Return to Transcripts main page
CNN Newsroom
President Obama Speaks on the Stimulus; U.S. May Take 40 Percent Stake in Citigroup; Out of Reach: College Students Struggle Financially; Oscar Night Nielsen Ratings Increase
Aired February 23, 2009 - 10:55 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: First of all, thanks for not breaking anything last night.
(LAUGHTER)
Thank you also for waiting until I had left before you started the conga line.
(LAUGHTER)
I don't know whether Rendell was responsible for that or -- but I hear it was quite a spectacle.
(LAUGHTER)
But Michelle and I just had a wonderful time last night, and I hope all of you enjoyed it. And it was a great kickoff of what we hope will be an atmosphere here in the White House that is welcoming and that reminds everybody that this is the people's house. You know, we are just temporary occupants. This is a place that belongs to the American people. And we want to make sure that everybody understands it's open.
Almost three months ago, we came together in Philadelphia to listen to one another, to share ideas and to try to push some of our ideological rigidity aside to formulate a recovery plan that would bring some relief to your states and to the American people.
And I want to thank so many of you who were active throughout this process to get the American Recovery and Reinvestment Act done. I don't want to single out too many folks, but Governor Rendell, Governor Douglas worked tirelessly. We had people like Governor Patrick and Governor Schweitzer, Schwarzenegger, Crist, who were, you know, out there consistently promoting the plan.
And as a consequence, we got this passed through Congress in record time.
And because of what we did together, this plan will save or create at least 3.5 million jobs in every state across the country. It'll keep your police officers on the beat, your firefighters on the job, your teachers in the classroom. It will provide expanded unemployment insurance and protect health care for your residents who've been laid off.
And beginning April 1st, it will put more money back into the pockets of 95 percent of your working families.
So this plan will ensure that you don't have to make cuts to essential services that Americans rely on now more than ever.
And to show you that we are serious about putting this recovery plan into action swiftly, I'm announcing today that this Wednesday our administration will begin distributing more than $15 billion in federal assistance under the Recovery Act to help you cover the costs of your Medicaid programs, I know something that is going to be of great relief to many of you.
That means that by the time most of you get home, money will be waiting to help 20 million vulnerable Americans in your states keep their health care coverage.
(APPLAUSE)
Children with asthma will be able to breathe easier, seniors won't need to fear losing their doctors and pregnant women with limited means won't have to worry about the health of their babies.
So let me be clear, though. This is not a blank check. I know you've heard this repeatedly over the last few days, but I want to reiterate it.
These funds are intended to go directly toward helping struggling Americans keep their health care coverage. We want to make sure that that's what's happening, and we're going to work with you closely to make sure that this money is spent the way it's supposed to.
We will get the rest of this plan moving to put Americans to work doing the work America needs done; make an immediate impact while laying the foundation for a lasting growth and prosperity.
These are the steps that we're taking to help turn this crisis into an opportunity and pave the way for future prosperity. But I know that many of you, rather than wait for Washington, have already made that happen in your states.
You are innovators. And much of the work that you've done has already made a lasting impact and change in people's lives.
Instead of debating the existence of climate change, governors, like the seven of you working together in the Western Climate Initiative and the 10 of you who are working together in the Regional Greenhouse Gas Initiative, are leading the way on environmental and energy policy.
Instead of waiting around for the jobs of the future, governors, like Governor Gregoire and Governor Granholm, have sparked the creation of cutting-edge companies and tens of thousands of new green jobs.
And instead of passing the buck on accountability and efficiency, governors like Martin O'Malley and Governor Kaine have revolutionized performance management systems, showing the American people precisely how their governments are working for them.
The point that I made yesterday, or last night, is something that I want to reiterate, though. You shouldn't be succeeding despite Washington, you should be succeeding with a hand from Washington. And that's what we intend to give you in this administration.
In return, we'll expect a lot from you as the hard work of making the recovery plan's promise a reality begins. And that's why I'm announcing today, that I'm asking my vice president, Joe Biden, to oversee our administration's implementation efforts.
Beginning this week, Joe will meet regularly with key members of my Cabinet to make sure our efforts are not just swift, but also efficient and effective. Joe is also going to work closely with you, our nation's governors, as well as our mayors and everyone else involved in this effort, to keep things on track.
The fact -- and the fact that I'm asking my vice president to personally lead this effort shows how important it is for our country and our future to get this right. And I thank him for his willingness to take on this critical task. In the coming weeks...
(APPLAUSE)
In the coming weeks, we're also going to appoint some of the nation's best managers and public officials to work with the vice president on this effort, and I'm pleased to make the first of these announcements today, with the appointment of Earl Devaney as the chair of the Recovery Act Transparency and Accountability Board.
Where's Earl? There he is.
Stand up, Earl, so everybody can see you.
(APPLAUSE)
For nearly a decade as inspector general at the Interior Department, Earl has doggedly pursued waste, fraud and mismanagement. He has the reputation of being one of the best I.G.s that we have in this town. And Joe and I can't think of a more tenacious and efficient guardian of the hard-earned tax dollars the American people have entrusted us to wisely invest.
I pointed out, just when I saw him -- I mean, he looks like an inspector.
(LAUGHTER)
He's tough. You know, he barely cracks a smile.
(LAUGHTER)
Earl is here with us today. I thank him for his willingness to take on this difficult, new assignment.
And I expect each of you to approach implementation of this recovery plan with the same seriousness of purpose and the same sense of accountability, because the American people are watching. They need this plan to work, and they expect to see their money spent in its intended purpose.
