Return to Transcripts main page
CNN Newsroom
Buffalo Plane Crash Hearings; Credit Card Crackdown; Minority Leader on Interrogations; Nostalgia on Ellis Boulevard; President Obama HOlds Town Hall in New Mexico
Aired May 14, 2009 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Our Senior Correspondent Allan Chernoff joins us live from New York.
What a set of hearings here, Allan. The airline says -- and we heard it just a moment ago -- it expects crew members to arrive at work well rested. It doesn't seem unreasonable.
But here's the question: How realistic is that if the crew members have to commute long distances to their base of operation?
CHERNOFF: Exactly, Tony. A major problem here, and it's quite clear, these hearings have made quite clear, that this sort of thing happens all the time. OK?
Let's take the situation of the first officer, Rebecca Shaw.
She was earning about $24,000, lived way out in Seattle with her parents, flew overnight to get to her base in Newark, New Jersey. Clearly, she did that all the time. She didn't have the money to stay in a hotel the night before her shift began.
The captain flew up from Florida. It's clear this is a major problem, and today, in fact, at the hearing they're discussing this very issue now, about should airlines provide accommodations for their crew prior to beginning the shift?
HARRIS: What am I missing here? Is it unrealistic to expect the employee to work in proximity to their base? What am I missing here?
CHERNOFF: Yes, the airlines are saying, well, we don't want to tell our employees where they have to live. But, you know, something has got to give here.
It's quite clear from these hearings that plenty of airline crew members are arriving at their shift without really having had a good night's rest. This is clearly a problem confronting the entire industry, but perhaps especially these regional airlines where people are earning much less money than at the major airlines. They simply can't afford to pay for hotels.
HARRIS: Yes. All right. Allan, appreciate it. Thank you.
Boy, as Allan just mentioned, the hearings are raising all sorts of questions, some questions about pilot training. Should the standards be upgraded, and who should be held responsible? Our Jason Carroll has that part of the story.
(BEGIN VIDEOTAPE)
JASON CARROLL, CNN CORRESPONDENT (voice-over): It happens after every airline crash -- the investigation. What went wrong? Who was at fault?
UNIDENTIFIED MALE: Are we ready to begin?
UNIDENTIFIED FEMALE: Yes, sir.
CARROLL: Hearings into the crash of Colgan Air Flight 3407 raised more questions. Should industry training and standards be upgraded?
Margie Brandquist says, yes. Sister Mary Petis (ph) was killed in the crash.
MARGIE BRANDQUIST, CRASH VICTIM'S SISTER: I think this was a perfect storm accident. And so until we know, we want to make sure that the FAA is held absolutely accountable.
CARROLL: The Federal Aviation Administration says that Colgan Air Captain Marvin Renslow met federal guidelines, which include being licensed and trained on the Dash-8/Q400 Bombardier.
MITCHEL: All I can say is Captain Renslow was fully qualified.
CARROLL: Renslow failed test flight called check rides five times before passing, but there are no FAA regulations on how many times a pilot can retake these tests. One former NTSB investigator and current commercial pilot, Ben Berman, says that should have been a warning.
BERN BERMAN, COMMERCIAL PILOT: So if a pilot has a pattern of failing multiple check rides over their careers, it should and usually does raise a red flag for the airline.
CARROLL: Renslow ended up meeting FAA-mandated experience in a flight simulator, but that did not include flight simulator training with a stall warning called a stick pusher. He only had classroom training.
Why? Again, not required by the FAA so Colgan Air didn't require it either.
MARY SCHIAVO, FORMER INSPECTOR GENERAL, DEPARTMENT OF TRANSPORTATION: Number of proposals in the works.
CARROLL: Mary Schiavo is the former inspector general of the Department of Transportation.
SCHIAVO: It's a co-dependent relationship. The airline did only what the FAA required even though going above and beyond would have been prudent. CARROLL: The investigation shows Renslow pulled up on the control column when he should have done the opposite. The airline says it could not speculate why. Since the accident, "Colgan has instituted stick pusher demonstrations in a flight simulator, even though it is not required by the FAA and is not the standard in the airline industry."
Families of the victims still have doubts the airlines and the FAA will take responsibility and make needed changes.
BRANDQUIST: I'm not confident at all. So you may see all these family members canvassing Capitol Hill until we get some responses.
(END VIDEOTAPE)
HARRIS: Well, so far, the FAA says it will not comment while in the middle of a hearing, but they may comment when the hearing is over.
Surprise interest rate hikes, hidden fees and penalties. President Obama hears complaints about credit card companies at a town hall meeting in New Mexico this hour.
Live pictures now from Albuquerque, where the president is scheduled to take the stage any minute now. We will, of course, bring you his town hall live.
The president wants Congress to clamp down on credit card companies, and he wants a bill on his desk by Memorial Day. What exactly would that bill do?
Josh, why don't you talk us through this.
The president wants a bill on his desk by Memorial Day. And as you mentioned last hour, there's some pretty big differences between the Senate version of the bill and the House version of the bill.
But what would he do when it's finally worked out here?
