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Obama Calls for Accountability in Recovery Act Funds; Medical Field Still Offers Employment Options; No Tax Refund for Victims of Identity Theft; Economic Downturn Reflected in Abortions, Online Dating, Divorces; Booklet Helps Kids Understand Economic Impacts
Aired March 20, 2009 - 12:55 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: And we want to break in here and take you now live to the president of the United States taking the podium there, speaking to the Conference of State Legislatures.
Let's listen in.
(JOINED IN PROGRESS)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It is wonderful to see so many of you, a lot of old friends who I saw on the campaign trail, had a chance to meet all across the country. And I'm glad we're now gathered together to try to actually get something done.
In over the last two years -- last two years during the course of this campaign, one of the things that I saw was how dedicated each and every one of you are to making sure that your states and your constituencies are well served by state government.
And part of my job as president is to ensure that we're a good partner with you, because you're where rubber hits the road. You're where people actually see the benefits of a good education and high- quality health care, transportation, energy plans that actually make sense.
And so the purpose -- the goal of this meeting is to ensure that we are all on the same page, because our folks are counting on it. And it's -- it's helpful for me, also, to talk to you, because you guys see things from outside of Washington. And the more I can break out of the bubble, the better off I am.
Over the last two days, I've been traveling in California, talking with Americans about the challenges they're facing as a result of this economic crisis. And these are challenges that all of you know very well.
You're on the front lines of this recession. It's your states that are struggling with shrinking revenues. Your budgets are being cut. Services that your families depend on in a moment of need are being placed under tremendous strain.
And as a former state legislator, I know how difficult your work can be and how important it is to have a strong partner in Washington. I want you to know that I'm committed to being that kind of partner.
And that's why we're taking unprecedented steps not just to help your states make it through these difficult times, but to make sure that you come out stronger on the other end, more prosperous than you were before.
That's the purpose of the budget that I'm submitting to Congress. It's a budget that makes hard choices about where to save and where to spend.
Because of the massive deficit we inherited and the costs of this financial crisis, we are having to go through the books line by line, page by page, so that we can cut our deficit in half by the end of my first term and reduce it by $2 trillion over the next decade.
What we will not cut are investments that will lead to real growth and prosperity over the long term. That's why our budget makes a historic commitment to comprehensive health care reform. That's why it enhances America's competitiveness by reducing our dependence on foreign oil and building on a clean energy economy.
And that's why it makes a down payment on a complete and competitive education for every child in America, from the cradle up through the time that they get a career. In short, our budget will strengthen each of our 50 states for generations to come.
And that's also the purpose of the recovery act that I signed into law last month. It's a plan that will not only help states and painful budget cuts, but also make a meaningful difference in the lives of Americans across this country.
Because of what we did, there will be teachers in the classroom and police on the beat who otherwise wouldn't be pursuing their essential missions. Because of what we did, neighborhood health clinics are creating jobs and providing affordable care to those who need it. And because of what we did, 95 percent of hard-working families will receive a tax cut, a tax cut that they'll see in their paychecks starting on April 1st.
So all together, we expect to create or save 3.5 million jobs, 95 percent of which are in the private sector. It's the most sweeping recovery plan in our nation's history. And with a plan of such size comes an obligation to be vigilant with every dime that we spend.
That will require all of us -- me, Joe, each of you -- to hold yourselves accountable. It will require a new level of transparency in how we invest taxpayer dollars. It will require a new sense of responsibility here in Washington, but also in the 50 states.
And that's a standard that we've sought to uphold from the very beginning. That's why I asked Joe to ensure that we are implementing our recovery act quickly and implementing it well. That's why I've appointed a proven and aggressive inspector general to help prevent waste and fraud before it happens and root it out when it does.
And that's why, on the very day I signed our recovery act into law, we launched a Web site called recovery.gov so that Americans can see where their tax dollars are going and make sure we're delivering results. And 46 states have launched their own Web sites linked to recovery.gov to help people keep track of how money is being spent down to the local level.
Today, as part of our continuing efforts to make government more accountable, we're taking the next step in implementing the recovery act. I'm issuing a directive that will provide guidelines to federal agencies for what does and what does not constitute an acceptable use of taxpayer money, guidelines that will help ensure that we are proving ourselves worthy of the great trust the American people have placed in us.
That starts with a fundamental commitment: Decisions about how recovery act dollars are spent will be based on the merits. Let me repeat that: Decisions about how recovery money will be spent will be based on the merits.
They will not be made as a way of doing favors for lobbyists. Any lobbyist who wants to talk with a member of my administration about a particular recovery act project will have to submit their thoughts in writing, and we will post it on the Internet for all to see.
(APPLAUSE)
If -- if any member of my administration does meet with a lobbyist about a recovery act project, every American will be able to go online and see what the meeting was about.
