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Bipartisan Meeting on Stimulus Package; President Obama at Energy Department; Stimulating Energy Jobs?

Aired February 05, 2009 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

DON LEMON, CNN ANCHOR: Top of the hour, breaking news here on CNN. They're working on that stimulus plan. You're looking now, live pictures on Capitol Hill.

Let's listen in to leaders talking about what they're working on.

SEN. SUSAN COLLINS (R), MAINE: It was supposed to be a bill to help our economy, so it's been a painstaking, very thorough, very comprehensive process where we're going through line by line.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: And that's literally what you all have been doing there, as senators, going through each spending program, saying do we think this is appropriate, do we think this will create jobs or not?

COLLINS: I know it's unusual to think of senators actually doing that kind of painstaking, thorough work, but that's exactly what we're doing. And these decisions are difficult.

For example, I think everybody in the room is concerned about a pandemic flu. But does it belong in this bill? Should we have $870 million in this bill? No, we should not. So after discussion we agreed that we would cut the funding for that, knowing that we can deal with that issue later.

SEN. BEN NELSON (D), NEBRASKA: What we have done is we felt that staff could be helpful, but in this situation, that we needed to work with one another to put together something that we, as members, really can feel comfortable with and use staff as a resource rather than the traditional way. That's why we've sat around the table. And it's always refreshing to be able to do that, because you talk -- there are no filters and you talk directly, straight to one another. And that's how you can...

BASH: Can you be specific on where you are now? Where exactly are you right now? I know you broke up, you're not finished yet, but how close are you? And have you made a decision in terms of those spending cuts, what you will cut and what you won't cut?

NELSON: I think we're still talking about some infrastructure items that we think are important, and we're asking our staff to take a look at that, see how that might fit into the package that we're agreeing to.

QUESTION: What are the areas of greatest concern? NELSON: Well, just what Senator Collins mentioned. That is that, whatever you have in there, that you want to be as robust and stimulus as you can have it so that it's not just a spending bill. And a lot of items that are solid public policy items that can be in other locations because they're not as stimulative, although very good, can be put -- we're scrubbing that out and keeping in that that we think is the most stimulative, and bills for the future.

BASH: Are you working on other issues besides spending? Meaning, have you also been talking about tax issues and other aspects?

(CROSSTALK)

NELSON: I don't think anything's off the table, but our focus has been primarily, I think, on appropriations.

QUESTION: Is there a goal for talk (ph) with a range of where you'd like to see the bill end up? And what guidance has the president given you?

COLLINS: Well, the president has given us guidance in the meetings that each of us had yesterday. The president made a strong case for a proposal that would be in the neighborhood of $800 billion.

Now, the Senate bill right now is over $900 billion, so that's one of the guidelines that we're also taking a look at. But I will tell you, particularly on my side of the aisle, there is a vigorous debate over what the size of the package should be, and it's a difficult debate because economists differ on what the size of the package should be. There's no consensus on that.

The president made a very strong case yesterday to me for a package of sufficient size to jolt the economy. We don't want a package that is too small because that will end up just wasting money.

On the other hand, we're very leery of having an enormous package that would not be necessary and would just boost the federal deficit.

QUESTION: Have you agreed to the number he's suggested?

COLLINS: Because we're still having discussions -- have I personally agreed? Let me say that, originally, I was looking at a $650 billion package. The president did convince me yesterday that a larger package would be good, but I cannot support a package the size of what the House passed.

BASH: Do you think you'll get this done today?

COLLINS: Yes.

BASH: You do?

COLLINS: I do.

QUESTION: (OFF-MIKE) NELSON: My style is always to keep the Democratic leadership informed, advised as to where we are on this or any other item I've ever worked on to avoid surprises. And they are aware of what we're talking about and supportive of our effort, because they recognize that we have the opportunity to bring about a bipartisan support of this legislation. And they're very much supportive of that idea, and they know that this is the way in which it's going to happen.

QUESTION: How is the White House further involved? Is Peter Orszag talking to you about the items that you're removing or keeping in?

COLLINS: I gave the president yesterday a list of what I thought should be in a stimulus package, and his advisers are reviewing that list, and I expect that we'll have further discussions with them today.

NELSON: I did the same thing.

BASH: They weren't in this room though; right?

COLLINS: No.

BASH: OK. Thank you.

LEMON: All right. CNN's Dana Bash speaking on Capitol Hill today, speaking with Susan Collins, and also speaking with Ben Nelson there, one Democrat and one Republican.

Hey, Dana, what was interesting to me is Susan Collins said, you know what? The president had convinced me that a bigger stimulus package -- that she would be in favor of it, but she can't vote for one as big as the House passed. And she gave her list of recommendations.

BASH: Exactly. And that really is the crux of what's going on here.

I'm just going to take this out so I can talk to you.

