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How Jobs Reports Affects Wall Street; President Obama's Money Experts; Stimulus: Senate Showdown; Financial Advice From an Astrologer; Family Financial Survival Tips for Troops; Phelps Looses a Sponsor

Aired February 06, 2009 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: All right. It is, Friday, February 6th, and here are the top stories we're following for you today in the CNN NEWSROOM.

President Obama, live from the White House this hour, rolling out a team of independent -- underline it -- independent economic advisers. We expect the president to comment on the dismal new jobless numbers.

At the Capitol this hour, Republicans and Democrats try to meet in the middle on a stimulus bill. The cost of an economic energizer, well, creeping closer to a trillion dollars today.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

Issue #1, the economy. Our starting point this hour, there is no way to sugarcoat the latest jobless numbers. The unemployment rate surged to 7.6 percent in December, and 598,000 Americans lost their jobs in January. Think of it this way -- that is roughly the population of the city of Las Vegas.

Companies eliminated more jobs in January than any single month dating all the way back to 1974. Since the start of this recession in December, 2007, 3.6 million jobs have simply vanished. Payrolls are shrinking at an alarming rate, and there is little to suggest that will change any time soon.

Let's bring in our business correspondent, Susan Lisovicz, at the New York Stock Exchange for us.

Susan, great to see you.

All right, talk to us about how this jobs report is playing out on Wall Street today.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: Well, Tony, we're partying like it's 1939 on Wall Street. And yes, you might scratch your head, because the numbers that you gave are grim.

In fact, one economist who I'm going to quote here said, "We're seeing a very severe violent collapse, inactivity. That could go on for months." So why is Wall Street rallying big-time? Well, because, one, the numbers as grim as they are, basically came within the range, within the whisper numbers that the Street was expecting. That they weren't even worse, if it you can imagine that.

Not only that. When you have this kind of urgency, when we have seen the deterioration that we have seen in the jobs market in the last three months, where job losses really started to accelerate, that puts the pressure on Washington with this new administration.

As you know, the Senate is debating the stimulus package. There is some hope that something could get done. And, of course, we have the Geithner plan on Monday with the bank bailout, and what form they'll take. So there is some optimism on that.

In fact, financial stocks are leading the rally. Bank of America shares are up 22 percent right now. A very influential analyst said that this particular company is sound, and it's leading a juggernaut of financial companies.

And for every stock that's declining, we have four stocks that are gaining. All 30 Dow stocks are higher. And you saw it. The Dow and the Nasdaq, the S&P 500, each up about 2 percent right now -- Tony.

HARRIS: And Susan, quickly, if I had to push you, what is it that the financial sector wants? Are they in love with this idea, in like with this idea of a bad bank?

LISOVICZ: I think they're in love with the idea of action.

HARRIS: Yes.

LISOVICZ: Action soon for Washington. That's not something that you always expect. In fact, that we seldom see.

HARRIS: Exactly. All right, Susan. Great to see you. See you a little later in the hour. Thanks.

President Obama turning to experts to try to turn the troubled economy around. Just minutes from now, the president introduces his team of economic advisers, heavy hitters he can turn to for guidance.

White House Correspondent Suzanne Malveaux joins us live.

Suzanne, great to see you.

So many of these people we are waiting to meet in just a couple of minutes. And maybe the question is, who are they, and where do they come from? Let's start with those two.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Sure.

Well, he's going to roll out his economic advisory board, and we're talking about people who are outside of the White House, their independent voices, a group of 15 or so he'll be meeting on a regular basis. To head up the board is the former Fed chair, Paul Volcker. This is somebody that the president has been working with for months now when it comes to seeking his advice.

Some other folks, really heavy hitters when it comes to the corporate world, the CEOs of Caterpillar, GE, Oracle, and then some academics, as well, those who are representing Yale University, the Harvard economics, as well as UC Berkeley. This is going to be kind of a very well rounded team.

But Tony, I should let you know that it's not necessarily a new group of people that the president is sitting down with. It's a very similar group to what we saw back in December, when he was still getting his transition economic team together in Florida. He actually introduced these folks, they talked about what they thought should happen, and so they have been advising the president.

We don't anticipate that they're going to come up against him in a very hard or tough way, because they've been talking to him for the last couple of months or so. So clearly, if they have serious objections, I think they probably would have chimed in by now.

We'll see if they're looking at the situation any differently, now that we find ourselves in perhaps even dire straits. But these are familiar faces. They're people that he is very comfortable with and that he has had numerous discussions with about how to move forward.

HARRIS: And Suzanne, I expect we will hear some kind of a comment from the president on the latest jobs report.

