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Austan Goolsbee Answers Viewer Questions; Plane Overloading Target of NTSB Investigation of Montana Crash; Robert Gibbs Daily White House Press Briefing; Cattle Theft on the Rise
Aired March 23, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, if mortgage-backed assets are lemons, the government's opening a lemonade stand. We're pushing forward on the original concept for the bank bailout, now retooled and ready for market. It's a market for those so-called toxic securities that have poisoned America's banks. And if you're willing to invest, the government will match your buy-in dollar for dollar and throw in loans besides.
So, what does this all mean for you? Will it work? Will it boost or bust the administration's credibility on the economic meltdown? We hope to tackle all those questions with CNN's Suzanne Malveaux -- she's at the White House -- and Allan Chernoff in our New York newsroom, and of course, Susan Lisovicz on Wall Street.
Let's go ahead and start at the White House, where the president is calling the plan a critical element on the road to rescue, but critical to its success are private partners, of course, partners who don't want to look up a year from now and find Congress coming after their bonuses.
Suzanne, you're the one that told me a number of private partners already stepping forward. Let's name them.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, sure. One of them, Bill Gross, of PIMCO, one of the world's largest and most respected of the bond investors. This is something that Allan knows about as well. He talked to Bill Gross earlier today. He is very much interested in this plan that he is going to buy into it.
Another name coming up, BlackRock. It's a major investment firm. It is not surprising, Kyra, that they have stepped forward. These are people they have been working with, the Obama administration turning to people like Bill Gross and saying, what do you need to make this enticing? Or what do you need to sign on to this program? And obviously, one of the things they needed was less risk and that the government would go ahead and subsidize the cost for some of those bad assets. You're already seeing some big names, a few big names. The real critical question here is in the days and weeks to come, are we going to see more investors, financial firms, signing on to this in a big way, in a substantial way, to really make a difference here, Kyra.
PHILLIPS: We are also seeing quite a PR campaign on behalf of the Obama administration from the primetime interviews to tomorrow night's speech that we're planning on hearing. MALVEAUX: Yes. What we saw on all of the talk shows, essentially in the morning, Christina Romer, a top economic advisor to the president - and really the person who arguably could say paints a pretty rosy picture, a rosy face to this economic crisis - getting out there and selling this plan. Interestingly enough, Tim Geithner , who's the one who will be implementing all this, not on camera today. It was a pen and pad type of detailed briefing. He's gotten some mixed reviews, as you know, about whether or not he can inspire confidence on Wall Street.
And then, tomorrow, the president - which everybody here at this place believes that is the best spokesman for selling, whether it's the budget, the bailout plan, you name it, he's going to go before the cameras, take some questions in a primetime news conference, obviously to try to sell this, to convince the American people, that they believe they know how to fix this economic crisis, Kyra.
PHILLIPS: Suzanne, thanks.
Are we looking at President Obama's defining moment here, a crucible, just two months into his term that could define his next four years and his legacy? A poignant statement from a California woman really got us talking. We will run it by Roland Martin in just a few minutes.
At every opportunity, the White House says it's not bailing out banks, it's bailing out consumers, and business owners and the whole U.S. economy.
So Allan Chernoff, what will the toxic asset auctions actually mean for us?
ALLAN CHERNOFF, CNN SENIOR FINANCIAL CORRESPONDENT: Ultimately, if this program works, it will mean that money will begin flowing to consumers, to businesses, but this program has to get in place, and it has to work.
Suzanne mentioned there are bidders stepping up to the plate. The bankers also have to be willing to participate. They have to be willing to sell their assets. So, for example, if they have a mortgage loan, say a toxic mortgage loan just like this, and they've got it on their books valued at 90 cents on the dollar, will they be willing to sell this for 70 cents on the dollar. That might be the price that a bidder like Bill Gross of PIMCO is willing to offer. This is partly a matter of a marketplace being created, and the buyer and the seller meeting to sell.
PHILLIPS: We will be following it. Keeping our fingers crossed the whole way. Allan, thanks so much.
It's a hit on Wall Street. The bailout plan that investors hated when it was vaguely presented last month has sparked a buying spree today. At times the Dow has been up more than 300 points. We will hear more from Susan Lisovicz on that in just a few minutes.
President Obama says that anger is no way to govern. You may recall the House passed a bill last week that would tax those AIG bonuses, and others like them, at a rate of 90 percent. The Senate is taking up its own plan but in an interview last night on "60 Minutes" Mr. Obama took a dim view of punitive taxes.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You don't want to be passing laws that are just targeting a handful of individuals. You want to pass laws that have broad applicability. As a general proposition, I think you certainly don't want to use the tax code to punish people.
I think that you've got a pretty egregious situation here that people are understandably upset about. So, let's see if there are ways of doing this that are both legal, that are constitutional, that uphold our basic principles of fairness, but don't hamper us from getting the banking system back on track.