That's the crux of what's been going on here and what has been going on in these meetings, Don. And it is that you have Republicans like Susan Collins, who is perhaps one of the most gettable Republicans for President Obama and the Democratic leaders, who say what is being debated right now on the Senate floor is simply too big, it is too much federal spending at this point that will not do -- will do too much, and maybe even will hurt the economy, and not just help the economy. So that's part of the issue.

But it was very interesting to hear, I thought, both Senator Nelson and Senator Collins talk publicly about what they've been doing privately. And that is really going through line by line some of these spending projects. And again, it has been going on for days and days between these two senators.

And you still see Senator Nelson speaking behind me, I believe.

But what was extraordinary about this morning is that they broadened it out. And it was maybe about 16 or 17 senators in this room, Democrats and Republicans.

In fact, something interesting, it was mostly Democrats interested. And again, the underlying issue here is, what can we cut in terms of spending that many of these senators believe is just too much, that is excess spending that doesn't do the job of creating jobs? And that's what they're talking about.

And again, you heard them say that they are close, but they're not there yet. And you know, this is really not easy for a lot of these senators...

LEMON: Yes, I'll bet.

BASH: ... especially the Republicans in this room who are talking about spending potentially between $600 billion and $800 billion, federal dollars. A lot of it spending that, again, is perhaps against the core Republican philosophy on how to deal with jump-starting the economy.

LEMON: If I'm not mistaken, I think I heard, Dana, Susan Collins say that it was almost up to $900 billion at this point.

BASH: Yes, exactly.

LEMON: OK. Dana, stand by.

BASH: Sure.

LEMON: If you want to way in on this, you can.

I'm going to bring in Christine Romans, who's been doing a lot of work on this stimulus plan.

Christine, you heard them talking there earlier. And, you know, Susan Collins saying, I can't support that big a bill.

Talk to me what about what the crux is here. And what are they fighting for, each side?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, the bill gets bigger and bigger and bigger. The House version was $819 billion. And now, with last night's amendment, the $15,000 tax credit for homebuyers, you throw in an AMT tax relief -- that's the alternative minimum tax relief -- you throw in a tax credit for car buyers and some other things, and you're talking about $900 billion.

So the president is trying to convince wary Republicans that he needs a very big bill, he needs a big stimulus to work. But then there's this horse trading going on trying to get rid of some of the programs that maybe Democrats and Republicans agree.

She mentioned a pandemic flu effort there, things that people agree can be cut out of here. They're trying to cut some money out, keep it big, but get it below that $900 billion mark.

LEMON: And Christine, you know what? The president turned on the charm offensive. He's been going -- both sides of the aisle holding a Super Bowl party this weekend, whatever.

ROMANS: Yes.

LEMON: The charm offensive does not seem to be working when it comes to this. And what some Republicans are saying, and even Democrats, is this is supposed to be a stimulus package -- you know what? I'm getting guidance. Hang on.

We're going to go to the president now. Christine, we'll get back to you.

The president speaking on energy now. He's at the Energy Department. Just showed up, and the introductions are happening here.

As these introductions are going on, we're going to go to Suzanne Malveaux, who's standing at the White House, on the lawn of the White House, a very windy day in Washington, and talk to her about what the president is expected to do at this meeting.

Suzanne, are you there?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: I am, Don. And what he's expected to do is he's going to be announcing the thousands of jobs, green jobs, that he believes will be created by this economic stimulus package. It's all a part of trying to sell that. And so he's going to be at the Energy Department talking about those jobs.

And then the other thing that he's going to be doing today is signing a presidential memorandum, essentially asking for the Department of Energy to require that appliances are made more efficient, energy efficient. That he's going to move up that timetable to August 2009 so that some of these appliances, everyday things that we use, dishwashers, microwaves, refrigerators, theses types of things, that they'll actually be made more energy efficient faster. And that the president will acknowledge and talk about the ways it will save energy, energy costs, and that that will also create a better economic environment.

So he's trying to tie all of this together -- Don.

LEMON: Yes. And you know, as we wait for these introductions here, as soon as he comes up to the podium we'll take it.

But Suzanne, you know, we saw that faith meeting this morning. And talk to us about this advisory board on faith that the president talked about at this prayer breakfast this morning.

MALVEAUX: Well, sure, Don.

And what he's trying to do is emphasize that, yes, the faith-based initiatives under the Bush administration, that they worked very well, that there were a lot of goals that they did accomplish. They did good work when it came to HIV prevention, education, reaching out to the poor, using faith-based groups to work with the government to do that. One thing, however, that he is changing, that he wants to make sure of, is that these religious groups, using federal dollars, that they're not able to discriminate when it comes to hiring practices, and that that is, in fact, enforced. If there's a case that has a question, that they'll take a look at it.

But let's listen to President Obama.

(APPLAUSE)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Thank you so much.

Well, it is a thrill to be here.

Thank you, Secretary Chu, for bringing your experience and expertise to this new role.

