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President Obama on the Economy; Senate Showdown on Stimulus; Interview With Congressional Oversight Panel Chair Elizabeth Warren

Aired February 06, 2009 - 11:58   ET

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

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you. Thank you. Please have a seat.

Good morning, everybody.

AUDIENCE: Good morning.

OBAMA: I have just had the opportunity to welcome the members of my Economic Recovery Advisory Board, and I'm grateful that I will have the counsel of these extraordinarily talented and experienced men and women in the challenging months to come.

If there's anyone, anywhere, who doubts the need for wise counsel, and bold and immediate action, just consider the very troubling news we received just this morning.

Last month, another 600,000 Americans lost their jobs. That is the single worst month of job loss in 35 years.

The Department of Labor also adjusted their job loss numbers for 2008 upwards, and now report that we've lost 3.6 million jobs since this recession began.

That's 3.6 million Americans who wake up every day wondering how they are going to pay their bills, stay in their homes, and provide for their children. That's 3.6 million Americans who need our help.

I'm sure that at the other end of Pennsylvania Avenue members of the Senate are reading these same numbers this morning. And I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious.

These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work. Now is the time for Congress to act. It's time to pass an economic recovery and reinvestment plan to get our economy moving.

This is not some abstract debate. It is an urgent and growing crisis that can only be fully understood through the unseen stories that lie underneath each and every one of those 600,000 jobs that were lost this month.

Somewhere in America, a small business has shut its doors; somewhere in America a family said goodbye to their home; somewhere in America a young parent has lost their livelihood, and they don't know what's going to take its place.

These Americans are counting on us, all of us in Washington. We have to remember that we're here to work for them, and if we drag our feet and fail to act, this crisis could turn into a catastrophe. We'll continue to get devastating job reports like today's, month after month, year after year.

It's very important to understand that, although we had a terrible year with respect to jobs last year, the problem is accelerating, not decelerating. It's getting worse, not getting better. Almost half of the jobs that were lost have been lost just in the last couple of months. These aren't my assessments. These are the assessments of independent economists.

If we don't do anything, millions more jobs will be lost.

OBAMA: More families will lose their homes. More Americans will go without health care. We'll continue to send our children to crumbling schools and be crippled by our dependence on foreign oil. That's the result of the inaction, and it's not unacceptable to the American people.

They did not choose more of the same in November. They did not send us to Washington to get stuck in partisan posturing, to try to score political points. They did not send us here to turn back to the same tried and failed approaches that were rejected because we saw the results. They sent us here to make change with the expectation that we would act.

Now, I have repeatedly acknowledged that given the magnitude and the difficulties of the problem we're facing, there are silver bullets and there ware no easy answers. The bill that's emerged from Congress is not perfect, but a bill is absolutely necessary. We can continue to improve and refine both the House and Senate versions of these bills. There may be provisions in there that need to be left out, there may be some provisions that need to be added.

But broadly speaking, the package is the right size, it has the right scope and it has the right priorities: To create 3 to 4 million jobs and to do it in a way that lays the groundwork for long term growth, by fixing our schools; modernizing health care to lower costs; repairing our roads, bridges, levees, and other vital infrastructure; move us toward energy independence. That is what America needs. It will take months, even years, to renew our economy. But every day that Washington fails to act, that recovery is delayed.

Now we also know that no single act can meet the challenges of this moment. This process is just the beginning of a long journey back to progress and growth and prosperity. Given the scope of this crisis, we'll need an all hands on deck approach to figure out how we are going to move forward.

OBAMA: And I'm pleased to have an extraordinary team, of -- of folks in my administration, Tim Geithner at Treasury, Larry Summers, Christina Roemer, Peter Orszag they're all here in the White House. I also want to be sure that we're tapping a broad and diverse range of opinion from across the country, because a historic crisis demands a historic response. And that's why we took the unique step of creating the new institution whose members have gathered here today.

Put simply, I created this Board to enlist voices to come from beyond the Washington echo chamber, to ensure that no stone is unturned as we work to put people back to work and to get our economy moving. Within this group you've got leaders of manufacturing, and leaders of finance. You've got labor and you've got management. You've got people who work in small businesses and people who work in large business. You've got some economists and some folks who think they're economists.

(LAUGHTER)

By the way, these days, everybody thinks they're an economist.

(LAUGHTER)

We will meet regularly so that I can hear different ideas and sharpen my own, and seek counsel that is candid and informed by the wider world. The Board is headed by Paul Volcker, not only because he's the tallest among us...

