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How Fair is the Foreclosure Prevention Plan; Protecting Your Money From Scams; Vice President Biden, President Obama Speak Before the Conference of Mayors
Aired February 20, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Trying to dig out of a six-year hole. Will the Dow drop to another bottom? Today we check out the market in just a minute.
You play by the rules. And others get the rewards? Fine print in the president's mortgage rescue plan.
And dangerous zip codes. Why do areas with more fast food places show a greater risk of stroke? It's Friday, February 20th, I'm Heidi Collins and you are in the CNN NEWSROOM.
Buckle up, we have another wild ride on Wall Street today. It began last hour when the opening bell faced its lowest starting point since October, 2002. In fact, just as last week, the Dow has lost nearly 10 percent of its value. And here's a truly ugly fact. In less than a year-and-a-half, the Dow has plunged more than 47 percent from its record close.
Let's see where the markets are right now. CNN's Susan Lisovicz is at the New York Stock Exchange watching the big board. So right out of the gate, we were down triple digits, now sort of teetering around the 100-point mark, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: It's a sharp sell off, you know, and Heidi, it's something that should be noted that as the market continues to move lower, these kind of point moves have - you know, have greater impact, because you know, you're operating from a smaller number.
COLLINS: Sure.
LISOVICZ: So a point move of 100 points on the Dow is 1.33 percent. So think about it. And what we are seeing is a clear recognition that the market is looking for the next support level. This just one day after the Dow closed at a six-year low. We saw the reaction worldwide, Asia retreated sharply, Europe remains down sharply.
And we're looking at - we're looking for the next support level for the Dow. 7286. That was reached in October in '02. If it gets there, that's the lowest point for the blue chip average in 11 years. So it's something we hopefully don't see, but it could be. The S&P 500, by the way, which tracks so many, which so many mutual funds track is not at its low of the bear, of this current bear market, Heidi, but it's about 15 points away. So it's getting dangerously close as well.
COLLINS: We always look at the Dow, but, you know, very important to keep our eye on the S&P, too.
LISOVICZ: A lot of markets watch that. It's a broader average, and so many of our investments really track that average in particular.
COLLINS: Absolutely. All right. Susan, thank you.
LISOVICZ: You're welcome.
COLLINS: Investigations on Wall Street. New York's attorney general has subpoenaed Bank of America CEO Ken Lewis now. The big question, according to a source in the investigation, whether the bank withheld key information from its investors. At issue, $3.6 billion in bonuses doled out by Merrill Lynch just days before the Bank of America bought the firm.
A new watchdog against fraud on Wall Street, former federal prosecutor Robert Zami has been named as the SEC'S new enforcement chief. His job will be to "crack down on those who would betray the trust of investors."
And there could be a fork in the road for Saab and its parent company, General Motors. The Swedish car maker filed for bankruptcy protection today, and has applied to be spun off from GM.
The nation's financial crisis from the city level. This hour, President Barack Obama meets with dozens of mayors from around this country. One topic, getting their share of the economic recovery plan. CNN White House correspondent Suzanne Malveaux is joining us now with a closer look. Hi there, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Heidi. We expect that meeting to take place about a half hour or so in the east room. We're told like up to 85 mayors from across the country, and obviously, the president is going to be addressing them.
The main message here out of the $787 billion economic stimulus package is accountability and transparency that he is going to say that everybody is watching, all taxpayers are watching, and there's a website, recovery.gov. And they'll be able to track where all of the dollars, supposedly where all of these dollars are going, how it's going to be spent, how it's a allocated and so there is a certain responsibility that the mayors have to make sure this is being processed correctly. That this really is going to those projects that they have put before the president.
And you may recall, Heidi, it was just a couple of weeks ago that you had a group of mayors here at the White House, meeting with officials. And the tables were turned at that point. It was Barack Obama, as well as White House officials saying, look, we need your support here for this economic stimulus. Even some of the Republicans, those who actually represent the traditionally republican states in their cities to try to convince their congressional representatives to move forward on this package.
So obviously, the president is going to be thanking some of them. One of them, Jerry Abrahamson. He is from Louisville, Kentucky, the mayor there. That's the home state of Mitch McConnell, the minority leader who obviously we know did not approve of this package. He is one of those Republicans who went forward and said, look, you know, I have some serious projects, I have some serious problems in my city, I need this money. So we're going to hear the president also thanking them, as well, Heidi.
