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Australian Bushfires; Stimulus Bill to Be Voted On; New Bank Bailout Plan

Aired February 10, 2009 - 09:00   ET

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

HEIDI COLLINS, CNN ANCHOR: America's economic recovery. The president takes his case to the people. The Senate brings its bill to a vote and a new plan for the bank bailout. Is there any help for you?

Plus, Australia's bushfires up close. Very close.

UNIDENTIFIED MALE: (INAUDIBLE) on fire. Car's on fire. Everything is gone. Even the car has blown up.

COLLINS: He watched his home burn down then helped save lives.

It is Tuesday, February 10th. I'm Heidi Collins. You are in the CNN NEWSROOM.

General Motors struggling to survive and announcing yet another measure to fend off bankruptcy. Just minutes ago, we learned the automaker will cut 10,000 positions across the world. It will also temporarily slash the pay of salaried U.S. workers beginning on May 1st.

Many of those salary cuts will be 3 to 7 percent. GM has faced dismal auto sales, as you know by now, and dwindling cash reserves to keep the company afloat.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My administration inherited a deficit of over $1 trillion. But because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income and even greater loss of confidence. Those are deficits that could turn a crisis into a catastrophe and I refuse to let that happen.

(END VIDEO CLIP)

COLLINS: Just hours after his primetime news conference, President Obama drives home the message, doing nothing is not an option. The Senate likely just hours away from passing its own massive stimulus bill. The new price tag? $838 billion.

Less than two hours from now, the treasury unveils an overhaul of the bank bailout. Troubled banks will find new strings attached and desperate homeowners may finally get a real life line. We have a lot of ground to cover today and CNN crews are here to lay it all out for us. Of course, Brianna Keilar is on Capitol Hill where the recovery plan faces its next hurdle. And Christine Romans of the CNN money team looks at the help that may be on the way for homeowners.

Let's go ahead and begin on Capitol Hill this morning. The Senate set to vote on the recovery plan a little bit later today. It is expected to pass despite bitter Republican opposition.

CNN congressional correspondent Brianna Keilar joins us now with more.

So how's this day going to look, Brianna?

BRIANNA KEILAR, CNN CORRESPONDENT: Well, Heidi, as you said, this Senate version of the economic stimulus package expected to pass this following the vote. We really kept our eye on yesterday a key test vote on that compromise that was struck between Democrats and a few Republicans on Friday night.

At this point now, staffers already are behind the scenes talking about the differences between the House and the Senate versions of this bill, and let's take a look at the overall price tag because, as you mentioned, Heidi, the Senate version is $838 billion. The House version, the version they passed a couple of weeks ago, $819 billion.

You can see it's not a huge difference in the price tag but the composition is different. The House version includes more spending on education and aid to states to the tune of about $100 billion. And the Senate version, on the flip side, includes more in the way of tax cuts. $70 billion to fix that alternative minimum tax so that upper middle class families aren't paying a tax they aren't meant to be paying.

And then, also, tax cuts for buying a home or a new car and these differences, this is going to be creating issues for House Democrats as they go forward in these negotiations.

(BEGIN VIDEO CLIP)

REP. JAMES CLYBURN (D), SOUTH CAROLINA: House Democrats do have a difference of their priorities. Once again, if the Senate wants to keep a ceiling on this bill somewhere around $830 billion, House Democrats do not have a problem with that. Within that $830 billion, we do have some ideas about what is more stimulative and what is more accountability and that is where, I think, we're going to have some negotiations.

(END VIDEO CLIP)

KEILAR: You heard Congressman Clyburn refer to keeping a ceiling there. And it's not necessarily the Senate Democrats want to keep a ceiling on this spending as so much as they may have to, because they only garnered a few Republican votes and these are key votes to get them past that 60-vote threshold which will, again, come into play in the final passage of this bill. And Susan Collins, one of those Republicans, has said, Heidi, that if she loses a lot of what she negotiated in these marathon sessions last week that her support may not be there. So you can see Senate Democrats kind of -- they are stuck a little bit. They have to pay attention to what these Republicans want.

COLLINS: Yes. I mean, we really did want an update on the situation with the bipartisanship of all of this. So we appreciate that, Brianna Keilar. We'll be watching closely today, of course.

