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Obama's Second Town Hall Meeting in Two Days; Bailout Plan Revised; Israelis Seek Change; Reunited Amid Rubble; GM's fight to survive

Aired February 10, 2009 - 10:00   ET

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

HEIDI COLLINS, CNN ANCHOR: 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.

President Obama on the road and on message. Just hours after this prime-time news conference, he drives home the message doing nothing is not an option. Next hour, the Treasury Secretary unveils an overhaul of the bank bailout. Troubled banks will find new strings attached and desperate homeowners may finally get a real lifeline.

Timothy Geithner's announcement coming your way live later tonight or today excuse me. And viewing the financial crisis from the top now, later Federal Reserve Chairman Ben Bernanke will testify at a House hearing. His focus, loosening up the credit markets and making money more available to you and me.

The more dismal news on the economy, a short time ago, we learned, General motors is making yet more cuts in its battle to survive. The automaker will slash 10,000 more positions across the world, more than a third of the eliminated jobs will be in the United States. And it will also temporarily reduce the pay of salaried U.S. workers beginning on May 1st. Many of the salary cuts will be three to seven percent. GM has faced stalled auto sales and dwindling cash reserves to keep the company afloat.

President Obama, in an urgent call for action.

(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: Let's go straight now to Capitol Hill to get more on this, where the recovery plan faces its next hurdle, of course. CNN congressional correspondent Brianna Keilar joining us now with more. Hi there, Brianna.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Hi there, Heidi, a vote today we're expecting in a few hours that would move the Senate's version of the economic stimulus package forward, and then the next step would be to reconcile the differences between the Senate version and the House version, and there certainly are some differences.

When you look at the overall price tag for both of them, it doesn't seem that different. $838 billion for the Senate, $819 billion for the House. But the composition of these two bills is really quite different. In the House, you have about $100 billion more in spending. On education, on aid to states, for things like health care. And then on the Senate side, that money is used instead for tax cuts, which includes about $70 billion to correct the alternative minimum tax, which some upper middle class folks pay, even though they were never intended to, some tax cuts for buying a new car or for buying a home.

And those tax cuts versus the spending, this could be an issue for House democrats in this negotiation process going forward, because what they would like to see, Heidi, is something more like what they have in their bill. More spending at the expense of tax cuts.

COLLINS: All right. We're watching closely today. Thank you, Brianna Keilar for us on Capitol Hill this morning.

And now to the bank bailout. Treasury Secretary Timothy Geithner plans to announce details of the overhaul this morning. Among the new features, foreclosure relief for Americans in danger of losing their homes. And creating tough new standards for banks looking for the taxpayer money. You want to keep it right here for live coverage of Geithner's announcement. We're going to bring that to you at the top of the hour, 11:00 a.m. Eastern.

President Obama going on the road to rally public support for the stimulus plan. His back drop today, Fort Myers, Florida, a city stung by foreclosures and aching for some kind of relief. CNN's Suzanne Malveaux is at the White House for us this morning.

Suzanne, after the vote, the next step is reconciling the differences between the House and the Senate bills, of course. We have been talking about what the main differences are here. Not a huge difference, at least in the cost.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, you're right, Heidi. And what we expect from the president to do today is that he's going to make the case that both sides need to come together and obviously pass the economic stimulus package as quickly as possible, that we know that the president is personally also going to get involved in the process.

I spoke with Press Secretary Robert Gibbs early this morning, and he said, yes, obviously he's going to try to get these sides together to work out a compromise. He believes that that is still very much possible. And one of the things that they're trying to do is convince the American people that their money is going to be spent responsibly.

And that is why you see the Treasury Secretary in about an hour or so, is going to lay out what they're calling this financial stability plan. This is obviously taking into account half of that $700 billion. Where did it go? A lot of folks don't know. They're going to make sure that at least half of it -- the half remaining, that the money is tracked. That there is some accountability.

So we are getting some details about what the Treasury Secretary is going to announce. One of them that they'll work with the Federal Reserve to commit $50 billion when it comes to home foreclosures, trying to keep folks in their homes. That was one of the priorities of the Obama administration. Secondly, that the Treasury is going to launch a new Web site. It's called financialstability.gov. That's going to be detailing where these federal funds are actually going, tracking the money.

