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Bank Rescue: Wall Street Reacts; Mobilizing Team Obama; Our Next Energy Sources; Strip Club Job Fair; Affording Private School; Move to Get Banks Lending Again; President Obama on Energy Plan; Plane Nosedives Into Cemetery
Aired March 23, 2009 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: Well, President Obama, later this hour, announcing plans to pour more money, more billions of dollars into his energy program.
This time, also today, another few billion to tell you about, going towards buying bad debt from banks. You know, those so-called toxic assets. Well, the treasury secretary, Timothy Geithner, explained this latest move to get banks lending again, as CNN National Correspondent Jessica Yellin was trying to write fast enough to keep up with this plan out there.
I hope you took some copious notes there. So tell us, what was the big deal? It sounds like we've got an auction we need to all go to.
JESSICA YELLIN, CNN NATIONAL POLITICAL CORRESPONDENT: That's right. The big picture, first of all, T.J., is that they believe that Wall Street is essentially holding the rest of the economy hostage because they have these so-called toxic assets on the books of some of these major financial institutions. So the treasury secretary's plan is to get these toxic assets off the books of these institutions. To do that, they want to sell them to private investors.
Well, right now, no one wants to take risks. No one wants to buy these assets. So how do you price them? How do you determine what the cost is? You put them up at auction and, as they say, ,let the market determine the price.
Well, they say that takes us the next step down, but the problem is, to get there, the private money has to be invested. And right now, private investors are afraid of taking risks. So they say government has to pool its money with the private investors to encourage individuals to take risks in this market. And they say that's the only way to get this whole process moving forward.
But critics say, T.J., that this is a bad investment for taxpayers because we are maximizing profit for investors, but minimizing gain for the taxpayers. The government says it's a win-win if it works, because it will free up the economy and banks will start lending to us again. We're just in the position of having to wait and see if it work.
HOLMES: OK. You were in this room listening to this and getting the plan, like I said, taking those notes. Now, I guess, how was this message delivered? Did you sense some confidence in that room, if you will? It was so different, the plan that came out before, people talking about how shaky his performance might have been. But does there seem to be more confidence in this plan going forward?
YELLIN: He is very clearly committed to this plan. He is not a person who exudes confidence. I described him to somebody else there as, he looks like an overgrown prep school student who's coming before the administration board because they broke the honor code.
HOLMES: Oh, my goodness.
YELLIN: He sort of sits there kind of cowering back. It's just his style. He's a very cautious guy, and he doesn't have a lot of reaction, and he seems very detached. But it seems to be a matter of presentation, maybe, as opposed to confidence in the plan.
HOLMES: All right. I'm going to have to write that down and make sure we use that description again, but we'll make sure we always credit you for it.
Jessica Yellin, again, we appreciate you. Thank you so much.
We now want to get to how this really affects you all out there, you and me, those folks trying to keep a job, trying to get a job, trying to start a business. CNN money team correspondent Christine Romans, really one of the leaders of that money team, joins us again now from New York.
And I guess that's the key in this whole thing. I guess we hear so many plans and so many numbers, and for folks sitting on their couch looking for a job, it's like, how does this affect me? So why is that so important to that guy?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Look, if Treasury Secretary Timothy Geithner and his team are right, and if this works, and if by the fall we have an active market for these things, even if they're not worth what a lot of people think they're worth, then the banks are healthier, they can start to lend and attract more capital. And if the banks are healthier, then that's the first step to an economic recovery.
Again and again, T.J., I've heard today people say, unless have you the banks healthy, you're not going to have a recovery. So this Geithner plan potentially could help everybody.
Here's the plan. As you heard from Jessica Yellin, the government puts up $100 billion, it creates this public/private partnership.
You share the risk, you also share the benefit, so that means private investors could make a whole lot of money on this. You hope -- you hope it works and they will, right? The government finances up to about 50 percent.
How will it help everybody? Look at what Timothy Geithner told "The Wall Street Journal" in on an op-ed. He said, "Simply hoping for the banks to work these assets off over time risks prolonging the crisis in a repeat of the Japanese experience."
The Japanese experience was, for the last decade, 10 years of recession or no growth. It was not pretty.
What they're saying is that we avoid that and everything -- it's better for everyone. Lending resumes and things get better.
There's a second part of this, an expansion of something that's called the TALF. This is loosening up the markets for securities that are backed by credit cards, by auto loans, by consumer loans. That's something that's already started. They want to really kick that into high gear, and that would hopefully free up lending in those areas as well.
HOLMES: All right. One note here before I let you go.
How much confidence is there out there that -- I mean, you've got to get people to want these bad assets, and they're trying to encourage it. But how is it being received so far? Is the government going to be able to do enough to encourage somebody to buy up this junk?
