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Pres. Obama Addresses Congress Tonight; Bernanke's Balancing Act; Few Governors Nix Some Stimulus Funds; Economic Crunch Crushing Dreams; Layoff Outrage
Aired February 24, 2009 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Bleak on the street. Dow drops to a 12-year low. Will new economic numbers and words from the Fed chair calm investors?
Also, the budget cut ting jobs begins on the White House lawn.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The helicopter I have now seems perfectly adequate to me. Of course, I've never had a helicopter before. So...
(END VIDEO CLIP)
COLLINS: A new Marine One may be too pricey but the president has other tough decisions to make. We take a look at his address to Congress.
And a company comes to town with jobs and then takes them back.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: What else do you have to say besides a hundred cars driving out of the parking lot with no jobs? What else? Congratulations. You've crushed a community.
(END VIDEO CLIP)
COLLINS: Laid-off without notice. Not the first time for this firm.
It is Tuesday, February 24th. I'm Heidi Collins. And you are in the CNN NEWSROOM.
The state of the economy, the leadership of the president both put to the test tonight in a prime time speech. President Barack Obama will deliver a stark message. The economy is in crisis and Americans could face even worse times ahead.
CNN White House correspondent Dan Lothian is going to take a look at the president's speech. We're going to come back to him in just a moment for that.
Meanwhile, the latest grim evidence of the tanking economy. This hour, Wall Street opens at its lowest points since 1997. The Dow has lost about half of its value since hitting record highs in October of 2007. And overnight, markets across Asia plummeted. Hong Kong's benchmark lost nearly 3 percent and Japan's Nikkei dropped about 1.5 percent.
We'll take a closer look at now at those markets. Adrian Finighan is in London this morning with a look at the overseas losses and Christine Romans is watching Wall Street in New York.
Let's go ahead and begin with you, Christine, good morning.
CHRISTINE ROMANS, CNN CORRESPONDENT: Good morning, Heidi. Well, it's what is called a mega meltdown when you look at just how far the Dow and the S&P have fallen in this bear market. Over at S&P Sam Stovall likes to chart these things, he knows his numbers inside and out. And he has charted all the bear markets since back to the Great Depression. It's at the 15th.
You look at the S&P 500 -- let's look at that one because it is a broader market. It shows that the pain is so widely spread, down 52 percent since its all-time hit back in October of 2007. Take a look since the $700 billion bailout was signed late last year, it's down 36 percent. A third -- more than a third of the value of the broader stock market vanished after, even after that bailout was signed. And since President Obama took office at the beginning of the year, down 11 percent.
What these numbers tell you, Heidi? They tell you that we are in the midst of a once in a lifetime, very painful dislocation in the global economy. It's taking time to work through. It is painful. Also you're hearing people on the street talk about concerns, still about the fragility of the banking system, concerns that much, much more money is going to have to be spent. This is a $14 trillion economy.
COLLINS: Yes.
ROMANS: And that it's going to take a lot of money to move this ship and at least try to put it back on the -- on the right path. And also, they'd like some more clarity from the White House about the banking system. You know, we keep hearing about confidence and patience, both of those things are lacking right now and that's exactly why you're seeing the stock market continue to put in such poor performances.
This is just -- the situation where you can't buy patience, you can't buy confidence, and in Washington they're trying to find out what kinds of things they can do to restore those two.
COLLINS: Yes.
ROMANS: It's a very, very difficult, difficult equation.
COLLINS: Yes. Markets don't wait around for anybody. All right, Christine, do me a favor. Stay with us, because I think it's really important to point out that this is a global story. I don't know if we can go do that enough when we're talking about this kind of money and this many people who will be infected by it -- affected by it, I should say.
Investor doubts weighing down markets, as we've been saying, from Asia to Europe. So we want to go ahead and bring in CNN's Adrian Finighan now in London this morning.
Adrian, good morning to you. How's the picture there?
ADRIAN FINIGHAN, CNN CORRESPONDENT: Not too good, Heidi. As we said, pretty bleak mood on the stock markets right around Europe right now. We've had some more figures out today which suggests that the recession is going to be deeper and more prolonged than at first thought.
The first of those figures, European industrial output it slumped in December, 5 percent on November, and that's down over 22 percent year on year. Factories reporting a steep drop in demand for their goods. And as a result of that, General corporate confidence has fallen, too, to its lowest level since 1990.
Now here in the U.K., retail sales figures also fell, not as bad as in January but they're expected to fall again next month. Business investment here in the U.K. as well. That's fallen nearly 4 percent in the fourth quarter of last year. And that's the sharpest drop since 1991.
So all of that, as far as the markets are concerned, having a big impact. It's financials, it's commodity related stocks, it's auto industry stocks that have all fallen today, dragging the indices down here in Europe after those big falls that you mentioned overnight in Asia.