(LAUGHTER)

... but because, by any measure, he is one of the world's foremost experts on the economy -- one of the most experienced, insightful economic minds. He's advised me for many months. He has helped steer the American economy through many twists and turns. Probably prior to this, the worst economic crisis we had back in the early '80s -- it was Paul Volcker who helped restore confidence and pull us out of that extraordinarily difficult time.

OBAMA: So I'm glad that Paul has decided to continue his public service at this critical moment.

Assisting Paul and the rest of the board will be Austan Goolsbee, who's been one my closest economic advisers and one of the finest young economists that we have in the country. And he's going to ensure that we are making the best possible use of this unique resource.

I'm not interested in groupthink, which is why the board reflects a broad cross-section of experience and expertise and ideology. We've recruited Republican and Democrats, people who come out of the government as well as the private sector.

Not everyone is going to agree with each other, and not all of them are going to agree with me. And that's precisely the point, because we want to ensure that our policies have the benefit of independent thought and vigorous debate.

We're also going to count on these men and women to serve as additional eyes and ears for me as we work to reverse this downturn. Many of them have a ground-level view of the changes that are taking place. As they work across different sectors of the economy and different regions of the country, they can help us see the trends that are not fully formed, the trouble that may be on the horizon, and the opportunities that have yet to be seized.

I look forward to relying on their input and recommendations on specific questions as we jumpstart job creation and pursue strong and stable economic growth.

This new institution should send a signal of how seriously I take the responsibility of building an economic recovery that is broad and enduring. These are extraordinary times and for far too many Americans, the future is filled with unanswered questions: Can I get a job? Will my family be able to stay in our home? Will I be able to retire with dignity, and see my children lead a better life?

Those are the questions that we will answer affirmatively during the course of this administration. We are going to create the jobs that our people need and the future that this great nation deserves. Those are the challenges that I've put before my economic team. And these distinguished advisers will be tackling those same issues in the months and years to come. So I'm grateful to them.

And before I officially sign this executive order, I would like Paul just to say a quick word.

VOLCKER: Well, thank you, Mr. President.

I will have a very quick word. You've spoken about the variety of experience and talent you brought together. One thing I am sure they all share -- we all share -- is the sense of urgency that you alluded to and emphasized.

The figures this morning simply reinforce that, and I can't imagine that the Congress won't share the sense of urgency and you can get on the -- on the road toward the kind of program you want.

Thank you for the confidence that you've shown in all of us. We hope to help.

OBAMA: Thank you, Paul.

All right, let me get over there. (OFF-MIKE)

All right. Thank you, everybody.

(APPLAUSE)

TONY HARRIS, CNN ANCHOR: And there you have the president signing his latest executive order creating the Economic Recovery Advisory Board. As you heard the president mention, he wants this to be a board that features voices from outside of the Washington echo chamber, so you have people from all walks of life here. You have people from universities around the country, people from labor, and people who are running businesses themselves. Perhaps in the strongest language so far, the president pushing Congress to pass the massive economic stimulus package, saying it would be inexcusable and irresponsible to delay. "Now is not the time for an abstract debate. It is time for action."

And the president took his message right to Main Street. Have a listen.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Somewhere in America, a small business has shut its doors. Somewhere in America, a family said good-bye to their home. Somewhere in America, a young parent has lost their livelihood, and they don't know what's going to take its place.

And these Americans are counting on us, all of us in Washington. We have to remember that we're here to work for them, and if we drag our feet and fail to act, this crisis could turn into a catastrophe.

(END VIDEO CLIP)

HARRIS: And let's bring in our White House Correspondent Suzanne Malveaux now.

And Suzanne, as you indicated, the president certainly used the new jobs report as a jumping-off point to drive home his message that he wants the economic stimulus package passed by Congress, and also to announce the formation of this new advisory panel.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Tony, there are two things that struck me about this event.

First, you take a look, and there's no question that the advisory board, they are the best in their business. Obviously some heavy- hitters, but they may depart in some ways from the president's agenda and his policy. But these are certainly not new faces or new figures that the president has been dealt with.

He has been talking to these folks, for the most part, over the last several months. He had a transition economic team that was put in place. He rolled them out in December. So don't expect any kind of grand departure from the president's economic policy because he has these kind of outside voices, this board that he's introduced today.

