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Bailed-Out Firms Owe Back Taxes; Bill Would Limit Bonuses for Bailed-Out Firms; Obama Visits Electric Car Plant; Government Web Site Offers Info on Help; Housing Market Offering Opportunities for First- Time Buyers; Researching Cures for Prostate Cancer

Aired March 19, 2009 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: Forget pushing. We're driving forward in the cars of the future. "The Road to Rescue" just may run through a green car test lab in Southern California. This hour, President Obama kicks some tires.

And Congress takes a new tact in the AIG bonus battle: taxes. Don't get mad: get 90 percent of those outrageous fortunes back.

Hello, everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.

Your money bailed them out. Now Congress says it's pay-back time. A lot happening this afternoon. The House is looking to levee a massive tax on some of the massive bonuses doled out by AIG and other bailed-out companies. And now we're learning that some of the firms that took your tax dollars allegedly didn't pay their own taxes.

As the new details come out, the new administration finds the "Road to Rescue" an increasingly bumpy ride. We're waiting to hear from the president this hour. We'll take it live as soon as it happens.

But first let's start with the staggering revelation. Thirteen firms getting federal bailout money owe more than $220 million in back taxes. So says the chairman of the House Ways and Means oversight subcommittee holding a hearing right now.

Congressman John Lewis says that two of the firms owe more than $100 million apiece. And he notes that the companies getting bailout money had signed contracts stating that they did not owe any taxes.

(BEGIN VIDEO CLIP)

REP. JOHN LEWIS (D), GEORGIA: Taxpayers have no sense that there is any control over this money. They have no idea what, if anything, they would get in return. This entire program is based on trust: trust in the giver, and trust in the taker. At this point, there is no trust.

(END VIDEO CLIP)

PHILLIPS: So what now? Joining us, defense attorney Steve Greenberg, who actually argued a lot of corporate cases. He's been following this one, of course.

Steve, let me just start out, I mean they committed a crime. They lied to the government. Correct?

STEVE GREENBERG, DEFENSE ATTORNEY: They did. The contracts they signed had representations in them that there were no taxes owing, and they said no taxes owing when they signed those.

You lie to the government to get a government benefit, it's a crime. There's no doubt about that. If you or I did that, if a poor person on the street did that, there would be consequences. Some U.S. attorney would be looking to charge them with a crime.

PHILLIPS: So why isn't that happening? Why can't we count on them being prosecuted?

GREENBERG: Well -- well, we can't count on them being prosecuted, because we've never before seen corporate entities prosecuted, except for the extreme situation like an Enron.

Frankly, we ought to see it. The public outrage is there now. They've committed crimes to get this money.

And what did they do with the money after they got it? These may be the same companies that paid themselves bonuses.

You know, again, if you were some average Joe on the street and you lied to the government, you can't get a student loan after that. You can't get Food Stamps after that. Yet look at these companies who took this money.

PHILLIPS: so you know what's interesting? Our political leaders just spinning their wheels, then? We are talking about all these various regulations and laws and bills that are being brought forward and signed quickly. Why shouldn't -- or should the focus be prosecuting people who lie when it comes down to taxpayer money?

GREENBERG: When they start prosecuting people, then maybe people will stop lying. You know, these contracts that they signed, I think it's reasonable -- I haven't seen the contracts, but it's reasonable to assume that each one of them said if you make false representations in trying to get this money, you have to give the money back.

Unfortunately, we all know the reality of it is that that money is long gone. Those firms took that money, and they blew through it. Some of them are coming back for more money now.

It's about time -- and I'm speaking as a citizen now. It's about time that people do get prosecuted for making these lies, for what they're doing, for misrepresenting, for stealing from the public trust, which is what they're doing in these situations. And then maybe they'll stop.

PHILLIPS: We can only hope. Steve, appreciate it.

Well, we definitely want all that money back, at least most of it. And House lawmakers are actually voting this afternoon on whether to levy a major tax on some of the hefty bonuses that were doled out by bailed-out firms.

The House bill would impose a 90 percent tax on bonuses paid to workers with household incomes topping $250,000. The tax would apply to companies that got at least $5 billion in government bailout money.

Brianna Keilar's on the Hill, of course, watching the vote for us.

Now, Brianna, this only impacts bonuses from this year. Correct? Just a few months ago. And then moving forward. So basically, if you got a big, fat bonus in 2008, you're free and clear.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Yes, under this bill. It has nothing to do with 2008 bonuses. It has to do with 2009 bonuses.