And it is the persistent fears, once again, Heidi, about the health of the financial sector, both on this side of the Atlantic and in the states that are dragging on sentiment most of all today. What was it one industry player said after the close of play day yesterday? The government sure doing a lousy job of dispelling pessimism.
Well, I'll tell you, Heidi, you'd be able to name your price if you had any good news to sell today.
COLLINS: Sure.
FINIGHAN: Optimism in very short supply.
COLLINS: Yes, no question about it. All right, Adrian and Christine, we certainly do appreciate that, really want to continue looking at this picture all across the world. Again, appreciate it, guys.
And in fact, you can always follow the markets on our Web site, CNNmoney.com. There, you can track this morning's futures plus market closes and trends.
Also a reminder, stay with us because at the bottom of the hour, we're going to go live to Wall Street, of course, for the opening bell at 9:30 Eastern Time. (BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I don't think there's any one specific thing that we want to hear. I mean, I think everybody is struggling, you know, right now, in this economy. I, myself, I haven't worked in about a year, but, you know, I think the main thing that we want to hear is that, you know, that the stimulus package that he's proposing is going to do something for us -- that's people that are struggling.
(END VIDEO CLIP)
COLLINS: People looking for answers. Tonight, President Barack Obama takes his economic message to Capitol Hill. He's going to be addressing a joint session of Congress at 9:00 p.m. Eastern.
And CNN White House correspondent Dan Lothian joining us now with a look ahead.
So, Dan, as we continue to see these stories and hear these stories from people all across the country, what will the president be telling them tonight?
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, he's telling them to hang on, that better days are ahead. The president, obviously, will be focusing on the economy and the speech that's really focused towards Congress but also speaking to the American people. Expected to last anywhere from 50 to 60 minutes.
And we're told by senior aides here at the White House that this will be, sort of, a thematic address, not get drilling down to any specifics, but laying out some of the challenges that are facing the country, talking about what the president has already done in trying to stimulate the economy, talk about that $787 billion stimulus package.
And the president, again, will try to balance between, you know, some of the difficult situations that the country is currently in but also trying to be hopeful. Take a listen to what Robert Gibbs had to say this morning on "AMERICAN MORNING."
(BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: We have a recovery and reinvestment plan that's now the law of the land and as you'll hear the president talk about tonight, he's already working on getting tax cuts to the American people and creating jobs. The bill has already done that.
But you'll hear him talk tonight about financial stability, about a housing plan for responsible homeowners that have played by the rules. You'll hear him talk about regulating the financial industry so we don't find ourselves at this point again. And you'll hear the president end tonight with a strong, hopeful message that we've met many of the challenges that have always faced this country and come out on the other side for a brighter America.
(END VIDEO CLIP)
LOTHIAN: And obviously, Americans are looking and hoping for some good news. In a CNN Opinion Research Poll, when Americans were asked, will Obama's speech make you feel more confident about the economy? 62 percent said likely. 37 percent said not likely.
But, Heidi, clearly, what the administration will point out tonight in this speech as the president addresses Congress will be that, this problem that we are in, this economic mess did not happen overnight so it won't be corrected overnight so the American people need to be patient -- Heidi.
COLLINS: It's kind of interesting, too, Dan, because it's almost like a State of the Union address but yes, doing it in a very, very different format.
LOTHIAN: That's right. In many ways, it will be like a State of the Union, but in this case, you know, there are a lot of expectations around this speech. The president talking at a very difficult time. You know, one thing that people keep pointing out is that every time that the president says something or does something to jump-start the economy, when you look at the stock market, the stock market really takes -- tends to take a slide.
COLLINS: Right.
LOTHIAN: But, again, Robert Gibbs, the press secretary, will respond this way saying, listen, you know, this will take time. It's not going to happen overnight. So the president is building for the future, not for these one-day events.
COLLINS: All right. We'll be watching. Dan Lothian, sure do appreciate that. Live at the White House this morning.
Thank you, Dan.
And you can see the President Obama's address to Congress right here on CNN. It will come your way 9:00 p.m. Eastern and then be sure to stay with CNN after the address for expert analysis.
"ANDERSON COOPER 360" comes on right after the speech so stay tuned for a special edition of that and also "LARRY KING LIVE," that will come your way at midnight.
Now before we hear the speech, we do want to hear from you. We want to know what you think should happen with your money.
And our Josh Levs is here now to explain how you can weigh in. And this is really a cool thing, Josh, that we are doing.
Facebook, tell us all about it.
JOSH LEVS, CNN CORRESPONDENT: I love it. I think it's a really great hook-up. It worked great for the inaugurations, going again, it's on the screen behind me. CNN.com Live throughout the day. It's already going. It's hooked up with Facebook. So as you watch, if you're a part of Facebook, you can just sign in right over here to the right and start telling everybody what you think. Two ways to interact with everyone watching or with just your friends.