COLLINS: Yes. They're all going to kind to be sharing their stories and saying why they need the money for their own cities. How bad are some of these problems for the mayors? Of course, we've heard about different cities across the country that have gotten more and more familiar with some of those troubled spots.
MALVEAUX: Oh, sure. It's absolutely amazing, because you talk about places from New Orleans to Miami to some of the smaller cities in the south. A lot of folks that are suffering. Eight out of 10 cities, the latest survey showing, that they are in financial trouble. It's from 64 percent, just in the last six months alone, Heidi. And then you have what are the sacrifices that they're actually making. 69 percent involved in hiring freezes, and layoffs. You've got another 42 percent delaying these projects that they've got really just on hold here.
And then 22 percent cuts across the board. So you're going to hear these mayors, they're going to come to our cameras, our stakeout position after this meeting, to talk a little bit about the specifics, what they are actually facing right now, Heidi.
COLLINS: All right. CNN's Suzanne Malveaux watching that story for us today. Appreciate it, Suzanne.
And at the bottom of the hour, just a reminder, President Obama talks to the group of mayors at the White House. It's scheduled for 10:30 Eastern. Of course, we're going to bring it to you live.
Also, we're going to hear about the meeting from one of the mayors who will be there in the noon hour, going to be joined by Los Angeles mayor Antonio Villaraigosa. That will be on Tony Harris's show, coming up.
Ready to move forward in California. Governor Arnold Schwarzenegger is scheduled to sign the state's massive budget deal today. The deal, though, wasn't easy to hammer out. The state tenet was locked in a marathon 45-hour session before finally reaching agreement.
(BEGIN VIDEO CLIP)
GOV. ARNOLD SCHWARZENEGGER: This is a historic budget. And not only did they pass a great budget, but also a great reform package, you know. This budget reform in the primary reform, education reform, it's all kinds of great things that will have a tremendous impact, a positive impact on the state of California. (END VIDEO CLIP)
COLLINS: The so-called great agreement calls for nearly $13 billion in tax hikes, and $15 billion in program cuts. They are hoping to erase the state's $42 billion shortfall by mid 2010.
Beer, wine, liquor, some say alcohol is recession-proof. Can selling it in stores on Sundays be the answer to some state's budget problems? We're going to talk about Georgia's effort to lift blue laws right after the half hour.
And this could get pretty ugly. This hour, hundreds of former customers of Bernie Madoff are expected to show up in a federal bankruptcy court in New York. They want to find out if they'll be able to get back some of their money from his alleged $50 billion scam. Many investors lost their life savings when they invested with the once well-respected financier.
And we have an update on Allan Stanford, the jetsetting Texan accused of a multibillion dollar scam. The FBI has tracked down the disgraced billionaire and served him with court documents. Stanford has not been charged, but the government has shut down three of his companies. Stanford's father says he hasn't heard from his son but wants him to hear this advice.
(BEGIN VIDEO CLIP)
JAMES STANFORD, FATHER OF ALLEN STANFORD: I almost want to cry, but what can i do? If I could tell him anything, Allen, call me, and just do the right thing. Whatever it is.
(END VIDEO CLIP)
COLLINS: Federal investigators say billions of dollars are missing from Stanford's companies.
Avoiding the scam. We want investors to be weary. So our personal finance editor Gerri Willis will join us with advice on how to avoid investment scams.
At least 11 tornadoes. The National Weather Service confirms that's how many tore across Georgia on Wednesday. One person died. About a dozen were hurt. The strongest tornado slammed into Wilkes County, with 166 miles per hour winds. Very early estimates puts damage around the state at $10 million.
(WEATHER REPORT)
COLLINS: Two people under arrest now in the on-going investigation into suspicious fires in Coatesville, Pennsylvania. 23 fires have been set in and around Coatesville since the beginning of the year. That includes one fire that destroyed 15 row houses. Coatesville is about 45 miles from Philadelphia.
An 11-year-old Alabama girl is fighting for her life this morning after police say she drank a chemical from a bottle used to make meth. (BEGIN VIDEO CLIP)
DENISE KELLEY, MOTHER: You know, with the help of god and prayers, my baby will live, but she'll never be the same. She'll never be the same.
(END VIDEO CLIP)
COLLINS: The girl's mother says her daughter innocently drank from a Sprite bottle. The liquid immediately burned her throat. Police say the liquid was possibly a chemical linked to a methamphetamine lab located in a backyard trailer where a relative lived.