MALVEAUX: Absolutely. He's going to use the jobs report, and he's going to make the case once again. He's going to say things are even worse, they're more dire than what we expected, and he's going to put more pressure on the Republicans, essentially making the case to get on board or simply pay the political consequences.

We have heard very partisan language coming from this president, specifically last night, when he says he was left with this mess, he was left with this huge deficit. He is trying to fix it. So he is imploring Republicans to come on board here. There's only three votes shy from the last count around where he needs that 60-vote threshold, so we'll see how that works.

HARRIS: Our White House Correspondent Suzanne Malveaux.

Suzanne, great to see you. Thank you.

The Senate majority leader says he is confident of a vote on an economic stimulus bill by this evening. Live pictures now from Capitol Hill, where debate is back under way.

Also back at it, senators meeting on the sidelines, trying to find common ground.

Our Congressional Correspondent Brianna Keilar joining us now, following all of the action on Capitol Hill. And Brianna, it sounds like it was a late evening last night. Senators back to work this morning in meetings and on the Senate floor, as well.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, that's right, meetings last night. And now, Tony, we're getting the sense, really, it is like a high-pitched scramble of negotiations and conversations here.

A couple of hours ago, you had Republicans meeting who were working on this bipartisan compromise with Democrats. Then you had -- we saw Peter Orszag, the president's budget director, in the office of Harry Reid, the top Democrat in the Senate.

Then we saw Republicans, a couple Republicans from that earlier meeting, go into Harry Reid's office. And this was very interesting, because Susan Collins, one of the Republicans really spearheading this bipartisan effort, came out of her meeting in Harry Reid's office and said, "We should have something later today." And she was smiling.

So that's quite a bit of a sign there, because it's been Republicans who have really been the ones kind of holding out and having major issues with this package. That confidence we're seeing from her, similar to what we heard Harry Reid say on the floor earlier.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: They have been genuine in their efforts. They have been responsible in their efforts. And while I don't agree with everything they're trying to do, I agree with the efforts that they have made.

And we have made progress. We have made progress since last night. We've been in a number of meetings already this morning, we worked late into the night last night, and I think that we're going to be able to work something out. I feel very comfortable that we can do that.

(END VIDEO CLIP)

KEILAR: So he's comfortable they can do that, but we're also getting a better picture, Tony, of one of the big stumbling blocks, and that is education. We were talking with Dick Durbin, number two Democrat in the Senate, and he said this is one of the areas that these moderates, especially these Republicans, have targeted.

In particular, almost $80 billion -- it's called an economic stabilization fund. It would go to states. And then the idea being that states would use it to, in a lot of ways, to rebuild some buildings, school buildings in their states. And what you have is, this is basically the baby of some Democrats, but some Republicans have said no, this really isn't the role of the federal government.

It's a tough, tough decision for Democrats, though, Tony, because one of their key constituents, education leaders, now coming out and saying, hold on. They are so opposed to this. So you can see they're working towards a compromise, but it's not without a little pain on both sides, for sure.

HARRIS: It sounds like it. OK. Brianna, good to see you. Thank you.

As the debate continues right now, floor speeches -- Senator John Thune speaking right now -- we will switch gears next hour and dive into the bailout of the banking and auto industries. Elizabeth Warren, the woman who is tracking your taxpayer dollars, will join me live. Her new report out today concludes -- would you believe it -- taxpayers got ripped off. Our words, not hers.

Elizabeth Warren, next hour.

And new this morning, peanut butter products possibly contaminated with salmonella went to school lunch programs in three states.

Senior Medical Correspondent Elizabeth Cohen joining us now from New York.

Elizabeth, good to see you.

Have -- let's start here -- have the schools been informed of the possible contamination?

ELIZABETH, COHEN, CNN SR. MEDICAL CORRESPONDENT: Certainly the states know that there's this possible contamination. Let's take a step back and look at it.

What the USDA is saying, according to "The Washington Post," is that peanut butter from the Peanut Corporation of America was sent to school lunch programs in Minnesota, Idaho and California in 2007. Now, that does not necessarily mean that these peanut products were contaminated. They may have been perfectly fine. So we don't know if they were contaminated, and we also don't know if anyone got sick -- Tony.

HARRIS: And Elizabeth, what do you do if you're worried about peanut products in your kitchen right now?

COHEN: Right. I imagine that everyone is worried about this.

HARRIS: Yes.

COHEN: Everyone has asked me this question. What do you is go to CNN.com/tips, and there you will see an explanation and also a link to the FDA Web site, where they have listed everything that has been recalled.

Now, I want to add one note to this. Let's say you have your peanut butter crackers in your hand and you wonder if you should eat them. And you say, "Oh, its not on the list, I think I'm OK." Well, what the FDA has been saying all along is, look, this is an ongoing investigation. Your crackers may not be on the list today, but they may be there tomorrow.

