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Fed to Pump $1 Trillion into Economy; Dodd Fesses up to Paving Way for AIG Bonuses; College Sophomore is Biz Whiz; Student Entrepreneurship Emerge in Tough Times; Dodgertown to Ghost Town
Aired March 19, 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: Accountability is a mile marker on the road to rescue. Happening today, Congress tries to get some of your money back from those outrageous AIG bonuses.
And a shock felt throughout show business. Natasha Richardson dead at the age of 45 after a skiing accident. We look back on the actress' career.
And a young man's bright idea to boost charities. His business success may inspire you. It's Thursday, March 19th. I'm Heidi Collins and you are in the CNN NEWSROOM.
From outrage to plans for punishment, lawmakers now trying to fix the bailout fallout paid for with your money.
Brianna Keilar is on Capitol Hill this morning as lawmakers look to tax executive bonuses big time. Stephanie Elam tells us about the AIG hearing on those bonuses and what happens next. And from Washington, Suzanne Malveaux brings us the president's side.
So big bonuses, big payback. In just hours the House will vote on a bill calling for a 90 percent tax on some employees whose companies got at least $5 billion in government bailout money.
As for AIG, CEO Edward Liddy says he has asked those who received $100,000 or more to return at least half of it. But he says he will not release the names of those executives for their own safety. He says he's gotten nasty threats targeting some execs who got bonuses.
Let's talk more now about that bill. Members of Congress may be channeling the public rage over the bonuses with a big fat tax. Let's check in now with Brianna Keilar live on Capitol Hill this morning.
So, Brianna, how is the House actually proposing to get this money back specifically?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: They have a unique proposal that is expected to be voted on early this afternoon, Heidi. It's a 90 percent tax on a bonus received in 2009. This would tax the individual who received the bonus and that person would have to make more than a $225,000 a year, their overall income.
This would go for people receiving bonuses from companies that get at least $5 billion in bailout funds. So that's in the House. That's what we're going to see today. Meantime, the Senate is considering its own tax on these bonuses, a bill that would tax these bonuses. It's a little different. It would tax the individual who receives the bonus.
It would also tax the company that gives the bonus, Heidi, and a little more focus in Senate on those retention bonuses. Not the merit bonuses. The ones where you give the people money just to keep them on board, Heidi.
COLLINS: Right. Understood. Two different questions here along the same lines. Is it going to work? I mean, is it going to work to get that money back? And then once you get that money back, what does it say about AIG and its success as a whole?
KEILAR: Well, is it going to work? That is really the big question, because there have been questions raised by experts about whether this is constitutional.
COLLINS: Right.
KEILAR: For a couple of different reasons. Maybe because it's retroactive and for some other reasons that have been brought up. That may be one of the reasons why you're seeing them only go after these bonuses for 2009.
But I think, overall, Heidi, this is Congress saying, look, we're doing something, there's so much outrage. We had that hearing yesterday with the CEO of AIG and they're trying to say that we are doing something today, we're doing something quickly.
COLLINS: Yes. I guess I wonder what it's going to do for the overall status and health of AIG if they do get that money back. So...
KEILAR: Yes, and that is...
COLLINS: It's a big question.
KEILAR: That's definitely a concern for the company. They've said they worry that those -- the bonuses will come back, right, with the resignations.
COLLINS: Yes. Yes. All right. Brianna Keilar, sure do appreciate that from Capitol Hill this morning.
Now outraged lawmakers had their say about AIG bonus payments. Edward Liddy tried to explain and our Stephanie Elam reports now on the House Financial Services Committee hearing.
(BEGIN VIDEOTAPE)
REP. PAUL E. KANJORSKI (D-PA), CHAIRMAN, SUBCOMMITTEE ON CAPITAL MARKETS, INSURANCE, AND GOVERNMENT SPONSORED ENTERPRISES: The truth, the whole truth, and nothing but the truth, so help you God.
EDWARD LIDDY, CHAIRMAN & CEO, AIG: I do. ELAM (voice-over): Edward Liddy, the government-appointed chairman and CEO of ailing insurance giant AIG, began his testimony with the preemptive strike.
LIDDY: I've asked those who received retention payments in excess of $100,000 or more to return at least half of those payments.
UNIDENTIFIED MALE: Mr. Liddy...
ELAM: Despite that admission, members of the House committee unleashed their anger.
REP. MICHAEL E. CAPUANO (D), MASSACHUSETTS: So you could have fired these people.
KANJORSKI: Pay the $165 million back.
REP. JEB HENSARLING (R), TEXAS: With all due respect, Mr. Liddy, AIG has failed.
REP. PAUL W. HODES (D), NEW HAMPSHIRE: AIG now stands for arrogance, incompetence and greed.
ELAM: Four hundred eighteen AIG employees got bonuses, 73 of them more than $1 million. Liddy said some have offered to return them but Frank focused on those who didn't.
REP. BARNEY FRANK (D-MA), CHAIRMAN, HOUSE FINANCIAL COMMITTEE: I do ask that you submit those names without restriction and if you feel unable to do that then I will ask the committee to subpoena them.
ELAM: Liddy refused, citing safety concerns, reading excerpts of a letter aimed at AIG.
LIDDY: "All the executives and their families should be executed with piano wire around their necks."
ELAM: But first, he needed to protect himself from a few rhetorical bullets shot his way.
