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President Obama Meets With Governors to Focus on State's Fiscal Responsibility In Spending Federal Stimulus Funds; Stock Markets Still in a Slide, But Auto Stocks Rebound Slightly
Aired February 23, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: The next hour of CNN NEWSROOM starts right now.
Well you know things have gotten pretty bad when the president has to call a summit on fiscal responsibility but pushing forward today, that's exactly what's happening this hour.
And how are things going for you personally during all of this? Would you believe most Americans say they're doing just fine?
Hi, everyone. I'm Kyra Phillips live at CNN World Headquarters in Atlanta. You're live in CNN NEWSROOM.
You're looking live at the White House Briefing Room at this point, where Press Secretary Robert Gibbs is due to step out any moment now. We will bring you the live Q&A when they see them.
Recession, entitlements, deficit and debt - they all add up to issue number one for the White House today. And this morning, President Obama talked up the stimulus with America's governors. This hour, he is holding his Fiscal Responsibility Summit, aimed at holding off future disasters in Social Security and Medicare, and cutting the deficit in half, he says, by the end of his first term.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now, I want to be very clear. While we are making important progress towards fiscal responsibility this year, in this budget, this is just the beginning. In the coming years, we'll be forced to make more tough choices and do much more to address our long-term challenges, from the rising cost of health care that Peter described, which is the single most pressing fiscal challenge we face by far.
(END VIDEO CLIP)
KYRA PHILLIPS, CNN ANCHOR, CNN NEWSROOM: Well, who wouldn't take a few billion dollars from the fed? Apparently the Republican governors of Mississippi, Louisiana, South Carolina, Alaska, Texas, Idaho and Georgia. They are saying no to stimulus dollars that broaden eligibility for unemployment benefits. Why? Well, the governors point out that the looser rules will be permanent but the federal help runs out after two years.
At his meeting today with all the governors, the president called concerns over jobless aid legitimate, but relatively minor. Louisiana's governor doesn't necessarily see it that way.
(BEGIN VIDEO CLIP)
BOBBY JINDAL, (R) LOUISIANA: 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 we identified on Friday. For example, $1 billion 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. The list goes on and on. There are several, 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 actually stimulating the economy.
(END VIDEO CLIP)
PHILLIPS: The Republican governor of California says he will take the federal money now and worry about the implications later. Speaking on CNN's "State Of The Union" Arnold Schwarzenegger said we're all in this together.
(BEGIN VIDEO CLIP)
GOV. ARNOLD SCHWARZENEGGER, (R) CALIFORNIA: If you have a team where half of it splits off, if it's a basketball team, or football team, you would never win a game.
(END VIDEO CLIP)
PHILLIPS: Well, elsewhere in the stimulus, $15 billion in Medicaid assistance is due to reach the states starting Wednesday. No one's objecting to that.
Now, you and the economy, how are things going in this country? Take a look at this, 73 percent told our CNN/Opinion Research pollsters they are very or somewhat scared about the country's future. But 21 percent suggested things are going well.
Now, contrast that sentiment with these numbers; 77 percent say things are going well for them personally, 22 percent say their personal situation is in bad shape.
Stay with CNN and the best political team on television tomorrow night as President Obama speaks to a joint session of Congress. The state of the economy is sure to be issue number one. Anderson Cooper will have the postgame coverage, followed by a special edition of "Larry King Live." You can watch along with your Facebook friends at CNN.com live. It all happens tomorrow night beginning at 9:00 Eastern on CNN and CNN.com.
Some positive news on the Big Three for a change, the United Auto Workers Union says it reached a tentative deal with Ford. The company will fund a health care trust for retirees. No details yet but the deal is likely to be the template for Chrysler and GM. Both must change funding for their trusts under terms of the government bailout. This is the second time this month that Ford struck a deal with the UAW on cost-cutting moves.
Ford, by the way, has not taken any federal loans.
So what does this agreement mean for Ford and the other cash- strapped automakers? Susan Lisovicz from the New York Stock Exchange with all the details and a look at how investors are reacting.
Hey, Susan.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Hi, Kyra.
Well, Ford shares up 9 percent. That's very, very good news in the sense that when you consider that the Big Three spend more money on health care than they do steel. One trader down here described the car companies as basically health care companies that happen to make cars. So it's a huge burden that's relieved if they can come to some sort of conclusion that will make all sides at least agreeable on what they should do on health care costs.
They've got enough problems in a deep recession like this. It's not only Detroit, Honda, Toyota, and all of those companies are suffering, too with this global downturn. Ford shares are up. GM shares are up 4 percent. That's good news because Ford closed on Friday, Kyra, at a price we hadn't seen since 1938.
Overall, the market, not doing so well. This is just indicative of the worries that remain out there. There you see triple-digit losses for the Dow. If the Dow closes there, 11-year low. So just another sign of the depth of this recession, and this bear market. The S&P is right now at its bottom for this current bear market. And that is an average that a lot of pros watch and it often can trigger more selling, if you can imagine that. Right now, we're just hanging right at that level, Kyra.
