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Signing the Recovery Plan; Stimulus Bonus Plan; Deadline Looms for Automakers; Clinton in Asia; The Last Seconds of Flight 3407

Aired February 16, 2009 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: Hello, everyone. I'm Tony Harris in the CNN NEWSROOM. And here are the headlines from CNN for this Monday, February 16th, Presidents Day.

A new president, but is it the same old Washington? Republicans attack President Obama on bipartisanship.

Things that go bump in the dark. Two nuclear-armed submarines collide deep down in the Atlantic.

And a burning mystery. What's this fireball streaking across the Texas sky?

President Obama's economic road trip. He is taking his message directly to the people in stops this week. The president due to arrive back in Washington this hour from a weekend in Chicago.

Tomorrow, he heads to Denver, where he will sign the $787 billion stimulus bill. Wednesday, the president travels to Phoenix to focus on the housing crisis. He is expected to announce a plan to help homeowners on the brink of foreclosure. And on Thursday, the president heads to Ottawa for his first official trip out of the country.

It was a bumpy road getting the stimulus bill through Congress, but tomorrow the president puts pen to paper to sign the massive spending and tax cut plan into law.

White House Correspondent Dan Lothian live with details.

All right, Dan. Good to see you.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Good to see you, Tony.

HARRIS: Signing the bill in Denver, is that mostly about or all about getting in front of a friendly audience and out of the Washington hot house?

LOTHIAN: Well, it really is getting in front of that friendly audience. As you've noticed, over the past week or so, the president has wanted to get outside of Washington, as he really was pushing for the stimulus plan.

We saw him go to Indiana. He was also in Florida. Wanted to get out there, and it was twofold -- talk to the people face to face and tell them how these jobs can be created, how their communities can be turned around, but it was also sort of a sign to Washington as well.

And so this is what the White House wants to do again. It's surprising, because this is the biggest initiative of this administration, and they're not signing it here in Washington. But as you mentioned, they're going to Denver.

And again, White House Press Secretary Robert Gibbs saying that they wanted to get out there in front of the American people and go to some of these communities that will benefit from some of the jobs. The jobs they're talking about, 3.5 to 4 million jobs that will be created by this stimulus bill. But there are a lot of questions about whether or not those jobs can be created and whether or not they can be created quickly. But the administration says that this money can be put to work very quickly in creating jobs.

Take a listen.

(BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: For the first time, we're going to put money back in the pockets of middle class Americans, not just those that have done well for the past few years, but people who need it the very most. We're going to make some needed investments that will help our long-term economic growth. All of those things together provide a balanced approach that will get this economy moving again, put people back to work, and we hope to see improvement soon.

(END VIDEO CLIP)

LOTHIAN: And Tony, you talked about the bumpy road. And certainly it was.

We saw again not a single Republican in the House voted for this, only three Republican senators came on board. And so this whole effort that the president really was pushing for, this bipartisan effort, certainly from Republicans, have been very critical of it.

We saw John McCain over the weekend, not very happy with how this has all played out. So that's something that will certainly hurt the administration going forward. But you know, Robert Gibbs pointing out that it's going to take some time. The president came here to change the way that Washington works, and he believe it's going to take some time before that happens.

HARRIS: You know, it sounds like it's going to take some time, Dan, to fill these vacant cabinet positions. Something tells me that the minute the president can confirm a commerce secretary, maybe the other pieces fall into place.

LOTHIAN: That's right. And you know, what's interesting is that this administration really has been trying so hard to focus on this stimulus package over the, you know, last few days or so. And they continue to be distracted by these withdrawals of the nominees.

And so -- but as they pointed out, this is not something that's going to happen overnight. They really have to take the time. It's not an "American Idol" contest, as David Axelrod pointed out. This is something they're going to have to take time and vet properly so they can find the right people for these positions. But certainly it's not something they want to be dealing with this far into the administration.

HARRIS: It's a little embarrassing, yes.

LOTHIAN: You know, they hoped to -- they wanted to have this behind them by now.

HARRIS: Our White House Correspondent Dan Lothian for us.

Dan, thanks.

LOTHIAN: OK.

HARRIS: You know, when Wall Street financial firms revealed earlier this year they doled out billions in bonuses, there were howls of protests. That outrage prompted Congress to further tighten executive compensation rules in the mammoth stimulus bill.

Jim Acosta now with details.

(BEGIN VIDEOTAPE)

SEN. CHRISTOPHER DODD (D), CHAIRMAN, BANKING COMMITTEE: I can't begin to describe the anger that we hear.

JIM ACOSTA, CNN CORRESPONDENT (voice-over): Added at the last minute to the stimulus, an amendment from Senate Banking Committee Chairman Chris Dodd that would slash those big executive bonuses at the nation's bailed out banks.

