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Obama Administration Unveils New Economic Plan; Markets Rebound
Aired March 23, 2009 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: He's already crippled the God (EXPLETIVE DELETED) economy, him and the Democrats.
RICK SANCHEZ, CNN ANCHOR (voice-over): Back to grassroots, using social media to push the Obama plan, just as they used it to help get him elected. Will it work?
New details on what caused this plane to bounce and burn on impact.
And what caused this crash that killed 14 people, including seven children? Were there too many on board?
(on camera): Wouldn't it be cheaper in the end? These companies on Wall Street paid for that money, right?
UNIDENTIFIED MALE: Power goes to money. That's what happened here. People with money got more power.
SANCHEZ (voice-over): Now that we detailed for you how much Wall Street's political influence spending has cost all of us, is it time to cut them off? Drilling down on how we got in this mess, so it doesn't happen again.
What America's talking about, your national conversation begins right now.
(END VIDEOTAPE)
SANCHEZ: And hello again, everybody. I'm Rick Sanchez here from the world headquarters of CNN.
You are not going to believe who stands to gain the most from this newest plan to save our economy.
Oh, here is a hint that you will probably be able to figure out real quick. Take a look at what's going on in the market so far. It's up almost -- no, it's up over 350 points so far.
Here's the backdrop to this story today. The president's right- hand man announced in a closed-door meeting with reporters today his new plan for saving the banks by helping them get rid of the hundreds of billions of dollars in toxic assets that we have been talking so much about, you know, the subprime mortgages that have created this havoc worldwide.
Here's the president's terse comment on Mr. Geithner's announcement today. Let's start with that.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: 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 position to design the regulatory authorities that are necessary to prevent this kind of systemic crisis from happening again.
(END VIDEO CLIP)
SANCHEZ: Now, this is interesting. Stay with me here.
Remember, the very first time the president sent his treasury secretary out to do this, it was seen as a disaster, and the market tumbled. You remember.
So, this time, what's the plan and how is it being received? Is it going to be different this time around?
CNN's Jessica Yellin, and Bob Lenzner from Forbes.com are joining us to talk about this.
First, the plan itself, the X's and O's, as they say in football.
Jessica, you were there. You were in the room when Mr. Geithner walked out and unveiled this plan. What's with this public-private holding tank that supposedly is supposed to sop up this mess that's out there? What is it?
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Well, Rick, let me tell you what Geithner told us.
The treasury secretary said to the gathering of reporters there that the problem has been folks who were investors took risks for so many years and they have been burned by those risks. Now they're scared of investing at all.
They're holding on to their money, and the government needs to find a way to prod them to take risks again. So they're pooling government money with some private money and asking them to get these bad assets off of the books of these banks. They say basically that these bad assets are holding the rest of the economy hostage.
That's his very optimistic take. I know other folks have a much more critical take on it. And I think Bob will have a very good explanation of that. I like to call him uncle Bobby. You can...
(CROSSTALK)
YELLIN: ... him why.
(LAUGHTER)
SANCHEZ: There you go, uncle Bobby.
Let me come at you then with that...
ROBERT LENZNER, NATIONAL EDITOR, "FORBES": That's how she knows me.
SANCHEZ: ... with that introduction from Jessica.
They're creating a middleman, Bob, I guess. I don't know what technically...
(CROSSTALK)
LENZNER: But you know who the middleman is.
SANCHEZ: Yes, the hedge fund guys who have been making a billion dollars...
(CROSSTALK)
LENZNER: Well, actually, there's an intermediary before the hedge fund guys. It's going to be Goldman Sachs. You have heard of them.
SANCHEZ: Yes.
LENZNER: And Barclays Bank. This is what the hedge funds told me this morning.
And they have already -- they have been negotiating with Treasury and FDIC about this for weeks. And they are going to be the special brokers. And they are going to be lent billions of dollars at a very cheap rate by the FDIC, and not have to pay that money back if they lose money on these transactions.
And the hedge funds, they're hoping the hedge funds are going to come in along with Goldman Sachs to buy these assets, but what the hedge funds are saying is, tell me who's going to decide what the price is. The banks may say one price and we think another price.
So, the details have not -- it's -- the market loves this when it got announced today, but I don't think -- very few people understand the ramifications and the details about how it' going to get done.
SANCHEZ: Of course the markets are going to love it. This is a hell of an investment. I think the risk is like 7 percent for them. Wouldn't you like to have an investment like that?
(CROSSTALK)
LENZNER: Yes. This is a big party for Wall Street if it works out, if it actually happens, because they don't lose any money if the thing goes sour and they could make really huge returns.
And, as a matter of fact, Rick, if this turns out -- and I don't know all the details of it. I really don't yet.
SANCHEZ: Right.
LENZNER: But there might be subsequent to this an outrage, just like there's an outrage about the AIG bonuses.
SANCHEZ: We're trying to get a handle, Jessica. Let me bring you back into this picture because you were there. I'm sure there were some people who countered him. You read Krugman's column today.
YELLIN: Yes.
SANCHEZ: He's calling this cash for trash.
YELLIN: Right.