But even that is creating a bit of a problem, Kyra, because obviously a few months have already passed, and so we're talking about bonuses that have already been awarded; and law experts say you can't do that, because the Constitution says you can't do it. There's a part in the Constitution that basically says you can't pass a retroactive law.

And although I'm not a law expert, I think the best way that I can explain it would be to say, say like -- say that theft is not against the law, but today I steal something. And then Congress passes a law tomorrow, and they say stealing is against the law, and they make it retroactive to cover something that was done before.

Well, law experts say the Constitution says you can't do that. And that's why, Kyra, we've heard from some Democratic and Republican lawmakers who say they don't know if they can recoup these past bonuses. Maybe they can do it going forward, but they don't know if they can make up -- for instance, these AIG bonuses that would fall under this legislation the House is voting on today, Kyra.

PHILLIPS: And you know, Brianna, this is obviously hitting a huge nerve among Americans right now. What's your take there on the Hill as you talk both to Democrats and Republicans? Is all of this hurting President Obama's credibility almost -- you know, just past his half-100-day mark?

KEILAR: What it's really doing is stealing the focus. Because right now the Obama administration is trying to sell Americans on its economic approach, trying to instill some confidence, and also trying to sell Congress on its budget proposal for 2010. There are some skeptics here: Republicans but also some Democrats.

That's a hard enough to do, just with the economic climate being what it is, Kyra, with the bailout fatigue being what it is. But then to throw on this outrage that we've seen about AIG, it is a giant distraction.

PHILLIPS: All right. Keep us posted on that House bill. We'll follow the vote. Brianna, thanks so much.

And before we move on I just want to repeat my offer one more time to the 73 current and former AIG executives who pocketed a million bucks or more in bonuses. Some of you supposedly have offered to give that money back. Well, your boss is asking all of you to return at least half.

So here's my offer. We're on the air for two hours. So go ahead, step up, come forward. Tell us your side of the story. All you have to do is e-mail us at CNNnewsroom@CNN.com. Tell us how to contact you, and we will get your story to all our viewers.

Bonuses, a dirty word right now. But other big companies bailed out with your money are still paying them out, companies like Fannie Mae. We're now hearing the struggling mortgage lender plans to pay four top executives bonuses of up to $611,000. Fannie says it needs to keep experienced people working to reverse the mortgage mess.

It's not easy being green, but President Obama says that the economy, the environment, the future of the nation depends on it. As we speak he's visiting the Edison Electric Vehicle Center in Los Angeles, the suburb there of Los Angeles actually, in Pomona, California. That's where our Ed Henry is traveling with him.

Now Ed, even 3,000 miles away, there's no escaping the bailout fallout.

ED HENRY, CNN CORRESPONDENT: Well, you're absolutely right, Kyra. I mean, the fact of the matter is with this latest revelation about these 13 firms who have received bailout funds but allegedly have not paid all of their taxes, owe some $220 million in federal taxes.

Literally just got off the phone with a senior White House official who was saying, "Look, we're still checking the facts on this. We don't know -- we don't want to just run out there and comment on something where we don't know all the details just yet. But this person said obviously the president of the United States believes everybody needs to pay their taxes, especially these firms who are receiving taxpayer help right now.

As you know, this kind of story, just like the AIG bonuses, can put the president a little bit on the defensive. When you talk to his top aides, they say he's out here on the road right now, here in Los Angeles, to go on offense. He wants to be talking, as you mentioned, about energy, health care, education, some of those priorities in his federal budget.

And they were planning this trip, as well as sort of a media offensive. As you know, tonight he's going to be appearing on "The Tonight Show" with Jay Leno. This is the first sitting appearance -- appearance by a sitting president on a late-night talk show. President is going to be walking a fine line there, though, obviously, to be on a comedy show at a time when a lot of the American people are suffering. White House aides say they believe, though, this is a good forum for the president to get his message out there, talk about his priorities, his economic plans, as Brianna was talking about. He doesn't want to be thrown off stride amid these other stories.

And then, of course, there's going to be a town hall where I am right now just in the next couple of hours. And it's interesting, there's going to be some star power. The governor of California, Arnold Schwarzenegger, will be here, lend some bipartisan support to the president and some of his economic plans.

The president will be taking questions, as he did last night from people here in California. The state is hurting. Unemployment rate over 10 percent. So he believes it is a good venue to reach out to people who are really hurting.

And you'll remember on a lighter note back in the campaign, I was at an event on Halloween with Governor Arnold Schwarzenegger and Senator John McCain, where Governor Schwarzenegger was laying into Barack Obama at that point, saying that he had skinny little legs and scrawny arms and saying he needed to work out a little bit more and he needed to beef up his ideas, as well.