Los Angeles police investigating this morning to determine who leaked a picture that appears to show the singer Rihanna bruised and battered. The photo was posted on a celebrity website, and the story is number one now on cnn.com's most popular. The TMZ website says the picture of the singer was taken after she was allegedly beaten by her boyfriend, Chris Brown.
Now, this is obviously not the picture. CNN has chosen not to show that picture, in fact. Its authenticity has not yet been confirmed. Neither Brown nor Rihanna has publicly acknowledged the domestic violence incident.
Food for the body, nourishment for the soul. An Ohio town ravaged by layoffs rejoices in the generosity of others. That story, just ahead.
(COMMERCIAL BREAK)
COLLINS: Anger over the foreclosure crisis pouring out into the streets of Oakland, California. Protesters had a rally in a neighborhood where last month more than 165 people lost their homes. Or now face the possibility of foreclosure. They're vowing to stop the banks from taking control of the properties.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: To get them to do something productive with the properties can change the quality of life in the neighborhood.
(END VIDEO CLIP)
COLLINS: Many troubled homeowners refinanced their mortgages with an adjustable rate, and when the rates shot up, they couldn't keep up with the payments.
The president says his foreclosure prevention plan will help preserve the American dream for millions of American families, but many homeowners say the playing field is tilted.
CNN's Candy Crowley looks at the plan's fine print.
(BEGIN VIDEOTAPE) CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Those 627,000 people filing for unemployment benefits last week point to another harsh month. That's what worries bank President E. Hunt Berke about the president's mortgage rescue plan.
E. HUNT BERKE, BANK PRESIDENT: My biggest fear is the job losses that will come. We know what we've got to deal with right now. But this proposal, for instance, doesn't take into account, you know, a lot of future job losses, which could change the landscape all together.
CROWLEY: Pouring over the details of the president's plan, bankers and homeowners are finding some interesting details. For instance, unless a bank takes TARP funds in the future, the plan is voluntary. Banks don't have to restructure or refinance any loan. Though Berke thinks they will.
BERKE: A lot of it is self-preservation. If we foreclose on an individual, we now own a house that we can't sell, because the market's bad.
CROWLEY: Also causing a say-what, for high-risk homeowners whose loans are reduced to a third of their income, there is an enticement. Pay on time, and the government reduces your principle by a $1,000 every year for five years.
Mr. and Mrs. Taxpayer, you're having your cup of coffee this morning, we're talking about essentially your neighbor being compensated $1,000 for making his mortgage payment.
CROWLEY: The administration is stung by complaints that people who work the system and defaulted when the game went sour are being rewarded. Officials note, there will be strict criteria for eligibility, and in this game, everybody wins.
SHAUN DONOVAN, HUD SECRETARY: We believe this plan will help to raise values of houses by $6,000 on average across this country. So this is important to do to stop foreclosures for everyone, not just those who are at risk.
CROWLEY: Berke and Herbert is Virginia's oldest bank and Berke says a conservative lender. No subprimes, no risky investments. Past-dues are up. Just a handful of foreclosures, but the books are solid. 20 banks, $1.7 billion in assets. No need for a government assist. But when customers complain the administration's plan is a handout to people with poor judgment, Hunt Burke disagrees.
BURKE: To fix this economy, we've got to start with housing and make this right, one way or another.
CROWLEY: Maybe it's not fair, he said, but that's not a good reason not to try to fix the problem. Candy Crowley, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Laid off workers in Wilmington, Ohio, getting much- needed help. An aid group brought boxes of food and personal items for the families of thousands of workers left jobless by a planned closure of air cargo carrier DHL. One says the aid is a gift from god.
(BEGIN VIDEO CLIP)
CHERYL BRADSHAW, FOOD AID RECIPIENT: We're raising two grand kids, and only have one income, so it's a big, big blessing.
(END VIDEO CLIP)
COLLINS: City officials estimate one in three families in Wilmington is affected by the DHL shutdown.
Fast food and strokes. A possible link? Just ahead.
(COMMERCIAL BREAK)
COLLINS: A new health warning to let you know about in today's "Daily Dose." The FDA says the drug Raptiva taken to treat the skin infection psoriasis can also cause a serious and potentially deadly brain infection. Health officials say there has been three confirmed cases and a possible fourth case of Raptiva patients getting a brain infection known as PML. Eighty percent of people who get PML die. The FDA says it will take steps to ensure patients are fully informed about the risk.
Help is on the way for many overweight children. Several health groups and private insurance companies are launching a new initiative now to get obese children more access to health care. Participating insurance companies will pay for at least four yearly visits to a dietician and to pediatrician. The doctors will advise the children and their parents on ways to slim down, and maintain a healthy weight.