PHILLIPS: All right. And concentrating on not worrying. If we could only do that.
LISOVICZ: If only.
PHILLIPS: Life would be -exactly. Susan, thanks.
LISOVICZ: You're welcome.
The Vatican has named its choice to fill one of the most prominent posts in the American Catholic Church. Milwaukee's Archbishop Timothy Dolan will take over the New York Archdiocese. He will replace Cardinal Edward Eagan, who is retiring. And Archbishop Dolan said today he's excited about his new role.
(BEGIN VIDEO CLIP) ARCHBISHOP TIMOTHY DOLAN, CATHOLIC CHURCH: My brother bishops, dear priests, religious women and men, seminarians, committed Catholics of this wonderful church, I pledge to you this morning my life, my heart, my soul. And I can tell you already, very sincerely, that I love you very much. I need so much your prayers and your support. I'm so honored, humbled and happy at the prospect of serving as your pastor.
(END VIDEO CLIP)
PHILLIPS: New York is the second largest archdiocese in the country, after Los Angeles. It serves 2.5 million parishioners in nearly 400 churches.
Well, the need is great, the mood, not so much. Police called in to do crowd control after thousands of people show up for housing help.
(COMMERCIAL BREAK)
PHILLIPS: We're talking recession, entitlements, deficit and debt. That's what the president is talking about with all kinds of key leaders at the White House today as he kicked off his Fiscal Responsibility Summit. Ed Henry, there, waiting for the White House briefing. Robert Gibbs about to step up to the mic at any point now to hear more about this summit.
Right, Ed?
ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: That's right, Kyra.
Also, obviously a big topic will be the president tomorrow evening addressing a joint session of Congress. He'll be laying out a lot of his spending and budget priorities. The full budget actually coming out Thursday.
The key is going to be the president making this promise now that he'll cut the federal budget deficit in half over the course of his first term. We know that deficit now is in the neighborhood of $1 trillion, $1.2 trillion. How exactly is he going to do that? The spending priorities are obviously going to be something that will be pressing Robert Gibbs about, something a lot of lawmakers, as well as the American people, will be paying a lot of attention to in the speech tomorrow night, Kyra.
PHILLIPS: Meanwhile, during this summit, I understand the president has created these breakout groups, is that right? It is various advisors and secretaries according to the issues that they represent, health care, Social Security, what more can you tell us about that?
HENRY: It's a mix of administration officials as well as lawmakers who handle specific issues, like Medicare or Social Security. Some big ticket items will have to be dealt with long-term to deal with not just the annual budget deficit, but the now well over $10 trillion in debt that the U.S. government has taken on over the long haul.
So these breakout groups are sort of looking at specific issue areas. We're not expecting any sort of grand pronouncements coming here. It's sort of a conversation starter. The president continues that conversation when he addresses the Congress tomorrow night. And then again, when the budget comes out, he's going to start getting pressed on exactly how all of this will add up.
Some of the savings that he plans to get, in terms of cutting into the budget deficit, would be from winding down the war in Iraq. But as we all know, just last week, he sent another 17,000 U.S. troops to Afghanistan. So while spending in Iraq may be winding down, it's very possible that spending in Afghanistan could be going up. So how all these numbers add up will be very important to press the White House on, Kyra.
PHILLIPS: And also, speaking of numbers, the fact the president's coming forward and saying I pledge to cut the deficit in half by the end of my first term, those are pretty strong words. They had a lot of critics coming forward saying, how exactly does he plan to do that?
HENRY: It's difficult, obviously. The president has said repeatedly that while he wants to cut into the deficit, in the short term right now, he has to be more concerned about the economy and turning that around. That's why even while he is talking about fiscal responsibility, last week he signed into law this $787 billion stimulus plan. He has said that the government has to take on even more debt in the short term in order to try to get this economy going again, but that is obviously adding to the long term debt issue.
When you add the $787 billion to what was passed and signed into law by President Bush last year, the $700 billion TARP bailout, all of this is adding up. And yet, there has essentially been very little, if any, spending cuts coming out of the Congress. So either in Democratic hands over the last few years, or Republican hands before that, Kyra.
PHILLIPS: All right. Robert Gibbs getting ready to step up on the mic, right now. I know you have to sit down and listen, Ed. We'll take the briefing live and debrief after this.
(BEGIN LIVE FEED)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Good afternoon, guys. How are you? I have absolutely nothing to announce, which means we'll go straight to questions.
Yes, Ma'am?
QUESTION: Thanks, Robert.
Is it true that the president was considering announcing a Social Security task force but decided not to? And can you talk a little bit about how he wants to, today, put meat on the bones of actually addressing some of these issues and carrying through on his deficit reduction promise? GIBBS: Well, Jennifer, I think everyone has seen the president convene today a summit on fiscal responsibility here at the White House. And reports over the weekend about a budget that will be outlined in greater detail on Thursday, that shows a deficit that was inherited before the stimulus of nearly $1.3 trillion, that the president believes, and the economic team believe, that we can cut in at least half, at the end of four years, the end of his first term.
