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Stimulus Signing Day; Help for Homeowners; Why Did Flight 3407 Crash? California Pink Slips; Economic Fears in Focus; Big Cuts at Mini; Stimulus Hits Home; Tennis Star Banned; King Sized Rejection
Aired February 17, 2009 - 11:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: The $787 billion stimulus bill, just a stroke of the president's pen, puts the massive economic rescue plan into motion. President Obama signs the bill about two and a half hours from now in Denver.
White House Correspondent Dan Lothian joins us live now.
And Dan, the stimulus is a big victory for the president, no doubt about it. But he is also looking ahead, isn't he, to the next item on his agenda?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Tony. Not spending a lot of time taking that victory lap.
HARRIS: Yes.
LOTHIAN: Certainly a critical bill for this president. But yes, he's focusing ahead to tomorrow as well, when he'll be in Phoenix, Arizona, and focusing on foreclosure and the foreclosure crisis.
This is an area that he'll be going to where, right around Phoenix, they've seen the median home price drop by about 35 percent over the past year. So it's exhibit number one for the administration as they try to roll out this plan, which we are told -- we don't have a lot of details, but we're told will be about $50 billion or more to help stem foreclosures and also cut down on the cost of mortgages -- Tony.
HARRIS: You know, there are some economists, Dan, as you know, and we talk to them all the time here, who think that this isn't enough money to really address the housing crisis.
LOTHIAN: That's true. I mean, obviously there are a lot of -- to be fair, there are a lot of economists who think that this really will help the foreclosure crisis.
HARRIS: Yes. Yes.
LOTHIAN: But there are some economists who think that, you know, this is a good start. But when you look at the losses, the mortgage losses, they think by the time this is all over, it will hit about $1 trillion. So they don't think that $50 billion or even $100 billion is really going to help, so something else is needed in order to address this issue, which of course is impacting so many Americans in pretty much all cities right now. HARRIS: That's right.
LOTHIAN: It started in certain areas, but everyone's being impacted by the foreclosure crisis -- Tony.
HARRIS: All right. Our White House Correspondent Dan Lothian for us.
Dan, thank you.
And we will have live coverage of President Obama signing the stimulus bill right here on CNN. That is scheduled for 2:40 Eastern. That's 11:40 Pacific.
For some of you, the wolf is at the door. Our Jim Acosta takes a look at those who might be helped by the president's housing plan.
(BEGIN VIDEOTAPE)
JIM ACOSTA, CNN CORRESPONDENT (voice-over): School bus driver and mother of two, Minta Garcia got the letter every homeowner dreads, "Your mortgage is in jeopardy of going into foreclosure."
MINTA GARCIA, DISTRESSED HOMEOWNER: We're going to be losing the house. We're going to lose everything.
ACOSTA (on camera): You think you're going to lose everything?
GARCIA: Yes.
ACOSTA (voice-over): Her message to the president...
GARCIA: Stop with the foreclosures, one.
ACOSTA (on camera): Stop the foreclosures?
GARCIA: Yes. Right now, because if people are losing houses, losing jobs, what are we going to do?
ACOSTA (voice-over): The White House says its housing plan will be one leg of a multi-legged stool that includes the stimulus and fixing the banks, with more legs to come to prop up the ailing economy.
TIMOTHY GEITHNER, TREASURY SECRETARY: This crisis in housing has had devastating consequences, and our government should have moved more forcefully to help contain the damage.
ACOSTA: Expected to cost $50 billion to $100 billion, the housing plan targets foreclosures by modifying loans for troubled borrowers. Some economists question whether the plan is big enough.
PETER MORICI, ECONOMIST, UNIVERSITY OF MARYLAND: We are likely looking at a trillion dollars in mortgage losses before this is all over, and putting $50 billion or $100 billion in is not going to solve the problem. ACOSTA: Like countless other Americans, Garcia admits she and her husband bought more house than they could afford, but she says the lender made the purchase all too easy. Now her mortgage is worth more than her house.
(on camera): How much was the house when you bought it?
GARCIA: Eight hundred.
ACOSTA: Eight hundred thousand dollars? And how much is the house worth?
GARCIA: Right now, it's like $675,000 on the market.
ACOSTA (voice-over): Foreclosure experts say America's home buying culture must change the president's plan to work.
PHILLIP ROBINSON, FORECLOSURE ATTORNEY: We lived in a culture in the last 10 years where mortgage originators said that you could use your house as a credit card to pay off your cars, to pay your credit card bills. Well, that doesn't exist anymore.