DODD: The idea that we continue to pour billions of dollars into institutions that are still awarding their employees massive amounts of income is infuriating.

ACOSTA: For banks receiving bailout money, the Dodd amendment would cap bonuses for top executives at one-third their annual salary, and no more of those lavish severance packages or golden parachutes.

KENNETH LEWIS, CEO, BANK OF AMERICA: We understand that taxpayers are angry.

ACOSTA: Take Bank of America CEO Kenneth Lewis. His salary in 2007 was $1.5 million, but his actual take-home pay was nearly $25 million, including bonus and stock options. Dodd's plan would have shrunk that bonus.

DAVID AXELROD, SR. WHITE HOUSE ADVISER: Well, obviously, Secretary Geithner and Mr. Summers had concerns about that.

ACOSTA: The amendment goes beyond what the White House originally proposed. President Obama wanted to limit executive salaries, not bonuses. BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Top executives at firms receiving extraordinary help from U.S. taxpayers will have their compensation capped at $500,000.

ACOSTA: Opponents of the bonus cap say it would cause a bank brain drain, driving away some of the industry's brightest executives to other jobs.

REP. PETE KING (R), NEW YORK: I think there should have been some caps. I think this went too far, and I think it can be counterproductive.

ACOSTA: But supporters ask, what brain drain, as in the brains who got the banks into this mess?

SEN. RICHARD SHELBY (R), ALABAMA: We should put a limit on where -- what these people make, where they're begging for our money. We should protect the taxpayers here.

ACOSTA: Dodd says his office is getting flooded with calls from Wall Street that he says amount to boardroom bellyaching.

DODD: We're in the deepest economic crisis in the lifetime of any living American, and they're worried about their pay.

ACOSTA: But limiting executive pay may be just the beginning.

As one key Republican put it...

SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: I would not take off the idea of nationalizing the banks.

ACOSTA (on camera): Critics of the bonus cap say it will tempt some banks to simply return their bailout money or find loopholes in the new law. But some in Congress aren't buying any of that, saying the banks need the bailout to survive. There is one thing lawmakers will have to keep in mind -- bankers pay taxes, and capping their bonuses will mean less revenue coming in to Uncle Sam.

Jim Acosta, CNN, Washington.

(END VIDEOTAPE)

HARRIS: And mayors across the country ready and waiting for some of that stimulus money. We will talk with two who lobbied for passage of the plan. The mayors of Phoenix, Arizona, and Southfield, Michigan, live in about, oh, seven minutes.

A big deadline is looming for Detroit. General Motors and Chrysler must prove to the government by tomorrow that they have a worthy turnaround plan.

Wow.

Lets check in with Susan Lisovicz at the New York Stock Exchange with more. Good morning, Susan.

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: I'm actually uptown today, Tony.

HARRIS: Oh, that's right. That's right.

LISOVICZ: They won't let me in the New York Stock Exchange. It's Presidents Day.

HARRIS: It's closed for Presidents Day.

LISOVICZ: There's plenty of business news though, and this one is certainly high on the list, Tony. The key word here is "viability."

GM and Chrysler have a Tuesday deadline to file their plans of viability with the Treasury Department. The deepening recession certainly has cut their car sales terribly. Right now in half.

GM received just about $13.5 billion from the government in late December, while Chrysler received $4 billion. And conditions in the industry have gotten considerably worse in the weeks since then, as job losses mount.

Now there's a serious risk that the pair could do the previously unthinkable, file for bankruptcy. "The Wall Street Journal" reports GM is poised to offer two options. Neither of them would come cheap.

The first is for the Treasury to commit billions more in bailout money to fund the carmakers' operations. The other is to provide financial backing as part of a bankruptcy filing. Some argue that reorganizing under bankruptcy protection is actually the best way for the company to slash costs and eventually return to profitability. Sources tell The Journal that the Treasury Department believes that GM needs at least $5 billion more in order to continue operating beyond the first quarter.

It's that dire -- Tony.

HARRIS: So one of the key problems -- and you've been following this and reporting on this -- particularly with GM, is that it has all of these unionized workers. And we know that the two sides are sitting down together and that those talks are pretty contentious right now, with some walkouts reported late last week.

LISOVICZ: That's right, Tony. And a lot of concessions have been made by the UAW.

The viability plans are supposed to include concessions from all groups tied to the automakers, including their workers. But GM's talks with the UAW broke off late Friday due to conflicts over health care benefits for retirees. It's been a huge, huge issue for some time now. The talks resumed yesterday, but no word as to whether any side made progress. Meanwhile, the Obama administration is not expected to appoint the so-called car czar, but rather create a presidential task force on autos overseen by two of his top people on the financial side. That is Treasury Secretary Geithner and the chairman of the National Economic Council, Larry Summers. And there's also going to be an appointment made to that panel of a restructuring expert. So that puts credence to the very real possibility of a bankruptcy filing.