ROMANS: Well, we already know that PIMCO, which is this huge bond house run by Bill Gross, a very well-respected veteran of the market, they're interested. BlackRock, they say they're interested, another asset manager. They're interested in signing on and either being an asset manager or learning more about this whole thing. So we already know there's a little bit of interest out there from some big names.
But keep in mind, some of my sources say, too, that you want to make sure the banks want to get rid of this stuff. I mean, what if the banks decide they don't like the prices they might get at auction...
HOLMES: Ah, that's an interesting point.
ROMANS: ... or they want to hold on to it a few more years because they think housing prices could recover, and they don't want to take the haircut they might get -- the haircut, if you will, they might take at auction? So there's still some details to be worked out, but clearly the administration, T.J., has been working on this for a good six weeks now, if not longer, so you'd think they've reached out to the financiers to find out it that there is interest.
HOLMES: Well, a lot of "ifs" in this plan.
Christine Romans...
ROMANS: We've never been here before, you know? I mean, we're just all working through it together.
HOLMES: All right. Christine Romans, we appreciate you working us through it, as always. ROMANS: Sure.
HOLMES: Thank you so much.
And the president, meanwhile, in all this talk about the economy and bailing out and the billions, well, he's going to be talking about something else this hour -- energy independence. He's outlining his plan live. It's going to come up -- we're expecting it at the bottom of the hour.
We want to head to Suzanne Malveaux, who is at the White House.
Suzanne, we've been talking about all this other stuff, and he's going to throw something else at us here. And I believe the count is day 63. What in the world are we going to do on day 101? We're not going to know what to do.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: It already seems like a year, T.J. I don't know, all of this that is happening.
And the president is going to make a case that it's all related, that this can actually save us some money and perhaps create some jobs as well. He's going to be outlining this energy initiative, talking about the need to lower the greenhouse gas emissions, as well as to invest in some programs for renewable sources of energy.
So what is he going to talk about? Dollars and cents. Again, the economic stimulus package. We're talking $787 billion. Of that, he says $39 billion is going to go to the Energy Department. He is also going to talk about $20 billion of that in tax incentives for these energy projects that he is going to be emphasizing.
And then he's going to be selling the budget. We're talking about that 10-year budget proposal. Out of that, $75 billion to make permanent some tax cuts that are helping create some of these energy research and experiments that he believes, ultimately, it's going to save energy, it's going to save money, and it's going to create jobs.
That's what you're going to hear from the president within the hour -- T.J.
HOLMES: All right. So he's making this sale, essentially. And I don't want to disappoint -- I guess a lot of people should know. You talked about $39 billion, he was going to go to the Energy Department.
This is stuff -- money that's already been budgeted. We talked about the stimulus plan there. This is not new money we're creating somewhere, this is stuff that's already tucked away in places and been set aside, essentially.
MALVEAUX: And he's also going to be talking about the budget. He's going to be trying to sell that $3.6 trillion, T.J. A lot of people looking at that figure very closely, wondering if there's too much spending that's taking place, whether or not it's going to be used well. That is the case that the president is going to be talking about in days to come, specifically that press conference that's tomorrow, prime time, to sell that budget to members of Congress, but more importantly to the American people. To say, hey, look, this is justified here, that we've got this figure, but this is about dealing with the energy policy, dealing with health care, education, all of these big items here that he wants to tackle, these entitlement programs, in the first four years of his administration -- T.J.
HOLMES: In the first four years. Like you said, it already seems like it's been a year, but we are counting to 63 only?
MALVEAUX: Sixty-three. OK.
HOLMES: Suzanne Malveaux, as always, a pleasure. Thank you so much.
MALVEAUX: Sure.
HOLMES: And we will be bringing you the president's remarks on investing in clean energy and new technology, as you just heard Suzanne describe. That live news conference he's going to be talking about here, again, we're expecting it in about 20 minutes, the bottom of the hour, 12:30 Eastern, 9:30 Pacific.
And CNN is your place to watch the president's primetime news conference you also heard Suzanne mention. That coverage begins with the best political team on television at 7:45 Eastern. The president's remarks are expected to start at 8:00 Eastern Time.
Well, you can probably expect more and more fury tomorrow over those fat bonuses paid to some AIG employees. Anger, of course, boiled over last week following news that the company paid millions in bonuses after taking billions in bailout money.
Tomorrow, a House panel holds another hearing on the federal government's effort to keep AIG from collapsing. The treasury secretary and Fed chairman, Ben Bernanke, both scheduled to testify, so you know this one's going to be good.
The president sounded off about the bonuses during his "60 minutes" interview, actually talking about those AIG bonuses and that they certainly should not be allowed to happen. We know that the president a short time ago was meeting with some of his people today, talking about the big mess.