ACOSTA (on camera): The White House is trying to lower expectations for its housing plan, keeping in mind the stock market tanked when Treasury Secretary Tim Geithner released his ideas for bailing out the banks. The administration says its housing plan is aimed at helping homeowners, not the Dow Jones.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
HARRIS: Well, today, 20,000 California state workers are being put on notice, they could lose their jobs this summer. That's because lawmakers are still deadlocked on a plan to deal with the state's $42 billion -- can you imagine that -- $42 billion budget shortfall. One state senator says if something isn't done soon, California could be faced with an even bigger chain reaction.
(BEGIN VIDEO CLIP)
DARRELL STEINBERG (D), CALIFORNIA STATE SENATOR: Real-life impact will be the slowdown and actual shutdown of hundreds of state- funded transportation projects, people not getting paid, taxpayers not getting refunds, IOUs.
(END VIDEO CLIP)
HARRIS: You know, it's something of an historic day. Hundreds of television stations not waiting, making the switch from analog to digital. That means unless viewers have a digital-ready TV, a converter box, cable or satellite service, they could be out of luck.
Congress postponed the conversion deadline until June. That was after funding for converter box coupons ran out. But some stations simply didn't want to wait. The West Coast has been experiencing a lot of rough weather the past few days. What's the outlook for today? We are monitoring it in the severe weather center.
We're back in a moment.
(COMMERCIAL BREAK)
HARRIS: GM and Chrysler are unveiling their roadmaps to the future today. The business blueprints will cut jobs, benefits and brands, and keep Detroit's long lifeline to Washington open.
CNN Business Correspondent Stephanie Elam following the story for us from New York.
Stephanie, good to see you.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Good to see you, Tony.
HARRIS: You know, let's get to -- got a bunch of questions for you. What does the government want to see in these viability plans from GM and Chrysler?
ELAM: Well, they made it very clear. In fact, in an open letter to the heads of GM and Chrysler, Nancy Pelosi, the speaker of the House, and also Barney Frank, who's the chairman of the Financial Services Committee, sent a letter saying here are the six things we're really looking for.
They want to see the ability to insure long-term viability. They also want to make sure that stakeholders share equally in the industry turnaround. They also want to see some commitment to protect health and pension benefits. Obviously that's a big sticking point for a lot of people.
They also want to see a commitment to restructuring the debt and protecting taxpayer interest. And along with that, here's the other key part -- they want to see, as conditions improve, that the taxpayers will actually benefit from that, get their money back, obviously, their investment that they put in there. And the last thing is they want these automakers to commit to achieving or beating fuel industry standards there.
So those are the six things that they're really looking to see.
HARRIS: Do we know what's been going on since the last round of hearings here? I mean, what actions have the carmakers been taking to move toward viability?
ELAM: Well, you know, for some of these carmakers, it could mean that they get rid of some brands.
HARRIS: Yes.
ELAM: Maybe just some brands that just have not been profitable. So in the case of GM, that may be Hummer, that may be Saab, that may be Pontiac. Those brands may just go by the wayside.
They're also looking to work with the United Auto Workers Union to see if they could get some sort of concessions, saying, hey, maybe you'll give up on this, maybe take a stake in our recovery, instead of taking out right now some of that money or some of those benefits. See if they could do that.
The other issue there is the people who are holding on to the debt. The companies with the -- they have large debt.
HARRIS: Yes.
ELAM: So if they can get some concessions on when that debt has to be paid back, that will help them out as well. So these are some things that they've been working on to try to help streamline their operations and get it to a point where they actually can make money that isn't going right back out the window.
HARRIS: Hey, Stephanie, do we know if these carmakers going to need more money? And if the answer is yes, any idea how much more taxpayer dollars they'll need?
ELAM: Yes, that's a really good question. You know, today we found out -- well, we didn't found out, but today is the day that GM is getting that additional $4 billion from the government, basically fulfilling the Bush administration's plan to give this money that would keep them from going into bankruptcy.
So if you look at that, GM then has asked for $18 billion originally to make it through to 2010. Chrysler asking for $7 billion. But then GM got $13.4 billion, plus that $4 billion today. And then Chrysler getting only $4 billion at that point.
So they didn't really get all the money that they asked for originally. And some experts look at this and say, hey, you know what? These companies are probably going to need more like $75 billion to $125 billion to really retool everything, get back on their feet, be able to hire more people, make products that people want to buy. So at this point that's one of the questions we want to know, do they need more money?
HARRIS: Right. And one more. We keep talking about Chrysler and GM. What's the Ford story?
ELAM: Right. And the reason we're not talking about Ford -- I know we usually say the Detroit three.
HARRIS: Yes.
ELAM: The reason we're not talking about them is because Ford said when they testified before Congress that they were OK, they thought that they could get through this problem without using taxpayer money. However, they did ask for a $9 billion line of credit just in case things get worse. But at this point we're really focused on GM and Chrysler, not Ford.
HARRIS: You see the Dow here? Down 259.
ELAM: It's not a happy day.
HARRIS: Not a happy day.
ELAM: No.