The second thing that really struck me here is that the language that he's using when he talks about these dire consequences, "catastrophe," "crisis," this type of thing, obviously the president has a challenge here. As he continues to use these kinds of words -- we've heard it dramatically shift in the direction of this kind of language over the last week or so -- is that the American people don't become desensitized to this, that they don't start to think, well, maybe we don't have to take this so seriously.

This is something, you know, obviously President Bush was dealing with when he talked about the national security threat. President Obama talking about the economic threat here.

A lot of people feeling that, but they don't quite know what to make when you talk about how things could get much, much worse. And so I think he needs to be careful with that. Obviously it is going to be a challenge to see if he can push people hard enough so that they'll act, they'll pass his economic stimulus package, without kind of scaring people into just, you know, becoming immobile about this whole thing and freezing.

HARRIS: That's a good point. OK. And we will follow that as well.

Our White House Correspondent Suzanne Malveaux for us.

Suzanne, appreciate it. Thank you.

The cuts are across the board and deep. Practically every industry except health care slashed payrolls in January. A grand total of 598,000 jobs absolutely disappeared last month. That is the biggest monthly loss since the recession of the mid-1970s.

The national unemployment rate stands at 7.6 percent. That is the highest level in 16 years. For comparison, the unemployment rate for January of 2008 was 4.9 percent.

The dismal job numbers adding urgency to the Senate debate on the economic stimulus package. That debate is playing out right now on Capitol Hill. And senators have been meeting on the sidelines trying to come up with a compromise.

Our Congressional Correspondent Brianna Keilar is following the developments for us.

Brianna, what is the latest? Where do things stand? There seems to be a sense growing that there may be some kind of compromise bill to be voted on later today.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, and we're hearing that from Democrats and Republicans. What you have is this mad scramble of meetings kind of coming off tangentially from this bigger discussion between Democrats and Republicans who have been trying to forge a compromise, a group of about 17 Democrats and Republicans. And now we've seen that these discussions are centering more -- or involving more Harry Reid, the top Democrat in the Senate. So that's something certainly interesting.

We saw two of the players, two of the Republican players in these meetings, Arlen Specter and Susan Collins, go to Harry Reid's office. And then when Susan Collins left, she said, "We should have something by today," and she was smiling. This is some optimism from her, shared by Harry Reid earlier today on the Senate floor.

(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've made progress.

We made progress since last night. We've been in a number of meetings already this morning, we worked 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: Now keep in mind, this compromise that's being forged involves really a handful of Republicans, is all. And so you have other Republicans saying, overall, this is not a bipartisan effort, bringing in many more Republicans than that. Some of them saying that the overall price tag which this group is trying to whittle down to, from what we can tell, about $800 billion, many Republicans say that is just not the right thing to do.

HARRIS: All right. Brianna Keilar for us.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: ... support a stimulus bill. That really hasn't been in question. But we will not support an aimless spending spree that masquerades as a stimulus.

The economy is in terrible shape. Millions are out of work. This morning's unemployment numbers are a further sign of the severity of the crisis. But putting another trillion dollars on the nation's credit card isn't something we should do lightly. We need to get a stimulus, but more importantly, we need to get it right.

(END VIDEO CLIP)

KEILAR: And Tony, the big question is, in these discussions, these bipartisan discussions, what exactly is going to get the ax? Because that's the whole point. You have these senators going through line by line, talking about things they can pull out, spending that maybe they think won't create jobs.

And we do have some insight now. According to Dick Durbin, number two Democrat in the Senate, education. This is going to be a tough pill for some Democrats to swallow because one of the proposals coming from Republicans is to cut out almost $80 billion for an education stabilization fund.

What is that? It's money that goes to the states, and then the states can use it to rebuild school buildings. Some Republicans say the federal government shouldn't be getting involved in that. And that is tough for Democrats to say OK to.

HARRIS: Yes, it sounds like it. OK. Brianna Keilar for us, following the latest developments on Capitol Hill.

Brianna, thank you.

The troubled $700 billion bailout plan gets a makeover. On Monday, Treasury Secretary Timothy Geithner announces what's described as a major reform of the program known as TARP. Geithner also expected to unveil a separate plan to buy up troubled assets from banks.

More troubling news about the TARP. A new report today says the Bush administration overpaid by billions of dollars when it bought stocks and other assets from financial institutions.

For example, the study says insurance giant AIG received $40 billion from the Treasury for assets valued at under $15 billion. The study was conducted by the Congressional Oversight Panel for the bailout.