And that's why we've created recovery.gov, a Web site so that every American can go online to see how their money is spent, and hold their federal, state and local officials to the high standards that they expect.
And I want to applaud governors Kaine, Patrick and Strickland for already having created their own recovery implementation Web sites to allow for the monitoring and accountability at the local level. I encourage every one of you to follow suit.
Let me be clear: We cannot tolerate business as usual, not in Washington, but also not in our state capitals. With Mr. Devaney's leadership, 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 federal agency proposes a project that will waste that money, I will put a stop to it.
But I want everybody here to be on notice that if a state government does the same, then I will call them out on it and use the full power of my office and our administration to stop it.
We are addressing the greatest economic crisis we have seen in decades by investing unprecedented amounts of the American people's hard-earned money. And with that comes an unprecedented obligation to do so wisely, free from politics and personal agendas.
And on this I will not compromise or tolerate shortcuts. The American people are looking to us for leadership, and it falls on us now to reward their faith and build a better future for our country. And I have every confidence that we can all do this.
Let me make one last point, and then I'm going to bring Joe up.
There has been some healthy debate over the last few weeks, last few days, about this stimulus package, even -- even among the governors. And I think that's a healthy debate. That keeps me on my toes. It keeps our administration on our toes.
But I just want us to not lose perspective of the fact that most of the things that have been the topic of argument over the last several days amount to a fraction of the overall stimulus package. This sometimes gets lost in the cable chatter.
For example, I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance. What hasn't been noted is is that that is $7 billion of a $787 billion program. And it's not even the majority of the expansion of unemployment insurance.
So it is possible for those who are concerned about sustaining a change that increases eligibility for part-time workers to still see the benefit of $30 billion-plus that is going -- even if you don't make the change.
So -- the reason I make that point is, I just want to make sure that we're having an honest debate in presenting to the American people a fulsome accounting of what is going on in this program.
You know, when I hear people say, "Well, there's a lot of waste in this program," well, from my perspective at least, keeping teachers in the classroom's not wasteful. From my perspective, tax cuts to 95 percent of working families is not wasteful. From my perspective, providing all of you additional resources to rebuild roads and bridges and levees and dams that will enhance the quality of life of your state but also make it more economically competitive -- that's not wasteful.
And so, if we agree on 90 percent of this stuff, and we're spending all our time on television arguing about 1, 2, 3 percent of the spending in this thing, and somehow it's being characterized in broad brush as wasteful spending, that starts sounding more like politics. And that's what right now we don't have time to do.
So, I will always be open to honest disagreements and I think there are some legitimate concerns that can be raised on a whole host of these issues. And you're responsible at the state level and, you know, if the federal government gives you something now and then two years later it's gone, and people are looking to you and to -- and starting to blame you, I don't want to put you in that position.
And so, you need to think about how this money is going to be spent wisely.
What I don't want us to do, though, is to just get caught up in the same old stuff that inhibits us from acting effectively and in concert.
There's going to be ample time for campaigns down the road.
Right now, we've got to make sure that we're standing up for the American people and putting them back to the work. All right?
(APPLAUSE)
Joe?
TONY HARRIS, CNN ANCHOR: All right. President Obama, meeting with governors from across the country right now. They're discussing the Revitalization and Reinvestment Act.
We just brought you comments from the president, and now the meeting begins. And we will be seeing the governors later this morning, after the meeting, making remarks from a stakeout position just outside the White House. And next hour we will hear from Vermont's Republican governor, Jim Douglas, a man the president singled out for his help just moments ago. That's Jim Douglas, next hour, in the CNN NEWSROOM.
We want to get quickly now to our White House Correspondent Suzanne Malveaux.
Suzanne, I noticed a different tone in the room today, as opposed to the tone that we heard and saw last week, when the president met with the mayors. A lot more applause from the mayors. This seemed like a pretty sober presentation. It reminds me that these men and women, they represent a group of people who might challenge the president one day down the road.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: There are a number of people who have challenged the president, and there's really a division within the Republican Party itself. We saw it kind of spill out into the open.
The National Governors Association, on one side, you had the California governor, Arnold Schwarzenegger, praising President Obama for this economic stimulus package. And on the other hand, you had the governor of Louisiana, Bobby Jindal, saying that he wasn't even going to accept some of these federal dollars out of principle, and also felt like he would be losing some control, some state control, if he did so. And so there really is a debate that's taking place.
And we heard President Obama for the first time take on some of those Republican governors, who -- even some of them who are rejecting this money, saying that, look, you know, this is just a very small portion of this $787 billion package that you guys are arguing over. He talked about the cable chatter, perhaps a little bit of a dig at us in the media, but saying, like, for the most part, we're in agreement here.
So he's obviously trying to appeal to moderate Republicans. He's, you know, tweaking a little bit those Republicans who do disagree with him, and trying to get everybody on board.
And Tony, what's interesting, he also made a case here to the American public, saying, look, this is going to happen rather quickly. There's been a lot of questions about how this money is going to be used and how fast it's going to generate jobs and help folks out.
He said April 1st, 95 percent of working families, those tax cuts will kick in. He also said starting this Wednesday, that is when about $15 billion will be distributed to Medicaid. And that is very significant, as well -- Tony.
HARRIS: And Suzanne, he also promised -- we heard this last week in comments to the mayors, as well -- he promised to call out the programs that he considers wasteful, and also to call out the governors who are responsible for those programs.