HARRIS: Stephanie, thank you.
ELAM: Sure.
HARRIS: Good to see you. Thanks.
Crash investigators outside Buffalo are hoping to finish gathering evidence before the snow starts falling again. We will get the latest in a live report.
(COMMERCIAL BREAK)
HARRIS: And this just in to CNN. Two former border patrol agents have been released after their sentences were commuted by President Bush last month. Ignacio Ramos has been released from prison in Phoenix, and Hose Compean just got out of prison in Elkton, Ohio.
The men had been serving sentences for chasing down and shooting a suspected drug dealer. That suspect allegedly ditched a vehicle containing more than 700 pounds of marijuana and made a run for the Mexican border. He received immunity from prosecution in exchange for his testimony against Ramos and Compean.
Federal officials are scrambling to collect evidence from the crash scene of Continental Flight 3407 before a big storm hits later this week.
Let's get the latest from Allan Chernoff, near the crash site in Clarence -- Allan.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Tony, the NTSB has not ruled anything out in this crash, but investigators are looking at issues such as the mechanics of the plane, what they call human performance, the performance of the engine as well. However, experts are focusing on two issues -- icing and the fact that the pilots were using the autopilot as they approached the airport.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): In only 26 seconds, Flight 3407 fell out of the sky, twisting and rolling uncontrollably until it flopped on a single home, six miles from the Buffalo Niagara Airport. It happened so suddenly that the pilot approaching the airport on autopilot appears to have had little chance of preventing the aircraft from stalling.
GREGORY FEITH, FORMER NTSB INVESTIGATOR: If the autopilot is flying the airplane, by the time the autopilot turns off or disengages, now the airplane is in an unusual latitude and the pilot has to try and do so many mental gymnastics, things like trying to figure out what the position of the airplane is and what the appropriate corrective action is. And at a low altitude, that is just not possible for successful recovery.
CHERNOFF: Flying on autopilot is standard operating procedure in most conditions, according to the National Transportation Safety Board. And the flight manual for the aircraft, the Bombardier Q400 turboprop, says, "Autopilot may be used in icing conditions with the exception of severe icing conditions."
Weather conditions last Thursday night were light to moderate icing near Buffalo. Experts say, though, it's possible for an aircraft to encounter patches of heavier ice. Even though the pilot had the deicer on for most of the flight, aviation experts say with the autopilot engaged, the crew may not have been aware of exactly how much ice had built up on the wings or the tail.
PUNEET SINGLA, ASST. PROFESSOR, UNIVERSITY OF BUFFALO: You don't have a very good view of the wing of the aircraft. He cannot look outside and see whether there is ice or not. There is no camera installed to give him a view of the wing.
CHERNOFF (on camera): He has to rely on his own manual field.
SINGLA: Yes.
(END VIDEOTAPE)
CHERNOFF: It will be many months before the NTSB comes to a conclusive explanation as to what exactly caused the crash, but near the top of the list of possibilities are those combination -- ice, and also the use of the autopilot -- Tony.
HARRIS: OK. Allan, a quick question here. If the weather conditions indicate light to moderate icing, and other planes seemed to have had no problem that night, how is it that 3407 might have encountered what you'd have to call catastrophic icing?
CHERNOFF: Exactly. I mean, only 27 minutes after 3407, there was another flight from Newark that came on the same path, landed in Buffalo just fine. What can happen though is that the individual plane, even if the general conditions are light to moderate icing, an individual plane might hit a patch where the icing is pretty severe. So that's always a possibility.
HARRIS: Could pilot experience have played a factor here?
CHERNOFF: That is a very interesting question for debate. A lot of aviation experts are saying, look, with 26 seconds left when the disaster struck, no one -- no one, not even Chuck Yeager, one aviation expert said to me, could have actually saved this aircraft. But the idea that, perhaps if you had had a lot of experience, maybe you might have had some concern, and you would have turned off the autopilot.
HARRIS: Yes. CHERNOFF: Maybe in that situation -- no one could turn the autopilot off. And then, getting the sensation that there was some ice on the wings and the tail, maybe that could have played. But again, I should emphasize that there are no aviation experts who are criticizing at this moment what the pilot and the first officer did. Nobody is saying that the fact that they were not very experienced flying that aircraft -- they're saying that was not necessarily a cause.
HARRIS: All right. Allan Chernoff for us.
Allan, thank you. Appreciate it.
California in the weather zone big time. A series of storms delivering relief to drought-ridden areas of northern California. Flashfloods and mudslides, however, on tap today.
The pelting rain and high winds not much fun if you're on foot, as you can see here. And look at this area of Highway 5 in the mountains north of Los Angeles. Heavy snow, a real driver's nightmare. Someone had a little fun there. It temporary forced the road to close.
Let's get an update on this scene now.