Harvard law professor Elizabeth Warren chairs that panel, and she joins us once again from Washington.

Professor Warren, thanks for your time. We appreciate having you on the program.

You know, Treasury had access to the same experts you did. So do we know why the Treasury overpaid?

ELIZABETH WARREN, CHAIRWOMAN, CONGRESSIONAL OVERSIGHT PANEL: Well, you know, we asked this question in our very first report, among the many questions, is the taxpayer getting a good deal for the money they're putting in? Are they getting a fair deal? That's what we were asking.

And Secretary Paulson sent a letter back to us, and the letter said these transactions are taking place at or near par. And all that really means is for every $100 that Treasury's putting in, we're getting about $100 back in terms of stock and warrants for the future.

We could have stopped there and said, thanks, we appreciate it. But we decided to do an independent investigation, got some very fancy accounting folk together, evaluation folks, a professor from Yale, a professor from Northwestern, a former comptroller of the pension funds for New York City. tried multiple ways to look at this. And the bottom line is, it just didn't come out that way.

For every $100 that Treasury put into that program, they got back about $66 in value. Now, there may have been good reasons for that, they may have wanted to create subsidizations for these banks. But the point is, you can't describe it as par and, in fact, make it a whole lot less than that without having some kind of credibility problem here.

HARRIS: No. No, I get that.

You said in your Senate testimony yesterday that moving forward -- and we want to do that, we want to look back a bit and look forward as well. You said yesterday in your testimony moving forward, don't spend more money without a clear strategy. OK.

We know the new treasury secretary, Timothy Geithner, will offer a new strategy before the Senate Finance Committee next week. Have you learned enough from your work so far to have an idea about what elements should be in a new strategy for TARP if the new strategy, for example, doesn't this include this or that? We will have missed an opportunity? WARREN: Well, I'm going to say it slightly differently.

HARRIS: OK.

WARREN: Look, we hope that this is helpful to have this valuation out there. It's a reminder, A, that can be done, and B, that somebody's going to do it. So that's going to have at least a sobering influence as people go forward.

But the real point, and the reason we're having trouble, you know, in the backwards look with Secretary Paulson, is you can't announce different things over time. You've got to really have a strategy, and you've got to be able to explain how this many hundreds of billions of dollars is designed to get us from here to there, and how we're going to measure our progress along the way.

You know, I done want to sound like a broken record here, but it keeps coming back to the same stuff. It's about transparency, it's about accountability, and it's about a coherent strategy over a period of time. This is a lot of money that's at stake.

HARRIS: Yes. But let me talk about it this way. Moving forward, should there be some kind of a program in the new strategy for TARP that does something significant about mitigating foreclosures?

WARREN: You bet. I appreciate your mentioning it, because it should have been on my list as I was ticking it off.

We have talked about foreclosures from our very first report. And let's remember, this is one of the few things that Congress specifically put in the bill authorizing TARP, and in our oversight responsibilities.

You know, after all, it's my view that this crisis started at the household level. It started with lots of lousy mortgage products that then got sliced and diced and spread throughout the national economy and throughout the world economy. They not only destabilized homes, they destabilized our economic system. If we don't find a way to put some brakes on the preventable foreclosures, the ones where people could stay in their homes and make payments, if we could just get these mortgages straightened out, if we don't find a way to stop the problem, to choke it off at its inception, things just keep getting worse.

HARRIS: Can I ask you -- let me just ask a pretty straightforward question here. What kind of shape -- and I don't know what kind of access you've had to the books of, say, Bank of America, or of Citigroup, but I'm thinking about Citi in particular here.

What kind of shape is Citi in?

WARREN: Well, we have -- we used for valuation only publicly traded information, publicly available information. We had fancy experts looking at it and lots and lots of data, but only things that were publicly traded. I haven't looked behind any curtains. What these data suggest is that there is a real problem. Overall, on average, for every $100 we put into Citi, we got stock and warrants for the future that are worth, at that moment, about $50. And since the time of the transaction, that value has plunged sharply. So where we stand today is in a lot worse shape, and that's because, at least as the market sees the information, Citi's in a lot worse shape.

HARRIS: So you know where I'm driving.

And forgive me, folks, in the studio and the control room here.

But what I'm trying to understand here is, as I'm listening to the hearing yesterday, I was struck by a sense that we could possibly end up pumping billions more into a bank like Citi or a bank like Bank of America, and this -- and all we're doing is softening the landing on the road to bankruptcy.