I think the American people are rightly concerned about the path of this economy, but also, concerned that for many years, we've had to borrow -- a borrow-to-spend attitude. What the president hopes to get our country back on is a program that helps us save and invest. The president outlined in his radio address a budget that is sober in its assessments, honest in it is accounting, which is a change, that will - as I said, invest in what we need, cut in what we don't and restore fiscal responsibility.
The president also talked during the campaign about this notion of the fact it is hard to get to some degree of fiscal responsibility without addressing all of our challenges. I think you'll hear the president begin to talk on Tuesday and continue what he did in the campaign to talk about strengthening retirement security, as well as cutting health care costs. I think the articles in the paper were -- demonstrated, for instance, that you cannot - if you're going to talk about Medicare and Medicaid, you're talking about the rising costs of health care in this country, that we've seen outstrip inflation sometimes more than double over the past 10 years. So without getting ahead of where the president's going to be on Tuesday , I think you'll hear him begin the discussion on restoring a sense of fiscal responsibility to this town, and understanding that we have to begin to live within our means.
QUESTION: I understand that he's displaying a commitment to that, by stating and commenting, and as you said, talking about tomorrow night, and further on Thursday. But if he doesn't start to put actual action behind it, those numbers aren't going to come down.
GIBBS: Well, I think you'll see this week the action behind that. Let me, again, not get ahead of where the president's going to be over the course of this week. I do believe, getting back to that, first phrase, I think you'll be able to see both in what the president says on Tuesday and ultimately what is forwarded to Congress on Thursday will demonstrate clearly the president's intention and desire to see our country return to a path of fiscal responsibility. And in doing so, through honest budgeting, making very tough decisions that the American people understand we have to make, and cutting this deficit in half by the end of his first term.
Yes, Ma'am.
QUESTION: On the question of bank nationalization, both Greenspan and Senator Graham have called it possible option. I think Greenspan said it was the least bad alternative. Are they wrong? Or is this something you're planning to do as part of the program announced today to allow banks to convert their government preferred shares into common? GIBBS: Well, let me, without getting into individual actions between banks and financial regulators, I would point you to first the statement the Department of Treasury put out about that. The reports mention that Citigroup is seeking to take part, possibly seeking to take part in a provision contained in the financial stability plan Secretary Geithner outlined last week. The president believes, the economic team believes, and I would simply reiterate what I said here on Friday, that the president believes that a privately held banking system, regulated by the federal government, is the best way to go about this.
QUESTION: Are you ruling out the possibility of taking a controlling interest in any of these large banks?
GIBBS: Let me repeat, I'm not going to get into discussing what individual banks might do with -in relation to discussions with financial authorities or individual regulators.
HENRY: Robert, on Jennifer's question about - when you said action this week in terms of Medicare and whatnot, without giving away specific numbers, and getting ahead of the president's budget, will he add specific cuts to these entitlement programs? To you lay them out and say honesty in accounting?
GIBBS: I think you will see the president making hard choices, the president making specific -- some specific cuts. There's no way for us to institute a budget that is free of gimmicks, that is honest in its accounting, and reduce that deficit by half in four years. I think you'll see real detail around what he's proposing. And I think you'll see some real detail around the important investments that he believes this country does have to continue to make, whether that's in health care, or in education, or in making our country energy independent. All of those things, I think you'll see the president discuss on Tuesday. Then I think you'll see detail wrapped around that on Thursday.
HENRY: During the stimulus talks, the president was very firm in saying there could be no earmarks in there at all. Right now, Democratic leaders are crafting this omnibus spending bill of over $410 billion. And there are reports from the Hill that there are over 9,000 earmarks in there already. Is the president is talking about fiscal responsibility today. Is he going to be leaning directly on his Democratic leaders to say cut out these earmarks or I'll veto that spending bill?
GIBBS: I have not talked to the president about the individual spending bill that, as I understand it, is largely left over from last year's session to fund - minus a continuing resolution - to fund government. I think that Congress will take that up. I have not talked to the president on that. Obviously, he is -there is concern. Everybody has to be involved in the sharing of pain in this. When you're at a $1.2 trillion or $1.3 trillion deficit, an economy where we are, I think it's everybody's responsibility to act accordingly and -- but short of talking to the president specifically on that --
QUESTION: Is he firm -- would he be willing to use his veto power against the Democratic governors to back that talk up?
GIBBS: Let me not get ahead of a discussion with him, not having seen, or not having had laying on his desk what Congress might ultimately send him.
QUESTION: Without getting ahead of the president, he has made it clear that -
(LAUGHTER)
GIBBS: I'm going to bring him and put him right here. So, that I can save at least two steps behind him.
(CROSS TALK)
GIBBS: He, when we do that, won't be taking any questions, just FYI.
QUESTION: He'll just be ahead of you?
GIBBS: Slightly.