(WEATHER REPORT)
HARRIS: And still to come, party politics is still dominating the scene in Washington. How is that impacting the president's efforts to get his economic plans in motion? I will ask one eof his top policy advisers. That's next.
(COMMERCIAL BREAK)
HARRIS: President Obama signs the stimulus into law in about two hours. The biggest government spending spree ever comes at a real cost here, a bruising three-week fight with Republicans that soured the tone in Washington and brought the honeymoon to a loveless end.
Here's our Senior Political Analyst Bill Schneider.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): It's gotten so bad, bipartisanship is now a partisan issue.
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: I want to thank the members of Congress who came together in common purpose to make it happen.
SCHNEIDER (voice-over): Came together?
SEN. LINDSEY GRAHAM (R), SOUTH CAROLINA: If this is going to be bipartisanship, the country is screwed.
SCHNEIDER: The economic stimulus plan passed the House with no Republican support and only three Republican votes in the Senate.
SEN. JOHN MCCAIN (R), ARIZONA: And it was a bad beginning.
SCHNEIDER: Why isn't bipartisanship working? There's real urgency out there.
OBAMA: When you start seeing an economic crisis of this magnitude, everybody's got to chip in. Everybody has got to pull together. Politics has to stop.
SCHNEIDER: But it hasn't. The red versus blue divide is still very much alive in Congress. When President Obama allowed House Democrats to shape the initial stimulus plan, it ran right into the buzz saw of old political divisions.
GRAHAM: I think the president should have gotten more involved in trying to bring Republicans and Democrats together to find common ground.
SCHNEIDER: But the plan passed.
What difference does it make that it got so little Republican support? It means the stimulus will be a continuing issue of partisan controversy.
President Obama is betting it will work.
OBAMA: It will save or create more than 3.5 million jobs over the next two years.
SCHNEIDER: Republicans sound like they're invested in failure.
SEN. JOHN MCCAIN, (R) ARIZONA: A lot of this package will not create jobs.
SCHNEIDER: They say they're just concerned.
REP. JOHN BOEHNER, (R-OH) HOUSE MAJORITY LEADER: I hope this bill works, I really do, for the good of our country, but my concern is that the plan that's outlined will not do what we want it to do.
(END VIDEOTAPE)
HARRIS: OK. Bill Schneider joins us live from Washington.
And Bill, is there any suggestion now that the Obama administration may have shown too much concern for bipartisanship?
SCHNEIDER: Actually, there was an interesting statement made by his chief of staff, Rahm Emanuel, who was quoted today in "The Washington Post." Emanuel said, "Rather than jobs being the message, we had bipartisanship being the message," as if the objective in this bill was somehow to demonstrate the president's leadership of a bipartisan coalition, and that may have been a mistake.
The president, however, when he was flying back to Chicago over the weekend, he spoke to a group of columnists. He defended the bipartisan approach. He said, "I want to listen to counterarguments from other parties. You've got that right. You just present them. We can compromise in order to get stuff done."
But then he added an interesting statement. President Obama said, "I am an eternal optimist, but that doesn't mean I'm a sap."
Tony.
HARRIS: OK. Bill Schneider for us.
Bill, appreciate it. Thank you.
SCHNEIDER: OK.
HARRIS: More now on the fallout from the fight over the stimulus.
Melody Barnes is director of the White House Domestic Policy Council, and she joins us live.
Melody, good to see you.
MELODY BARNES, DIRECTOR, WHITE HOUSE DOMESTIC POLICY COUNCIL: It's great to be here. Thank you for having me.
HARRIS: Well, Melody, I'm only going to belabor this for a couple more questions, and then we're going to look forward. All right?
BARNES: OK.
HARRIS: I've got to ask you, first of all, what really from inside the bubble, so to speak, what disappointed the administration about the debate over the stimulus plan and some of the language from Senate Republicans we were kind enough to play for you again?
BARNES: Well, obviously, we would have hoped for more Republican support in the Congress. But at the same time, the president is very proud of the fact that we received the support that we did in Washington. And also importantly, support from mayors and governors all over the country.
You know, he was just in Florida recently with Republican Governor Crist. That was important to him. We also know that there are those around the country who are embracing the fact that we are about to create or save 3.5 million jobs.
So we have to move through the process. His hand will continue to be extended to those on both sides of the aisle, but we're about the business of creating jobs and investing in our future.
HARRIS: Melody, I'm going to ask you a question in just a moment about the metrics you're using for the saving and creating of jobs here, but one more question here. Was one of the lessons for the president, if you are president, take your message to the people directly, particularly on these big initiatives?
BARNES: Well, I think you're absolutely right about that. I mean, we were in Peoria, we were in Florida. We were -- he's in Denver today. We were in Elkhart.