Am I overstating it here?

WARREN: I don't want to speculate on whether you're overstating here, but the real point that this takes us back to is we've got to have a plan that reaches further than the end of next week. We've got to have a plan that says realistically, this is where the values are in our financial institutions, this is where they ought to be, and how are we going to bring those two things together? In a long-term...

(CROSSTALK)

HARRIS: How much more money do we have to pump into the system to bring those together?

WARREN: That's exactly right.

HARRIS: Taxpayer dollars.

WARREN: Taxpayer dollars. And also, let's do be clear. How much are we going to have to say others, investors, are going to have to take their losses, too?

But we've got to find a way to close that gap. And until we find a realistic way to close that gap, we're not on the way to solving the problem.

HARRIS: Professor Warren, I appreciate your work so much. And come back and talk to us any time.

Thank you.

You know, we have heard a lot from adults on this crisis. Now hear from young folks as they talk about the recession's impact on them.

(BEGIN VIDEO CLIP)

HARRIS: How scary is it for you to be however many years you are away from entering the job market to take a look at where we are right now, snapshot, now? UNIDENTIFIED FEMALE: I have friends of mine right now who have already graduated who are teetering. They're unsure of whether they're going to have a job in a month.

(END VIDEO CLIP)

HARRIS: Our future leaders speak out about the economic crisis when class is in session.

(COMMERCIAL BREAK)

HARRIS: The single mom who recently gave birth to octuplets is finally talking back. Nadya Suleman tells NBC she can provide for her 14 children and has no plans to be a welfare mom. Suleman is taking a lot of heat for undergoing fertility treatments that resulted in the birth of eight babies.

(BEGIN VIDEO CLIP)

NADYA SULEMAN, MOTHER OF 14 CHILDREN: Yes, I feel as though I've been under the microscope because I've chosen this unconventional kind of life. You know, I didn't intend on it being unconventional. It just turned out to be.

All I wanted was children. I wanted to be a mom. That's all I ever wanted in my life. I love my children.

(END VIDEO CLIP)

HARRIS: Suleman, an only child, says she has always longed for connections and attachments, and it was her dream to have a huge family.

You know, it has been many years and a lot of hair since I was in college, but class is back in session. Hear my conversation with these bright, young adults, their solutions for the economy, and the stress of being a student today.

(COMMERCIAL BREAK)

TONY HARRIS, CNN ANCHOR: While Congress argues over the best way to stimulate the economy, smart college students are talking about solutions of their own. Class is in session, college style. I headed to Georgia Tech to get this lesson.

(BEGIN VIDEOTAPE)

HARRIS: Hey, everybody. How are you? "Class In Session" Georgia Tech style. Here we go.

Can I get a (INAUDIBLE)? How are you? Lord, have mercy! Hi, what's your name?

CHRISTINE LIU, FRESHMAN INDUSTRIAL DESIGN: Christine.

HARRIS: Let's have at it, all right? Class is in session. I want my hard core realists in the group to respond to this. Microsoft slashing 5,000 positions.

LIU: Yes. Oh, yes.

HARRIS: You with me? You with me? Chipmaker Intel cutting as many as 6,000 jobs. No, no, no, we don't have years to turn this around. How much time do you give the president to show some results?

LIU: He needs to work hard and work fast so that people have faith in him that he's going to change the economy. So even if it is just for like a short-term, like two-year plan to get people jobs.

SEBASTIAN GUERRERO, GRAD STUDENT - CIVIL ENGINEERING: We didn't become the great country we are now, you know, in 10 years or eight years. I mean it's going to take a long time, especially if you're looking at restructuring the workforce, you know, and shifting to a green economy, that's definitely going to take many decades.

HARRIS: We are an impatient nation.

LAURA STILTZ, SENIOR - APPLIED MECHANICS (ph): We need to learn patients.

HARRIS: We want it stopped (ph) yesterday!

NICK WELLKAMP, SENIOR - INDUSTRIAL ENGINEERING: Yes, but people . . .

HARRIS: We want this economy -- I'm not done -- we want this economy fixed yesterday! We're not going to give him eight to 10 years to show real results. Come on.

WELLKAMP: But part of the economy -- it's an economy based on trust. You know, you have to have trust for a bank to lend someone.

HARRIS: Trust, confidence, yes.