REP. STEPHEN LYNCH (D), MASSACHUSETTS: This is so outrageous that you would say we're not going to be victims of our own stupid decisions.
LIDDY: You have generously used the word "you" in that construct. As I mentioned, these contracts were all put together before I was at AIG, so I really do, I take offense, sir.
ELAM: Liddy said some bonus recipients had actually helped AIG cut its toxic assets, reducing its derivatives business more than a trillion dollars to $1.6 trillion.
LIDDY: The American taxpayer is better off because we have less risk, but we have to keep shrinking this business dramatically quickly so it doesn't get away from us.
(END VIDEOTAPE)
COLLINS: Stephanie Elam joining us now from New York to talk a little bit more about this.
So, Stephanie, it was a bit of a different tone. Really interesting yesterday from Edward Liddy that we're used to seeing from some of these executives in the past. Obviously, this is a guy who's basically appointed to this job, earning a dollar a year and trying to wind down this company the best that he can.
How did it fly, do you think, I would say, with the American public?
ELAM: Yes. Well, you know, it is a different situation here. I think for a lot of Americans, Heidi, they don't necessarily know the ins and outs that he was appointed.
COLLINS: Yes.
ELAM: Asked by the government to come in. He's a former executive who's came basically saying this is his patriotic duty to try to get AIG back online. So the fact that he came here and say I didn't have anything to do with these problems. But he was a little bit more feisty, fighting back a bit and you don't normally see that because a lot of these CEOs have been in this position for a while.
So I think that was one of the major tone differences that we saw yesterday.
COLLINS: Yes, and we also heard him say that, you know, as we've reported here already, that he's wanting some of these executives who got the bonuses to pay them back, at least half of them.
Did he give any timeline, though, on when his company might actually be able to pay back the bailout money?
ELAM: Yes. He's saying that $170 billion, they're thinking within two to three years they'll be able to pay back that money to the American taxpayers, to get those companies -- to get that company shored up and back online.
That's what he was saying there, but obviously, people looking for direct numbers when that's going to start happening. That's what people are looking for now.
COLLINS: Yes. Yes. All right, well, Stephanie, we sure do appreciate it. And it was interesting testimony. Thank you.
ELAM: Yes.
COLLINS: An about-face from Senator Christopher Dodd a day after telling CNN he didn't know how it happened. He owns up to helping pave the way for those huge AIG bonuses. It was a last-minute addition to a measure aimed at strictly limiting executive bonuses. The loophole exempted any bonuses agreed on or before February 11th.
(BEGIN VIDEO CLIP)
SEN. CHRISTOPHER DODD (D), CHMN., BANKING HOUSING, URBAN AFFAIRS COMMITTEE: I apologize. I had some confusion about whether or not we wrote it exactly but I didn't write it at my own behest. I was being sought out and asked to modify this with the alternative by candidly being -- losing the amendment itself.
(END VIDEO CLIP)
COLLINS: Later this hour now we're going to be looking at who in Washington pressed Dodd to make the change and why that happened.
President Obama says he'll take responsibility for the AIG bonuses but he says he's outraged over the company's actions.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know a lot of you are outraged by this. Rightfully so, I'm outraged, too. It's hard to understand that a company that's relying on extraordinary assistance from taxpayers to keep its doors open would be paying anybody lavish bonuses.
It goes against our most basic sense of what's fair. And what's right. It offends our values.
(END VIDEO CLIP)
COLLINS: CNN White House correspondent Suzanne Malveaux joining us now live from Washington.
Suzanne, the White House now admitting that its treasury secretary, or excuse me, its Treasury Department was involved in some way in allowing these bonuses in the first place, right?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You're absolutely right, Heidi. The White House aides that I spoke with said, yes, Treasury officials did ask Senator Dodd to insert that language which did allow AIG to get these executive bonuses.
They say it was out of a concern there'd be potential lawsuits from those workers who were there, they had this binding legal agreements to get the bonuses, and that the lawsuits could be more expensive than the bonuses themselves. That is their explanation.
So you may be getting this kind of outrage here but there is also some resignation that was just too difficult to fully extricate from the AIG deal. So what is the president doing? He's focusing on moving forward, putting regulations or legislation in place to make sure that this doesn't happen again.
COLLINS: OK. Interesting. We'll be watching the follow-up from that, of course. We also know the president is in California today. So the highlight of the trip there?
MALVEAUX: Well, obviously, this is to sell the economic plan, as well as the budget, the economic stimulus. He's going to be at a town hall meeting with Governor Arnold Schwarzenegger. He is one of the few Republicans who actually supported Obama's $787 billion...
COLLINS: Yes.
MALVEAUX: ... economic stimulus plan and Obama is really going to be like Santa Claus. He's delivering a list of projects for California.
COLLINS: They need it in California.
MALVEAUX: They could use the stimulus money. He also, Heidi, is going to use a little bit of humor and charm. Later in the day he's going to be on "The Tonight Show with Jay Leno," obviously, you know, talking about the economy but, you know, he's also going to tell a few jokes, we think.
COLLINS: Yes. Yes. We'll also be watching for that. Got to watch his tone there, obviously. Doesn't want to be...
MALVEAUX: Right.
COLLINS: ... too, too funny.
MALVEAUX: Sure.