So they have said, if you have a peanut product like crackers or ice cream or something like that, and you don't want to throw -- and it's not on the list, it doesn't mean it's OK. Wait a little while. It might show up on the list.

HARRIS: Very good.

Our Senior Medical Correspondent Elizabeth Cohen from New York with us.

Elizabeth, thank you.

And doctors say they caught her cancer early, but this morning, there was a lot of speculation about whether Justice Ruth Bader Ginsburg will return to the Supreme Court. The 75-year-old justice has been diagnosed with pancreatic cancer. She is recovering from surgery at a New York hospital. Her condition raises the possibility that the court's only woman and leading liberal could be forced to slow down or step down.

We are just moments away from President Barack Obama's announcement of a new Economic Recovery Advisory Board, an independent board. We will bring it to you live right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

BLITZER: OK. A couple of things. Let's put up a couple of pictures here.

First of all, the East Room of the White House now, where any moment now we're expecting President Obama will introduce his independent Economic Recovery Advisory Board.

And let's show the picture of the Senate floor right now, where debate continues. Senator Daniel Inouye speaking right now.

So we will keep an eye on both of these events and bring you developments. And certainly, we will take you to the president's comments as soon as they begin.

Let's talk to Gerri Willis now.

You know, the economy is certainly backsliding. And count on some up-front advice right now from our personal finance editor. There she is, Gerri Willis.

Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi there, Tony.

HARRIS: Hey, you want to get to some e-mails today?

WILLIS: It's a busy morning, but let's squeeze them in.

HARRIS: Yes, let's do that. All right. The first one comes from Brad, who writes, "My son is in 10th grade and another in 6th grade. I don't want to do 529 funds because they will lose money. I want to get the most from financial aid."

What do you think of this approach?

WILLIS: Well, you know, Brad, look, 529 college savings plans, there are tax-advantage ways of saving for college if you don't know about them, but they don't have to be all about stocks. They can contain a variety of conservative investments.

Look, options range from money market accounts to bond funds, CDs. You can also used an age-based asset allocation fund that begins aggressively but then becomes more conservative as your child gets closer to college. You may also try getting as much scholarship money as you can.

Here is a great Web site, fastweb.com, for the free money.

HARRIS: Nice.

All right. Our second e-mail comes from Janet. She lives here in Georgia.

She writes, "I have been looking for a job for seven months. I got an offer for the perfect job, but my credit score is in the high 500s. Will this hurt my chances of getting the job, and should I explain this to HR in advance?"

What do you think about this, Gerri?

WILLIS: Well, Janet, I wouldn't say a word, frankly. Look, your credit score won't matter, because employers, well, they're not supposed to use the scores as part of employment screening. But they are allowed to look at your credit report.

OK. Plus, employers must tell you if they're picking into that report before they do it. And they're not allowed to use that information as the only reason to disqualify you from a job.

Look, if your job includes handling money, or sensitive financial info, well, then this could be a very big deal. But if not, you might want to hold that back. And if it is, feel them out. If you believe it will improve your chances, bring it up. But you don't have to, because at the end of the day, they're not supposed to even look at those scores.

HARRIS: You got time for one more?

WILLIS: Sure.

HARRIS: OK. This one is from Dee, and Dee writes, "If you have a credit card that is closed and a current credit card, both with balances..." Dee's question is, "Which should you pay off first?"

WILLIS: Well, Dee, both balances, they've got to go.

HARRIS: Yes.

WILLIS: So figure out which will benefit you the most. Check the interest rate on the cards. You'll want to funnel more money toward the card with the highest rate.

You want to pay as much as you can over the minimum. Doubling your payment is always a good idea, because it pays off the debt much faster.

And, of course, if you have any questions, send them to me at gerri@cnn.com. We love to hear from you.

HARRIS: How about "YOUR BOTTOM LINE," coming up this weekend, for everyone?

WILLIS: Saturday at 9:30 a.m., right here on CNN. Evaluating the stimulus plan, what can you get out of it? Economizing your life. Plus, I have an exclusive interview with Shaun Donovan, President Obama's new secretary of Housing and Urban Development.

I'm going to give you the time again, 9:30 a.m. Saturday, right here on CNN.

And you'll join us. Right, Tony?

HARRIS: Hey, absolutely. And thanks for giving us the heads up on Elizabeth Warren. She's a friend of the show now.

WILLIS: She's great.

HARRIS: And she's coming up next hour, right here in the NEWSROOM.

WILLIS: Yes, very exciting. I'll be watching that.

HARRIS: Yes, and we'll be watching you this weekend. Thanks, Gerri.

WILLIS: Thank you.