QUESTION: Without doing that, he's made it clear that at the very least, letting the Bush tax cuts expire is in the game plan. I'm just wondering, there have been other ideas floated out there in terms of tax cuts, or tax increases, rather, on people who make more than a quarter of a million dollars a year. If it doesn't make sense to raise taxes this year, because of the recession, might it also be problematic for the economy to recover if taxes are raised next year? Would that principle not still apply?
GIBBS: Well, I guess some of that depends maybe where we are in the economy. Let's understand where we are in terms of the fiscal -- I'm sorry, in terms of the economic recovery plan. You have one of, if not the largest tax cut ever enacted in a two-year period, as the president stated this weekend, going into people's paychecks beginning April 1.
The president campaigned on a promise to ensure that money would get into people's pockets that had seen their wages decline over the past few years. And he made good on that promise through the recovery plan, and believes that will have a stimulative effect on the economy. The president has also talked about, in some form or another, letting the tax cuts for the top 1, or so, percent, either be repealed or expire because the president believes that after many years of having a tax code that favored the few over the many, that a combination of both the recovery plan and what may or may not be in the budget for future years begins to right the tables a bit on who this tax code is written for, and the people that deserve to be part of the benefit now.
QUESTION: Because, if I could just follow up? To be more precise in my question, isn't it true that the people who we're talking about raising their taxes, people who make more than a quarter of a million dollars a year, whether it's going from 35 percent to 39.6 percent, or the hedge fund managers going from 15 percent to 35 or 39.6, or capital gains taxes going from 15 percent to 20 percent, that these are the people who will invest to create the new jobs, and at a time of recession, taking their money and giving it to the government, or giving it to other people, actually could impede the cause of job growth?
GIBBS: Well, I think the president talked about this extensively in the campaign.
QUESTION: But that was before this recession became as big as we now see it.
GIBBS: I think I would posit that the recession was big at the end of the campaign. Again, I think there's an element, first, of tax fairness. And I think that -- I think this president understands that there have been many benefits for the few at the expense of a few benefits for the many. That through the recovery plan, and in the coming years, the president believes it's important that those that have not seen much in the way of an increase in their paycheck have more money in their pockets. That may require those that share in great benefits, huge benefits in the tax cuts from 2001 and 2003 - again, importantly for those making more than $250,000 a year - I think the top 1 percent of all wage earners in this country -- is fairness that the president believes is important.
QUESTION: On health care, lot of talk in the summit about health care being the number one item for long-term fiscal responsibility and moving in the direction of health care reform. For people not terribly sophisticated about all this, like me, and the average viewers out there, it just seems counterintuitive that you would insure 40 some million people who aren't insured now, and that would save money. How are you going to get the long-term deficits under control by health care reform, which means spending more for more people?
GIBBS: But well, Chip let me -- I think one of the things that's inherent in the health care system that this country has right now is we spend more than I think virtually any industrialized country in the world for outcomes that lag many other industrialized countries in the world. That we are, through lack of fundamental reform, paying amazing amounts of money and we see spikes in that each year, in what it costs somebody to go get health care coverage in this country. It puts small businesses out of business. It creates a tension where larger businesses aren't able to offer health care to their employees because what was something that was affordable last year is unaffordable next year, because the price increases by 10 percent.
What you will see the president talk about, going forward, and certainly contained in the recovery plan, are investments and steps that can be taken that will ultimately save this country money. The health IT in the economic recovery plan will make health care more affordable, will save patients' lives, and increase the quality and outcome of the health care that millions of people are provided. We are not going to be able to -- let me say it this way. Reform is important in order to cut the incredible increases in cost that we see each and every year as businesses and families and individuals struggle to keep up with the pace of health care inflation. What the president will talk about, and begin to outline over the course of the next several weeks, is to build on the reforms that we saw in the recovery plan as I mentioned on health IT. That will begin to streamline the process and make it more affordable, but I think you'll see, again, not wanting to get ahead of him, the president talk about lowering cost for those that are fortunate enough to have health care and ways which we can provide greater access for families and small businesses to get health care.
I would point to the legislation that passed a few weeks ago in Congress and the president signed that increased the share of children covered through the state children's health insurance program; a model that has worked for many years and was expanded and signed into law by this president.
Chuck.
QUESTION: Robert, I want to follow up on Jennifer's first question, which was did you guys have a Social Security task force, or something, that was going to be part of this that was --?
GIBBS: I have to go back - I will have to go back and read the article and see exactly what's in there, and check on that. Whether it is -- whatever you call it, the president, I think many of you -- well, let me -
QUESTION: (OFF MIC)
GIBBS: Can you read back?
(LAUGHTER)
Let me go back and look through -- but regardless of what you call it, Chuck, the president is committed to dealing with the rising costs of retirement security and health security in this country. You saw the president talk about in Iowa and throughout the campaign, ways in which to strengthen the solvency and longevity of Social Security. You'll see the president talk about, as I just talked about with Chip, take actions to reform our health care system which will add life to the Medicare trust fund.
QUESTION: Speaking about health care issues, one of the executive orders that I think some people expected the president to sign pretty quickly was something lifting some of the restrictions President Bush had put on stem cell research. Is there a reason why he hasn't made that one of his first initial, like Guantanamo Bay was?