And the reason why I'm uptown today, once again, Tony, is that financial markets are closed in observance of Presidents Day. But you know, investors need a day off, because when we return tomorrow, the Dow Industrials will be coming off their worst weekly performance on a percentage basis. Since the average hit its bear market lows in late November, the Dow is now down 10.5 percent this short year.

HARRIS: It's just hard to know what turns that around for investors, but you'll be following it and you'll fill us in.

LISOVICZ: Well, that's why I think that a lot of investors are crying for stimulus.

HARRIS: Yes.

LISOVICZ: And that certainly is another thing that adds to Detroit's woes.

HARRIS: Good point.

LISOVICZ: I mean, GM's shares are down probably more than 20 percent this year to date, and they were under terrible pressure last year. And that just really puts their financial situation -- it make it's much more -- that much more precarious.

HARRIS: Yes.

Good to see you, Susan. Thank you.

You know, it is not a bird or a plane. It's a big fireball in the sky. Take a look right there. You see it? And an even bigger mystery today.

(COMMERCIAL BREAK)

HARRIS: Some Republicans blasting President Obama over the stimulus bill. They say he failed to deliver on his pledge of bipartisanship. Is this part of the GOP strategy? Can Republicans win by losing?

(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")

DAN AKROYD, ACTOR: All right. Here's the deal. Pelosi says the Democratic House and Senate members want to work out their version of the bill, and then show it to us for our input.

UNIDENTIFIED MALE: So basically we're being cut out.

AKROYD: It looks that way.

UNIDENTIFIED MALE: That's great!

UNIDENTIFIED MALE: Yes, this is perfect. They're not letting us participate at all.

UNIDENTIFIED FEMALE: Like we don't even exist.

UNIDENTIFIED MALE: We're totally powerless.

(END VIDEO CLIP, "SATURDAY NIGHT LIVE")

HARRIS: OK. A little fun with "Saturday Night Live" there.

Congressional Correspondent Brianna Keiler live from Capitol Hill for us.

Brianna, good to see you.

What is the Republican strategy here?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, with only three Republicans of the entire Congress on board voting yes on this economic stimulus package, it's obviously about making President Obama and Democrats own this stimulus package. This is their baby.

And it's not that Republicans want the economy to fail. They don't. And they do want the government to get involved. But there's certainly a political calculation here on a couple of fronts.

One is that if this economic stimulus package is slow to work -- and we've heard from many economists that it could be slow -- it may be too slow for the election cycle going into November of 2010, and that could obviously play into the hands of Republicans. The other thing, Tony, as you know, historically, the first midterm election in a new presidency, the president's party tends to lose seats in Congress.

HARRIS: Yes.

KEILAR: And right now, Democrats have such a big majority in the Senate and the House, they -- they, you know, in a vacuum would have a hard time holding on to some of these seats.

HARRIS: Sure.

Let's go to a big -- look, this is a big "what if," but what if the stimulus works? What then for Republicans in the next election?

KEILAR: Well, it's possible then that they could have gambled and that they could have lost, especially in some of those districts that are very hard hit. Michigan, for instance, where unemployment is so high, and there are members, Republican members, who voted against this, especially in the House.

Some Democratic ads have already been run against these members, and you can just see that it's a Democratic campaign ad waiting to happen, and vice versa as well. If the economic stimulus package isn't working or isn't working fast enough, Republicans could run those ads and capitalize on this against Democrats.

HARRIS: Boy. You know, I'm struck by the emptiness of the halls around you, and we can hear your voice just reverberating against the walls there.

One more quick question for you. The lack of bipartisanship on the stimulus vote, will we see more of that on other issues, Brianna?

KEILAR: That's the expectation, Tony. If ever there was an incentive for an opposition party to work with a president, this is it...

HARRIS: Yes.

KEILAR: ... with a president who is as popular as President Obama is. And still, Republicans haven't taken that route. So that's one thing to show you as well.

But the other thing is that Republicans are really trying to re- brand themselves. They think that having gotten away from their brand of small government under President George Bush, that's one of the reasons why they saw a lot of these seats slip away. They're trying to reclaim that fiscal conservative label, and they think that what they've done here in the last few weeks has really been that voice of fiscal conservatism, and they plan on doing that going forward, because there's a whole lot more on the economy that we're looking at.

They have to pass -- Congress has to pass the budget for the second half of the fiscal year, housing, bank reform. And Republicans can move forward with the strategy on those issues too -- Tony.