(END VIDEO CLIP)
PHILLIPS: At first glance, you might think you're having a deja vu moment. Barack Obama's vast army of volunteers back on the streets but this time, they're asking for something other than your vote.
Here's CNN's Jim Acosta.
(BEGIN VIDEOTAPE)
JIM ACOSTA, CNN CORRESPONDENT (voice-over): Don't tell them the race is over. Once volunteers for the Obama campaign...
UNIDENTIFIED MALE: I just want to ask you, that if you support that, and if you are willing to sign this petition?
UNIDENTIFIED FEMALE: Oh, definitely.
ACOSTA: A vast grassroots network of supporters is back on the trail.
MICHAEL LAFEMINA, VOLUNTEER, ORGANIZING FOR AMERICA: Basically, here's the plan.
ACOSTA: Reactivated, this time to sell the president's agenda.
LAFEMINA: Would you be interested in signing that?
UNIDENTIFIED MALE: I'm interested in talking about it.
LAFEMINA: OK.
UNIDENTIFIED MALE: I'm not saying that I'm interested in supporting all of his plans.
LAFEMINA: 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 check book out.
ACOSTA: To California, on behalf of something called Organizing for America, a project of the Democratic Party run by remnants of the Obama campaign.
LAFEMINA: 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 did they do it? Using the campaign's old e-mail lists, Organizing For America alerted supporters to visit its website, 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.
UNIDENTIFIED MALE: If you could provide your name and some contact information, we will make sure we send information.
UNIDENTIFIED MALE: I will 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.
SEN. KENT CONRAD (D), NORTH DAKOTA: I'm especially concerned about the long term.
UNIDENTIFIED MALE: He's not trying to balance 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.
UNIDENTIFIED FEMALE: Are they filming him?
UNIDENTIFIED MALE: 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.
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.
Jim Acosta, CNN, Washington.
(END VIDEOTAPE)
PHILLIPS: So, what do you think? The president's agenda, is it too much, too soon? We will talk it over with our Roland Martin.
(COMMERCIAL BREAK)
On Wall Street, investors banking on the newest financial rescue plan. Stocks are soaring as the government unveils its latest bailout. Susan Lisovicz at the New York Stock Exchange.
Susan, I'll tell you what, the rally, it really picked up steam since this morning.
SUSAN LISOVICZ, CNN FINANCIAL CORRESPONDENT: Yes, you know, you are seeing a return to greed in the marketplace, Kyra. If you check out the Big Board, this is a huge rally. Right now, the Dow Industrials are up nearly four percent. That's how low it's been. A 286-point move is nearly four percent.
Why is that? It's encouraged that there may be some signs of stability in the banking sector if this plan, unveiled by the Treasury Department today, works. And if the banking sector improves and it starts to make loans, we all benefit from that. You are seeing a marketplace here on Wall Street very much encouraged by that.
PHILLIPS: You have taught me this, day in and day out, seeing those signs of life is what will keep this rally going. So can you give me one, two, three signs of life that we've seen recently that's contributing to this?
LISOVICZ: I'm glad you mentioned that, because the Dow is on a hot streak. In the last two weeks, the Blue Chips are up 1,000 points. It is hitting the low of the bear market. Two weeks ago, the low of the bear market, now 1,000 points sprint.
Why is that? We've gotten trickles of good news, and the most recent, not only this Treasury Department announcement today, existing home sales, the broadest part of the housing market, surged more than 5 percent last month. Nearly half of that was because homes are in foreclosure and people were buying cheap.
The fact is, people were still buying and the market was expecting a decline. In the last couple weeks, we've heard Citibank, Bank of America, said they made money in the first couple weeks. We had this extraordinary announcement from the Federal Reserve. It's going to buy Treasuries. We had some other good news in other areas, and the market has responded. That's how the market will improve, and that's how the economy is probably going to improve. It's a huge, huge issue. Didn't happen overnight and it's not going to happen overnight, the recovery, either, Kyra.
PHILLIPS: Let's hope we keep seeing these good numbers. Susan, thanks so much.
LISOVICZ: My pleasure.
PHILLIPS: All right. Let me read all of you this letter to the editor of "The New York Times." We couldn't stop talking about it this morning. It's from a woman by the name of Paulette Altermyer (ph), in Cupertino, California.
This is what she writes: "President Obama may not realize it yet, but his Katrina moment has arrived. This is a defining moment for his presidency and how he responds will determine the trajectory of his term."
She thinks that his efforts so far are, quote, "sorely wanting."
We want to run this by our political contributor, Roland Martin. He joins us live now, out of New York.
OK, so Roland, what do you think? This is what caught our attention. President Obama may not realize it yet but his Katrina moment has arrived. What do you think?
ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: First of all, I disagree because look, Katrina was a microcosm, if you will, of the presidency of George W. Bush. Really what defined the presidency of George W. Bush really was the war in Iraq. So, when you look -- when you compare the two, on a large scale, the war in Iraq, and the economy along the same lines, the overall economy will determine whether or not president Obama, frankly, wins a second term. So, these are small elements that we're seeing right now. So, I won't say that what the AIG somehow compares to Hurricane Katrina. Not even close.
PHILLIPS: So Frank Rich writes in an op-ed piece in "The New York Times," Roland, "unless and until Barack Obama addresses the full-depth of Americans' anger with his full arsenal of policy smarts and political gifts, his presidency -- and worse -- our economy, will be paralyzed. "
MARTIN: Well, again, I think the White House probably will be saying, hey, Frank Rich, Dow up 272 points right now, if you look at our screen.
Look, here's one of the problems here. There's a different -- I agree when people say look, you can express anger, you can have all kinds of emotions when it comes to what's happening with bonuses, but you do have to keep your eye on a much larger prize and that is how do you confront the reality of home foreclosure. That's one aspect. How do you confront toxic assets. That's another aspect. How do you confront lending. That's another aspect.
If you only spend your time only dealing with the anger of bonuses, you lose oversight of the whole deal. Should they be angry? Absolutely. Should they be making sure these folks are not getting bonuses? But it is wrong. It is a wrong-headed thing for any president to only be so fixated on the anger around bonuses and not the much larger problem and that is trying to save jobs and keep folks from cratering when it comes to home values and home foreclosures and to keep the economy going when it comes to Wall Street and Main Street.
PHILLIPS: Grassroots helped him during the campaign, now we're seeing it again.
MARTIN: And Kyra, also what helped him during the campaign was all of those moments when Maureen Dowd and other columnists were saying Mr. President, you should hit back, you should fight, he always said no, maintain calmness, stay focused. At the end of the day, who won?
PHILLIPS: Now he's got all his volunteers out there again knocking on doors. Take a listen. Look at this.
(BEGIN VIDEO CLIP)
LAFEMINA: You interested in signing up?
UNIDENTIFIED MALE: I'm interested in talking about it. I'm not saying that I'm interested in supporting all of his plans.
LAFEMINA: OK.
UNIDENTIFIED MALE: He's already crippled the (EXPLETIVE DELETED) economy, him and the Democrats.
UNIDENTIFIED FEMALE: Are they filming him?
UNIDENTIFIED MALE: I don't care, let them film me.
(END VIDEOTAPE)
PHILLIPS: A lot of characters out there, but look, he's got the volunteers out there again, going door-to-door. It's very interesting to see this dynamic. Why is it happening, will it work, is this the right thing to do?
MARTIN: Remember, on election night, he used the word "we" 47 times in his speech. What he said over and over and over again, that one president cannot solve this issue. One person cannot solve it. You have to have people also buy into it as well. So consumer spending, consumer consumption, we can't talk about how to be less dependent on oil from the Middle East if we still want to drive over and over and over again. We have no focus on public transportation. So the American people have a role in this as well. So, utilizing the army of volunteers makes perfect sense. In terms of trying to get people involved in this overall issue. It could backfire. People could say look, you know what, I don't want to support your entire budget, and that's fine. But if we as voters, if we just sit here and say we don't have a role in this, it's all on him, we have nothing to do, I think we're making a mistake. What happened on election day is one thing. It's a whole lot of work, everybody must do, since election day to make this economy greater. Not just the president, not just Geithner, not just Congress, but the everyday person at home plays a role in all of this.
PHILLIPS: Good to see you, Ro.
MARTIN: Hey, shout out to my Lady Aggies, Texas A&M. Big win in round one. So have to give them a shout out.
PHILLIPS: He's always got to throw in the alma mater. You kill me.
MARTIN: Whew! Got to. That's why I have my Aggie Maroon on, you know.
PHILLIPS: All right. Look, you want to sportscast, you head over to ESPN, my friend, OK? My friend, I'll catch you later.
MARTIN: I'm a multi-talented brother, now.
PHILLIPS: Yes, you are. That's a whole other story.
All right. Part of the Midwest dealing with a double whammy right now. Rain and melting snow has residents scrambling to fill one million sandbags right now amid fears about historic flooding.
Chad Myers is all over it.
(COMMERCIAL BREAK)
PHILLIPS: You have been sending us your questions to president Obama. Now we have one of his economic advisors here to answer them. He's standing by now, live, at the White House. We will go there in just a sec.
(COMMERCIAL BREAK)
PHILLIPS: You've got questions, we've got answers. As promised, we've got the man to answer some of your mail to the chief, e-mailed questions. Joining us, Austan Goolsbee, he's a member of the White House Council of Economic Advisors.
Austan, thanks for being with us.
AUSTAN GOOLSBE, WHITE HOUSE ECONOMIC ADVISOR: My pleasure.