SANCHEZ: A lot of questions about what this little inside entity is and how it's really going to work. How did Geithner explain it?
YELLIN: Well, what he said, and he explained that this is essential, that there has to be a certain amount of risk taken by the government in order to fix this problem. And he feels that this is a manageable risk and that, without the government's involvement, nothing is going to change, and that, with this plan, if it works out, yes, the private entities that Bob's talking about might get super, super rich, but that will help the whole economy, and so we shouldn't mind.
The problem is, is that, as we're saying, the taxpayers take all the biggest part of the risk. We're insuring this...
(CROSSTALK)
SANCHEZ: Yes.
YELLIN: And other folks stand to get really super rich.
What Geithner failed to do in the event was project the kind of confidence you want from some leader, somebody who is going to be a statesman and rise to a moment. It's not his persona. It's not who he is.
I think one of the reasons the market may be going up right now is because Obama, President Obama, is fronting this plan. Geithner's almost nowhere on camera today. You didn't hear him talking about the plan at all, unlike last time.
SANCHEZ: Bob, why not just -- look...
LENZNER: Geithner's coming to New York, by the way, on Wednesday morning. He's going to be speaking to the Council on Foreign Relations. And I'm sure everybody is going to be there to listen to what he's got to say.
YELLIN: Oh, yeah. SANCHEZ: Is the president going to keep him away from cameras this time and put him in a closed door with a bunch of reporters with notepads?
(CROSSTALK)
SANCHEZ: Go ahead.
LENZNER: The one thing is, even if this thing works, and they buy the toxic stuff, who's to say that the banks are going to turn around and start lending money out again?
SANCHEZ: Exactly. So, if there's so much risk that this thing's even going to work, why not just forget all this hocus-pocus and just nationalize the damn banks to begin with...
YELLIN: Politics.
SANCHEZ: ... since it seems to be heading in that direction, guys?
YELLIN: Politics. You can't do it. President Obama is already being accused of being a socialist. Now, they laugh that off. But if he were to nationalize the banks, there's a potential political problem there. This is about politics.
SANCHEZ: But even the guys on the right who are criticizing him for being a socialist or a communist are the same people who are saying you might as well just go all the way if you're going to dip your foot in the water.
YELLIN: Some, but -- go ahead.
(CROSSTALK)
LENZNER: There's one thing to be said for this. And that is it is a very bold plan, like what Bernanke announced last week about putting the trillion dollars into the financial markets, buying treasuries and mortgage-backed bonds to drive the interest rate on the mortgages down.
I mean, if this does work, the thing is, the people who are going to make huge profits are some of the names that we have been talking about all along here, like Goldman Sachs...
(CROSSTALK)
SANCHEZ: They made the money when the market was -- when everything was going down, and they're going to make just as much money when it's going up.
LENZNER: That's the way it's been all through history, by the way. I'm a former Goldman Sachs employee, so I know that very well. They are a very smart bunch of people.
SANCHEZ: I will tell you, the American people are sitting out there going, when is this thing going to finally end?
And you know what? I guess, in the end, if they fix it with this solution, great.
Guys, thanks so much. You're both smart. I appreciate you.
Speaking of the guys who are going to be making out real good on this, let's go to Susan Lisovicz. She's been watching the market all day long for us today.
And up 371, boy, they didn't like the first plan, but they certainly like this one, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, you know, Rick, the market has never been a place where things are done on a modest scale. So, when investors don't like something, they speak loudly, and when they like something, they speak loudly.
And, you know, you're talking about, yes, some people may get rich off of this. Yes, that's what greed is all about, taking risk and buying up what is today cheap stocks, especially financial stocks.
(CROSSTALK)
SANCHEZ: But with our money, with our money, though. It's with my money and your -- they're getting help from the government to get rich. Let's not forget that.
LISOVICZ: Yes, yes, and a lot of money that's already come this way. And that's one of the things that is encouraging Wall Street. Bob was just talking about it, the Federal Reserve buying treasuries. It's like the government is buying government debt.
There has been a lot of extraordinary things that are happening and there's a lot of money. And Ben Bernanke said, this is like a major fire and they're throwing everything at it.
SANCHEZ: Yes.
LISOVICZ: Later on, we will talk about water damage and things like that.
But there's no question that there's a lot of ammunition being thrown at this.
SANCHEZ: It's amazing watching this story develop this way. We are going to get back to you in a little bit. We will be with you by the end of the show, so we can let you help us close out the day, Susan.
LISOVICZ: Thank you, Rick.
SANCHEZ: All right.
Cameras roll as a plane bounces and then rolls and then bursts into flames. We have got new details as we take you through these unbelievable pictures.
And then look at the market again today. Is this remarkable? Is it going to take Tim Geithner from pariah status to hero status, literally, pariah to possible hero?
Oh, think about this one. What does it cost you every time a big company spends hundreds of thousands of dollars to influence a politician, say a senator, $1.7 million, or a congressman, $1.3 million, to get elected? But does it cost you? Think about it.
(BEGIN AUDIO CLIP)
SANCHEZ: Hey, this is Rick Sanchez. Thanks for calling.
