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Tax Cuts In Stimulus Bill So Small They Could Go Unnoticed; Secretary Of State Clinton Starts An Asian Tour In Japan
Aired February 16, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: A sit-down with CNN's John Roberts.
And, hey, how much do you weigh? All right, how much credit cart debt do you have? Two awful questions there, wouldn't you agree? So, which would you rather admit to a new sweetheart? Carol Costello looks at dating and debt.
First, President Obama chose the Mile High City to sign the sky- high economic rescue package. Tomorrow in Denver, he will sign the American Recovery & Reinvestment Act. Don't expect things to happen in that order. The reinvestment comes first, consisting of $308 billion in so-called discretionary spending; $267 billion in direct aid, such as jobless benefits, and $212 billion in tax breaks.
The tax breaks breakdown to a $400 credit for most workers, a patch in the dreaded alternative minimum tax, a temporary expansion of the child tax credit, new initiatives for home and car buyers, and a boost in the higher education credit.
Now, one big question everybody's e-mailing us now: When am I going to see some cash from this stimulus bill? Our Personal Finance Editor Gerri Willis, is live in New York. Can you answer it, Gerri?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: I sure can. You won't like the answer. Look, the short answer, the tax benefits are going to be awhile in coming. Unlike the first stimulus plan, you won't get a check in the mail. You'll just see less tax money taken from your paycheck. Even that's not going to start until probably June.
Ultimately, you will get $400 if you're an individual tax filer, and $800 if you're a couple, both people working. But you may not even notice the difference because it may amount to less than $20 per paycheck.
Now, for seniors, they get their money faster. They will get a check for $250, pretty quickly. But remember, other benefits are tax credits that won't kick in until you file your taxes for 2009 and that's about 14 months from now, Kyra.
PHILLIPS: All right, Gerri. We'll be talking a lot in the next hour. We have a number of e-mails for you. She is going to actually join us.
WILLIS: Excellent (ph).
PHILLIPS: Thank you so much.
WILLIS: My pleasure.
PHILLIPS: So, tell us what you want to know about the stimulus package. E-mail your questions to CNNNewsroom@CNN.com. Gerri is sticking with us for the next hour to try to answer most of them for you.
Well, the road to recovery starts tomorrow for GM and Chrysler at least on paper. In exchange for more than $17 billion in bailout loans, the faltering U.S. automakers have to show plans to reinvent themselves for the 21st century. For its part, the White House is planning a presidential task force to oversee the overhaul, and forget a car czar. This will be a group effort, drawing members from across the Cabinet.
So, can the car makers pull it off? Is Washington in the driver's seat? We will run these questions and more past automotive analyst Lauren Fix, in just a few minutes.
Now we all know, of course, that the economic crisis is global. Few countries are as hard-hit as Japan. The Japanese government is saying today the country's economy shrank at its fastest rate in 35 years, in the fourth quarter. The 3.3 percent drop from the previous quarter equals an annual pace of more than 12 percent. That makes it the steepest slide for Japan since 1974.
Now, the bad news on Japan's economy comes as Hillary Clinton arrived in Tokyo on her first overseas trip as secretary of State. Her message, Asia can expect a very different kind of diplomacy from the Obama administration than what they experienced from former President Bush. CNN's Jill Dougherty is in Tokyo for us.
(BEGIN VIDEOTAPE)
JILL DOUGHERTY, CNN INTERNATIONAL CORRESPONDENT (voice-over): Hillary Clinton arrived 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.
HILLARY CLINTON, U.S. 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.
DOUGHERTY: Secretary Clinton will be visiting four countries in Asia, beginning here in Japan, then going to Indonesia, South Korea, and finally, to China.
(on camera): There are three top issues that she will be addressing; the first one, of course, economic crisis affecting the United States, but also affecting the world. Here in Japan, very hard hit by that financial crisis. She will be talking with the leaders of those 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 will 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.
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 she doesn't only want to stay in offices, and government office, ministerials, et cetera, she wants to meet with citizens. She will begin that process tomorrow, here in Tokyo, by visiting and talking with the students of Tokyo University.
(END VIDEOTAPE)
PHILLIPS: All right. Jill Dougherty, there, following the secretary of State. Jill, thanks so much.
Now with Hillary Clinton hard at work in Japan, what's her husband Bill up to? He tells CNN's John Roberts that one thing you won't find him doing is being a house husband. With that out of the way, the two got down to discussing the new man in the White House.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR: 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?
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: 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 bereft of 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 would 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. 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.
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 and raise taxes. Either one would be bad for the economy. The third thing it does is create new jobs. 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 of this.