Here's the president's sound we're just getting from him.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: ... financial system, so banks are lending again, so that the secondary markets are working again in order to make sure that families can get basic consumer loans, auto loans, student loans, that small businesses are able to finance themselves, and we can start getting this economy moving again.
As I've said before, there are a number of legs in the stool in the economic recovery. Step one was making sure that we have a stimulus package that was robust enough to fill the huge gap in demand that was created by the recession.
Step two was making sure we had an effective homeowners plan to try to keep people in their homes and to stabilize the housing market. Because of the work that's already been done, you are starting to see glimmers of hope in the housing market that stabilization may be taking place. Mortgage rates are at a very, very low level, and you're starting to see some activity in the housing market.
We then took a series of steps to improve liquidity in what had been secondary markets that had been completely frozen. And we are now seeing activity in student loans and auto loans. We announced last week a small business initiative that ensures that we have more activity, and you start seeing small businesses being able to get credit again in order to sell products and services and make pay roll.
And this morning, Secretary Geithner announced the latest element in this multi-pronged approach, and that is a mechanism that he, in close consultation with the Federal Reserve and the FDIC, has initiated in order to allow banks to take some of their bad assets off their books, sell them into a market, but do so in a way that doesn't just obligate taxpayers to buy at whatever price they're willing to sell these assets. Instead, it involves a public/private partnership that allows market participants who have every interest in making a profit to accurately price these assets so that the taxpayers share in the upside, as well as the downside. And we believe that this is one more element that is going to be absolutely critical in getting credit flowing again.
It's not going to happen overnight. There's still great fragility in the financial systems, but we think that we are moving in the right direction. And we are very confident that, in coordination with the Federal Reserve and the FDIC, other relevant institutions, that we are going to be able to not only start unlocking these credit markets, but we're also going to be in a position to design the regulatory authorities that are necessary to prevent this kind of systemic crisis from happening again.
And I'm looking forward to traveling to the G-20 so that we ensure that the activities that we're doing here in the United States are effectively matched with comparable action in other countries. And Secretary Geithner's already traveled and met with the finance ministers of the G-20 states so that we can make sure that we're all moving on the same page.
So the good news is that we have one more critical element in our recovery, but we've still got a long way to go and we've got a lot of work to do. But I'm very confident that with the team we've got assembled, we're going to make it happen.
All right?
Thank you, guys.
(CROSSTALK) OBAMA: You know, I'll have a full press conference tomorrow night, and you guys are going to be able to go at it.
All right?
Thank you, guys.
HOLMES: You see the president there after his daily economic briefing. You saw the Fed chairman, Ben Bernanke, there to his left. Also in the room, FDIC Chairwoman Sheila Bair. And also, of course, his treasury secretary, Timothy Geithner, who released a plan to get those toxic assets off the banks books, released that just today.
The president there, again, something you hear every time he talks about the economy now, confidence, confidence. Confidence that things will get better. Certainly said this will not happen overnight, still a long haul to go, but he is confident. And once again, you heard him there say he is confident in the team he has assembled.
We have been hearing calls for Timothy Geithner to step down from particular congressmen on Capitol Hill. The president, last night, defended his treasury secretary on "60 Minutes," and he continues to say he has got the right team in place.
We are expecting again to hear from the president at the bottom of the hour talking about his plan for renewable energy, to get this billions and billions of dollars going towards new forms of energy. Expecting to hear from him at 12:30. You'll hear that live here in the CNN NEWSROOM.
Meanwhile, another story, a tragic story we're keeping an eye on. Five hundred feet short of the runway, a plane nose-dives into a cemetery. Seven children killed, also seven adults as well. A lot of witnesses saw this thing.
(BEGIN VIDEO CLIP)
MARTHA GUIDONI, WITNESS: I've never seen anything like this in my life. We were just taking a ride, and all of a sudden we watched this plane just take a nosedive right into the cemetery.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
HOLMES: All right. Investigators at the scene of two plane crashes that happened just hours apart. One of them was in Montana -- specifically Butte, Montana -- where seven adults and seven children were killed. This is the one you're seeing actually on this side of me, a picture of it.
It actually nose-dived into a cemetery. That was in Butte, Montana.
The other crash happened across the globe in Tokyo. This was on a FedEx cargo plane.
As you see this video here, it was caught bouncing on the runway a couple of times, before then bursting into flames. Again, this was a cargo plane from FedEx.
Two American crewmembers on board were killed. But we'll let this video play out and you'll see this thing burst into flames. But just an amazing scene, an unfortunate, tragic thing to be happening and to be caught on tape.