GIBBS: Stay tuned.
QUESTION: You said that, I think, a couple weeks ago, stay tuned. Again, I'm waiting for the clock.
GIBBS: This is that sitcom where it says to be continued, dot, dot, dot.
QUESTION: Right. Do we tune in to next week's episode? I mean? (LAUGHTER)
GIBBS: In the running sitcom it will be --
QUESTION: Is it weeks and days, not months? Is there a preference over --
GIBBS: I would say weeks.
QUESTION: Weeks?
GIBBS: Well, I don't want to get too far afield from where I am, but I think as I understand it, what President Bush did through executive order and what legislation sits on Capitol Hill doesn't necessarily -- in some ways they're two different issues. There's existing federal funding -- there's federal funding for existing lines, then a broader expansion of federal funding that obviously the president, through Congress, stated his support for.
QUESTION: You believe they're two different things, some things he could do with executive order?
(CROSS TALK)
GIBBS: Well, what you specifically asked me about was an order that President Bush did in, I believe, September or August of 2001, and then legislation which again, doesn't -- those things don't fully overlap.
QUESTION: One will be done on executive order and one will be legislation that --
GIBBS: To be continued.
QUESTION: Why tinker with Social Security when it's solvent?
GIBBS: Because it is...
QUESTION: To 2040. There are other issues in front of us.
GIBBS: There are many issues in front of us. But we are not going to get ourselves on to a sustainable path of fiscal responsibility unless or until we address many of those issues. The president obviously ...
QUESTION: Why is it an issue?
GIBBS: Well, I think -- I don't know the exact years, but there is an inflection point in the funding where the trust fund is, if we haven't already passed that line, we're soon to pass the line where what is going in and what is coming out no longer adds to that solvency of the trust fund and is no longer equal to each other.
QUESTION: I'm just wondering, (INAUDIBLE), and there's great suffering going on now, so I don't see why you ought to... GIBBS: Well, Helen, don't posit what the president wants to do is institute great suffering. But understand that the way the program is structured and although the solvency may go to 2040 or 2041, there, I think, is great concern that the number of people paying in and the number of people -- what is paid in no longer equals what is going out. Therefore, in order to get to some sustainable path to fiscal responsibility, the president understands that hard choices are going to be made, and he's going to --
QUESTION: Increase taxes?
GIBBS: The president talked about some specific ways to do that in the campaign, and I think you can't have a discussion without people bringing a lot of ideas to the table to hash through. David?
QUESTION: Thanks, Robert. Two completely unrelated questions.
GIBBS: Excellent.
QUESTION: The first is about climate change legislation. I presume the president will refer to it in the speech tomorrow night. On Capitol Hill, there's been some difference of opinion, with at one point Speaker Pelosi and on the Senate side Jeff Bingaman, saying that this will be -- they expect to pass climate change legislation by the end of next year, and Henry Waxman and others talking about doing it on a faster pace.
Given that during the campaign, the president talked about the urgency of now related to climate change, would he like to see this done this year as opposed to waiting full session to get it done?
GIBBS: Well, urgency, as you pointed out, is important. Whether or not -- I mean, I don't know enough about the individual politics in each house, in each proposal, to understand whether it's this year or next. I think the president would say if we had significant legislation that began to address climate change and allowed us to spend even more money investing in alternative energies to ensure that we weren't adding to the amount of greenhouse gases in our atmosphere, whether that's this year or next year, I think both of us would agree that that's a big change that we would welcome. Your second, albeit unrelated, yes.
QUESTION: On an unrelated front. The Justice Department under the Bush administration took a position in opposing lawsuits regarding the White House e-mail system. Two groups, the National Security Archive and CREW, filed a suit to force the White House to locate up to perhaps five million missing e-mails and protect others, and the Justice Department filed to dismiss that suit.
You just missed a deadline on Friday, the Obama administration, to remove that Justice Department motion. So is it the Obama administration's position, is it the same as the Bush administration position on the White House e-mails, and do you not want to have a full accounting of what might have been missed or lost during the Bush years? GIBBS: I'm out of my depth in terms of the legal issues on Friday. Dare I say e-mail the Justice Department? And I think they're the best repository for such questions.
QUESTIONS: Given your transparency, your love of transparency and all the wonderful executive orders --
GIBBS: I'm not sure that I would -- there are many things that I love, David. I'm not sure transparency...
QUESTION: I meant institutionally.
GIBBS: Yes.
QUESTION: Would you -- do you think that the citizens who care about these (INAUDIBLE) would expect a different approach to this issue from the Obama administration than the Bush administration?
GIBBS: Without understanding the specifics of what the Justice Department has been engaged in, I think you understand that this administration and this presidency seek a greater amount of transparency than Washington has seen. I would leave the specific issues relating to the case that you're talking about for somebody at the Justice Department to answer. Yes, sir.
QUESTION: Back to Social Security. Any speculation about a task force or whatever aside, do you think that it's politically and practically possible at this time to tackle major Social Security reform when you've got all these other big economic challenges the president's been talking about doing?
