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Lawmakers Wrestle Over What To Do with Remaining TARP Funds; Saving Money Through Re-financing; The Story of Emmett Till
Aired January 13, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
(Voice over): Seemed like they handed out those bailout billions faster than they could print them. Now, moves to tighten up TARP. Lawmakers want to make sure, if they release more money, they don't have more oversight problems.
And putting your house in order. Can you save money with a refi? More importantly, can you even get one? The lowdown on these low mortgage rates from Gerri Willis.
(END VIDEO CLIP)
KYRA PHILLIPS, CNN ANCHOR: Hello, everyone. I'm Kyra Phillips live in CNN World Headquarters in Atlanta. You're live in the CNN NEWSROOM.
We're all over the bailout story, like hair on a St. Bernard, but it's not the only story out there. Coming up in just a bit: What would the Reverend Martin Luther King, Jr. say about an African-American president? It was the kind of thing that he dreamed of, but would never see in his lifetime, but he helped guarantee it in our lifetime.
And on a totally different note, you won't believe what this guy allegedly did for money and beer. Let's just say he probably won't be winning father of the year.
All right. Up first, write the checks and cross your fingers, believe it or not, that was plan A for the bank bailout, officially known as the Troubled Asset Relief Program. Now with half the money gone, and the president-elect requesting the other half, it's time for plan B. Team Obama and many in Congress are insisting that future bailout beneficiaries be required to boost lending and curb foreclosures.
Last hour the incoming president met on Capitol Hill with Senate Democrats and as we speak, the House Financial Services Committee is meeting for a hard look at TARP, past and future. We're triple-teaming the TARP campaign with CNN's Brianna Keilar on the Hill, Christine Romans in our New York studios and Dan Lothian at the White House.
Let's go ahead and begin with Congress, for those opposed to doling out another $350 billion point to the meager results from the $350 billion that have been spent already.
Brianna, will this be a battle for the president-elect do you think?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yeah, this is really a tough sell for him, Kyra, because Democrats and Republicans really feel burned by how that first $350 billion was spent.
If you talk with Democrats and Republicans, they'll say they don't think credit is flowing enough. They don't think there was enough accounting for where the money went. They don't know where a lot of it went. If you talk with Democrats, they say homeowners facing foreclosure were left in the lurch. They weren't really helped by that first half of the financial market bailout plan. And if you talk with Republicans, like Senator Republican Leader Mitch McConnell, they are upset that part of that fund was broken off and given to the auto industry, something that was not intended by Congress when this legislation was passed. Here's what McConnell said on the floor today.
(BEGIN VIDEO CLIP)
SEN. MITCH MCCONNELL, MINORITY LEADER: The current administration, regretfully, used these funds for the auto industry, a move that I opposed. Now congressional Democrats are suggesting more of the same. The American people still don't have assurances that this money will not be wasted or misused to play favorites. So far the incoming administration has not said whether it plans to limit the funds to their original purpose, or to expand their use to help specific industries.
(END VIDEO CLIP)
KEILAR: So, with this request of these funds comes a vote from the Senate, and from the House, on whether to block this request from President Bush. But at the request of President-Elect Barack Obama, we're expecting the Senate will vote Thursday or Friday and the House will follow.
The thought here is that if -if President-Elect Obama can get the votes he needs, he'll be getting them from Senate Democrats. So, what luncheon did he go to? Who is he meeting with today on Capitol Hill? Where he has been putting the phone calls? With the Senate Democrats. At the same time, though, Kyra, the number two Democrat in the Senate, Dick Durbin, saying he's worried that they don't have the votes, that this is still up in the air.
PHILLIPS: Perfect timing, Brianna. Let's go ahead and go to the chairman of that committee, Barney Franks. We're going to listen in.
(JOINED IN PROGRESS)
REP. BARNEY FRANK, (D-MA) CHAIRMAN, FINANCIAL SERVICES CMTE.: This is the membership. I will say that the ranking member and I were unsuccessful in our effort to reduce the size of the committee. We mean no disrespect to our newer members, but we are the second largest committee in the House and it is unwieldy and I apologize to all members on both sides. It takes longer to get to people in terms of questions. We try to accommodate that. If we get any bigger, we would have no spectators at all, because membership is eating into the public sector.
We regret and I did want to reassure people the ranking member and I tried very hard, but it was a committee people wanted to serve on, so here we are.
This meeting is to discuss legislation to set conditions with regard to the second $350 billion of the rescue plan that we adopted last fall. When we adopted that, we put into it that there would be a two-part operation, that the administration could in effect, with a slight declaration, access $350 billion. But before they could access the second $350 billion, there would have to be a period in which they notified Congress, waited 15 days and any member of Congress could then bring a resolution to the floor to disapprove this.