(END VIDEO CLIP)
PHILLIPS: You may have noticed those spiffy cowboy boots that the former president was wearing. He told John that he loves cowboy boots and some college students in El Paso gave him that pair last March.
Today's the 67th birthday of North Korea's autocratic leader, Kim Jong-il. The government is vowing to carry out another test firing of its longest range missile. Before leaving on the trip, Clinton had warned North Korea against any provocative action. The issue will likely be high on the agenda during Clinton's other stops in South Korea, China and Indonesia.
And another long-time U.S. adversary celebrating today, Cuba. On this day 50 years ago, Fidel Castro was sworn in as Cuban prime minister. That event came, of course, just a few weeks after Castro's guerrilla force toppled the Batista government, on January 1st, 1959.
What about President Obama and his views on North Korea and Cuba? His tone is more conciliatory than former President Bush's. Mr. Obama has said he's willing to hold direct talks with North Korea, possibly including Kim Jong-il, but North Korea must agree to abandon its nuclear ambitions. In Cuba, President Obama calls for more engagement with Havana and he's indicated that he is willing to hold talks with Cuban President Raul Castro. Also, he's called for freedom for all Cubans.
Well, they've got game, but does he? Some NBA All-Stars man up and help us break down President Obama's skills on the court.
(COMMERCIAL BREAK)
PHILLIPS: We've been reporting on the crossroads facing GM and Chrysler. Tomorrow's the day they have to sell Washington on their long-term survival plans and the new administration is making plans of its own. Automotive analyst Lauren Fix has been along for the ride. A long, wild, unsettling ride for years now, I should probably say. She joins me now with her view on the road ahead.
You know, Lauren, first of all, what do you think about the fact that, because we heard all these rumors there would be a car czar, it's going to be a car czar. Now it will be this task force led by Treasury Secretary Geithner. Good news, bad news, good move?
LAUREN FIX, AUTOMOTIVE INDUSTRY ANALYST: Well, certainly better than a car czar. I was absolutely against that. I even put that in my blog, Please, No Car Czar. Before one person makes a decision that we're all driving beige, boring cars and no more fun vehicles. Because we like our cars.
PHILLIPS: OK, but fun vehicles, I mean, we're in a time where they have got to be -- we have got to be going green on so many levels, or we're just going to take the companies and our economy into the tank. FIX: It's not just about going green. I think that's the problem. The government assumes we all want hybrid cars. They're assuming we all want to go green. And that's not necessarily the case.
PHILLIPS: That's not true at all.
FIX: No. I don't want a green car. Many people don't. I like a car that gets great fuel efficiency, but I want something fun. I want a convertible, or whatever my needs are, I want to be able to have that. If I have one person making the decision who doesn't have experience with the auto industry, doesn't have marketing experience, or even communicates with the consumer, then that's a disaster. I'm hoping this task force is a better choice but I'm concerned when you see EPA, and you've got all these government panels, and councils that are all based on the environment and energy. I am just hope they don't tell us what we want and we can tell them what we want to drive.
PHILLIPS: All right. I did ask you the question, what would you recommend if indeed you were on this task force. You're kind of tackling one of the points you made. That is find out what the consumers want. Yes, there's talk about hybrids and going green and making cars that are more economically sound. But you're right, bottom line, gas prices go down, people will want their SUVs and their big vans and their convertibles that can suck up a lot of money - especially if you drive a Mustang. But anyway that's a whole other story. But there's going to have to be a happy medium. How do they do that?
FIX: First off, find out what the consumers need. They need people that have expertise in manufacturing. That's what kills me when you look at a company like Chrysler, you have seven product lines that sell, and actually make them money. Why are we carrying the other product lines? If you and I own anything else, if you made hamburgers, McDonald's is smart enough to know if they have five product lines that sell, they keep those product lines. And get rid of the rest. That has always been the problem. We know that Saturn has issues, HUMMER has issues, Pontiac, look at the Chrysler line, they have issues.
Even Ford is trying to pare down what they have and use what's called a global platform, which means what chassis they're using in Europe, and other places, let's use it here in the U.S. as well. Maybe we will modify the interior or exterior look, but the bottom line result, you'll get a car that is safe, has been sorted out. And you don't have to worry about warranty and safety issues, which we can always get under control if there's one global platform.
Ford has already started doing that with the Edge and the Flex and the Fusion and the Taurus. So they are starting to try and do that. I know that General Motors is also trying to do the same thing. I'm a little concerned about Chrysler and their merger with Fiat. We don't know all the details yet.
PHILLIPS: I know something else, that you would say to this task force, is that you have got to restructure your deals with the unions.
FIX: Right.