And in all of those places he received such a warm welcome from the people because those are the individuals who have been losing jobs, who are worried about keeping their jobs. And they were the ones who were saying, Mr. President, we need to get this legislation passed, we need to get it signed so that we can go about creating and saving -- you can create and save the jobs that we so desperately need.
HARRIS: So much -- I'm sorry, Melody. I just don't want to lose the time that I have with you.
You know, so much of this plan is about confidence. And I've got to tell you, I have talked to economists for months now, and they can't agree on the prescription for turning the economy around. How confident is the administration that the plan, the recovery and reinvestment plan the president will sign into law today, will work in the short term and in the longer term?
BARNES: Well, as the president has said, no plan is perfect, but the perfect can't be the enemy of the absolutely necessary. And this plan was absolutely necessary.
One of the things we heard consistently from economists is that we had to act quickly and decisively. We worked with some of the best people around the country to put this together. And we do believe that we'll create or save the number of jobs that we've been talking about.
HARRIS: So let's take a look at one of the aspects of the plan, the tax cuts to the middle class. We're going to put some details up here. You know them.
I guess the question that I get from economists, and the back and forth is, at least to this question, why sort of a little over time, as opposed to a lump sum approach? Some have suggested maybe a debit card.
BARNES: Well, one of the things that we discussed with economists is a balance, a balance between the amount of spending in the bill and the number, the amount for tax cuts in this bill.
HARRIS: Yes.
BARNES: We believe that we've struck that right balance, that this bill will spend out at a rate over the next couple of years that will start to stimulate the economy, while creating and saving those jobs that I was talking about, and also investing in the kind of infrastructure that I was talking about. We've been able to accomplish one of the president's signature goals. He talked about it for months on the campaign trail, providing a middle class tax cut, and also providing relief to small business owners. So it was a combination of things that were necessary to stimulate the economy.
HARRIS: Melody, how are you going to measure the short-and-long- term success of this program? You know this game. We here at CNN and the other networks around the country are already setting up our own metrics for measuring your claims of jobs saved or created. How will the administration know the stimulus plan is working? The first indications?
BARNES: Well, one of the things we'll start to see, we'll make sure that people aren't being laid off, and we'll start to see jobs being created. We're also asking the American people to join us in watching this.
In fact, just within the last hour, we've put out recovery.gov, which is a Web site that's going to allow the American people to see how the money is being spent, to see how the number of jobs that are being created. This is the kind of transparency and accountability that the president was talking about on the campaign trail, and we're all about changing business in Washington. So we're meeting that commitment.
HARRIS: When you send out those press releases talking about jobs, you know I'm going to have you back on this program and we're going to talk about it.
BARNES: I hope you do. Please do.
HARRIS: We will.
Melody, thanks for your time. We appreciate it.
BARNES: Great. Thank you for having me.
HARRIS: All right.
BARNES: OK.
HARRIS: State leaders are on the front lines of the economic meltdown in California. That means lots of layoffs could be coming soon. Who is being impacted?
(COMMERCIAL BREAK)
HARRIS: Twenty thousand California state workers are on the brink of losing their jobs while lawmakers continue to argue over a plan to balance the state's enormous budget deficit. Live now to CNN's Dan Simon. He is following the developments from San Francisco.
And, Dan, I feel like -- correct me if I'm wrong here -- not everyone getting a note in the mail is said to be laid off, correct?
DAN SIMON, CNN CORRESPONDENT: That's correct, Tony.
You know, this thing is such a mess. And really, where to begin. Let's talk about these pink slips. And they're going out to 20,000 state employees. Now, as you said, it doesn't mean that they're going to get laid off. This is really a step in telling these people that because the state is going broke and because there's no resolution to this budget crisis, that there is a possibility -- there's a possibility -- that there could be widespread layoffs in the state of California.
Let's talk about where we are with this budget negotiation, because that's really the sticking point here. All that need to happen is one Republican -- one Republican needs to stay yes to this budget deal. But the problem is, the deal contains $14 billion in tax increases and, obviously, many Republicans are philosophically opposed to that notion. Not to mention the fact that they signed anti-tax pledges -- most of them in Sacramento -- and they're worried -- at least the theory goes -- is that if they sign on to this budget that there is a chance that, you know, when re-election comes around, that voters aren't going to like it and they're going to vote them out of office.
So that's really where things stand right now, Tony. As you know, things have been sort of ratcheting up here in California. First thing that happened is that all these infrastructure projects, billions of dollars worth of infrastructure projects, came to a halt. And then the governor said, we're not going to give out tax refunds. They're going to be delayed. Then you had work furloughs two days a month for unpaid leave for countless government workers. And now this next step. It's just a continuing process. And until there is a deal in place, it's just going to keep getting worse.
Tony.