Now on to the bank bailout. Treasury secretary Timothy Geithner plans to announce details of the overhaul this morning. Could this be the foreclosure rescue that frantic homeowners have been waiting for?

CNN's Christine Romans joining us now with a preview of that.

Yes, that's the big question. Homeowners sitting there, and hopefully at home, mayeb not, because they have lost their home, are saying what's in it for me now? How has this chanced?

CHRISTINE ROMANS, CNN CORRESPONDENT: You're right, Heidi. And listen, this has been a solution that has eluded now two administrations. This one is going to give it a try. But for more than a year, really 18 months, we've been talking about a worsening foreclosure crisis. And in fact, when we look at the statistics, we know that that foreclosure crisis has actually accelerated over the past few weeks.

I mean some statistics show that a house is being foreclosed on every 13 seconds in this country right now. So part of the bank bailout overhaul, the TARP overhaul, that will be announced later today, is expected to be $50 to $100 billion in foreclosure prevention, which...

COLLINS: Yes.

ROMANS: ... could include measures to actually modify your loan. But here's the real concern and the challenge for this administration, Heidi. We know that the foreclosure crisis was sparked by people being in homes with mortgages that were not appropriate for them. With mortgages that were faulty.

The second wave of this is people who are facing foreclosure because they lost their income and they lost their job.

COLLINS: Right.

ROMANS: It's the same problem but it's two different parts of the same problem and that's going to be the real challenge here. You can help people fix these bad mortgages by loan modifications but if somebody has lost a job, or, God forbid, in a family two people have lost their job, then that's a real serious problem for the next wave of foreclosure crisis.

And that's something we're looking very closely to see what Timothy Geithner, the Treasury secretary, is going to say about in just about a couple of hours. COLLINS: Yes, that's right. And you know, this overhaul actually hinges on some of the what they call public/private partnerships. Tell people a little bit more about what that is.

ROMANS: Well, it looks like what the White House wants to do and the Treasury secretary wants to do is he wants to bring in Wall Street, he wants to bring in private enterprise to sort of help take responsibility for this and help be part of the solution.

This is what Larry Summers, you know, in the White House, chief economic guru in the White House, had to say about the public private part of this.

(BEGIN VIDEO CLIP)

LAWRENCE SUMMERS, DIRECTOR, NATIONAL. ECONOMIC COUNCIL: You'll If government is going to be putting money at risk, wherever possible, we want to make sure that somebody in the private sector is willing to take the same risk that taxpayers are being asked to take.

(END VIDEO CLIP)

ROMANS: So the idea having the federal government, the treasury or the Fed, helping to sort of guarantee or backstopping some of the losses but, indeed, having the private sector help take responsibility for mopping up -- investors really, help take responsibility for mopping up some of these bad assets off the banks' books.

How will it work? We just don't know yet. We're waiting to get some more details about it, of course, but one of the skepticisms, of course, is that Wall Street sort of helped lead us into this. Wall Street, the big banks got all this money in the first half of the TARP of the bank bailout and there's a lot of criticism about their performance and behavior with that money.

You know, how much of a -- how much moral authority has Wall Street and the private sector lost here and what kind of pressure can the federal government apply to get what they want, frankly, from Wall Street.

COLLINS: Yes. No question. All right. CNN's Christine Romans, appreciate that.

ROMANS: Sure.

COLLINS: Thanks very much. In fact, you are going to want to keep it right here on CNN for live coverage of Timothy Geithner's announcement. We're going to bring that to you when it happens 11:00 Eastern.

President Obama, right now, he is heading to go Ft. Myers, Florida. A live picture of Air Force One at Andrews Air Force Base. A city devastated by foreclosures.

And CNN's Suzanne Malveaux is at the White House now to tell us more about what's going to be happening today. So, obviously, another town hall meeting much like what he had yesterday in Elkhart, Indiana.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Heidi, we just saw Marine One leave the White House just moments ago. You pointed out Air Force One is waiting for him. Essentially he's going to be holding one of those town hall meetings very much like what you saw yesterday in Elkhart, Indiana.

And he's very much trying to take this debate outside of Washington away from kind of the food fight between Democrats and Republicans, and emphasize that he gets it, he understands what the American people are going through, he is highlighting their pain and their problems and it is all a part of this campaign, obviously, to sell this economic stimulus package and to take some of the power away from Republicans who are nay-sayers and even some moderate Democrats who don't believe in this plan, in this approach.