There were people who, at the time, said that this was mere window dressing. It is clear they were wrong. This restriction on the second half has turned out to be very important. And I think helpful. Because there was a great deal of dissatisfaction in the Congress, reflecting dissatisfaction in the country, with the way the first $350 billion was spent.
The question now is why are we acting at this point? And I received a letter from the members of the minority, the ranking members, saying they want to hold off. But here is the problem. President Bush, at the request of president-elect Obama, triggered a 15-day period yesterday. The House has six days before a resolution must come to the floor, resolution of disapproval. Because we wrote into this bill very powerful rules that allow any member of the House to get a bill to the floor, the Senate, I think, has even a shorter period of time.
I think it is important that at least the House of Representatives be able to express its views on this before a resolution of disapproval comes up. Members will have a right to vote on the resolution of disapproval. There will be no effort, I am sure, to stop it and no such effort if it came would be successful because of the way we wrote this bill.
There is one issue, as I read the law, apparently we may have to vote on Sunday. I think we might be able to get some agreement so we wouldn't have to vote 'til Wednesday -- it said within six days. There will be conversations going on with the leadership. But there will be a vote. Many of us believe that before voting yes or no, we ought to be able to say yes, but. And that's what this bill is. I take it back, not yes but, but yes if.
The incoming administration believes strongly that this $350 billion will be helpful. Having given $350 billion to the Bush administration, I believe it is reasonable to make it now available to the Obama administration, but with much more in the way of restriction. Now, it is probably the case that we will have a hard time getting a bill signed into law. The legislation that we intend to bring forward does not confer new powers on the administration. It does mandate that they do things within the existing powers. That is, everything in the bill could already be done if they were ready to do it. And it reminds me of what Harry Truman said, being president of the United States means trying to get people to do what they should have done in the first place on their own if they had any brains.
And that's what we are trying to do with the TARP. We're trying to get the administration to do what it should have done in the first place. We believe that if these conditions are met, that will make it a very useful thing. And what we expect is that -- and I would hope before we in the House vote on a motion of disapproval, we can pass a bill that tells the administration what we think is necessary, and that we get a commitment from the new president of the United States that he will abide by it.
And I have a good deal of confidence in the new president of the United States, but we are putting the bill forward because I've also learned from a prior president of the United States who in turn learned from the head of the Soviet Union -- and I'm of course referring to Ronald Reagan's wisdom passed along with the Mikhail Gorbachev, trust but verify. This is the trust but verify bill with regard to the Obama administration with the TARP.
But let me give you an example -- and my time is running out and I'm going to hold everybody to the time.
If we do not get the second $350 billion, I do not see any way that we can get substantial foreclosure relief. If we get the second $350 billion, I believe it should be conditioned on the administration promising us very substantial foreclosure relief, improving hope for homeowners, building on the work of secretary - of FDIC Chair Bair, acting as secretary of press to the current secretary of HUD says we should do with buying off home mortgages.
I also believe that we can get to a situation where the larger banks having gotten money, we can now advance money to the smaller banks, the community banks, under conditions that will make sure that it is used appropriately. And in most, although not every single case, relend (ph).
We will, therefore, be proceeding in this manner. We will do what the rules allow, which is have 20 minutes of opening statements on each side. I will be holding members very strictly to a five-minute rule. And I now recognize -- or within the 20 minutes, I now recognize the gentleman from Alabama for such time as -- he says two minutes, he wants?
REP. SPENCER BACHUS, (R-AL) RANKING MEMBER, FINANCIAL SVRC. CMTE.: Mr. Chairman, before I start, I want to advise our members that we'll all be doing two minutes, those that have requested.
BARNEY: All right. That makes it easy for the time keeper. Two minutes for each of the Republican members.
BACHUS: Mr. Chairman, you and I agree on one thing, and that's that the $350 billion second affirmation is very important. In other words, before we can spend the second half of the money, it has to get congressional approval. And if you'll recall the purpose of all of this relief plan, or rescue plan, as the chairman's saying, or bailout as the American people call it, the purpose was to stabilize the financial system.
We were presented with a doomsday scenario that the markets were going to melt down and our financial system was going to collapse. And as a result of that, this bill passed. Now, what confuses us, in a letter to House Republicans, just this past week, Chairman Paulson said this: "We have in fact met our original stated objective -- objectives which were to immediately stabilize the financial system by strengthening financial institutions, arrest the wave of financial organization failures, and establish a basis for recovery."
If you all recall, when this passed, six major institutions had collapsed over a short period of time. The markets were going up and down 1,000 points. That's no longer the case. And he -- and Secretary Paulson says he's accomplished the purposes of the program.
Now, having done that, and prevented maybe a doomsday scenario, perhaps, we're seeing something else very different. We're seeing now this thing transition, if we approve this second half, into a grab bag, where people can just reach in and get taxpayer money. And as most of you know, people are lining up to get this money.