The more fast food restaurants near your home, the higher chances of your having a stroke. That's the conclusion of a new study out of the University of Michigan. CNN's senior medical correspondent Elizabeth Cohen joining us once again.
Elizabeth, are we really at risk of getting a stroke if we pick up a burger and fries near our homes as opposed to going miles and miles and miles to pick it up?
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: No, it doesn't really matter. It doesn't really matter. They were just looking - these folks are looking at a county in Texas, and they found that people who lived near a lot of fast food restaurants had a higher incidence of stroke.
Now, even the authors say, this doesn't mean that fast food causes strokes. But they said it's an interesting observation that folks who live near lots of these restaurants do have a higher incidence.
COLLINS: Because they're just inclined to go more often, because it's right around the corner, is that the deal?
COHEN: The study didn't really look at that. And some people, for example, the restaurant association is like, look, this study doesn't prove that fast food restaurants are problematic. For example, here's two questions that I had, maybe folks who live in neighborhoods with lots of fast food restaurants, because many of them are relatively poor neighborhoods, maybe they don't have health insurance or maybe they tend to smoke a lot. So it might not be the restaurants per se that are doing the damage.
COLLINS: OK. And that's what the restaurant industry is saying?
COHEN: They're saying this study is completely flawed. That's right.
COLLINS: OK. Well, some of us eat fast food, you know, every now and then as sort of a treat. What are some smart choices, though, when you actually go?
COHEN: You know, it's nice there are smart choices. Years and years ago, there were no smart choices. You could go gluten-free, that's true but years and years ago, you probably couldn't go gluten free, or you couldn't get a lower fat option. But now you can.
So let's take a look at McDonald's, for example. You could go to McDonald's and you could choose to get a Big Mac and a small fries, and you would set yourself back 770 calories and 40 grams of fat, holy smokes. That's a lot of fat. OK.
COLLINS: Yes, you're done eating for two weeks.
COHEN: Your arteries are clogged. Exactly. Or you could choose an Asian chicken salad and a yogurt with granola and fruit, and you'll be at 320 calories and 12 grams of fat. It does not take a professional dietitian to know which is the smarter choice there. So you can make smarter choices at fast food restaurants.
COLLINS: I'm just saying, why go to the fast food restaurants for the salad?
COHEN: You know what, for some people. Look, with the salad, that's true. But in some neighborhoods fast food restaurants are sort of kind of all you've got.
COLLINS: Yes. True.
COHEN: There's not a whole lot of options.
COLLINS: That's true. All right. Very interesting. We always love to hear the fat content of our fast food.
COHEN: Right. Exactly.
COLLINS: Elizabeth, thank you.
COHEN: OK. COLLINS: Well, the mayors of many cities across this country getting the ear of the president and vice president today. You're actually looking at some live pictures now of the White House. Mayors from all across the country gathering to talk about the $787 billion economic recovery plan. We're keeping a close eye on things. We're going to take you there live when the meeting begins.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: The nation's financial crisis being looked at today from the city level. The mayors of many different cities meeting the president and vice president at the White House. In fact, you're looking at some live pictures there of the east room.
So the mayors are gathering there to talk about the $787 billion economic recovery package. And we are keeping a very close eye on things. Going to take you there live when the meeting begins. And we'll hear from one of those mayors right here in the NEWSROOM. Los Angeles mayor Antonio Villaraigosa. He's joining us live in the noon hour.
First, it was Bernie Madoff and his alleged $50 billion ponzi scheme. And now it's Texas billionaire Allen Stanford accused of swindling investors of $9 billion. So how can you avoid being scammed when you invest? Here are answers to that question from CNN personal finance editor Gerri Willis.
I could talk about the origination of this story forever with you, Gerri, but that's not the plan today. We really want to try and help people be careful with their money and know where they're investing it.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, look, scammers exist everywhere. Regulators banned more than 350 brokers from the business just last year. When it comes to keeping your money safe, you are your own best defense.
Steve Wiseman is the author of "The Truth About Scams."
(BEGIN VIDEO CLIP)
STEVE WISEMAN, ATTORNEY: You've got to do your homework, you've got to understand the kinds of things that can go on. You've got to understand what you're investing in.