MALVEAUX: And that was very similar to what we heard, the warning that he gave to the mayors when they were here at the White House.
HARRIS: Yes.
MALVEAUX: Obviously, he is trying to make an impression to the American folks that people are going to be held accountable, whether it's on a local level, a state level. Recovery.gov is the Web site where you can kind of see this unfold in the days ahead.
HARRIS: Our White House Correspondent Suzanne Malveaux for us.
Suzanne, great to see you. Thank you.
MALVEAUX: Thanks, Tony.
HARRIS: The president will give opening remarks at the Fiscal Responsibility Summit. That's at 1:00 Eastern this afternoon at the White House. And watch it live, right here on CNN.
What do the nation's governors think about the massive stimulus plan? Most can't wait to get the cash, like Republican Governor Arnold Schwarzenegger of California.
(BEGIN VIDEO CLIP)
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: The Obama administration says with this new national stimulus plan, you will get a lot of money in California. It believes this plan will create 400,000 jobs in the state of California.
We try to ask everybody in a position of power to be accountable. Do you believe that number -- is 400,000 the right barometer to see if this plan is a success in California?
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: Well, you know, you never know exactly. I mean, you can only estimate.
Like, for instance, with infrastructure, we know that every $1 billion that you spend on building roads or classrooms or any kind of infrastructure, it creates 18,000 to 25,000 new jobs. So I think that it could create this kind of amount of jobs. And we welcome this economic stimulus package. I think it's terrific, it will help us.
(END VIDEO CLIP)
HARRIS: And other governors, not so confident. They don't like the strings attached and worry taking the money will eventually lead to higher taxes. Among them, Mississippi's Haley Barbour, also a Republican.
(BEGIN VIDEO CLIP)
KING: Haley Barbour, are you prepared to say no to the federal government, "I won't take your money," and then "Governor Granholm, I would be grateful if you would take it," and then just write her a check?
UNIDENTIFIED MALE: Well, wait a minute. Wait a minute. We're over here too. We'll take it too.
GOV. HALEY BARBOUR (R), MISSISSIPPI: Well, the truth is, I don't know of any governor who has talked about not taking any of the money.
KING: But you won't take some?
BARBOUR: There is some we will not take in Mississippi. If we were to take the unemployment insurance reform package that they have, it would cause us to raise taxes on employment when the money runs out. And the money will run out in a couple of years, and then we'll have to raise the unemployment insurance tax, which is literally a tax on employment.
I mean, we want more jobs. You don't get more jobs by putting an extra tax on creating jobs.
(END VIDEO CLIP)
HARRIS: Pennsylvania Democrat Ed Rendell, the governor of Pennsylvania, says although the plan is not perfect, it will be a tremendous help.
Taxpayers could soon own a bigger chunk of Citigroup, perhaps as much as 40 percent of the financial giant.
Business correspondent Stephanie Elam is in New York for us.
Stephanie, I look at that headline and I wonder, do we want Citi? And what is it going to cost us?
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Yes, do you want to be an owner...
HARRIS: Yes.
ELAM: Let me break it down for you, Tony.
First of all, you hear that number and you're thinking, wait, we're going to put more money into Citigroup?
HARRIS: Yes.
ELAM: And really, what's happening here is, you already did it. The taxpayers already gave that $45 billion bailout that we saw Citigroup get last fall. So this amount of investment would come from that.
So what happened is, the government has preferred shares, basically being, hey, if Citigroup rebounds, we'll be able to benefit from that rise back. They're saying they can take those preferred shares and translate those into common shares.
That's what we own in our 401(k)s. Some people may invest directly into Citigroup.
HARRIS: That's right.
ELAM: That's why we care about that stock. So that's how they're saying that this would happen.
So if you are a shareholder in Citigroup right now, you would just see your shares diluted a bit. And that's why some shareholders are worried about that whole conversation about nationalization of a bank, and concerned what that would mean overall.
Now, taking a look at Citigroup in particular here, the CEO on Friday telling his employees that, you know what? Our capital level is very strong, we are fine. The Obama administration reiterating yesterday and today -- or Friday and today -- that basically they want to keep these banks in the private sector, not to change that. But just saying if they need some help, they'll be there to provide a cushion. And that's part of that stress test we've been hearing about -- Tony.
HARRIS: Yes, what does it really mean? Explain it to us, this idea of stress test.
ELAM: Basically looking to see if these banks are viable. Can they continue?
HARRIS: Yes.
ELAM: Are they going to be OK? You don't want to keep pumping money into a bank that's not going to be able to survive. So the idea being, can you get funding, can you stay around, are you viable? Taking a look to see what their capital needs are, and then the banks will be able to go out first to the private sector, see if they can get funding there. And if not, then just as a cushion, it would not be ongoing, it would not be prolonged, providing this financial cushion from the government.
HARRIS: I see.
ELAM: But making sure that people know that it's not going to stay that way. That's just in case of.
HARRIS: So -- great, so this might be our first look, take the lid off of these banks, take a look at the books, and find out whether or not these banks are really solvent or not.
ELAM: And this is -- you know, the government coming out -- five different organizations within the government coming out together today saying that this will start on Wednesday, where they'll start looking at the banks. And overall, you know, you saw Citigroup's stock on Friday drop by more than 20 percent, down below $2 a share.
This is a stock that traded over $50 in 2007. That's not that long ago. So this is a big deal here.
HARRIS: Yes.