But today we're asked within about a 72-hour period, going to go to rules committee at 5 o'clock, with very few specifics, we're being asked to vote about a bill we know nothing about. We've not been told why we need it. We've not been told what we're going to do with it. We're not informed. We don't have the facts. But we're told we need to pass it. And we're not informed. And that's not the way to do legislation.
We understand Americans are struggling, that people are out of work. But that's no excuse to rush to judgment. And really take $350 billion from the very people that we're concerned about. Thank you, Mr. Chairman.
FRANK: The gentleman consumed 52 -
(END LIVE FEED, IN PROGRESS)
PHILLIPS: Relief, rescue, bailout, whatever you want to call it, that money coming from the government is supposed to give us all stability in our financial system. Right now that's exactly what the House Financial Services Committee is trying to figure out right now. What should happen to the second half of that bailout money? Where should it go?
This much we do know, if the rest of the bailout funds are released, they probably will be -- it won't be business as usual, I guess we could say. Christine Romans keeping track of the strings being attached and how they could form a bit of a safety net for all of us. It looks like Barney Frank, the chairman of the committee, saying they may not vote until Sunday.
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: He's being very clear here, that the next $350 billion and the way it's spent will not look like the first $350 billion. If he has his way, he wants - and he said it several times here, substantial homeowner relief. It's been the big Democratic criticism of that first chunk.
They had thought -they say now, they had thought when they passed the original $700 billion that it would have homeowner relief and it would help Main Street. The administration has always said it was only about stopping the bleeding and stopping the crisis at the very minute. So, you have these two different views of what the $750 billion was for.
Congressman Frank, his TARP reform plan is to reduce foreclosures. He wants $40 billion to $100 billion as quickly as possible for foreclosure relief with a March 15th deadline for the Treasury to develop this foreclosure plan, and to actually spend the money, start spending the money, $50 billion deployed to help people by April 1st.
So he talks about strengthening accountability, closing loopholes. But he's very clear, Kyra, that it is homeowner relief that he would like to get to here.
I want to get back to sort of this idea about what Congress is saying now. Members of both parties are saying now they don't like the way the way the first half was deployed. But remember, they passed it. They passed it with the accountability restrictions that were in there, with the oversight restrictions that is were in there. They passed it at the time. And they passed $700 billion of it. So this next incoming administration, they is $350 billion for them to spend. It's already been passed. Congress has to act to not give the money, not necessarily to give the money. So, it's an interesting distinction here.
Barney Frank also saying the first administration had $350 billion to spend, so they'll give the Obama administration a crack at it spending $350 billion, but with some strings attached to it, Kyra.
PHILLIPS: All right. Christine, thanks.
If you still don't believe that these are strange times, just consider a sitting president deferring to his successor on a $350 billion spending request. Dan Lothian is at the White House where the transition to power is either really, really smooth, or really, really blurry. What do you think, Dan? Which is it?
DAN LOTHIAN, CNN CORRESPONDENT: That's right. It could be a little bit of both. In this case what you have seen is that the Bush administration seeing eye-to-eye with the Obama team as to this $350 billion. Realizing that this money needs to be released, so that it can help turn this economy around.
Mr. Obama up on the Hill meeting with congressional leaders, trying to make that sales pitch. This is really the first big test for President-Elect Barack Obama. He does not want to see a political showdown on this. If for some reason that $350 billion is blocked, then he would be forced to veto any kind of bill that would come to him. It's not the way he wants to begin his administration. So, he is pointing out that this is money, this $350 billion could be used to help to keep people in their homes. But he's also pointing out that there will be a lot of transparency with how that money is used.
And of course, again, emphasizing that something has to be done. And this $350 billion certainly is a start to help turn the economy around, Kyra.
PHILLIPS: And we'll keep following the House Financial Services Committee and probably going to vote on Sunday. We heard from Barney Frank. We'll track it. Dan Lothian, thanks.
The recession's silver lining, it could be a rare opportunity for homeowners to reduce their mortgage costs. And our Gerri Willis will tell us all how.
(COMMERCIAL BREAK)
PHILLIPS: Barack Obama's just a week away from becoming the nation's first African-American president. The historic moment just four decades after the Reverend Martin Luther King, Jr. was gunned down in Memphis. What would he think about the historic moment that's about to take place? Our John Zarrella visited the National Civil Rights Museum in Memphis.
JOHN ZARRELLA, CNN CORRESPONDENT (On camera): Kyra, the road to the White House brings us to Memphis, Tennessee, and the National Civil Rights Museum and the Lorraine Motel. This is the balcony where Doctor King stood when he was assassinated. If he were still with us, what might he say about the Obama presidency?
(BEGIN VIDEOTAPE)
ZARRELLA (voice over): Memphis, the Lorraine Motel, in the parking lot below room 306, two vintage Cadillacs. History's detail preserved. This is where Martin Luther King Jr. died, 1968.