A third thing, requiring banks to show how government assistance will expand lending and how they intend to use taxpayer dollars. The big problem last go-round Heidi, as you know, those banks held on to the money. They did not release that money to allow -- to lend to families and to businesses. So the credit market really is frozen. They will try to unfreeze that, if you will, defrost.

And then finally, they are going to limit executive compensation, those golden parachutes that you hear about, require any kind of luxury spending to be transparent. So these are just some of the things that they're doing that will be rolled out by the Treasury Secretary to help the American people at least have some confidence again that the government knows what its doing and is ultimately going to be responsible with our dollars, Heidi.

COLLINS: Yes. How successful can House Democrats be in getting more funding for -- or some of these other programs that we have been talking about for a long time now, education, for example?

MALVEAUX: A lot of democrats are quite upset about that on the Senate side, because they took a huge chunk, billions -- tens of billions of dollars out on these education programs. We heard President Obama also express some frustration about that. It's not clear whether or not that really is going to survive on the House side. I mean, they've made some serious cuts, some serious compromises, even the president says this is not a perfect bill, it's not a perfect process.

So it's hard to say, Heidi, whether or not that's actually going to survive in the final forum. It certainly did on the Senate side. And it seems at least the Democrats and even the president are willing to accept that.

COLLINS: All right. CNN's Suzanne Malveaux at the White House for us this morning. Thank you, Suzanne. And don't forget, we are going to be having live coverage of the President's town hall meeting in Fort Myers, scheduled to get underway in less than two hours from now, 12:05 Eastern.

Proof that winter is far from over. Parts of California are getting snowed under, but, of course, key resorts don't mind a bit. A long holiday weekend is just a few days away. Icy conditions are making travel a bit dicey in Arizona, though. Winter storm warnings are out in 2/3 of that state.

And high winds are the problems in the Midwest. You're not seeing things, either. That's a trampoline in a tree. It could get a lot worse today, too. Tornadoes are in the forecast. Rob Marciano joining us now to talk a little bit more about that. Hey there, Rob.

ROB MARCIANO, AMS METEOROLOGIST: That's why I don't like trampolines. I mean, if the trampoline can't even stay away from the trees, what's to say that jumping -

COLLINS: Did you that bear jumping down from the tree. Remember that famous video, on to the trampoline that we aired many, many times?

MARCIANO: Oh, yes.

COLLINS: Looking for the bear.

(WEATHER REPORT)

COLLINS: Winter definitely not over. No doubt about that. Thank you, Rob.

MARCIANO: All right.

COLLINS: Twenty bushfires still burning in southeastern Australia. Officials there now say the death toll will likely top 200. The fires broke out on Saturday fueled by extremely high temperatures and parched land. A task force is investigating some of the fire as possible arson. And officials are planning to release a sketch of the suspect. Tent cities have now been built to shelter some of the thousands of people who are homeless. Many families have been separated by fire. We're going to show you two of those families, now back together.

Overhauling the bank bailout program. We'll talk about what it could mean for you with a man who knows business in just a moment.

(COMMERCIAL BREAK)

COLLINS: Just a quick live look for you. Senate floor, as you know by now, the economic stimulus plan is getting ready to be voted on. There is a test vote yesterday, a bit of a compromised version now made its way to the Senate floor. So $838 billion plan will be voted on today, and we will continue to follow that and any developments that come out of the Senate.

(BEGIN VIDEO CLIP)

OBAMA: The credit crisis is real. And it's not over. I mean, we averted catastrophe by passing the TARP legislation. But as I said before, because of the lack of clarity and consistency and how it's applied, the lack of oversight in how the money went out, we didn't get as big of a bang for the buck as we should have.

My immediate task is making sure that the second half of that money, $350 billion, is spent properly. That's my first job. Before I even think about what else I've got to do, my first task is to make sure that my secretary of the Treasury, Tim Geithner, working with Larry Summers, my national economic adviser, and others, are coming up with the best possible plan to use this money wisely. In a way that's transparent and in a way that provides clear oversight.