JOSH LEVS, CNN CORRESPONDENT: Yes. You know, it's interesting, because if these go through, it really would have an impact on basically everyone. I mean, this is one of those laws that could quickly translate into all of our, as we like to say, wallets a lot of the time.
Let's start off with the basics. I have a good graphic for you from the good team at CNN Money here that will show you, no matter whether we get the Senate version, the House bill, Tony, this is what would happen either way.
You've got no fee hikes for being late on other types of bills. Currently, because of just the complexities in these laws, these credit card companies can charge you more, raise your fees if you're late on a utility bill. They can track other bills.
There would also be no fees for paying by phone, which is something some companies are trying.
Also, Tony, this is important, it will be tougher for young people to get cards. And that's part of what's important to a lot of families here. A lot of people think these companies are going after young people, trying to get them in debt early on. So that's something.
HARRIS: Well, should we -- do we have time to sort of sort through the differences between the House and Senate bills?
LEVS: Yes. Let's do it. I've got a couple more graphics, because I want to take everyone through this, because one thing, you know, Washington, you're going to see things go back and forth, House versus Senate.
This is what the Senate bill is saying. The Senate bill would stop fee hikes if you're 60 days late, but the House bills only 30 days. So that's one of the big differences there. A lot more, Tony.
HARRIS: Josh, yes, let's do this -- let's get to -- you saw the press conference with the House speaker, Nancy Pelosi...
LEVS: Yes, I saw that. Yes.
HARRIS: ... this morning responding to what she knew and when she knew it about enhanced terror techniques, really waterboarding.
Let's get to House Minority Leader John Boehner.
(JOINED IN PROGRESS)
REP. JOHN BOEHNER (R), MINORITY LEADER: ... look backwards and have this commission. Then we ought to put it all on the table. Not just part of the picture, not just some picture that will be flattering to my Democrat colleagues. Just get all of the facts on the table.
I don't think it's in the nation's interest. And I don't think it's in the interest of keeping our troops safe, nor in the interest of keeping the American people safe.
QUESTION: The speaker said this and Mr. Hoyer said this yesterday. The problem is not as, the Republicans have put this, what the speaker knew, who, what, when, why, but the question of what went on in these interrogation sessions and whether or not that was consistent with U.S. policy and whether or not that was legal.
Isn't that truly the broader issue here?
BOEHNER: I don't think it is. And I'll tell you why.
Early on, when I began to receive a number of briefings from our intelligence community, there would tend to be more lawyers in the room than intelligence officials, and because they wanted me to understand that what the law was and what the finding was and what the background was for them proceeding with whatever the operation was. And so having dealt with the lawyers that work for our intelligence agencies, I can tell you that our professionals operate under very strict guidelines, strict guidelines that are laid down by the lawyers at these agencies so that their work is done within the law. And I have not one doubt, not one doubt, that our intelligence officials proceeded within the law and proceeded appropriately.
QUESTION: But her point -- part of the speaker's point this morning was that what ultimately she decided needed to be done was to change the control of Congress, ultimately to change the presidents. The problem was Republican policy that she disagreed with was leading the country astray, and that's what she said this morning was what needed to be changed. That was the problem.
Your response?
BOEHNER: Well, I think the problem is that the speaker has had way too many stories on this issue. And as I said earlier, I think she's posed more questions than she has provided answers.
At the end of the day, I know what these briefings are. I was not a member of the leadership at a time when these briefings occurred, so I can't relate the extent of these briefings. But other members in our conference were in these briefings.
And when you look at the number of briefings that the speaker was in and other Democrat members of the House and Senate, it's pretty clear that they were well aware of what these enhanced interrogation techniques were. They were well aware that they had been used. And it seems to me that they want to have it both ways. You can't have it both ways.
QUESTION: (OFF-MIKE)
First question, you signed your name on a letter to President Obama (OFF-MIKE).
BOEHNER: I just think that the appointment of Harry Knox to head the Office of Faith-Based Activities, considering his anti-Catholic rhetoric over the years, is inappropriate. And that's why I signed onto the letter. And I would hope that more members of Congress would raise objections as well.
QUESTION: And the second question, I want to ask about the proposal of, as part of the overall health care reform, that would either reward or penalize...
HARRIS: And here we go. House Minority Leader John Boehner at his weekly event where he meets with reporters, appearing to -- I'm sure I have this wrong -- appearing to agree with Speaker Pelosi in getting all of the facts on the table about what members of Congress knew, and particularly the members of the various committees with jurisdiction in this area. What members knew about enhanced interrogation techniques. Specifically, we're really talking about waterboarding here, when Congress knew about waterboarding, and what members did with information once they had it. We are going to continue to follow this and put together the comments from the speaker with the firestorm that is really surrounding Speaker Pelosi. We'll do that with our Senior Congressional Correspondent Dana Bash.
Chrysler plans to shut a quarter of its dealerships. The company told a bankruptcy court today 789 will be closed -- 789. Chrysler currently has about 3,200 dealerships.
Last hour, I talked to a Long Island, New York, Chrysler dealership owner who has been selling cars for 40 years.