ELAM: Today, Citigroup is trading higher, close to 9 percent, on the fact here that the government seems to not being on the side of just letting the bank go by the wayside, if that's what's going to happen, not letting it collapse, showing their support behind this behemoth of a bank.
HARRIS: Yes. Appreciate it. Thank you, Stephanie. ELAM: Sure, Tony.
HARRIS: The economists who say they predicted this recession now say they have a prediction for how long it will last.
(COMMERCIAL BREAK)
(WEATHER REPORT)
(COMMERCIAL BREAK)
HARRIS: The mystery of who killed congressional intern Chandra Levy eight years ago may soon be solved. Levy's mom says police are close to making an arrest.
A source says the suspect is Ingmar Guandique. He is currently serving 10 years for attacking two other women in the same area where Levy's body was found. For her family, the news is bittersweet.
(BEGIN VIDEO CLIP)
SUSAN LEVY, CHANDRA LEVY'S MOTHER: I mean, you want justice. You want the person, you know, incarcerated.
ROBERT LEVY, CHANDRA LEVY'S FATHER: In prison.
S. LEVY: And you want justice.
R. LEVY: Want him put away.
S. LEVY: It shouldn't happen to anyone.
R. LEVY: Yes.
S. LEVY: That's how I feel. And the word "closure" is not...
R. LEVY: Yes, we don't like that word, but we're just...
S. LEVY: There's no such word.
(END VIDEO CLIP)
HARRIS: Guandique has reportedly denied being involved in Levy's death.
Arsonists hit again this weekend near Coatesville, Pennsylvania. Seven middle school buses charred in Brandywine Township, just north of Coatesville.
The damage estimate, $400,000. And so far, no suspects have been named. The case adds one more to the dozens of unsolved arson fires in Coatesville. Two suspects have been arrested in 10 of 66 fires set in the last year.
The archbishop of Milwaukee taking over in the Big Apple. The Vatican announced today that Archbishop Timothy Dolan will become the archbishop of New York. He succeeds Edward Egan, who is retiring after nearly nine years. Dolan, who is 55, became archbishop in Milwaukee in 2002.
Back on the bench. Supreme Court Justice Ruth Bader Ginsburg is making her first public appearance since her February 5th surgery for pancreatic cancer. This is file video from more than three years ago. Ginsburg joined her colleagues this morning following a month-long recess.
Doctors say Ginsburg's cancer was caught early. They have given her a somewhat optimistic prognosis.
Scraping and saving every dime and nickel. Tempted to keep all of your money in your mattress? Personal Finance Editor Gerri Willis has her top tips on better ways to save.
(COMMERCIAL BREAK)
HARRIS: Everyone, all together now, take a deep breath. Dow blue chips have lost almost half their value since stocks hit their high mark 16 short months ago. A lot of people are wondering if retirement is out of reach.
Personal finance editor Gerri Willis is here with some tips.
And Gerri, good to see you.
You know, we've said it here before, don't panic. But I'm edging closer and closer. Talk me from the edge, Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, I'll try to talk you from the edge.
You know, look, you need some perspective here. You know, there have been losses, and I'm not going to deny that. The average 401(k) balance is just $50,000. That's only enough to keep a couple going in retirement for maybe two or three years, at best. 401(k) balances have dropped 27 percent, they did last year, from $69,200 to $50,200, and that according to Fidelity Investments.
But look, Tony, you know, the stock market isn't going to zero, and neither are mutual funds. So let's put this in perspective.
Compared to last fall, there are some reasons for optimism. First, the focus of concern, it's pretty much moved to the economy and away from whether the nation's banking infrastructure is going to collapse tomorrow. That is a big improvement in sentiment. Recessions come and go, but we can't do without a banking system.
Number two, the fears that the financial rescue attempts are doomed to fail, well, that's overblown. Already, the federal government's effort to stabilize money market mutual funds is a big success.
Remember this last fall? There was a run on money market funds, a big deal, very frightening. And those, of course, are a critical part of the nation's financial infrastructure.
The government guaranteed those funds, and now the balance in those safe-as-cash funds is $4 trillion, more than before the run on the funds. What's more, the government has collected $1 billion in fees for its efforts, and it's yet to pay out any claims. So there is some success to be registered already on these efforts.
HARRIS: Yes. Let me drill down on it a bit more with you.
Should I even be invested in stocks right now, Gerri? I know that the idea of putting it in a mattress is a bad idea, but should I be looking at other options possibly?
WILLIS: Well, you always should look at all options; right? But, you know, look, the problem is that people have a tendency to focus on returns.
HARRIS: Yes.
WILLIS: And check out these S&P 500 returns. This is a broad basket of stocks. You can see what goes on here.
We've had some increases and then big losses last year and this year. But you can't obsess just over your 401(k) balance, how much money you have. You've also got to look at the numbers of shares you own.
Look, you've been adding to the total number of shares throughout this decade, and you're buying now at lows. And, of course, what's more, your 401(k) doesn't have to be entirely in stocks. You need an intelligent mix of investments to make sure your money grows over time.
Again, mix it up, diversification. And, of course, even though these stocks have had terrible, disappointing returns over the past, say, 18 months, the reality is that you, as you continue to invest, are owning more shares, buying more shares, and you're buying them at a very low price. So your cost of investment going down here.
And, of course, if you have any questions, send them to me at gerri@cnn.com. We love to hear from you.
HARRIS: Context and perspective. Well done, Gerri. Thank you.
WILLIS: Thank you.
HARRIS: All right.