These are unprecedented restrictions that will help ensure that lobbyists don't stand in the way of our recovery. And this plan cannot and will not be an excuse for waste and abuse. Whenever a project comes up for review, we're going to ask a simple question: Does it advance the core mission of the recovery act? Does it jump- start job creation? Does it lay the foundation for lasting prosperity?
The initiatives that will get priority will be ones that have demonstrated how they meet this test, initiatives that maximize the number of jobs we are creating so we can get the most bang out of every taxpayer buck, initiatives that help make health care more affordable and rebuild our crumbling roads and bridges or provide other enduring benefits to the American people.
Now, no plan is perfect, and I can't stand here and promise you that not one single dollar will slip through the cracks. But what I can promise you is that we will do everything in our power to prevent that from happening, which is why we're building on the provisions in the recovery act to forbid the use of these funds to build things like dog parks.
Now, let me be clear. I don't have anything against dog parks.
(LAUGHTER)
I intend to get a dog.
(LAUGHTER)
What I do oppose is building them with funds from the recovery act, because that's not how we'll jump-start job creation, and that's not how we'll put our economy on a firmer footing for the future.
And because I'm not willing to ask all of you to do what I'm not willing to do myself, we're going to set an example here in the White House. And I'll give you an example.
Recently, a proposal was submitted requesting recovery act funds to modernize old electrical and heating systems in the East Wing of the White House. Now, this is a much-needed project. It's long overdue. And I hope Congress funds it in the future.
But because this request does not meet the high standards that I have set, because it will not create many jobs or advance our recovery, it will not be funded under the recovery act.
The rules I'm putting in place today will help create a new culture of accountability. And I'm pleased that the U.S. Conference of Mayors is committed to joining us in this effort.
I don't need to remind you that the American people are watching what we do. They need this plan to work. They're skeptical, and understandably, because they've seen taxpayer dollars frittered away before. They expect to see their hard-earned money spent efficiently.
And this extraordinary moment requires extraordinary responsibilities on all our part. There's little room for error here, especially in a time for crisis.
You know, during World War II, a largely unknown senator grew concerned that waste, corruption and scandal threatened to choke off our nation's war efforts before they'd truly begun. Congress didn't think a whole lot of the matter and granted him far less money than he'd asked for.
But this little-known member of Congress named Harry Truman had the courage of his convictions, so he traveled all across the country, gathered information, holding hundreds of hearings and issuing dozens of reports. And when it was all over, he had saved billions of dollars and deterred corruption and bolstered America's confidence in the conduct of the war.
What Harry Truman understood was that spending tax dollars wisely isn't just about keeping our books straight; it's about fulfilling our obligations as keepers of the public trust.
And while I do not know how long the road to recovery will be, I do know that we're in a fight right now to get this economy back on track. And if we act with the same sense of responsibility that Harry Truman showed during wartime all those years ago, and if we build a partnership that stretches from the statehouse to the White House, then we'll turn this economy around and the American people will emerge from this crisis stronger than we were before. So thank you very much. I'm looking forward to working with you. Thank you, guys. I -- thank you.
(APPLAUSE)
Thank you. Now, before I start taking some questions, I want to bring up to the podium here Speaker Joe Hackney, who's wearing his Tar Heel blue today.
(LAUGHTER)
I was entirely objective in filling out my college brackets, much to the consternation of Reggie Love from Duke. But -- but Joe's not here to talk basketball; he's here to speak on your behalf.
Joe, great to see you.
(APPLAUSE)
JOE HACKNEY, SPEAKER, NORTH CAROLINA GENERAL ASSEMBLY: Mr. President, Mr. Vice President, thank you very much for inviting us here today. We very much appreciate the consultation and the interaction that we've had today.
You have before you today the legislative leadership, top leadership in about 35 states, I believe. And thanks for picking UNC. And if you can, with proper oversight, we can win this thing.
(LAUGHTER)
Mr. President, you are the first alumnus of NCSL to become president. I trust...
(APPLAUSE)
FREDRICKA WHITFIELD, CNN ANCHOR: All right. Sorry about that. We lost that transmission there from the White House. President Barack Obama, you heard him reiterating his plan as he talks to 60 state legislative leaders, all meeting there in Washington.
He says that, if the budget that he submitted to Congress goes successfully, then certainly, he would be taking some unprecedented steps to help states in so many different ways in these difficult times. And he reiterated that 95 percent of Americans under his budget plan will indeed get tax cuts beginning April 1.
Meantime, our weeklong journey on the "ROAD TO RESCUE" is ending where it began: with jobs. Today we learn U.S. companies carried out more than 2,700 mass layoffs in February alone. A mass layoff is 50 or more jobs cut at once. These amount to almost 300,000 positions, which is still less than half the number lost last month overall.