Meanwhile, we'll turn back to the crash in Butte, Montana. CNN's Dan Simon keeping an eye on the very latest there.
(BEGIN VIDEOTAPE)
DAN SIMON, CNN CORRESPONDENT (voice-over): The single-engine turboprop plane, a Pilatus PC-12, was just 500 feet from the runway in Butte, Montana, when witnesses say it crashed straight into the ground.
GUIDONI: I've never seen anything like this in my life. We were just taking a ride, and all of a sudden, we watched this plane just take a nosedive right into the cemetery.
SIMON: The FAA confirms seven children and seven adults were on board. No one survived. Federal officials say the group might have been headed to a ski trip, but the destruction at the crash site leaves very few clues.
GERRY O'BRIEN, EDITOR, "THE MONTANA STANDARD": One of the eyewitnesses who ran across the street in there and took some photos said he was about 20 feet from the wreckage. It had created a large pit when it augured (ph) in, and it just disintegrated. There wasn't much left of the plane, of the wreckage.
SIMON: The aircraft began its journey in San Diego and made a few California stops, the last of which was in Oroville, where it refueled before heading to Bozeman, Montana. The FAA says the flight diverted to Butte, where it went down in the Holy Cross Cemetery, just 500 feet from the airport. The cause of the crash is still unknown.
BEN BERMAN, FMR. NTSB INVESTIGATOR: The loading of the aircraft is one of the things the investigators will be looking into. They will be looking into whether there was a possibility of engine failure that could have brought the airplane down, as well as many other possible crash causes, including weather and pilot performance and all kinds of things.
SIMON (on camera): Not much information yet about the victims. Again, seven adults, seven children dead. We can tell you that CNN did speak to two people who live in the Napa Valley community in California. They tell us that a family of five -- a family of five died in this crash.
The father, said to be a prominent eye surgeon. The mother, a dental hygienist. They had three children ages 4, 3s and 2. Dan Simon, CNN, Butte, Montana.
(END VIDEOTAPE)
HOLMES: We'll turn back now to that video we showed you of the crash in Tokyo. This is incredible, the FedEx crash that killed both American crew members.
You can see this thing bounce a couple times and then burst into flames. It was coming in for a landing.
Witnesses say, again -- we're all witnesses to it, really, looking at that video -- that it bounced at least twice on that runway, then veered to the left, then exploded there. The flight was coming in from China. Airport officials say wind shear may have been a factor in this thing.
(WEATHER REPORT)
HOLMES: And stay with us, folks. We're going to be bring you breaking news we're getting out of Pakistan of an explosion near a police station.
Stay with us.
(COMMERCIAL BREAK)
HOLMES: All right. Want to tell you what we're seeing out of Islamabad, the Pakistani capital, where we understand an explosion has taken place. Some new pictures we are seeing here, but again, Pakistani television reporting that this was an explosion that took place near a police station there in Islamabad, which is actually very close to a market, but certainly near a police station.
Don't have a good count on how many possibly injured or hurt in this thing. Reports out there saying one and up to two possibly -- in some media reports, one and up to two people have been killed in this bombing. Again, we understand this was very near a police station there.
Our sources are working this. Our international desk working this story for us, but information we are just getting in, that in fact there has been an explosion near a police station there in Pakistan, in Islamabad in particular. But these are some of the first pictures we are seeing out of that area. Tough to make them out right now, but still, you can see kind of a chaotic scene there.
We all over this story. As we get more information, we absolutely will pass that along to you.
Meanwhile, right now, something else we're waiting on right now is the president. President Obama, expecting to hear from him out of D.C.
Not exactly sure -- we're looking at the back of an SUV. Not sure where this camera position is, but I understand it's a live picture, so there you go.
He's going to be talking about some of his plans for a clean energy future. You know that's a live picture of the White House. His clean energy future coming up. Expecting to hear from him right at the bottom of the hour. Here we are, so maybe any moment.
When it happens, we'll bring it to you.
(COMMERCIAL BREAK)
HOLMES: All right, the president and the Obama administration, their latest attack on the banking crisis. Today, Treasury Secretary Timothy Geithner revealed plans to buy up bank's bad debts. Toxic assets, as they're called. Under this plan, private investors would be teaming up with the government to buy up those bad debts and the FDIC would auction off the debts like troubled mortgage loans, things like that, and provide financing to whoever won the bid. So the federal government hoping to provide enough support to buy at least $500 billion, maybe even up to $1 trillion, in bad assets.
Want to head over to Wall Street, see how this plan, and Susan Lisovicz, New York Stock Exchange.
Well, does it seem like Wall Street has enough details now? They didn't like it the first time around. It was too vague. But now are there enough details that we expect some kind of a rally today?