UNIDENTIFIED MALE: Hey, Rick, it's Mike from Cincinnati.
If AIG and the other companies are too big to fail, then they're too big to manage. The Antitrust Division of the Department of Justice needs to step up and find a way to break these companies into manageable, financially feasible and reasonably smaller companies. If they're too big to manage, then they should be dismantled appropriately.
(END AUDIO CLIP)
(COMMERCIAL BREAK)
SANCHEZ: Welcome back to the world headquarters of CNN.
In case you haven't heard, let's bring you up to date on the big story today. It's really what we're calling TARP dos, or TARP II. In other words, Tim Geithner comes out, meets with reporters and says, look, this is what we're going to do.
Wall Street loves what he's planning to do, experts, not so much. And as far as you're concerned, well, let's look at what you're saying.
Twitter board, if we would, Jonathan. Take me over there. Look at this. It's number one. He's saying this about this situation. I'm going to move it up just a little bit.
Well, that's about Susan. Sorry. Next one.
"Are we looking at the overall grandness of the apparent shuffle of thoughts and focus to accomplish something more sinister?"
Now, go back to the Susan one up there, if you would, Jonathan. "Tell Susan to get her cowbell out again. I love her."
It looks like the market is going to do well.
One more. Frogpajamas says: "If Wall Street doesn't make money, we all crash. Wall Street is still America. That's where many of us grow, usually our money." Well, it's an interesting scenario that's being set up today by this announcement by the administration, because it has people asking whether it's only our money that has to be used by the same people on Wall Street that created the problem to now fix the problem.
In other words, they're going to make money on the way up, just like they made money on the way down. Is that fair? Tim Geithner getting a lot of heat. As a matter of fact, he's being called a Wall Street guy, and it's because of his Wall Street connection and his connection to Henry Paulson that he's getting so much -- well, so much criticism, not just from the right, but also from the left.
I want to read you a couple things here. You ready? Let's start with Paul Krugman, "New York Times," today. This is what he wrote. Let me bring that to you. You ready?
"This plan will produce big gains for banks that didn't actually need any help. It will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear," says Mr. Krugman, "that when the plan fails, as it almost surely will, the administration will have shot its bolt. It won't be able to come back to Congress for a plan that might actually work. What an awful mess."
Then Arianna Huffington from "The Huffington Post" says this. Do we have the full thing? Yes, there it is. "Geithner's actions throughout his career, including his time as treasury secretary, are proof that the toxic thinking that got us into this mess is part of his DNA." She's going after Geithner. Listen to this.
"That's why every proposal he comes up with this is deja vu all over this, a remixed variation on the same tried and failed let the bankers work it out approach championed by his predecessor, Hank Paulson" -- Arianna Huffington, "Huffington Post."
Let me introduce you to my guest. Maria Cardona is a Democratic strategist. Rich Galen is a Republican strategist.
Guys, thanks so much for being with us.
(CROSSTALK)
RICH GALEN, REPUBLICAN STRATEGIST: Great to be with you, Rick.
SANCHEZ: Maria, let me start with you.
When you got "The Huffington Post" writing like this, I mean, what do you have on your hands here?
MARIA CARDONA, DEMOCRATIC STRATEGIST: It's so interesting, because the first time that Tim Geithner came out with his plan, everybody panned it, including Wall Street, clearly, with what the market did.
SANCHEZ: Well, they love it today.
CARDONA: Well, they love it today. So, I think that they're in a position where they are not legislating -- and appropriately so -- due to the market's up and downs or due to what people are saying or not saying about them. They are looking at the short-term crisis, as well as the long-term recovery that needs to happen.
What he did today is going to actually help the banks and lending institutions clear their books, so that they can get credit flowing again.
(CROSSTALK)
SANCHEZ: But it's such...
(CROSSTALK)
SANCHEZ: ... Maria, Maria, Maria, Maria...
(CROSSTALK)
CARDONA: ... for workers, that they need credit. They don't have it right now.
SANCHEZ (singing): Maria, Maria, Maria...
(LAUGHTER)
SANCHEZ: ... it is such a scroogie to the American people. It's their money to make the same guys rich who essentially got rich while they were screwing up the market.
I'm not saying it's not going to work. I'm not smart enough to tell you that. But I'm telling you, on its face, it looks like the taxpayers are getting hosed.
CARDONA: But here's the important thing about this plan. It is a public-private partnership, which means that the government is going in with the Federal Reserve and the FDIC in partnership with private investors.
That means that the taxpayers' money, your money, my money, is going to be leveraged, so that gains, we will profit in that and any losses will be spread out evenly as well.
SANCHEZ: OK. Is it a necessary evil, Rich?
GALEN: You know, everything I know about economics I learned from QuickBooks. So, I'm not the right guy here.
(LAUGHTER)
GALEN: But let me say this about the market. I think everybody -- I mean, I haven't been studying it very closely, because I have actually been trying to get some work done.
But what I do know is Friday was triple witching day. There was a lot of money sitting around over the weekend, so the institutional investors decided to rush in. I would not -- I would not -- Maria is right. Do not bet the ranch on what you're seeing on these one-day things.