So how's this for a number: $1,845,000,000? That's the latest estimate of this year's federal deficit from the nonpartisan Congressional Budget Office. Needless to say, it's an all-time high, due mostly to bailouts, stimulus and sagging tax revenues. And speaking of stimulus, the White House is keeping a close watch on all those dollars flowing into state capitols, as you see in this live shot, reestablished now again there at the White House. Sorry about that. That's not the live shot. That's images earlier. That's taped images right there.
So you just heard the president's remarks to the state lawmakers. And that brings us to CNN's Suzanne Malveaux at the White House.
Susan -- Suzanne, you also had your listening ears on. So what's the mission here?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Fred, the message is very clear from both the vice president and the president. We heard it before, Vice President Joe Biden saying that he was going to take a spotlight and a bull horn to anything that really wasn't kosher in terms of spending of this economic stimulus money.
We also heard the president saying that there is little room for error here, especially when it comes to this time of crisis.
Obviously, what they're doing on one hand is they are warning the state officials, "We need your cooperation here; this has to be a transparent process." And on the other hand, they're really kind of imploring them, if you will, to cooperate, because ultimately, it is this administration that is going to be responsible for tracking those dollars and making sure that taxpayer dollars are being used and spent well.
This is a tough sell for the administration, as you know, Fred, because of some of the shenanigans, as the White House likes to put it, that has happened before with our tax dollars. And those numbers that came out today, the Congressional Budget Office saying $1.8 trillion for a 2009 budget. The Obama administration said it was $1.7 trillion.
Officials here are trying to say that, "Look, while this is a problem that we inherited, it only underscores the real economic crisis that we're dealing with."
So this administration really has to, in some ways, cajole, convince, even perhaps even threaten some of these state lawmakers, state officials to cooperate here and make this all work. Because it is going to come back on this White House if it fails -- Fred.
WHITFIELD: And Suzanne, while he is meeting with state legislative leaders, there are some governors there as well as at least one big-city mayor. And what's the dialogue there?
MALVEAUX: Well, he has some heavy hitters. Obviously, California Governor Arnold Schwarzenegger and one of the few Republicans, Fred, who backed the economic stimulus package. He was with President Obama yesterday in California at that town hall meeting. Obviously very strong, very influential Republican by his side to back him up on this. You have Ed Rendell, the governor of Pennsylvania, very important Democratic governor, as well as New York Mayor Michael Bloomberg, very important independent.
All three parties represented here with the president to give the American people this picture, this message, that, "Look, you know, we're behind this guy. We believe in what he's doing." But ultimately, Fred, they know they've got to wait and see whether or not this is all going to work.
WHITFIELD: All right. Suzanne Malveaux at the White House, thanks so much. Appreciate it.
Well, among the state lawmakers who met today with the president is Peter Groff, the first African-American president of the Colorado Senate. He'll be joining us live from the White House in just a few minutes to tell us about his account.
Meantime, the Special Olympics is calling last night's presidential gaffe a teachable moment. As you may have heard, Mr. Obama spent a few minutes on the "The Tonight Show with Jay Leno, where the conversation turned to bowling.
(BEGIN VIDEO CLIP)
JAY LENO, HOST, NBC'S "THE TONIGHT SHOW WITH JAY LENO": Are they going to put a basketball -- I imagine the bowling alley has been just burned and closed down?
OBAMA: No, no. I've been practicing.
LENO: Really? Really?
OBAMA: I bowled a 129. Yes.
LENO: No, that's very good. Yes. No, that's very good, Mr. President.
OBAMA: It was like Special Olympics.
LENO: No, that's -- that's very good.
OBAMA: No, listen. I -- I'm making progress on the bowling. Yes.
LENO: And how about -- are you going to put...
(END VIDEO CLIP)
WHITFIELD: Well, before the show even aired, the president phoned the Special Olympics chairman to apologize.
Today, the group put out a statement saying, in part, "We invite the president to take the lead and consider hiring a Special Olympics athlete to work in the White House. And in so doing, he could help end misperceptions about the talents and disabilities of people with intellectual disabilities and demonstrate their dignity and value to the world."
Special Olympics chairman Timothy Shriver is Larry King's guest tonight at 9:00 p.m. Eastern, only on CNN.
So who got paid? We don't know yet which AIG workers got the $165 million worth of bonuses that have sparked so much outrage, but we could be a step closer.
Under mounting pressure, the bailed-out insurance company has sent a list of those workers to New York Attorney General Andrew Cuomo. He's not revealing any names just yet. Cuomo's office says, quote, "We are aware of the security concerns of AIG employees, and we will be sensitive to those issues by doing a risk assessment before releasing any individual's names."
All right. That's an obvious nod to the public furor over the bonuses. If you need more proof that emotions are running high, check this out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hey, hey, what's the fuss?
UNIDENTIFIED MALE: Hey, hey, what's the fuss?