PHILLIPS: Here's such a huge sticking point because do these companies go for more taxpayer dollars, and give a break to employees, or do employees need to come forward and say hey, I'll give you a certain part of my salary, I'll go ahead and take cuts in retirement, go ahead and take cuts in benefits. Both situations don't look good. How do you find a happy medium there?
FIX: Well, I said in the past, I guess it's not going to work out so well, it would be nice if oil manufacturers were the ones funding the car industry because there is a relationship there. But obviously, they don't want to give up all their tons of profit. Having the government continue to bail out these companies is going to get very expensive for us as the consumer. It's going to cost us in each car that we buy, it will cost us in our taxes. And like you, I don't want to pay any more in taxes. I think I pay plenty as it is.
PHILLIPS: At the same time, you don't want the struggling worker at the plant to have to take a hit in retirement or benefits or salary just because these big companies, you know, blew all their money on big bonuses.
FIX: Well, that's part of it, but I think they made poor choices and they moved too slowly. If General Motors, they're saying that if they can't come to an agreement with the government, they might go Chapter 11, which means they would reorganize. If that's the case, that could be very detrimental to the UAW, who has been trying to say we have workers here, they did their job for you. And if you look at their perspective, they expect their benefits. That's the sticking point they're having right now. Who's going to pay for the health care benefits?
These people are living a long time, someone's got to fund the bill. They did their part of the deal. Now it's the manufacturers have to do their end. That's going to cost somebody money somewhere. They have will have to be cutting back in areas of production, in areas of people, and unfortunately, until they pare down some of the content they're offering consumers, I don't think there's going to be much change.
PHILLIPS: We're following all these restructuring deals they have to bring into Washington tomorrow.
FIX: Should be exciting.
PHILLIPS: Yes, definitely. We're following it. Thanks, Lauren.
FIX: Thank you, Kyra.
In Buffalo, New York, memorials and questions. Fifty lives lost in Thursday night's plane crash. Finally details from the flight recorders are coming out.
(COMMERCIAL BREAK)
PHILLIPS: More details coming out now about the last seconds of Continental flight 3407. They're pretty terrifying. Investigators studied the flight data and voice recorders over the weekend. And the devices log the plane's violent movements and the pilot's actions just before Thursday night's crash near Buffalo, New York.
All 49 aboard, and one person on the ground, was killed. It seems that things went wrong very quickly, in a matter of 26 seconds. Autopilot has the plane on a controlled descent into Buffalo. Then suddenly a warning tone sounds and autopilot disengages. The nose of the plane pitches up, then dips dramatically, and the aircraft starts rolling from side to side. Now, all the while, dropping about 20 times faster than normal. The crew's use of autopilot in icy weather has come under some scrutiny now and it turns out that the NTSB, the FAA, and the plane's manufacturer all make different recommendations.
(BEGIN VIDEO CLIP)
STEVE CHEALANDER, NAT'L. TRANSPORTATION SAFETY BOARD: Is that normal to be flying on autopilot when you're coming into a weather situation? And the answer I gave was, yes, because it is normal and you're encouraged to use the autopilot to help you with the workloads of these intense, high intense weather situations that we fly into all the time.
(END VIDEO CLIP)
PHILLIPS: Meanwhile, the crews are still at the crash site right now working to recover the victims' remains.
It's not exactly a winter wonderland. Southeastern Virginia woke up to a dusting of snow today. These pictures of the Virginia Beach area were sent in from one of our I-Reporters, William Bernstein.
A different story on the West Coast, though. Check out the highways in Frazier Park, California. They have gotten about several inches so far. Officials there are warning drivers about low visibility with a big winter storm on the horizon.
It could be the largest winter storm of the season to hit California, right, Chad?
CHAD MYERS, CNN METEOROLOGIST: Absolutely, certainly of '09. Had a couple of storms in '08, before we got the New Year that were pretty good. But this could be three to four feet of snow through the Sierra. Snow on the grapevine this morning, it was closed for a while. That's the I-5, north of LA, right about there.
The whole storm system wrapping up, will move through the Rockies and into the Plains and maybe even make severe weather as we work our way into the end of the week, farther to the east. But today the focus is on California and from Sacramento to San Francisco, where it's raining, all the way down into Bakersfield. The whole valley, they are getting rain, but you get yourself up 3,000, 4,000, 5,000 feet, depending how far north or south you are into the Sierra, that's where the snow is really coming down today and if you like the snow, today's the day to maybe go play in it.
If you don't like the rain, today's one of those days you are going to sing a song about LA. Boy, is it pouring there as well. It never rains in southern California, except for today. In Sacramento all the way back into San Francisco, some lighter showers there.