And if you're not part of Facebook, when you check out CNN.com Live today you can sign up really easily. And as par of this, what Heidi was just saying, absolutely, we want to hear from you throughout the day. We keep hearing President Obama plans to talk about how to cut the deficit in half. Well, here's a graphic for you. We want to know what you think should be cut.
Weigh in for us. If you're on Facebook, you can find my page. We've got a discussion going there right now. It's already begun. Just search "Josh Levs CNN" on Facebook. If you're not Facebook, you can e-mail us. It's cnnnewsroom@CNN.com.
How should the U.S. cut back? What do you think should be removed from the nation's budget? One of the toughest decisions any president ever has to make. So weigh in and, Heidi, I'll be back later this hour. We'll (INAUDIBLE) some of the first reactions we're getting.
COLLINS: All right, very good, Josh, sure do appreciate it.
LEVS: Thanks a lot.
COLLINS: And a quick reminder now, CNN.com is teaming up with Facebook to bring you special coverage throughout the day. You and your Facebook buddies can see a special edition of John King's "STATE OF THE UNION" at 11:00 a.m. Eastern. Then at noon, CNN's Christiane Amanpour takes a look at the presidential address happening tonight.
Be sure to check out CNN.com for the rest of the lineup.
An economy in crisis. Americans on edge. We'll show you how to build your first line of defense.
(BEGIN VIDEO CLIP)
OBAMA: We do ourselves no favors by hiding the truth about what we spend. In order to address our fiscal crisis, we're going to have to be candid about its scope and that's why the budget I will introduce later this week will look ahead 10 years and will include a full and honest accounting of the money we plan to spend and the deficits we will likely incur.
To start reducing these deficits, I've committed to going through our budget line-by-line to root out waste and inefficiency.
(END VIDEO CLIP)
ANNOUNCER: CNN NEWSROOM brought to you by...
(COMMERCIAL BREAK) COLLINS: A swift water rescue team saves a couple in Arizona. The man and the woman were holding on to a tree to keep from getting swept away in the fast-moving current. Wow, witnesses say the couple had been riding an all-terrain vehicle before getting stranded in the river. The couple was taken to an area hospital for treatment.
Another rescue, this time, a Coast Guard helicopter crew was called in to pick up a surfer off California's north coast. The surfer had gotten caught in a dangerous rip current. A friend made it to shore and then called for help.
The stranded surfer was exhausted, though, from fighting the choppy seas so a rescue swimmer helped get him to safety. The teenage surfer was flown to a nearby hospital for treatment and went home to his family.
A terrifying wakeup call in New York's Chinatown. Look at that. A four-alarm fire inside a six-story apartment building. Fire officials say one person died, at least 20 others are hurt. Nearly 170 firefighters responded to that scene. One of them has minor injuries. We don't know right now how that fire started.
Wildfires in Oklahoma keeping firefighters busy and, today, crews in the southeast need to stay on their toes, too. The National Weather Service issued a red flag warning in Georgia, Alabama and Florida. Warn dry conditions could lead to fires there and parts of Texas, too. Most of the warnings start around mid-day and last through the evening.
Perfect time to get over to Rob Marciano standing in now at the Weather center to look at all of that tracking. Boy, I don't think I've seen that much red on the map for a long time.
ROB MARCIANO, CNN METEOROLOGIST: It's a precautionary measure just encouraging kids not to play with matches because dry conditions are ripe for that kind of stuff.
But no problems in Maine, Heidi. And check out some of these video coming in. Yesterday, we told you about the snowstorm that was affecting that area. Big-time snow. Several inches and, in some cases, a couple of feet, plus wind. And power lines down at one point, they had 140,000 people without power, about half or so of those folks are back online thankfully, but it's going to be a chilly day today, for sure.
(WEATHER REPORT)
MARCIANO: Atlanta, we have a tower cam? We don't. We do? Take a look.
COLLINS: Yes. I can see it.
MARCIANO: This is for you because you live close by, Heidi. WSB, there's the shot. Actually, its iris to up a little bit too much. It's nicer than it looks like out.
COLLINS: It looks kind of nuclear.
MARCIANO: It looks a little bit hazy and hot and yes, like we got bombed, but I think it's the camera angle there.
COLLINS: All right, Rob. We will check back with you later, if you're there.
MARCIANO: All right. I'll be here.
COLLINS: OK. All right, Rob. Thanks.
Crunching numbers and making tough choices. How a household budget now could save you from crisis later.
ANNOUNCER: "Weather Update" brought to you by...
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I would like to hear him just reconfirm the things that he's already been saying about maybe giving us a couple of, I guess, current statistics about how much progress he's already made with the things that he's been speaking of in the past. And pretty much just continue to let us know and keep us informed about his plans.
(END VIDEO CLIP)
COLLINS: What do you want to hear? President Barack Obama speaking to a joint session of Congress about the economy. You can see it live here on CNN at 9:00 p.m. Eastern.