GIBBS: Well, I think the discussions that were -- all of what we're talking about, whether it's fiscal responsibility, financial stability, health care, education, energy independence, recovery, all of those are -- I think are contained in the larger economic challenges that this country faces right now. The president understands he wasn't elected to preside over a series of fundamentally easy choices and decisions to get us from where we are to where he knows this country can be.
Some of those decisions will be hard. He's made many of them in a budget that you'll see on Thursday. But I think the president understands that we have any number of big challenges that have to be addressed and that we can't shy away from.
QUESTION: Do you get the sense that your Democratic allies have the political stomach to deal with tackling major Social Security reform now?
GIBBS: I think that it is going to be hard -- I think it's going to be hard to address a lot of our challenges without dealing with all of them at the same time.
QUESTION: In terms of capturing new revenue and counting hedge- fund profits as income, politically, is that a much easier lift now than it was? I mean, is that low-hanging fruit? GIBBS: I think this issue came up in -- they all blur together -- probably the spring of '07. I don't know if it was any easier then when the president supported those changes. I think that he -- I don't think -- the decision that -- any decision that he makes on that is not based on the politics of the ease of right now. I think the decision that he made back in the spring or early summer of the campaign were based on the fundamental fairness of those funds acting a lot more like income than capital gains.
QUESTION: But it didn't happen. I mean, there was opposition, even Democrats controled the Congress then. Now, you're running the tables. You expect it to happen?
GIBBS: Well, again, not getting ahead of what might be in his budget, I think the plan that he puts forward, he's confident (INAUDIBLE) provides the best way forward to addressing those problems and putting us on a path toward fiscal responsibility. Major?
MAJOR GARRETT, SENIOR WHITE HOUSE CORRESPONDENT, FOX NEWS CHANNEL: The reports that...
GIBBS: Two unrelated questions?
(LAUGHTER)
GARRETT: Binyan Mohamed, a Guantanamo detainee, arrived in Britain today. This will constitute the first Guantanamo detainee released freely into society. How does the administration respond to criticism from some of the military families whom you met with just a couple weeks ago that this is premature, it's before the 180-day review is complete and does not fulfill his promise to them and the country at large that he would weigh all security implications before making a decision on a detainee for release?
GIBBS: Well, as you state, the president made a decision at the beginning of his administration to close the facility at Guantanamo Bay and to start a process of evaluating the detainees there in accordance with his solemn obligation to do all that he can to keep our country safe, to do it in a way that protects our men and women in uniform and does so in accordance with our American values. That process, as you know, is ongoing.
In terms of the specifics related to Mr. Mohammed's case, I would point you toward the Department of Justice, but the president feels confident that the process that his administration has undertaken will yield results that keep us safer.
GARRETT: Can you comment in any way on how the administration decided this person was not only subject to release but would not pose a future danger?
GIBBS: Well...
GARRETT: Either to the country or...
(SOUND OF PHONE DIALING) GIBBS: I'm making a call right now to find out.
(LAUGHTER)
GIBBS: I'd point you to Matt over at Justice.
GARRETT: On the question of treasury, I know you don't want to comment on things that are part of existing authority, banks coming in and seeking something it can already do. Can you say today, because the markets have been roiled for two days on rumors or speculation or fear of nationalization, the administration is not actively contemplating anything beyond existing authorities and transactions that can be engaged with between banks and the Treasury Department?
GIBBS: For a lot of reasons --
GARRETT: Can you say anything any more (INAUDIBLE) than that? If not, why not?
GIBBS: Let me -- I felt good about what I said on Friday. The market seemed to feel good about what I said on Friday, that the president believes that a privately held banking system regulated by the government is the best model.
QUESTION: To follow up on the question about Guantanamo Bay, can you tell us who from the administration has gone down there? I know a number of people. Eric Holder is there today. Who's actually gone to Guantanamo, and what have they reported back?
GIBBS: I know Greg -- I believe Greg Craig has gone and I know Eric is -- sorry, the attorney general is down there today. The process for making these decisions is ongoing, and when we have larger announcements and decisions to announce, we'll do that. I'm not going to sort of rolling comment on what the attorney general or the White House counsel might have deduced from one visit. Yes, sir.
QUESTION: Is the president going to see General (INAUDIBLE) when he's in town at all?
GIBBS: I don't know the answer to that.
QUESTION: Will you ask him?
GIBBS: I will.
QUESTION: Robert? Going back to bank nationalization issue again, you have chosen your words very carefully when talking about this, and there have been market repercussions.
GIBBS: Good market, come on. Somebody called it the Gibbs Rally, for goodness sakes. Let's go with that.
(LAUGHTER)
GIBBS: Right? Come on. If people are watching.
(CROSSTALK)
GIBBS: I know. It went up like 200 points or something.
QUESTION: One-day market trends?
(LAUGHTER)
GIBBS: Only one-hour market trends. Go ahead, I'm sorry. There's no telling what the market just did.