COLLINS: All right. Suzanne Malveaux, appreciate that. Thank you.
AIG brought to its knees by the financial crisis. Now disgrace for rewarding failure with your tax dollars. Next, some perspective on why it happened and where we go from here.
(COMMERCIAL BREAK)
COLLINS: There's a lot of blame to go around for the AIG fiasco. President Obama and his Treasury secretary, members of Congress all shouldering some responsibility.
I want to talk more about that today. Joining me is Peter Morici. He's an economist and international business professor from the University of Maryland.
Peter, nice to see you again. President Obama says the buck stops with him. Is that enough?
PROF. PETER MORICI, ECONOMIST, INTERNATIONAL BUSINESS, UNIVERSITY OF MARYLAND: No, and I think, frankly, it's a disingenuous comment because he isn't doing very much about the problem. And after all, it was the White House that leaned against Senator Dodd regarding that amendment in the stimulus package.
And it doesn't seem like the White House is very serious about this executive bonus problems. It might have to do with President Obama's background. I mean he has a lot of connections with wheelers and dealers and so forth as a lawyer and so forth. And... COLLINS: OK, but to be fair, I mean, you're an economist. You're an international business professor. I mean, to me, when we look at the bonuses, and again, I would never say that it was OK to do. I mean there were contracts, you know, they were -- they deserve the money, they don't deserve the money.
But, to me, I'm just looking at the numbers. I mean, you've got $165 or $170 million that we're talking about for the bonuses. But the problem with AIG and the structure of it and the health of it is so much larger. Let's say they get all the money back. Is that going to change anything?
MORICI: As my Italian friends would say, piano, piano. We have a problem here. And that the bonus structure on Wall Street really can't be justified in terms of other industries. You know, where people work at similar skill levels? And you only take out for small margin when you make a loan. You loan someone $100,000, you charge five, you borrow at three.
You know, you're only dealing with less than 2 percent of the loan. There's not a lot of money there to carve up and it can be argued that these very large bonuses and the way they are structured encourages people to take reckless bets. And they are really not justifiable in terms of the value they create.
And what's happened is sort of compensation cartel on Wall Street. Everybody agrees that everybody else should be paid these outrageous salaries when they're really not supportable elsewhere in the industry.
COLLINS: Yes -- I mean maybe that's something that people don't understand all too well. How does it work? If you just said salaries, really we're talking about bonuses. What's the salaries like? Salaries much, much less...
MORICI: They're not much.
COLLINS: ... than the average guy and then you work for a bonus, correct?
MORICI: Right. And it's not so much that you work on commission. Is that the problem is that when they don't do well, it doesn't cost them anything. So you have situations where executives will make lots of reckless loans, they turn a lot of paper, there's a profit on paper, they get a big bonus.
And then the next year when things go sour, it isn't like they have to pay the money back. They get their $600,000 or their $250,000, whatever their base is.
COLLINS: All right. Well, let's listen in, if we can, just a minute, because I want to get your reaction. Yesterday, you had some pretty strong things to say both about Timothy Geithner...
MORICI: Yes. COLLINS: ... and the acting CEO of AIG, Ed Liddy, who was giving his testimony yesterday on this whole situation. Let's listen to just a little chunk of that and I want to get your reaction.
(BEGIN VIDEO CLIP)
LIDDY: The risk assessment was we've made great progress in winding down this business. But there is still $1.6 trillion of stuff in that portfolio. There's risk that that could blow up. And if it were to explode, it can cause irreparable damage to that progress that we've already made.
(END VIDEO CLIP)
COLLINS: Yesterday, you said Ed Liddy's disingenuous, has no credibility with you, you compared him to your feelings about Geithner, and you said he's about as bright as Mr. Geithner.
After you watched some of the testimony yesterday and reminding everybody this is a guy who stepped in, apparently, to try to help out, making a dollar a year, and basically government appointed, what's your reaction now?
LIDDY: He's still a captive of the culture. He thinks he has to pay people these exorbitant amounts of money. You know, if he was -- the really correct way to do this is just pay people salaries. And right now you wouldn't have to pay these kinds of bonuses in the form of a salary to get the financial engineers necessary to unwind these derivatives.
Two years ago, when we were bailing out AIG or whatever it was, it was tough to find people. But since that time, if you lose your job on Wall Street, it's pretty hard to find another one. And, you know, a couple of years ago, people were quickly going over to the Middle East, to the money centers there, where investments banks are being organized and finding work.
COLLINS: Yes.
LIDDY: Not so today. So you can get people. So I don't buy it. He's doesn't -- he's not in tuned with the labor market.
COLLINS: All right. Well, we're watching very closely yet again today as you would imagine. Peter Morici, the economist and international business professor at the University of Maryland.
Peter, nice to see you. thank you.
MORICI: Take care.
COLLINS: Lose your job and you could lose your health insurance. If you have to buy your own, we're going to tell you how to get the best deal for your age and your money.
(COMMERCIAL BREAK) COLLINS: The family of actress Natasha Richardson thanking people for their prayers and asking for privacy after her death. Richardson died yesterday following a fall on a ski slope in Canada.
CNN's Brooke Anderson looks back on her career.