(CROSSTALK)
SANCHEZ: You're right. But let's talk about the target here. The target seems to be Geithner. And he has been hit hard by the right. Some people are calling the plans communist, socialist. And now he's getting hit by the left, saying, oh, you're a big Wall Street guy and you're trying to help them. He's getting hit from both sides.
(CROSSTALK)
CARDONA: He must be doing something right.
(CROSSTALK)
SANCHEZ: Let Rich finish...
(CROSSTALK)
GALEN: Maria, come on, let's be fair here.
I wrote a column this morning about yesterday's "New York Times," which read very much like "The Weekly Standard." It wasn't just Paul Krugman, but Frank Rich went after Larry Summers and Geithner.
SANCHEZ: Yes.
GALEN: Maureen Dowd went after the administration. The editorial page editors went after the administration.
There is a growing sense of unease that maybe this thing writ large is bigger than they can handle on their own, and maybe it's time for the president to do what he promised to do when he was running, and that is to bring people in from both sides, from all angles, sit at the table and say, let's see if anybody's got any good ideas, because, if anybody did, they would be doing it.
SANCHEZ: Yes.
Maria, go ahead.
CARDONA: That, you know, he's been hit from the left and from the right, which I think means that he's probably doing something right.
(CROSSTALK)
SANCHEZ: That's fair.
GALEN: No, he's doing everything wrong.
CARDONA: No, the bottom line is that the people who are focused -- the people whose problems are focused on in this plan are the taxpayers. American working-class families who have not been able to get credit to buy cars, to get student loans, to get their houses, are the ones who are going to be benefiting from this plan.
SANCHEZ: But, in the short run, it's going to be hard for them.
Hey, Rich, let me ask you a question. My father-in-law lives in
Moultrie, Georgia, staunch Republican, loves everything about the party, gets all their mail, get all their e-mails. He and I were having a conversation this last weekend.
And he says to me, "The only thing I fear about my party these days is we're becoming the party of no and can't."
GALEN: Yes. I think that's true.
SANCHEZ: And this is a guy who's dye-in-the-wool, right?
GALEN: Yes, but it's -- the Republican Party has been rocked back on its heels. It can't find, as we like to say, its voice, much less the voicer, so yes.
And because of the way -- if you're -- when you lose elections the way we did in 2006 and 2008, and you have got these huge majorities on the Hill, the Republicans aren't necessary and they are acting accordingly. They're just kind of sitting back there trying to find a hole.
(CROSSTALK)
SANCHEZ: But you just said, Rich, that the Obama administration needs to reach out to the other side, get everybody together and come up with a solution.
GALEN: Yes.
SANCHEZ: If the other side keeps saying, no, all we want you to do is fail, it's hard to get them on board now.
(CROSSTALK)
GALEN: But they haven't been allowed to be at the table.
Go back to -- just go back to the Chris Dodd stuff.
SANCHEZ: Is that true, Maria?
CARDONA: Rick, no.
(CROSSTALK)
GALEN: They had the conference committee in secret with only Democrats. That's not reaching out.
CARDONA: Rick, you hit the nail on the head.
(CROSSTALK)
SANCHEZ: Maria, you got 10 seconds. Take us out. We have got to go.
CARDONA: You hit the nail on the head. This president has bent over backwards reaching out to Republicans, inviting them to the White House...
GALEN: He didn't say that.
(LAUGHTER)
CARDONA: ... going to the House, going to the Senate, making sure that he reached out for ideas.
SANCHEZ: I didn't, actually.
CARDONA: Their ideas have been included in a lot of the plans.
(CROSSTALK)
SANCHEZ: I think we're going to have to pick this conversation up again. You guys are good. This was enjoyable. And it was smart and it was heated. My thanks to you both, Maria and Rich.
(CROSSTALK)
SANCHEZ: You liked the song, by the way?
(LAUGHTER)
CARDONA: I loved it.
(LAUGHTER)
SANCHEZ: Good.
If you haven't seen this video, you're missing the moment of the day. Why wasn't this landing successful? It looked like it was going to be. We will tell you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: He's already crippled the God (EXPLETIVE DELETED) economy, him and the Democrats. I don't care. Let them film it.
(END VIDEO CLIP)
SANCHEZ: Let them film it, not just strategists that are going after each other on this newscast, grassroots, social media interaction, community building. This is what got President Obama elected. So, now he's using it to sell his programs. But not everybody is buying. Who is? And who isn't? That's what we are going to parse through. And then South America's top lefty leader calls President Obama an ignoramus. I think he said ignoramus. The honeymoon may be over between Hugo Chavez and President Obama. That didn't take long.
(BEGIN AUDIO CLIP)
UNIDENTIFIED MALE: Hey, Rick, good morning. This is Robert in Miami.
What's with all this criticism of President Obama just because he laughed -- was laughing on "60 Minutes"? Psychologists will tell you need a good sense of humor during tough times to keep a good mental -- you know, mental state. Who would they prefer, somebody like House Minority Leader John Boehner, who always has a scowl on his face and looks like he he's eternally constipated?