You know, under the best of circumstances, it can be tough to pay for college. In this recession, more students are finding higher education simply out of reach.
CNN's Jason Carroll reports.
(BEGIN VIDEOTAPE) JASON CARROLL, CNN CORRESPONDENT (voice-over): If one wanted a case study in how the economy is hurting college students, Nykeba Corinaldi says look no further.
NYKEBA CORINALDI, SYRACUSE UNIVERSITY SOPHOMORE: I came back to school not knowing where and how I was going to pay for school.
CARROLL: Corinaldi is a sophomore at Syracuse University in New York.
CORINALDI: Well, the untouchables were just completely out of the system.
CARROLL: In her short time here, she has taken two jobs and still struggles to pay bills.
CORINALDI: I originally came to Syracuse on a loan. And due to the recession that we're in, my school no longer accepts it.
CARROLL: Corinaldi applied for 12 loans and was rejected by all. To make matters worse, her mother lost her job.
According to the American Council on Education, an advocacy group, more and more students and families are hurting and facing new barriers in access to higher education.
JIM BOYLE, COLLEGE PARENTS OF AMERICA: Right now, you have this kind of a perfect storm of costs of college continuing to rise, but the economy performing so poorly, that parents are not able to rely on stable jobs.
CARROLL: Dozens of schools, such as Catholic University in Washington and Princeton University, are trying to help by making small tuition increases. Some universities, Lincoln Memorial in Tennessee and Sierra Nevada College, are temporarily freezing tuition.
LORENA ROSE, SYRACUSE UNIVERSITY SOPHOMORE: The thought of how I'm going to get my bills paid permeates my thoughts, my daydreams, everything that I do every day.
CARROLL: Struggling students like Lorena Rose and Maxwell Brown hope the government's money reaches them in time.
MAXWELL BROWN, SYRACUSE UNIVERSITY SOPHOMORE: It's always in the back of my mind when I'm in class, or taking a test or something, like that. It's always like, if I don't do well, you know what I mean, and I lose money, that's going to hurt her, and that's going to hurt me too. So where is that going to come from?
CARROLL: All the students we spoke to are working to make ends meet. Syracuse University is also raising money to assist financially strapped students.
UNIDENTIFIED FEMALE: These students are going to be the students who solve breast cancer, who bring about solutions for poverty. So we've got to invest in our young people. CARROLL: As for Corinaldi, all she can do is keep working and hoping.
CORINALDI: Semester to semester. That's pretty much how I'm living.
CARROLL (on camera): More help may be on the way. Included in the president's stimulus bill is a little more than $30 billion to help students beat the cost of higher education. Some of that assistance coming in the form of Pell grants. Even so, many of the students we spoke to are not confident that money will reach them in time.
Jason Carroll, CNN, New York.
(END VIDEOTAPE)
HARRIS: Log on to CNNmoney.com for some advice and answers. Check out our Special Report, "America's Money Crisis." We update this page all the time. That's at CNNmoney.com.
One town is cutting its budget, shutting down its health department. Really?
And we are waiting for some of the nation's governors to come to this bank of microphones just outside of the White House to talk about their thoughts after the meeting with the president on the implementation of the American Recovery and Reinvestment Act. We'll bring you those comments right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: How are things going today? Well, it depends. If you're talking about the country as a whole, attitudes are pretty dismal. Seventy-three percent told our CNN Opinion Research pollsters they are very or somewhat scared about the country's future. Twenty- one percent suggested things are going well.
Contrast that sentiment with these numbers. Seventy-seven percent say things are going well for them personally, 22 percent say their personal situation is in bad shape. When it comes to the economy, everyone wants to know when we will see a turnaround. Today, we have a new prediction, and there is some hope. Really?
Susan Lisovicz is at the New York Stock Exchange with details. I'm going to sit back and listen to this, Susan. Good morning.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Tony. It's like one of those optical illusions. You think you're almost there, you're rounding the corner and then you see, oh, it's so much more further. It's really kind of what economists are saying. There is light at the end of the tunnel. The problem is, the tunnel is longer than we thought originally.
The National Association of Business Economics says we're in the thick of the recession right now. Well, that's a no-brainer. The group expects this quarter will be the worst in terms of the hit to economic output or gross domestic product. But slow and steady is the key.
The group says that in the second half of the year, we could see slight growth with a solid recovery coming in 2010. Sounds like its far off. It is one year away.
Today, stocks are doing what they do in bear markets. The Dow right now at an 11-year low. An 11-year closing low. I don't think I need to say anything more. It's at an 11-year low. A year and a half after it hit an all-time high above 14,100, the Dow stands at below 7,300. The Nasdaq composite, meanwhile, is down 2 percent, Tony.
HARRIS: Didn't we start off in positive territory today?
LISOVICZ: We did, didn't hold. Did not hold.
HARRIS: It did not hold.
LISOVICZ: And that was after a fresh six-year low for the Dow on Friday. A six-year low is looking pretty good right about now.
HARRIS: How about that. What about the recovery, Susan? any idea of how strong it will be?
LISOVICZ: Well, it's going to take time, I think, for us to recoup those gains that we saw, those all-time highs. The NABE expects stocks to come back, with the S&P 500 ending the year at 975 or about 25 percent higher. So, expecting a higher stock market. The group also sees auto sales and housing starts making it back at least to '08 levels, as well as the creation of more than 1 million jobs next year. However, unemployment could be the last thing to turn around because employers need confidence to hire.