UNIDENTIFIED MALE: Hey, hey, what's the fuss?
(END VIDEO CLIP)
WHITFIELD: D.C., Denver, Boston, just some of the cities where protestors are hitting the streets this week, rallying at AIG offices, major banks and other corporations. They're demanding better corporate behavior and urging Congress to crack down.
The House got the message, overwhelmingly passing a bill to let a 90 percent tax on some bonuses paid by companies getting bailout money. But not everyone's on-board. Republican congressman and former presidential candidate Ron Paul tells CNN this is not the way to go.
(BEGIN VIDEO CLIP)
REP. RON PAUL (R), TEXAS: In Congress they panic, they react minute to minute. Whether -- whether it's passing the Patriot Act or doing all these things, they react in emotional ways.
So when the banking crisis hit, instead of dealing with over the last decade, which I've been begging and pleading for them to do, they wait and, "Oh! There's a financial crisis. Oh, it came from too much spending, too much taxes and too much printing of money."
So what do they do? They spend more. They blindly appropriate this money. And I just think the whole process is outrageous, and we're on the verge of a major crisis.
(END VIDE CLIP) WHITFIELD: The Senate plans to take up a different version of the legislation next week.
Meantime, a young couple can't get their tax refunds or stimulus check, even though they've done nothing wrong. What the IRS is and isn't doing about identity theft and what you should do if it happens to you.
(COMMERCIAL BREAK)
WHITFIELD: California, the nation's most populous state, is reeling from the recession. It's been ravaged by the housing meltdown. Its finances are in shambles, and its jobless rate is soaring. So job fairs are drawing a lot of people who are looking for work. These scenes in Fresno, where thousands of people stood in long lines to meet with employers. About 2,000 jobs were actually available.
So one bright spot on the jobless front in California, the medical field, especially nursing. And a great place to get a degree, the state's community colleges, which are seeing an enrollment explosion.
CNN's Ted Rowlands reports from Los Angeles.
TED ROWLANDS, CNN CORRESPONDENT: Fredricka, we are in the nursing skills lab at Santa Monica College in Southern California. And as you can see, this is where nurses are trained to be nurses, using mannequins rather than real people to be safe. And it is just really fascinating to watch them learn this trade.
This is Jane Reynolds, a third-semester student. Used to be a fraud investigator, laid off a couple years ago.
But now Jane, you are becoming a nurse as you try to insert this IV into a virtual patient here. Tell us, why nursing?
JANE REYNOLDS, NURSING STUDENT: Well, one reason was that I wanted to help people. And the other reason is that there's endless career paths in nursing.
ROWLANDS: And that is a theme that we have been hearing. A lot of people redefining themselves, coming back for a second career, getting into the health-care industry. Not only because they think they have an interest in nursing, but also because there is stability here and, more importantly, jobs.
Ida Danzey is the associate dean here. Tell us about the interest you've seen. You even have a waiting list.
IDA DANZEY, ASSOCIATE DEAN, SANTA MONICA COLLEGE: We have a wait list. And that wait list has about 350 students who are qualified applicants. And I was about to do the combination. And a number of those applicants are second careers, and quite a few have a bachelor's degree in some other profession. ROWLANDS: Now, you said one of the concerns is that you get in some people that are in it because they know there's stability but might not be cut out for nursing.
DANZEY: Yes. Some people are in because they want to earn a living while they pursue another area of interest. And for example, musicians. And we have some people interested in being dancers, actors. And when they don't have a gig, then they can always work.
ROWLANDS: Needless to say most of them do not last.
This is a great room here. These students right now are dealing with a virtual patient. This patient reacts to everything they do: blood pressure, et cetera, et cetera. It even talks back to them, telling them their symptoms.
This is one of the many programs around the country.
A nurse starting in an urban area makes about $58,000 a year. And to educate yourself at a community college, a couple years of your time and a couple thousand dollars. You can get through the program for about five grand. A good deal, and a lot of people are getting into it -- Fredricka.
WHITFIELD: Perfect, Ted. We like that encouragement. Thanks so much.
All right. In our next hour of the NEWSROOM, Ted will fill us in on a growing trend in California: pink slip parties, where jobless people can network with each other and with potential employers.
Thousands of taxpayers won't be getting a refund this year, but it's not because they owe Uncle Sam. It's because someone stole their identity and then their checks.
Abbie Boudreau from CNN's special investigations unit has this story.
(BEGIN VIDEOTAPE)
ABBIE BOUDREAU, CNN CORRESPONDENT (voice-over): Brenton King is a 25-year-old father and husband. He says he was only 17 when someone stole his wallet and his identity.
BRENTON KING, ID THEFT VICTIM: I started receiving letters from the IRS, and the letters were asking me to pay taxes for a lot of income.