(END VIDEO CLIP)

COLLINS: We do expect to hear more about this plan next hour, directly from the new Treasury Secretary. But joining us now from Emory University right here in Atlanta, no stranger to the CNN NEWSROOM, Jeffrey Rosensweig, a professor at the school's business college.

All right. So Jeffrey, nice to see you again. Who is it that cares about this today, the second chunk of the TARP money that's going out? People sitting at home waiting to hear about this, or is it the people who work for the banks and the financial companies who are waiting to hear what Timothy Geithner will say?

JEFFREY ROSENSWEIG, EMORY UNIVERSITY: Interestingly, so much press has been about the stimulus plan, because it has to do with spending or tax cuts. But really, everyone should care about this. Because this, if it's done right, will stop people from getting foreclosed upon, it will free up some loans for student loans, for credit cards. This is very crucial. Also, by holding our banking system together, it should stop banks from failing. This is extremely crucial to all of us, and it needs to be done right. And I'm encouraged by the plan that I'm hearing.

COLLINS: You are encouraged by the plan that you're hearing, and it is this second chunk of the money. Is this it, is this all that's going to needed for the bank bailout?

ROSENSWEIG: Heidi, that's a very sophisticated question, because I don't think so. I think there will be more money needed. But that doesn't mean we shouldn't do this. And if we do it right, some of this money could ultimately come back to the taxpayer. In other words, some of this will be spent to put it into banks. But that doesn't mean it that necessarily is just going down some bottomless hole.

The taxpayer, the government, will be buying in some sense pieces of these banks. And if we can get this system growing again, and that involves what we talked about yesterday, the stimulus plan, as well as this TARP plan, if the economy grows, these banks will, at some point, do well. And the taxpayers' ownership in them will do well. COLLINS: Well, you mentioned the free flow of credit, if that's even a term that we can ever use again. We certainly hope so. As consumers, of course. Is there any way, though, that the government can actually force a bank to let some of that money go, and get it back into the system?

ROSENSWEIG: Some people think the banks should be completely nationalized, and the U.K. may do some of that. You know, if the bank is owned by the government, the government makes those decisions. I think we'll probably come up with a good compromise, where there still is a lot of private sector involvement. Because as U.S. people, we've always believed in the private sector. But the government this time is going to have a lot more say in terms of what are you using that money for?

This plan will not say, you can take that money and buy another bank, so you have a bigger empire, or you can pay yourself outrageous salaries. So this time, I think they are going to strike a balance. And as you said last night, think President Obama and his team know that their own future is somewhat at stake. If we put in this much taxpayer money, and we don't see money flowing into things like student loans, the American public is going to be very angry. So there will be more transparency.

COLLINS: And the economy itself. In fact, listen to this, real quickly, former CEO of General Electric, Jack Welch on the same topic.

(BEGIN VIDEO CLIP)

JACK WELCH, FMR. CHAIRMAN & CEO, GENERAL ELECTRIC: If our economy doesn't have credit, we don't have a game. And we've got to get credit flowing. I know people are angry with the TARP and other things. But we have to get -- what we're doing with this stimulus plan is we're buying a new wardrobe for a patient who is lying in cardiac arrest.

We have got to take the operation, which are the banks, and get the blood flowing, and the blood in this case is credit.

(END VIDEO CLIP)

COLLINS: Jeffrey, how long is it going to be before we start to feel like that's actually happening?

ROSENSWEIG: This can happen quickly. It can happen more quickly than some of the government spending, for instance. To give one example, what Jack Welch is probably talking about, you know, we can give as much bailout money as we -- as we want to the U.S. car companies, and that could be good money after bad, unless people buy cars.

COLLINS: Right.

ROSENSWEIG: You know, $25 billion, we're just buying some time. We need, for instance, some -- either credit going to people, maybe more directed. Telling the banks we want to see this kind of action. Because right now, people -- even people with pretty good credit records, cannot get financing, even if they wanted to buy a U.S. car. That's one example.

COLLINS: Sure.

ROSENSWEIG: We talked about student -- people needing student loans, which both helps the future of our country, and helps keep people doing something positive while there is a lot of unemployment. So he is absolutely right. And I think President Obama is focused on that well. And -

COLLINS: Right.