Well, it's a question a lot of us are asking. How do we protect ourselves from economic catastrophe? One answer begins at home. It's creating your own household budget so you can track where your money is going.
CNN personal finance editor Gerri Willis is here now with some advice on how to do that.
Yes, Gerri, how do we get started with something like that?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, you know, it's sort of a daunting prospect but one way to start is to keep a money journal for a month. That mean you write down exactly what you spend on a daily basis from your morning coffee to your cable bill, get in touch with where you're spending your money. You may be surprised at how much you allocate to certain expenses.
Most people are still spending cash on discretionary items even though we're in a recession, and that's not a bad thing, but you need to know exactly where your money is going.
Next, figure out where you should be allocating your money in an ideal world. Take a look at this pie chart, it will tell you where to spend your money, how the utilities and insurance should be 40 percent of your budget, how your mortgage or your rent should only be 31 to 33 percent of that total.
Living expenses, food, clothing and medicine, 25 percent. Transportation, that's everything from paying the car to putting gas into it, 15 percent. Savings 5, debt 5, education and child care, 6 percent, and recreation 4 percent.
Of course, your situation will vary. These are just guidelines on what your budget should look like but at least it gets you thinking in the right direction. Heidi?
COLLINS: Well, all right. So then you know how to track your expenses. You're watching everything going out. How do you then decide I've got cut back here and then cut back here and divvy it up the right and most effective way?
WILLIS: Well, if you want to automate -- you know how you spend and where it goes so that you don't have to spend all your time writing it down, go online. Track your income and your outgo with software like Quicken or even a Web site like CNNMoney.com can he help you organize yourself when it comes to your savings and your spending.
Currently, Quicken has a free, free online version where you can track all of your money on one page. You can see your retirement, your checking account, all of your money at one time. What's more, the program calculates where your money is being spent by category and how you're progressing toward your goals. It will even alert you if your balances are getting low.
So there's -- it's an easy to use Web site. I've done it myself. Sign up. It's free. It will help you organize your thoughts when it comes to money.
COLLINS: All right. Gerri Willis, our personal finance editor, sure do appreciate it.
Thanks, Gerri.
WILLIS: My pleasure.
COLLINS: The state of the economic recovery plan. The president is talking to Congress tonight. We're going to take look at what effects his message may have on the economy.
(BEGIN VIDEO CLIP)
OBAMA: The casual dishonesty of hiding irresponsible spending with clever accounting tricks. The costly overrun, the fraud and abuse, the endless excuses. This is exactly what the American people rejected when they went to the polls. They sent us here to usher in a new era of responsibility in Washington, to start living within our means again and being straight with them about where their tax dollars are going and empowering them with the information they need to hold all of us, their representatives accountable.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: All right. So your responses are flying into our e- mail and Facebook question today which is, just a reminder, what should the nation cut from the budget? Our Josh Levs is going to be along in just a few minutes with some of your reactions. There's one of them there. We'll get to more a little bit later on.
Meanwhile, a brutal sell-off on Wall Street took the major averages down yesterday by more than 3 percent each. So, today, the Dow and S&P 500 begin trading at levels we haven't seen in almost 12 years.
Susan Lisovicz is at the New York Stock Exchange now with a look what to expect today.
Hi there, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi. Yes, 12 years ago, that was 1997 when "Cold Mountain" was the best-selling book and Celine Dion's "All By Myself" was the top song.
COLLINS: How can we forget?
LISOVICZ: How can we forget? It was so long ago.
COLLINS: A lot of people feeling all by themselves with these numbers. Yes.
(LAUGHTER)
LISOVICZ: Oh yes. Very lonely, indeed. But here's some good news. At the open, seconds away, we're expecting a slightly higher open after yesterday's big sell-off but gains may not hold because the steady drum beat of bad economic news continues.
The S&P/Case-Shiller Home Price Index shows prices in the nation's 20 biggest cities fell by a record 18.5 percent in December and in about half an hour we're expecting to learn consumer confidence continues to fall this month to the lowest level on record.
Investors will be looking for some signs of direction from Fed Chief Ben Bernanke as well. He'll be on Capitol Hill delivering testimony on monetary policy. Wall Street, of course, will be listening for any insights he can provide on his expectations for the economy or what the administration plans to do to help struggling banks.
One bank that's bucking the trend is JP Morgan Chase. Its shares up right now nearly 3 percent. The company is slashing its quarterly dividend by nearly 90 percent to 5 cents a share. JP Morgan says the money saving move is a precaution and will help it survive if the recession lasts two years and if the unemployment rate hits 10 percent.
JP Morgan, by the way, one of the healthiest banks. This is the bank that took over Bear Stearns about a year ago. Checking the early numbers. Signs of life, Miss Collins. The Dow Industrials is up 24 points at 7136. That's about half of what it was in October of '07 when it was over 14,000.