(END VIDEO CLIP)
WILLIS: All right. So here are the red flags to watch out for. You want to be suspicious of any claim on performance returns. Anything that promises no risk, or if it's just incredibly complicated, avoid that. Watch out for investments that are not independently audited. Your money should be held separately from the brokerage's accounts, and an independent custodian should be appointed to manage it. Now, be aware of any adviser who won't let you have access to your account online or has - or if you have difficulty taking money out of your account. That is a big red flag - Heidi.
COLLINS: No question. So then what have - unfortunately, you do get scammed, I mean, do you have any recourse? Because right now, there's even testimony today that's going to be happening. A bunch of these investors want to hear whether or not they're going to be able to recover any of their money, the ones duped by Bernie Madoff.
WILLIS: Right, well, you can alert the cops on the beat, right? You can complain to the Securities and Exchange Commission at sec.gov; you can contact your state attorney general's office; and FINRA.org, now that is the largest regulatory agency that looks over what financial advisors do.
Now, a good first step, though, because this is really reporting the things that went wrong, right? A good first step, a preemptive move, check out your money manager on FINRA's website, FINRA.org. You can look at their disciplinary history and find out if they've been in trouble in the past. And we'll talk about how to protect and save your money, plus what the housing fix will mean for you and your family on "YOUR BOTTOM LINE" this Saturday at 9:30 a.m. Eastern time right here on CNN.
COLLINS: OK. Gerri, appreciate it. Thank you.
WILLIS: My pleasure.
COLLINS: On Wall Street now. It was less than a year-and-a-half ago, the Dow topped 14,000. Remember that? Euphoric investors were talking about 15,000, even 20,000. I think I might have been one of those people. Today, investors would be happy, though, to see 8000 again. Susan Lisovicz on the floor of the New York Stock Exchange. With details of today's sell off.
And I know if I didn't say it, Susan, you would remind me of what I was saying all that time ago.
SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: I am nostalgic for those days. I think people need to drink that Red Bull or whatever that kind of positive affirmation that we were all drinking in those days.
But, you know, since then, just to put it in perspective, the Wilshire 5000, which is the broadest look at publicly-traded stocks in the United States has lost nearly $10 trillion since that 2007 record high. It was October of 2007. The Dow Industrials specifically, those 30 stocks, have lost nearly half the value since hitting 14,100. And that is one of the Dow's biggest declines in a bear market ever, exceeded by only by the Great Depression years, 1929 to 1932 when the Dow erased 90 percent of its value. No one is predicting that we're going to go there, but what we are seeing is that the Dow is at six- year lows and falling further after it hit a new bear - closed at a new bear market low for this particular cycle.
And in particular, we are seeing financials getting pounded. We're looking at some of the biggest - the financial bellwethers getting creamed. Bank of America shares are trading under $3.50; Citigroup is under $2. The banking sector is the heart blood, as one analyst said, of U.S. capitalism. They need to have stability. Investors are very worried that they are going to be nationalized. No one knows what's going to happen.
The fear is playing out on the streets. What you're seeing right now on the big board is the Dow Industrials are off their lows, but still down 80 points, less than 200 points of the low of the last bear market in 2002. The NASDAQ, meanwhile, is down 5. And the S&P 500, as we mentioned before, Heidi, is about 15 points from its low of this bear market cycle. And that is the average that a lot of mutual funds track. So a lot of us - a lot of our retirement planning or savings are tied to that particular average - Heidi.
COLLINS: Yes, absolutely. All right, Susan, thank you. We'll continue to watch those numbers all day right here in the CNN NEWSROOM.
Meanwhile, want to get a quick check of the weather.
(WEATHER REPORT)
COLLINS: Let's go ahead and listen in now, from the East Room, Vice President Joe Biden alongside President Barack Obama just before the Conference of Mayors that will take place very shortly. Forgive me, Biden is speaking first. Let's listen.
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: Well, thank you all for being here today. And welcome back to the White House.
(LAUGHTER)
Mr. Mayor, my mayor in the city of Wilmington, Jim Baker, when I got elected, he assumed that he got an office in the West Wing, but -- but he has a telephone number that is accessible.
Hi, Jim. How are you?
Thank you all for being here. It's great to be with so many -- so many leaders who are -- literally, to use that shopworn phrase, on the front lines, where -- where the economy lives and dies and where people are struggling. And you have to deal with it every day.
You know, in a long career in politics, there's one overwhelming reason why I never ran for mayor, which is, it's too hard.
(LAUGHTER)
They have got your phone number, and they know where you live, and they come and they use it. Well, President Obama and I are turning that around. We want you to know, you can have our phone number, and you know where we live, and...