I guess they've sort of kissed and made up a little bit there, Kyra.

PHILLIPS: All right. Ed Henry, appreciate it.

Well, the Edison plant has been doing research for Ford since 2007. Ford plans to market a battery electric vehicle by 2011 and a plug-in by 2012. And that is the facility that Obama's going to be visiting.

And the other U.S. automakers have green cars on their horizons, too. A story in "The Detroit News" caught our eye today. It says that Chrysler plans to build 100 all-electric vehicles by the end of this vehicle and plans to have four electric models on the road in four years. GM is placing its bets on the Chevy Volt, due to hit show rooms late next year. The president wants a million plug-in hybrids on America's roads by 2015.

And speaking of the president, you'll see him live this hour at the Green Car Garage, as we mentioned. From there he's going to head to Los Angeles for a town-hall meeting hosted by L.A.'s mayor and California's Republican governor, Arnold Schwarzenegger. You heard Ed mention that, as well. You're going to see that live, too, just after 4 p.m. Eastern right here on CNN.

And later the president tapes an appearance, as Ed mentioned, on Jay Leno's "Tonight Show."

Well, some good news/bad news on the jobless front. Fewer people than expected filed new claims for unemployment benefits last week. But continuing claims set another new record. The government says that 646,000 people filed initial claims. That's 12,000 fewer than the week before. But 5 1/2 million people filed continuing claims. That's a jump of 185,000 from the previous week.

Well, out of a job and no hopes right now of finding another one? A lot of our iReporters are letting us know just what it's like in the unemployment lines. Take a listen.

(BEGIN VIDEO CLIP)

KYLE AEVERMANN, IREPORTER: I can't find a job. Searching three months. Cannot find one job anywhere. Anywhere. And it's frustrating. It's stressful. Going to places, turning applications in, asking if they're hiring, calling places seeing if they're hiring, going online and applying. In the past three months out of all the job applications I've filled out I've only had one interview, and I didn't get the job.

(END VIDEO CLIP)

PHILLIPS: Well, according to the U.S. Labor Department, more than eight percent of American workers are now without a job.

Financial disaster for some, the opportunity of a lifetime for others. You can find examples of both in one California neighborhood. Our Ted Rowlands is there.

TED ROWLANDS, CNN CORRESPONDENT: Yes, Kyra, coming up, we're going to have the tale of two types of houses. We're in Riverside County, California, the home, the epicenter of the misery of foreclosure. We'll show you the good and the bad coming up in the NEWSROOM.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JODI FURMAN, NEVER PAY RETAIL AGAIN BLOGGER: I never preview (INAUDIBLE) because I always plan my purchases. I know what I need, and I make sure that I give myself enough time to find it at the discount that I want to pay. So that goes with everything, though. I mean, it goes with groceries. It goes with clothing. It goes with cars. No matter what you want, if you have enough time, you can find the price that you want to pay, rather than the price that someone's asking.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

PHILLIPS: It's a good deal if you've got good credit. Mortgage rates are headed even lower. The Federal Reserve plans to buy $750 billion worth of mortgage-backed securities and another $300 billion in government bonds. That's a trillion-dollar investment. It's expected to knock up to half a percentage point off home loan rates. The national arm for a 30-year fixed-rate loan is currently about 5.15 percent.

Refinancing isn't an option for a lot of people, in some cases because after steep drop in the value of their homes. But there are other steps that you can take.

Our Gerri Willis tells us about a new Web site with information about government help.

(BEGIN VIDEOTAPE)

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Let's look at the government's new Web site that will help you understand if you're eligible for the government's housing programs. It's just out today. It's called MakingHomeAffordable.gov.

As can you see from the home page here, there's lots of great information for you if you're looking to find out whether you're eligible or not. Just click on this tab right here, and you'll find out if you are eligible, say, for a loan modification. You fill out this list of questions, you hit submit and you'll find out, can you get money or not?

Want to show you some other things on this great Web site. There's also information about how to find a counselor if you're having problems. They'll help you contact your mortgage servicer, and there are resources. You know, if your mortgage broker is using words you don't even understand, this is a great place to go.

Finally, the payoff here, you can figure out exactly how much money you would save on your mortgage using this calculator on the Web site. So we've entered your total monthly payments, your monthly gross income. Do you qualify? Yes, you do. And here's how much you would save each and every month from this program if were you a participant: $715. That's big dough for a lot of people out there. Check it out. The Web site is fantastic.

(END VIDEOTAPE)

PHILLIPS: Well, President Obama's California trip spotlights that state's dismal housing slump, but the steep drop in home values means a lot of opportunity for people who were once priced out of the market.