PHILLIPS: I will get right to it for you. Douglas wrote in wanting to know this from you. "Is the little guy, (the middle class) going to be able to buy into the toxic asset buyout via a special mutual fund or similar tool? GOOLSBEE: Well, it's a good question. The only thing is, I'm not exactly sure, the amounts of money in this thing are going to be large amounts of money. It's probably not -- it's probably not going to be the most direct individual investor friendly kind of program. But all of the conditions of who can apply; it's going to be a totally open process, in which people apply and are selected and all of that is laid out on the Treasury website.
PHILLIPS: I guess another way to look at it is pretty neat to see people just writing in from all economic levels wanting to somehow help out, Austan. I guess that's a positive.
GOOLSBEE: Exactly right.
PHILLIPS: Kevin wants to know, "The economy is only getting worse, people losing jobs, et cetera. How is bailing out the banks, so they can start lending again, going to help regular people when they won't be able to qualify for loans anymore?"
GOOLSBEE: Well, look, what Kevin's asking there, a lot of people are asking all over the country. And that is the economy's in sour shape and how does fixing the financial system affect regular people. The president's been pretty clear about this, and that is, for us to have recovery, fixing the financial system is a key component. It's not the only component.
When you see these people saying well, we shouldn't be trying to fix healthcare or the education system, or put other priorities in the president's budget, we ought to just be thinking about how to fix the banks, that's not true. Nor is it true that we can do things without fixing the bank. This brick today that Secretary Geithner puts in is one brick in a wall of trying to rebuild the entire house of the economy.
What you see is if we can get these credit facilities going and get lending going again, what you can see is small business, large business, job growth reigniting, as well as consumers being able to qualify for auto loans, student loans, mortgages, where right now they're getting choked off because the banks are really trying to contract in every form they can.
PHILLIPS: Miss King has two questions here for you. When are the states going to receive the money, that's the first question. The other part is what can ensure that we don't suffer more as elected officials play politics?
GOOLSBEE: OK, both of those are good questions from Miss King. The money is going out to the state. Some of that money, I believe, has already started going out. It depends on which types of programs. So the things that can be addressed right away are things where they're trying to give the states money to cover programs like hiring police, keeping them out on the streets, extending unemployment benefits. Those things go quicker.
As you get into the more medium term over the next year, you get the bigger infrastructure projects and things like that, so that money will go to the states over the next year or so, and then the tax cut part of the stimulus package will start going out, they will adjust withholding tables starting in April.
As to how we maintain good oversight, let's call it that, the president has been totally committed for years, not just recently, but also in the financial rescue package itself, that we must have the most open, accountable process with good oversight over how we spend the money. Exactly so that we don't get into the same old way of doing business, of everybody just kind of looking out for their own congressional district, or their own special project. We've got to maintain that accountability.
If you go to Recovery.gov, you can track all the money, every dollar, where it's spent, how many jobs are created, and all of those things. So the president's really committed to that.
PHILLIPS: We definitely check in on that website actually quite a bit and get ideas to ask you questions. Final one, if you don't mind, Austan?
GOOLSBEE: Sure.
PHILLIPS: All right. Dave writes in and said, "I would like to know if the idea to allow the use of my IRA money, penalty free, is still going to happen?"
GOOLSBEE: Well, Dave, I'm not exactly sure on that idea. I don't think that was in -- I'm not sure which of those was in the stimulus. I don't think that exact idea is. But the general idea of giving consumers the ability to spend money at a time of crisis coupled with in the longer term, putting in savings accounts and other kinds of retirement savings encouragement. So that they can build a margin-for-error nest egg that they need, if we ever get into a downturn in the future. That's pretty fundamental to the president's budget, and with the tax cut making work pay, with a series of the spending programs that are in the recovery package, I'm hopeful that it's going to address some of those concerns that Dave mentioned.
PHILLIPS: Austan Goolsbee, we will check in with you again, if you don't mind.
GOOLSBEE: Anytime.
PHILLIPS: Will you come back?
GOOLSBEE: Yes, I will.
PHILLIPS: Thanks, Austan.
GOOLSBEE: Take care.
PHILLIPS: Do you have more questions for the president about the economy, or stimulus package? Just e-mail us at Mailtothechief@cnn.com. We will try to get you some more answers.
A ski vacation to Montana ends in disaster. All 14 people onboard killed in the crash of a small plane. What investigators say may have been the problem. We will have it for you.
(COMMERCIAL BREAK)
PHILLIPS: All right. Well, you never know what will come up at the White House briefing. But today, look for questions on the toxic assets plan, on taxing those huge AIG bonuses, and of course, on the president's primetime news conference tomorrow night. Press Secretary Robert Gibbs due to step out any minute now. We'll come back as soon as he steps to the podium.
President Obama, as we mentioned, will face reporters tomorrow and CNN, of course, will bring it to you live. Our special coverage starts at 7:45 p.m. Eastern time.