Everywhere you see purple, that's a foot of snow or more. That's a really big area of a foot of snow and a lot more in some spots, Kyra.
PHILLIPS: Exactly. Scott, my director said, "Let's go. Grab our skis, our snowboards, yes, the kids.
All right. Chad, thanks.
MYERS: You got it.
PHILLIPS: So many Americans are facing job losses in this economy. We will look at why it's even tougher for veterans home from war to find work.
(COMMERCIAL BREAK)
PHILLIPS: We're pushing forward on the president's agenda and we're not the only ones.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: She jumped out of bed, put her clothes on, and ran down.
(END VIDEO CLIP)
PHILLIPS: That was yesterday in Mesa, Arizona, where President Obama plans to visit Wednesday. He'll be announcing his long-awaited plans to curb foreclosures and the curbs outside Dotson High School are full of people who don't want to watch it on TV. Last we heard, ticket distribution was scheduled to start last hour.
Our in-box is overflowing with your questions about the new stimulus package. A lot of you looking for relief. That's why we asked our Personal Finance Editor Gerri Willis, to answer e-mail questions. Stick around for a couple hours.
Let's get right to it, Gerri. This comes from Brad. And he asks, "When will the unemployment extension start and how -- when will it start, and in how many weeks?"
WILLIS: It could happen fairly quickly. There already have been a number of extensions to jobless benefits. As we've been saying the stimulus bill adds an additional 20 weeks of benefits, plus 13 more if you live in a high unemployment state, plus you get more cash on top of that, an additional $25 on top of the roughly $300 that workers are currently getting.
It's obviously not a ton of dough, but at least it's more. Obama's economic team has said they expect stimulus package could bring down the jobless rate to seven percent in 2010. Remember, right now, it's 7.6 percent.
PHILLIPS: All right. This one coming from Bruce in Michigan. "Will unemployment checks still be taxed under the stimulus plan?"
WILLIS: You know, Bruce, this is one of those things that just makes people angry. One of the big problems with jobless benefits, they get taxed. But the stimulus bill goes right at that, making the first $2400 worth of benefits exempt from federal taxes.
PHILLIPS: All right. This one coming from Renee in Wisconsin, "I have been laid off since January 5th, 2009. Gerri, what is the protocol for receiving the 65 percent supplement for the COBRA insurance? With this supplement, my COBRA is almost affordable."
WILILS: Yes, it's so expensive. I understand, Renee. Look, you do fit parameters for receiving this extra assistance. The stimulus package targets people who were laid off between September 1, 2008 and December 31st, 2009, the end of the year. Government will subsidize 65 percent of insurance premiums for up to nine months.
Remember, COBRA applies to group plans of companies employing at least 20 people. It allows you to extend your coverage as a worker, so the company that employed you, that gave you coverage, you extend that coverage, and now the government will step in here and help you cover that cost because it's not cheap, Kyra.
PHILLIPS: Gerri Willis, appreciate it.
WILLIS: My pleasure.
Well, they put their life on the line fighting the wars in Iraq and Afghanistan. And back at home, they face another battle, trying to find a job in their new life as civilians. Here's CNN's Pentagon Correspondent Barbara Starr.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN PENTAGON CORRESPONDENT (voice-over): Tom Tarantino led patrols through the most dangerous neighborhoods of Baghdad. Steven Taylor through Navy reconnaissance planes over Iraq. Both, now civilians, walking the halls of Capitol Hill to make sure Congress understands that veterans are struggling in the economic downturn.
Tyler is unemployed. Tarantino, after ten months, found a job with a veterans advocacy group.
TOM TARANTINO, IRAQ & AFGHANISTAN VETERANS OF AMERICA: I might have been about a month away from not being able to pay any of my bills.
STARR: Both men say the military isn't doing enough to get troops ready for tough times in the civilian job market. Taylor is a Naval Academy graduate. His final tour of duty was the White House operations center. STEPHEN TAYLOR, IRAQ VETERAN: I might not be actually taking the job that I actually think that I'm qualified to take, because of the economy.
STARR: One estimate says unemployment among vets is more than 8 percent.
TARANTINO: I think you're going to find a lot of corporations are a bit more reticent to hire beecause they're afraid of things like post-traumatic stress.
STARR: And on the street, veterans are falling between the cracks.
PAUL RIECKHOFF, IRAQ & AFGHANISTAN VETERANS OF AMERICA: There are 2,000 homeless Iraq and Afghanistan veterans on the streets right now.
STARR: To keep that from happening, these vets want more funding for programs to help veterans make the transition from the front line to the assembly line or even the boardroom.