GWEN HARMON, NATIONAL CIVIL RIGHTS MUSEUM: It's not so important that Martin Luther King Jr. died here, is that he lived here. And he changed Memphis. He changed America. And he did change the world.
ZARRELLA: Gwen Harmon is a director at the National Civil Rights Museum, of which the Lorraine is a part. Since Barack Obama's victory, Harmon has sent a change in those who come here.
HARMON: We see curiosity, we see pride. We see a sense of hope now. The groups are younger, they're bigger. We also see more diversity.
ZARRELLA: And all of this would have pleased Doctor King.
CLARENCE JONES, KING SPEECHWRITER: He had great faith in the fairness and decency of the American people.
ZARRELLA: Clarence Jones, for eight years, until King died, Jones was his confidante, speech writer, attorney. About an African- American president? JONES: What he would say, however long it takes, and some reasonable period of time, not an eternity, but in some reasonable period of time, there will be, I'm sure he would have said that clearly.
ZARRELLA: And more.
HARMON: He would say, still so much to do. As long as a child goes to bed hungry, we have work to do.
ZARRELLA: The museum tells the story of those who paved the way in civil and human rights. There's a bus from the 1955 Montgomery boycotts.
(On camera): We leave the bus and we come to the next period of time.
HARMON: 1960, this is actually my favorite exhibit. This shows the power of networking as far as a movement.
UNIDENTIFIED MALE: Is everybody ready?
CHILDREN IN UNISON: Yeah!
UNIDENTIFIED MALE: All right.
ZARRELLA (voice over): Today students from Arlington Elementary are here.
UNIDENTIFIED MALE: Oh, that's the room where Doctor King was in.
UNIDENTIFIED MALE: He'd probably feel very proud.
UNIDENTIFIED FEMALE: I think that he would feel good, because he would know that he helped change.
ZARRELLA: Change that might not have taken place, Harmon and Jones say, if not for those like Doctor King, who paved the way with their blood and tears.
(END VIDEOTAPE)
ZARRELLA: Many of those who were with the civil rights movement say that what Barack Obama has accomplished is not dissimilar to what Doctor King did. Both men built a movement, based in no small part on substantial support from white America, Kyra?
PHILLIPS: All right, John Zarrella, thanks so much.
If anyone could speak for Doctor King in 2009, it would definitely be the Reverend Joseph Lowery. He worked with and walked with King back in the day and he co-founded the Southern Christian Leadership Conference with him. Reverend Lowery joins me now here, live in Atlanta.
Great to see you, Reverend.
REV. JOSEPH LOWERY, CO-FOUNDER SO. CHRISTIAN LEADERSHIP CONFERENCE: Thank you. Good to see you.
PHILLIPS: If you don't mind, Reverend, just take a moment to think back to that day, on the mall, Martin Luther King giving that speech, the "I Have A Dream" speech. Think about your emotions, what you were feeling. Embrace that for a minute. And now fast-forward, here you are going to be in the same place giving the benediction for a black president. It's such a twist in time.
LOWERY: Yes, it is. And yet there's such a connection. I'm having problem separating the two. When I stand on the capitol steps next Tuesday, God willing, they tell me if you look down The Mall, you can see a portion of the Lincoln Memorial. If I do see it, and I hope I do, I believe I'll also see the profile of a young preacher, 34 years old, who in 1963 stood at the Lincoln Memorial and called a nation to move beyond the restrictions, the barriers of color, to the higher level of character and competence and so forth.
And when we see Barack Obama accept, and make the oath, take the oath, to be the 44th president of the United States, this is -- this represents the nation's response to that challenge that Martin gave on the Lincoln Memorial in 1963. For indeed, in this election, America has moved beyond the restriction of color to the high level of competence and character, and hope and change.
PHILLIPS: So, Reverend, you mentioned the challenge that Martin endured that day. Are there similarities? Or is it more a lot of differences to the challenge that Barack Obama will face on Tuesday, standing in the same place, giving his speech?
LOWERY: Well, I think Barack Obama will face many different challenges, although they will have their roots in the same cause, perhaps. But I was thinking the other day, I remember back when blacks were hired as baseball managers, managers of baseball teams. It usually was a team that was on the bottom, and was bankrupt, and needed rebuilding. And here we have this history repeating itself at the helm of the nation. That Barack Obama comes to this office at a time when the country's in worse economic condition than at any time since the Great Depression.
And it's sort of like that manager who is comes to the team when it is completely depleted, it's pitchers have thrown their arms out, the batters have stopped hitting. But I think God's able. I know God's able. And I believe Barack -- I think God will work -- continually work through faithful leadership to restore the nation's stability, to restore us to -- I think if Barack can lead us and help build confidence in the American people, in it's government, where we've left corruption and greed take us to a lower level of economic condition. Yes.