SUSAN LISOVICZ, CNN CORRESPONDENT: Yes, we're seeing a big rally. I'd say stocks have been toxic assets for a long time, but not today, T.J. We're seeing a huge rally. The three major averages each up four percent.
What you're seeing is hope, or maybe you could call it greed. Greed had been missing in the market for some time, but stocks are cheap and you are seeing buyers feast, in particular on banking stocks. Many of them are up in the double-digits.
We have detail -- of course there are a lot of questions whether this plan will work. But the fact is, we are seeing some encouraging signs coming from the Obama administration. Also, believe it or not, T.J., from the housing market. Today existing home sales in February surged more than 5 percent. The street was expecting a decline there. Nearly half of the properties that were bought were in foreclosure. So they're cheap, but the fact is you are seeing some buying. And it's translating into buying on the street.
Right now the Dow is up 322 points. I just want to mark, in the last two weeks, the Dow has surged 1,000 points. And two weeks ago is when the Dow hit the low, the current low for this bear market. So a big sprint indeed.
HOLMES: Well, I was wondering why you were so upbeat today. It's kind of tough sometimes covering all that down economic news, but it's good to see a bit of a rally. A lot of folks down there smiling right now, but hopefully it can continue.
Susan Lisovicz, we always appreciate you. Thank you so much.
LISOVICZ: Thank you, T.J.
HOLMES: Now you can be sure to check out cnnmoney.com for more on your pocketbook issues, including the seven new rules of financial security. It offers important advice that you certainly can use.
All right, what's the president got going on this week? Let's take a look.
Tomorrow he will actually be meeting with the Australian prime minister. He'll hold a prime time news conference, of course, as we've been mentioning tomorrow evening.
Then, on Wednesday, looks like the president is going to be delivering remarks on his budget priorities. He's going to be talking to the Senate Democratic caucus. And then in the evening, he'll be attending a fund-raiser for the Democratic National Committee. Well, again, we're waiting for the president to speak. He'll be there in Washington. He'll be talking about his energy plan and how to provide some tax cuts to help stimulate this economy. And, of course, he'll be talking about his budget. A big push right now to sell that thing. Stay with us. We'll have his live remarks.
(COMMERCIAL BREAK)
HOLMES: All right. The campaigning is not over just yet. You thought it was done. Nope. Team Obama is back on the job. CNN's Jim Acosta explains why you might be getting a knock on your door.
JIM ACOSTA, CNN GENERAL ASSIGNMENT CORRESPONDENT: T.J., President Obama won the election with the help of an army of grassroots supporters who organized online, then took their message to the streets. Now the president is calling on his volunteers, once again, to sell more than a campaign. (BEGIN VIDEOTAPE)
ACOSTA (voice-over): Don't tell them the race is over. Once volunteers for the Obama campaign...
UNIDENTIFIED MALE: I just want to ask you if you support that and if you're willing to the sign this.
UNIDENTIFIED FEMALE: Oh, definitely.
ACOSTA: A vast grassroots network of supporters is back on the trail.
UNIDENTIFIED MALE: Basically, here's the plan.
ACOSTA: Reactivated. This time, to sell the president's agenda.
UNIDENTIFIED MALE: Could you be interested in signing up?
UNIDENTIFIED MALE: Well, I'm interested in talking about it.
UNIDENTIFIED MALE: OK.
UNIDENTIFIED MALE: I'm not saying that I'm interested in supporting all of his plan.
UNIDENTIFIED MALE: OK.
UNIDENTIFIED MALE: I'm part of a nationwide movement today called Organizing for America.
ACOSTA: Michael Lafemina was one of hundreds of volunteers who went door-to-door from New York...
UNIDENTIFIED FEMALE: No money is involved.
UNIDENTIFIED MALE: Really? I've got my checkbook here.
ACOSTA: ...to California on behalf of something called Organizing for America, a project of the Democratic Party run by remnants of the Obama campaign.
MICHAEL LAFEMINA, OBAMA VOLUNTEER: I don't feel like I'm volunteering for President Obama, I feel like I'm volunteering for myself, for our country, for our democracy.
ACOSTA: How do they do it? Using the campaign's old e-mail list, Organizing for America alerted supporters to visit its Web site where a message from the president was waiting.
OBAMA: Talk to some neighbors and let people know how important this budget is to our future.
ACOSTA: And voila! (ph)
UNIDENTIFIED MALE: If you can provide your name, some contact information, we would send you some information.
UNIDENTIFIED MALE: I would be happy to do that.
ACOSTA: The mission on this outing -- to blunt criticism from Republicans.
SEN. JUDD GREGG (R), NEW HAMPSHIRE: If we maintain the proposals which are in this budget, over the 10-year period that this budget covers, this country will go bankrupt.