And thanks to all of you who have done so much on behalf of the country each and every day here at the department. You know, your mission is so important, and it's only going to grow as we transform the ways we produce energy and use energy for the sake of our environment, for the sake of our security, and for the sake of our economy.

As we are meeting, in the halls of Congress, just down the street from here, there's a debate going on about the plan I proposed, the American Recovery and Reinvestment Plan. This isn't some abstract debate.

Last week, we learned that many of America's largest corporations are planning to lay off tens of thousands of workers. Today, we learned that last week, the number of new unemployment claims jumped to 626,000. Tomorrow, we're expecting another dismal jobs report on top of the 2.6 million jobs that we lost last year. We've lost half a million jobs each month for the last two months.

Now, I believe that legislation of such magnitude, as has been proposed, deserves the scrutiny that it has received over the last month. I think that's a good thing. That's the way democracy is supposed to work. But these numbers that we're seeing are sending an unmistakable message, and so are the American people -- that time for talk is over.

The time for action is now, because we know that if we do not act, a bad situation will become dramatically worse. Crisis could turn into catastrophe for families and businesses across the country. And I refuse to let that happen. We can't delay and we can't go back to the same worn-out ideas that led us here in the first place.

In the last few days we've seen proposals arise from some in Congress that you may not have read, but you'd be very familiar with because you've been hearing them for the last 10 years. Maybe longer.

They're rooted in the idea that tax cuts alone can solve all our problems, that government doesn't have a role to play, that half- measures and tinkering are somehow enough. That we can afford to ignore our most fundamental economic challenges, the crushing cost of health care, the inadequate state of so many of our schools, our dangerous dependence on foreign oil.

So let me be clear. Those ideas have been tested and they have failed. They've taken us from surpluses to an annual deficit of over $1 trillion, and they've brought our economy to a halt. And that's precisely what the election we just had was all about.

The American people have rendered their judgment, and now's the time to move forward, not back. Now is the time for action. Just as past generations of Americans have done in trying times, we can, and we must, turn this moment of challenge into one of opportunity. The plan I propose has, at its core, a simple idea -- let's put Americans to work doing the work that America needs to be done.

This plan will save or create over three million jobs, almost all of them in the private sector. This plan will put people to work, rebuilding our crumbling roads and bridges, our dangerously deficient dams and levees. This plan will put people to work modernizing our health care system, not only saving us billions of dollars, but countless lives. This plan will put people to work renovating more than 10,000 schools, giving millions of children the chance to learn in 21st century classrooms, libraries and labs. And to all the scientists in the room today, you know what that means for America's future.

This plan will provide sensible tax relief for the struggling middle class, unemployment insurance and continuing health care coverage for those who have lost their jobs. And it will help prevent our states and local communities from laying off firefighters and teachers and police.

And finally, this plan will begin to end the tyranny of oil in our time. After decades of dragging our feet, this plan will finally spark the creation of a clean energy industry that will create hundreds of thousands of jobs over the next few years -- manufacturing wind turbines and solar cells, for example. Millions more after that. These jobs and these investments will double our capacity to generate renewable energy over the next few years.

We'll fund a better, smarter electricity grid and train workers to build it, a grid that will help us ship wind and solar power from one end of this country to another. Think about it, the grid that powers the tools of modern life, computers, appliances, even BlackBerrys...

(LAUGHTER)

... looks largely the same as it did half a century ago. Just these first steps towards modernizing the way we distribute electricity could reduce consumption by 2 to 4 percent. We'll also lead a revolution in energy efficiency, modernizing more than 75 percent of federal buildings and improving the efficiency of more than two million American homes.

This will not only create jobs, it will cut the federal energy bill by a third and save taxpayers $2 billion each year, and save Americans billions of dollars more on their utility bills. In fact, as part of this effort, today I've signed a presidential memorandum requesting that the Department of Energy set new efficiency standards for common household appliances. This will save consumers money, this will spur innovation, and this will conserve tremendous amounts of energy.

We'll save through these simple steps over the next 30 years the amount of energy produced over a two-year period by all the coal-fired power plants in America. And through investments in our mass transit system to boost capacity, in our roads to reduce congestion, and in technologies that will accelerate the development of innovations like plug-in hybrid vehicles, we'll be making a significant down payment on a cleaner an more energy-independent future.

Now, I read the other day that critics of this plan ridiculed our notion that we should use part of the money to modernize the entire fleet of federal vehicles to take advantage of state-of-the-art fuel efficiency. This is what they called pork.

You know the truth. It will not only save the government significant money over time, it will not only create manufacturing jobs for folks who are making these cars, it will set a standard for private industry to match. And so when you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, are these folks serious? Is it any wonder that we haven't had a real energy policy in this country?

For the last few years I've talked about these issues with Americans from one end of this country to another. And Washington may not be ready to get serious about energy independence, but I am. And so are you. And so are the American people.