The NASDAQ meanwhile is up 11 points. One trader -- one senior trader says reminds us that the S&P 500, the broadest of the three major averages is just inches away from its intraday low of this bear market.
That's a critical point that a lot of traders will be watching, and that trading today may be inhibited by, one, the presidential speech, two, Mr. Bernanke's comments on Capitol Hill, and of course then some of the economic reports that we're yet to get. He says be very, very, very nimble, as if we haven't been!
COLLINS: Yes. That's going to be very, very, very afraid.
LISOVICZ: Yes.
COLLINS: Heard that before in a few movies, too.
LISOVICZ: Maybe that's just his euphemism.
COLLINS: Maybe. All right, Susan, thank you. We'll check back with you later on.
LISOVICZ: See you later.
COLLINS: Meanwhile, let's take a look now at President Obama's schedule for today. Coming up in about an hour, he will be in the Oval Office to welcome Japan's prime minister. And then this afternoon the president and vice president will meet with Defense Secretary Robert Gates, and then tonight as we've been telling you, the president addresses a joint session of Congress. He's talking about the economy.
Earlier, White House Press Secretary Robert Gibbs appeared on CNN's "AMERICAN MORNING" to talk more about the message tonight.
(BEGIN VIDEO CLIP)
JOHN ROBERTS, CNN ANCHOR: Still, the markets do not have the confidence that they need to get going again. What more can he say to give them that confidence?
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, look. We've got a lot of challenges and we didn't get here overnight, John. And I think whether it's a Wall Street investor or a family at home watching this program, we're not going to get out of this overnight. I'm not -- you know, whether we've hit the bottom or not is hard to tell. But what this president is focused on is taking steps each and every day.
(END VIDEO CLIP) COLLINS: The economy is clearly still issue number one for Americans. Our new CNN Opinion Research Poll asks what the top priority should be for the president and Congress over the next year and the economy topped the list at 70 percent. Terrorism, number two at 51 percent, just ahead of health care and education.
So be sure to stay with CNN for complete coverage now of the president's address. It will happen tonight. You can see it live at 9:00 p.m. Eastern, and then stay with us after the address for expert analysis from the Best Political Team on Television and, of course, the CNN Money Team as well.
Joining us now to talk about the president's message is Jeffrey Rosensweig. He is an associate professor of International Business and Finance at Emory University.
Professor, thanks for being with us again. We always like to have you on to sort of make it all make sense for us, if you will. So when we see the markets -- we were just talking with Susan Lisovicz. And we hear that the president is going to be talking about the economy, there has sort of been this trend and maybe that's too strong of a word, but that the numbers just go sliding right off the map. Are we going to see more of that come tomorrow?
JEFFREY ROSENSWEIG, PROF. GOIZUETA BUSINESS SCHOOL, EMORY UNIVERSITY: Well, one important thing is it would be so easy to blame the president, because you see this correlation, you know. Here comes this new president. He has plans like the stimulus plan and down goes the market. But I feel he inherited a mess. I'm not blaming any particular person for that mess.
COLLINS: Well, isn't it about the confidence, though?
ROSENSWEIG: Exactly.
COLLINS: Because regardless of the blame game, because we could do that...
ROSENSWEIG: Exactly.
COLLINS: ...you know, all day long.
ROSENSWEIG: Exactly.
COLLINS: But, really, we're talking about this consumer confidence and what he could be saying.
ROSENSWEIG: Yes. And that's why the most important thing he does is he can't hide from realism but I'm getting a little worried that he is amplifying this fear. You had mentioned the fear -- I think you were right.
COLLINS: Yes.
ROSENSWEIG: You know, we cannot just talk about how bad things can be if we don't have the stimulus plan or don't follow the stimulus plan. We elected him because he seems to be the kind of person who could paint a vision of a better future.
You know, we're not going to spend money. No one is going to buy a house unless they have a vision of a better future that that house might go up in value someday or that they can afford to buy something because they'll have a job in the future. So one thing I'd like to see out of him is a little bit of why we elected him, which is some hope and some vision for the future, as well as concrete plans.
COLLINS: Well, and it's hard to think about that or see that vision, I guess, for a lot of people when we talk about the deficit, and he is talking about cutting it in half by 2013.
ROSENSWEIG: Yes.
COLLINS: Possible?
ROSENSWEIG: Yes, possible. Not probable. And I'm actually wondering why he is talking about that, because it's out there. I think maybe he is doing that to restore the faith that we will get a handle on this. But I think what people are worried about right now, like when you had just said such a high percentage in the poll, they say the economy is the issue.
COLLINS: Sure.
ROSENSWEIG: And it is. I don't think they're worried about the deficit in 2013. I think they are worried about jobs right now. So, FDR, if he did one thing wrong during his first 100 days, he was experimenting here. He was over there. I think President Obama, I hope tonight I feel a real focus from him.