But he's trying to show that by being close and understanding Americans' problems, he understands the solution. That is essentially the message. And Heidi, I should let you know, there are some new details coming out about that announcement just in a couple of hours from the Treasury secretary. The financial stability plan.

A couple of the details, the aspects of this from the administration. They're going to be using the Treasury Department working with the Federal Reserve to commit 50 billion to help people stay in their homes. The Treasury is going to launch a new Web site called FinancialStability.gov. That's going to detail where these federal dollars are going and how to track where the money is actually going.

It's also going to require banks to show how government money, government assistance, will expand in lending and how they intend to use taxpayer dollars. That was a big problem before in the first $350 billion that banks were holding on to that money. They weren't necessarily letting it go and lending to families and businesses. So they are addressing that in this plan.

And finally, also, they deal with limiting executive compensation, basically following whether or not there is luxury goods, you know, planes, things like that, big trips that these companies are involved with.

These are just some of the highlights of the plan, Heidi. We expect a lot more details in the next couple of hours. We have learned that the Treasury secretary Geithner will say specifically that the actions we took were absolutely essential but they were inadequate and he will go on to say that the force of government support was not comprehensive or quick enough to withstand the deepening pressure brought on by the financial crisis.

So, clearly, Heidi, an acknowledgment that the last time around that $350 billion not handled well that they're going to try to get a handle on how to deal with this next portion, Heidi.

COLLINS: Yes, no question. And we just want to let everybody know what we are looking at, of course, here on the monitor behind us. And it'll split screen with you, Suzanne. And I know you probably can't see, but the president is landing down at Marine One at Andrews Air Force Base.

And as we have been mentioning all day, already this morning, he will be on his way to another town hall meeting taking place in Ft. Myers, Florida because it, too, much like Elkhart, Indiana, where he was yesterday, been hit very, very hard by this recession, foreclosures and unemployment and so forth.

So as he get ready to depart and makes his way on to Air Force One, Suzanne, what likely is he going to hear? He's going to be talking to people there, I'm sure. Whether or not it's going to be something that he is aware of by way of questions in advance and so forth, he's going to have a lot of issues to tackle and they will be personal ones.

It'd be so different than last night from the press. These are actual people who have been affected by what's been happening in their community.

MALVEAUX: And you'll hear -- you'll hear him talk about the fact that he will acknowledge some of their pain, their problems. He will acknowledge that this is a place where it had the highest home foreclosure rate last year in the country. So these are people who are suffering, who have lost their homes, who've lost their livelihood.

And he is going to say, I get it, I understand it, and this is why this economic stimulus package is so essential to pass in the Senate and, obviously, to move on in conference between the House and the Senate.

I had a chance earlier this morning to ask Press Secretary Robert Gibbs, is the president going to do anything different this time around? Is he going to get more involved in that conference process to try and figure out the final bill, the details. I mean he said he is going to be very active, very much involved in this, continue to reach out to the Republicans, continue to reach out to the Democrats to try to get this on his desk by Monday.

But he feels this is critical, absolutely critical. So make no mistake, this is part of a very aggressive public relations campaign that you're seeing here to sell this plan.

COLLINS: Yes, no question. And as we continue to we are -- in fact, we are going to be talking a little bit later, Suzanne, to a couple of people from Ft. Myers who waited for a long time to get tickets to go to this town hall event that will be happening a little bit later today.

Same situation in Elkhart. A lot of people wanted to go and there were only 1,500 tickets. So we had the opportunity to talk with them a little bit more. Some of the information that we've gotten in about the home prices. And just let me give everybody an idea as we continue to wait for the president to come out of Marine One there at Andrews Air Force Base.

Apparently, according to "The New York Times" here, 2007, foreclosures just completely multiplied. The median home price in this area, Ft. Myers, that we're talking about, dropped to $215,200. That was down from $322,000. So basically the home values had dropped about $107,000. That is definitely one of the most alarming figures we've heard.

MALVEAUX: You're absolutely right, Heidi, and one of the reasons why you're actually going to hear the Treasury secretary in about -- in a couple of hours or so is that he is going to be talking about the home foreclosure, the crisis, the housing crisis. There were a lot of questions about the initial round of that money, the bailout money, the $700 billion, whether or not any of that was going to really help people stay in their homes.

While the second half of this, the Obama administration...