PHILLIPS: Have you -- I know you're the last-minute speech writer, prayer writer, thought writer. Are you going to wait again the night before to write your benediction? LOWERY: No, I've already begun putting my thoughts together. I haven't completed it yet. Probably won't complete it until the night before. It's a bad habit.
PHILLIPS: Just as I thought.
LOWERY: It's a bad habit. But I'm hoping the Lord will continue to fill my thoughts and let my words reflect at least a portion of his will.
PHILLIPS: Well, we know Martin Luther King, Jr.'s spirit will be with you that entire day. We can't wait to hear your benediction. Reverend Joseph Lowery, I know this is a day you waited for and prayed for, for decades. Thanks so much for talking with me today.
LOWERY: Thank you.
PHILLIPS: My pleasure.
The dream digitized, speeches, sermons and letters written by Martin Luther King, Jr., yes, even the "I Have A Dream" speech that Reverend Lowery and I were just talking about, now cataloged on computers and available to the public. I'm going to show you how you can go on and see them, the originals.
And some college students from California taking the long way from San Jose to the inauguration. They're actually detouring through a long stretch of history that paved the way to next Tuesday.
(COMMERCIAL BREAK)
PHILLIPS: Check this out. Scholars, historians and people who are just plain curious will be able to get an eyeful of the Martin Luther King Jr.'s papers, more than 7,500 documents, sermons and notes to himself from 1946 until 1968, are now digitized, online and accessible at the Woodruff Library in Atlanta. Take a look at this. A lot of this stuff has never even been seen before.
The actual Web site is auctr.edu, and when you go on this site, for example, you'll be able to see a draft of Dr. King's address -- well, we know it as the "I Have a Dream" speech, but do you know what it was actually called before it was turned into the "I Have a Dream" speech? "Normalcy Never Again."
And as you remember, when he started giving that speech, that thought just came to him. He ad libbed. So many of his speeches, he would write bullet points down. There's the actual picture from that day and from that moment.
And if you move on the Web site, you'll see these various pictures that are owned now by -- when we got these here in the city of Atlanta, Shirley Franklin was terrific in securing the money to bring these papers to Atlanta.
But look at that. You can actually go to the draft of the Nobel Prize acceptance speech, also. You remember he got that in December of 1964. It's actually handwritten on five pages of yellow legal paper. And that collection also includes drafts of his lecture to the Nobel Committee and speech at the Atlanta dinner honoring the receipt of his prize. And that's right there.
That's one of the neatest things I learned about Martin Luther King, Jr. when I saw this Web site, but actually saw the actual papers when they were on display here in Atlanta. He would be in various restaurants, bars, speaking engagements, on the bus, at home, in jail as you know, and he would scribble out his thoughts on random pieces of paper. A lot of his speeches were just on napkins that actually still exist, and you'll be able to see them now on this Web site, auctr.edu. It's special access through the Woodruff Library here in Atlanta, Georgia.
Straight ahead, Hillary Clinton facing her Senate colleagues and on course to become the nation's top diplomat. Live coverage from the Hill as she's meeting before senators asking her questions about what she has to offer as secretary of state.
And homeowners, now is the time to ditch that jumbo mortgage. Our finance expert will show you how to do it the smart way. Stay tuned.
(COMMERCIAL BREAK)
PHILLIPS: Unemployment lines across the country are growing, And one state has run out of money to Dole out to the people in need. Susan Lisovicz at the New York Stock Exchange with those details for us. Hey, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Kyra. Well, Ohio was suffering even before the recession was officially declared. Ohio has so many people asking for unemployment benefits that the state simply ran out of money. State officials say there shouldn't be any disruptions in benefits, though. It's already been approved to borrow $250 million from the federal government, so it can send out checks this month.
The Buckeye State is battling huge job losses in the auto as well as banking sectors. Last week, Ohio extended the operating hours for its unemployment claims hot line because of the huge volumes of calls it's getting. So, those people may be getting a little more work, but it's for an unfortunate reason -- Kyra.
PHILLIPS: Well, there's a lot of states dealing with high unemployment right now. Could we see this in other places as well?
LISOVICZ: It's certainly possible, Kyra. I mean, states aren't bringing in as much tax revenue because of the broad downturn in business.
Meanwhile, of course, job cuts are rising. Today, Pfizer and ING Group announcing cuts at their companies. Fed chief Ben Bernanke, speaking in London, said today to expect more of the same in the coming months. We're seeing losses on Wall Street. With about an hour and a half to go in the trading session, the Dow Industrials right now down 51 points or more than half a percent. The Nasdaq is basically flat.
There's one big bull that is surviving, Merrill Lynch's trademark bull. Bank of America recently took over the firm. "The Wall Street Journal" says it will not put the bull out to pasture. The company's iconic symbol and the Merrill name will be used for the combined firm's wealth management unit. So, there is a bull about in this ferocious bear market. Kyra, back to you.