Inaction is not an option that is acceptable to me, and it's certainly not acceptable to the American people, not on energy, not on the economy, not at this critical moment. So I'm calling on all the members of Congress, Democrats and Republicans, House and Senate, to rise to this moment.

No plan's perfect. There have been constructive changes made to this one over the last several weeks. I would love to see additional improvements today. But the scale and the scope of this plan is the right one.

Our approach to energy is the right one. It's what America needs right now. And we need to move forward today. We can't keep on having the same old arguments over and over again that lead us to the exact same spot where we are wasting precious energy, we're not creating jobs, we're failing to compete in the global economy, and we end up bickering at a time when the economy urgently needs action.

I thank all of you for being here, and I'm eager to work with Secretary Chu and all of you as we stand up to meet the challenges of this new century. That's what the American people are looking for, that's what I expect out of Congress, that's what I believe we can deliver to our children and our grandchildren and their future.

Thank you so much, everybody. I appreciate it. Thank you. (APPLAUSE)

LEMON: All right. President Barack Obama at the Energy Department talking about how renewable energy, green energy, can help the economy, and also help with the stimulus package. At the very end there, getting very passionate, saying, "I'm calling on all members of Congress, Democrats and Republicans, House and Senate, to rise to the occasion," saying that we can't keep relying on the same old arguments when precious energy is being wasted. Asking everyone to participate in passing the stimulus package, which includes some energy language in it.

The president talking just moments ago. Also Secretary Chu there from the Energy Department, introducing him.

So we've been talking a lot about renewable energy. So here's a question. It's also part of that economic stimulus package that goes before Congress. Both the Senate and the House versions include billions of energy projects. Here's the question -- will that money create jobs?

Kitty Pilgrim has -- finds out for us.

(BEGIN VIDEOTAPE)

KITTY PILGRIM, CNN CORRESPONDENT (voice-over): In a perfect world, energy would be clean, plentiful and cheap, generated by wind and sun. A great goal, but some say not appropriate for a stimulus plan.

PETER VAN DOREN, CATO INSTITUTE: Voter sentiment for renewable energy is kind of a make believe fantasy that somehow money can come from heaven and make things beautiful and cheap and green all at the same time, and no one's bills go up. And of course none of that's possible.

PILGRIM: There are lots of reasons for our economy and environment to invest in wind and solar energy, but wind and solar are capital- intensive industries, not labor intensive. So job creation would be expensive.

According to the Center for American Progress, it would take $50,000 of taxpayer money to create every green job, a government subsidized job in an industry already heavily subsidized. The House stimulus proposal of $18 billion would be 10 times the current government funding for renewable energy. The Senate plan of $14 billion is seven times higher. And neither plan would spend the money quickly.

REP. DARRELL ISSA (R), CALIFORNIA: Whether you're talking 14 or 18, you only have about two that could possibly be properly spent in the first two years. These projects are taking ten-plus years to get off the ground because even those who say they're environmentalists don't want them in their back yard.

PILGRIM: And the Congressional Budge Office says the new funding would not be stimulative. "We therefore expect that the proportion of spending that would occur in the first few years would be lower than for the existing programs, reflecting the time it would take DOE to establish new programs."

Some say the heavily-subsidized renewable energy industry does not deserve even more money.

THOMAS PYLE, INST. FOR ENERGY RESEARCH: That money doesn't grow on trees. It comes from somewhere. So if we are spending taxpayer dollars to prop up these industries that wouldn't otherwise exist in the private sector, we are diverting those resources away from other things.

PILGRIM: Kitty Pilgrim, CNN.

(END VIDEOTAPE)

LEMON: All right. Well the bailout, the handouts, and the stimulus package. CNN's Lou Dobbs pulls them apart for you. He'll do it line by line to separate the pork from what might really fix the economy. Don't miss Lou's "Line Item Veto," a special segment. That's tonight on "LOU DOBBS TONIGHT," 7:00 p.m. Eastern, right here on CNN.

A lot of people want tax cuts as a part of the massive stimulus bill. But what kind of tax cuts? Well, that may depend on who you are.

(COMMERCIAL BREAK)

LEMON: For the first time, we are hearing what went down when US Airways Flight 1549 ditched into the Hudson River. Crash investigators today released conversations between the cockpit crew and air traffic controllers. Birds took out both engines shortly after takeoff from New York's LaGuardia Airport on January 15th.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: (INAUDIBLE) 1549, 270.

UNIDENTIFIED MALE: This is Cactus 1549. Head first (INAUDIBLE) turning back towards LaGuardia.

UNIDENTIFIED MALE: OK. You need to return to LaGuardia? Turn left heading up 220.

UNIDENTIFIED MALE: 220.

UNIDENTIFIED MALE: (INAUDIBLE). He's got emergency returning.

It's 1529 (sic). Birds strike. He lost all engines. He lost the thrust in the engine. He's returning immediately.

UNIDENTIFIED MALE: Cactus 1529? Which engines?