ACOSTA: And even a few skeptical Democrats over the president's budget.
UNIDENTIFIED MALE: I'm especially concerned about the long term.
UNIDENTIFIED MALE: He's not trying to pass the budget. It's coming out of my pocketbook.
ACOSTA: As Michael Lafemina found on Long Island, not everybody is sold.
UNIDENTIFIED MALE: He's already crippled the (EXPLETIVE DELETED) economy. Him and the Democrats. I don't care. Let them film it.
ACOSTA: These volunteers insist they can take the heat.
UNIDENTIFIED MALE: Keep up the good work, Obama.
UNIDENTIFIED FEMALE: We support him 500, 2,000 percent.
(END VIDEOTAPE)
ACOSTA: If it works, Organizing for America could put its volunteers to work again on other White House plans, giving the administration a ground force that can gather signatures and work the phones to push the president's agenda. It has all the makings of a campaign before the re-election campaign -- T.J.
HOLMES: All right. And our thanks to our Jim Acosta there.
CNN, of course, your place to watch the president's prime time news conference, which will be coming your way Tuesday night. Coverage begins with the best political team on television at 7:45 Eastern Time. The president, we expect his remarks to start at 8:00 Eastern Time.
Well, have you seen these pictures? Kind of some pretty stuff. Very pretty pictures. But it's not all fun and games and pretty pictures there in Alaska where this volcano is shooting some pretty nasty stuff into the air
(COMMERCIAL BREAK)
HOLMES: All right. Look at that picture there. That is Alaska's Mount Redoubt volcano. It's putting on a bit of a show right now.
Geologists have been expecting a bit of a show. They've been expecting it since late January when they detected some rumblings with that volcano. Redoubt has now erupted five times. That happened all overnight. This is the largest eruption -- I don't know if this is the one you're seeing -- but one of the largest shot a plume of smoke more than nine miles into the air.
Now, if you're not familiar with Redoubt and where it is, it's about 100 miles southwest of Anchorage. We are getting reports that some surrounding communities now are starting to get a little bit of dusting of fine, gray ash. But this thing has not erupted in such a way since back in 1989. Even though it's some nice pictures to look at, it can cause some problems for some airplanes and also people with respiratory illnesses.
And as we've been telling you, we're waiting to hear from the president. Expecting to hear from him at the bottom of the hour. We're past the bottom of the hour now, but we will let you know. He's going to be talking about energy and his energy plans. When he does, we'll take you live to that.
But in the meantime, we're going to take you live to New York and cnnmoney.com's Poppy Harlow. She is there.
Hello to you. A lot of talk about energy. Some big plans and some more big money.
POPPY HARLOW, CNNMONEY.COM: Yes, some more big money is for sure, T.J. And we all know President Obama pushing for more investment in clean energy. Expected to speak here really any minutes.
Some things we want to outline for you ahead of what he has to say to us publicly. We know the president's 10-year budget sets aside $75 billion to make existing tax cuts for renewable energy research permanent. The idea here really, T.J., push that private investment in research and development. The administration insists that these billions of dollars are really money well spent, saying every dollar we spend on R&D in terms of clean energy adds $2 to our economy in the long run.
A big part of this also, of course, comes back to job creation. The president has promised to create millions of jobs that are energy- related positions in this country. But the president's budget for all of this has come under heavy criticism lately because of new, higher deficit projections. Today's event really all about drumming up that support for investment in renewable energy, especially at a time like this when it's hard to get support for any kind of spending, even though some argue we just can't afford it right now.
So it's going to be very interesting to hear what he has to say on that front, backing his plan, T.J.
HOLMES: And, you know, you talk about some of that criticism there and it's so hard to get people to look so far ahead into the future and how this is going to benefit us. So I guess -- well, how is he going to marry (ph) it down a little bit? Is he going to try to highlight particular things, particular projects today?
HARLOW: He is. And what I think is very interesting about what's planned is, he's coming together with the private sector. There's going to be representatives from some clean energy companies there as well. Solar is a big focus today. Several alternative energy companies are participating in the event at the White House today.
One company we want to mention here, Solyndra. You may not have heard of it. It produces solar panels for commercial buildings. This is their website. You can check it out to learn more. But last week this company won the very first federal loan guarantee for an alternative energy project. Congress set up this loan guarantee program about four years ago, but it's really been bogged down in red tape. And Solyndra plans to use $535 million in terms of that loan guarantee to build a second solar panel factory.
We also heard Energy Secretary Steven Chu saying that project could put 3,000 people to work. So what you're seeing, sort of the theme of the day here, T.J., the government coming together with the private sector, trying to move these things forward - T.J. HOLMES: Yes, we will see if we can encourage the private sector to get involved.