It won't be reporters grilling Treasury Secretary Tim Geithner and Ben Bernanke tomorrow. It will be the house financial services committee. There will be plenty of deep anger and outrage that Geithner talked about today. The issue is million dollar bonuses. In some cases, multi-million dollar bonuses. And for the executives who drove AIG to ruin, taxpayers now own 80 percent of the world's largest insurance conglomerate at a cost of more than $170 billion.
JPMorgan Chase, a company with $25 billion in TARP funds, now clarifying its plans for two new corporate planes. ABC News reported that JPMorgan Chase wants to spend $138 million for a new pair of corporate jets and a renovated hangar to hold them. Well, the company claims it's not using TARP money for any of this and tells CNN that it won't spend any money on these planes until its TARP loan is completely paid back.
An update now on a story we just told you about as well. The Air Force is now saying that there was not a crash of one of its C-17 transport planes near Olney, Texas. Callers to police there had reported that a C-17 had gone down near that town today, but repeating now, the Air Force says there was no crash. Olney is 45 miles south of Wichita Falls, Texas.
Now to Montana and a ski vacation that ended in a deadly crash of a small plane in Butte.
CNN's Dan Simon is there.
DAN SIMON, CNN CORRESPONDENT: Kyra, we've gotten new details surrounding this crash and the first thing has to do with the number of people on board that plane. As you know, there were 14 people on board; seven children, seven adults. But the plane was apparently only configured for 11 people, so the NTSB is probing what may be an overloading situation.
The second thing has to do with the pilot. We are told he was one of those fathers who was headed on that ski trip. In other words, he had his family with him.
Let me show you where I am. I'm about 300 yards away from the crash site, the cemetery directly behind me. And I want you to listen now to a witness who observed what happened and ran over to the crash scene to see if she could help.
(BEGIN VIDEO CLIP)
MARTHA GUIDONI, WITNESS TO PLANE CRASH: I've never seen anything like this in my life. We were just taking a ride and all of a sudden, we watched a plane just take a nosedive right into the cemetery.
(END VIDEO CLIP)
SIMON: No operating theories yet in terms what have may have caused this plane to go down , but we can tell you a couple things. Number one, apparently weather, not a factor. The second thing, fuel also not a factor.
Meanwhile, in terms of the victims, haven't gotten a whole lot of information. But we can tell you, they include a family of five in northern California in the Napa Valley community. The father was said to be a very respected eye doctor. The mother, a dental hygienist. And they had three children, three very young children ages four, three and two.
Kyra, back to you.
PHILLIPS: well, our iReporters have been sending in pictures of that accident. Here is just a few.
This one sent in by Danny Rollison, they were taken just 45 minutes after it happened. Officials had already roped off the area.
And here you see in terrifying detail a cargo jet crash today in Tokyo. The FedEx MD-11 jet was arriving from China when it bounced on landing at Tokyo's International Airport. As then, as you can see, erupted into a fireball. Investigators say wind shear may have been a factor there. Both the American pilot and co-pilot were killed.
And a volcanic alert level goes to red in Alaska. The 10,000- foot Mount Redoubt volcano, located about 100 miles southwest of Anchorage, has erupted five times since early this morning. Redoubt began erupting 2:00 a.m. Eastern time. Some plumes of smoke and ash were blown 50,000 feet high. Ash from the volcano is expected to blow north and pass just west of Anchorage. Redoubt last erupted 20 years ago.
Floods and wildfires causing worry and work today. Swollen rivers in North Dakota overflowing the banks there. Rain, melting snow, also the culprits. Fargo residents, especially concerned about the Red River. It's expected to crest more than 20 feet above flood stage in the coming days.
And in the sky over central Florida this weekend, a massive plume of smoke from a brush fire. Tallahassee residents there used garden hoses to battle the blaze until firefighters arrived. Flames there caused the vinyl siding to actually bubble on some of the homes.
Rough situations in both areas and there's still more trouble brewing. Chad Myers, you have your hands full today, my friend.
CHAD MYERS, AMS METEOROLOGIST: It is going to be a busy day here, I think, even with tornadoes in the middle part of the country. And this is the time of year that it is. Cold air is trying to hang on, saying, wait, I still want to be winter. Spring says, hey, the calendar already says March, let's go as is trying to push warm up ahead. The cold air comes in behind. That typical clash that we get in Spring and it's severe weather season.
We already have a couple tornado watches now from Oklahoma all the way down to - up to about South Dakota - Kyra.
PHILLIPS: All right. Appreciate it, Chad.
We've to get straight to the White House now. Robert Gibbs up at the mike. Let's go ahead and listen and see what he has to say.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Yes, I don't know why. Maybe I got taller.
(LAUGHTER)
QUESTION: You're looming.
GIBBS: The...