TARANTINO: I got lucky. I can only imagine the people that are really facing it, facing the end of the rope and figuring out what their options are.
STARR: Barbara Starr, CNN, Capitol Hill.
(END VIDEOTAPE)
PHILLIPS: Today is Presidents' Day, a time for paying tribute to all those who've served in our nation's highest office. This is also Black History Month. CNN's Don Lemon spoke with retired General and former Secretary of State Colin Powell about our country's first African-American president.
(BEGIN VIDEOTAPE)
DON LEMON, CNN ANCHOR: This thing called "African-American Firsts," ysou were first in many ways, right? What do you think about the new first that we have?
GEN COLIN POWELL (RET.), FORMER U.S. SECRETARY OF STATE: Well, you can't really go any higher than this now. So we have to stop thinking about firsts and thinking about our fellow citizens, many of whom are African-American and Hispanic and rural kids who are coming along and see these firsts. Either first secretary of state, first chairman, first national security adviser, and now we see the first president who happens to be African-American.
But we can't think that, well, everything is well now, we've got it, we've got a black president. We've got to think about the other members of our society, many African-Americans, especially, who are still in need, and they are not first.
We have 50 percent of our young black kids who are not going to be first anything because they haven't graduated from high school. They are dropping out, particularly in our inner cities. And so, we should be so proud of how far we have come in the last 50 years so that we now have a man who is president who is African-American, but let us not rest on that pedestal. Let's recognize we have a long way to go.
LEMON: Do you feel like you in some way contributed to where we are now, that moment, this new president?
POWELL: Yes, I think I did, but I'm not bragging about it because hundreds of thousands contributed. I contributed in a visible way by becoming the first secretary and the first national security adviser and chairman who is black, but I was given that opportunity. I'm more impressed by those who came before me who could have done the same thing I did, but they didn't have the opportunity, because of racism and segregation and Jim Crowism, but they still fought.
(END VIDEOTAPE)
PHILLIPS: Colin Powell, warrior-statesman, praising President Obama and paying tribute to all black Americans who came before.
(COMMERCIAL BREAK)
PHILLIPS: Money issues can sure muck up marriage. Did you know that they can derail dating, too? CNN'S Carol Costello has been checking out dating and debt.
(BEGIN VIDEOTAPE)
CAROL COSTELLO, CNN CORRESPONDENT (on camera): Kyra, remember the good old days when talking about your evil ex-boyfriend ruined your chances with a potential lover? Today, the biggest turnoff is a financial black hole.
(voice-over): With Valentine's Day romance still lingering, love is definitely in the air. Unless you carry a great big balance. According to creditcards.com, would-be lovers would rather talk about their age, their weight or their love life than credit-card debt.
JEFF GARDERE, CLINICAL PSYCHOLOGIST: It's one thing to carry around that emotional baggage. That's bad enough. But then when you have the financial baggage thrown in, this is something that may make your potential date or your first date do this.
COSTELLO: It's a sign of the times. In the new movie "Confessions of a Shopaholic," love is confounded by a mountain of debt.
(VIDEO CLIP -- "CONFESSIONS OF A SHOPAHOLIC")
COSTELLO: Ask around. Everyone at this speed-dating session is looking for love, not a financial black hole. A few thoughts on just how much debt matters.
UNIDENTIFIED MALE: I consider finances a big deal when I meet somebody. Just like I consider hygiene a big deal.
UNIDENTIFIED MALE: You know, if she looks like Jessica Alba, you know Jennifer Lopez, of course, my heart, but the only way that it's really going to have an effect on me is if she continually is asking me to borrow money.
UNIDENTIFIED FEMALE: How is he handling it? If he's stressing, I don't want to be part of a stressful situation. If he asks me for money, absolutely not.
COSTELLO: If you carry debt, that's darned depressing. But wait. If cupid nets you a kindred spirit, you just may find love after all.
(on camera): So, if you're both in a mountain of debt, it can be a beautiful thing if you work together.
GARDERE: If you're both in a mountain of debt, it can be a beautiful thing to work together, especially if you're able to discuss it in a positive way, empowering one another, looking at strategies instead of just sitting around and crying about it.
COSTELLO (voice-over): Hey, couple that with a little Marvin Gaye, and isn't that romantic?.
(on camera): See, Kyra, who knew a budget can be sexy?
(END VIDEOTAPE)
PHILLIPS: Budget can be sexy. Carol Costello, thank you so much. More from the CNN NEWSROOM in just a second.
(COMMERCIAL BREAK)
PHIILIPS: Roland burris has been on Capitol Hill as the new U.S. senator from Illinois for one month now, but controversy over how he got there isn't fading away. Illinois Republican leaders are calling on him to resign. This happened after Burris acknowledged that he was asked to give money to former Governor Rod Blagojevich's campaign.