HARRIS: Let me try this one on you. And I'm wondering if this is part of the debate in Sacramento right now. You send out the pink slips to people who may not, in the end of the day here, get laid off. Is that in any way being perceived as fear mongering, or is it more hard-core economic reality for California? Is that part of what is being debated out here -- out there?
SIMON: You know, I really think it's both. I mean what better way to motivate lawmakers to really get this thing done than to say, look, if you don't get a budget deal in place, that is really going to affect, you know, thousands of state workers who obviously, you know, rely on their benefits and everything else to take care of their families. So -- you know, and also, bottom line, the state is going broke, Tony. The state controller says really until the end of the month do they have enough money to cover their bills? So this is just another step. It keeps just escalating day after day.
HARRIS: Right. And very quickly, what's happens -- what's all of this back and forth doing to the governor's approval rating?
SIMON: Not good. His approval rating now is at 40 percent. A year and a half ago it was like at 60 percent. Governor Schwarzenegger much more popular around the country than he is in his own state. But he doesn't have to worry about re-election in 2010. That's because he's going to be out of office because of term limits.
Tony.
HARRIS: All right. CNN's Dan Simon for us.
Dan, appreciate it. Thank you.
Let's turn to Wall Street now. We are continuing to see a sharp pullback midway through the session as worries over the economic stimulus plan weigh on the minds of investors. Let's check in with Susan Lisovicz, who is at the New York Stock Exchange.
All right. Where are we this hour, Susan?
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, we're midway through the session and really the sentiment is the same as when we opened, and that is bleak. The market now selling off three days in a row, but this is the nastiest. And we got within a whisker of the low for the bear -- of this current bear market with the Dow Industrials.
You know, there's a lot of reasons that we're selling off. And, you know, they're familiar to our viewers. The concerns about the stimulus package, which will be signed this afternoon. The fates of General Motors and Chrysler. You know, just the continuing drumbeat of bad, economic news. Whether it's Japan, the second largest economy seeing its annualized GDP fall 12.7 percent, or, you know, the SEC announcing that it charged four people in connection with an $8 billion stock fraud. So there's just a lot of bad news an it's translating into a market rout.
Right now the Dow Industrials are down 265 points or nearly 3.5 percent at 7,584. It got within one point of 7,552. That's the low it reached back in November.
And, you know, unfortunately, we've gotten used to 250 point sell-offs. It may not seem like a lot, but it's much more significant than a year ago because of the losses sustained over that time. An equivalent drop, just to put it in perspective, Tony, when the Dow peaked at 14,000, would be a sell-off of about 500 points.
The Nasdaq, meanwhile, is down 3.75 percent. The Nasdaq is down 4 percent. So it's just a rough day on the markets. And, you know, we're half-way through. Got hours to go before that closing bell sounds.
HARRIS: Got to get through it.
LISOVICZ: Yes.
HARRIS: Susan, thank you.
LISOVICZ: You're welcome.
HARRIS: When you see one in traffic, the Mini Cooper makes most people smile. The move is a lot angrier where they build the cars these days. (COMMERCIAL BREAK)
HARRIS: You know, Detroit automakers aren't the only ones struggling these days. Hundreds of workers got their walking papers at a factory that builds the iconic Mini Cooper. Here's CNN's Jim Boulden in Oxford, England.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The way that it's been done to you people is a disgrace.
JIM BOULDEN, CNN CORRESPONDENT, (voice over): This mobile phone video shows the anger of many employees early Monday when 850 temporary workers were told they were immediately out of a job. The workers were apparently upset at union officials for not doing more for them. BMW owned Mini says the popular model suffered steep falls in sales in January. In a statement Mini said, it's not immune to the economic downturn, though sales in 2008 were higher year-on-year.
And though cars were being shipped out Monday morning, the plant will be closed for the rest of the week. And starting in March, the weekend shift will be gone, along with those 850 temporary workers.
UNIDENTIFIED MALE: I've got a wife and three children. One of them's two years old. And I'm just worried about the -- trying to find a new job now.
BOULDEN: Union leaders say it's all the more surprising given that Mini runs such a moderate and profitable plant.
TONY WOODLEY, UNITE UNION: Why is it that they couldn't, if not work shared (ph) or found money from the government? Why is it that they couldn't have gone to voluntary redundancies (ph)? And the answer quite simply is, it was a little bit more expensive, wasn't it?
BOULDEN: Mini joins Honda, Toyota, Nissan and Jaguar Land Rover in either idling plants or cutting shifts in Britain. In France and the United States, the government has stepped in to loan billions of dollars to automakers. The UK government said Monday it's doing all it can to help those affected, but has so far resisted calls to bail out the industry. The opposition conservative party is calling for the government to do more.
MARK HARPER, MEMBER OF PARLIAMENT: The fact is they were going to have to reduce the production at that plant. And I think that tells you all you need to know about the government's initiatives on the car industry are simply not working.