COLLINS: And Suzanne, just want to let people know, obviously, we are now seeing the president. He's just come down the stairs of Marine One and getting ready to get right into Air Force One on his way to Ft. Myers, the area that we're talking about.

I'm sorry, Suzanne, finish your thought.

MALVEAUX: Oh, no. I was just saying that that's one of the things the Treasury secretary is going to talk about. He's going to talk about a portion of this new plan, that the kind of money they're saying, at least $50 billion that they're talking about, to reduce monthly payments and establish loan modification guidelines for government and private programs. This is a part of what they're talking about, getting people back into their homes.

COLLINS: Sure.

MALVEAUX: And obviously, something they are addressing this time around, Heidi.

COLLINS: All right, it will be very interesting to watch as we continue to follow these live pictures coming into the CNN NEWSROOM right now. Alongside Suzanne Malveaux standing by at the White House for us at her regular post.

Suzanne, we appreciate that. The president now getting ready to get into Air Force One there at Andrews Air Force base on his way for Ft. Myers, Florida.

And don't forget we, of course, will have live coverage of the president' town hall meeting in Ft. Myers set to get under way just after noon Eastern. So make sure you stick around for that. Going to be happening in the CNN NEWSROOM.

It is a big sales pitch. President Obama driving home his point on the economic recovery plan. So how is he doing?

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN, the most trusted name in news. Now back to the CNN NEWSROOM. COLLINS: So did the president accomplish what he set out to do last night? And joining me from Arlington, Virginia to about talk a little bit about it, Jim Vandehei, the executive editor for Politico.com.

Jim, nice to see you as always.

JIM VANDEHEI, EXECUTIVE EDITOR, POLITICO.COM: Good to see you, Heidi.

COLLINS: How did the president do last night?

VANDEHEI: I think he accomplished his goal which was he really needed to sort of grab the public's attention and talk about the need to get the stimulus bill done right away. He needs to start defining the stimulus debate on his terms. I think for the first couple of weeks he stumbled in that area and I think he allowed Republicans and he allowed the critics to define the stimulus bill, particularly the one that came out of the House as sort of a boondoggle to liberal special interest groups.

And now what he was able to do last night, and I think with some success, is say, no, we've changed that bill in the Senate. This is a bill that most economists think can do some good in the short term and it's a bill I'm willing to ram through even if we only get three Republicans on it.

COLLINS: Yes, you know, yesterday, we talked a little bit about what we were going to be expecting by way of his tone and his demeanor last night, whether he was going to come across as a tough guy on this or conciliatory because he's trying so hard to garner some Republican support here.

What do you think you saw?

VANDEHEI: Right. Certainly more of a tough guy approach. And I think by necessity. I mean he couldn't come out and talk in conciliatory terms because there really is no conciliation. There's -- you know, you only have three Republicans in the Senate that are supporting the stimulus bill. Not a single Republican in the House. So this is not, by any definition, a bipartisan bill.

COLLINS: No.

VANDEHEI: It's a Democratic bill that happened to pick up three Republican votes. And he understands now that he owns this package. And despite what he said last night at that press conference any economist you talk to on the left or right or any serious economic adviser will tell you that it is not certain at all that this bill will do what they want it to do.

You're talking about a $14 trillion economy and an $800 billion bill while larger and bigger than anything we've ever reckoned with as a country, it might not be big enough to sort of jolt the economy back to the place that they want it to be. And so now he has total ownership of that and he's going to have to educate the people on -- I think constantly on what will work, why he's doing what he's doing and what the challenges are. COLLINS: Yes. And we're going to talk a little bit more about that because I think it's a really interesting point. We have an economist coming on a little bit later to talk to about...

VANDEHEI: Good.

COLLINS: ... whether or not that's what he may be thinking. But let me go and play some of this sound because I want to get your take on this. He did continually mention about inheriting this debt. Let's listen for a moment.

VANDEHEI: Right.

(BEGIN VIDEO CLIP)

OBAMA: What I've been concerned about is some of the language that's been used suggesting that this is full of pork and this is wasteful government spending, so on and so forth. First of all, when I hear that from folks who presided over a doubling of the national debt, then, I just want them to not engage in some revisionist history. I inherited the deficit that we have right now and the economic crisis that we have right now.