HARRIS: And once again, let's show you the East Room of the White House. We are just moments away from President Barack Obama's announcement of his new independent Economic Recovery Advisory Board. When the event begins, we will take you there live, right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: All right, Roger (ph) -- yes, I think this is probably the best way to do it, to split the screen here and show you as much activity as we can right now.

You see Senator Lindsey Graham right now on the Senate floor having his turn -- whoa, OK. Lose me. Lose me. He is having his turn to talk about the massive economic stimulus plan. And we are getting indications, at least from Senate Majority Leader Harry Reid, that there may be some kind of compromise, that both sides may be close to a compromise, and there might be a vote. There may just be a vote on the package at some point later today, perhaps this evening.

And lower left there, you can see the East Room of the White House right now, where President Obama, any moment now, is expected to come out with members of his new Economic Recovery Advisory Board. Paul Volcker, lead adviser, economic adviser for the president, will be there as well.

So we're expecting the event in the East Room to get under way any time now. When it does, we will take you there live. And we will continue to monitor the debate on the Senate floor on the economic stimulus plan.

If you're looking for a job outside the United States, well, think twice, because the economic downturn is, in fact, global.

Our Stan Grant reports on a couple feeling the impact in Dubai, one of the wealthiest places on earth.

(BEGIN VIDEOTAPE)

STAN GRANT, CNN CORRESPONDENT (voice-over): Lisa Charbel is due to give birth in four weeks. Her husband has lost his job.

So much for the dream life in Abu Dhabi.

LISA CHARBEL, HUSBAND LOST JOB: We have to get on a plane tomorrow and go home.

GRANT: Lisa and her husband Joseph arrived in the United Arab Emirates from Australia less than a year ago. They expected to stay at least five years. Now they face going back home, out of work and out of money.

JOSEPH CHARBEL, LOST JOB IN DUBAI: Everything (INAUDIBLE), somebody wants to buy it, come and get it.

GRANT: The Charbels are like hundreds of other expatriate couples in the UAE caught up in the global economic crunch. The slowdown not as severe here as other parts of the world, but jobs in the region are drying up.

Construction is slowing, oil prices have slumped, and the real estate boom appears to be waning. Leasing signs are more visible. House prices have slumped 25 percent in Dubai since September last year. The UAE Economy Ministry is reportedly setting up an emergency committee to deal with the global slowdown.

Shirley Morrison heads an expatriate relocations company. Fifteen years in Dubai, she says these are the toughest economic conditions she has seen. SHIRLEY MORRISON, EXECUTIVE EXPAT RELOCATION: People are losing their jobs. Clients that I have relocated in December have lost their jobs, three weeks after they moved in. Their telephones hadn't even been connected, and they were calling me, saying, "Shirley, you've got to help me."

GRANT: Each person who loses a job loses money. Not just the salary and benefits, but everything they have outlayed (ph) to set up, and the costs of going hope home. It regularly runs into the tens of thousands of dollars.

MORRISON: On average, I mean, look at all these. I mean, nursery schools, schools, relocation. Do you know, a lot of companies won't pay for (INAUDIBLE).

GRANT: In desperation, cars are being dumped at the airport as expats make quick exits. Look inside, half-finished cups of coffee, children's toys. No time to clean the car.

(on camera): From here, these abandoned cars will be taken to auction and sold to the highest bidder. That is, if there is anyone still around willing to buy them.

(voice-over): The Charbels are selling their two cars, right now making an inventory of everything they own, simply too expensive to ship it home. Their advice to any potential expats, think hard before you come.

J. CHARBEL: Unless you've got it written in your contract that you're going to be fully employed for two to five years, I would not get on that plane.

GRANT: The voice of bitter experience.

Stan Grant, CNN, Dubai.

(END VIDEOTAPE)

HARRIS: Well, the president will certainly be talking about the latest jobs report when he enters the East Room any minute now, we're expecting. Let's show you a live shot of that.

We understand that the people in the room, the gathered guests, as you see, have stopped taking their picture, or at least having their picture taken alongside the presidential podium. So that's a good indication that we might be getting under way here pretty soon.

When this event starts, we will, of course, take you there live.

In the meantime, in the NEWSROOM, planning your business by looking at the stars. Financial advice from an astrologer?

(COMMERCIAL BREAK)

HARRIS: Well, we just couldn't resist the photo. Let's take the East Room full, Roger (ph), if we could, so we could show folks just a moment ago. Well, there you go, there are people again - as soon as I mentioned that folks had taken their seats and word having their pictures taken next to the presidential lectern, you can see that folks are standing up again, music is playing, and having their pictures taken, once again.

So we are waiting patiently for the president to come to the East Room with Paul Volcker and to announce his Economic Recovery Advisory Board. When that event begins, we will take you there live.