Ted Rowlands joining me live from Lake Elsinore. Actually, a very beautiful area.

Hey, Ted.

TED ROWLANDS, CNN CORRESPONDENT: Hey, Kyra.

Yes, we're in Riverside County, which as you know is sort of the epicenter of this foreclosure mess. A lot of homes in foreclosure. The street we're on, in fact, is littered with some foreclosures. Some of these houses have signs. Others don't. A lot of homeowners going through misery.

But on the other side of the coin, there are a lot of very, very happy people that wouldn't have been able to get into a house that now are purchasing homes in California, a very tough market to get into.

Rachel Morales is a realtor.

You deal with the good and the bad. It must be heart-breaking on one end, but, boy, some people are getting good deals.

RACHEL MORALES, REALTOR: Yes, they certainly are. The banks have dropped the homes tremendously in the past few months. And homeowners that usually couldn't purchase before are being able to purchase at very low prices right now.

ROWLANDS: This is a case in point, Kyra. This home right here went for over $500,000 just a few years ago. And Shane Latham (ph) and Kathy Valdez just picked it up for a cool $220,000. Young couple in their 20s.

Guys, you probably would not have been able to afford this house even maybe six months ago. How's it feel to be in a home: four- bedroom -- or three-bedroom, three-bath, almost 3,000 square feet?

You're a nurse?

SHANE LATHAM (PH), HOMEOWNER: Yes, I'm a nurse. (UNINTELLIGIBLE)

ROWLANDS: So and Kathy, for you, boy, this looks like a dream home, huh?

KATHY VALDEZ, HOMEOWNER: Yes, it is actually. I mean, I'm in my 20s. I mean, why not? A house right now, we could afford it.

ROWLANDS: The reality is your next-door neighbors have lost hundreds of thousands of dollars in equity. Do you feel a little bad for them as you take advantage of this opportunity?

LATHAM (PH): Of course. We've got to feel for people (UNINTELLIGIBLE).

VALDEZ: Yes, well, I mean maybe it was the wrong time to purchase the house, but I mean, now was the best time to purchase a house.

ROWLANDS: You know, you guys have done nothing wrong; you're just taking advantage of the opportunity, obviously.

But Kyra, the problem, of course, in this whole scheme is that, as happy as these folks are, it really does bring down the equity levels of everyone in this neighborhood.

And this is being played out across the country. It is a very complicated problem which has a lot of misery associated with it. This is an example of silver linings: some pretty happy people that are in the home of their dreams, in their 20s, and able to make their payments...

PHILLIPS: And Ted, let's just...

ROWLANDS: Yes. PHILLIPS: Let's just lay out the reality here. You know, obviously, you live in California. I lived there, too. I remember getting hired from CNN. Prior to that I was in my 20s living in L.A., could never afford to buy a house. That is unbelievable...

ROWLANDS: Yes.

PHILLIPS: ... that in their 20s they got that house for $220,000.

ROWLANDS: It's extraordinary. I mean, just six months ago, you could get a two-bedroom, one-bath in a sketchy neighborhood for $500,000. And, you know, this is a beautiful street, beautiful area: $250,000. I mean, it's like we're living in Atlanta all of a sudden.

PHILLIPS: Yes, exactly. I was just going to say, I moved to Atlanta, I was able to buy my first house. I should go back to California!

ROWLANDS: Yes.

PHILLIPS: Ted, thanks.

Well, they're America's biggest minority group, and they're really having a tough time in this recession. So how are Latinos in the U.S. making ends meet? Our Brooke Baldwin brings us the story. Just a sec.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

FURMAN: Spaving is going broke while saving. What that means is that you see something that's a great price. It's a $100 item, and it's on sale for only $5.00. So you buy it, and you think that you saved $95. But you didn't. No one put $95 into your bank account. You actually just took $5.00 out. So that's spaving.

And I think a lot of us are guilty of it. We kind of shop as recreation. And a lot of times you find something that seems like a great deal, but if you don't need it, don't buy it. And those little tiny purchases that add up over time.

If you took that $5 that you would have spent and put that into your bank account or into the stock market, which right now is really the world's greatest sale, that will do you a lot better for the future than buying that item that you're never going to use.

(END VIDE CLIP)

PHILLIPS: Good advice.

Well, the nation's biggest minority group, Latinos, is getting hit hard by the recession. Their jobless rate is in double digits. And many Latinos are losing everything: their homes, their cars, even their families. CNN's Brooke Baldwin shows us just how tough it is for some Latinos here in Atlanta.