QUESTION: (OFF-MIKE)
GIBBS: I don't know -- it feels like you may have already asked the first question. I don't -- I'll let you guys...
QUESTION: (OFF-MIKE)
GIBBS: How is everyone? My only announcement is I endeavor to make this briefing shorter than this weekend's Gridiron dinner. But other than that...
QUESTION: Thanks. Can you talk a little bit about...
GIBBS: Go ahead. I'm just trying to get them -- go ahead. Sorry.
QUESTION: ... talk a little bit about the bank rescue program? I know that the...
(CROSSTALK)
(LAUGHTER)
GIBBS: Wow. I -- I didn't even put a quarter in. That thing is cool, isn't it? All right. All right. Thank you for the -- yes. Oh, all right. Good things you guys don't have the control on that thing. Yes, that's progress, right there. Progress is good. Thank you. Wow. I asked Bill to do something and still hasn't been done.
QUESTION: Take three.
QUESTION: Bank rescue, serious, somber. Leveraging -- leveraging out the money, you're still only going to get at, as I understand it, between $500 billion and $1 trillion of these bad assets, which is about either a quarter or half, depending on what it gets to or what people think of the amount on -- on the books. What is -- how is that effective?
GIBBS: But I think let's -- let's understand before we surmise what that number could be to understand that the -- one of the things that the health assessments on the banks will do will give a greater understanding of exactly what that is.
I do think what Secretary Geithner laid out today, though, using both public and private money in order to clear from the balance sheets of these banks toxic or legacy assets, is a plan that will get the economy moving and get credit flowing.
QUESTION: That's my question. How do you know it's going to get the economy moving if you're only getting at what some say, as I said again, is either a quarter or a half of bad assets?
GIBBS: Well, again, I don't...
QUESTION: And you don't...
(CROSSTALK)
GIBBS: I guess I don't want to buy into the premise that...
QUESTION: Well, if you don't even know how much is on their books, then why even go ahead with the plan now?
GIBBS: Because you guys keep asking for it. No, again, look, I -- I -- I think -- I think it's safe to say that these troubled assets are there and the -- Secretary Geithner and the president are taking strong action through this plan to get them off the balance sheets and to get credit moving again.
I think that, obviously, this is a plan that balances public and private risk. It allows the market to set the rate so that the government doesn't overpay for assets. And we're confident that, as the president said, that this will take steps in the right direction in order to remove these from balance sheets and get credit flowing again. Loans that will go to small businesses and families, big businesses alike I think is a strong step in the right direction.
In terms of the size and the amount, obviously, this is a bid to use $75 billion to $100 billion worth of TARP money to leverage a much larger pool of capital to do this, and I think it's a -- it's a strong step in the right direction.
I would point out, this is one of many steps that the economic team and the Obama administration have taken since coming to office. This is yet another facet to this -- the challenges that the economy has faced just through financial stability, leaving aside the president's strong desire to have an economic recovery and reinvestment plan that will create jobs and get the economy moving again, but this is another step in terms of unfreezing credit markets, dealing with home prices and home foreclosures.
Obviously, the remaining step through the health assessments is to determine what capital banks might need under worst- case scenarios. So I think, again, it's a positive step in the right direction and one of many steps that we're taking under this administration to -- to get the economy moving again.
QUESTION: Nobel Prize-winning economist Paul Krugman says this toxic debt plan is almost certain to fail. He's called it a rehash, a recycling of a cash-for-trash plan that was abandoned -- that was proposed and abandoned by the Bush administration in the fall. Any response to that?
GIBBS: Well, I mean, look, I'd -- without responding, I guess, directly to that, I think what -- look, the alternative to a plan that manages risk and reward and doesn't have the taxpayer shouldering 100 percent of the burden is to do exactly that and shoulder the whole thing.
I also think that, if you look at -- as I said a minute ago, I think this is a system that also takes into account having market help in determining the price of -- the price of some of these troubled assets to ensure that the government doesn't overpay.
And, look, I think some of Mr. Krugman's argument is also -- in some ways, deals with a different aspect of the plan, and that's bank capitalization. I think -- I don't think anybody that reads anything about these plans should misunderstand that there is another step in terms of the health assessments, as I said, of -- of these banks in order to determine, through public or private means, whether additional capital is needed in order to survive under the worst-case scenario of an even more severe recession than we're experiencing right now.
But the president and the team are confident that the plan as outlined will take crucial steps in freeing up credit and getting the economy moving again.
QUESTION: But how do you reassure private investors who might invest in this plan that they might not -- that they wouldn't be subject to the same kind of pushback on, say, executive bonuses that AIG is facing since, in fact, the investors in this plan would be receiving discounted taxpayer -- discounted investments?
GIBBS: Well, look, I mean, I think this obviously is a -- this is a different program than what was set up under or -- or what is -- what exists under TARP.