Burris says that he refused, and he says that he didn't mention it despite being asked at the governor's impeachment hearing if he had spoken with associates of the governer. But Burris says that today, he's done everything required of him.
(BEGIN VIDEO CLIP)
SEN. ROLAND BURRIS (D), ILLINOIS: There was no change of any of our testimony. We followed up as we promised the impeachment committee. We have done everything here that we said that we were going to do. So the information that's been reported in terms that this was done because there was a fed statement is absolutely, positively not true.
(END VIDEO CLIP)
PHILLIPS: Well, Illinois Republican State Representative Jim Durkin isn't buying a word of it.
(BEGIN VIDEO CLIP)
REP. JIM DURKIN (R), ILLINOIS GENERAL ASSEMBLY: It's very disturbing, and it's very sad that we're still continuing on with this matter, but the fact is, Mr. Burris not only swore under oath before the committee that he would tell the truth, but he submitted two affidavits to this committee, and each one of them is inconsistent with the other. At some point in state government, we're going to have to tell people when you get before a committee and you are sworn in to tell the truth, we're going to take it serious.
(END VIDEO CLIP)
PHILLIPS: Blagojevich was accused of trying to sell President Obama's old Senate seat, you may remember. He appointed Burris to the seat before he was removed from office.
Well, Olympic champion swimmer Michael Phelps navigating some troubled waters lately after pictures of him surfaced allegedly taking a bong hit. Sean Callebs here with the latest on the Phelps drug investigation. OK, so, is he going to be charged? Is he not going to be charged? Held accountable, not held accountable? What's the deal now? It's back and forth.
SEAN CALLEBS, CNN CORRESPONDENT: It happened in Richland County, in South Carolina. And right after this came out, the sheriff there, Leon Lott, had a lot of pressure to investigate what was going on. Like, you know, you have this gold medalist, national figure, this hero, you know. It was the one hit heard around the world, basically. You know, what are you going to do about this?
Well, he launched a pretty aggressive investigation. He's going to hold a news conference in a matter of minutes, probably about 15 or so minutes. He is not going to pursue any charges against Michael Phelps. That's going to be the big news that comes out of this.
PHILLIPS: So what happened? I know you used to work in that market. You know this sheriff before he became sheriff, right?
CALLEBS: Right.
PHILLIPS: And going after drug dealers and -- that was sort of his main focus.
CALLEBS: Yes. That I would say was the cornerstone of the way his career moved up. He was a patrol officer. He made a name for himself in that county aggressively pursuing narcotics investigations. He drove around in a Porsche. This is back in the '90s, when "Miami Vice" was all the rage. He kind of did that whole dress -- honestly. You know, he did the whole dress --
PHILLIPS: Did he have the white pleasure suit and the whole -- or leisure suit?
CALLEBS: That looked good back then. And so, you know, he felt a lot of pressure from the community. Look, here we see Michael Phelps clearly hitting a bong. The problem is, anybody who's followed this from a legal standpoint, what do you charge him with?
PHILLIPS: Right. What do you charge with, how do you even go any further with this?
CALLEBS: Exactly. And authorities didn't know what was in the pipe. They apparently went after the other people who were at that party because the authorities really crashed that in a huge way, went after the people who were having that party. They took about seven people into custody. Charges are still pending against those seven.
But nothing is going to be filed against Michael Phelps. However, what I'm told, he is going to be making some statements around the state. He's going to appear with Leon Lott, the sheriff. He's going to talk about an anti-drug message. The kind of thing you would expect someone to do who's trying to make good on restoring that golden image.
PHILLIPS: Thanks, Sean.
Well, he's the nation's hoopster-in-chief but what do some NBA all-stars think of President Obama's game? Five pros team up for some analysis on his skills.
(COMMERCIAL BREAK)
PHILLIPS: Just about every city and town in America has a plan for its share of the stimulus pie. We're going to be following the dollars in the weeks and months ahead, but let's pick out just a few projects in Iowa, Ohio and California, shall we?
Council Bluffs, Iowa wants to spend $2.5 million on a two-lane street. Overall, that city of 62,000 has a wish list worth $229 million. And then Cincinnati, Ohio wants $5.2 million to upgrade the airport, part of a best-case scenario plan worth $333 million. The airport project is expected to mean about 60 new jobs, by the way. And then statewide, the Golden State has a $44 billion project list that includes 200 grand for a locker building with showers for bike commuters in Sonoma County.