HARLOW: Yes, exactly.
HOLMES: All right. Poppy Harlow for us in New York. Thank you, as always.
HARLOW: You're welcome.
HOLMES: Like we said, we're waiting to hear from the president about these energy plans. So, as we stand by and wait to hear from the president, what should we talk about? How about strip clubs? Yes, I said it. We're going to take you to a strip club where there was a long, long line outside over the weekend. But they weren't there to see anybody dance, they were signing up to maybe start dancing there.
(COMMERCIAL BREAK)
HOLMES: The president has arrived at the Eisenhower Executive Office Building, which is literally right across the street from the White House. Just took the short walk. He's going to be delivering some remarks to some energy entrepreneurs and leaders in the research community, talking about clean energy future and how he wants to invest in a lot of these new forms of energy and -- and, oh, let me see here.
Ah, top left of the screen there. That is the actual podium. Forgive me, my eyesight must be getting bad here. But there it is. That picture there. You can see it a little larger now. Waiting for him to step up to that podium and step into that room. When he does, we will take you to his remarks live. Again, we know he's in the room -- excuse me, in the building, just waiting on him to step into that room. So that can happen at any moment.
So in the meantime, we want to move on to some other things, but now I guess I feel kind of strange talking about strip clubs while I'm waiting to hear from the president of the United States. But that's what I've got to talk about here.
A lot of people looking for a job. And if you are willing to take your clothes off, then we have got the place for you. It's called the Foxy Lady strip club in Providence, Rhode Island. The club held a job fair. Yes, this weekend, a job fair. Had about 30 positions open. Now this wasn't just for people who wanted to take off their clothes, even though, yes, they were hiring some strippers. They also need bartenders, servers, managers, things like that.
I spoke with the mayor of Providence about the job fair.
(BEGIN VIDEOTAPE)
HOLMES: Let me get your thoughts on the unemployment rate there in your town. And again, just the sign of the times of something like this we're seeing now. MAYOR DAVID CICILLINE, PROVIDENCE, RHODE ISLAND: There's no question that Rhode Island is suffering from one of the highest unemployment rates in the country. And what's very upsetting about the economic recovery plan is we'll be able to demonstrate real job growth, particularly in green technology jobs in the building trades and the infrastructure work and in some important technology investments.
But, you're right, the Foxy Lady announced that they are looking for bartenders and bouncers and dancers and a whole range of positions and are going to have a job fair because they feel like there's a lot of people who might be looking for work. But we certainly want everyone who is looking for a job to find work in our state, and certainly in my city. The economic recovery plan has lots of ability to do that, but I think there are industries that are growing even in these bad economic time.
HOLMES: Yes, yes, a job is a job right about now.
CICILLINE: A job is a job, right?
HOLMES: And we hear their Friday legs and eggs brunch is a hit there. But let me go back to you . . .
CICILLINE: Come down to Providence, I'll take you there.
(END VIDEOTAPE)
HOLMES: Just need to get on the record I am not going to the legs and eggs brunch at that club.
Well, we also talked to Florida Congressman Connie Mack. He saying that Treasury Secretary Tim Geithner not up to the job. He told us this just here last hour here live. Said he wants them to resign. If not, says he needs to be fired. Take a listen.
(BEGIN VIDEO CLIP)
REP. CONNIE MACK (R), FLORIDA: I believe he is impeding our ability to move forward. And again, it goes down to confidence. And this just isn't me talking. There have been Republicans and Democrats who are skeptical. And I think more people need to come forward and to ask for him to step down or resign so we can bring someone in who's got the skill sets and that the American people can have confidence in to get our economy moving.
HOLMES: And you say someone there. Who would you like? And if you don't have a name, what type of person? Because he comes with great credentials, this Timothy Geithner. A lot of people say he's a really sharp guy. So do you have a name? Or what type of guy who has a different background than Geithner does, and experiences than Geithner, would you like to see?
MACK: Well, I think, again, this is someone that the president will have to look into and make that nomination and go through the Senate process. That's one of the responsibilities of the president. But we clearly need someone who's got the skills to handle the job and who can instill confidence in the American people and the taxpayers. And in my opinion, Tim Geithner is not the person.
HOLMES: He's not the person. Did you want him to resign before this whole AIG mess about these bonuses really came down hard last week? Did you want him to go before that or was that the last straw?
MACK: Well, I -- you know, I was disappointed in his confirmation in the first place, to be honest. And I also -- and then everything after that kind of leading up to AIG just kept eroding this confidence that people have in him.
(END VIDEO CLIP)
HOLMES: All right. Again, that was Representative Connie Mack speaking to me a little earlier here in the NEWSROOM.