QUESTION: Has the White House crafted a communication strategy to talk about the sensitive issue of nationalization? Do you have to be careful and take great care at least in talking about this issue for fear of market repercussions?
GIBBS: I was counseled when I stood up here that I should take great care in speaking about any number of subjects for the ramifications for our relationships with other countries, our national security, our banking system, the stock market, my overall well-being, might be impacted.
QUESTION: I can't help but notice you're reading from a prepared statement on (INAUDIBLE), but you're extemporizing --
GIBBS: Well, I'm reading exactly what I said Friday in order to make sure that you all understand that I feel so good about what I said on Friday, I thought I'd try it again on Monday.
You know, obviously there are a lot of moving parts in the financial stability plan, but you know, it may sound like a broken record, but it's the belief of the president and the economic team that the structure of a privately held system regulated by the government is the best way to do things.
QUESTION: Why not say, "We are not going to nationalize the banking system?" Why not say it just like that?
GIBBS: Like I said, I felt so good about what happened on Friday, I thought I'd do it again.
GARRETT: But that's not enough to quiet these fears and anxieties on Wall Street. And bank stocks, though they went up a little bit, they have gone down again.
GIBBS: Right, but Major, again, my job is not to --
QUESTION: (INAUDIBLE) the perception that it's possible. Can you close the door?
GIBBS: I think you can look at the transcript and posit many possibilities based on any answers on any given day. I don't think that the, you know -- there are any number of challenges we have in front of us on any number of economic issues. The president and his team work every day on, as you saw today, implementing the recovery through a very strong, the naming of a former I.G. at the Department of Interior that's used to rooting out waste and abuse, fiscal responsibility summit to get us on the pathway towards a sustainable budget.
Work goes on in financial stability, and later this week, we'll have legislators down to talk about regulation in the financial industry. A lot goes on to continue to meet each and every one of these challenges. (INAUDIBLE)?
QUESTION: On Afghanistan, the progressive caucus plans to send a message to the president that they're a little frustrated with his decision to send more troops there. Congresswoman Maxine Waters said Friday, "We don't want to send our young people off to war without really understanding what we're doing." Is the president concerned about the more liberal members and voters out there frustrated with his decision with Afghanistan, and does he have an exit strategy for Afghanistan?
GIBBS: Well, you know, I don't -- the president spoke throughout the campaign about the fact that we had long ago taken our eyes off of the problem that we faced in Afghanistan, the attacks that struck this country and were planned there, that we needed to draw down our forces in Iraq, add forces to the fight in Afghanistan to ensure that the attacks that we have faced in 2001 don't happen again. I'm not -- I don't think anybody would be surprised that the president made that decision based on the fact that he'd campaigned on that for a year and a half.
To your larger question, the president talked about this in his statement, and I -- will talk about this to some degree tomorrow, the dangers that we face in a very uncertain world. One of those issues being Afghanistan. I think that though the president's strategy of placing for the first time in a long time, a focus on that area in addition to the ongoing 60-day review that the administration is undertaking relating to Afghanistan and Pakistan are important to reorient where we are in terms of our national security to prevent attacks like the ones that happened in 2001.
QUESTION: You think this strategy will come out of that?
GIBBS: I think the review is a comprehensive review of our policy in that region, including our force structure and posture as it relates to that.
(CROSSTALK)
GIBBS: Well, it's a 60-day review that I think began a week or so ago, or ten days ago, so we've got 50 or so days.
QUESTION: May I follow up on that? Two questions.
GIBBS: Two?
QUESTION: One is not question, really, if I may ask you, did the president watch last night the Academy Awards, and has he seen the famous movie from India?
GIBBS: I don't --
QUESTION: And if he has not seen it, if he's planning to see it.
GIBBS: Well, I don't know how long he was dancing to Earth, Wind and Fire last night. I don't know how much -- I left here and still saw a good portion of the Academy Awards while I was trying to go to sleep.
I don't know if he saw "Slumdog Millionaire." I know he wants to.
(LAUGHTER)
GIBBS: I don't know if he...-
QUESTION: What movies does he not want to see?
GIBBS: Look, I think a lot of the movies that he has seen recently are movies that might also entertain a 7- and a 10-year-old girl. Not sure that "Slumdog Millionaire" would be on that list.
QUESTION: One question on Afghanistan, I'm sorry, to follow up.
PHILLIPS: All right, well, all things serious. Robert Gibbs there of course talking about the fiscal responsibility summit the president is holding at the White House today. Now even commenting on the Oscars.
Finishing up the White House press briefing there. If anything else comes forward, we will of course talk to Ed Henry there from the White House.
Meanwhile, some hard decisions ahead for the defense secretary. He's got some slicing and dicing to do on the Pentagon's budget. Billions of dollars, thousands of jobs in his hands. No pressure, right?
(COMMERCIAL BREAK)
PHILLIPS: Well, as for those stimulus dollars, at least half a dozen Republican governors say they will pass on some of the extra unemployment aid. CNN's Jim Acosta takes a look.
(BEGIN VIDEO CLIP)
OBAMA: The last thing I want to do is hold up the food.