(BEGIN VIDEOTAPE)

BROOKE BALDWIN, CNN CORRESPONDENT (voice-over): It's lunchtime at Coco Loco (ph), and the orders keep coming in.

JULIO GUZMAN, OWNER, COCO LOCO: My sales, they've been up for the past five months versus last year.

BALDWIN: This recession has forced owner Julio Guzman to get creative. Between online advertising, extra catering, and his loyal customers he keeps Coco Loco in the black. For Guzman and thousands of other Latinos, living on a budget is simply a way of life.

GUZMAN: We come here with nothing. You know, we have to start. You know, we don't inherit the house from the families or any wealth. We have to start from scratch.

BALDWIN: It's a theme all too familiar to the Latino community.

AURELIO ARIZMENTi, DJ: They came to America with nothing, with zero, nothing, zip. They start over again. It is really hard.

BALDWIN: Aurelio Arizmenti is a disk jockey as a Spanish- language radio station in Atlanta. Every morning Arizmenti takes calls from listeners, many of whom are quite concerned about the economy.

ARIZMENTI: People who didn't used to, have their own business. They're broke now. They are losing their houses. The cars, trucks, everything.

BALDWIN: This caller works in construction. Says jobs are drying up because people aren't building.

This caller says he's about to lose his house and is afraid if that happens, he'll lose his family, as well.

According to the U.S. Bureau of Labor Statistics, the fastest growing segment of the U.S. population is getting hit hard. Unemployment in February: double digits at 10.9 percent. That is the biggest jump from the previous month, compared to every other group surveyed.

UNIDENTIFIED FEMALE: We lived through enough recessions.

BALDWIN: But those numbers don't worry Julio Guzman. He grew up in Cuba under Fidel Castro's regime.

GUZMAN: Shortage of everything. So you know, we were creative back then. You know, we learned to survive, because you know, if you try, you'll make it.

BALDWIN: And making it for Guzman is the American dream. (END VIDEOTAPE)

PHILLIPS: You know, just listening to Julio, Brooke, I mean, that's the Latino work ethic.

BALDWIN: Absolutely.

PHILLIPS: I mean, he's talking about life in Cuba and other parts of Mexico. Heck, I mean, they're probably thinking this is cakewalk.

BALDWIN: This is nothing. He said he grew up under Fidel Castro, all those restrictions. This is nothing. It provided an interesting perspective.

PHILLIPS: Now, we're talking legal immigrants there. What about the illegal immigrants. Are we able to get a feel for how they're being affected in the economy?

BALDWIN: It's a totally different part of the equation, part of the answer. And let's talk numbers for a second, because people may not realize, according to the Pew Hispanic Center, as of March 2008, unauthorized immigrants make up 4 percent of the U.S. population. So translated to about 12 million people.

And that actually is down, that estimate is down from the previous year, according to the Pew Center Research. Why? Well, the slowdown of the U.S. economic growth has had a disproportionate impact on foreign-born Latino workers and a heightened focus on enforcement of immigration laws, has generated a lot of fear among Hispanics.

So for example, I brought a little prop for you. This is the "Mundo Hispanico," and this is a newspaper that, it says on the front, "The voice of the community," the Hispanic community in Georgia. I was talking to the editor of this paper a couple minutes ago. And he gave me an example.

So he said, "You know what? If you're trying to get work, let's say a construction job, for example, and you don't have a driver's license," you wouldn't, you don't have papers, "and you live in Cobb County." That's part of Atlanta. According to a new ordinance, if you get pulled over for a broken taillight, something fairly -- fairly routine, instead of getting a ticket, you get taken to the sheriff's office, possibly put in jail, and deported.

So he told me, Brooke, a lot of these illegal immigrants, you know, they're not chancing it. They're either staying at home, not working, or they're fleeing to other cities where the immigration rules aren't quite as stringent.

PHILLIPS: Wow. And so what's interesting -- and I should probably tell our viewers, you know, Brooke is bilingual.

BALDWIN: So are you.

PHILLIPS: But it -- you were working this story... BALDWIN: Yes.

PHILLIPS: ... and you were looking at the "Mundo Hispanico." You actually went to college with the editor.

BALDWIN: How funny. Rodrigo Cervantes. I studied abroad a little bit in Mexico City, and he's from Mexico City. And I held this up two days ago, talking about a different part of the story, and he said, "Brooke! Why didn't you call me? I know you."

PHILLIPS: You are linked into the community.

BALDWIN: We're tapped in.

PHILLIPS: All right. You're also tapping in to try and help people -- well, our effort here...

BALDWIN: Yes.

PHILLIPS: ... on our show to help the unemployed get employed. You went to a job fair yesterday.