UNIDENTIFIED MALE: He lost thrust in both engines, he said.

UNIDENTIFIED MALE: Got it.

UNIDENTIFIED MALE: Cactus 1529 (sic), do you want to try to land on one brake? UNIDENTIFIED MALE: We're unable. We may up in the Hudson.

(END AUDIO CLIP)

LEMON: And they did end up in the Hudson. All 155 people on the plane escaped with their lives. It's being called the miracle on the Hudson.

The crew from Flight 1549 live on CNN. That will happen on Monday night, "LARRY KING LIVE," 9:00 p.m. Eastern, right here on CNN.

Iraqis have voted. What are they saying with those ballots? We'll get a live update from Baghdad.

(COMMERCIAL BREAK)

LEMON: Both Democrats and Republicans want tax cuts in the massive stimulus bill, but define tax cuts. Well, you get a different answer from each party, whoever you ask.

Last hour, we looked at tax breaks for individuals. Now CNNMoney.com's Jeanne Sahadi is going to drill down on tax cuts for businesses.

Hello, Jeanne, again.

JEANNE SAHADI, CNNMONEY.COM: Hi, Don.

LEMON: So we started last time with the Democrats. Why don't we start with the Republicans now?

SAHADI: Sure.

LEMON: This go-round.

What do they want?

SAHADI: Here's some good news. For all the partisan bickering over tax relief for individuals, there's a lot more agreement when it comes to tax relief for businesses between the two parties.

Both of them want to give cash to struggling businesses and give them tax incentives to make investments, to kind of get the wheels of the economy rolling again. But where Republicans differ from Democrats is that they would like to see the income tax rates for businesses, both corporate and individual -- because a lot of small business owners pay at the individual income level -- they'd like to see those lowered. And they'd also, as I mentioned in the earlier segment, like a payroll tax holiday not just for workers, but for their employers. Just like you and I pay 6.2 percent of our salaries into Social Security, likewise, our employer does the same.

So that would be a big sort of pop of cash into employers' bottom lines quickly. But they do agree with Democrats, and they like the provisions that are in the stimulus bills in both the House and the Senate that increase businesses' abilities to write off losses and expenses. In addition, they also like the renewable energy production tax credits and other tax breaks that encourage conservation.

DON LEMON, CNN ANCHOR: OK, Jeanne, now you can clear your throat because -- you can clear your throat now because you're off. Your mike is clear. OK. Now let's talk about the Democrats. What do they want, Jeanne?

SAHADI: Sure. The Democrats, they're all behind letting businesses write off more of losses, and write off more of their expenses. If you encourage businesses to write off more in their expenses, that encourages them to buy more essentially. It won't help all businesses, but it will help those who buy manufacturing equipment and the like.

They also have been behind the buy American provision. It was softened a bit in the Senate last night. But they are the ones who are promoting that, let's make sure we use the stimulus money to buy American products and American materials to make the products that are funded by stimulus.

LEMON: Appreciate it. Thank you very much, Jeanne.

SAHADI: Thank you. Thank you.

LEMON: All right. Where was the Securities and Exchange Commission when Bernie Madoff was running an alleged Ponzi scheme? Where were they? Well, one man says he repeatedly gave investigators hard evidence and they ignored it.

(COMMERCIAL BREAK)

LEMON: All right. Let's check the big board now. I see the Dow is up 83 points. Let's check the Nasdaq. At last check, the Nasdaq was up 27 points. It is up 24 points now. We will check back in with our Susan Lisovicz, who is live at the New York Stock Exchange to get an update on exactly what's going on.

In the meantime, al Qaeda finding a new safe haven in Yemen. CNN has learned a growing number of al Qaeda operatives have entered the country from Saudi Arabia over the past few weeks. U.S. and Yemeni official tell us those operatives are reviewing -- or renewing a network that could potentially threaten American and Saudi targets in that region.

Most of the bailouts have been counted -- the ballots, I should say. We've been talking so much about bailouts lately, every word looks like it. Most of the ballots have been counted in Iraq. And let's get the results now from last weekend's election. Live now to Baghdad. CNN's Arwa Damon.

Arwa, what are the results showing? And interestingly enough, there were women on those ballots. I'm wondering if any women won.

ARWA DAMON, CNN CORRESPONDENT: Well, Don, let me set this straight about the women that are running. And there were some 4,000 female candidates. They have actually been allotted certain numbers of seats under Iraq's electoral lot. Every single, political party, when it does put forwards its candidates that are going to be sitting on these provincial councils, every third person under this law has to be a woman. This is part of this whole balancing of power, equality that we're seeing many people trying to create here.

What has been also interesting in these elections was the showing that we saw made by Iraqi Prime Minister Nuri al Maliki's political bloc. Remember, these elections were also widely being viewed as something of a referendum on his rule. And over the last four years, there has been much talk about his political death. We've had rumors of coups. We've seen widespread dissatisfaction. Still, his political bloc managing to win nine out of 14 provinces.