(BEGIN VIDEOTAPE)
BROOKE ANDERSON, CNN CORRESPONDENT (voice-over): Natasha Richardson was a London native who had entertainment in her blood. She hailed from an acting dynasty. Her mother was the Oscar-winning actress Vanessa Redgrave. Her father the late director Tony Richardson and her sister, actress Joely Richardson. She was also the niece of Lynn Redgrave.
The 1998 remake of "The Parent Trap," among the movies in her four decade long career in television and on the big screen. She appeared in a variety of other films including "Patty Hearst", "Maid in Manhattan", "The Handmaid's Tale", and the film, "Nell", where she co-starred with Liam Neeson who became her second husband in 1994.
NATASHA RICHARDSON, ACTRESS: Mommy loves daddy really.
ANDERSON: Her stage resume was also lengthy in both Britain and the U.S.
She won a Tony Award and several other honors in 1998 for playing Sally Bowles in the revival of the musical "Cabaret."
Natasha Richardson leaves behind her husband and two sons. She was 45.
Brooke Anderson, CNN, Los Angeles.
(END VIDEOTAPE)
COLLINS: Richardson was seemingly fine after her fall. The ski resort says she showed no visible sign of injury. But soon complained she didn't feel very well. Many people wonder how this can happen. Here's what one doctor told our Larry King.
(BEGIN VIDEO CLIP)
LARRY KING, CNN HOST, "LARRY KING LIVE": It was a small slope and she was laughing. What do you guess happened?
DR. NEIL MARTIN, CHIEF OF NEUROSURGERY, UCLA MEDICAL CTR.: In some cases, even a fall from a few feet from standing erect to hitting the ground can be enough to cause a serious injury. If you can't protect yourself, if your head hits hard, then your brain collides with your skull and a serious injure can occur.
We have to be cognizant of the other possibility and that is that maybe there was some pre-existing condition that may even have triggered the fall and then snowballed.
(END VIDEO CLIP)
COLLINS: Natasha Richardson dead at 45. She leaves behind a husband and two children.
(COMMERCIAL BREAK)
COLLINS: AIG - it's become the company everyone loves to hate. Promises by some employees to pay back bonuses, at least part of them, doing little to calm people's anger over the initial payout.
So what will it take to clean up AIG's mess? Let's talk about it with Ron Shelp, who held a top position at AIG for 12 years. He's also the author of "Fallen Giant: The Amazing Story of Hank Greenberg and the History of AIG."
Mr. Shelp, first, I just want to ask you what kind of company was it to work for when you were, which I understand is from 1973 to 1985?
RON SHELP, AUTHOR, "FALLEN GIANT": Well, it was a very exciting company. I've had some wonderful jobs but I think AIG was the most exciting place I ever worked.
COLLINS: Why?
SHELP: Well, one reason is that one of my principal responsibilities, I was the international troubleshooter. That meant if we had problems around the world, they got thrown on my desk. So when Nixon opened China, Greenberg called me into his office, he's the CEO, and said now that it's open, I want us to go back to China where we started
So, I got that assignment and there were nationalizations around the world when we get taken over by governments and I got that assignment. So, it was a fun, challenging job.
COLLINS: What's changed about this company?
SHELP: What, what?
COLLINS: What's changed about this company, the one we're looking at now in 2009?
SHELP: Probably lots of things. But two things for sure. First, it's so much bigger. It's at least twice as big anyway you measure it. It's in many more lines of business including the one that's causing us the problems.
Secondly, Greenberg, who was CEO almost 40 years...
COLLINS: Wow.
SHELP: ... so dominated the company and so drove the corporate culture and he's gone. As you recall, governor, but at that time attorney general, Spitzer...
COLLINS: Right. SHELP: ... forced him out. And that's changed the company...
COLLINS: Well, tell me more about that, if you would, about Eliot Spitzer in all of this.
SHELP: Well, Eliot Spitzer was very competent, very talented and, you know, very ambitious, frankly. And there was an issue that involved a reinsurance company that's owned by Warren Buffett of Berkshire Hathaway and AIG, a transaction, what Eliot Spitzer called an accounting transaction.
He made a big thing out of it and he forced the AIG board to ask for Greenberg's resignation.
COLLINS: All right. Well, I got to get your reaction to some of this testimony that we heard yesterday from the current CEO, this gentleman, Ed Liddy, who is obviously in there now trying to wind things down, as he has said, the best way that he can.
About these bonuses, what do you think about these bonuses? They're legal, they're contractual or not? They shouldn't be paid out?
SHELP: Well, the one thing I don't want to become is a defender of the bonuses. They stick in my craw, too. They are unfortunate, but they are there. And I think the real issue with these bonuses now is they're such a distraction with the president of the United States holding a press conference on the lawn and before he goes to California.
COLLINS: Yes.
SHELP: With the secretary of the Treasury talking about them and working on them all the time. And with AIG people who got some of the bonuses not focusing on closing up this financial products unit. Unfortunately, there's such a distraction, they're preventing us from getting on with other things.
COLLINS: Well, very quickly, to that point, what is the future of AIG?
SHELP: Well, if it follows the prescription you read about, AIG will continue for a while. But, eventually, there will be spin-offs of various companies when times are better to pay off the government debt and there will be a future for a public -- as a public company, which I'm interested in as a shareholder, there will be a spin-off of one company called AIU Holdings and that's the big property and casualty insurance company that operates in about 130 countries.
COLLINS: All right.