BOUDREAU: King says for years, at least five people used his Social Security number. And since the criminals earned income on his number and never paid their taxes, the Kings can't get any tax refund from the IRS or their government stimulus check.
JENNIFER KING, VICTIM'S WIFE: We want to put that in the bank. We want to be able to put money down on a home. BOUDREAU: The Federal Trade Commission says more than 50,000 Americans have fallen victim to this type of identity theft. It's a way for criminals to file false tax returns so they can get refunds or evade taxes altogether.
J. KING: From before we even file our taxes we know we're not going to get anything back. That's really frustrating.
BOUDREAU: King says when he went to the IRS to report the problem, no one believed that he was the real Brenton King.
Senator Chuck Grassley says he feels the IRS is not doing enough.
SEN. CHUCK GRASSLEY (R), IOWA: They aren't going to prosecute, and that's not very helpful. It sends a signal that you get a free pass if you're doing identity theft using IRS instruments.
BOUDREAU: National taxpayer advocate Nina Olson helps taxpayers resolve problems through the IRS.
NINA OLSON, NATIONAL TAXPAYER ADVOCATE: We see a lot of activity now because clearly, folks who are trying to perpetrate a fraud have to get their claims in early before the true taxpayer files their return.
BOUDREAU: Olson says there is help for the Kings through her office. Brenton King says he just wants his life back and that stimulus check.
B. KING: The fear is that it will happen for the rest of our lives.
(END VIDEOTAPE)
BOUDREAU: An IRS spokesman tells us that preventing identity theft is a top priority and that the agency has a special unit that deals with this issue. But when we asked them how many people have been prosecuted for this crime, he wasn't able to give us those numbers. So this is happening to so many people.
WHITFIELD: Very bad. I'm so feeling for them.
BOUDREAU: Oh, yes. They're not alone either.
WHITFIELD: No, they're not. So that means the IRS hopefully will do something, or can they do anything?
BOUDREAU: Well, in response to Congress they decided that they are going to send out letters to people that they feel are victims of identity theft. And we just have to wait and see if that works. We hope that it does, because something needs to be done to help these people.
WHITFIELD: Absolutely. Something's got to give. So where can you turn if -- you know, while you're waiting for something to give? BOUDREAU: Right, right. Well, you can -- you can call this IRS identity theft hotline. And we're going to give you those numbers: 1- 800-908-4490 or the taxpayer advocate service at 1-877-275-8271.
So hopefully if people call those numbers -- and they're on dotcom.
WHITFIELD: Good.
BOUDREAU: So if you didn't get those numbers, they are on dotcom. Call them.
WHITFIELD: Perfect.
BOUDREAU: They need to help you. You people need help.
WHITFIELD: Oh, yes, I know what it feels like. I've been a victim of identity theft.
BOUDREAU: Oh, really?
WHITFIELD: It's a nightmare, and it does take a long time. So I understand where they're coming from. And hopefully, help is on the way soon.
BOUDREAU: OK.
WHITFIELD: OK. Thanks so much, Abbie. Appreciate it.
BOUDREAU: Thanks.
WHITFIELD: All right. Well, some French are violently unhappy. We'll tell you what happened to spark this protest march in Paris.
(COMMERCIAL BREAK)
WHITFIELD: In France, chaos in the streets as that country weathers the economic crisis. French authorities say more than one million people took part in 200 protest marches across the country, including this one in Paris. Union leaders say the number was three million.
Violence marred the protest in the French capital. Hundreds of young people actually clashed with police, as you see there.
France's economy is shrinking at its fastest pace in three decades. Protestors say the government isn't doing enough to try to stop the slide.
The economic slowdown overseas is having an impact far beyond job losses and street protests. In cities like London and Moscow, there are signs that personal lives and social attitudes are changing based on today's economic insecurities.
Here are two snapshots from Britain and Russia.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: I'm Matthew Chance in Moscow.
And as the global financial crisis continues to wreak havoc with Russia's economy, one Russian newspaper is reporting that the downturn may be having an impact on the size of the country's population, as well. According to the paper, Internet providers say they've recorded a tenfold increase in the number of web searches being performed for abortions or abortion services, a fact it puts down to increasing numbers of women being unable to afford having children in a time of crisis.
Meanwhile, demographic experts approached by the same paper predict that about 150,000 fewer babies will be born next year compared to this year because of the financial crisis, while abortions will grow by between 8 percent and 10 percent, perhaps more among low- income families.
JIM BOULDEN, CNN INTERNATIONAL CORRESPONDENT: I'm Jim Boulden in London.
This recession is certainly having an impact on relationships here. Match.com says the number of people looking online for love in Britain is soaring. Apparently, that's cheaper than the bar scene.
But sadly, divorce rates are also said to be soaring, up some 17 percent so far this year, according to one account. But either way, it is good to know that Britain is still the No. 1 destination for champagne exports from France.