HARRIS: Oh, boy.
LISOVICZ: Yes.
HARRIS: All right, Susan, thank you.
LISOVICZ: You're welcome, Tony.
HARRIS: See you next hour.
All right, faced with the rising debt, cities and towns everywhere are cutting back and laying off workers. But the entire health department? That's exactly where the town of Amesbury, Massachusetts, did. Doors closed, labs shuttered because the town is in debt more than $800,000.
(BEGIN VIDEO CLIP)
TERRY ARSENAULT, MASSACHUSETTS PUBLIC HEALTH NURSE: I perform daily functions of disease control, access to immunizations, and those functions are not covered as of Friday.
(END VIDEO CLIP)
HARRIS: Well, Amesbury officials say they're working on a plan to cover some of the duties. Possibilities include a mutual-aid agreement with surrounding areas and hiring contractors.
Closing soon, liquidation sales, space for rent, all literally signs of the times. And our iReporters are capturing them. Let's take a trip down to CNN.com's iReport desk. Let's do this and check in with one of the guys are helping us run things down there in our iReport operation.
It is a massive operation, as you know at this point. IReports coming in from all over the world. There he is...
TYSON WHEATLEY, PRODUCER, CNN.COM: Hey, Tony.
HARRIS: ... sitting there in Tyson's corner. Tyson Wheatley. Tyson, good to see you. What do you have for us today, Doctor?
WHEATLEY: Well, we're talking about signs of the tough economy. And, you know, for the last few weeks, we've been inviting iReporters to basically grab their cameras and go around their neighborhoods and show us some signs of a recession. And as you know, Tony, the stories that are often most important to our readers are the stories that are happening right outside their door.
And in this case, these are real signs of the troubling economy. And I want to share some photos with our audience here. And this comes to us from Julio Ortiz-Teissonniere. And, you know, he's lived in New York City for 25 years in the Chelsea District, actually, which is one of Manhattan's most affluent neighborhoods.
HARRIS: Absolutely.
WHEATLEY: But even there, you can see signs of the struggling economy. And basically, Julio went for a walk with his camera, and within a few blocks of his apartment, he was able to see lots of signs, store closing, for rent. You're looking at a photo of a newsstand there on 18th and 8th.
And he's also sent in a photo of a local DVD store that is -- ran on some hard times. This here is a photo of a Barnes & Noble bookstore on 21st Street and 6th Avenue. And according to Julio, that's been completely empty for the better part of a year now.
HARRIS: Hey, Tyson.
WHEATLEY: Yes.
HARRIS: I apologize for having to interrupt. But as you know, we've been waiting for the governors from across the country to come to the stakeout position after their meeting with the president and make some remarks, and Pennsylvania Governor Ed Rendell is up first.
(JOINED IN PROGRESS) GOV. ED RENDELL (D), PENNSYLVANIA: ... minutes with us after a 45-minute session with his Cabinet. He answered questions that were not prescreened or preprepared. My guess is, he answered about 10 or 12 questions. It focused mostly on the stimulus, some implementation, although our implementation questions were mostly gone over with the Cabinet officials that we met with.
We talked about some of the broad far-reaching things in the stimulus like health care, technology or the development of green jobs. And it was a very, very insightful, frank dialogue with the president. The president, I think, got an assurance from each and every one of us that regardless of where we stood on the legislation itself, we were going to do our very best to make sure that it worked.
The American people are looking, in my judgment, for a sign of hope. They're looking for some reason to be optimistic, and that will come, in my judgment, when they see the stimulus begin to roll out. And every one of us as stewards of a great deal of money that the stimulus is putting out, as stewards, we have an obligation to make sure that that money is spent wisely, effectively, efficiently, and quickly, so it gets out into the economy, it produces jobs, it produces orders for factories of steel or asphalt, concrete, lumber companies.
And I think we all take that obligation very seriously. We pledge for the president our full cooperation. This is going to be a work in progress, but the good news is, some of that money, as the president announced today that $15 billion is available for this year's increased Medicaid costs for the states. And that will begin to be distributed.
And as soon as the money becomes available, we're going to make good use of it, and we're going to try to make this economy turn around and try to give a message to the American people that help is, in fact, on the way. There's reason to be hopeful. There's reason to look up. And we're dedicated to making it work. Jim?
UNIDENTIFIED MALE: Well, thank you very much, Mr. Chairman. Governor Rendell has very articulately described the meeting we had with the president. He indicated, as a number of us, did that there are differences of opinion on some elements of the recovery package, and differences of views on how we move this economy forward.
But all governors, all Americans are united on the objective of putting more people to work, creating jobs, ensuring prosperity, getting our economy moving once again. And if we focus on our common goals, I'm confident that we can get the job done.
We had a wide ranging discussion on issues such as housing and health care, as well as economic recovery, and I express my appreciation to the president for reaching out to us in December when most of us gathered in Philadelphia. And I hope that we'll maintain that relationship and work together in the best interests of the people whom we all serve.
RENDELL: Questions? QUESTION: Governor Rendell, you've had to adjust to your budget in Pennsylvania. It's about $99 billion across all governors, budget deficits this year. Projections are $180 billion two years from now. Do the governors believe that though the stimulus will help, a second stimulus might be necessary a year or a year and a half down the road (INAUDIBLE) at numbers like that?