(END VIDEO CLIP)

COLLINS: Jim, how do you think this came across? Him continually saying because I think that it was a bit of a theme here. I think he mentioned it at least three times in what I saw that he had inherited this.

VANDEHEI: Right.

COLLINS: And would have to deal with it from here on out.

VANDEHEI: That is very much true. He did inherit this economy and there's no doubt that Republicans under George Bush spent an extraordinary amount of money, grew the size of government in extravagant terms and it's why Republicans now are trying to sort of change their image and say, no, we're all about keeping government smaller.

They certainly were not about keeping government smaller when they were in power. What he is saying is true. What he's saying about the economic situation that he inherited is true. What's not true is the thing -- he kept talking about in that press conference this idea that there's a lot of Republicans who just want to do nothing.

I don't think there's that many Republicans who want to do nothing.

COLLINS: Yes.

VANDEHEI: What they want to do is something very much different than what he wants to do. They want to do almost exclusively tax cuts directed at different groups of people. What he was -- what Obama would like to do is a mix of tax cuts in government spending. It's a philosophical difference and it's one that, you know, Democrats are going to win because, guess what, they have the power and they can do whatever they want to do right now.

COLLINS: Yes, they have the numbers. All right, hey, I want to ask you also, how do you think the press did last night? There were an awful lot of questions, of course, on the economy. There were questions about Afghanistan and Iran. But then there was also this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: What is your reaction to Alex Rodriguez's admission that he used steroids as a member of the Texas Rangers?

OBAMA: I think it's depressing news on top of what's been a flurry of depressing items when it comes to Major League Baseball.

(END VIDEO CLIP)

COLLINS: Two wars and $838 million plan that is for the American people. A question on A-Rod? Do you think he was caught off-guard by that one?

VANDEHEI: He was caught off-guard. I think I tend to -- I think I'm with you on this one. I thought that the question was a little bit frivolous given sort of the gravity of the moment but I was arguing with my co-editor over here this morning. We thought, no, you need question like that...

COLLINS: Really?

VANDEHEI: ... because they throw him off-guard and they might elicit a response that you might not otherwise get. But I tend to agree with you that given the complexity of the stimulus bill, given the problems that we have in Afghanistan and the fact we're about to move troops from Iraq to Afghanistan.

COLLINS: Right.

VANDEHEI: Boy, we should take this opportunity to really pound away on the details and the rationale of the big decisions that he's making.

COLLINS: First primetime conference, too. It was interesting.

VANDEHEI: Yes. You're right.

COLLINS: All right. But we appreciate you having around, sure do appreciate that and we will check in with you later on next time he has a press conference.

VANDEHEI: Great. Take care.

COLLINS: Jim Vandehei, thanks.

VANDEHEI: Have a good day.

COLLINS: He sends his family to safer ground and then takes the last pictures as his house burns down. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Everyone has lost everything. There is our house, baby. Gone. Everything is gone.

(END VIDEO CLIP)

COLLINS: A man refuses to be a victim of Australia's bushfires. Find out what he does after he puts his familiar camera down.

(COMMERCIAL BREAK)

COLLINS: Keeping up with President Obama on the job now 22 days. In just about two hours from now he is set to arrive in Ft. Myers, Florida. And two minutes after noon he lead a town hall meeting there, his second in two days. And after returning to Washington, Mr. Obama plans to sit down with members of the Fiscally Conservative Democratic Blue Dog Coalition.

President Obama's strategy of pushing the economic recovery plan on the road puts some of the hardest hit cities in the spotlight. Yesterday, it was Elkhart, Indiana. And just after noon today, it will be Ft. Myers, Florida. Of the nearly 70,000 people there, about 10 percent were unemployed last November and they also lost more jobs there than any county in the country between 2007 and 2008.

President Obama lost Lee County to Senator McCain during the election. We'll be talking to two Ft. Myers residents in just about 20 minutes or so and they'll be telling us how things really are down in Ft. Myers area.

And don't forget to keep it right here on CNN. We'll be live in Ft. Myers, Florida just after noon Eastern for the president's town hall meeting.

The opening bell just about to ring on Wall Street and investors are expected to be a bit hesitant ahead of the announcement of a revamped bank bailout plan.

Susan Lisovicz is at New York Stock Exchange now with a look ahead of how the trading day will be shaping up.