SHELP: So there's a future and hope.
COLLINS: So there is a future. Yes. Understood.
SHELP: Thanks, though. Yes. I hope so. COLLINS: All right. Well, Ron Shelp, we appreciate you here today as a former AIG worker and, of course, as author of book, "The Fallen Giant: The Amazing Story of Hank Greenberg," the then CEO when you were there, "and the History of AIG."
Thanks again for your time.
SHELP: Thank you.
COLLINS: On Wall Street, the blue chips are red hot. The Dow has risen in six of the past seven sessions. Opening bell for you there. Yesterday's gain was fueled by the Fed and Susan Lisovicz is at the New York Stock Exchange now with details on this and a preview, drum roll, of what to expect today.
Hi, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Heidi.
Wall Street applauding the Federal Reserve's increasingly aggressive efforts to revive the economy. And we are expecting that positive sentiment to carry through at the open. And that's what we're seeing in the first few seconds of trading.
The Central Bank said it's planning to pump more than $1 trillion into the financial system. A big chunk of that will be used to buy long-term treasury bonds and more mortgage-backed securities as a means to free up credit and lower mortgage rates. The Fed's dramatic move brought an instant response and long-term interest rates. The yields on 10-year treasuries, the benchmark for home mortgages. Still the biggest one-day drop since the crash of 1987.
One of the concerns prompting the Fed to take such action, deterioration on the jobs market. New jobless claims fell last week to $646,000. That's a high level, of course. But continuing claims hit another record high with nearly 5.5 million people now drawing unemployment benefits for more than one week.
FedEx considered an economic bellwether plans to cut jobs, reduce workers hours and trim air and truck capacity. All this as the shipping giant reports a 75 percent drop in quarterly profits.
But Oracle, the text sector, declaring its first dividend since going public more than 20 years ago. Oracle shares right now up 12 percent. And, overall, nice follow-through, Heidi. The Dow industrials up 53 points or 0.75 percent. The NASDAQ is up one percent. The Dow is above 7500. I just want to say that, because I know you like hearing that level. Citigroup shares, meanwhile - is that applause I hear?
COLLINS: Yes, -- no. I like a higher level, actually, than 75. A lot higher like double would be better!
LISOVICZ: I might have to bring the cow bell back out.
COLLINS: Please! We like the cow bell. LISOVICZ: Citigroup shares are up 19 percent. They have tripled in the last couple of weeks. Still trading under $4 a share, but big gains. Remember, it broke a buck earlier this month. It is planning a reverse stock split. That is something that we see rarely, but Time Warner, our parent company, did it recently to increase the stock price. And Citigroup is going to do that as well.
COLLINS: When you say it's tripled, that sounds so good. And then you realize where they were before (INAUDIBLE).
(CROSSTALK)
LISOVICZ: Yes. Then you see the level.
COLLINS: Yes. All right. Susan Lisovicz, we'll check back later on. Thanks.
LISOVICZ: You're welcome.
COLLINS: On the "ROAD TO RESCUE," we're trying to figure out and explain the financial crisis we are in. One part of the mess is huge bonuses at AIG. And our Dana Bash got to the bottom of a mystery about how those bonuses were paid out.
(BEGIN VIDEOTAPE)
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): All this outrage about AIG's bonuses, from the White House...
OBAMA: People are right to be angry. I'm angry.
BASH: ...to Capitol Hill.
SEN. MAX BAUCUS (D), MONTANA: The country is angry. Individual Americans are angry. I am angry.
BASH: Yet, Congress passed a bill last month that the president signed into law allowing AIG to keep its bonuses. And, for days, no one would fess up about who was responsible for a mysterious loophole that let that happen.
But CNN solved the mystery. It was the Obama Treasury Department and Senator Chris Dodd. Here's what happened. Last month's massive stimulus bill included a Dodd measure to strictly limit executive bonuses, but slipped inside at the last minute, an exemption for bonuses agreed to on or before February 11, 2009.
That allowed AIG to go ahead with its controversial bonuses. On Tuesday, Dodd adamantly denied to CNN that he was responsible for the exemption.
SEN. CHRISTOPHER DODD (D), CONNECTICUT: When I left the Senate, it was not in there. So, when I wrote the language, there was no such language like that. I can't point a finger at someone who offered the change at all. BASH: But the next day, an official at the Treasury Department flatly contradicted Dodd, telling CNN his office did know, and that it was Obama Treasury officials who pressed him to make the change, because they worried that his measure to limit executive bonuses in preexisting contracts like AIG's would face a legal challenge.
When CNN took that information to Dodd, he reversed course and admitted he did make the change.
BASH (on camera): You did agree to modify this, to put that clause in?
DODD: The alternative was losing, in my view, the entire section on executive excessive compensation. Given the choice -- this is not an uncommon occurrence here -- I agreed to a modification in the legislation, reluctantly. I wasn't negotiating with myself here. I wasn't changing my own amendment. I was changing the amendment because others were insisting upon it.
BASH (voice-over): Dodd insisted he made the change at the behest of the administration, but admitted he was wrong in initially denying his role.
(on camera): You were very adamant yesterday -- very adamant that you didn't know how this change got in there, and now you are saying that you -- that your staff did work with the administration.
(CROSSTALK)
DODD: Well, going back -- going back and looking at it, obviously, I apologize.