WELLKAMP: So if you have the government installing new programs that people are optimistic about and that start to show good signs immediately, even if it's not the massive results yet, that signals good, long-term growth. And I think getting this country back into a state where it is optimistic about the economy naturally helps the economy do better. If people are willing to spend their money, then we don't have an economic problem. If we do this economic stimulus right and actually invest in infrastructure, in 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.

GUERRERO: The thing is, we can put band-aids on the patient but not cure the disease. And what we need is structural change. I mean we've got to re-invest our capital. We've got to re-invest our human capital, our labor force, so that we can, again, have that new economy for the next century.

HARRIS: How scary is it for you to be, however many years you are away from entering the job market, to take a look at where we are right now? Snapshot, now.

STILTZ: I have friends of mine right now who have already graduated who are teetering. They're unsure of whether they're going to have a job in a month. I talked to a friend of mine who is an architect and he -- I asked him, how is it going? And he's like, well, I know I have a job for at least another month. So -- and he is like very, very nervous about it.

SHELBY BERNARD, SENIOR - SCIENCE TECHNOLOGY & CULTURE: So many of my friends have been to the career fairs trying to get jobs, hoping to get picked up by the people that they work for in their internship, and it's just not happening. So I think the best bet for me is to get my master's and prolong the repaying of the debt that I've acquired.

HARRIS: While you acquire more debt!

BERNARD: While I acquire more. But hopefully I'll be better able to pay it off once I do get out.

(END VIDEOTAPE)

HARRIS: Pretty smart, huh? Class is back in session next week as our future leaders weigh in on fighting terrorism an race relations in America.

The jobless numbers are out and the news pretty grim. Our Money team will fill us in on where we go from here, next in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Let's take you to the Senate floor right now and the debate continues over the stimulus package. OK. So I have to tell you that just a couple of minutes ago, Senator John McCain gave the Senate a piece of his mind. Have a listen.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN, (R) ARIZONA: Mr. President, you cannot call a bill bipartisan if it has two or three or four, or even five Republicans out of 535 members of Congress. You call it an agreement, but you cannot call it a bipartisan agreement. And that's not what the American people want today.

Yes, unemployment's up to 7.6 percent. The American people expect us to sit down together. My recommendation, as I see him on the floor, the distinguish chairman of the budget committee, the senator from North Dakota who probably knows as much about budget issues and spending than anybody, and others be appointed by both leaders to sit down in a room so that we can come out with a bipartisan agreement. That means leadership, that means involvement, not just of a couple three who may be in some respects not reflective of the whole 41 Republican members of the United States Senate.

(END VIDEO CLIP)

HARRIS: OK. So that was John McCain just moments ago. And this is Democrat Blanche Lincoln of Arkansas who is speaking right now. We will keep our eye on the debate, as we get to our Money team right now.

The economy has lost jobs for 13 straight months now and there's nothing to suggest it won't be 14 or 15 or 16. The unemployment rate hit 7.6 percent last month. Translation -- about 12 million Americans need a job but can't find one. The CNN Money team is covering issue number one from New York for us. Chief business correspondent Ali Velshi and "Your Money" co-host Christine Romans.

All right. You just heard the sound bite from Arizona Senator John McCain. I'm trying to understand what it is that we're fighting over here. Now clearly moderates were meeting yesterday trying to work out some compromise language and now John McCain is saying, that's not going far enough. What are we talking about here? The mix between spending and tax cuts and -- excuse me, when the government cuts taxes, is it the government spending?

ALI VELSHI, CNN CORRESPONDENT: Well, let me tell you, this is as old as battles between the Trojans and the Greeks. I mean, this is really -- the issue of how you stimulate an economy.

Now let me just tell you, tax cuts -- the idea is that if you put tax cuts in place, people save money. Businesses save money. They use that money in a way that creates demand, creates jobs, maybe they'll expand their business, create factories, things like that, employ people. Those people then have an income, pay taxes and spend and that's how you stimulate the economy.

Or you create jobs. You spend it on infrastructure. The most perfect example of that is if you actually build things. These shovel-ready projects and people have jobs.

HARRIS: Yes. Yes.

CHRISTINE ROMANS, CNN CORRESPONDENT: Those are jobs instantly. Those are jobs are like three steps down the line.

VELSHI: They're ready to go.

ROMANS: Those are jobs that . . .

VELSHI: But there's a big debate. Some people say this is not effective. You're building stuff but it's not really creating jobs. You're doing stuff that just -- you know, projects that are going to be done in a year or so.