(BEGIN VIDEO CLIP, "LARRY KING LIVE")

LARRY KING, HOST, CNN'S "LARRY KING LIVE": You see any - any light here at the tunnel, end of the tunnel?

SUZE ORMAN, PERSONAL FINANCE EXPERT: Well, it will depend. Again, do we pass this recovery plan; do we not? In the very near future, I'm sorry to say, I don't see any light at the end of the tunnel, because it's going to take time.

And that's why I keep saying to you, and I've been saying it all of the time, you've got to play recession, so to speak. Play depression. Play like you've got a job layoff, even if you're in a situation right now where you have a paycheck coming in, everything is relatively OK, you have got to put every single penny away, just in case. In case you get sick. In case you are laid off. In case your corporation shuts down.

(END VIDEO CLIP)

HARRIS: Wow. OK. Advice from an expert, the personal finance guru, Suze Orman on CNN's "LARRY KING LIVE" talking about how to survive these tough economic times. Orman says, save your money, build up a safety net so you're prepared if the worst happens.

The world's number-one automaker now running in the red, Toyota posting a 28 percent loss for the third quarter. The company says it now expects to lose $5 billion for the fiscal year ending next month. That's three times more than originally predicted and marks Toyota's first net loss since 1950.

These financial tough times prompting people to seek advice in unusual places. Some even looking to some celestial bodies.

Our Brook Baldwin explains.

(BEGIN VIDETAPE)

MAXINE TAYLOR, ASTROLOGER: The best part is that the money is coming. So you can exhale.

BROOKE BALDWIN, CNN CORRESPONDENT (voice-over): Maxine Taylor talks finances with clients almost every day, but you won't find stock portfolios or balance sheets here. Maxine's method is more celestial.

TAYLOR: Jupiter is crossing into your second house of money. Jupiter is abundance. BALDWIN: Maxine Taylor is a licensed astrologer studying the effect of stars and planets' position on everyday life.

TAYLOR: So I began studying astrology in 1966.

BALDWIN: Ever since, the economy started slipping, she's seen a rise in clients' concerns over cash.

TAYLOR: You can feel the energy. They're frightened. They're worried.

BALDWIN: Lisa Paprellali (ph) and Brett Nadel are long-time customers. Lisa runs a multi-million dollar food distribution company, and Brett is a chiropractor with three businesses to oversee. Both of them trust Maxine to predict their financial fortune.

TAYLOR: It may be tight this month and then again in August.

LISA PAPRELLALI (ph), ASTROLOGER CLIENT: Do you see me selling the business, do you see me keeping the business?

BALDWIN: They're major life questions.

DR. BRETT NADEL, CHIROPRACTOR: I'm thinking about some kind of marketing campaign or some type of expansion. Should I launch a new program now? I always talk to her about that.

TAYLOR: Plenty of pressure from this planetary prognosticator.

BALDWIN (on camera): Have you ever been wrong?

TAYLOR: Yes.

BALDWIN (voice-over): Only once, according to Maxine, and that was an accident. She says she tells it like it is. And in her 42- year career, so far, so good.

TAYLOR: I don't say things like, "oh, my God, I don't tell you how to tell you this, but..." I will guide them through what they need lovingly and positively.

BALDWIN (on camera): When you come in - what do you say to naysayers who say, you're sitting here, you're asking about you're multimillion-dollar business, and you're looking at some stars?

PAPRELLALI (ph): Well, you know, I'm very intuitive, so I kind of get that. I know what I know, and I just kind of go with what works for me and it does work for me.

BALDWIN: And for the rest of us looking for economic advice...

TAYLOR: We are going to be having help with the economy this summer.

BALDWIN: That's one prediction that might convince even the nonbelievers to watch for the planets and the stars to align. Brook Baldwin, CNN, Atlanta.

(END VIDEOTAPE)

HARRIS: Well, bargain hunters are gearing up for big sale in Kansas this weekend. The Leavenworth Salvation Army has more than 6,000 pairs of new name-brand jeans to move out of the door. The price? Pretty remarkable, actually.

(BEGIN VIDEO CLIP)

MARK NANCE, SALVATION ARMY: Well, we're selling the jeans for $3.00 a pair, and is the reason we're doing that is because, well, they were donated, and we have a lot of people in need in our community right now, plus in communities throughout Kansas.

(END VIDEO CLIP)

HARRIS: Well, the money will help needy families pay rent and utility bills. Police seized the jeans when they busted a smuggling ring. The pants eventually wound up with the Salvation Army.

A new priority for the military is now providing survival tips and tools to help troops cope with the economic crisis.