ROSENSWEIG: Oh, sorry.

COLLINS: That's all right. That's all right. There's so much to talk about. We'd like to have you come back too because we're going to be watching closely today Timothy Geithner coming up a little bit later and then there's the whole idea of stimulus as well for a vote today in the Senate. So we appreciate your time, as always. Jeffrey Rosensweig, professor from Emory. Thanks so much.

ROSENSWEIG: Thank you, Heidi.

COLLINS: You want to keep it here for live coverage of Secretary Geithner's announcement. We plan to bring it to you at 11:00 a.m. Eastern live. And don't forget, you can see the President's town hall meeting in Fort Myers, Florida right here in the NEWSROOM as well. Our live coverage begins just after noon, Eastern.

A brain scan. What answers can it give researchers and patients when it comes to Alzheimer's? We'll ask our resident brain surgeon, Dr. Sanjay Gupta.

(COMMERCIAL BREAK)

COLLINS: Federal agents paying a visit to a Peanut Corporation of America plant in Georgia. And its headquarters in Virginia. The FBI executed search warrants on both plants linked to the Salmonella outbreaks yesterday, hauling away boxes and other pieces of evidence. Eight people have died, and nearly 600 have gotten sick since the outbreak. The peanut butter recall launched weeks ago has expanded now to include more than a thousand different products.

In response to the Salmonella outbreak, Georgia lawmakers debated a proposal yesterday that could force food manufacturers to share internal reports with investigators. The measure would require food makers to alert inspectors within a day if an internal test shows a contaminant. It could also force companies to test products at least once a year.

A possible break through in slowing or preventing Alzheimer's disease. The secret may be in the brain scans of patients suffering from mild cognitive impairment or MCI. CNN's chief medical correspondent and resident neurosurgeon Dr. Sanjay Gupta is joining us now. You seem like the guy for the job on this one. So, Sanjay, if you are diagnosed with MCI, are you actually more apt to develop Alzheimer's, then?

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Well, you know, that's the common theory. And put it more simply, people say that they've had memory problems earlier on in life, are they more likely to develop Alzheimer's later on in life?

It's not quite that easy, but researchers may be one step closer to figuring out who is more likely to develop full-blown Alzheimer's later on. Pictures tell a thousand words, Heidi. Let me show you a couple.

I find this really fascinating. This is what the brain looks like of someone with Alzheimer's brain. This is the front of the brain. This is the back of the brain. Pay attention to the blue, the dark blue here, that's where cells are starting to die. This lighter blue or aqua blue, that's where they have already died, that's known as atrophy. That's a problem.

Now, I want you to compare and contrast, what you referred to already as mild cognitive impairment. Again, people who have had memory problems, but not enough to affect their daily life. Over here, you have mild cognitive impairment plus atrophy. You see this brain looks very similar to someone with Alzheimer's, even though they don't have it. Again, compare these brains.

Look at this brain with MCI plus atrophy compared to the Alzheimer's brain, very similar, but these patient's have very different symptoms. What you might guess, Heidi, and here is the crux of the issue is that 30 percent of the people in this group within one year went on to develop Alzheimer's disease. They didn't have it within one year, you can predict 30 percent of them would do on to develop it.

Compare that really quickly here to the brain of someone who just had memory problems, but hardly any atrophy here, just a few scattered blue areas, only about eight percent of them went on to develop Alzheimer's. This is a clue, Heidi. This is a potential clue in trying to figure out who is most likely to develop Alzheimer's later on in life. It's not ready for prime time yet, but I found this really fascinating.

COLLINS: Yes, no question. I mean, we all know that there isn't a cure for Alzheimer's just yet. Could this be the breakthrough, the next step that scientists have really been waiting for?