Hi there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Heidi. Wall Street, once again, tethered to Washington. I am told that the stock market opened yesterday, but basically, the major averages went nowhere. I mean the NASDAQ was literally unchanged.

Why is that? Well, as you know, the new and improved TARP was postponed by a day and, basically, we're waiting on that and stimulus in about 90 minutes, Treasury secretary Timothy Geithner slated to unveil the new and improved bank bailout plan. The administration under pressure to explain exactly how it plans to use the remaining $350 billion of funds. The Treasury secretary has pled clear and specific plans. Meanwhile, President Obama's economic stimulus package cleared a big hurdle in the Senate last night when a vote to end debate was approved. And that, Heidi, is a remote opening bell, I might add.

COLLINS: Yes.

LISOVICZ: That is coming all the way from China to celebrate Suntech's solar-powered office there. It's the world's largest grid connected, building integrated solar office. That is something, obviously, that is also -- that is alternative energy, something that's supposedly will be involved with stimulus.

The president, last night, talking about the urgency of passage of this package and that failure to act would lead to more job loss. Well, guess what? General Motors cutting 10,000 salaried jobs today. At least 3,400 of those will be U.S. positions. It's also imposing salary cuts of up to 10 percent from all salaried workers.

Meanwhile, FedEx plans to lay off 900 employees in its freight unit. And finally, Swiss Bank, UBS cutting another 2,000 jobs on the heels of a big quarterly loss. What we're seeing in the first minute of trading, modest losses. The Dow, the Nasdaq, S&P each down about a little bit more than half a percent. Your bright spot of the day is the closing bell. Not the opening bell. You want to talk about energizing the traders? The "Sports Illustrated" swimsuit models.

HEIDI COLLINS, CNN ANCHOR: No!

LISOVICZ: Yes! And I've had the pleasure of interviewing these models.

COLLINS: Yes?

LISOVICZ: Yes. Talk about -- well, you know?

COLLINS: Well, save it for the close.

LISOVICZ: Yes.

(CROSSTALK)

COLLINS: We'll watch the rating go.

LISOVICZ: I'm never more popular than when I'm on the floor interviewing those models. Just put it that way.

COLLINS: Really? Excellent. All right, Susan, we'll be watching for that. Thank you.

LISOVICZ: OK. You're welcome.

COLLINS: Meanwhile, though, a full-blown crisis. That's what President Obama called the recession during his first prime time news conference in an extreme case like this, the president says government has to take the lead to turn it around.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the State of Maine. And if there is anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don't know where their next paycheck is coming from.

And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to 4 million jobs, because that's what America needs most right now. It is absolutely true that we can't depend on government alone to create jobs or economic growth. That is and must be the role of the private sector.

But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life. It is only government that can break the vicious cycle where lost jobs lead to people spending less money which leads to even more layoffs, and breaking that cycle is exactly what the plan that's moving through Congress is designed to do.

When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage. We'll also provide a $2,500 tax credit to folks who are struggling to pay the cost of their college tuition and $1000 worth of badly needed tax relief to working and middle-class families.

These steps will put more money in the pockets of those Americans who are most likely to spend it and that will help break the cycle and get our economy moving. But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems. Especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it's only helped lead us to the crisis we face right now.

(END VIDEO CLIP)

COLLINS: We will hear more from the president's news conference from last night a little bit later on in the show.

Severe storms expected for the part of the south, and we are talking about some damaging winds and large hail. Nobody really likes to hear that. Rob Marciano joining us now with details.

Hey there, Rob.

(WEATHER REPORT)

COLLINS: OK, Rob, keep us posted. In fact, if those tornadoes develop at all. Appreciate that.

ROB MARCIANO, AMS METEOROLOGIST: All right.

COLLINS: Thousands out of work and so many losing their homes to the American dream now a nightmare for many people living in southwest Florida. Hear firsthand what people say they need to turn things around.

(COMMERCIAL BREAK)

COLLINS: Seeing the president up close. An opportunity not every American gets, and iReporter Joshua Bartman was determined to document his experience at yesterday's town hall meeting in Elkhart, Indiana. Bartman says he hopes the president can turn things around. For now, he is working at a Wal-Mart trying to save enough money to go back to college. His pictures there.

Putting people back to work. President Obama told the country last night it cannot be done with tax cuts alone. He says it's time to spend money to make money.