Our Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN PENTAGOON CORRESPONDENT (Voice-over): Here at Fort Belvoir, Virginia troops and their families aren't just waiting for President Obama to fix the economy, they have turned up, determined to learn how to better manage their own finances. Twenty- four-year-old Private Eric Ingram lost his job at circuit city when it went out of business. Now his only income, a part-time National Guard paycheck.

PVT. ERIC INGRAM, U.S. ARMY: I've gotten used to living paycheck to paycheck from every previous job I had, and I don't want to get into that situation where I have a house and I have something happens and the car breaks down.

STARR: These day-long workshops began late last year at bases around the country when the economy collapsed. Troops and their families say some of their biggest worries, how to handle mounting debt, especially while overseas.

SPC. SAM HAYES, U.S. ARMY: Because everybody's got debt from mortgages to property and cell phones to anything. And what kind of debt is acceptable to have?

STARR: John Meeks is here to explain banking basics. Young soldiers, he says, are especially vulnerable in today's recession to using payday loans and pawn shops to get easy money at a high cost.

JOHN MEEKS, FDIC COMMUNITY RELATIONS: You get a lot of kids who, basically, are on their own for the first time, they're getting their first paycheck, and they're kind of prone to this kind of excesses kids tend to be broken to.

STARR: Twenty-one-year-old Private First Class Kyle Thomas says what he learned here will help make sure it doesn't happen to him.

PFC. KYLE THOMAS, U.S. ARMY: I just want to make sure that I save money, and when it comes to that time, have - have a good financial plan.

STARR (on camera): The military began this program in response to the economic downturn to help troops and their families. But it's now been so successful, that they plan to continue it at military bases around the country for months to come.

Barbara Starr, CNN, Fort Belvoir, Virginia.

(END VIDEOTAPE)

HARRIS: So we have smart college students brain storming solutions of their own to the economic crisis. I went back to class to hear what they have to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE COLLEGE STUDENT: If we do this economic stimulus right now, and actually invest in infrastructure and new forms of transportation and new forms of energy and actually create new markets and help support these new types of industries, I have a lot of hope that we can come out of this stronger than we were before.

UNIDENTIFIED FEMALE COLLEGE STUDENT: We're taught to reach for the sky, and that we can reach all these things we want to do. We want to be doctors and lawyers and all of these things cost more money. You know? Basically. So, should we have cheaper dreams and goals, because frankly, I'm scared.

(END VIDEO CLIP)

HARRIS: And you can hear more from these young adults, future leaders in the next hour, CNN NEWSROOM. It's "Class in Session: The College Years."

(COMMERCIAL BREAK)

HARRIS: Once again, want to show you the East Room of the White House. Any moment now - although there's a little bit of guidance that says the obvious - it states obvious, that the president is late. He is still meeting with the members of his economic advisory - no, Economic Recovery Advisory Board. And then, at some point, they will come out and we will be introduced to this team. It's - was scheduled to begin at about 11:15, obviously late. But whenever it begins, we will take you there and bring you to the event live here in the NEWSROOM.

Another airplane lands in water and everyone is safe, this time in Darwin, Australia. Officials say the pilot encountered problems shortly after takeoff. He landed twin propeller plane in the ocean. The pilot and all five passengers aboard were unhurt and managed to walk ashore. Australia media have dubbed pilot "Sully Light." They are comparing him to Captain Chesley "Sully" Sullenberger who safely landed a U.S. Airways jet in New York's Hudson River last month.

More on this story now. Calm, confident and capable. Voice recorders from us airways flight 1549 reveal new details about Captain Chesley Sullenberger in the moments before the jet crash landed in the Hudson, again, last month. We will play part of it for you. Then, listen to what some of the passengers told CNN's Larry King after hearing the recordings.

(BEGIN AUDIO CLIP)

CAPTAIN CHESLEY "SULLY" SULLENBERGER, PILOT, U.S. AIRWAYS FLIGHT 1549: This is Cactus 1539. Hit birds. We lost thrust in both engines we're turning back to LaGuardia.

AIR TRAFFIC CONTROLLER: OK, yes, you need to return to LaGuardia. Turn left heading of two two zero.

SULLENBERGER: Two, two, zero.

AIR TRAFFIC CONTROLLER: Cactus 1529, if we can get it to you, do you want to try to land runway one three?

SULLENBERGER: We're unable. We may end up in the Hudson.

(END AUDIO CLIP)

(BEGIN VIDEO CLIP)

KING: Carl, what goes through you when you hear that, especially the calmness?

CARL BARZARIAN, FLIGHT 1549 PASSENGER: I - you know, to me, my son played it for me this morning, and I found it incredibly stressful and sobering that we were so close to death. That's the bad side. And I'm really not keen on hearing it too many more times.