We've been asking you to e-mail us your questions for the White House in a segment that we have now called "Mail to the Chief." Hundreds of you have been writing in, and the majority of your questions, of course, have been about the economic stimulus package. And right now, the chief economic adviser to Vice President Joe Biden is joining us to try and answer some of those e-mails that you sent us.
Jared Bernstein, thanks so much for joining us.
JARED BERNSTEIN, CHIEF ECONOMIC ADVISER TO VICE PRES. JOE BIDEN: Thanks for inviting me back, Kyra.
PHILLIPS: Well, I'm going to get right to it, OK? Tracy wants to know this. "Currently, we only pay into Social Security up to $102,000 of income. Why don't we raise this to $25 million so that all the overpaid CEOs can pay into the system?"
BERNSTEIN: Well, Tracy raises a great question. It's one that has been under consideration in various times throughout the Social Security debate in past administrations. I'm sure we'll talk about it in this one as well.
I mean, one thing to keep in mind is that Social Security is actually a very progressive system already. The benefits paid out to lower-income people are actually larger relative to their contributions, if you compare that to higher-income folks. So, you already have a progressive system if you look over the lifetime of the program.
But, you know, there is a good reason to consider raising the cap, and that has to do with the fact that there's more wage inequality. So, as your question suggested, you know, there's a lot more high income up there than there used to, but this is something that is for, I think, deliberate kind of consideration by tax specialists as we proceed through this debate.
PHILLIPS: All right. This one coming from Rebecca. "Why don't the American people get the $400 each in a check lump sum instead of $8 a week. What is $8 going to do? A lump sum, well, it would really actually help more."
BERNSTEIN: Well, actually, if you look at the last rebate, if you go back to February of last year, there was a lump-sum rebate check that got sent out to people, and about a third or so was spent and the rest was saved or used to pay off debt. That may be a fine idea, but it doesn't necessarily really help stimulate the economy in the way we need it to. Our belief is if you get the money directly into folks' paychecks, it will lead to the kind of consumer spending that's going to help create more economic activity and generate more jobs and growth.
PHILLIPS: All right, Jared, this one coming from Lanny. "Will the stimulus package contain anything that will help homeowners like me who are caught with an upside down mortgage where the home is now worth substantially less than the mortgage owed on it?"
BERNSTEIN: Another great question. We made a very deliberate calculus there that we would relegate that side of the economic challenge facing American families to the to the financial stability plan that Treasury Secretary Geithner talked about last week. And within that plan, you're going to learn about as that rollout continues, a very aggressive plan to help responsible homeowners stay in their home. And if they're under water and they ought to stay in their house, they deserve help in staving off foreclosure.
PHILLIPS: All right, Jared, I've got one more from you. Scott wants to know, "Does the stimulus package include any tax relief on the 10 percent penalty for early withdrawal of my 401(k) during 2008?"
BERNSTEIN: I'm not aware of any relief of that type in the stimulus package. Remember, the tax relief in the stimulus package, the large bulk of that is targeted at middle- and lower-income households who are feeling really the deepest pinch in their paycheck. And the "making work pay" tax cut, which was of course a policy that this president ran on, gets a major down payment in this stimulus package. That's going to get out into the economy, start creating jobs quickly. I think it's really one of the most stimulative pieces of this.
PHILLIPS: Jared Bernstein, I appreciate it. Now, Jared, we've been sending in e-mails on the Web site on behalf of our viewers, so could you just check in there with the president and others and let them know that we need some answers to some of our e-mails from viewers?
BERNSTEIN: I'll make sure he knows about that.
PHILLIPS: OK. Thank you so much, Jared.
All right. If you have questions for President Obama, even Jared Bernstein there, you can e-mail us, mailtothechief@CNN.com. We're going to continue to pass your questions on to the White House and actually read the responses that we get right here on the air.
As always, Team Sanchez back there, working on the next hour. What have you got going?
RICK SANCHEZ, CNN ANCHOR: Well, you know, I guess, here's the question: Are Republicans, congressional Republicans in particular, who had a big zero on stimulus, betting -- you were just talking about stimulus a minute ago -- are they betting that the stimulus package won't work? I mean, some would argue that they're hoping it won't work.
I think politically, I guess you could say well, that's what you do. I mean, you're the opposition in this case. But we're looking at a situation where you're talking about the good of the country as well. So, this is a really interesting discussion.
So, we're going to be talking to Marcia Blackburn. She's a congresswoman from Tennessee, obviously part of the GOP, a Republican, who's going to answer these questions for the American people, who literally, you know, want these questions asked.
Then we're going to have a couple of other things going on today. There's a new presidential poll out that's going to tell you exactly where -- and this is interesting -- where would you think George Bush would stand in comparison to other presidents on the economy, on foreign affairs and in overall. There's now -- 160 historians have been asked this question, and we've got the answer for you.