(BEGIN VIDEO CLIP)

OBAMA: More than 90 percent of the jobs created by this plan will be in the private sector. They're not going to be make-work jobs, but jobs doing the work that America desperately needs done. Jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don't face another Katrina. They will be jobs building the wind turbines and solar panels and fuel- efficient cars that will lower our dependence on foreign oil, and modernizing our costly health care system that will save us billions of dollars and countless lives. They'll be jobs creating 21st century classrooms, libraries, and labs for millions of children across America. And they'll be the jobs of firefighters, teachers, and police officers that would otherwise be eliminated if we do not provide states with some relief.

After many weeks of debate and discussion, the plan that ultimately emerges from Congress must be big enough and bold enough to meet the size of the economic challenge that we face right now. It is a plan that is already supported by businesses representing almost every industry in America; by both the Chamber of Commerce and the AFL-CIO. It contains input, ideas, and compromises from both Democrats and Republicans. It also contains an unprecedented level of transparency and accountability, so that every American will be able to go online and see where and how we're spending every dime. What it does not contain, however, is a single pet project, not a single earmark, and it has been stripped of the projects members of both parties found most objectionable.

(END VIDEO CLIP)

COLLINS: In just a few minutes, we are going to be having more from the president's news conference from last night. And, don't forget, you can see the president's town hall meeting in Ft. Myers right here in the NEWSROOM. Our live coverage gets under way just after noon Eastern.

The bank rescue plan. Billions of dollars and a whole lot of questions. This morning, big changes on how your money is spent

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COLLINS: Rescuing the nation's banks. The government is about to overhaul how your money is spent. And private investors are expected to kick in. A preview of this morning's announcement now from CNN's Joe Johns.

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JOE JOHNS, CNN CORRESPONDENT (voice-over): Hold on to your wallet. They're rolling out part two of bailout for the banks. It's called TARP, The Troubled Asset Relief Program which under President Bush was widely criticized to put it mildly, because no one knows what happened to that first $350 billion of your money.

Granted, it almost certainly avoided a complete financial meltdown. Problem is congressional watchdogs revealed the Treasury shelled out $78 billion more for bank assets than they were worth, which we didn't find out about, until, well, last week.

ELIZABETH WARREN, TARP CONGRESSIONAL OVERSIGHT PANEL: Taxpayers frankly need to be outraged because Treasury needs the message loud and clear, and the message is you tell us the truth. You describe what it is that you're doing and then we can participate in that decision-making process.

JOHNS: An Obama administration official tells us the new financial stability plan should open up the flow of credit, leverage private capital and impose new conditions on the money. Doug Elliott of the Brookings Institute says those conditions will be tough.

DOUGLAS ELLIOTT, BROOKINGS INSTITUTION: Clearly, the mood of the public in Congress says that there needs to be that kind of accountability.

JOHNS (on camera): The government says to expect something new, too. A plan to get banks to sell and private investors to buy those bad loans undermining confidence in the financial system. The idea? Treasury would guarantee a bottom price for these toxic assets to make sure they can sell and if the assets turn around and make money, the buyer keeps the gains.

ELLIOTT: If you have private investors making the pricing decisions and using their own money, and then the government participating alongside, that's a much cleaner way of doing it.

JOHNS (voice-over): The Obama administration also plans on committing at least $50 billion to help homeowners avoid foreclosure, which was supposed to happen the first time around.

ELLIOTT: $52 billion would have a real leverage effect because what you're talking about doing is using that money to fund interest rate reductions, or reductions in principal, or payments to the mortgage servicers. JOHNS: All that said, you haven't heard the last of TARP. Analysts say it's likely there will be a need for even more money later this year.

Joe Johns, CNN, Washington.

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COLLINS: You can see the president's town hall meeting in Ft. Myers right here in the CNN NEWSROOM. It's scheduled to get under way at 12:05 Eastern.

Home video of a house in flames. An Australian man takes us on a personal tour of devastation. But his story doesn't end in the ashes. What he did after he left his house is unforgettable.

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COLLINS: Nearly 1,000 homes have been destroyed in the Australian bush fires. This is the story of one of them. And of its owner who has come to be known as a hero in the town of Kinglake. Brad Price shot this home video.