PHILLIPS: All right, Susan. Thanks.
LISOVICZ: You're welcome.
PHILLIPS: Well, it could be the one bright spot on the otherwise bleak economic horizon. Mortgage rates are way down, and that means homeowners have a shot at slashing housing costs, if you know how. And if you don't, well, CNN's personal finance editor, Gerri Willis, does. Gerri, you say you have good news for us?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Can you believe it? I had to call you right away.
PHILLIPS: You of all people would bring me good news.
WILLIS: Well, this is important. Look, people out there, they're struggling with these mortgages. And now there is starting to be an asset, because mortgage rates are down. According to Freddie Mac, they're the lowest since they started track of these rates 31 years ago.
Look at the numbers. The 30-year fixed-rate average at 5.01 percent. Yummy, luscious. Fifteen-year fixed rate at under 5. Look at that. Kyra, I'm telling you, this is fantastic. And really, really at lows here.
You should consider refinancing now if you don't owe more on your property than it's worth. Hey, if you plan to stay in the house for the long term, even lock in a rate that's at least half a percentage point lower than on your existing mortgage. It's critical to know those things, obviously.
But, look, if you've got one of those nasty adjustable-rate mortgages or you're a first-time homebuyer, now is the time to start thinking about this. Now, Kyra, you know, this isn't free. It costs some money -- $2,000, $3,000 --
PHILLIPS: Closing costs, right?
WILLIS: Yes. And it's not nothing. Now, you can typically roll these into the loan itself. It's better if you pay it out of pocket because, why increase your mortgage amount? But there is a cost involved. And you can mess with your mortgage deduction, because if you reduce your mortgage costs by bringing down your rate, that also brings down your tax deduction. So, something important to know as you're considering whether or not to do this -- Kyra.
PHILLIPS: And it's funny, I keep going back and forth, back and forth, trying to figure out if I want to do it right now as well. I'm actually going through all the options. So, what should people do if they're considering refinancing right now? Because right when I think it sounds like a good deal, then something else is kind of thrown in, and then I hesitate.
WILLIS: Well, you know, one thing that kind of makes it difficult to figure out, if you have a big loan, what they call a jumbo loan, you're not getting these low, low rates, because mortgage rates for jumbo loans are 2 percentage points higher almost. So, what a lot of folks are trying to do to be smart about it is taking out two loans rather than one, so they can lock in that low 5.1 percent, 30- year fixed rate.
Another thing to do, if you're just getting to the question, trying to decide whether it's the right thing to do or not, one good idea, call your existing mortgage lender and say, you know, hey, I'm looking at my mortgage. I see rates are low. What can you do for me? will you modify my existing loan? That way you can keep your costs low when you go and do it.
So, devil's in the details. You've really got to do the math. You know, you don't want to be way deep into a mortgage loan, 15 years in, and get a new 30-year loan. That makes no sense because you'll pay way too much in interest rates.
So, do the math. Great Web site to go to to help you do that math, bankrate.com. Another good one, hsh.com. They can tell you the mortgage rates in your area, because believe it or not, it really depends on where you are what you pay.
PHILLIPS: Thanks, Gerri.
WILLIS: My pleasure.
PHILLIPS: Well, what's your take on this country's economic woes? CNN'S iReporters are sharing their ways of dealing with some of the more pressing problems. Take a listen.
(BEGIN VIDEO CLIP)
JOHN STEVENS, IREPORTER: I got rid of my 2007 Honda, my new Honda car. I gave it back. I bought a 1991 Honda Civic with 90,000 miles on it, so that's my main transportation right now. No car payments. Insurance is a whole lot cheaper. I've cut back on insurance costs. Cut back on gas costs.
Just not doing anything. I'm not going anywhere, not driving anything unless I have to, you know, either do something with my son, or job -- you know, job-interview related. That's all I'm doing.
ROBIN SAVAGE, IREPORTER: When I go out to eat, which is really not that often, but, you know, we all deserve a little treat now and then. And what I do is I split my meal with the other person, and, you know what, the portions actually come out better anyway. And you save money and you save calories.
SAL STEELS, IREPORTER: Definitely not going to see any movies, or, you know, changing our cable package to the basic package. I mean, we're not in a position where we're pulling the two-ply off the paper towel, but, you know, we're definitely trying to save our pennies and keep our credit good.
(END VIDEO CLIP)
PHILLIPS; The conversation doesn't have to end there. Send us your thoughts and solutions about America's struggling economy at iReport.com. We want to see them.