HARRIS: Very good.

Brianna Keiler on Capitol Hill for us.

Brianna, good to see you.

And as we were talking to Brianna, obviously you can see Air Force One touching down. The president back in -- shortly back in Washington, D.C. It is a very, very busy week for the president, and we will tell you all about it in just a couple of moments.

Many of the nation's mayors are ready and waiting for financial help once President Obama signs the stimulus bill tomorrow. Two of the mayors who lobbied for passage of the plan are joining us, Mayor Brenda Lawrence of Southfield, Michigan, and Mayor Phil Gordon of Phoenix, Arizona.

Good to see you both. Thank you for your time today.

MAYOR BRENDA LAWRENCE, SOUTHFIELD, MICHIGAN: Glad to be here, Tony.

MAYOR PHIL GORDON, PHOENIX, ARIZONA: Nice to see you, Tony.

HARRIS: Well, Mayor Lawrence, let me start with you. Do you believe that the signing of this -- this is for both of you, actually. Do you believe that the signing of this legislation tomorrow in Denver by the president will set off -- and you have to be honest on this one -- will set off battles in state capitols across the country, pitting mayors like yourselves against other mayors, even in your own states, and then against governors in your own legislators?

What do you think, Mayor Lawrence?

LAWRENCE: You know, it's going to be a hard -- and really, a well, hard-fought fight, because we need the money. And the states are suffering and the cities are suffering.

But what's important is that when you talk about shovel-ready, when you talk about actually taking this money and turning it over to jobs and turning it over to fixing infrastructure, the cities can do that. The cities can do it immediately. And it's not that we're against our state government, but the government, once you get into that state bureaucracy, it's all over the place. If you give it to cities, we have proven with our community buy grants and other funds, that we actually turn that into jobs, turn that into projects, and it can be immediately a stimulus.

HARRIS: Boy.

Mayor Gordon, what do you think? What are the next, I don't know, 30, 60 days like for you?

GORDON: Well, we're ready to go. In fact, I told the president and the speaker that March 31st, we'll create 7,000 new jobs in shovels in the ground with the light rail project that's already designed and ready to go.

And as the mayor said, cities in partnership with small and large businesses are transparent, open, much faster. And we can get going. And in fact, we're ready to go, and we're hoping that these would have been done sooner.

This -- 90 percent of America lives in cities, and that's where the jobs are created, and that's what's going to turn around this country. So we're excited.

HARRIS: Yes.

Mayor Lawrence, what's your -- honestly, I want you to go on record here. What is your top priority here? You get this money, whatever the sum is, give me two projects that you're ready to go with right now.

LAWRENCE: Right now...

HARRIS: Right now.

LAWRENCE: Right now I'm ready to go with roads. Our roads are crumbling, and our infrastructure. And we all are shocked when we hear of a major disaster, when it comes to roads, crumbling bridges and those things.

I tell you, my roads are a very, very high priority. I am ready to go. I have the plans, we can just turn it over.

HARRIS: Yes, give me a road, because I want to send one of our teams up. Maybe I'll come myself. What are you going to start with?

LAWRENCE: Evergreen Road. Evergreen Road, one of our main...

HARRIS: Evergreen Road.

LAWRENCE: Yes. Yes.

HARRIS: Is it a mess right now? Is it a mess?

LAWRENCE: It's a mess.

HARRIS: OK.

LAWRENCE: And Ten Mile Road.

GORDON: Let's not leave out Phoenix, light rail.

HARRIS: Absolutely. The question was to you next. What do you want to start with?

GORDON: Three miles: 19th Avenue and Montebello. The Dunlap, ready to go, designed, architect plans, the light rail, and the people mover at the airport.

Those two projects alone will put 15,000 new people to work within the next 60 days, guaranteed. I'll sign a contract.

LAWRENCE: And Tony...

HARRIS: Yes, go ahead.

LAWRENCE: ... what's so important about this, understand, we cannot do -- we cannot begin these jobs because we don't have the funding or the resources. That's why this is so important.

These are shovel-ready jobs, but they were going to have to be put on the back burner while we put police and fire and pay our bills and make sure we're picking up the garbage. So that's why this stimulus is so important to us, this city.

GORDON: And I think unlike the states and the federal government, both systems are broke. The cities aren't asking for a bailout on operational, they're asking for money in partnership with the universities and the private sector to create jobs, jobs immediately, and assets that will last for generations. It's exactly what everybody articulated, but nobody in Congress or the states can put down. HARRIS: Mayor Gordon, are you ready for -- you get this huge -- I don't know what your share of this is going to be, but do you have the systems in place to get this money out of the door in a responsible way so that you don't waste even a dollar of this money?