BASH: Senator Dodd says he is not trying to protect AIG. In fact, he insists that when this was negotiated a month and a half ago, no one believed we would, quote, "We would be sitting here talking about AIG and the bonuses."
Dana Bash, CNN, Capitol Hill.
(END VIDEOTAPE)
COLLINS: Buying your own health insurance can be tricky. Our senior medical correspondent Elizabeth Cohen is here now with some things you need to keep in mind when in your "30s, 40s and 50s."
It's a different picture regarding your age.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: That's right. It is a different picture. And many more people are finding themselves in the situation of having to buy insurance as more people get laid off and lose the insurance they had from their employer.
COLLINS: Right.
COHEN: So let's go over the kinds of things you need to think about at different ages. First of all, when you're in your 30s, there's a temptation to have no insurance. I mean, you're healthy probably and you're not planning to spend a lot of time with the doctor. Buy something. Even if it is just catastrophic insurance, get something in case, God forbid, you get hit by a bus.
Also, once you get into the insurance pool, we're told they can't kick you out, even when you're old and sick. They may raise your prices a lot, but they can't actually kick you out. Those are important things to remember in your 30s.
COLLINS: OK, so fast forward ten years in your 40s. What changes?
COHEN: Well, in your 40s, hopefully, you've got a little bit more money. So you can set aside some money in a health care savings account. Those can be very useful later on when you do have health problems.
Also, if you haven't heeded our advice and gotten insurance, certainly get insurance before you hit the big 5-0. The minute you hit that birthday, they will raise your rates. So if you can get in when you're 49 1/2, even the day before your birthday, do it.
COLLINS: All right. So that brings up a good point. I mean, you can still get coverage when you're 50. It's just going to cost you a whole lot more.
COHEN: It will cost you more. And you know what, some people are really going to have a hard time getting coverage in their 50s because they have certain kinds of pre-existing conditions. So some people, really it's not possible which is why you want to try to get it younger. But let's talk about what you really ought to have in your 50s. Hopefully you've already purchased it by then.
But make sure the coverage you have in your 50s has a good prescription drug program. A lot of people once they get in their 50s and 60s are taking multiple drugs, and those can get very expensive. Also, make sure that screenings are covered. We're talking about things like colonoscopies that people are suppose to start getting in their 50s.
COLLINS: Yes. All those screening.
COHEN: And if they're not covered, you might be tempted to just skip it which could be a huge mistake.
COLLINS: Yes. We've been talking about that for days now. Definitely. Don't want to do that.
COHEN: No.
COLLINS: All right. Our senior medical correspondent Elizabeth Cohen.
Elizabeth, thanks for that.
COHEN: Thank you. COLLINS: Some good advice.
Taking charge of their destiny. Top college students turn from careers in finance to financing their own dreams. We'll lay out their plans.
(COMMERCIAL BREAK)
COLLINS: Need some news on the economy? Meet CEO Ben Lewis. He doesn't fly on a corporate jet; he doesn't need a bailout, but does have a good idea. Here is CNN's Jim Acosta.
(BEGIN VIDEOTAPE)
BEN LEWIS, ENTREPRENEUR: Every bottle you buy, you're giving 10 cents.
JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT (voice-over): He looks like an intern, pitching the latest product from corporate America.
LEWIS: I'm Ben. Nice to meet you.
ACOSTA: But Ben Lewis is selling his own brand of bottled water. It doesn't come in different flavors. It comes in different causes.
LEWIS: Our whole selling point is, it's not about the water, it's about a movement.
ACOSTA: A dime from each bottle of Give goes to charity. Oranges helps the fight against muscular disorders. Pink is for breast cancer research. Green goes to the environment. Blue, children with AIDS. Did we mention Ben is still a sophomore in college?
(on camera): And Ben, how did that happen?
LEWIS: We started making deliveries out of the back of my car with a few good friends of mine and it really just expanded.
ACOSTA (voice-over): Now he's got a bottling plant supplying ten retail chains, including whole foods. And he's raised $75,000 for his charities, which you could say are drinking it up.
DANA RICHARDSON HERON, SUSAN G. KOMEN FOUNDATION: If you have a choice to buy water that's going to benefit a corporation versus water that's going to benefit an organization such as Susan G. Komen for the Cure, I think you'll choose Ben's water.
ACOSTA: After all the carnage on Wall Street, investors are craving new ideas from new faces. It was only a decade ago when Google was founded by two college students working out of a garage. Is Ben on to something? His roommate, Greg, thinks so.
GREG VAN, BEN LEWIS'S ROOMMATE: We need more Google ads. We need more, you know, more Facebook guys. We need more Bens. And hopefully, America will still be at the top of its game.
ACOSTA: But Ben's got a ways to go. He only has four employees, and has yet to turn a profit.
(on camera): There's a little extra in there for pizza money and that sort of thing?
LEWIS: Hopefully, at the end the day, yes.
ACOSTA (voice-over): Ben Lewis remembers how he started out selling lemonade. So he knows what to do when the economy hands you lemons.
LEWIS: I think it's a great time for an entrepreneur to start a business. I think if you have a good idea and the passion, and a unique concept, and really the energy behind it, it's -- you know, the economy...
ACOSTA (on camera): You can make it happen.
LEWIS: ...you can make it happen.