RENDELL: Well, let me start by saying that, look, we understand first and foremost we have a responsibility to deal with our own budget problems, despite the fact that Pennsylvania is one of the top states in the union in what money it gets from the stimulus. Our government and our citizens get over $16 billion. I announced two weeks ago $1 billion worth of budget cuts, elimination of almost 20 percent of the different lines in our budget as well as raising revenues of about a quarter of a billion dollars. Those are steps we had to take. The stimulus doesn't change that.
But I think we have to cooperate in making this all work. We can't keep going back to the federal government and saying, you know, you gave us the stimulus, but we have bigger budget gaps. We have some responsibility to deal with that ourselves. And I think every one of us, Republican or Democrat alike, understands that responsibility and is willing to take that responsibility to ourselves.
Do we need another stimulus down the road? Let's see how this one works first. Personally, you know, I would have liked to have seen more direct money in infrastructure. But that's a particular source of interest to me. But I think if this stimulus works, hopefully we won't need any additional federal dollars.
But understand, we share the responsibility, as the mayors do. All of us have to make the cuts that are necessary, have to do revenue enhancements when they're absolutely needed. So we're going to do it ourselves. Let's wait and see whether we need a second stimulus, and let's hope we don't.
UNIDENTIFIED MALE: And remember, Ed, the Medicaid portion of the package is extended over three different fiscal years. So, we'll have the ability to spread that out over some time and see how it works.
RENDELL: Right, and the stabilization is two years.
QUESTION: I'm sorry, can we hear from Governor Jindal, please. Does he believe the president's comments and perhaps (INAUDIBLE) his criticisms were fair of saying that he believes that most (INAUDIBLE) to agree with 99 percent of the plan and that there's a lot arguing and debate, chatter over cable television over very small portions?
GOV. BOBBY JINDAL (R), LOUISIANA: No. One, let me say this. I do appreciate the president acknowledging that there are legitimate concerns, legitimate issues when it comes to taking temporary federal dollars that could create permanent state spending obligations. For example, the money that we identified in Louisiana on Friday that we will not be accepting. However, I continue to say, as I've said before, that certainly I think there could have been a very different stimulus bill written. There could have been a stimulus bill that was truly targeted and temporary, focused on infrastructure, focused on the kinds of tax credits that would have gotten investment moving in the private sector.
So, it is not just limited to those provisions that we identified on Friday. For example, a billion dollars for the census, for example, $300 million to buy cars for the federal government, for example, $50 million for the National Endowment for the Arts. And the list goes on and on. There are several spending -- there are several dollars included in the stimulus that it's not apparent to me why they necessarily had to be in the stimulus package, what they have to do with stimulating the economy.
But I think what's also important today is the president talked about a couple of other things. He talked about the fact that now going forward, now that the stimulus bill has been written and passed into law, it is important that we ensure those dollars are spent with as much accountability and transparency as possible.
Secondly, I heard both the president and the treasury secretary talk about the fact it is going to be absolutely critical to make sure our financial markets are working, that if we don't get the financial markets working again, the stimulus will not be effective. And that is absolutely critical. And I also heard the president say today that he welcomed the debate, welcomed the honest disagreements, philosophy and opinions.
But that we also, I want to echo what the leaders of NGA have said today, I appreciate the opportunity to come and to listen to the president, to talk with him and his senior administration officials. We had a chance to meet with senior Cabinet officials, and I think that healthy dialogue is very good.
QUESTION: Did the president indicate how those funds to be allocated to funds that you are not going to accept for your state would go to other states?
JINDAL: He did not. No, he did not. Thank you.
QUESTION: Governor Jindal, when President Obama says there's no more (INAUDIBLE). So, if you don't take the federal grant from here, how will you come up with any solutions for no more (INAUDIBLE) for your state? Any solutions?
JINDAL: Well, one of the things that I was happy to actually see in the stimulus, one of the things that I mentioned to the president and his officials, senior officials, in November -- I'm sorry, in December when we met in Philadelphia was that there are actually 4,000 different projects that have been -- the funds have already been provided by Congress that are in some state of protest or appeals with various government, federal government bureaucracies.
The total at stake there is $1.4 billion. And again, these are dollars that have already been approved for things like schools, fire, police stations, hospitals. And one of the things I was pleased to see in the stimulus was that there is a mechanism, an arbitration mechanism that will allow for a speedy resolution. A lot of communities three years after Katrina and Rita are simply ready for an answer. They want to know yes or no whether they're going to get these disputed dollars so they can rebuild their infrastructure.
So, I was very pleased to see that included in the stimulus. That was added on the Senate side. It is in the final version of the legislation. And again, it's not providing additional -- you're right, it's not providing additional dollars related to Katrina and Rita, but it is going to make sure that the dollars that have been approved can be spent, can be spent more quickly, and it can go to building infrastructure.
Also had a very good conversation with the new HUD secretary about the continued housing. He'll be coming himself -- as you know, the president has announced -- to come see the needs in our community. Let me some of my other governors, my fellow governors answer a question.
QUESTION: Finally, how do you feel being (INAUDIBLE) President Obama?
JINDAL: Look, I think every American is incredibly proud by the president's personal story, the fact that we will be seeing him addressing his first joint session of Congress tomorrow night. You know that I have been selected and honored to give -- I am honored to be giving the Republican response.
Let me say that we're certainly as Americans very proud of his accomplishments, and I also want to say this. And again, I do want my fellow governors then to come up. Let me say this. We absolutely, Republicans or Democratic governors, we want our president to succeed. When we disagree with him, we will certainly offer alternative ideas and solutions.