LAWRENCE: Oh, absolutely. Cities are so transparent. We don't have all the mirrors and the dark corridors to hide money. You will absolutely -- and our residents and federal government will see that we will dig the ground and start working.

HARRIS: Mayor Lawrence, just a second. I just want to let everyone know the president is deplaning Air Force One at Andrews Air Force Base with a trip back to the White House, Washington, D.C.

As we've been mentioning, a busy, busy week for the president. Tomorrow, it's off to Denver, where he will sign this massive economic stimulus package that will eventually have money for states like Michigan and like Arizona.

The mayor of -- the mayor of Southfield, correct?

LAWRENCE: Correct.

HARRIS: Southfield, Michigan, is on with us, Mayor Lawrence.

And Mayor Lawrence, you were answering the question whether or not you're ready with the infrastructure in place to make sure this money goes out the door and to the streets without a wasted penny.

LAWRENCE: I was telling you that cities are so transparent. We're very open. We don't have the smoke and mirrors to hide things. We are -- you know, the residents are watching us.

The state, the federal government can come in and see the shovels in the ground. And we are so in need of this infrastructure dollars. I can tell you that's my priority here in Michigan.

HARRIS: Yes.

LAWRENCE: But in addition to that, these partisan discussions that go on, when you get to mayors, we all have a letter on our chest, but when it comes to fixing our cities, that's all gone away. And I can tell you the federal government can take some lessons from mayors when it comes to, throw that out the window. This is about the people. And really, we are in a crisis and we need to focus and get back to work.

HARRIS: Hey Mayor Gordon, here's a little pressure on you. Maybe it isn't, but I'm going to heavy some on you.

If you don't end up getting enough of this money, as determined by the people of the city of Phoenix, if you don't get what is considered to be by the pundits, by the analysts of your city to be your fair share of the money, you know, that becomes a re-election issue for you. And maybe I'm jumping ahead, I don't know if you're going to run for re-election, but potentially, that's there for you, isn't it?

GORDON: You know, not really. First of all, again, this country is putting out almost $1 trillion worth of money that's going to take years to get out. We have projects, as the mayor discussed, that are ready to go, that will put people together and working.

I mean, Phoenix is still growing. It's a dynamic city. Sure, we would like more, but all we're asking for is to help bridge the gap and get real projects going, whether it's in police or roads or airports or reclamation projects.

I'm confident. And the president was right.

HARRIS: Yes.

GORDON: You know, no bill is perfect. Everybody was focused on the 10 percent that wasn't. And meanwhile, people are losing their jobs, suffering.

This money is going to be made available. In fact, we're starting projects now on the basis that money will be coming. We're not even waiting to receive the money.

HARRIS: OK.

Mayor Lawrence, I'm going to tell you, if you don't get your fair share, it's going to be a re-election -- it's going to be a re- election issue. Someone's going to run against that. You know I'm correct in suggesting that.

LAWRENCE: You know, right now we have been, as city government, working so hard to make do with less. In Michigan right now, my area, my county, I have over an eight percent unemployment rate. I can tell you that any money that we get, you're going to see movement, you're going to see some jobs created as a result of that.

And I think with all of the media, everyone understands that this money is being controlled by so many different factors.

HARRIS: Yes.

LAWRENCE: And we're going to be very, I can tell you, ambitious in letting the public know what we're getting.

HARRIS: That's good. You didn't take the political bait there.

Mayor Lawrence, I appreciate it.

GORDON: That's why she's a good mayor.

(LAUGHTER)

HARRIS: Yes.

Mayor Gordon, thank you both so much. Thanks for your time.

GORDON: Come on to Phoenix.

HARRIS: OK. Will do.

LAWRENCE: Bye-bye.

HARRIS: It sounds like something out of a movie. Can you believe this? Two nuclear submarines collide. Why did it take days for anyone to find out about it?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GRAHAM: If this is going to be bipartisanship, the country's screwed. I know bipartisanship when I see it. I've participated in it. I've gone back home and gotten primary opponents because I wanted to be bipartisan.

There's nothing about this process that's been bipartisan. This is not change we can believe in. You rammed it through the House, you started it out with the idea we won, we write the bill.

The markup, Chuck, in the Senate took an hour and 40 minutes. What's the AMT got to do with creating jobs?

(END VIDEO CLIP)

HARRIS: Wow. Did you catch that? The Republican senator from South Carolina suggesting President Obama screwed up when it comes to bipartisanship, Democrats and Republicans working together.

(COMMERCIAL BREAK)

HARRIS: Comes to bipartisanship. Democrats and Republicans working together. The stimulus package made it through Congress with the support of only three Republicans.