Well, firm, direct, not mincing words, Hillary Clinton today in her confirmation hearing before the Senate Foreign Relations Committee. As you know, President-elect Obama picked his former campaign rival for secretary of state. Right now she's facing a cordial group of fellow senators. She spoke easily on a world of issues, including the war in Gaza. Here's a little bit of it.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D), SECRETARY OF STATE APPOINTEE: As intractable as the Middle East problems may seem, and many presidents, including my husband, have spent years trying to work out a resolution, we cannot give up on peace. The president-elect and I understand and are deeply sympathetic to Israel's desire to defend itself under the current conditions and to be free of shelling by Hamas rockets. However, we have also been reminded of the tragic humanitarian cost of conflict in the Middle East and pained by the suffering of Palestinians and Israeli civilians.
(END VIDEO CLIP)
PHILLIPS: Hillary Clinton isn't the only Cabinet nominee facing confirmation hearings today. The Senate is also quizzing Arne Duncan for education secretary, Steven Chu, nominated to head the energy department, Shaun Donovan, the secretary of housing and urban development nominee, and Peter Orszag, nominated to head the Office of Management and Budget.
Well, take it from the experts, it's weather so cold you don't need to go outside unless you have to. We're going to check out the latest in the big blast of Arctic weather that's put much of the country in a deep freeze.
(COMMERCIAL BREAK)
PHILLIPS: The weather's so cold, it's dangerous to go outside. Folks in the upper Midwest and Great Plains are bundled up against a bone-numbing blast of cold air on the heels of a blizzard. The system straight out of the Arctic.
Check out this temperature, 37 below zero this morning in Grand Forks, North Dakota. That's a record low. Along with the cold, heavy snow is making roads and highways pretty treacherous there. And then, Chicago, certainly no stranger to cold, snowy weather.
But this system's nothing to mess around with, believe me. A lot of people had to sleep on cots or on the floor at O'Hare and Midway airports after airlines canceled more than 300 flights ahead of expected blizzard conditions.
Tell you what, there's some brutal weather out there, my friend.
CHAD MYERS, CNN METEOROLOGIST: It is so cold.
PHILLIPS: Have you ever slept on the airport floor?
MYERS: No.
PHILLIPS; Really? Even living in Buffalo?
MYERS: No, I never did. Although I loved it when the airport chairs didn't have the arms...
PHILLIPS: Oh, that's right.
MYERS: ... because you could lay along. And now they've got those big steel things, and you can't get comfortable on that chair if you tried.
PHILLIPS: It's very uncomfortable. Yes, you have to put your feet in someone else's lap.
MYERS: Exactly.
PHILLIPS: I have no problem doing that, drooling on the shoulder of the guy next to me.
(WEATHER REPORT)
PHILLIPS: Thanks, Chad.
Well, this is a pretty cool story. You guys will want to stay in tune to hear from our students from San Jose State. They're actually getting schooled in the sacrifices of the civil-rights movement. We're tracking them as they make their way to the famous and infamous spots of the civil rights movement. Remember Emmett Till, that young man that allegedly whistled at a white woman, and he paid with his life? Wait until you see what's happening now to the grocery store that Emmett Till once walked up to.
(COMMERCIAL BREAK)
PHILLIPS: Well, if you MapQuest the route from the Bay Area in California to Washington, D.C., it looks nothing like this. But students at San Jose State are on a mission. Before they get to the inauguration, they want to see the civil-rights landmarks that helped pave the way to next Tuesday, from the infamous motel in Memphis to the store counter in Greensboro and the many spots in between, including Selma, Alabama. That's where they are right now.
Justin Perry is one of those students. And he's on the phone with us this afternoon.
Hi, Justin!
VOICE OF JUSTIN PERRY, SAN JOSE STUDENT: Good afternoon, Ms. Phillips. How are you?
PHILLIPS: Good! Thank you so much for calling in. We appreciate it.
You know, this is amazing what you guys are doing. And what an incredible opportunity to learn about history. The moments in history we should never forget, from a pretty horrifying perspective, in addition to the moments of history that we'll never forget that really inspired this country.
And a place that you went to yesterday, Money, mississippi, we can never forget Emmett Till and what happened to him. Tell me what it was like to go there, and what did you learn about this young boy that allegedly whistled at a white woman and lost his life for it?
PERRY: Yes, ma'am. We learned a lot. We were taken on a tour, and we visited the funeral home, the courthouse where Roy Bryant and J.W. Milam were acquitted. We went to the grocery where everything happened. And we also saw the Tallahatchie River where the body was dumped.
It was pretty disheartening to see what lengths people took to torture such a young boy. He was only 14 when his life was taken from him.
PHILLIPS: And we're looking at video now of the funeral of Emmett Till. And this was a very powerful moment in history, because his mom chose to have an open casket so the world could see what these two white men did to her son.
And it was such a powerful moment in history that it is what inspired Rosa Parks to actually stay on that city bus and trigger a whole another movement.