HARRIS: But when individuals aren't spending enough money to keep the economy going, someone has to do the spending just to keep the gears going, right?

VELSHI: Just to keep the economy going.

ROMANS: Well, you know, the big economy right now is downshifting. We're in a big downshift. And people are trying to figure out, is there some kind of dislocation in the economy that's going to last one year, two years, three years, four years? Is it something we can help with spending right now? Is it -- can we take the edge off with a lot of big spending?

One thing that I think, Tony -- and I don't know if you agree with this, Ali -- is that in Washington there's this idea, don't just stand there, do something.

VELSHI: Right.

ROMANS: And they all know they have to do something. And a lot of these economists are saying you have to spend a lot of money. You've got to really get ahead of this. But how to do it and what exactly to do, there are a million different ideas, depending on where you are, I think, on the political spectrum, quite frankly, of how to do it. More tax cuts, more safety net spending, more infrastructure spending, more investments, some mix of this.

One of the criticism has been that this whole effort is unfocused. But, at the same time, it's also diversification. They're trying a lot of different things. And the economists who I talk to say, we don't know what the perfect mix is. There might not be a perfect mix. And so this is what we got.

HARRIS: OK. So we were looking at these job numbers. And, I mean, this is just really sad stuff with people losing their jobs. And I'm wondering, I hear economists suggest that this could turn around in the summer, later this year. I'm just wondering, what would lead a turnaround?

ROMANS: Well, and what kind of turnaround? We were just talking about this, Tony. OK. So you had 598,000 jobs lost just in January. The president wants to save or create 3 million to 4 million jobs. Put that in context . . .

VELSHI: Now so we've lost 3 million since the recession started, right? So we're already down three. And then you think that a healthy economy should be creating 1 million to 2 million a year. Just to keep the unemployment rate steady, you'd have to actually create that many jobs because that's how many people enter the workforce. So we're already past that number.

Now, let's talk about how you create jobs. Let's say you stop this. So you look at that chart. Let's say February we don't lose as many jobs. And then March we don't lose as many jobs. And April we lose even fewer jobs. You can still lose another 2 million or 3 million jobs by the end of the year just as you're ramping up. So the recovery could be starting in three months, let's say . . .

HARRIS: Yes.

VELSHI: We're not saying so. But that doesn't mean you're not going to lose jobs for the rest of the year. It doesn't mean that -- I just means that the degeneration of the economy will slow down.

HARRIS: Hey, before I let you go, will you please tell us what we've got planned for "Your Money" this weekend? A show I don't miss. ROMANS: Well, we're going to try to sort this out and figure out what is a good mix and how are you going to feel a stimulus if and when it is passed, how soon will you be able to feel it, what's it going to feel like, what's it going to look like and what are the big challenges here as we go ahead.

HARRIS: Ali, Christine, great to see you, as always. Thanks for you time.

VELSHI: Thank you, my friend.

HARRIS: All right. Despite the hard times facing businesses, many companies still offer workers a severance package. Really? Senior correspondent Allan Chernoff is in New York.

And, Allan, how many people are actually still getting severance pay?

ALLAN CHERNOFF, CNN CORRESPONDENT: Tony, millions and millions are. I'm here with the good news. You've been hearing a lot of bad news today. But there is some good news.

People aren't just being tossed out on to the street. The fact is, the vast majority of U.S. companies do offer severance. On average, two weeks for every year that you've spent at the company. So if you've worked at a company for 10 years, that means, on average, you'll get 20 weeks of severance. That's not all that bad. And more companies have been increasing their severance than decreasing. And in addition, looking forward, only 3 percent of U.S. companies plan to reduce severance, according to a recent survey by Right Management.

(BEGIN VIDEO CLIP)

TONY SANTORA, V.P., RIGHT MANAGEMENT: It shows the employees that aren't affected by a downsizing that the company does care and they always are thinking in the back of their mind, what if that's me. And that is a -- certainly an opportunity to retain good employees.

(END VIDEO CLIP)

CHERNOFF: Now, of course, the higher you stand on the corporate ladder, the better you're going to do if you happen to be laid off. If you're a top executive, well, three weeks, on average. Managers, 1.8 weeks. Professional and technical workers, only about 1.6 weeks.

Here's another very interesting chart. Let's have a look at the next one. Because even though the U.S. is holding pretty steady, have a look at the comparison to the other leading industrialized nation in the world. Japan, Germany, Canada, they all offer, on average, more than three weeks per year of service. And the UK, about three weeks. The U.S., only about two.