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VOICE OF BRAD PRICE, KINGLAKE, AUSTRALIA RESIDENT: The fire front's past now, everything's gone. I'm over at Kylie's house which is next door, every house around has just burnt down. There's Trev's house over there. There's the neighbors out the back. I've burnt all me face trying to fight the fires. I did as much as I could, I saved me dog that's all I was worried about. But I've lost everything. I've lost my grandparents photos. I've lost everything. I've lost everything.

This is next door, it's gone, completely gone. We got nowhere to live anymore. There's our house, gone. This is the front yard, trees are on fire. There's Erin's car, it's gone. There's the shed with me Ute, she's gone. Everyone's lost everything. I tell you what, well, there's our house baby, gone everything's gone. Next door, there's the shed, shed's on fire, car's on fire. Everything's gone. There goes Erin's car blowing up. I'm going to take a walk around town and see if I can help anyone so stay tuned.

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COLLINS: And that's exactly what he did. For the next six hours, Price searched for survivors in his town. He brought a dozen people to safety, including one elderly woman with burns over her body.

Police put the death toll at 181, but that number is expected to rise. Australia's prime minister says more than 500 people have been injured and thousands more are homeless. Officials say two towns have been completely wiped out. 20 fires are still burning. Offers of help have poured in from a number of countries, including the United States. A day of change for a key American ally in the Middle East. Israelis are picking a new prime minister in a tight race. Polls show a lead for someone who has held a job before. Conservative leader Benjamin Netanyahu. The number show moderate. Foreign Minister Tzipi Livni close behind. We'll be watching that.

It looks like flipper times 200 in the Philippines Manila Bay. All these dolphins nearly beached themselves in the shallow water. Rescuers used boats to drive them back to sea. Surprised marine experts are trying to find out why they came in so close. Incredible pictures.

A stunning admission by the highest paid player in the game. Will A- Rod's career or Major League Baseball ever recover?

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COLLINS: Yankees' slugger Alex Rodriguez is coming clean. He apologized to his fans yesterday on the ESPN for using performance- enhancing drugs.

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ALEX RODRIGUEZ, YANKEES 3RD BASE: I was naive, and I wanted to prove to everyone that, you know, I was worth, you know, being one of the greatest players of all-time. And I did -- I did take a banned substance. And, you know, for that I'm very sorry and deeply regretful. And although it was a culture back then, and in Major League Baseball overall, it was very -- I just feel that -- you know, I'm just sorry. I'm sorry for that time. I'm sorry to my fans.

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COLLINS: A-Rod admitted using anabolic steroids during the 2001 to 2003 season. He picked up a league MVP award during that time.

The plan may not be perfect, but there's no time to hesitate. That's how President Obama pitched his economic recovery package in prime time.

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OBAMA: Some of the criticisms really are with the basic idea that government should intervene at all in this moment of crisis. Now, you have some people, very sincere, who philosophically just think the government has no business interfering in the marketplace. And in fact there are several who've suggested that FDR was wrong to intervene back in the New Deal. They're fighting battles that I thought were resolved a pretty long time ago.

Most economists, almost unanimously, recognize that even if philosophically you're wary of government intervening in the economy, when you have the kind of problem we have right now -- what started on Wall Street goes to Main Street, suddenly businesses can't get credit, they start carrying back their investment, they start laying off workers, workers start pulling back in terms of spending -- that when you have that situation, that government is an important element of introducing some additional demand into the economy. We stand to lose about $1 trillion worth of demand this year and another trillion next year. And what that means is you've got this gaping hole in the economy.

That's why the figure that we initially came up with of approximately $800 billion was put forward. That wasn't just some random number that I plucked out of a hat. That was Republican and Democratic, conservative and liberal economists that I spoke to who indicated that given the magnitude of the crisis and the fact that it's happening worldwide, it's important for us to have a bill of sufficient size and scope that we can save or create 4 million jobs. That still means that you're going to have some net job loss, but at least we can start slowing the trend and moving it in the right direction.

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COLLINS: Stay with CNN for live coverage of the president's town hall meeting in Ft. Myers. That is set to get under way just after 12:00 Eastern Time. We'll be watching for that.

President on a mission en route to rally Americans for the recovery package.

Back in Washington, the Senate closes in on a deal.

Plus, help for homeowners. Financial rescue plan getting an overhaul. Details coming up live this morning. It is Tuesday, February 10th, I'm Heidi Collins. You're in the CNN NEWSROOM.