(END VIDEOTAPE)
WHITFIELD: Interesting. Champagne or not, Britain is facing a lot of the same challenges as the U.S., including a housing crunch. Last month in Britain, mortgage lending fell to the lowest level in eight years.
On the "ROAD TO RESCUE," knowledge is power. And that applies to everyone. We'll look at ways to help children understand the cold, hard facts of hard times.
(COMMERCIAL BREAK)
WHITFIELD: Stimulus isn't cheap. Neither are bailouts nor government in general. And recession takes a bite out of tax incentives. All that adds up to a staggering deficit now pegged at almost $1.85 trillion in fiscal 2009. The White House says it is still committed to cutting that in half by 2013 while making huge investments in education, health care and clean energy. On the labor front, the government counts more than 2,700 mass layoffs in February alone. Each of those cost at least 50 workers their jobs.
It's all about the business practices, not the bonuses. Former New York Governor Eliot Spitzer says we're missing the big picture when it comes to bailed-out insurance company AIG and the $165 million in bonuses that it paid out. But it's also at the center of something far worse, says Spitzer. He investigated AIG when he was New York attorney general. Here's part of his exclusive interview with CNN's Fareed Zakaria, who also asked why anyone should take the scandal- plagued Spitzer seriously.
(BEGIN VIDEOTAPE)
FAREED ZAKARIA, HOST, "FAREED ZAKARIA GPS": So, do you think that the problems that AIG got into later on stem from some of the same practices that you were trying to get at?
ELIOT SPITZER, FORMER GOVERNOR OF NEW YORK: They stemmed from an effort from the very top to gin up returns whenever, wherever possible, and to push the boundaries in a way that would garner returns almost regardless of risk. Back then, I said to people, AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. And as I have written...
ZAKARIA: Meaning what? Meaning that a lot of the money that we, the taxpayers, gave AIG has ended up being paid to Goldman Sachs?
SPITZER: Precisely.
ZAKARIA: And other companies.
SPITZER: The so-called counterparties to these very sophisticated financial transactions. When AIG initially received $80 billion, a decision that was the consequence of a very brief meeting of the president of the New York Fed, the secretary of the Treasury, perhaps Chairman Bernanke, and arguably some reports say the chairman of Goldman Sachs, $80 billion, virtually all of it flowed out to counterparties, $12.9 billion to Goldman Sachs.
Why did that happen? What questions were asked? Why did we need to pay 100 cents on the dollar on those transactions if we had to pay anything? What would have happened to the financial system had it not been paid? These are the questions that should be pursued.
Now, the bonus is a real issue. It touches us viscerally. The real money and the real structural issue is the dynamic between AIG and the counterparty.
ZAKARIA: You know, there are a number of people watching who are going to say Eliot Spitzer doesn't have credibility to talk about these issues because of what happened over the last year with your own behavior. What would you say to them?
SPITZER: I would say to them that I never held myself out as being anything other than human. I have flaws, as we all do, arguably. I failed in a very important way in my personal life, and I have paid a price for that. I have spent a year with my family, with my wonderful and amazing and forgiving wife and three daughters. And will have rebuilt those relationships, and hope to do that as time goes on. I also feel that to the extent, if I'm asked, and I can contribute to a very important conversation, I will do that as well. That is our right, arguably our obligation as citizens. I will do what I can and with full awareness and heaviness of heart about what I did.
(END VIDEOTAPE)
WHITFIELD: All right, former New York Governor Eliot Spitzer there on "GPS," which you can of course see this weekend.
AIG, corporate crackdowns, even the prostitution scandal that cost him his job. More from the former governor this weekend on "FAREED ZAKARIA -- GPS." An exclusive interview Sunday at 1:00 and 5:00 p.m. Eastern.
So, if you think losing a job or a home is hard, try breaking the news to your kids. Over the past few months, millions of parents have faced that heart-rendering moment. And this booklet right here has some help for you and for your kids. It's called "What Can I Do? My Journal for Caring and Sharing in Tough Times." Its author is Denise Daniels, a pediatric cancer nurse by training, now an authority on parenting and crisis intervention.
She joins us from Minneapolis. Good to see you. What provoked this book for you?
DENISE DANIELS, PARENTING EXPERT: Well, there was an overwhelming and unmet need to help families cope during this time of financial crisis. And I partnered with Scholastic for many, many years. They've been all about helping kids, helping parents and helping educators. So, it was a perfect partnership to be able to bring this opportunity and these resources out there to help families right now.
WHITFIELD: OK, and it's personal for you.
While we talk, we're seeing some images of President Obama leaving the meeting with the state legislative leaders. He met with over 60 of them, and some governors, as well as mayors. They've leaving that meeting now. Just some recent images there.
Meantime, Denise, you know this personally because you and your kids, your entire family, had to deal with losing everything about ten years ago, and then building from that.