That and a whole -- oh, and you know what? The Chris Brown case, which is an interesting case. Chris Brown and Rihanna, apparently there's a new update on that story, and there's also an update on the story that we've been following out of that supposed UFO over south Texas. There's a new --
PHILLIPS: A perfect segueway, yes. Don't kill my story. Don't kill my story, Rickcam. SANCHEZ: Going back to you. Did I really?
PHILLIPS: Yes. You got a sponsorship for that Rickcam?
SANCHEZ: No, but we've got a guy -- wait. Whatever you're about to say, I can best you. You ready for this?
PHILLIPS: No. I'm going to move on.
SANCHEZ: We've got a guy on the air coming up in a little bit who's going to tell you that everything the government says is bull.
PHILLIPS: Oh, imagine that. That'd be a first. Thanks, Rick. We'll be watching you through your little Rickcam.
SANCHEZ: Love you.
PHILLIPS: Love you more.
All right. Let's get to what he was talking about. What the...? is this? The flaming speck, it was shooting across Texas's wild blue yonder. Well, apparently the fireball jangled a lot of nerves over the weekend and had plenty of people saying what the...?
But authorities still aren't sure what it is. But they do know what it wasn't. U.S. Strategic Command says the burning object was not debris from the U.S. or Russian satellites that had collided last week. Their next best guess, well, it's what our Chad Myers said. They say it's probably a meteor.
And hey, be on the lookout for some really hot wheels. Somebody rode off with one of Lance Armstrong's bikes over the weekend. Three of his teammates lost their rides, too. Armstrong actually broke the news on his twitter feed and offered a reward. Armstrong actually broke the news himself on his Twitter feed and offered a reward. As he points out, it's going to be hard for anyone to sell his one-of-a- kind bike used for time trials. Armstrong and his crew are competing in the tour of California this week.
Well, they've got game, but does he? Some NBA All-Stars man up and help us break down President Obama's skills on the court.
(COMMERCIAL BREAK)
PHILLIPS: Trash-talking is nothing unusual on the basketball court or here in the CNN NEWSROOM, as you can probably see. And you better believe that NBA players are pros at it. So when five past and present All-Stars teamed up to rate President Obama's game, well, we got a little worried because there might be some personal fouls. Fortunately, our John King was there to referee.
(BEGIN VIDEOTAPE)
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Everybody gets one tip. Help him out.
STEVE NASH, PHOENIX SUNS: Keep the dream alive. Get better every summer. He'll be in the league before he knows it.
MAGIC JOHNSON, NBA HALL OF FAMER: Continue to pick the right teammates. Because that's what he's done so far. He's running with the right teammates. That's how he's going to turn the country around. And tshat's how you win pickup games. You pick the right people.
GRANT HILL, PHOENIX SUNS: I think he should continue to play. That's the main thing. He should continue to play. I know it's hard to do with all his responsibilities. But you can tell he loves it. We have all seen his passion for the game of basketball.
(CROSSTALK)
JOHNSON: To Grant's point, that's why he should play, because of all the responsibility. That will be his getaway.
CHRIS PAUL, NEW ORLEANS HORNETS: Because when we play, when we play, regardless of all the things we're going through with our families, your wife, girlfriend, anything like that, when you're on the court, everything is out of my mind. Nothing else is going on in the world. I tell people I'm two totally different people on the court and off the court. On the court (INAUDIBLE).
UNIDENTIFIED MALE: You're a pain in the neck.
PAUL: Yes. Yes. You can call it what you want to. You can call it what you want to. But that's just another world for us. That's just a whole other world. So, if you ever want to get to know me, don't play basketball with me. Don't play basketball with me.
KING: If you're picking him, based on what you've seen, if you're picking him for your team, what's his natural position?
JOHNSON: He's going to be a point, because that's how he thinks.
UNIDENTIFIED MALE: Because he sees the floor very well.
JOHNSON: He sees it. Also, you see the play before it really develops. That's how he's running the country. A point guard got to think five minutes ahead. And you ask these two guys, they know the time, they know what they have to do at that particular time, but they also are thinking five minutes ahead, because we got to know what's going to happen five minutes down the road.
So he's got to stay at point guard because he's running the country the same way. He's got to think for the future. And so, he's a point guard for sure.
PAUL: You need to keep playing but not too much. Stay the president. Don't try to take my job.
(END VIDEOTAPE)
PHILLIPS: All right. Rick Sanchez takes the ball from here with the rest of CNN NEWSROOM at the top of the hour.