But on the other side, it's exhilarating, again, that we're blessed with the best feat in aviation; with the best pilot and copilot. That's all I can say about it.

KING: Vince, what goes through your mind?

VINCE SPERA, FLIGHT 1549 PASSENGER: Well, Larry, the entire conversation you hear going back and forth, it was just indicative of how the entire cabin was. It was calm, controlled, but tense. And that's really what that conversation started - or started to sound like to me.

KING: Alberto?

ALBERTO PANERO, FLIGHT 1549 PASSENGER: Well, it's like filling pieces into the puzzle. While everything was going on the plane, we didn't have much information of what was going on, actually. So hearing this now kind of, you know, fits into the puzzle, where we see where I was at the point when everything was happening on the plane.

KING: Brad?

BRAD WENTZELL, FLIGHT 1549 PASSENGER: It's an amazing thing to hear, not only from our perspective when we were basically going for a ride, but to hear from the man who just him and the good Lord had our lives in his hand.

(END VIDEO CLIP)

HARRIS: Wow. Brad Wenzel, who you heard from last there, has a new nickname for pilot, "Cool Hand Luke."

Larry King will talk live with cool Captain Sullenberger and the crew about what went through their minds as Flight 1549 descended into the Hudson. That's next Tuesday, February 10th, 9:00 Eastern right here on CNN.

And you're coming through for us once again. Since January first, CNN has received more than 1,000 nominations of people you think should be a 2009 CNN hero. And as we review the entries, we've asked some very familiar faces to introduce us to their heroes. Here is Grammy Award Winner Winston Marsalis with his pick.

(BEGIN VIDEOTAPE)

ANNOUNCER: This is "CNN Heroes."

WINSTON MARSALIS, MUSICIAN: The most essential thing for the development of kids are those things that they do that's not school- related. Starts this group, I want to sing this. I want to enter this talent show at a young age. Do whatever you put your mind to.

I'm Winton Marsalis, and my hero uses jazz music to inspire the minds and souls of young people.

DAVEY YARBOROUGH, CHAMPIONING CHILDREN: Back in the '80s, one of my visual arts students was killed due to his involvement with drug trafficking. To have an element on the street take a student that was so bright and so promising was a trigger for me to open a music program, to take young people and nurture them on their time.

I really wanted to be able to see the students develop. We have a mentoring system of professional artists.

Sometimes I wonder, am I really getting through? But when I see that light go on in the student's face that says I can wake up tomorrow and do it again.

ON SCREEN: "Since 1998, Davey Yarborough's Washington Jazz Arts Institute has provided Jazz instruction and mentorship to more than 1,000 students from the Washington D.C. metropolitan area... free of charge." MARSALIS: He is the next step for heroic action. He sacrifices, but he actually is fulfilling himself. The students, you know, they admire him and look up to him and - they love him.

ANNOUNCER: Tell us about your hero at cnn.com/heroes.

(END VIDEOTAPE)

HARRIS: OK. And we think we are very close now to the event that we've been telling you about for the last hour. The president now in the East Room. We're expecting him very shortly. We believe - we believe we're inside well inside the two-minute warning for the president arriving in the East Room. And he will be joined by Paul Volcker, who, as you know, has been a lead economic advisor to the president. He will introduce, along with the president, the president's new Economic Recovery Advisory Board.

And this is a team of people who the president knows very well. This is a group of people - as you see, the Treasury secretary, Tim Geithner walk into the room. This is a group, as we have learned from our White House correspondent - as we learn from our White House correspondent, Suzanne Malveaux. This is a group of people that the president has depended on during the campaign, certainly in the general election campaign, to help him craft his message on the economy, certainly you would imagine that their input has been sought after and given freely as the president has formed the basis for his economic stimulus package.

You'll recall that the president's initial idea was for an economic stimulus package that was two-thirds spending, one-third in tax cuts. It was to come in at about $775 billion. And as the legislative process has played out, that bill has grown in size exponentially. And we are getting some indications that this Senate may be able to take a vote on a plan at some point later today.

As you take a look at the box in the lower right-hand portion of your screen, you can see Senator Jon Kyl now is having his moment in the Senate now to talk about the economic stimulus plan. Not sure if he is offering an amendment to the bill that passed the House, but we know that this process is also about Senators offering their remedies, their RXs, to make the stimulus package better, more substantial. And, at least at this point, to better target the economic stimulus plan, and to bring it down in cost.

Right now, based on the work of the Senate, it is running at about - close to $900 billion. And certainly part of the work that is going on right now is trying to find the savings in that, to cut out whatever fat is in that legislation. And you would think a bill that is close to $900 billion would have plenty of fat that you could slice out of it.