DANIELS: Yes. That was a really difficult time for our family. And although we lost our house through a fire, it was a time where my kids were really unstable for a while. It was a very difficult time because they lost all of their toys, their books, their familiar surroundings. So, it's a grief and loss process. And that's what families are going through when their homes are foreclosed on and they have to move to other places.
WHITFIELD: Yes, and we're looking at a picture of the family, everyone intact and very happy now. But your kids are adults now, but at the time they were smaller. So, let's talk about this workbook that you have, because that's really what it is. It's for kids to be able to write in it, treat it like a journal. You explain to them in the book, it's OK to feel upset. Take me through the steps.
DANIELS: Well, it's natural. It's natural to feel afraid. And kids always want to know, who's going to be there to take care of me, in the egocentric world of the child. And so, the exercises in this book are really important because it walks kids through the steps of knowing that it's OK to be afraid. It's OK to be upset.
WHITFIELD: Like talking to a friend, talking to a counselor. These are some of the steps to go through.
DANIELS: Absolutely. That's right.
WHITFIEDL: Have a good cry. It's OK to be upset and cry about it.
DANIELS: It's absolutely OK. But parents are doing that too, right now. This is a really tough situation for families. There's sadness, there's anger, it's really a whole range of emotions that families are going through. And so, what we want to do as parents is to be a good model and show them that it is OK to be upset, but what do we do with that and how can we make ourselves feel better.
WHITFIELD: And even in this journey through this journal, you're asking the kids to spell out all the special things about your parents. And so, that page is kind of blank in the book for them to say, let's put it all in perspective. I really love my parents because of this, not necessarily because of the things that we don't have right now.
DANIELS: That's right. It's really teaching a valuable life lesson of self-worth versus net worth. In our society, unfortunately, we're identified through our job and how much money we have. And what we want to teach kids is, what's really important is not how much money we have, not the car we drive or where we live, but what's really important is what's on the inside.
WHITFIELD: And don't forget to be a kid in the very end.
DANIELS: Absolutely. We don't want to overburden our children with all the responsibilities and all of the information of what's going on. What's mentionable is manageable. We want to be talking to our kids, but we really want to encourage them to play and just be a kid. That is what we need to do as parents to best support our children.
WHITFIELD: Denise Daniels, thanks so much. Great advice...
DANIELS: Thank you.
WHITFIELD: ... for parents, and for kids, especially, who are really having a difficult time in these hard times for everyone. Thanks again.
DANIELS: Thank you.
WHITFIELD: All right, you asked. We're answering. Important health and medical information from our Elizabeth Cohen.
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WHITFIELD: All right, we're starting something new here in the NEWSROOM. Every week, senior medical correspondent Elizabeth Cohen gets tons of questions on how to become a more empowered patient. So, on Fridays, we're going to answer some of your e-mails. So, Elizabeth's here right now. Let's get right to it.
Dexter is our first e-mailer, with a question. He says, "I saw your recent report on prostate cancer screenings. Is it the PC screen that advances the cancer? If so, how does it do this?"
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: All right, this is a tough one. Dexter is confused because this is a confusing story. Yesterday, "The New England Journal of Medicine" came out with a study that said men who get tested, get screened for prostate cancer, they die of prostate cancer just as often a the guys who don't get screened.
My goodness! Does that mean you should stop getting screened? Well, here is the bottom line with prostate cancer screening. Sometimes men get screened, they find a tiny little prostate cancer, and doctors feel compelled to treat it when the man maybe could have lived with that prostate cancer for decades, no problem. Sounds crazy living with a cancer, but prostate cancers grow so slowly that it's possible.
And here's the big problem, Fred, is that the treatment sometimes is worse than the disease.
WHITFIELD: It exacerbates...
COHEN: Yes, well, it causes other problems. So, let's look at dark side of prostate cancer treatment, why you might not want to get it. It can make a man impotent. It can also cause incontinence.
It can also cause depression because then a man is aware he has cancer, and it's a cancer that -- I know this sounds weird -- really isn't all that big of a deal. Also, if you have tests that show you have prostate cancer, you may be uninsurable in the future. You're going to have a hard time getting insurance, possibly.
WHITFIELD: Gosh, it's so unusual to hear, maybe you don't want to get it treated if you have cancer.
COHEN: I know, like a breast cancer, you want to know. You want to treat that. But prostate cancers are different. They grow slowly...
WHITFIELD: Because they're slow-growing.
COHEN: ... and you may just want to watch it and that's it. WHITFIELD: OK. This from Meredith, who has an interesting question here. "About four months ago, I was in the hospital for 10 days because of an undiagnosted gastric problem. They found nothing. I ran up a bill of $75,000, which I have not paid. What do I do?"