Don.

LEMON: Arwa Damon. OK, Arwa, we appreciate your reporting. Thank you very much for that.

You know, Congress is weighing in on the national salmonella outbreak today and studying ways to put more bite in food safety laws. The FDA says peanut butter made at this Georgia processing plant was tainted with salmonella. And officials say the plant shipped the peanut butter even though tests showed it was contaminated. Eighth deaths and hundreds of illnesses are linked to the bacterial strain. The plant's owner denies any wrongdoing and says the facility was inspected by state and federal workers back in 2008, just a year ago, last year.

A salmonella warning from FEMA today. It goes out to victims of last week's ice storm in Arkansas and also in Kentucky. FEMA says ready- to-eat meals it handed out contained peanut butter made at the Georgia plant. The governor of Kentucky says be cautious and toss out those packets.

(BEGIN VIDEO CLIP)

GOV. STEVE BESHEAR, (D) KENTUCKY: We have, since last Wednesday or Thursday, distributed over 100,000 meals. We have not had one report of anybody being ill as a result of eating any meal. As a matter of fact, I ate one of those meals down in western Kentucky the other day. And I know I ate the peanut butter because I like peanut butter. And I'm here today and I feel OK. So we don't expect any trouble with this, quite honestly. But out of an abundance of caution, we are taking quick steps.

(END VIDEO CLIP)

LEMON: This is one of the worst ice storms that that region has faced. And 157,000 customers still without power in Kentucky after last week's ice storm.

Regulators who are supposed to protect investors under fire today over that Bernie Madoff investigation. The whistle-blower who tried to tell authorities about the alleged $50 billion Ponzi scheme is sounding off. The story from senior correspondent Allan Chernoff.

(BEGIN VIDEOTAPE) ALLAN CHERNOFF, CNN CORRESPONDENT, (voice over): A damning indictment of the Securities and Exchange Commission from the man who tried to blow the whistle on Bernard Madoff.

HARRY MARKOPOLOS, MADOFF WHISTLEBLOWER: I gift-wrapped and delivered the largest Ponzi scheme in history to them and somehow they couldn't be bothered to conduct a thorough and proper investigation.

CHERNOFF: Over the past decade, Harry Markopolos, a certified fraud examiner, provided the SEC with memos detailing evidence of Madoff's alleged fraud. Even names and phone numbers for the SEC to call. But he could never generate interest beyond Boston SEC staffer Edward Manion (ph).

MARKOPOLOS: In 2000, Mr. Manion warned me that relations between the New York and Boston regional offices was about as warm and friendly as the Yankees-Red Sox rivalry and that New York does not like to receive tips from Boston.

CHERNOFF: Markopolos, who worked at a Boston money management firm that asked him to replicate Madoff's supposed investment strategy, said it took him only five minutes to suspect Madoff was a fraud. Four hours of number crunching, to be certain. But the SEC, he testified, is financially illiterate, over lawyered and far too cozy with those it's supposed to oversee.

MARKOPOLOS: The SEC is always captive of the industry it regulates and it is afraid of bringing big cases against the largest, most powerful firms.

CHERNOFF: Markopolos said he feared for his life as he investigated, convinced that Russian mobsters and Latin drug cartels were Madoff clients. Madoff, charged with running a multibillion dollar investment fraud, remains under 24-hour penthouse arrest at his luxury Manhattan apartment as he awaits indictment. Following Markopolos's testimony, SEC directors got grilled.

REP. GARY ACKERMAN, (D) NEW YORK: You have totally and thoroughly failed in your mission. Don't you get it? I only have five minutes. Someone's got to start.

LINDA CHATMAN THOMSEN, SEC ENFORCEMENT DIRECTOR: Let me start with enforcement. We began an investigation in 2006 and it was closed without action.

(END VIDEOTAPE)

LEMON: Senior correspondent Allan Chernoff joins us from New York.

Allan, before I get to that, there's a new list of customers. I want to ask you, if it took this person who testified five minutes to figure out that this was a scheme, why didn't it take -- why didn't other people figure it out that quickly?

CHERNOFF: Well, Harry Markopolos had a lot of experience in investments and specifically in the type of strategy that Bernard Madoff supposedly was utilizing. So Markopolos was able to look at it very easily and say, this simply cannot be. And one of the points he made yesterday was that the SEC needs experienced people who understand how Wall Street works. He was arguing, if you have more gray-haired folks, more people without hair on the SEC staff, they'd be able to do a better job on these.

LEMON: OK, man (ph), there may be some truth to that if he could figure it out that quickly and other folk couldn't. It took them years and they didn't figure it out until the kids came forward.

OK, let me ask you this, there's a new list of customers, so-called customers for Bernie Madoff. Tell us about that list.

CHERNOFF: Well, holding it up right now -- 162 pages.

LEMON: Wow.