You know, if we do this and we're doing this, things will be better. And you will get a job, so you don't have to just live in fear. So I don't like all these things that are important.
COLLINS: Right.
ROSENSWEIG: But right now, it's jobs, jobs, jobs.
COLLINS: But it can't be make believe either. I mean, he has to really do this cause and effect type of thing and make it make sense for everybody, regardless if you're on this side of the political fence or this side.
ROSENSWEIG: That's right. That's right. He is right on a knife edge, which is, as you said, if it's just make believe, no one is going to -- you know, no one is going to give him credibility. But sometimes, he comes in, I think, to convince Congress. He's worked so hard I think to get Republicans on board that if we don't do the stimulus plan we're going to have double digit employment. If we don't do this, your house will go way down in value. People don't need to hear that right now. Business leaders don't need to hear that.
Let's say you were running your business or you're thinking of starting a business. Most businesses are started in this company by women, for instance. If they are only hearing how bad things are going to get, why would they start a business and take that risk?
COLLINS: Well, sure.
ROSENSWEIG: So I think you've really got it perfect, Heidi, which is how does he be realistic and yet at the end, 10:00, make people feel better. Make them feel like we got the person, we elected him, he's the right person. And that's still coming through in CNN polls.
COLLINS: Yes.
ROSENSWEIG: Everyone I think thinks he is the right guy, doing a good job. He has to keep that and never squander that political capital he has, that he is someone that we think has the vision to pull us out of this.
COLLINS: Politics works into the economy? You got to be kidding me!
ROSENSWEIG: Well, right now --
COLLINS: I know that was happening.
ROSENSWEIG: Economics works into politics. Politics works in the economy.
COLLINS: Got it. All right.
ROSENSWEIG: I'm just glad economics works into CNN.
COLLINS: Yes, there you go. All right. Jeff Rosensweig, we sure do appreciate it. Associate professor of international business at Emory University. We will see you again shortly. Thanks, Jeff.
ROSENSWEIG: OK.
COLLINS: A tough balancing act on Capitol Hill today for Americans top money man. Fed Chairman Ben Bernanke is starting two days of testimony before Congress. Bernanke will give an update on the economy one day after the Dow and S&P fell to those lows we were just talking about. Lawmakers will also get a chance to hit him with questions about the bank bailout.
Well, most governors fighting budget shortfalls can't wait to get their hands on the share of the economic recovery plan funds, but a few governors are being picky about what they accept. Here now is CNN's Candy Crowley.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): A rising star in the Republican Party, Louisiana governor Bobby Jindal is taking some heat for his decision not to take some of the federal stimulus money. You'd be surprised who understands.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance.
CROWLEY: At issue, states that take federal unemployment money aimed at part-time laid off workers are required to change state laws to broaden benefits. The Louisiana governor told NBC's "Meet the Press" that's great until Washington stops writing checks.
GOV. BOBBY JINDAL (R), LOUISIANA: Within three years the federal money is gone. We've got a permanent change in our laws. We have to pay for it. Our businesses pay for it.
CROWLEY: Jindal will refuse about $100 million out of the $4 billion available to Louisiana. And he remains critical of the stimulus plan, citing wasteful spending that will not create jobs: A billion for the census bureau; $300 million to buy hybrid and electric cars for the federal government; $50 million for the national endowment for the arts. You will not be surprised who disagrees.
OBAMA: Somehow it's being characterized in broad brushes, wasteful spending. That starts sounding more like politics.
CROWLEY: There are other Republicans like Mississippi governor Hayley Barbour and South Carolina's Mark Sanford who will also refuse some money. But the focus is on the young charismatic Bobby Jindal, the first governor of Indian decent. He was seen as a possible running mate for John McCain. And after McCain lost Jindal went to Iowa to address a conservative group.
There is talk which he does not deny he may make a presidential run in 2012 which is to say there is more to the stimulus discussion than dollars and cents.
He is taking political hits back home. His Democratic lieutenant governor suggests Jindal needs to choose whether he represents Louisiana or the Republican Party. "It puts the governor at risk of sending mixed messages," he said. "Louisiana should be very aggressive in going to get this money."
In another political swipe, the two New York senators released a letter sent to the president saying they'd be happy to take any money refused by governors.
Republicans look to Jindal to help change the face of their party. He was tapped to give the Republican response to the president's speech to Congress.
JINDAL: We're going to look for every opportunity to reach across the party line to work with him.
CROWLEY (on camera): Jindal's response on behalf of Republicans is a bit of a political coming out party. He needs to be bipartisan while challenging the policies of a president with approval ratings over 60 percent. In the face of the party, it isn't as easy at it sounds.