(END VIDEO CLIP)
JIM ACOSTA, CNN CORRESPONDENT (voice-over): The highlight of the winter meeting of the national governors association? Dinner at the White House. But some governors sound like they've bellied up to the stimulus buffet, turning up their noses at parts of the plan they don't like, as if the package is government a la carte.
GOV. BOBBY JINDAL (R), LOUISIANA: We're going to look at every provision, see what's good for the state, see what's not, see what strings are attached. But the reality is, the bigger philosophical point is this. I just have a fundamental disagreement with this package.
ACOSTA: Six Republican governors are hinting they may reject parts of the stimulus worth billions of dollars, three of whom hail from the poorest states in the nation.
UNIDENTIFIED MALE: At times, it sounds like the Soviet grain quotas of Stalin's time.
GOV. HALEY BARBOUR (R), MISSISSIPPI: There are some we will not take in Mississippi.
ACOSTA: Mississippi's Haley Barbour says the plan's money for the unemployed could lead to a tax increase on some businesses.
BARBOUR: I mean, we want more jobs. You don't get more jobs by putting an extra tax on creating jobs.
GOV. CHARLIE CRIST (R), FLORIDA: It's not a matter of bucking the party. It's a matter of helping the people.
ACOSTA: Other Republican governors say this is no time for getting picky.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If you have a team where half of it splits off, if it's a basketball team or a football team, you would never win the game.
ACOSTA: Some state leaders talk as if there may be leftovers.
GOV. JENNIFER GRANHOLM (D), MICHIGAN; The governors who are trying to decide whether they'e going to accept the stimulus money or not, we'll take it. We'll take your money. South Carolina, I'll take your money. Louisiana, we'll take it.
ACOSTA: New Orleans Democratic Mayor Ray Nagin accused his Republican governor, Bobby Jindal, of political posturing.
JINDAL: We are still a center-right country.
ACOSTA: Hailed as the future of the GOP in 2012, Jindal spoke to a Christian conservative group in Iowa after the November election.
NAGIN: And I told the governor personally, any dollars he does not want, we will take them gladly.
ACOSTA (on camera): No governor has said he or she will flat-out reject all of the stimulus money, precisely because doing so creates a major political problem. If the stimulus works, any opposing governor could be out of a job.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
PHILLIPS: And a reminder, stay with CNN as President Obama outlines his economic plans in a speech to Congress tomorrow night. Anderson Cooper will have our postgame coverage followed by a special edition of "LARRY KING LIVE." You can also watch along with your Facebook friends at CNN.com live. It all happens tomorrow night beginning at 9 Eastern on CNN and CNN.com.
Defense Secretary Robert Gates has some tough decisions to make about his defense budget. He must decide if a big-ticket item like the Lightning II fighter jet is really worth $950 billion, or if the Future Combat System and Virginia-class submarine merit its multibillion dollar price tag. Gates sees some positives in the cuts, namely, deep-sixing stuff that's too expensive, doesn't deliver the goods or both.
(BEGIN VIDEO CLIP)
ROBERT GATES, U.S. SECRETARY OF DEFENSE: This moment also presents an opportunity, one of those rare chances to match virtue to necessity, to critically and ruthlessly separate appetites from real requirement.
(END VIDEO CLIP)
PHILLIPS: One possible Gates idea not to buy dozens of fighter jets could trigger a real fight in Congress. Lawmakers say the program generates 12,000 jobs in 44 states.
Some soldiers should be getting bonuses from the Pentagon right now for money already set aside for them. So, why haven't they seen a dime of it? Well, so-called "stop loss" soldiers, about 13,000 serving beyond their enlistment period, are supposed to get bonuses. That's 500 extra bucks a month per person.
Well, the Pentagon admits it's about five months behind paying out that money, even though Congress budgeted $72 million for it this budget year. The Pentagon says it's working on a plan to get the bonuses rolling.
When the economy's gone to the dogs, well, dogs suffer, too. Pet food banks popping up around the country to help Fido and Fluffy's people through the rough times.
(COMMERCIAL BREAK)
PHILLIPS: Well, many of the nation's newspapers have been hit by a perfect storm of falling and -- ad revenue, rather, and circulation and rising debt. Philadelphia's two major daily papers are the latest to file for Chapter 11 bankruptcy. "The Inquirer" and the "Daily News" will continue publishing as the papers' company attempt to restructure debt of $390 million.
Now, the tough economy is impacting pets as well. Hundreds of people in Clackamas County, Oregon have reached the point where they can no longer afford to feed their family and their animals. So, they're giving up their animals to shelters. Well, A group of volunteers created a dog food bank to help keep those pets with their owners.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We give out canned food. We give out dry food. And we try to match up what we have in the warehouse with what people are using for their pets.
(END VIDEO CLIP)
PHILLIPS: The dog food bank provides a month's supply of food, no matter what the size of the animal. It's set up primarily for dogs but also helps cats, too.
We'll see you back here tomorrow. Rick Sanchez takes it from here.