CHERNOFF: Maybe we can come back here. More than 13,500 entries. Now this was put out to the bankruptcy court by Irvin Picard. He's the trustee in this bankruptcy case. This is not a list, though, only of customers, even though it does say customers. Bernard Madoff himself is listed here 29 times. His wife, Ruth, is also listed here at least once. And his sons, one of them we had believed was a customer. But also his attorney, Ira Lee Sorkin, is listed as a customer. Mr. Sorkin says, no, ne was never a customer. And some of the victims that we've interviewed are not on the list. So there's a lot of confusion here. The trustee and other lawyers at his firm have not returned our phone calls, our e-mails, nothing so far. So lot of confusion here. Hopefully we'll be able to clear it up at some point.

LEMON: Yes, and these are alleged victims, alleged victims, until this has been fully investigated. I mean everyone from John Malkovich, again an alleged victim, john Denver, Eli Wizel (ph). A lot of folks. A lot of big-name people supposedly alleged victims on this list.

So where do we stand right now with all of this?

CHERNOFF: Well, the case right now is not quite at a stand-still, but there have been some plea negotiations between Mr. Madoff's attorney and the U.S. attorney's office here in New York. February 11th is the next deadline for the government to bring an actual indictment against Mr. Madoff. He hasn't been indicted just yet. That deadline was pushed back once. It could easily be pushed back again. And, meanwhile, Mr. Madoff remains in his penthouse apartment under 24-hour watch.

LEMON: It is a fascinating . . .

CHERNOFF: So this thing could drag on and on, Don.

LEMON: Fascinating story that we may never get to the bottom of. Allan Chernoff, we appreciate it. Thank you.

The Obama administration is moving to overturn energy leases approved by the Bush administration which would allow drilling on sensitive land. It's all part of today's "Energy Fix" report coming up.

(COMMERCIAL BREAK)

LEMON: The president talking about energy today. Renewable energy. So we will talk as well. At the Republican National Convention last summer, though, we heard the chant "drill baby drill." But the Obama administration is putting the brakes on plans to drill for more oil and gas. Cnnmoney.com's Poppy Harlow has our "Energy Fix" from New York.

Hi, Poppy.

We've heard the president talking a lot about energy. So what's going on with this issue?

POPPY HARLOW, CNNMONEY.COM: You know, this is a big move, Don. This is a high-profile reversal of what we saw from the Bush administration. The Interior Department is canceling leases that would have allowed drilling on more than 100,000 acres of federal land in Utah, saying the Bush administration rushed to the December auctions on these leases without doing proper environmental review. Now that land in Utah could still be used for drilling down the road, but the Obama administration wants more study to be done before that happens.

In the meantime, the oil and gas industry not so pleased about this. It says scrapping these leases will mean higher energy costs and job losses. That's their argument. And we know no one wants to see more job losses today, Don, especially following the wake of that weekly jobless claims report that was so stunning this morning.

LEMON: Yes, absolutely right, the energy industry, Poppy, is upset. Environmental groups must be happy about this, yes?

HARLOW: Yes, they're cheering somewhere, Don. Very happy. Environmentalists have fiercely opposed drilling on this land for a long time, partly because it's close to two national parks. Several groups have sued trying to stop these sales. A college student, Don, even went further. He snuck into an auction and actually won 13 plots of land even though he had no intention of paying the $1.8 million that he bid for that land. Take a listen to what he had to say.

(BEGIN VIDEO CLIP)

TIM DECHRISTOPHER, ENVIRONMENTAL ACTIVIST: I sat there and I thought, if worse came to worse, if I took this action and I ended up in prison, would I be able to live with that. And I said, yes. And if, on the other hand, I saw this opportunity to make a difference and to not only set aside some land but to keep some oil in the ground so that we have a better chance for a livable future and I turned down that chance, would I be able to live with that. And I decided that, no, no, I wouldn't.

(END VIDEO CLIP)

HARLOW: Now, even though, Don, these leases have been scrapped, he still faces -- could face criminal charges. But what this is, really, is a move by the Obama administration that is a clear signal that it has a major shift in thinking when it comes at least to that "drill baby drill" chant that we heard.

LEMON: We shall see. Thank you, Poppy.

HARLOW: You're welcome.

LEMON: Meantime, a naval mystery has been solved and a stash of gold, to boot. There's gold out in the sea.

(COMMERCIAL BREAK)

LEMON: One of the greatest naval mysteries ever solved. That is according to a group that says it has found the HMS Victory, which was the world's leading warship when it disappeared more than 250 years ago. There may be four tons of gold on-board. The answer man, Josh Levs, joins us now with some of the images of this ship. Two hundred and fifty tons, right? What are we talking about here?

JOSH LEVS, CNN CORRESPONDENT: You're thinking of it, more than 250 years old.

LEMON: No, four tons of gold on board. If they do find that, that would and big booty.