Candy Crowley, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Bobby Jindal will be giving the GOP response to President Obama's address to Congress tonight. So here's a little more about the rising Republican star. He was born in Baton Rouge in 1971 to an Indian immigrant couple. He graduated from Brown University and attended Oxford University as a Rhodes Scholar. Between 2001 and 2003, he served as assistant secretary for the Department of Health and Human Services. He returned to Louisiana to run for public office. I mean, he lost a tight 2003 race for governor, but was elected to Congress in 2004 and re-elected in 2006. He was elected governor of Louisiana in 2007.
So what do you want to hear from the president tonight? Our Josh Levs is tracking that.
Hello, once again, Josh. What are people saying?
JOSH LEVS, CNN CORRESPONDENT: And hello to you, again, Heidi. You know, something in conjunction with the president's speech, we're asking this on my Facebook page today. It's joshlevs/cnn. Here is the question. "What should be pulled from the budget?"
I'll tell you, the responses are flying in and so far, by far, one topic is dominating. What is that? We'll have it.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
OBAMA: We are addressing the greatest economic crisis we have seen in decades by investing unprecedented amounts to the American people's hard-earned money. And with that comes an unprecedented obligation to do so wisely, free from politics and personal agendas. On this, I will not compromise or tolerate short cuts. 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.
(END VIDEO CLIP)
COLLINS: President Obama talking about your money and promising to spend it well as he works on resolving our economic crisis. He was speaking to the National Governors Association, by the way, yesterday.
We do want to know what you think, of course. We've been asking you for your Facebook responses and e-mails this morning on your own economic plan. Josh Levs joining us once again.
So you're getting a ton of responses here?
LEVS: A ton of responses, yes. We keep refreshing the computer. And I'm sure there's been more in the last few minutes. I'll just tell, everyone. We're doing this in conjunction with this -- cnn.com/live is hooking up with Facebook again today like we did at the inauguration. It's great. While you watch the special programming on dot com throughout the day right over here to the right, you can sign into Facebook or you can sign up for it if you're not part of it. You can see me there. And you can weigh in throughout the day. See what people think or just what your friends think.
Now this is what we're asking in conjunction with that. It's a my Facebook page at joshlevs/cnn. Here's a question, "What should be pulled from the budget."
We keep hearing that the president is going to talk about slicing that deficit in half. Here are some responses. Kelly says, "How about cutting out increases in pay for elected officials?" And by far, Heidi, that's the thing we're hearing most of.
But let me read you one of the responses here. David writes, "Congressional pay cuts, while they might make people feel good, would be like talking a thimble full of water out of the ocean. It isn't going to solve anything."
And, you know, we're hearing a lot of back and forth on that. Some other topics, too. Just check out what Walker says. "Not sure we should cut anything since doing that would just put more people on the dole. Better to wait until recession is over then cut the budget."
And we'll have some one more here from Paul, who says cut defense spending in half. We already have the most powerful and technologically advanced army/navy/air force in the world.
I got a graphic for you here that shows how you can weigh in. You can do either way. It's Facebook.com. My page is joshlevs/cnn or e-mail us at cnnnewsroom@cnn.com.
And Heidi, as you can tell, people have a lot to say here so we're going to showing up throughout the morning and share some of that with you.
COLLINS: All right. Josh, sounds good. We'll keep checking back, because I know how busy you are there. Thank you.
LEVS: Yes. Thank you.
COLLINS: You can see President Obama's address to Congress right here on CNN. It comes your way, live, at 9:00 p.m. Eastern. And then be sure to stay with CNN after the address for expert analysis. "ANDERSON COOPER 360" comes on after the speech, and stay tuned for a special edition of "LARRY KING LIVE" coming your way at midnight.
Do you remember that Chicago plant laid off workers without notice? Well, they have done it again, and this time, in a different state.
(COMMERCIAL BREAK)
COLLINS: Your responses are literally flying in to our e-mail and Facebook questions today. This is the question. What should the nation cut from the budget? Our Josh Levs is following your reaction. You can see President Obama's address to Congress right here on CNN. That's going to happen tonight 9:00 p.m. Eastern. That is why we are asking that question.
The financial crisis causing some students to rethink their college plans. CNN national correspondent Jason Carroll talks with a high school student trying to overcome financial obstacles to get the education she has always dreamed of.
(BEGIN VIDEOTAPE)
JASON CARROLL, CNN NATIONAL CORRESPONDENT (voice-over): As Mia Sarah Abedullah sits in class, she focuses not just on the lesson of the day, she also daydreams about her future.
MIA SARAH ABEDULLAH, STUDENT: I have a lot of goals and they're all pretty intense but I'm set on making them happen.
CARROLL: One goal that this high school junior, get into a prestigious university, maybe even an Ivy League school. Mia says she has the grades, the drive, but what her family no longer has is the money.
ABEDULLAH: So I'm looking into "C" schools as opposed to like big name universities that I was previously really obsessed with.