So we're holding steady. U.S. companies still offering that severance, but, boy, nothing compared to overseas. Tony, if you want to be laid off or if you're going to be laid off -- of course nobody wants to -- but if you're going to be laid off, better for it to happen, say, in Japan.

HARRIS: Yes. Do we make up the discrepancy there with other benefits for laid off workers?

CHERNOFF: There are other benefits. Most companies in the U.S. offer outplacement services. A company that comes in, helps you find a new job, present your resume properly, interviewing techniques, et cetera.

And, of course, also, as you might expect, if you're a big executive, if you're up on that corporate ladder, you're likely to get other perks, too. Some executives still get their secretarial assistants. Obviously most of us don't even have secretarial assistants. But also they'll get assistance in some cases like personal financial planning. A lot of perks like that, you know. And some can even still use the company car, maybe even the company jet. That's way up. That's about 10 levels above our pay grade.

HARRIS: Yes, that's way up the food chain. Exactly.

All right, Allan, appreciate it. Allan Chernoff for us in New York.

Once again, take a look at the Senate floor right now. Senator Max Baucus is talking about the stimulus plan. The conversations continue. We will monitor the conversation. You're in the CNN NEWSROOM.

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HARRIS: Well, let's take you to the New York Stock Exchange right now and take a look at the big board. Boy, the bulls off to the races right now. As you can see, triple digits and then some. The Dow up 179 points. Slightly off of session highs. You got a bad jobs report and look what happens to the markets. Off an running here. The consensus seems to be that the jobs report, while bad, wasn't as bad as it might have been. So a nice rally. The Nasdaq up 35 points as well.

If you are seeing red today, it is because the American Heart Association is urging everyone to wear red for women. Some of the people wearing red in our NEWSROOM. It is all about calling attention to heart disease. In case you didn't know, it is the nation's leading killer of women.

How healthy is your heart? We've got some tips on how you can find out.

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HARRIS: Our Judy Fortin is on the heartbeat today, warning it's never too soon to start tracking your heart.

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JUDY FORTIN, CNN CORRESPONDENT, (voice over): Carrie Vincent is your typical busy mom. But 18 months ago, without warning, she had a heart attack at 31, just days after giving birth to her son, Griffin. CARRIE VINCENT, HEART PATIENT: They told me that I had 90 percent blockage to my left side.

FORTIN: Carrie suffered from a clotting disorder. A simple blood test warned her of her condition, but she never expected heart problems in her 30s.

VINCENT: When I was 31, I had a heart attack.

FORTIN: Now an advocate for women's heart health, she holds seminars to let women know the signs of heart disease and what tests they can take to prevent it.

VINCENT: Know your numbers and what they mean.

FORTIN: But what numbers and tests are important, and for whom? According to the American Heart Association, everyone after the age of 20 should have their blood pressure checked, along with their good and bad cholesterol levels. And don't forget testing for triglycerides. Those are the fats in your blood that can lead to heart problems. If you're at high risk, meaning you're obese, a smoker, have diabetes or a family history of heart disease, ask your doctor about a test that measures your LDL size (ph).

DR. SCOTT JEROME, UNIVERSITY OF MARYLAND MEDICAL CENTER: Some people, if you look at them and they have completely normal LDL numbers, but then you break down their LDL size, OK, we fine that they have small particles.

FORTIN: According to the National Cholesterol Education Program, the smaller the LDL particles, the more likely they will enter the vessel lining, increasing a patient's risk of heart blockages. Another test to consider, sea reactive protein. It's a marker for inflammation that can lead to heart problems.

JEROME: What we see it irritates the lining of the blood vessels. And when you irritate the lining of the blood vessels, you allow (ph) the cholesterol, the plaque to get inside the blood vessel.

FORTIN: Cardiologists say this test is a must if you have heart disease in the family. If you don't, you can probably put this one off. And interested in those new CT and MRI scans hospitals are touting?

JEROME: They actually look at the blood vessel and see if you've got hardening of the arteries.

FORTIN: Be careful. Although some scans can provide good information like coronary calcium scores, the American Heart Association warns, due to radiation levels, people with no risk should think twice before having the test. And if you have family history of heart disease, talk to your cardiologist to see if the scans are right for you.

Judy Fortin, CNN, Atlanta.

(END VIDEOTAPE) HARRIS: And CNN NEWSROOM continues with Kyra Philips right after this.

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