Thank you.
(END AUDIO CLIP)
(COMMERCIAL BREAK)
SANCHEZ: The big news is TARP Some people love it. Some people hate it. Obviously, we're going to be giving you both sides. The market seems to love it, by the way. Whew, almost at 400, look at that. We're going to be watching that all the way until the very end.
But how about this story? Two plane crashes, opposite sides of the world. Too many people died. Look at these pictures. This is as remarkable as it gets.
I want to start you off in Tokyo. This is Narita Airport. That was an MD-11 cargo plane belonging to Federal Express. It's just pieces today. Look what's left. It slammed into a runway and exploded. The two-man flight crew, both American, are dead.
An NTSB team from the states is on the way to help find out. But I want to show you something else. See if you can cue up, Dan, see if you can cue up the plane as it's making its landing now. Get away from these stills. Go back and see if we have it. David told me he would put it in there for you. We will wait. Don't worry about it.
Let's see if we can find that plane as it's actually making its landing. See if you got it. There it is. Look at this, folks. There's the plane actually recorded. See, it bumps once, bumps a second time, and then OK, so, fine, a plane will bump once in awhile, right? We have all been on planes that bump when they land. But this one bumps so high that it actually gets thrown to the left and then just burns right up, both guys dead.
Now, here's another crash, maybe even more newsworthy, to tell you about. Take a look at this. This is a crash in Butte, Montana -- 14 people were on board a single-engine private plane designed to only carry 11. Witnesses say it crashed into a cemetery short of the runway. Don't know why it crashed yet. Don't know if weather was a factor either. Don't know why so many people were packed inside it, by the way.
That's a problem. We do know that an entire family was on board, including some children. Everyone was killed. CNN's Ted Rowlands is getting new information from the co-workers of one of those victims, a father of three from California. We are going to try and get to that in just a moment. We have been working that story all morning long.
Meanwhile, social media, it got President Obama elected, right? We use it here on this newscast, were the first to do so. Can President Obama now use it to sell his economic package?
And then, if a congressman gets over $1 million in campaign contribution, how does that affect me; how does that affect you? It's not my money; it's not your money, right? Or is it?
(BEGIN AUDIO CLIP)
UNIDENTIFIED FEMALE: Hey, Rick.
I think the media needs to stop focusing on stupid stuff, like the Special Olympics and the fact that he kind of joked around about the economy. I mean, who hasn't joked around about it at this point? If you don't laugh, you cry.
I'm Heather from Austin. Thanks. Bye-bye.
(END AUDIO CLIP)
(COMMERCIAL BREAK)
SANCHEZ: Look at that. Looky here. The market is up over 400, just did so during that last commercial. We're up to 405 right now. We will continue to watch this for the next 30 minutes for you.
And folks at home are watching it as well. As a matter of fact, go to that middle one right there that says Kayla, Jonathan. See? Kayla Boesch-Mohart says, "I know it makes me feel a little more confident to see the Dow up so much, after months and months of seeing the red arrow."
Yes, it does.
Let's talk about President Barack Obama. We all know, especially folks who watch this particular newscast every day, the importance of social media. Barack Obama used social media. He used community building. He used interactive grassroots campaigning to get elected -- to become the president of the United States. But this weekend, we watched as he also started to use it to get his economic package sold to the American people.
How's it going?
Here's Jim Acosta.
(BEGIN VIDEOTAPE)
JIM ACOSTA, CNN NATIONAL CORRESPONDENT (voice-over): Don't tell them the race is over. Once volunteers for the Obama campaign...
MICHAEL LAFEMINA, VOLUNTEER: I just want to ask if you support that and if you're willing to sign this petition.
UNIDENTIFIED FEMALE: Oh, definitely.
ACOSTA: A vast grassroots network of supporters is back on the trail...
LAFEMINA: Basically just, 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 -- I'm not saying that I'm interested in supporting all of his plan.
LAFEMINA: OK.
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 right 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.
LAFEMINA: I don't feel like I'm volunteering for President Obama. I feel I'm volunteering for myself, for our country, for our democracy.
ACOSTA: How did 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.
(BEGIN VIDEO CLIP, COURTESY MYBARACKOBAMA.COM)
OBAMA: Talk to some neighbors and let people know how important this budget is to our future.
ACOSTA: And voila.
LAFEMINA: (INAUDIBLE) provide your name and some contact information and we'll make sure...
Then we can -- we can send you information. I can leave you with that.
UNIDENTIFIED MALE: Sure. I'll 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 am especially concerned about long-term.
UNIDENTIFIED MALE: He's not trying to pass the buck. 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 LANGUAGE) economy -- him and the Democrats.
(CROSSTALK)
UNIDENTIFIED MALE: I don't care. Let him 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 (on camera): 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)
BLITZER: Venezuelan President Hugo Chavez, a veteran at taking shots at U.S. presidents. But he seemed to give President Obama a bit of a break early on. Well, the bloom is off that rose.
And have you ever thought about running for Congress? What would you need?
You need smarts, right, and connections, name recognition, good looks?