CARROLL: Mia's father passed away eight years ago and just this last year her mother was laid off after working 22 years in the financial industry. She was torn on how to break the news to her daughter.
ANNA ABEDULLAH, MOTHER: I couldn't tell. How do you tell your child, you can't, you know, afford the college she wants to attend?
CARROLL (on camera): Do you remember sort of what the feeling was, I mean you're not going to have the exact words but when your mom came to you and said you know we're going to have to reevaluate this?
ABEDULLAH: It was dream-crushing kind of. She didn't want to disappoint me, but you know, there's no way to not.
CARROLL (voice-over): A national survey showed just over half the families polled are now considering limiting their child's college choices to less expensive schools like public colleges. The economic downturn means fewer families can count on equity in their homes as a way to offset tuition like they did a few years ago. The other problem, many parents are unsure about their future on the job or like Anna Abedullah, are out of a job.
ANNA ABEDULLAH: It's aggravating. I mean, 22 years of working and you figure you're going to, OK, continue working and then I don't know where to take it from there.
CARROLL: Mia does. She applied to a few New York state schools where tuition would be as little as a quarter of what it would cost at Columbia University, but she still hopes with a job and some financial aid, her Ivy League dream can come true.
ABEDULLAH: I believe that if you like think -- if you dream about it enough, you'll get it. So I hope so. Fingers crossed.
(END VIDEOTAPE)
CARROLL: Another point about Mia Sara, she was diagnosed with leukemia some time ago, and fought her way through that. She and her mother say, if she can fight her way through that, they can find a way to beat this financial situation they found themselves in - Heidi.
COLLINS: Well, Jason, for a long time -- I mean, everybody seems to think that if you get really good grades, you can, of course, put yourself up for some type of scholarship. But now is that being cut back on, too -- I mean, access to those?
CARROLL: Well, that's a good point, Heidi. But, you know, what their problem is now, there are so many students who find themselves in a similar situation. They've got the good grades. They've got the extracurricular activities. Now they all qualify for these types of scholarships. So the competition for that now is even greater. And there's just so many of these scholarships that can be given out. That's the reality.
COLLINS: Understood. All right, boy, it's tough out there. Jason Carroll, sure do appreciate it. Thank you.
Real effects of the economy. One couple must decide if it's time to give up their dream home, and they aren't alone. Maybe of their neighbors are facing the same fate.
(COMMERCIAL BREAK)
COLLINS: This reminder for you. You can see President Obama's address to Congress right here on CNN. It's going to come your way, 9:00 p.m. Eastern. And then be sure to stay with CNN after that address for expert analysis. Anderson Cooper 360 comes on right after the speech, and then stay tuned for a special edition of "LARRY KING LIVE," that will come your way at midnight.
Iowa workers thought they would benefit when a company that shut down in Chicago moved its operations there. Now those idle workers are also out of work. CNN's Susan Roesgen reports.
(BEGIN VIDEOTAPE)
SUSAN ROESGEN, CNN GENERAL ASSIGNMENT CORRESPONDENT (voice-over): More than 100 people lost their jobs Monday in Red Oak, Iowa. Laid off by a company that says it's out of cash.
NATE LUN, IOWA PLANT SUPERVISOR: Sure, I'm angry. I've developed a relationship with all these people. And what are they going to do now?
ROESGEN: The workers are especially bitter because they thought they were getting the benefit of another plant closing in Chicago. Remember those window factory workers who were laid off without notice just a few weeks before Christmas? The union staged a sit-in at the factory until the workers got what they were legally owed, 60 days pay.
But as CNN reported last month, before the workers were laid off, the company owner had already changed the company name and moved most of the operation to Red Oak, Iowa.
(on camera): The very same week the union workers in Chicago were being told the company was broke, the company was doing the same work here at this factory in Iowa, a nonunion state.
(voice-over): This is Rich Gillman, the man who owned the Chicago company and now the Iowa company. His creditors in Chicago told us that when the Chicago workers demanded their severance, Gillman demanded 60 days salary for himself and payoffs on the leases on his Mercedes and BMW. Leases worth more than $98,000. The creditors refused. Gillman declined CNN's request for interviews when we wanted to talk to him last month about the move to Iowa. And he did not return our phone calls for this story, either.
DWAYNE ANDREWS, IOWA PLANT MANAGER: The groups that came in and took the operation over back in December, basically grind us to the ground the way we see it.
ROESGEN: The Chicago union now is suing Gillman alleging unfair labor practices. Whether the nonunion Iowa workers will get their money is up in the air.
LUN: What else do you have to say besides 100 cars driving out of the parking lot with no jobs? What else? Congratulations. You've crushed a community. That's about it.
ROESGEN: The Iowa factory had been opened under the new management for less than three months.
Susan Roesgen, CNN, Chicago.
(END VIDEOTAPE)