So when you were there, and you were learning about this, and you were seeing it for yourself, what did it do for you as a journalist, as a young college student, someone who's on his way to D.C. to actually see what this time in history is making Tuesday so possible for everybody?
PERRY: As for me, it was a very strong reality check. The image of the corpse are very graphic. But to see how far along we've come from Emmett Till's murder to now with President-elect Obama being inaugurated on the 20th of January, we've made great strides in this country.
PHILLIPS: And you actually had a chance to talk with someone there in Money, Mississippi. What's going to happen to the grocery store, the grocery store where Emmett Till allegedly whistled at this white woman and lost his life for it? What's going to happen to it? PERRY: Yes, ma'am. Jerome G. Little, the first black president of the Tallahatchie Board of Supervisors, is attempting to purchase the grocery store and turn it into a historic museum. If I could read you the quote.
PHILLIPS: Go ahead.
PERRY: Mr. Little said, "efforts are under way by local government to purchase the Bryant grocery store and turn it into a historic national museum. It needs to be made a part of the Emmett Till Trail. This will be good for Leflore County, the Delta, and the state of Mississippi. This is a great educational tool for the civil rights movement."
PHILLIPS: Wow. Justin Perry, appreciate you reporting back to us. We're going to continue to follow your trip along with all the other students all the way to Tuesday. I'm glad it's been such a powerful time for you, Justin, and the rest of the students.
PERRY: All right. Thank you for the opportunity, Ms. Phillips.
PHILLIPS: Thank you, Justin.
Well, we're going to follow them, of course, all the way from San Jose and check in on their progress as they wind their way to Washington. You can actually track them too whenever you want. Just go to ireport.com. You can follow their journey, see their pictures, and check out all their stories.
And also -- as always Team Sanchez back there working on the next hour of CNN NEWSROOM. Hey, Rick, what do you have going?
RICK SANCHEZ, CNN ANCHOR: Everybody's talking at once. Angie's telling me what we're going to do. Dexter's telling me what else we're going to do in a little while. And you know, we're kind of trying to put it all together for you.
PHILLIPS: You need to be told what to do, Rick. Otherwise you're a wild horse out in the field.
SANCHEZ: I've got kids; I've got a wife; and I've got a mother still, so you know, I'm used to it.
Hey, you know something -- I see we got the picture. You see (INAUDIBLE) that going on behind me right there? That's a very important committee that's taking place right now.
Barney Frank has been livid all day long. You know this TARP money that we've talking about. $350 billion of your money, and what he wants to know is, we gave you the money, banks, how are you going to spend it? And would you mind being accountable for it? Would you mind coming back and telling us how you're spending it? And by the way, are you giving it to people who are going to be able to help their own lives. I mean, regular Americans as opposed to just other banks. I mean, this is part of that conversation. Oh, and it gets better, Kyra, there's another $350 billion that now needs to get issued to them as well. And there are some people in Congress, and possibly even Barack Obama, who's going to say, you know what, until you come clean on the first $350 B's, we're not going to give you the next $350 billion, as well.
So, it's your money. We're watching it for you. And we'll going to have that on our show as well as the missing pilot who's in hiding. An e-mail that he sent to a friend. All that, and more.
PHILLIPS: We'll be watching. Thanks, Rick.
SANCHEZ: Yes.
PHILLIPS: Well, dads aren't meant to give their daughters away to be married, and those brides, well, they're meant to be adults. This father allegedly sold his teenager off. Then, what he wanted in return, and how he got caught make for a mother of a story.
(COMMERCIAL BREAK)
PHILLIPS: Well, leading off today in our "What The" file, a storyy that's incredibly sad and incredibly stupid at the same time. A California man's been arrested for allegedly selling his 14-year-old daughter into marriage. Now, police say they found out when the dad actually called them because the buyer welched on the deal. Apparently, he shorted the dad on the payment. You know what that was? $16,000 and hundreds of cases of beer, Gatorade, wine, soda, and meat. True idiot.
Well, jumping and weeping for joy.
(APPLAUSE)
Ron Clark kids got a Capitol surprise. Pack your bags, guys.
(COMMERCIAL BREAK)
PHILLIPS: Well, it's already been a pretty fantastic school year at The Ron Clark Academy. Students became an internet hit with their song "Vote However You Like." They sang for us here in the CNN NEWSROOM, performed all over the place. Well, that song's just helped them land them the field trip of a lifetime.
(BEGIN VIDEO CLIP)
RON CLARK, RON CLARK ACADEMY: We're going to the inauguration.
(APPLAUSE)
(END VIDEO CLIP)
PHILLIPS: That's right. Our kids just found out they're going to D.C. next week. They're going to sing their new song "Dear Obama" at a bunch of inaugural balls. Have a great tame -- great time, guys.
And hey! Shoot us some i-Reports, OK? We want to bring you back after Tuesday. Rick Sanchez takes it from here.