Maybe.
Oh, and did I mention an average of $1.3 million?
Is there any way to uncouple money and politics?
I've got a guest who says yes.
(COMMERCIAL BREAK)
SANCHEZ: We've been telling you about this unbelievable plane crash. We've now got a new development in that story.
I want to take you to Ted Rowlands, who's spoken to, apparently, a family member of one of the victims, right -- Ted, you there?
TED ROWLANDS, CNN CORRESPONDENT: Well, Rick, we talked to a number of associates. We haven't talked to a family member yet of one of the victims. But we're getting more of an indication of what exactly happened.
Basically, there were three families on board this private plane. And they were going together on this ski vacation in Montana. Two of the mothers on board were sisters. And the plane was owned by their father.
Now, we're getting a lot more information about specifically one of these families. Dr. Erin Jacobson is an ophthalmologist here in Napa Valley. That's where we are right now. And this is a guy that is being described by co-workers as just an all star ophthalmologist, on one hand; but, on the other hand, one of these guys that is up for doing anything -- an avid skier. In fact, they say they used to use this plane, these families, often, to go on these ski vacations. So this was nothing out of the ordinary.
But most of all, everybody here is describing this doctor as a devoted father.
SANCHEZ: You know what I'm interested in, Ted?
I'm interested in the guy who was flying this plane. Apparently, he was one of the dads, right, according to the last report that I read?
ROWLANDS: Yes.
SANCHEZ: Is that correct?
ROWLANDS: Yes. Well, that's what the FAA has just released. And it's very puzzling, because they're -- the FAA just simply said -- they're not identifying who the pilot was, but they're saying one of the fathers of the families on board was piloting this plane at the time of the crash. Now, if you do the math, you have 14 people on board -- seven children, six adults that are associated with the family and one other adult, assuming that person was the pilot.
But we're not quite sure now with this FAA report of whether -- if one of these fathers stepped into the cockpit or one of these fathers had a pilot's license and was piloting the plane at the time of the crash.
SANCHEZ: Oh, man.
ROWLANDS: Obviously, it will go -- this will be a major part of the investigation.
Let's quickly listen to some of the reaction from family members here in Napa Valley about this tragic loss.
(BEGIN VIDEO CLIP)
SUZANNE RAY, OPTHAMALMIC ASSISTANT: He was fun. You know, we all were like family. We just -- we had a lot in common. And we really enjoyed working with him. And he'll definitely be missed.
DR. MICHELLE KERR, EYE CARE CENTER: It's like getting hit with a baseball bat. He was a leader. He was one of our rocks here in the -- in the eye care center. Having that rock taken away is -- it's going to be significant.
(END VIDEO CLIP)
ROWLANDS: And those are co-workers of Dr. Erin Jacobson.
Rick, I'll tell you, we cover these stories a lot, but this guy really made an imprint in this small community. A very tragic loss -- a horrible, horrible story.
SANCHEZ: And there's a lot of stuff to this story that we're going to have to stay on top of. I know you will, especially that bit about there being, perhaps, more people on this plane than the plane was actually designed for, as well.
So, Ted Rowlands all over it.
As we get more information, we'll break in right away with it as he brings it to us.
Thanks again, Ted.
Here's another story we're following: "President Obama, poor and ignorant. President Obama needs to read more. President Obama has a lot to learn about Latin America."
Not my words. Those are the words of Hugo Chavez. He was willing to give Obama the benefit of the doubt. But now that he heard the president compare Venezuela with Iraq and in the same sentence with terrorism, he's calling the president, well, an ignoramus. Ignoramus is what Mr. Chavez calls him.
Glenda Umana is joining us now.
She's over at CNN Espanol following this story, as well.
I'm not even -- and, you know, I know all the words in Spanish like elutil (ph) and invesil (ph), ignorante.
GLENDA UMANA, CNN EN ESPANOL: They're all words.
SANCHEZ: But ignoramus?
What is that?
Ignoramus?
UMANA: Ignora -- it's like ignorante, too. It's like ignorant, too.
SANCHEZ: Right.
UMANA: And this is -- Rick, this all about Reis Tallinn (ph), the Venezuelan ambassador in Washington. Hugo Chavez said he was considering doing just that when Barack Obama arrived at the White House. But announced yesterday he is changing the plans, he said because Obama accused him of exporting terrorism. Chavez said yesterday that the United States is the terrorist, not him. He described Obama, as you were saying, all these words -- poor, ignorant who needs to read more about Latin America.
But, Rick, we haven't heard Obama say anything like that. He mentioned cutting foreign energy dependence, to stop sending money to dictators...
SANCHEZ: Right.
UMANA: ...but without saying who are those dictators.
SANCHEZ: Yes. I think somebody perhaps is winding Hugo Chavez up and Yes. May have done that to try and get this kind of response from him because it seems to befit him.
Glenda Umana with that report from CNN Espanol.
UMANA: Ciao.
SANCHEZ: In 90 percent of Congressional races, usually the person who spends the most money wins.
Does that mean that you can essentially buy a Congressional seat?
And would that be a problem if it were so?