Obviously, there's a line that has to be walked in understanding that the public and the taxpayers shouldn't and don't want to shoulder 100 percent of the risk, but I think the balance that's struck here in sharing that risk and spreading the reward is one that is able to navigate that. QUESTION: Speaking of navigating, this -- introducing this plan puts you in between Wall Street executives, who are skeptical because of the precise point that was just made, that there might be some sort of populist backlash, and legislation trying to claw back something from -- from earnings that they make from this, and populist rage on Capitol Hill. What have you done or the administration -- what has the administration done to reach out to both sides to make sure that this works?
GIBBS: Well, obviously, this is a result of extensive discussions with both Capitol Hill and -- and people both on Wall Street and involved in -- in the market in order to set up a plan that we think will best achieve the objective of -- of freeing up capital.
Look, I think whether -- I mean, I think the president spoke clearly about this over the weekend in the interview that he did with "60 Minutes" in understanding that we -- taxpayers are very much correct that we have to understand and deal with excessive compensation and bonuses.
The president has outlined a plan to start on that, so that bonuses aren't a way of rewarding people that are not succeeding. Bonuses have typically been something that's given to people that are doing well, but, also, we have to take steps to ensure that whatever is done is done in a way that furthers our recovery and stabilizes our financial system.
And, look, it's -- it's -- it's something that the president is aware of. In all honesty, I don't -- I think this is -- this has not been a -- this is not a new tension. I think this tension has been certainly prevalent, if not completely -- if it had lacked -- even if it lacked obviousness, in all honesty, for a long, long time, even dating back to the -- before the middle of September of last year when bailouts became a word that more Americans were hearing each day.
QUESTION: Sure. But it's peaking a bit, I mean, in terms of Wall Street skepticism and also populism on the Hill. I'm just wondering if you could be a little bit more specific about what specific outreach you've done. Did the president -- once the plan was in place -- did he call bicameral, bipartisan leadership of the Hill and brief them? Did Geithner go to Wall Street and talk to people there, talk to CEOs?
GIBBS: Well, I know -- I know Secretary Geithner's in New York tonight, obviously, speaking, and I'm sure that will involve an audience that includes both CEOs and bankers. I -- I can certainly check. I don't have in front of me what the -- whether or not the president talked explicitly to Capitol Hill about this.
But, look, I think that is -- that's something the president understands, that tension. And -- and I think the steps that he has taken and will take underscore the notion that we have to deal with what are sometimes forces that are pulling in opposite directions.
I think it underscores the necessity of working to try to get it right and not -- not lurching in -- in -- in any one direction, but navigating opposite forces in order to do what's right for the economy.
QUESTION: Robert, in rolling out the details today, Timothy Geithner used a more sort of quiet approach, pen and pad with reporters, not getting out there on television in a very public way. Why?
GIBBS: You guys always -- every time we do one of these things, we do a background briefing, and somebody asks if it can be on the record, and we don't -- we don't want just a speech. We'd like to do so Q&A and...
QUESTION: But this was a major -- but this was a major event.
GIBBS: ... so we put the secretary of treasury out on the record to...
QUESTION: This is was a major event. Everyone was waiting for the details. And it almost seemed like it came out in -- in a less than sort of bombastic way.
GIBBS: I guess he's worried a little bit less about what the packaging is on -- on the president -- the president and more importantly what's inside of the box. You know, I suppose we could have rigged out some flags, and printed up some placards, and cued up some old campaign music.
But I think what's important maybe not for Washington reporters, but what's more important for the American people is to get the details of a plan that works to get their bank lending money again. I think that's, in all honesty, what the American people care most about.
I think -- I think if you objectively look at what this administration has done or what the economic team has done in the course of about nine weeks of service, I think you'd be hard-pressed to find nine weeks where more solutions were outlined of problems and challenges that have been facing this country probably since the 1930s.
QUESTION: And just another question. Christina Romer in an interview with CNN earlier today talked about how, if -- if this doesn't work, that we'll review it, we'll tweak it, I think was the exact language that she used. Is -- is there a backup plan if this doesn't work? And when you say "tweak it," does that sort of instill sort of a lack of confidence that this will actually work?
GIBBS: Do we have a backup plan if it doesn't work? And if we do have a backup plan, does that denote that we're preparing for it not to work?
QUESTION: No...
(CROSSTALK) GIBBS: ... I just -- I want to sift through the circular nature of it.
(CROSSTALK)
QUESTION: ... but I'm just wondering, does that give a sense...
GIBBS: I think it is safe to assume that any policy that this administration -- or I'll speak broadly for any politician in the country. If they roll out a plan, it's constantly evaluated to ensure that the objectives by which the plan was introduced are met by the implementation of the plan.
And if the plan doesn't meet through its implementation the objectives of what it was outlined to do, that that plan might be augmented to meet those objectives.
QUESTION: (OFF-MIKE)
GIBBS: That was more this than that.