BALDWIN: Yes.

PHILLIPS: And you're participating in our 30-second pitch movement.

BALDWIN: So great, from the Kyra team here. Great idea. The 30-second pitch. Yes. We talked to this woman, Kim Thomas. She has two children. Tragically lost her husband recently. Here she is. And guess what, she's trying to get work. So, coming up next hour, we're giving her 30 seconds on CNN -- What a deal! -- to see if she can pitch herself to a potential employer and see if we can get Ms. Thomas some work.

PHILLIPS: All right. Thanks, Brooke.

BALDWIN: You're welcome.

PHILLIPS: All right. I guess I say gracias.

BALDWIN: De nada.

PHILLIPS: All right. Congress says companies should hire Americans first before they hire a skilled immigrant. Critics say there aren't enough Americans to fill those high-tech jobs. So, how the immigration debate affects your bottom line. We have a guest coming up right after the break.

(COMMERCIAL BREAK)

PHILLIPS: President Obama spending one more day in southern California, where the green cars of the future are the green jobs of today. He's actually at the Edison Electric Vehicle Lab in the L.A. suburb of Pomona. We expect to hear him live in just a few minutes, and we'll take it. The Edison Lab, by the way, does research for Ford, which plans to market a battery electric vehicle in two years. Apparently he's been driving it around. Chrysler plans to sell four electric models in four years. GM hopes to get its Chevy Volt on the road late next year. The president wants a million plug-in hybrids on the road by 2015.

Well, highly skilled workers are key to expanding high-tech industries. And these days, many of the high-tech workers are immigrants. Supporters say that there simply aren't enough U.S.-born workers to fill the need, and they warn that the new immigration rules will only make things worse.

Let's bring in Matthew Slaughter. He's senior associate dean at Dartmouth's Tuck School of Business. Good to see you.

MATTHEW SLAUGHTER, SR. ASSOC. DEAN, DARTMOUTH'S TUCK SCHOOL OF BUSINESS: Thank you. Good to be here, Kyra.

PHILLIPS: So, you know, in particular, right now, in this time, a lot of people are saying, why should we be concerned with legal immigrants in this country when Americans are lining up across the country by thousands and thousands just trying to get a job?

SLAUGHTER: That's a great question. I think there's two things to think about. One is to understand that skilled immigrants have long been a source of job creation for the U.S. economy. They bring new ideas, new business connections and the ability to help create jobs in new companies and existing companies.

And the second point is to keep in mind that there is a lot of Americans who legitimately are hurting in the recession right now, but the way to support them is through an expanded and stronger social safety net, not through trying to put up barriers to immigration.

PHILLIPS: So, Matthew, can you give me some solid examples? Because if you are American A, sitting at home, frustrated as heck because you can't even put food on the table, and he or she is watching this interview, they're going crazy right now thinking, tell me why I should support this when I'm out of work.

SLAUGHTER: Great question. I'll start with my industry, higher education. American higher education has been a strong global industry in large part because we have welcomed immigrants both as students and as faculty. At the Tuck School of Business at Dartmouth, about a third of our student body and about a third of the faculty are foreign-born.

And that's true in a lot of other really dynamic American industries. Studies have been done of biotechnology and information technology in the United States, and have found that a substantial fraction of the new jobs and new companies that have been created in the past generation in these key industries were founded by immigrants. So, that's a really important thing to keep in mind, which is the number of jobs in the U.S. economy is not fixed. It grows over time. Hopefully it grows through the support that immigrants provide.

PHILLIPS: Now, illegal immigrants. Are you even able to gauge what type of impact -- we talked a little bit with our Brooke Baldwin about that as she's been in tune with the Latino community here in Atlanta. Is that having an impact on where the economy is right now?

SLAUGHTER: It does. All forms of immigration have an impact on the total size of the economic pie for the U.S. and on the distribution of economic activity. And again, that comes to an important point that you raise which is there is a lot of American families and workers that are struggling, especially with the recession right now.

But the way to support them is through an expanded social safety net, things like wage loss reinsurance, things like greater health care coverage during unemployment spells. If we do that and combine it with especially skilled immigration policy that welcomes the job creation opportunities that those bring, that's going to be the way to help the American economy go forward.

PHILLIPS: Matthew Slaughter, interesting perspective. Appreciate your time.

SLAUGHTER: Thanks very much.

PHILLIPS: Americans have a lot of company in this recession that we're in. Its impact is being felt around the world from Jerusalem to Abu Dhabi to Madrid. We've got reporters in those cities with a look at how they're feeling the crunch as well.