(APPLAUSE)
... and we expect you to use it. Already, we've met with you and the Conference of Mayors over a half-a-dozen times. Too often in the past, America's cities have been neglected and our mayors haven't had -- haven't been able to be heard on the questions of national policy. That's a story you all understand and know very well.
But we know how important cities are. Sixty-five percent of our nation's population, as you all know, live in our cities. Our cities are the home of 7 out of 10 American jobs. And when you're talking about the knowledge economy jobs, the number rises to 8 in 10, 8 out of 10.
Cities are vital to our economy, essential to our recovery, and haven't been paid much attention to. Our economy can never reach, in our view, its full potential if we have people who are living blocks away, but worlds away from the bustling downtowns full of opportunity.
Our poor transportation system don't provide mobility when people need to get to the job or -- or there aren't enough police or firefighters in the communities to keep the communities safe.
And that's why the American Recovery and Reinvestment Act President Obama signed this week, I think, includes unprecedented investment in American cities.
(APPLAUSE)
Simply stated, that's the commitment made in this law. Now the hard part, in one sense, is up to us. We've got to make this work. We've got to make it work for our people. We've got to make it work for our cities. We've got to make it work for all our people.
The American people have trusted their government with an unprecedented, unprecedented level of funding to address the - the economic emergency we face. In return, we have to prove to them that their dollars are making a difference in their communities.
We've already set up a Web site, Recovery.com, which will show where and how the money is being spent. The public can actually go on a Web site and see how we're spending this money.
President Obama has been insistent during his campaign and from the time we won on accountability and transparency. All of you know, if we don't meet that minimum threshold, the likelihood of the public trusting us to do this kind of thing is going to evaporate very rapidly.
Transparency is vital, and effectiveness is paramount. These investments are a huge opportunity, a huge opportunity to create jobs today and strengthen our economy for tomorrow. We've designed this bill to save and create -- save or create over three million new jobs. And we'd like to see it do even better than that.
And that's where your efforts come in. You are -- you're -- you're the ones who know the areas that give us the greatest return on our investment. You know it better than we do. You're the ones who know -- you're the ones who know which projects will crystallize private investment and even greater growth in your cities. And the world's watching. The world's watching to see how well this is going to work. And we need your help. We need your help in making it work and work quickly and effectively.
As of today, we are one month into this administration, although I said to the president in the past, it feels like a little longer than that. But we are one month into this administration.
And think what the president's already done. Already signed into laws the -- there's the Lilly Ledbetter Fair Pay Act. We've expanded state health insurance -- Children's Health Insurance Program. We've covered an additional four million children.
We've put forward -- excuse me -- we've put forward a plan to reduce preventable home foreclosures. We've won passage of the largest economic recovery effort since World War II, in a month, in a month.
(APPLAUSE)
So the results of the president's leadership with your help are already there and clear for everybody to see. But it's been a great privilege to also see how much this president has done behind the scenes to make this happen.
I've been here for eight presidents, for eight presidents. You can tell by my look, I've been here.
(LAUGHTER)
But I want to tell you something. The hard choices the president has made, the patient outreach he's done, the firm resolve he's shown, the results of this work, I think, speak for themselves. But I am pleased to speak about the man who made these results happen.
There is so much more to do, so much more. But already President Obama has put our nation on the path toward greater recovery, not only greater recovery, but greater decency, greater fairness, greater opportunity, along with economic recovery
For years, many of us have hoped for such accomplishments. And in just one month, an incredible new president has made this a reality.
So please join me in welcoming the president of the United States of America, Barack Obama.
(APPLAUSE)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Thank you. Thank you. Thank you, everybody. Thank you.
Thank you so much. Thank you. Thank you. Thank you. Thank you, everybody. Thank you. Please, have a seat. Thank you. Thank you so much. Whenever I have the opportunity to meet with mayors, I think about how I got my start doing that you do each day, working with folks at the local level and doing our best to make a real impact on the lives of ordinary Americans. And that's just another reason why I'm so happy to welcome all of you here today.
I want to offer -- take a little personal prerogative here and welcome my own hometown mayor, my friend, Rich Daley.
(APPLAUSE)
His steady leadership has proven again and again that the American city can be a place of boundless opportunity and a source of solutions to our public problems. He has made a deep and lasting difference in the quality of life for millions of Chicagoans. I'm surprised he's still talking to me, because I stole Arne Duncan from him.
(LAUGHTER)
But -- but I am confident that he will -- he will continue to do -- make great strides.
I see friends from all over the place, some -- some old friends, not old in years, but people who I've known a long time.