President Obama getting ready to sign off on that massive economic stimulus plan. The president will sign the bill into law tomorrow in Denver. The package totaled $787 billion in spending and tax cuts. It includes $27 billion for states to build and repair roads and bridges. That's less than half of what state officials hoped for.

It's Presidents' Day here and the nation's stock markets are closed. But they were open elsewhere. And just about all of them down for the day. The negative numbers came after Japan reported worse than expected fourth quarter gross national product numbers.

Back in the states, gas prices up. AAA says a gallon of unleaded costs $1.96. A month ago, it was $1.83. And you're probably wondering, could we be hitting $2 a gallon soon? OPEC decided over the weekend to consider cutting production.

He is one of the few people who can truly sympathize with President Obama. A man who ran on the economy and faced his fair share of critics on Capitol Hill. CNN's John Roberts had a chance to talk to former President Bill Clinton about President Obama's showdown with Congress over the stimulus. John spoke with him in Austin.

(BEGIN VIDEO CLIP)

JOHN ROBERTS, CNN CORRESPONDENT: What do you think of the job that President Obama did on this? And is he, in fact, -- does he, in fact, have the experience necessary to be a good president, reach across party lines and craft a bipartisan bill?

WILLIAM J. CLINTON, FORMER U.S. PRESIDENT: Well, first of all, he has reached across. And it takes two to tango. I find it amazing that the Republicans, who doubled the debt of the country in eight years, and produced no new jobs doing it, gave us an economic record that was totally berupt (ph) in any productive result, are now criticizing him for spending money.

You know, I'm a fiscal conservative. I balanced the budget. I ran surpluses. If I were in his position today, I'd be doing what he's doing.

Why? Because the problem with the economy is the housing decline led to the general decline in values. Assets are going down. The only -- this stimulus is our bridge over troubled waters until the bank reforms kick in.

He did the right thing. He did everything he could to get Republican support. He took some of their tax cutting ideas. But if you look at this bill, it is designed to do three things. And it does all three. It puts money in the hands of people who need money to survive. Unemployment benefits, food stamp benefits, tax cuts.

Second thing it does is to give money to state and local governments so they don't have to lay a million people off or raise taxes. Either one would be bad for the economy.

The third thing it does is create new jobs. And I think, given the Congress he had and the environment and the speed with which they had to move, I think he did a fine job with this.

(END VIDEO CLIP)

HARRIS: The former president was in Austin hosting the Clinton Global Initiative University. The university encourages college students in higher institutions to come up with projects and ideas to address global issues.

Former first lady turned senator turned Secretary of State Hillary Clinton making her first overseas trip as a member of the new administration. She is assuring our friends we're there for you. CNN's Jill Dougherty details her itinerary.

JILL DOUGHERTY, CNN CORRESPONDENT: Secretary of State Hillary Clinton arrived here in Tokyo. It's the first stop on this one-week trip to Asia. And she started here in Japan for a reason. She said that Japan is a cornerstone of the U.S. relationship in Asia. (BEGIN VIDEO CLIP)

HILLARY CLINTON, SECRETARY OF STATE: I have come to Asia as my first trip as secretary of state to convey that America's relationships across the Pacific are indispensable to addressing the challenges and seizing the opportunities of the 21st century.

(END VIDEO CLIP)

DOUGHERTY: Secretary Clinton will be visiting four countries in Asia, beginning here in Japan, then going to Indonesia, South Korea and finally to China.

There are three top issues that she'll be addressing. The first one, of course, economic crisis affecting the United States, but also affecting the world. And here in Japan, very hard hit by that financial crisis. She'll be talking with the leaders of these countries about what can be done and also briefing them on what the United States is doing with its stimulus plan.

Also, security. A very big issue here in Asia, and that usually means North Korea. She'll be talking with the leaders of these countries about how to stop the North's nuclear weapons program.

And also here in Japan, talking about a very key issue for them, and that is the fate of the abductees. Those are Japanese citizens who were kidnapped back in the 1970s, and '80s, and their fate, in some cases, is not known. The Japanese want an accounting and Hillary Clinton will be meeting with some of the families of those abductees.

And then finally, climate change. Another very big issue in Asia, and especially in China. Hillary Clinton is bringing along her climate change envoy.

Finally, Secretary Clinton says that she doesn't only want to stay in offices and government offices, ministerials, et cetera, she wants to immediate with citizens and she will begin that process tomorrow here in Tokyo by visiting and talking with the students of Tokyo University -- Tony.

HARRIS: Jill, thank you.