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN INTERNATIONAL CORRESPONDENT: I'm Paula Hancocks in the Galilee in northern Israel. Workers at Israeli factories threatened with closure are starting to take matters into their own hands. It could be a sign of exasperation or a lack of trust in the government or management. An entire town came out to protest the potential closure of this canned-goods factory. It eventually found a buyer.

Down the road, employees at a chicken factory are barricading themselves in every night for more than a week, protesting the fact that they haven't been paid since January and they don't know even know if they still have jobs. And one supermarket chain which went under was looted by both creditors and employees, both saying that was the only way they thought they could get back the money they were owed.

STAN GRANT, UNITED ARAB EMIRATES CORRESPONDENT: I'm Stan Grant in Abu Dhabi, which produces about 10 percent of the world's oil. That's providing a buffer against the economic downturn. Here, construction is continuing, and they're preparing to host big events like the motor Grand Prix later in the year.

But just an hour's drive is Dubai. There, construction is slowing. Real estate prices have gone off a cliff, and they're even advertising now distress sales. Work visas are being cut in the thousands. It is really a tale of two cities.

AL GOODMAN, CNN MADRID BUREAU CHIEF: I'm Al Goodman in Madrid, where the economic crisis is forcing the divorce rate down, according to some lawyers. They say many Spaniards can't afford the legal fees, and they can't sell their homes, which often provide the cash for divorce settlements. So, they're toughing it out together.

But the financial crisis is causing more traffic accidents, says the government's top traffic official. Worried about money, some Spaniards aren't concentrating like they should behind the wheel.

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PHILLIPS: And one country that could help pull the world out of recession, China. The World Bank says it's a relatively bright spot in an otherwise gloomy global economy.

Six years of war in Iraq. Hard to believe, isn't it? What started with shock and awe has given way to timetables and pullouts. And it was a year ago that I was on assignment in Baghdad, where I had an exclusive interview with General David Petraeus, back then the top U.S. commander in Iraq. I got unprecedented access to the general for 35 minutes in an interview simulcast around the world.

The reason? People back in the U.S. were hungry for answers. Answers about when the war would end and when troops would finally come home. Here's what the general told me a year ago.

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PHILLIPS: The president in no way, shape or form talking about a timeline. That is a big political discussion. It's a big discussion among Iraqi people, even U.S. troops. Can you even, five years into this war, say it is good for U.S. troops to stay or go at this moment?

GEN. DAVID PETRAEUS, COMMANDER, MULTINATIONAL FORCES IN IRAQ: Well, first of all, I think let's just focus on where we are right now and recognize that we're in a good bit better place in terms of security and even in terms of political progress by the Iraqis than we were, say, a year ago. We're in the midst right now, as you know, of drawing down the surge forces.

In fact, we will take out by the end of July, we'll reduce by over one-quarter our ground combat power. Five of 20 brd combigade combat teams, two Marine battalions and a Marine expeditionary unit. We recommended that. We believe we can carry that out without unduly jeopardizing the gains that we and our Iraqi partners have fought so hard to achieve.

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PHILLIPS: And here's where we stand now, a year later. President Obama plans to pull all combat troops out of Iraq by August 2010. But he plans to keep between 35,000 and 50,000 support troops on the ground. All U.S. troops must be out of Iraq by December 31st, 2011 under a deal the Bush administration signed with the Iraqis. For years, doctors have debated the value of prostate screenings. Now two new studies are weighing in, but are they clearing anything up? Elizabeth Cohen joins us live.

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PHILLIPS: Well, close to 30,000 American men will die of prostate cancer this year. Even so, doctors don't support routine screening because they're not sure how useful it is. Two long-term studies are looking into that right now, and some results have just been released. But somehow, we're not any closer to the answer.

Hopefully, our senior medical correspondent Elizabeth Cohen can help us sort this all out. Tell us about these studies.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: What one of these studies found is that, you know how they say get your mammogram or get your colonoscopy? Well, that is really true. You want to get your mammogram. You want to get your colonoscopy.

But you know what? You might not want to get your PSA screening test. Here's the reason. This new study in "The New England Journal of Medicine" found it didn't save lives. In the end the men who got screened for prostate cancer were no more likely to live than the men who didn't get screened. And when we say screening test, we're talking about a PSA and a digital rectal exam.

PHILLIPS: All right, so, actually the treatment, then, can be worse than the illness?

COHEN: Yes. This is the big problem. This is where -- this is the crux of it. Obviously, it's not good to get prostate cancer. But prostate cancer grows very slowly so a screening test may pick up on a small prostate cancer that isn't going to kill a man. He can live with it for decades. But what would happen is that a doctor might say, yikes, cancer! Let's treat this.

