace and in government, that restoring that confidence, restoring that trust is going to be very important.
(END VIDEO CLIP)
COLLINS: Expect to hear more about the troubled U.S. markets just a few moments from now. President-elect Barack Obama giving what his aids are calling a major speech on the economy at the top of the hour.
He will also talk more about the recession, which he warns could, quote, "linger for years, unless Congress pumps in it big money." Of course, we're going to bring all of this to you live and Mr. Obama's speech from George Mason University just as soon as it begins.
No time to waste. Obama says fixing the economy will take dramatic action ASAP. Here to talk more is our chief business correspondent Ali Velshi and Christine Romans in New York.
If you are President-elect Obama, what's the first thing you do, Ali?
VELSHI: I think, you need to restore trust. The fact is most Americans don't believe that Wall Street will look after them, let alone not take their money. And then most people don't think Washington is in a position to do so.
And by the way, Heidi, this was the case before we heard of the Madoff scheme. So people had lost trust without a scheme, or without some kind of fraud, and then that came on top of it, and it has most average Americans thinking, you know, this is not for me, this is not my world, I don't understand it. They're just out to mess around with me and I'm walking away from it.
That hurts the economy, and that's what President-elect Obama has to do, is make people understand that he's -- he gets it, and they're going to try and fix it.
ROMANS: And he has to be really frank and tell people just how dire it really is. It is so rare to hear a president and a vice president and his team talking so frankly about double digit unemployment as a risk.
COLLINS: Absolutely.
ROMANS: And the economy absolutely tanking...
VELSHI: But it shouldn't be, it shouldn't be rare. We complained for a long time last year, Heidi. I'm talking about the fact that I wish this administration would come clean and say what's going on. Because you can't fix something if you're not honest about what the problem is. And now these guys are being overly honest. ROMANS: But they have to be honest, because they have to lay the ground work and let everybody know and really raise awareness about the situation we're in so they can get what they want. So they can push this through.
I mean, there is going to be pushback and infighting and politics and horse trading about what the stimulus is going to look like. They have to sufficiently convince Congress and the American people that we are in such big trouble here, in the short-term and long-term, that we got to do it. We got do it right. We got to do it fast, and forget the political fighting.
COLLINS: Yes. No question. Everybody was worried before about scaring the American people. No one's really talking that way now.
Ali and Christine, sure do appreciate this. Want to make sure we get out on time here to not miss a single second of the speech.
So, I'm Heidi Collins. Thanks for watching, everybody. Just us again, tomorrow morning at 9am Eastern, and for now, our coverage continues now with Tony Harris.