BOULDEN: The Mini job cuts may have taken the country over the milestone of 2 million people unemployed. A level not hit since 1997.
With the Mini plant scaling back, there are new fears that industrial output across Britain could suffer the biggest yearly drop since the second world war. During the boom years, the country touted its flexible working conditions in order to attract companies like BMW. Now the unions say that's coming back to haunt British workers because during the recession it's easier to shed jobs here.
Jim Boulden, CNN, Oxford, England.
(END VIDEOTAPE)
HARRIS: If you want to green-up your home and get the government to kick in for part of the bill, now may be the time to do it thanks to the stimulus. Alison Kosik has our "Energy Fix" from New York.
Alison, I'm all ears.
ALISON KOSIK: Well, hello to you, Tony.
About $8 billion worth of stimulus money is destined for home energy improvements. So if you've been thinking about replacing an old furnace or poorly insulated windows, this may be the year to act. The stimulus allows homeowners to claim a 30 percent tax credit for energy efficient purchases and renovation. And that's up from 10 percent currently.
Now, keep in mind, the credit can't exceed $1,500 and be sure to save your receipts for tax time. Purchases have to meet certain efficiency levels to be eligible, so check the manufacturer's website to make sure they qualify. Now if you're thinking of investing in a new energy efficient dishwasher or clothes drier, there's also money for that. The stimulus includes $300 million for rebates on Energy Star appliances. And that's on top of rebates already available from about 15 states. Not a bad deal, Tony.
HARRIS: Hey, Alison, no, that's not a bad deal at all. But what about weatherizing homes? Isn't that a big chunk of the stimulus plan?
KOSIK: You're exactly right. $5 billion is set aside to weatherize low and middle income homes. And that's up from just $500 million last year. Weatherizing can be as simple as caulking and sealing or as extensive as replacing leaky windows and old furnaces. And it can shave an estimated $358 a year off the average home's electric bill. Income eligibility varies by states, but generally a family of four has to be making less than $32,000 a year to qualify. President Obama says not only will this program cut energy costs for low-income Americans and improve the nation's energy efficiency, but he says it will also create tens of thousands of green jobs.
And for more energy fixes, log on to cnnmoney.com.
Tony, back to you.
HARRIS: Boy, Alison, that's an "Energy Fix" for us today. Thank you.
KOSIK: It is. HARRIS: An Israeli tennis player qualifies for a tournament, but organizers tell her to stay home. We will have the latest on their reasons. And also the latest on the international fallout.
(COMMERCIAL BREAK)
HARRIS: A look now at some of the most popular stories at cnn.com.
An Islamist TV station, the founder accused of beheading his wife. Police in Orchard Park, New York, have charged the man with second degree murder. They found the body of his wife at the TV station. She had been decapitated.
Also among the most read stories, a teenage girl found dead in an army barracks. Authorities say the 16 years old had no obvious signs of trauma when they found her in a barracks at Ft. Lewis near Tacoma, Washington. Another girl was found unconscious. An army spokesman says investigators questioned the soldier who was allegedly an acquaintance of the girls but have made no arrests.
And a Chinese mistress contest takes a deadly turn. A married businessman who could no longer afford to keep his five mistresses held a competition to decide which one to keep, but Chinese media report say one of the women who was eliminated drove the man and the other four off a cliff. She died. The others were injured. Man!
See the most popular stories at cnn.com.
Organizers of a major tennis event in Dubai have issued a statement explaining why they won't let an Israeli tennis star take part. Our Josh Levs joins us now with that story.
And, Josh, this story was developing yesterday. We took a moment to pull it all together. So what do you have for us?
JOSH LEVS, CNN CORRESPONDENT: You know, it has captured attention all over the world. And there are these new twists today.
The government of Dubai -- just to give you the basics here -- did not allow this 21-year-old, Shahar Peer, a visa to play in the Dubai tennis championship tournament. And that was taking place this week. The reason is that she's Israeli.
Now the organizers have put out a statement. And this is what they say. They say they respect her but they list some points for their decision here. They say, public sentiment remains high in the Middle East and it is believed that Ms. Peer's presence would have antagonized our fans who watch TV coverage out of Gaza. They say Ms. Peer personally witnessed protests against her at another tournament in New Zealand. Also, concern was raised about her wellbeing and her presence. Given the public sentiment, the entire tournament could have been boycotted by protestors.
And then they added this, Tony. They said, we do not wish to politicize sports, but we have to be sensitive to recent events in the region and not alienate or but at risk the players and the many tennis fans here in the UAE.
Now one quick point on that I will just tell you. We hear a lot of references to a protest in New Zealand. CNN has reported that about 20 people protested there and they were moved before her match. The World Tennis Association has threatened to drop Dubai from the tour in future years. And here's what the chairman told CNN.