GUPTA: I think what this represents is not an opportunity for everybody that has ever had memory problems to go out and say I need an MRI scan. That's not the answer. But what I think is, if they're going to put this in the clinical trials, and they're going to start to figure out who and why people are developing Alzheimer's, and then, as you're pointing out, be able to intervene. We don't have a cure, but this puts us one step closer to figuring out why people have such profound debilitating effects of Alzheimer's and memory problems, where others never seem to develop it. So I think that's going to come quickly within the next few years or so. COLLINS: Wow, interesting. And we talk a lot about brain exercises. My mom is doing a lot of crossword puzzles, and memory games now. Is it true, then, that that really does help keep our brain strong, as we age?

GUPTA: It does seem to. Simply doing cognitive exercises seems to help not only clinically in terms of what you observe, but also when you do these scans on people who have done a lot of these cognitive exercises, their brains tend to change in a way. What I found even more interesting, and I really started to incorporate this into my own life is simple physical exercise. Not necessarily strenuous exercise, but simple, regular physical exercise of some sort seems to affect the way that your brain metabolizes things, as well, and could help ward off Alzheimer's.

So cognitive therapy and physical exercise is your best bet for now.

COLLINS: Excellent. All right. Dr. Sanjay Gupta, our chief medical correspondent. Thank you.

GUPTA: Thanks, Heidi.

COLLINS: Bailout plan changes. What they could actually mean to you. Find out in about 30 minutes. We've got live coverage coming up. And Treasury Secretary Timothy Geithner's announcement. Keep it right here on CNN.

(COMMERCIAL BREAK)

COLLINS: A crucial day for President Obama's economic recovery package as the Senate gets ready to vote on the bill, the president is on his way to Fort Myers, Florida, where housing market is in free- fall. He'll make his case again there at his second town hall meeting in two days. Southwest Florida struggling with the foreclosure crisis and rising unemployment rates. Now Florida's governor has four words for President Obama, "Show me the money." Governor Charlie Christ along with hundreds of residents will be attending today's town hall in Fort Meyers. They are hoping to hear some solutions.

Joining us from there is Bo Turbeville, the chairman of the Lehigh Acres Planning Corporation, and Joan Patterson, a retiree from the area.

Thank you both for being with us. We know that everybody is starting to gather there behind you in Fort Myers for this town hall.

Joan, I want to begin with you. I know you're a retiree, four kids, two of which are out of work at this time. Tell me a little bit about how this has affected you and your family personally.

JOAN PATTERSON, RETIREE: Well, they've managed to survive, because they have taken charge of their situation and done what they had to do. It is not a drain on me, per se, but through them I've learned of things that I think should be known, such as one of the changes I want in the bill right now is I ask that when they set the date for COBRA assistance, which my children are not eligible for, that they would move the date forward to January 1st, because the real recession started in December of '07. So January of 1st of '08 would be my request to the conference committee and to Barack Obama.

COLLINS: Are you worried about your kids?

PATTERSON: ... people in Lehigh are in the same boat.

COLLINS: Do you worry about your kids? Joan, can you hear me OK? I'm just wondering if you worry about your kids and their future in this type of economic environment.

PATTERSON: I worry 'til we get more jobs in the economy. That everybody's in danger, not just my children, but the whole nation needs jobs. Lehigh needs jobs.

COLLINS: And Bo, let me ask you, I know you used to be the president of the Chamber of Commerce. You have been able to sort of keep your finger on the overall feelings of this area. What have you noticed? What has changed about the people in Fort Myers, Florida?

BO TURBEVILLE, CHAIRMAN, LEHIGH ACRES COMMUNITY PLANNING CORPORATION: Well, you know, a lot of the outlook is still positive. You know, we know there's a lot of work that needs to be done. Foreclosures, of course, being the main thing. And the lack of jobs for Lehigh Acres has been really a problem. About 58 percent of all of our community are blue collar workers and a lot of those people are out of work. You know, the working class -- middle class working family, one person, the wife would have been a waitress, and a -- you know, husband, was a construction worker. And, you know, now they're both out of work. So those are the kind of people we need to help. Truly the people that did not squander money, they just have -- or found some hardships.

COLLINS: Well, we have certainly appreciated your time here today, and we know that you are listening for some very specific things coming from the president at this town hall. Right behind you there, going to be happening at noon -- 12:05 to be exact today.

So once again, we appreciate your time. Bo Turbeville and Joan Patterson, thank you.