But we face serious challenges as a country, economic challenges, international challenges. We're going to look for every opportunity to reach across the party line to work with him. We want to see him succeed. But to answer your question, I'm certainly as an American very proud of his accomplishment and I'm going to be proud to watch him address the Congress tomorrow.
HARRIS: There you have it. The National Association of Governors meeting with the president and the vice president, talking about ways to spend the American Recovery and Reinvestment Act funds, the stimulus plan. You heard from Pennsylvania Governor Ed Rendell. You also heard from Governor Douglas from Vermont on the right side of the president during his remarks before the meeting and leading the discussion afterwards.
And also, we should make note here that we are will be talking to Governor Douglas next hour in the CNN NEWSROOM around 12:15 Eastern. That is 9:15 Pacific time.
Hollywood's gold rush. The red carpet, the fashion and of course, the gold statue. It's next in the NEWSROOM. Wow!
(COMMERCIAL BREAK)
HARRIS: You know, it was the night Bollywood came to Hollywood and stole the show. "Slumdog Millionaire" the big winner at the 81st annual Academy Awards. Look at the red carpet. CNN's Kareen Wynter -- man, talk about a long night, early day, long day -- is in Los Angeles for us this morning, fresh from a date with Oscar. Kareen, great to see you.
KAREEN WYNTER, CNN CORRESPONDENT: Hi, Tony.
HARRIS: Look, a magical night, right, in Hollywood.
WYNTER: Absolutely.
HARRIS: But before we get to who won some of the night's biggest awards, big winners for the night, the Academy did try to reinvent its show this year. And the question is, did it work?
WYNTER: Did it work? So many people are wondering that question this morning, Tony. Let's start with the show's host, Hugh Jackman, Aussie actor. He had huge shoes to fill last night, but he opened the show, Tony, with a bang.
When we spoke with him last week during rehearsals, you know, one of his concerns was, hey, I don't think I'm going to be as funny as past hosts, hosts like comedians Jon Stewart and Chris Rock. But judging from some of the reviews that are coming in this morning, Tony, well, some say he pulled off quite a show.
His opening number was done in a low-budget but still funny way to reflect the hard economic times we're in, kind of tongue in cheek.
HARRIS: Yes.
WYNTER: And the Academy told me there had been such a focus on reformatting the show, reinventing it, if you will, this year to help spike ratings. And there were some changes. For instance, groups of previous winners presented the major categories in the best actor category. For example, Robert De Niro joined Anthony Hopkins, Adrien Brody on stage, among a few others, to announce the winners. Sean Penn, by the way, snagged that award for his portrayal of a gay politician in "Milk."
So, Tony, we're checking to see when Nielsen will be releasing those numbers to see how the ratings were last night, but judging from the reviews, I think people liked what they saw.
HARRIS: I tell you what, you want big numbers for the Oscars, nominate the movies that people go to see...
WYNTER: Absolutely.
HARRIS: ... and the actors that we go to see in those movies. Speaking of which, you know, I've got to tell you, I don't know how many people went to see this film "The Reader" with Kate Winslet, but I'm telling you, she was terrific in that. So, the fifth nomination for Kate Winslet, and she took the award last night.
WYNTER: Tony, it was truly her award to win. You know, she cleaned up all award season, from the Screen Actors Guild to the Golden Globes. You knew that. Many people undeniably had their bets on Winslet.
(BEGIN VIDEO CLIP)
KATE WINSLET, OSCAR-WINNING ACTRESS: I think there's a secret in having some kind of belief in yourself, you know, and -- you know, I feel like a very unlikely hero here right now. You know, I'm -- I was not the privileged kid who things like this could possibly happen to. You know, it's -- yes. It really is a dream coming true. I mean, it really is.
(END VIDEO CLIP)
HARRIS: Boy. Kareen, look, you've been following the major contenders all season. Any big surprises here?
WYNTER: Absolutely. And the show actually started off with this. The biggest surprise, many people are talking about, Tony, was in the supporting actress category. The gold went to Penelope Cruz for "Vicky Cristina Barcelona." Well, many who we had been speaking to said that, you know, they were banking on Viola Davis of "Doubt" or even "Benjamin Button"'s Taraji P. Henson and her incredible performance.
So a bit of an upset on that, and not for Penelope. She's probably still celebrating and drinking the bubblies this morning. So, no upset on her end. She walked away with the gold. And, Tony, I just learned that we have some preliminary numbers in, and I don't know if you want to take a guess here on the ratings from last night?
HARRIS: They're up. They're up.
WYNTER: Guess what, 6 percent.
HARRIS: They're up 6 percent?
WYNTER: Six percent. Yes.
HARRIS: Of course, that's "Slum Dog." That's a heck of a movie. And Heath Ledger and all the sentiment around that award. Yes, yes, I would have suspected they would be up. And that Hugh Jackman, he's not a bad-looking guy.
WYNTER: Not at all. Very, very charming. Hey, maybe he'll be back. Maybe not next year, because they like to mix it up, but we'll probably see him coming back in the future, Tony.
HARRIS: Look, he's doing that wolverine movie. Come on, now, he'll be back.
All right, Kareen. Great to see you. Thank you.
WYNTER: Thank you, Tony. Bye.
HARRIS: Vermont's governor in the CNN NEWSROOM talking about the Reinvestment and Recovery Act. I will talk live with Governor Jim Douglas next hour in the NEWSROOM, around 12:15 Eastern. That's 9:15 Pacific.
(COMMERCIAL BREAK)