My other hometown mayor, Mufi, it's great to see you, all the way from Honolulu.
We've got Mayor Riley (ph) and others who are in - in attendance, Shirley Franklin doing great work, and Mayor Villaraigosa and Mayor Dellums from -- you've got the California contingent.
So I'm grateful to all of you. And I think all of you understand that we meet at such an urgent time.
You know, last night, I signed an executive order establishing the White House Office of Urban Affairs. And I've...
(APPLAUSE)
I've chosen Adolfo Carrion to be its first director. Adolfo rode a real success story in the Bronx as -- as borough president, and now he's going to be working with all of you to write our next success stories in cities across the country. He's going to be responsible for coordinating all federal urban programs, and I've asked him to set up an advisory council with mayors and other urban leaders so that we can develop a new metropolitan strategy based on the lessons that you've learned.
Now, rebuilding our economies and renewing our cities is going to require a true partnership between mayors and the White House, and that partnership has to begin right now. Those of you who've traveled great distances to be here come from different parties and philosophies. You govern very different cities. They're made up of different citizenries with different demographic make-ups. But today, in the face of our common challenges, you're all hearing the same stories. I know, because I'm getting letters from constituents all across the country in many of your cities. But you're on the front lines in our communities. You know what happens when folks get laid off or they lose their homes or their health care and they turn to the mayor's office for help.
And just as your services stretch, your classrooms get crowded, and your streets grow less safe, your budgets shrink. You can't deficit spend, so you face impossible choices, raising taxes, cutting essential services, laying off teachers, firefighters, police officers.
And that's why the recovery plan we put into action this week is so important. It's a plan that will save or create 3.5 million jobs over the next two years, will help those hardest hit by our economic crisis.
It will aid state and local governments in hopes you can avoid those excruciating choices. It provides greater unemployment insurance for nearly 18 million Americans and protects health care for seven million who lost their health care along with their jobs.
It includes the most progressive tax cuts in our history, spurring job creation and putting money into the pockets of 95 percent of all hard-working families.
It invests in what works for our cities, by funding programs like the Byrne Justice Assistance Grant and the COPS program, which boosts public safety and bring down crime. It rewards responsibility, making sure that, if you work hard, you won't have to raise a child below the poverty line.
But what makes this recovery plan so important isn't just the jobs it will create or the immediate help it provides. It's that we are putting Americans to work doing the work America needs done in critical areas that have been neglected for too long.
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So this plan does more to lay a new foundation for our city's growth and opportunity than anything Washington has done in generations, and it will bring real and lasting change for generations to come, because we know we can't build our economic future on the transportation and information networks of the past.
We're remaking our cities with the largest new investment in our nation's infrastructure since Eisenhower built an Interstate Highway System in the 1950s. Ray LaHood is going to be busy, because we're putting 400,000 men and women to work rebuilding our crumbling roads and our bridges, repairing our faulty dams and levees, replacing our aging water and sewer pipes, and rolling out broadband lines to nearly every community in America.
We are going to unleash...
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We're going to unleash the potential of all our regions by connecting them with world-class transit systems and high-speed rail, making our metropolitan areas more livable and sustainable in the process.
Because we know education is the single-best bet we can make to change the odds of our children and our cities, we are making the largest investment in education in our nation's history. It will prevent harmful education cuts and save jobs of tens of thousands of teachers, 14,000 just in New York City, and it will make a historic investment in early childhood education and upgrade classrooms and libraries and labs across America, so that millions of our children are prepared to compete in the 21st century.
Because we know that spiraling health care costs are crushing families and businesses alike and straining budgets across government, we're taking the most meaningful steps in years to modernize our health care system. We're going to computerize America's medical records, while maintaining rigorous privacy standards, saving billions of dollars and countless lives. We'll focus on prevention and keeping millions of Americans from having to set into the doctor's office in the first place.
Taken together with the earlier enactment this month of long- delayed laws to extend health care to millions of more children of working families, we've done more in 30 days to advance the cause of health care reform than this country has done in a decade.
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And because we know we can't power America's future on energy that's controlled by foreign dictators, we're making an investment that within three years will double the renewable energy output its taken us 35 years to reach.
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We'll provide tax credits and loan guarantees to companies that create this energy, allowing them to expand rather than lay people off. We'll fund the Energy Efficiency and Conservation Block Grant you conceived, saving our cities and our consumers money.