U.S. Special Envoy Richard Holbrooke wrapping up a three nation tour of South Asia. He met with Indian officials Monday. They discussed the spiraling violence in Afghanistan and simmering tensions between India and Pakistan. Holbrooke arrived in New Deli Sunday from Afghanistan. He visited Pakistan last week.

The crash of Flight 3407, what happened in those final fatal seconds? We'll have a live report from the scene.

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HARRIS: The last seconds aboard Continental Flight 3407. Investigators reveal new details about the pilot's actions and the dire moments before the plane hit a house. They had the plane on autopilot during decent to Buffalo.

CNN's John Roberts talked to National Transportation Safety Board member Steve Chealander about that.

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ROBERTS: What about this idea of the autopilot being on at the time? People familiar with this aircraft say that in an icing condition, it's not a good idea to have the autopilot on. I know the NTSB recommends that the auto pilot be turned off in severe icing conditions, but we only heard about significant icing here. They say that not -- that having the auto pilot on doesn't give the pilot a real feel for how the aircraft is performing. What's your sense of that? Was it a mistake to leave the auto pilot on?

STEVE CHEALANDER, NTSB MEMBER: I wouldn't characterize it as a mistake. We have, as the NTSB, that being the we, have indeed recommended that -- encourage pilots to disengage the auto pilot when they are flying in icing conditions. Now that recommendation has been made to the FAA on behalf of the air carriers and the FAA is studying that recommendation. And we get into a letter writing campaign with the FAA, if you will, determining whether or not it's a good idea to follow our recommendation or not.

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HARRIS: And CNN's Allan Chernoff joins us live from Clarence Center, New York.

And, Allan, what are you hearing from other experts on this crash?

ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Tony, first off all, one of the most important experts, the company that actually manufactured the plane, Bombardier. In the operators manual, Bombardier says to pilots, it's OK to use the auto pilot during icy conditions, except when you've got severe ice. Under severe ice conditions, they say switch over to manual. Some pilots, some experienced pilots say, look, when it is icy out there, you're better off if you're on manual.

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JOHN LUCICH, LICENSED COMMERCIAL PILOT: When an airplane's on autopilot, the pilot sometimes gets a sense that the airplane's more stable than that. OK. The problem is, though, the pilot does not get to feel what's going on with the airplane.

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CHERNOFF: That, of course, is one very important focus of the investigation that is continuing and will be going on for quite some time. How severe was the icing there. And, of course, should the pilots have been stuck on auto pilot -- Tony.

HARRIS: Yes. And, Allan, what else are we learning about the final moments of that flight? CHERNOFF: Tony, we've learned that the final moments were just absolutely horrifying. I mean, it's scary to just talk about it, to think about it. What the pilots did, as they approached the airport here, as all pilots do, they extended the wing flaps. The whole idea of that is to give the aircraft a little bit of lift as it slows down for the landing.

But when they did that, something went terribly wrong. The nose popped up 31 degrees. And then all of a sudden popped down by 45 degrees. Just imagine that, flipping up and down, and then the rolling. The plane rolled to the left 46 degrees and then all of a sudden flipped to the right 105 degrees. Tony, that's beyond vertical.

Inside of the aircraft, the force was double the normal force of gravity. So the passengers were just shoved down and the plane literally fell from the sky, falling 800 feet in only five seconds. Tony, those final 26 seconds must have been absolutely terrifying.

HARRIS: Boy. All right. Allan Chernoff for us.

And, Allan, a better result on this next story. We're going to put up, I guess, a series of pictures here. Taking you now to Ft. Lauderdale, Hollywood International Airport in Florida. And you're looking at pictures now of -- that's a bird. Yes, that's a bird that smashed through the windshield of that small, private -- I don't believe it's a -- I believe it's a private aircraft. I don't believe it's a commuter aircraft. Maybe we'll widen out on the shot and get a better view of the entire aircraft. But that's what you see right there. That is a bird that has smashed through that windshield.

And here's the pilot, we believe, as you can see, holding a bandage to the side of his head. He took something of a shot to his head from that bird. Talking to an official and getting the story down. We understand that -- and, clearly, the plane landed safely. So, you know, the pilot was able to manage the situation. And you can see other folks on the scene now taking pictures. The investigation is underway. But this is pretty amazing stuff here of this -- of this bird having smashed through the windshield of this aircraft. And the pilot appears to be OK.

Let's take a quick break. We're back in a moment. You're watching CNN NEWSROOM.

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HARRIS: Snowy coasts in the California mountains. Six feet in some spots. A skier's dream, to be sure, just in time for the President' Day weekend crowd. Virginia Beach, that's the other picture you see here. Just a dusting. But that rarely happens in Virginia Beach.