And this reminder, we are going to have live coverage, of course, of the president's town hall meeting. Is getting ready to begin at 12:05 Eastern. You can watch it live right here in the CNN NEWSROOM.

Bailout, revamped. Just about 30 minutes from now, Treasury Secretary Timothy Geithner will announce the changes made to the fiscal rescue plan. So, joining us now live is CNN Senior Correspondent Allan Chernoff with a look at what we can expect here.

Talking about a lot of piles of money here today, Allan.

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Yes, we are. And you know, there have been lots of piles of money handed out so far to the banks. The way that it's been working thus far under the bank rescue plan is, take some money. Just hand it out. The banks do whatever they want with the money. A lot of the banks have been holding on. They have not been lending. That's done nothing to help the economy.

So the new plan, the bank stabilization plan here, the financial stabilization plan, is to hand out money still to the banks, but with conditions attached to this money. The federal government wants to know about the bankers' lending the money. They want to see the money lent out. They are going to place restrictions on this cash. They don't want the banks to be just increasing their dividends to use the money for acquisitions, for stock buybacks, to increase executive compensation. They want this money in the system, and so they're going to have strings attached to it. And hopefully, that's going to help revive the lending system -- Heidi?

COLLINS: Yes, but, what about the idea of bad banks? Getting those rotten assets off of the books?

CHERNOFF: That's right. There are a lot of these little piggies that have been very bad bankers. And what the government wants to do now is to get private investors to come in, in partnership with the government, to buy these rotten assets. We have been trying to get rid of those rotten assets. They have not been getting out of the banks, or hardly at all. What they want to do now is basically get all of those assets out of the banks, and they're going to do that by putting funding up to help out the private investors so that they can take those rotten assets off the books of the banks, and then the bankers can go ahead and do business and hopefully make good loans that will help the economy -- Heidi?

COLLINS: Yes, hopefully. All right. That is the key word.

CNN's Allan Chernoff. Thank you, Allan.

And you 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 a.m. Eastern.

Quickly want to get this story out to you just as soon as it comes in here to the CNN NEWSROOM. We've been following this story for quite some time. New developments regarding the salmonella case.

Listen to this. Plainview Peanut Company, which is a subsidiary of Peanut Corporation of America -- that's the corporation and the company that's had so much trouble with all of this -- announcing today that it has suspended operation of its Plainview, Texas processing facility while the Texas Department of State Health Services and the Food and Drug Administration complete their investigation of this particular plant's procedures. They're also looking at their records of food safety. They have voluntarily done this now, taken this action, in order to cooperate with the FDA and the Texas Department of State Health Services during its food safety investigation.

So, this is the story about salmonella that we have been covering for many, many days now. Six deaths in all. So we will continue to follow it and let you know what more could happen here. Turning now to Wall Street, where investors are a bit jittery, leading up to Timothy Geithner's announcement. Susan Lisovicz is at the New York Stock Exchange with more on where stocks stand ahead of the TARP.

Hi there, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi.

Well, we're selling off ahead of it, but you know, what the treasury secretary says, the details could be -- let me just fix my mic here, so you can guys can hear me better.

COLLINS: While you do that, Susan, since my mic is on, I will look at those numbers on the big board that we have right now. Unfortunately, down by triple digits, down about 109 points, Dow Jones Industrial Averages still above that 8000 mark, though, that we have been watching for lately.

LISOVICZ: There you go. Yes, we're seeing a sell-off. But, you know, we're seeing a sell-off ahead of the announcement, but what the treasury secretary says is of huge interest on Wall Street. And you know, Allan Chernoff gave an excellent set-up scene as to what may happen with the strings attached. That is of keen interest here and I'll tell you why. Because, you know, it's one thing to have strings attached to the remaining TARP money with the financial system. It's another thing for the government to get so involved that it could make a bad, terrible situation even worse. And that's been the big fear here.

The sense that we're getting is that the treasury secretary prevailed for the government not to -- in a sense, almost nationalize these huge financial companies. Remember, these are publicly-traded companies. But we won't know exactly until the treasury secretary sells it in less than 30 minutes. So that is a big concern.