ACOSTA: Ben Lewis has picked a controversial vehicle for his cause. Environmentalists worry about the plastic bottles that are piling up fast in the nation's landfills. But Ben says he's got all of that figured out with plans to roll out a biodegradable bottle that decomposes in a decade, instead of a century.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Reinvent the American dream. That is the goal of the founder of the Kairos Society. It's the exclusive organization of college students aiming to become entrepreneurs like Ben Lewis.
Ankur Jain is a sophomore at the Wharton School of Business. He says many of his fellow students are switching from financial career tracks to start their own businesses. Probably not a bad idea. Ankur is in Philadelphia joining us live.
So you're pretty good buddies, are you not, with Ben Lewis, definitely who we just saw a piece on?
ANKUR JAIN, KAIROS SOCIETY: Actually, Ben lives right next door to me. One of my closest friends and one of the founders of the Kairos Society with me.
COLLINS: There you go. What is the Kairos Society? What are you guys trying to do?
JAIN: So you can imagine right now in these tough times. Traditional pathways are kind of disappearing for college students but, in a way, these tough times have actually been the best for young entrepreneurs around the country. I mean, historically, some of the most successful companies have started during times like this. I mean, you look at Microsoft in the '70s, Apple, even CNN during the '80s recession. It's what we're doing with the Kairos Society. It's trying to reinvent the American dream for these college students around the country. We've become the premiere entrepreneur organization at 18 of the top universities. And going out to find these young college students who want to pursue their passion and connect in with each other so they can turn their dreams into reality.
COLLINS: Isn't it expensive? I mean, I'm listening to you talk, love the idea of sort of taking on these different projects that have such social responsibility to them.
JAIN: Right.
COLLINS: But I'm thinking about myself in business school going -- geez, you know, that is really an undertaking. Where do I get the money to do that?
JAIN: Well, see, the cool thing is a lot of these students are actually not only concerned with doing well but doing good. So for the first time you're finding this next generation of entrepreneurs is finding social responsible causes. And as you can imagine right now, with all the fear over Wall Street and the greed that's throughout the country, there's a lot of money that people want to direct towards socially responsible causes, socially responsible businesses, and particularly young people around the country.
COLLINS: But don't young people want to make money, too? I mean...
JAIN: That's the best part.
COLLINS: ...how do they make money doing this?
JAIN: I really believe that young people today can actually make money and do well while doing good. I mean, I think Ben Lewis is a great example. Starting a beverage company that allows you to not only buy a consumer product, but give to a charity of your choice is just one example of many. I mean, we have a student at MIT, for example. He's looking into alternative energy. And he just recently invented a new shock absorber for large vehicles and military vehicles that harnesses the vertical motion from the vehicle and charges the fuel cells with it.
COLLINS: Yes. I had that idea back in fourth grade, and I forgot to bring it up.
JAIN: Well, this guy is now getting military vehicles sent to him to outfit and send to Iraq for testing. So you can imagine there's a lot of money to be made while doing good in the world, and that's something that we really believe in at the Kairos Society.
COLLINS: In fact, you do have quite a few people in the current business system leaders. JAIN: Right.
COLLINS: And big CEOs that are helping to sort of encourage the entrepreneurs in your group, the Kairos Society.
JAIN: Right. And it's interesting because at this time, you are seeing an unprecedented partnership between the experienced leaders of today and the leaders of tomorrow. I mean, you're seeing these young college kids who haven't been confined by the preconception of how business should run and they see innovative opportunities in nearly every place they look.
(CROSSTALK)
COLLINS: So as you -- pardon the interruption. But as you watch sort of the going gone, if you will, some of the shenanigans that we have seen over the past several months, your generation not jaded about the business world?
JAIN: You know, I think that people are looking at this as an opportunity for them to step up. I think in the past, it was always -- there's the traditional path and I'm going to go work for one of those guys. And now they are saying, you know what, that might not be the most appealing job. I want to create value for myself and do what I love.
And so you are seeing these kids working with these experienced leaders around the country to create their ventures, again, in a way that's never been done before because they see unique opportunities all around the country.
And so, again, at the Kairos Society, we're trying to create this mentor-mentee relationship...
COLLINS: Right.
JAIN: ...throughout the year. And one of the things we're doing, actually, is this April, we're having a group of 500 of these top students from around the country join us on board the Intrepid Air, Sea and Space Museum to sit down with the collection of world leaders and top entrepreneurs to discuss how they can use their innovations to change the world for the better.
COLLINS: Yes. You've got something like 500 kids coming there, and a fabulous person who is going to host it. I guess that would be me.
JAIN: That would be you.
COLLINS: That's why we want to bring you on. Because you've got a whole lot of kids that are going to be there, and you've got some incredible leaders that are coming and saying this is how you do it...
JAIN: Right.
COLLINS: ...or this is how you don't do it, so it's going to be a fantastic event.
(CROSSTALK)
JAIN: Right. And we're fortunate enough to have leaders like President Clinton and Mr. Gates Sr. talk to these kids, again, about how to do well and do good in the world.
COLLINS: Yes.
JAIN: And I think that's something that we really believe in at the Kairos Society as we...
COLLINS: Well, we'll be watching. We will be watching. We're watching you, too. We want to hear your ideas. Ankur Jain, thanks so much for your time.
JAIN: All right. Thank you, Heidi.