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HARRIS: How would you figure the economy? We asked some experts to share their solutions in 90 seconds or less. (COMMERCIAL BREAK)

HARRIS: Time now for another installment of a segment we call "90 Second Prescription." Top economists give us their plans for solving the country's economic crisis in 90 seconds or less. Here we go.

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JEFFREY MIRON, ECONOMIST, HARVARD UNIVERSITY: My view on the stimulus package is to focus on the long run, not just the short run. Similarly, we should focus on efficiency, not just on redistribution.

Several things that would help is this regard would include repeal the corporate income tax, which would stimulate investment in jobs, moderating the growth of entitlements, like Social Security and Medicare by say increasing the age of eligibility for those programs, eliminate wasteful spend, such as agricultural price subsidies, boarder transportation projects like the big dig in Boston, renewing our commitment to free trade so that we don't end up with retaliation from other countries and shrinking world trade, as we did in the Great Depression, and we should stop bailing out banks and other businesses that have taken risks, excessive risks or made bad business decisions so that we give the private sector appropriate incentive to think carefully about business plans to undertake.

I think if we do this, we will both get some short-run stimulus from things like repeal of the corporate tax and we will set the stage for a more productive economy going forward.

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HARRIS: OK. With time to spare.

A mysterious fireball shoots across the Texas sky. You see it there? Officials say it's not debris from the recent collision of two satellites, but they haven't offered any other explanation. Whatever it was, it was caught on tape by a photographer covering a marathon.

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EDDIE GARCIA, PHOTOGRAPHER: I was shooting it at the time. And at the time you kind of look -- I'm looking in the view finder and I see just something flying through the sky and it kind of looks like it could be dust, it could be something. And then I look up and, no, it was something burning in the sky. And, you know, this is something that you see at night clearly during a, you know, meteor shower or something like that, but you don't see something like that during the day.

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HARRIS: Yes. Federal officials say there were no reported sightings from pilots in the air at the time, just lots of calls from people on the ground.

Oh, big fella. That's not Jason from "Friday the 13th." It is Shaquille O'Neal, grooving his 7'0" 325 pound frame ahead of the NBA all-star game in Phoenix. Now, look, we don't have time for sports here in the NEWSROOM, but we do have time for 325 pounds of smoothness. Thanks to our friends at our sister network, TNT, for capturing this. Shaq and his former Laker's teammate, Kobe Bryant, played the all-star game like it was 1999. They led the Western Conference to victory and shared the MVP award. How about that.

Things that go bump in the dark. Two nuclear-armed submarines collide deep down in the Atlantic. How did this happen?

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HARRIS: British and French nuclear submarines collided in the Atlantic earlier this month. Both countries confirming an embarrassing accident involving highly-volatile materials after the subs returned to their bases in western France and Scotland. I talked with Phil Black about the incident earlier. He's in London.

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PHIL BLACK, CNN CORRESPONDENT: No one involved in this is exactly proud of it. To begin with, the British ministry of defense, behind me from just where I'm standing now, refused to confirm that this had happened at all. The French navy, well, they admitted that their submarine had been involved in a collision, but they said it was probably with a shipping container.

We now know that this collision did, in fact, take place. Both sides have made the embarrassing admission that their respective subs have, as they say, come into contact with each other, which basically means they crashed. They admit that it happened while on separate patrols in the middle of the Atlantic. They say that they were traveling at slow speed and well submerged.

So an embarrassment. But this is significant because the fear is it could have been so much more than that. As you say, they're nuclear-powered. They're all -- they were both carrying ballistic nuclear missiles. Sixteen in all. And each carry multiple nuclear warheads as well -- Tony.

HARRIS: Phil, all right, forgive me for the obvious here, but how could something like this happen?

BLACK: Well, this is the question. These submarines are designed to run quiet and deep and to avoid detection. So that they can, at any time, they do run on a constant war-footing. Their job is to be ready to launch their nuclear pay loads if the order comes down.

Now, while avoiding detection, they're also supposed to be listening out for other ships and submarines in the area. It appears that in this casing, both submarines simply failed to detect the other. We don't know why that was. Perhaps that both were simply too successful at being stealthy themselves. But this is all what the respective authorities from both countries are very much now very keen to try and work out, just how this did happen -- Tony.

HARRIS: And one final quick one. Any damage to either of these subs?

BLACK: Indeed. Both subs were damaged. We know for a fact that the French submarine suffered damage to its sonar nose cone. That's concerning, some experts say, because that's the pointy end of the boat. That's where a lot of the missiles and -- sorry, and the torpedoes are kept. It could have resulted in an explosion. We know the British boat was damaged as well, but we don't know just how badly. Both submarines have sense limped back to their respective home ports.

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HARRIS: And CNN NEWSROOM continues right now