I'm getting into this next with a guy who says he has a much better way. We've been all over this and we'll bring it to you, next.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back.
Seventy thousand people are now following us on Twitter, we are honored to say. Two of them are commenting right now.
As a matter of fact, let's go to the very top of our Twitter board, Jonathan, if we could. Ecurra says: "How much -- how long do citizens have to wait for everybody to show their uneasiness?"
And, obviously, there's a lot of uneasiness. But not on Wall Street. Look at that number on the right of your screen.
But let's go to Codees, as well. He's saying: "Our president is damned if he does and or damned if he doesn't. Those who want to criticize him, will simply do so any way you slice it."
Yes, he did get criticism when the market was down and now he's still getting it when the market was up. It comes with the job.
I want to talk about something that may have to also come with the job. If you want to be a Congressman or if you want to be a senator in the United States of America, how -- if you want to run for office in the United States, you've got to come up with a lot of money to do so, is that right?
Because you've got to get money from people and then does that influence you?
Let's look at the numbers. We talked about this Friday. I want to break it down even more.
Ready?
Put this one up.
This is first -- let's start with a senator, all right?
The cost of running for a Senate seat in the United States of America in 1976 was $609. Today, $9.6 million. Think about that, folks.
Congress -- you want to run for a seat in the House?
Want me to show you what that costs today?
Let's go back to 1976 first, right?
$87,000 is how much money you had to raise if you would -- had a decent chance of getting elected.
Do you know how much money you need to get elected today?
$1,300,000.
Is that crazy or what? Bob Edgar is the president of Common Cause. He's a former Congressman himself and he's good -- good enough to join us.
Some people are watching and they say why should I care, Bob?
After all, that money -- that's not my skin. I'm not paying for that. If some Wall Street company wants to pay for that, the heck with them.
BOB EDGAR, PRESIDENT AND CEO, COMMON CAUSE: Actually, it impacts on all of us. There are two corrosive influences in Washington. One is money and one is ego. And money has just exponentially grown over the years.
When I ran for the United States Senate back in 1986, I had to raise $4 million. Arlen Specter, my opponent, raised $6 million. Two years ago, the same race in Pennsylvania cost $37 million.
SANCHEZ: Well, we've been talking about it -- look, Bob, we've been talking about this all week long. I mean I've told people that the folks on Wall Street who got all this regulation through that would make them rich paid $5 billion between 1998 and 2008.
People who watch this newscast have probably memorized that number by now.
But, you know, as you look at this, you have to try and say OK, so, if that's a problem where's the solution?
And some folks have mentioned public financing. Let...
EDGAR: You see...
SANCHEZ: ...the taxpayers go out and give them the money that they need and set a cap on it, right?
EDGAR: This week, we're going to roll out here in Washington something called the Fair Elections Now Act, which will, in fact, impose public financing on the House and Senate, in a voluntary way, because of the Supreme Court action.
But we have had success in Connecticut, in Maine and Arizona. This past November, 75 percent of those running for the state legislature in Connecticut used public financing and 81 percent of them got elected.
SANCHEZ: My Twitter guys...
It works.
SANCHEZ: My Twitter guys are going to say that I interrupt too much. But I've got to do this, because I'm running out of time.
How would public as opposed to private be cheaper for me?
How would that be cheaper? EDGAR: It would be...
SANCHEZ: Explain it to me.
EDGAR: It would be vastly cheaper if we could get all candidates running at the local level, the state level and the national level to use public financing. Right now, every time you fill up at the gas station or you go for a medical procedure, billions of dollars are flooding into two things -- lobbying and campaign finances. And the numbers that you put up on the board, the only way those House and Senate members are getting that money are from large corporate interests, union interests that are giving legal contributions. But those contributions are simply corroding the system.
SANCHEZ: So when the guys on Wall Street paid $3 million for lobbyists -- $3 billion for lobbyists between 1998 and 2008, they ended up charging you and me for what they paid those lobbyist lobbyists.
EDGAR: Absolutely.
SANCHEZ: That's the point to be taken out of this.
Bob, we're out of time.
Can we get you back?
EDGAR: Yes.
SANCHEZ: Let's do this again. I think there's a lot to talk about here. Appreciate it.
EDGAR: Thank you.
SANCHEZ: We've got a ton of questions about Treasury Secretary Tim Geithner and his economy plan. White House insider Gene Sperling is a senior adviser to Geithner, his right-hand man. So he's the right-hand man to the right-hand man of the president. He's next.
(COMMERCIAL BREAK)
SANCHEZ: Well, whatever it is Mr. Geithner announced today, I'll tell you what, Wall Street seems to love it. Look at this number -- up 458. That's going to put a smile on the face of my next guest.
Gene Sperling is the right-hand man to Tim Geithner.
He's joining me now from the White House.
Mr. Sperling, thanks so much for being with us, sir.
GENE SPERLING, SENIOR TREASURY ADVISER: Thanks for having us, Rick.
SANCHEZ: All right. So you know what this is being called. They're calling it a feeding fest for Wall Street. But is it a scrooging for taxpayers?