The hope is that the TARP will help stabilize the banks, but, of course, also a big concern is what happens with the stimulus. If that helps to improve the economy, then everything would work. That is that banks would not only be stabilized, but then, in a sense, they would start to lend again. And that's really what you want the banks to do. They're not in a position to do so now and that's been very obvious.

What we're seeing on Wall Street in the meantime, triple digit losses. The markets went nowhere yesterday. You know, because the TARP plan was postponed by a day. But right now, we're seeing losses. But that could obviously change, given the sense that we're going to get a lot of news today, Heidi.

COLLINS: Yes, absolutely. Absolutely, all right. Well, we will continue to watch those numbers and watch for what happens, obviously, on the Senate floor, as well.

Thanks so much, Susan Lisovicz, appreciate that. A new leader with a mandate for change. That's what Israelis are looking for as they head to the polls today. But at what price? Peace in the Middle East? Our Senior Political Analyst Bill Schneider is in Jerusalem for us this morning.

And Bill, tell us a little bit about what the polls are showing at this point.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, they're showing a big increase in the vote for the right wing parties. One of them is led by Benjamin Netanyahu, the former prime minister, but there's also a new protest party, a far-right party led by Avigdor Lieberman. Now here's the irony. If the right wing vote increases but it's split between those two parties, that could enable the Centrist candidate, a woman whose currently the foreign minister, Tzipi Livni, to squeak through with her party getting the largest number of votes and then she would most likely be invited to form a government. So she could win, even though the vote for the right is growing very fast.

COLLINS: Bill, tell us a little more then about why Israeli voters are moving to the right.

SCHNEIDER: There's a disillusionment here in Israel. I traveled around the country over the weekend. You hear it from the voters. They feel as if they have tried every approach to peace and it hasn't worked. Particularly unilateral disengagement from Gaza. They feel that they got out of Gaza, and what happened Hamas was elected and they ended up going to war. So the voters feel as if the peace process has stalled. They don't see how it can be pursued. And a lot of them are saying we have to vote for security first.

COLLINS: Well, it may seem like a simplistic question, but what difference does it make who wins?

SCHNEIDER: It's not a simplistic question, because that's exactly what Israelis are telling me and our reporters. They're saying, I don't know or care.

COLLINS: They don't care?

SCHNEIDER: It doesn't make a lost difference. Well, they don't care that much, because first of all, whoever wins is going to have to form a coalition government, and most likely, all of the leaders of the major parties are going to be part of the new government. So it won't be all that different.

The second point is, they have elected left wing governments that have brought the country to war. They have elected right wing governments, Ariel Sharon was a hawk who sponsored unilateral disengagement. So they're not sure exactly what to suspect. A lot of voters here are very cynical about politics.

But I'll tell you one thing. The one thing that will be a key factor is how strong a government it will be. If it's a strong government that has good support in the parliament, the Knesset, it may be able to make some moves towards peace. But if it's a weak and unstable government, that's very insecure, then any bold moves will be very difficult.

COLLINS All right. Our Bill Schneider coming to us live today from Jerusalem. Bill, appreciate it. Thank you.

Now to Iran. Opening the lines of communication. Iranian President Mahmoud Ahmadinejad echoing what President Obama said at his news conference last night. Both leaders agreeing the world is entering a new era of dialogue and welcomed talks between Washington and Tehran. However, President Obama says it won't happen overnight, because of Iranian support for organizations like Hamas and Hezbollah, what the U.S. considers terrorist organizations.

Overhauling the bank bailout. New details and a live announcement at the top of the hour. And watching the ripples on Wall Street. One more look for you there live at the big board. Dow Jones Industrial Average is down about 91 points.

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COLLINS: First a blizzard, now a flood. People living in western Pennsylvania had to be evacuated when the temperatures went up and everything started melting. The river was packed with ice and then overflowed. No one was hurt, but no one is letting their guard down yet, either.

Another warm-up seems to be taking place, this time in the Midwest. Rob Marciano joining us now to talk more about that, because it has been extremely cold there.