We'll build a bigger, better, smarter electricity grid that delivers clean energy from communities that produce it to the cities that need it. So these are the steps we're taking to help you turn this crisis into opportunity and bring our cities into the future.
Now, Washington can't solve all the problems facing our cities, and I know you don't expect us to. Instead of waiting for Washington, many of you have already made our cities laboratories of change, coming up with innovative new ways to solve the problems of our - of our time.
And one of the great pleasures of running for president was having a chance to see great work on renewable energy in Des Moines, or, you know, seeing what kinds of wonderful companies are being created in Seattle, and hearing about some of the urban planning strategies that are taking place in Charleston, so all of you have already taken the ball and run with it, even when you weren't getting help from here, but it won't be bad to get some help, because...
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You know, instead of debating the existence of climate change, mayors like Greg Nickels in Seattle are leading efforts to make cities greener and more efficient. Instead of just talking about health care, mayors like Gavin Newsom in San Francisco have been ensuring that those in need receive it. Instead of wringing your hands over poverty, you've got Antonio in Los Angeles making relentless efforts to alleviate it.
You shouldn't have to succeed, though, despite Washington. You should be succeeding with a hand from Washington. And that's what you're going to get now.
Now, what is required in return, what I will need from all of you is unprecedented responsibility and accountability on all of our parts. The American people are watching. They need this plan to work. They expect to see the money that they've earned, that they've worked so hard to earn, spent in its intended purposes without waste, without inefficiency, without fraud.
And that's why I'm assigning a team of managers to ensure that every dollar is spent wisely. And that's why we've created Recovery.gov, so that every American can go online to see how their money is spent and hold their federal, state and local officials to the highest standards they expect.
So I want to be clear about this: We cannot tolerate business as usual, not in Washington, not in our state capitals, not in America's cities and towns. We will use the new tools that the recovery act gives us to watch the taxpayers' money with more rigor and transparency than ever. If a...
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If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. I want everybody here to be on notice that, if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.
We have asked for the unprecedented trust of the American people to deal boldly with the greatest economic crisis we've seen in decades and the privilege of investing unprecedented amounts of their hard- earned money to address this crisis. And with that comes unprecedented obligations to spend that money wisely, free from politics and free from personal agendas. On this, I will not compromise or tolerate any shortcuts.
The American people are looking to us, each of you, as well as myself and Joe and others in our administration, for leadership, and it's up to us to reward their faith.
Now, this plan doesn't mark the end of what we'll do together; it marks the beginning. My administration has outlined plans to stabilize, repair and reform our banking system, to get credit flowing to families and businesses, to stem the spread of foreclosures and keep families in their homes.
Together, we will tackle the urban challenges of our time and foster diverse, creative and imaginative economies that bring opportunity to every corner of our cities. We'll do all this because, despite the different backgrounds of the mayors in this room, we all share the same vision for our cities: vibrant places that provide our children with every chance to learn and to grow, that allow our businesses and workers the best opportunity to innovate and succeed, that let our older Americans live out their best years in the midst of all that metropolitan life can offer.
I know this change is possible. I know because I saw it in all those years ago in neighborhoods on the South Side of Chicago, where ordinary Americans came together and worked alongside the mayor's office to forge a better future.
I know because I've seen it in cities across this country, where many of you that I had a chance to meet with, I saw how you focused on fresh ideas over stale ideology and as you moved your cities forward.
And I know it because I see it in the faces of Americans everywhere who are ready to roll up their sleeves and join in the work of remaking this nation.
So now it falls to us to seize the possibilities of this moment and convert peril into promise. See to it that our cities and our people emerge from this moment stronger than they were before. Starting today, that's what you and I are going to do, together.
And I'm absolutely confident that our people will benefit and people will look back and say that this was a turning point, this was a moment where, in the midst of great crisis, leadership was shown and we created a -- a new platform for success for all Americans in the future.
Thank you so much, everybody. Appreciate it. All right. Thank you. Thank you.
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Thank you. Thank you.
Everybody, please have a seat. I think they've got to move out a whole bunch of folks here so we get some more work done. So everybody just stay in your seats. I'm going to come around and start shaking some hands. Just stay seated. I'm coming to you.
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And then -- and then we'll do a little bit -- little bit more work, all right?
COLLINS: President Barack Obama appearing with Vice President Joe Biden at the Conference of Mayors, just before they actually head into that conference. Several mayors from all across the country talking about the economic stimulus package, if you will, and how much and for each city what everybody is going to get out of this. That's why the mayors are there today.
We're going to take a kick break here and be back in a moment.