SPERLING: No, not at all. I mean, look, this is just one more step in a financial stability plan -- a comprehensive financial stability plan that has been addressing issues in the financial crisis, from housing to small business loans to the strength of capital for bank lending. And this is another piece, but it's an important piece.
And, in fact, what is -- what taxpayers should like about this is that we rejected the model that suggested that we should have the public simply go out and buy all these assets, dollar for dollar, take on all the risk, manage them ourselves, risk overpayment because we, the government, were going to set the price.
What we did is we are leveraging taxpayer dollars. We're getting a leverage from the FDIC and Federal Reserve, from the private sector. And they're sharing risk with us. And we're using private sector investors to help determine how much these assets cost, because, ultimately, we want out of this credit crisis...
SANCHEZ: Does it worry you...
SPERLING: ...and get back to a vibrant market again.
SANCHEZ: Does it worry you that these private investors, as you refer to them, end up being the same scoundrels who screwed the whole thing up in the first place and they're now going to go back in and make money on the way up, as they did on the way down?
SPERLING: Well, no. Let's look at what we're actually doing here. We're trying to get banks, for example, that have been holding these loans that are truly legacies of one of the worst financial periods in our country, where reckless loans were made with poor risk assessment, with no oversight that now burden our financial system. And we're trying to get these unlocked -- off balance sheets so that we can have cleaner bank balance sheets, where people are more willing to invest and they can get lending going again.
SANCHEZ: What -- what if this doesn't work?
Will you nationalize?
SPERLING: No. Our goal -- look, first of all, we're very confident that this overall plan we have -- all the pieces together are moving us in the right direction toward recovery. We've already seen some positive results in terms of lower mortgage prices and in terms of 30 percent more people refinancing, in terms of $9 billion through our lending facility in its very first month. So we believe that this will move us in the direction of the financial recovery that is essential for economic recovery overall.
SANCHEZ: And most...
SPERLING: And this is designed carefully to make sure that taxpayers are getting the best bang for the buck and that we are sharing risk, not shielding the risk, of the private sector. If they make bad investments in this program, they will everything.
SANCHEZ: Right.
SPERLING: But if they do well, the taxpayer will share in that benefit. That's aligning the private sector interests with the larger public interest.
SANCHEZ: Whatever -- Gene Sperling, whatever it takes I think is what most folks who are watching right now would say. And we'll be watching what you do.
Thanks so much, sir, for taking time to talk to us.
SPERLING: Thanks, Rick.
SANCHEZ: We really appreciate it.
Standing by his man -- Obama wouldn't take Geithner's resignation even if he offered it.
Is he quelling the public's thirst for the Treasury secretary to step aside?
We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back.
I'm Rick Sanchez at the World Headquarters of CNN.
You saw the big announcement made by Timothy Geithner today. And Wall Street has eaten it up. They love this new TARP plan, where there's going to be a lot of folks on Wall Street who are probably going to do pretty well -- the middle men, as they might say. There's the number, up 475.
Will it be 500 in the next four minutes?
Possibly. We're watching it.
And here's what you're saying about it.
Let's go real quick -- blaqmag says on Twitter -- let's go through these Twitters real quick, all right?
Ready?
"Rick, great job. I watch you every day. No one is truly answering your question -- how is this a good deal for my street, not Wall Street?"
The next one says: "If Wall Street affects Main Street and Wall Street's doing well. Won't it affect us? Duh."
The next one says: "Regarding the Geithner plan, you're looking at the shiny object instead of paying attention to the reason for the plan -- credit markets."
And the last one says: "CNN, who did you think was going to make the money off this deal, the people? Ha. No. It's Wall Street again."
Speaking of Wall Street, Susan Lisovicz is standing by.
She's going to take us there. We're going to count this thing down and see if it goes any higher. And I guess that would be a good thing -- Susan.
Stay with us.
We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Susan Lisovicz is joining us now.
How high can it go?
And a lot of our folks are saying, hey, does this mean the president is doing -- oh, my God, it's going to hit 500, isn't it?
Look at that.
LISOVICZ: These are the best gains of the year, Rick Sanchez -- and, in fact, the best gains since November. The markets are on a tear. The Dow is up 1200 points in the last two weeks -- investors responding to some encouraging news from the housing market, as well as the Treasury Department's plan to help prop up banking. Existing home sales jumped 5 percent last month -- Rick.
SANCHEZ: Wow!
LISOVICZ: The market was expecting a decline. And this is exactly what the market has been waiting to hear. Very -- enjoy the view. Hopefully, we can have some positive mode tomorrow, Rick.
SANCHEZ: Oh, it's a joyous day on Wall Street. I hope it works that way for the rest of us.
We'll keep watching it for you.
Susan Lisovicz, you do you great work.
Thanks again.
Here's another guy who does great work, Wolf Blitzer in "THE SITUATION ROOM".
WOLF BLITZER, CNN ANCHOR: Thanks very much, Rick.
Happening now, financial detox -- it's the latest effort to unclog jammed credit lines.
Will it detoxify assets that prevent you from getting loans or will it be a multi-billion dollar waste of money?