(WEATHER REPORT)

COLLINS: Officials in the Australian state of Victoria now say the death toll from the bush fires there will top 200. More than 20 fires are still burning today, and as reporter Mark Burrows of Australia's 9 news reports, those fires can be hard to contain.

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MARK BURROWS, AUSTRALIA'S CHANNEL 9 REPORTER (voice-over): A fire that's taken so much, and still it seems to want more. Yara Glenn, Tulangi (ph), Heelsville, towns in the Yara Valley still in the firing line.

It's unpredictable. One moment it's barely moving, the next it's tearing towards communities.

UNIDENTIFIED MALE: The fire could be doing absolutely nothing, and in -- you know, within half an hour, it could be, you know, off and running again.

BURROWS: The menacing view at Heelsville last night, a forest of embers. The town directly in its path.

Volunteers forget about rest and the convoys run to the fire front. And with the threat so close, no one wants to risk staying at home on the fringes.

UNIDENTIFIED FEMALE: There's been four of us sleeping in one car. It's myself, my father-in-law, my husband, and my 11-month-old son.

BURROWS: At least they've been together. Lela (ph) and Rodney Pittward (ph) became separated when the fire hit Hazeldeen (ph). They feared the worst when they ended up evacuated to different towns. Today, they were finally reunited.

At Whittlesee (ph) daughter spots her father driving down from the burnt-out down hills. They have been seen each other for three days.

UNIDENTIFIED MALE: Don't cry. Please, please! Rosa.

UNIDENTIFIED FEMALE: I love you.

UNIDENTIFIED MALE: I love you, too.

BURROWS: This is what was they've left behind, a landscape from another planet. And it rolls on endlessly. Hillsides, national parks, reduced to stubble. Somehow, a flock of sheep survive.

This was the township of Marysville (ph), as green as it gets. Marysville (ph), as it is now. A colorless ghost town.

In the Kinglake (ph) area, evidence of some desperate moments, a burned-out farm and vehicle tracks leading to a dam. No word on whether those inside survived.

(END VIDEOTAPE)

COLLINS: If you would like to help the people in Australia who have lost their homes to the fires, you can visit our "Impact Your World" page. There you will find links to charitable organizations. Once again, that's at CNN.com/impact.

Rewriting the bank bailout. New rules about to be unveiled at the top of the hour. We're going to have live coverage of that, as we look at these live pictures now with Treasury Secretary Timothy Geithner's announcement.

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OBAMA: 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 costs of their college tuition. And $1,000 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 have 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.

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COLLINS: Comments like that, expect to hear more of those comments when President Obama reaches Florida in just a little while. His plane will touch down in Fort Myers, that's where he'll hold his second town meeting in two days. It is another chance for Mr. Obama to outline his economic recovery plan. We will have live coverage, of course, of the president's town hall meeting. It begins just after noon Eastern.

President Obama's strategy of pushing his economic recovery plan on the road puts some of the hardest-hit cities in the spotlight. Yesterday, it was Elkhart, Indiana and today Fort Myers. Of the nearly 70,000 people there, about 10 percent were unemployed last November. They also lost more jobs there than any country in the country between 2007 and 2008. President Obama lost Lee County to Senator McCain during the election.

The bank bailout now, part two, in fact. New rules and possibly new benefits rippling to your street. We'll have live coverage of Timothy Geithner's announcement.

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COLLINS: California may have to free thousands of inmates to relieve prison overcrowding. A special panel of judges tentatively ruled the prison population must be cut by 40 percent. Implementing the court's ruling would result in up to 58,000 prisoners being released. Governor Arnold Schwarzenegger says he promises to appeal the case to the Supreme Court if necessary.

R&B star Chris Brown has canceled appearances at this weekend's NBA All-Star Game. Brown is accused of domestic assault and faces a felony charge of criminal threat. His girlfriend, singer Rihanna, is the alleged victim. Brown turned himself in Sunday night and was released on bond.

You'll want to keep it here for live coverage of Treasury Secretary Timothy Geithner's announcement. We are going to bring that to you live at 11:00 a.m. Eastern.

For now, I'm Heidi Collins. Join us tomorrow morning beginning at 9:00 a.m. Eastern. CNN NEWSROOM continues with Tony Harris.