But that is the work that is going on right now. And the Senators are meeting; some are meeting in side meetings. We know of a meeting this morning with Arlen Specter - Senator Specter from Pennsylvania - where Senator Susan Collins was a part of that meeting, as well. And as those Senators and others were trying to work on the compromised language, what to - what to get rid of. And how to better target the package.

So here's what we'll do. So that I'm not simply vamping here, we will take a quick break. And we believe we're close - the president announcing his new team to guide him on the economy - and we'll come back and we believe at that time we'll have the president.

Let's take a break. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Once again, just want to give you a quick update. Once again, we are waiting for the president and the members of his new Economic Recovery Advisory Board to enter the East Room where we will get our moment to be introduced to them formally. When that event begins, we'll take you to the East Room live right here in the NEWSROOM.

Up to his neck in hot water, Olympic champ Michael Phelps loses a lucrative cereal contract and is temporarily suspended from competitive swimming. Kellogg Company says it won't renew Phelps' advertising contract. Phelps was photographed smoking from a bong and has since apologized.

(BEGIN VIDEO CLIP)

MICHAEL PHELPS, OLYMPIC SWIMMER: I clearly made some bad judgments and mistakes in my life. And you know - I think the best thing is to learn from your mistakes. And you know, it's already what I've done and what I continue to do and, you know, I'm going to do everything I can, you know, in the pool. And I'm already back in the water training, still deciding on a lot of things. But I'm happy to be back in the water. And you know, that's the place where I feel at home and feel comfortable.

(END VIDEO CLIP)

HARRIS: Phelps won't be allowed to compete for three months. USA Swimming says Phelps disappointed thousands of kids who look up to him as a role model.

Vindication could come today for the family of Timothy Cole. Cole died in prison while serving time for rape which DNA tests show he did not commit. A Texas court is expected to issue a ruling soon. The 1985 rape victim and another man who confessed to the crime have testified in Cole's defense. His mother tearfully pleaded for the judge to overturn her son's conviction.

(BEGIN VIDEO CLIP)

RUBY SESSION, TIMOTHY COLE'S MOTHER: He cried. (INAUDIBLE) Rock him in my arms. He said, mama, why did they convict me of a crime I did not commit?

(END VIDEO CLIP)

HARRIS: Cole died of asthma complications after about a decade in prison. He was 38 years old. If a judge exonerates him, it would apparently be the first posthumous exoneration in Texas history.

Making sure your tax dollars aren't wasted, Elizabeth Warren head of the Congressional panel overseeing the bailout joins me next hour in the CNN NEWSROOM.

But very quickly now, let's take you to the East Room of the White House where we will see the president momentarily. We are certainly seeing the members of his new advisory panel on the economy. The president to be making comments shortly. And as you can see, there is quite a panel. Let me see how many members are actually on this panel. It's well over - well, that's a big panel.

And again, this is the team that the president will be looking to for advice, for guidance on the economy as he not only continues to work through this economic downturn, but continue to craft plans to help stimulate this economy in the years to come. From what we know, this is a group from the business sector. Also some academicians as well. Apparently all leading lights and people that the president apparently has turned to time and time again as he has sought out their advice to lead the company - or, the country out of the economic downturn we're in right now. Front and center is this economic stimulus plan, as you know, being debated right now on the Senate floor.

We were monitoring comments moments ago from Arizona Senator Jon Kyl. We will continue to do that and bring you some of those comments certainly in the next hour of the CNN NEWSROOM.

But as you can see, this advisory panel now posing for pictures. This is a team that will be led by the former-FED Chairman Paul Volcker, 81 years old. And he led the Federal Reserve, as you may recall, from 1979 until 1987.

So once again, we're waiting -- any moment now - for the president to come through the door or through the curtain and introduce us to this team. No way to know at this point if that's going to happen any moment now. But we certainly want to stay with the shot and bring you the president as soon as he enters the East Room.

And while we do, what do you say we listen to maybe just a bit of what Jon Kyl is talking about and his thoughts on the stimulus package and keep the screen split. What do you say?

SEN. JON KYL (R), ARIZONA: ... by reductions in spending or tax receipts, which is the normal appropriation process, and we'll inevitably result in inflation which robs every American and in particular, retired Americans who have to rely upon their savings. We have to consider the long-term consequences. And I would hope that the better Republican ideas that have been so far pretty much rejected by our colleagues on the democratic side can be brought to the floor as amendments and will be supported so that there can be broader support to this legislation. If it's adopted on virtually a party- line basis, that is not going to be good for the country and the end result will not stimulate the economy. Mr. President, I would like to ask unanimous consent for three items to be placed in the record at this point. The first is an editorial in "The Washington Post," February fifth called, "The Senate Balks." The second is a column in...

HARRIS: And now, the President of the United States.