(BEGIN VIDEO CLIP)
LARRY SCOTT, WTA TOUR CHAIRMAN: We were assured when the tournament was sanctioned for Dubai that if an Israeli wanted to play, they would be given permission to play. So this runs counters to everything that we were promised. And I think it's a real setback, not just for the world of tennis, but the whole international sporting community will take note of this. And, you know, if international sport's going to take place in countries, they have to let any player that has earned the right to play compete.
(END VIDEO CLIP)
LEVS: And, Tony, we have heard from Shahar Peer herself about the decision that Dubai made.
(BEGIN VIDEO CLIP)
SHAHAR PEER, TENNIS PLAYER DENIED VISA: I don't think it should happen. I think sports and politicians has to stay on the side and not to be involved. So I really hope it's not going to happen again to not only me, but to any other athlete.
(END VIDEO CLIP)
LEVS: And, Tony, I'll just tell you, some tennis players are speaking out on her behalf, including Venus Williams. Dubai's decision has really angered a lot of people. "The New York Times" over here is reporting that The Tennis Channel has decided not to televise this. And, of course, you can get a lot more details right here, cnn.com.
Tony.
HARRIS: Just crazy. All right, Josh, thank you.
One county holds the distinction of giving President Obama the lowest percentage of votes in the country. We'll see where it is and hear what they're saying about him now.
(COMMERCIAL BREAK)
HARRIS: President Obama, not a popular guy in King County, Texas. In fact, almost no one there voted for him. Our Gary Tuchman went in search of someone who did.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT, (voice over): In all the United States, out of all the nation's 3,100 plus counties, tiny King County, Texas, stands alone.
Did you vote on Election Day?
UNIDENTIFIED FEMALE: Yes, I did.
TUCHMAN: And who'd you vote for?
UNIDENTIFIED FEMALE: John McCain.
TUCHMAN: Who did you vote for?
UNIDENTIFIED MALE: I voted for McCain.
TUCHMAN: How many of you, a show of hands, voted for Barack Obama?
Percentage-wise, no county in America rejected Barack Obama to a greater extent than this county near the Texas Panhandle. And what makes it more interesting is that most of the voters here are registered as Democrats.
John MCcain almost won King County by acclamation. The Republican received 93.2 percent of the vote here. Barack Obama, 4.9 percent. If you got everyone in this entire county who voted for Obama and put them all together, they would fit in a mini van. The new president received eight votes.
At the K-12 school in the town of Guthree (ph), the only school in the county, the basketball coach and principal is Roddy Shipman.
Do you know anybody who voted for Barack Obama in this county?
RODDY SHIPMAN, KING COUNTY RESIDENT: Not personally, no. It's kind of a hush deal I think.
TUCHMAN: This snowplow driver also doesn't know anyone who voted for Obama, but he has some advice for the new president.
UNIDENTIFIED MALE: Help out the little person. Help us -- help us out a little bit.
TUCHMAN: Charlotte McCauly also has some advice for Obama -- listen to the Lord.
CHARLOTTE MCCAULY: I just ask God that he would help him truly connect with him so that he would know what God's heart was for the United States of America.
TUCHMAN: Many here are relying on prayer to counter their disappointment. Not every congregant at King County's Living Church of Jesus Christ is from this county. These people say they voted for McCain.
JAYNA BRUTON, VOTED FOR MCCAIN: Ultimately, God is in control, so he has a plan with Obama to be in there. And I'll just support God's plan and we'll see what happens. TUCHMAN: The pastor has a similar sentiment.
: The election's over. We need to get behind him and support him, pray for him. And I'm big on -- I love this nation and I'm big on, I don't think we should badmouth him, you know what I'm saying. He's our president.
TUCHMAN: But 88-year-old James Sweeney isn't quite as charitable about Obama.
JAMES SWEENEY, VOTED FOR MCCAIN: And I don't think that he'll do -- Bill or Hillary Clinton will tell him what to do, all the way. He'll never make a move without talking to those two people.
TUCHMAN: And what do you think of the Clintons?
SWEENEY: I don't.
TUCHMAN: This county is almost all white, but county leaders reject that racism has anything to do with the minuscule Obama numbers. Instead, many people here say they just saw McCain and Palin as more moral and trustworthy.
MCCAULY: I believe trust has to be earned. And since he's just become our new trust, I'd have to say I don't trust him right now, but I hope that as we pray for him and, you know, that we can come to trust him.
TUCHMAN: Before we leave this remote county, we find Ann Rocha (ph).
Did you vote in the presidential election? Who did you vote for?
ANN ROCHA: Barack Obama.
TUCHMAN: You voted for Obama?
But Ann moved to King County just after election day. So the identities of the Obama eight are still a mystery to us.
(END VIDEOTAPE)
HARRIS: CNN NEWSROOM continues right now with Kyra Phillips.