And the treatment itself can cause really serious problems. Let's take a look at what the treatment can cause. The treatment -- different treatments for prostate cancer can cause impotence, can cause incontinence, can cause depression because a man knows that he is living with cancer.

It can also cause insurance problems. A man finds out he has prostate cancer. It may be hard, if not impossible for him to get insurance down the road. And the irony is that that cancer maybe was never going to kill him. That cancer, perhaps he could have lived with just fine for decades.

PHILLIPS: Yes, we were all talking about people that we know that they've had prostate cancer for decades and they're just fine. One person we even know is in his 90s, which is amazing. So, if a guy finds out he has it, then how does he know, you know, what to do? It can't be an easy answer.

COHEN: There is no easy answer. I have been talking to experts all day who spend their lives on this question, and they didn't have an easy answer. But here's what it comes down to.

You have to recognize that getting a screening test for prostate cancer, there are risks to doing that. There is no risk to having a mammogram, pretty much. There is pretty much no risk to having a colonoscopy. There are risks to having prostate cancer screenings. So, you have to sit down with your doctor and say, look, I know a screening test can have its own problems. Am I sure that I want to get it? And you have to decide together with your doctor, are you sure you want the screening test?

PHILLIPS: All right, Ms. "Empowered Patient" columnist, what's the topic today?

COHEN: The topic today is how to save money on prescription drugs. And frankly, Kyra, I don't know anyone who doesn't want to save money on their prescription drugs. So, you can go to CNNhealth.com to see that column. And also, we will be taking questions on Fridays from now on -- We're calling it "Free Advice Fridays" -- on questions about your health care. If you have any questions, send us an e-mail at empoweredpatient@CNN.com.

COLLINS: Thanks, Elizabeth.

COHEN: Thanks.

COLLINS: Well, you don't have to be the brightest bulb to know that turning out the lights can save money on your electric bill. But it's sure a lot easier when you have a switch to flick, unlike one place.

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COLLINS: It's a no-brainer. Tennessee would save a bundle of money if lawmakers flicked off the lights when they leave the office at night. Great idea, right? But there's just one problem. In most rooms, there's nothing to flick. No light switches. The bulbs 24/7.

Electricians say the state could save $300,000 a year by killing the lights overnight at the government complex -- 300 grand. One lawmaker says that he's going to ask the architect to try to put in some switches.

And, well, when you're the boss, you're going to have to make some tough decisions. But can you imagine having to lay off your own son? The V.P. of a family-owned manufacturing business, Dan Highland (ph), was thrilled to hire his kid last year. But then...

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DAN HIGHLAND (ph), VICE PRESIDENT, MANUFACTURING COMPANY: When things started getting difficult for us, he was one of our last hired employees, and so, you know, in all fairness, he to be one of the first ones to go. And that was difficult to do.

(END VIDEO CLIP) PHILLIPS: Car parts make up a huge chunk of that company's business, so its fortunes have fallen right along with Detroit's. Dan Highland (ph) says that over the past year he's had to cut his staff by half.

Well, there's a scandal that's brewing in Britain that got us pretty upset, too. Over two hospitals wasting money and food in a huge way. They apparently threw away about $60,000 worth of meals last year. Over that same period, 2,500 patients were suffering from malnutrition or other deficiencies when they were discharged. Members of Parliament are demanding an investigation.

Young, smart and struck with a great idea.

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JIM ACOSTA, CNN CORRESPONDENT: How did that happen?

BEN LEWIS, ENTREPRENEUR: We started making deliveries out of the back of my car with a few good friends of mine.

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PHILLIPS: Even in this economy, a small business is born. If he can do it, couldn't you?

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JODI FURMAN, NEVERPAYRETAILAGAIN.NET: In general, buy less. We don't need half the stuff that we actually own. If you can clear out your closets, sell the things that you don't need, and just stop buying as recreation, it's hard.

Shopping is fun. So what I've done really is made shopping for the things that I need fun as well. It's almost a game. I really -- I almost compete with my friends. We share coupons. We swap coupons. We tell each other about great deals.

And that's really what the blog and the online group is about is really helping each other out. But make it a game. I come home, and I'm thrilled that I saved 75 percent off.

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PHILLIPS: I want to take you straight to Pomona, California. The president of the United States getting ready to step up to the mike. As you know, even in the midst all this bailout money nightmare, he's still trying to concentrate on his green agenda. And today, he is visiting the Southern California Edison plant, the Electric Vehicle Technical Center there in Pomona, California.

Oh, let's -- yes, let's listen to the worker who's introducing him. He's got a personal story.