QUESTION: On -- on pricing, what makes you confident that they will be able to find prices here that private investors are attracted to? And what happens if they don't? Does this thing just fail?
GIBBS: Well, no, I think -- and, obviously, I think Secretary Geithner talked about this, this morning, but, look, you -- you have competing interests. And putting these two competing interests together gives each involved an incentive to find a way to do business that ultimately works for the American people.
Obviously, we've talked a lot about the need in this room for banks to have bad assets off of their balance sheets. So that gives somebody the -- the incentive to figure out how to do that in a way that makes sense for them and still provides them that relief.
Obviously, having a public-private partnership also gives both taxpayers and private investors that have the wherewithal to...
PHILLIPS: We'll keep following Robert Gibbs there at the White House briefing and monitor what he has to say. Meanwhile you can go to CNN.com/live and watch it right now in its entirety.
One point three billion dollars just sitting there gathering dust at the IRS. Some of it could be yours, but time's wasting. Do you want it back?
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PHILLIPS: Well, Lance Armstrong's comeback has taken a step back. The seven-time Tour de France champ broke his collarbone today and might need surgery. He was racing in Spain as a sort of prelude to his return to the French race when he fell. Armstrong says that he's miserable, needs to relax for a couple days before deciding what he's going to do next.
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(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We need some inventiveness. Your country needs you to create new jobs and lead new industries. Your country needs you to mount an historic effort to end once and for all our dependence on foreign oil. And in this difficult endeavor, in this pursuit on which I believe our future depends, your country will support you. Your president will support you.
(END VIDEO CLIP)
PHILLIPS: Presidential pitch for clean energy, American ingenuity and big new spending in the face of historic deficits. President Obama is defending his top priorities as the budget battle takes shape in Congress.
For more on the president's plan for renewable energy, let's check in with CNNMoney.com's Poppy Harlow. She's in New York.
Hey, Poppy.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Hey, Kyra.
Yes, we all heard the president today pushing for more and more investment in clean energy. The private sector, a big part of his vision right now, outlining that today.
Some new news to tell you about today. His 10-year budget setting aside $75 billion to make existing tax cuts for renewable energy, research and development permanent to try to really - the idea here, push more and more private investment even during this recession, when it comes to R&D in terms of alternative energy. The administration insisting that every dollar spent is worth it. Saying, each and every dollar we spend on R&D adds $2.00, Kyra, to our economy in the long run.
But the president's budget has come under heavy criticism, especially lately. A lot of people arguing, especially with those new higher deficit projections, that this is just not the time to spend that money. The president, today, clearly trying to drum up support, Kyra, for more and more investment, billions in alternative energy.
PHILLIPS: Well we'll keep following all the projects, that's for sure.
Thanks so much, Poppy.
HARLOW: Sure.
PHILLIPS: Well, call it a sign of the recession. Cattle rustling on the rise. You may not be worried about the little doggies, but the average pound of a price of ground beef, currently two and a half bucks. It may skyrocket, too, if the cattle thieves have their way.
KTXA's Seema Mathur says ranchers are trying to protect their herds.
(BEGIN VIDEOTAPE)
MISSY BONDS, BONDS RANCH: The left ear is a yellow electronic tag.
SEEMA MATHUR, KTXA CORRESPONDENT (voice-over): From electronic ID tags to traditional branding, Tarrant County rancher Missy Bonds makes sure her cattle can be identified. She can't afford not to.
BONDS: If these cattle are stolen, there is no way for us to recover the loss.
MATHUR: Depending on the type of cattle, each can be worth between $500 to $900. And thieves know that.
H.D. BRITTAIN, CATTLE RANGER: When you steal a cow, it's not like stealing a television. When you take a television to a pawnshop, you only get a percentage of it. When you steal a cow, you get the true value of that cow.
MATHUR (on camera): Cattle rangers say they recovered more than $4 million worth of stolen livestock in the last year between Texas and Oklahoma. They say, that's double the amount that was stolen in 2007.
BRITTAIN: It's since the economy started going down, things are picking up.
MATHUR (voice-over): Rangers say they're watching auctions and are strategically placed around the region, ready to lasso in stolen cattle and criminals.
BRITTAIN: We've still got the rope and the horse, but we use the laptop and cell phone and everything else we need.
MATHUR: Rangers say, without the branding, which is equivalent to a VIN number on a car, they can't help victimized ranchers.
BONDS: It can be extremely financially cripple for a cattle rancher.
MATHUR: Missy says, in these economic times, she says her family ranch can't afford not to take preventive measures.
(END VIDEOTAPE)
PHILLIPS: That's, again, Seema Mathur out of Dallas, Texas. Well, the special rangers who work for the Cattle Raisers Association say that rustling has increased by 200 percent in last year alone.
That does it for us. We'll see you back here tomorrow.
Rick Sanchez takes it from here.