COLLINS: Appreciate it.
Five days and five cities. CNN's "AC360" on the "Road to Rescue." Tonight, day four, Anderson Cooper is looking into the far- reaching effects of what went down on Wall Street and the lessons learned. That's at 10:00 p.m. Eastern, 7:00 Pacific.
From Dodgertown to ghost town. A 61-year home stand is over in Vero Beach, Florida. Could a new team boost spirits and business?
(COMMERCIAL BREAK)
COLLINS: We all need a little help in these tough economic times. So it's time for our "Deal of the Day." It's a way to stretch your dollar just a little bit further.
If you are planning to travel, think about taking a train. Amtrak has a lot of everyday deals to get through with less impact on the environment. Deals include half-price fares for kids between the ages of two and 11. There are also other deals for seniors, students and veterans. And some of the fares are as low as 20 bucks from St. Louis to Chicago. You can get a full list of deals and prices at amtrak.com.
Lots of stories to tell you about this morning. First, big pay- back for big bonuses.
Brianna Keilar, let's start with you.
KEILAR: We're following the House of Representatives today, Heidi. Expected to vote to take back those AIG bonuses by taxing them. We're following all of the action. We'll have a live report from Capitol Hill at the top of the hour.
ABBIE BOUDREAU, CNN INVESTIGATIVE CORRESPONDENT: I'm Abbie Boudreau. Most of the focus has been on AIG executives and their million-dollar bonuses. But what about the team that's supposed to hold those executives accountable? I'll show you who they are and what their paychecks look like. That story at the top of the hour.
ALLAN CHERNOFF, CNN SENIOR BUSINESS CORRESPONDENT: I'm Allan Chernoff, in Newark, New Jersey, where an elementary school is doing more than educating its students. It's actually caring for their parents. More details at the top of the hour.
COLLINS: Looking forward to all that. Guys, thank you.
Plus, a snapshot on the "ROAD TO RESCUE." Our focus, planning for retirement in these tough financial times.
(COMMERCIAL BREAK)
COLLINS: A 61-year tradition gone in a cloud of dust. Hitting a town not just in its heart, but in its wallet, too. Still, Vero Beach, Florida officials believe the game is not over yet.
CNN's John Zarrella is in an unusually quiet Dodgertown.
(BEGIN VIDEOTAPE)
JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Peanuts, popcorn, cracker jacks, on the menu at Dodgertown in Vero Beach, Florida, but you're not getting them. You're not getting a game, either. The spring training home of the Los Angeles Dodgers for more than half a century is empty.
UNIDENTIFIED MALE: Things were bad enough, and now here's a little bit more hit in the stand. So...
ZARRELLA: For county commissioner Peter O'Brien, the timing could not be worse. Tourism is down, thanks to the economy. And their reliable source, the Dodgers packed their balls and bats and left for Arizona last year, costing the area tens of thousands of fans who dumped $35 billion into the economy.
CROCE GIAMBANCO, OWNER, NINO'S CORNER: We're never going to see it anywhere in this town after the game.
ZARRELLA: Croce Giambanco owns Nino's down the block from the stadium. Business is off 20 percent.
GIAMBANCO: We're not having the traffic. We're not having the business that we did in the past years. So this particular one, it's gone. They're not here.
ZARRELLA: The city and county are doing everything to land any kind of baseball semi-pro leagues tournaments, another major league team. They spend $100,000 a month, just keeping the facility in playing shape.
UNIDENTIFIED MALE: I feel like we can play a game today.
ZARRELLA (on camera): And maybe two.
UNIDENTIFIED MALE: Maybe two. ZARRELLA (voice-over): While they're dying for baseball here, 100 miles down the road, baseball may be just dying. The Florida Marlins want a $600 million ballpark on the site of Miami's Old Orange Bowl. The city of Miami-Dade County would pay for most of it with tourist tax dollars that are currently declining. The opposition calls it a millionaire's bailout.
MICHAEL BURNSTINE, COALITION AGAINST MARLINS BAILOUT: To sit here and take moneys that we aren't even sure they're going to be there, and put them towards a stadium that really is for the benefit of a singular private, for-profit enterprise is just the wrong time. Period, the end.
ZARRELLA: Others say it would be bringing desperately-need jobs in the long and short-term.
MAYOR CARLOS ALVAREZ, MIAMI-DATE COUNTY: We will have a major league baseball franchise here for the next 35 years. We will have in the short term 1,000, 2,000 jobs in the construction area.
ZARRELLA: Final commission votes on the deal are expected to be close. And if the Marlins are shut out in Miami...
UNIDENTIFIED MALE: If they were to become the Vero Beach Marlins, we'll have them.
ZARRELLA: And then we'll get our peanuts, popcorn and cracker jacks, again.
(END VIDEOTAPE)
COLLINS: John Zarrella joining me now live from Vero Beach, Florida.
So, John, when is this vote going to take place?
ZARRELLA: Well, Heidi, the City of Miami is actually voting today on the Marlins' deal. And if they approve it, then it will go to the county. The county hasn't set a date yet for the vote, because they're waiting to see what happens in the City of Miami. And, again, it is expected to be very, very close.
COLLINS: All right. We want to know about who that next team is going to be later on, too. We'll check back with you.
John Zarrella from Vero Beach. Thanks so much. We appreciate it, John.