COHEN: Meredith -- so many people are in her situation. There are so many bankruptcies these days, people who are working, people who are earning money, but they go into bankruptcy because they can't pay their medical bills. Who can pay a $75,000 medical bill? Come on.
So, we have some advice for Meredith. The first thing she wants to do is get a copy of that bill -- it's very important -- and look for double charges. People get charged double. I heard of someone who got charged for a surgery she never had.
Then negotiate with the hospital. Just say to them, look, I can't pay it. Will you take 40 percent? And sometimes hospitals will just take 40 percent because they figure you're not going to pay the whole thing, just, you know...
WHITFIELD: Right. They'd rather take something.
COHEN: Right exactly, than nothing. And then the other tip that we have is, you know what, consider bankruptcy. If that is your only -- if that's your only option, you know, these hospitals are not going to just kind of forget about you. They're going to keep after you.
WHITFIELD: Because you're not likely the only one, either. It's not that one $75,000 bill, but there may be ten others.
COHEN: And more tips, CNN.com/empowered patient. Tips for people in medical debt.
WHITFIELD: All right, Elizabeth. Thank you so much. Appreciate it.
COHEN: Thanks.
WHITFIELD: All right, well, among the state lawmakers who met today with the president is Peter Groff, the first African-American president of the Colorado Senate. He will be joining us live from the White House next in the NEWSROOM.
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WHITFIELD: We've been reporting on the president's bridge- building meetings with state and local leaders, with stimulus spending high on the agenda. I'm joined now by the president of the Colorado Senate, Peter Groff.
So, Senator Groff, were you at all pleased after your meeting with the president? I understand that a lot of states felt a little left out post-stimulus spending. But now there was some reassurance. In what way? PETER GROFF, PRESIDENT, COLORADO STATE SENATE: Well, you know, this was a great opportunity for us to actually sit down with the president and talk about what role state legislatures would have. Obviously, the stimulus dollars go to the governors, but we write the budget. And so, we were excited to have this conversation with the president and with Secretary LaHood from Transportation.
WHITFIELD: Did you feel you really didn't have that clear understanding before your meeting today? Was it that face time with the president that clarified certain things for you?
GROFF: Well, I think it was an opportunity, really, to get an idea from the administration what the timelines are. As legislatures are now writing budgets and some of us are getting ready to end, we needed to know what role we could play going on and making sure that our states get the money, and put it out on the streets and put people back to work.
WHITFIELD: And so, the president also said by taking these unprecedented steps to help states in these difficult times, he is relying on Congress to accept his budget plan. So, how reliant on that plan are you? How reliant on Congress are you to see that the president's promise is fulfilled?
GROFF: Well, the fact that the president's a former state legislator and an alum of this organization, we feel very good about what role we will play in that. Clearly, we will have to wait for Congress to pass the budget. And I've urged my members of Congress to look at it carefully and make sure that it does pass and that it gets to the governor's -- or gets to the president's desk here so that we can continue a lot of the programs that the stimulus dollars will help us at least hold on to. But we need that continuing funding that the president talked about today.
WHITFIELD: There are some states that have already showcased how stimulus dollars being used. Say, for example, in Maryland, there are a number of road projects. For Colorado, is there anything Coloradoans can see already as evidence of that stimulus plan?
GROFF: Well, with the bill that we passed and the governor signed, Senate Bill 108, our (INAUDIBLE) bill, which really put money into transportation, into 126 structurally deficient bridges that we have, the money that is coming from the federal government clearly will help us deal with the transportation issues that we have.
And I think Coloradoans will soon very see -- will soon see quickly how those dollars are being put to use, putting Coloradoans back to work. And of course, with the tax cut coming on April 1st for 95 percent of Americans, we are looking forward to those dollars coming to the state and putting Coloradoans back to work.
WHITFIELD: And how is your state doing with the joblessness, the unemployment rate and perhaps even foreclosures? Colorado is not on that -- at the top of the list of foreclosures, but certainly it's happening in your neck of the woods just like it is anywhere else across the country. GROFF: Colorado had been one of the leaders in foreclosures. But thanks to some legislation that we passed a couple of years ago and that Governor Ritter signed, we've begun to see that number slow down just a little bit.
Our unemployment numbers are relatively high for our state. But because we have been working on the green energy economy with Governor Ritter, putting some programs in place, we have seen the impact of the unemployment numbers in Colorado not as high as the rest of the country. But clearly, we'll need these stimulus dollars to put Coloradoans back to work. And we're ready to do that in our new energy economy.
WHITFIELD: Excellent. Senator Peter Groff, thanks so much for your time.
And of course, we're going to be hearing more from the White House...
GROFF: Thank you.
WHITFIELD: ... but in the form of the press secretary, Robert Gibbs. That press conference will be taking place next hour. And of course, we'll bring that to you live as it happens. There are live pictures inside, just as reporters there get at the ready.
Much more of the NEWSROOM right after this.