LEVS: Yes, it would be. And we want to get that word in and congratulations. I'll tell you something, it's four tons of gold is one -- just one of the many things exciting people.

You're about to see some cool video. It's up online from The Discovery Channel. You are able to see it here. But it looks better when we, as we say in the business, take it fall (ph). Check this out, Don. This is animation they've put together of what these ships were like at the time. The HMS Victory, the predecessor to another ship that later took the same name, used to have all these cannons along the side and it was in the world the leading ship.

Well, one reason they're pretty comfortable that this is the one that they found is -- let's check out the next video -- is that when they were going down there and using some of these materials that they have to kind of excavate what they're able to find down there, pull things apart, check out that mechanical arm. This is so cool. This is underwater treasure hunting. They've found what I'm going to show you on the third video now, and that is that they found, they believe, one of the cannons that used to do that. OK. So there were dozens of cannons on this ship. They would shoot outward. They were protecting the ship. Sometimes the ship did carry precious metals, which is why it could, indeed, have that gold.

Now, when they went down there, even after 260 years, this ship was lost in 1744. No one knows what happened to it. No one has ever known where it went. They found that. And now they've added a little animation to show you the cannon that they have since studied. Check it out. Forty-two pounder they're saying. And it was able to, they say, be one of the most powerful groups of cannons that was ever around.

And then one more thing. I want to show you something. We have a full screen here with what they think might potentially be on this ship from way back then -- four tons of gold, the largest collection of bronze cannons and, Don, the largest consignment of bronze guns anywhere in the world. They think they might find that on the ship.

LEMON: You know, I wasn't being -- I mean that's what they call that, that word. Yes, that's what they call it when you find that.

So how do we really know, though, that this is the HMS Victory. By the way, that video under the water, again, that is incredible. Did I (INAUDIBLE) mention that, whatever. But the underwater thing is (INAUDIBLE).

LEVS: It's amazing. Yes, well this is the thing. So the bronze -- suggestion of finding that bronze cannon makes them think that that indeed could be it. But I do want to say, to get both sides in here, have one more graphic from you. This is from the British government. And they are saying, "we have been in touch with the company. We cannot, at this stage, confirm their claims. Assuming the wreck is indeed that of a British warship, her remains are sovereign immune. The wreck remains the property of the crown." And everyone's going to have a chance to learn about this. All this is from a program called "Treasure Quest" that airs tonight on The Discovery Channel at 10. And I'll tell you something, it's going to get a lot of attention because this is a giant mystery, Don. People have been following literally now for centuries. It could be the answer.

LEMON: Ah, very interesting. OK. Thank you very much for that, Josh.

LEVS: Thanks a lot.

LEMON: You know what, families are in survival mode right now. Several generations riding out the economic downturn together under one roof.

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LEMON: You know what, the bad economy is bringing families together, literally. And we're seeing more and more multi-generations living together under one roof. Our Alina Cho takes a look at one New York family.

(BEGIN VIDEOTAPE)

ALINA CHO, CNN CORRESPONDENT, (voice over): Just a year ago, German and Lillian Tixe (ph) had a ribbon cutting ceremony to celebrate their new home. They planned to live on the first floor and rent the second and third. But they never dreamed their tenants would be their own adult children, until German suddenly lost his job.

KANESSA TIXE, MOVED BACK IN WITH PARENTS: He was pretty quiet. He didn't want us to talk about it. We're all like, oh, we're going to help you. I can get you a job. CHO: German's daughter, Kanessa Tixe, moved in. So did her step brother Eric, step sister Lilly, and her family. They're all helping out by paying rent. And their landlords are strict.

K. TIXE: You better pay the rent on time. Actually they charged us a deposit.

CHO: It's a living situation that's becoming common. According to grandparents.com, 65 percent of those surveyed say the bad economy will bring more multi-generational families together under the same roof.

AMY GOYER, GRANDPARENTS.COM: This is a dollars and cents issue. When it comes to the bottom line, can you afford to live on your own. And if you can't, then families come together and do what they have to do.

CHO: It's not without its downfalls.

K. TIXE: Every time I go out they're like looking out the window or asking me where I'm going. It's like, I feel 16 again.

GERMAN TIXE, ECONOMY BRINGS KIDS HOME: The music is to high and we call -- put (ph) it down because, you know, sometimes we have to live (ph).

CHO: Experts say problems are bound to arise.

GOYER: The little things can get to you. I hear the most problems from the kitchen. I know one mom was telling me that she just burst into tears because her mother was criticizing the way she made a peanut butter and jelly sandwich.

CHO: But if living together is a dollars and cents issue, time together is priceless. Even more so for the Tixes. This multi- generational family is about to expand. Lilly is due in April.

K. TIXE: We're very close, very united. And I think now that we live together, it shows even more. Many of our friends and families come here and they wish they were this close.

(END VIDEOTAPE)

LEMON: That is it for me. The CNN NEWSROOM continues right now with Kyra Phillips.