Like we've said, the president has made it into the building, the Eisenhower Executive Office Building there in D.C. Expecting to hear from him on some comments about clean energy future.
Just some opening remarks being made right now. When that -- they do hand it over to the president, we will certainly step in and listen to him live. But please know, we are keeping an eye on it, monitoring it, and you will not miss a moment of the president speaking.
We just -- we're talking about the Treasury secretary. President Obama is standing next to his guy. He told "60 Minutes" Steve Kroft that he is sticking by Timothy Geithner, even though some critics are calling for his resignation over the AIG bonus backlash.
(BEGIN VIDEO CLIP)
STEVE KROFT, "60 MINUTES": Your Treasury secretary, Tim Geithner, has been under a lot of pressure this week and there have been people in Congress calling for his head. Have there been discussions in the White House about replacing him?
OBAMA: No.
KROFT: Has he volunteered to or come to you and said, do you think I should step down?
OBAMA: No. And he shouldn't. And if he were to come to me, I'd say, sorry, buddy, you've still got the job. But, look, he's got a lot of stuff on his plate. And he is doing a terrific job. And I take responsibility for not, I think, having given him as much help as he needs.
(END VIDEO CLIP)
HOLMES: All right. By all accounts, he needs a lot of help. A lot of his top deputies and assistants not been put into place. At last check there were 15 vacancies among those top 17 jobs within the Treasury secretary that he needs to help him out. Again, letting you know, we're waiting to hear from the president on energy and our energy future and investments in new energy. That's, again, a live picture. Eisenhower Executive Office Building, right across from the White House. The president is there. Opening remarks being made now. When the president starts speaking, we will bring it to you live. Don't you move.
(COMMERCIAL BREAK)
HOLMES: Once again, keeping an eye on the executive -- the Eisenhower Executive Building there in Washington, D.C. The president delivering some remarks about a clean energy future and investments we need to make and that he would like to make in his budget, and also set aside several billion dollars to make these investments that will help us out in the future. You're looking at a room full of energy entrepreneurs there he is meeting with and speaking to today. When he steps up to that podium and starts to deliver his remarks, we will bring that to you live. You will not miss it.
Meanwhile, more about this economy and how it's affecting people. Difficult times certainly for a lot of folks and parents now having to make some tough choices. Do you sacrifice this so that your child can continue to go to private school? CNN's Susan Roesgen takes a look.
(BEGIN VIDEOTAPE)
SUSAN ROESGEN, CNN GENERAL ASSIGNMENT CORRESPONDENT (voice-over): For most parents, private school tuition has never been cheap. But these days, some parents are struggling more than ever to pay it.
UNIDENTIFIED MALE: Marian Catholic High School tuition.
ROESGEN: Leo and Pam Pochinskas had to make a choice, take their kids out of private school or take out a second mortgage. They took out the second mortgage.
LEO POCHINSKAS, PARENT OF PRIVATE SCHOOL STUDENTS: So I've got to pay it off, it might take me five years or ten years. This is an investment for a real person.
ROESGEN: Leo is a musician, who's had his hours cut in half at a local music store. Pam works in a corporate office that shrunk from five people to two.
PAM POCHINSKAS, PARENT OF PRIVATE SCHOOL STUDENTS: There are nights when I do have -- when I don't sleep. And there's nights when you have the stomachaches, and you would say -- you know, is this all going to turn around? And, you know, am I -- are we going to be a statistic?
ROESGEN: Joey Pochinskas is a freshman at Marian Catholic High School. Emily Pochinskas is a senior. They're combined private school tuition is about $15,000 a year. And the alternative is a lot closer and cheaper. (on camera): In this case, the public school is just a few blocks away and they wouldn't have to spend thousands of dollars to send their kids here.
(voice-over): But Pochinskas believe their children are getting a better education where they are. A few weeks ago, the principal of the private school had to send 300 students home because their parents hadn't paid the tuition on time.
SISTER CATHLEEN ANNE TAIT, PRINCIPAL, MARION CATHOLIC HIGH SCHOOL: I think there are families who say we just simply can't do that. You can't forego a mortgage payment forever. You know, so there are people that have to make those choices.
ROESGEN: And that's why the Pochinskas will skip eating out, keep clipping coupons and hang on to a 22-year-old car.
EMILY POCHINSKAS, PRIVATE SCHOOL STUDENT: I know that what they're doing for me, like, it's not necessarily the easiest thing because I, you know, my mom comes home, some days I make dinner, and we'll sit down and we'll talk. And, you know, I'll be like how is everything going, mom? She's like, yes, you know, another person was let go today.
ROESGEN: Susan Roesgen, CNN, Chicago.
(END VIDEOTAPE)