(BEGIN VIDEO CLIP)
GERARD BROSHART, CHRYSLER DEALER: It's so sad. It's so sad.
We've been here since '66. You know, we sell between 400 and 500 Chryslers every year.
There's no one left on the South Shore. Why they got rid of me I have no idea.
From (INAUDIBLE) to Staten Island on the South Shore, there are no Chrysler dealers. I am inundated with service. It's just a big surprise but it's such a disappointment.
You know, we're a small store. We owe nobody anything. You know, we have no debt.
Why close me? They're the ones that went bankrupt. I didn't go bankrupt.
(END VIDEO CLIP)
HARRIS: We're going to follow this man's story.
The cuts will cost thousands of jobs in communities across the nation. Local governments will lose a key source of tax revenue as a result.
More on issue number one, the economy.
The ongoing jobless claims set a new record for the 15th week in a row -- 6.5 million American workers are now receiving benefits. First-time claims total 637,000, more than expected, but that is still below March's peak.
Wholesale prices jumped .3 of a percent in April. Inflation fueled by the largest increase in food prices in a year. Even with that increase, overall prices are down for the past 12 months.
People are losing jobs and watching their homes fall into foreclosure. We track this every day. And people are actually seeing their savings disappear. But some Americans are fighting back by starting a new business because the old one simply shut down. Now, tonight, join Anderson Cooper and Ali Velshi for real solutions from people surviving tough times. Watch the CNN Money Summit, "Money & Main Street" primetime special. It is tonight at 8:00 Eastern.
President Obama is tackling controversy over his commencement appearances head on. We will hear what he said to graduates at Arizona State University just last night.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: President Obama taking some time out of his schedule for the class of 2009. Last night he wrapped up the first of three college commencement speeches he will deliver this season, addressing some 9,000 graduates at Arizona State University, making light of the school's decision not to give him an honorary degree.
Is this correct here?
CNN's Carol Costello, superstar correspondent for "AMERICAN MORNING." You often see her filling in on that program as well.
This has got to be past your bedtime.
CAROL COSTELLO, CNN CORRESPONDENT: It is, but I'm loving being on this show, Tony. Thank you.
HARRIS: Carol, it's good to see you.
COSTELLO: It's good to see you, too.
Hey, let's start with Arizona State.
HARRIS: Yes, let's do that.
COSTELLO: Yes, because the president, you know, he has this way of turning lemons into lemonade, using this controversy as a life lesson. He threw in a little humor and he turned out a recipe for turning an uncomfortable moment into a meaningful one.
Listen.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I really thought this was much ado about nothing. But I do think we all learned an important lesson.
I learned never again to pick another team over the Sun Devils in my NCAA brackets. It won't happen again.
President Crow and the Board of Regents will soon learn about being audited by the IRS. (END VIDEO CLIP)
COSTELLO: Mr. Obama also gave a little fist bump to graduating seniors. So, that was the humor part.
The life lesson part, well, the president told the crowd he doesn't dispute the suggestion by university officials that he hasn't achieved enough in life. He embraces that saying one's title, even if it's president, says little about how one's life has been led. There's always more to learn, he says.
Now it's onto Notre Dame. And it'll be a lot more difficult for him there, Tony, because this is a lot more controversial. Some students and protestors are quite upset with the school's decision to invite the president to speak at the catholic university's commencement and they've protested because of his stances on abortion rights and stem cell research.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We do not believe it's right to celebrate a man who has gone so against catholic principles.
UNIDENTIFIED MALE: We can't afford to send a message to people that we value power and fame over our catholic identity.
(END VIDEO CLIP)
COSTELLO: But according to a new poll from the Pew Foundation, just 28 percent of American Catholics said it was wrong for Notre Dame to invite the president to speak. The president will try to work some of his magic at Notre Dame on May 17th. And he's going to meet this challenge head-on. I'm sure he'll talk about the issue because as he likes to say, we can disagree without being disagreeable.
HARRIS: Carol, good to see you.
COSTELLO: Nice to see you, too. Thanks for having me.
HARRIS: Come on the program any time. Love to have you.
And CNN will bring you the president's commencement address at Notre Dame Sunday live 2:00 p.m. Eastern, 11:00 Pacific.
Let's see the gizmo here. No, let's take it full.
The president scheduled any moment now. Albuquerque, New Mexico. He should take the stage shortly. The president expected to hear a number of complaints about credit card companies at this town hall meeting, again, scheduled to begin any moment now.
A hamburger and root beer, it was a tradition in Cedar Rapids, Iowa, until floodwaters destroyed a restaurant and much of the neighborhood it served. We'll look at the challenges that people there face in power "Money & Main Street" report, that's next.
(COMMERCIAL BREAK)
HARRIS: An authentic '50s drive in. We're talking about burgers, jukeboxes, car hops. Then, the flood. The owner is trying to rebuild, but the recession is not helping.
Here's CNN's Ed Lavandera with today's "Money & Main Street" report.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT (voice-over): The smell of grilled hamburgers lingers in what's left of this A&W drive-in.
ED WARD, FLOOD VICTIM: This was the dining area.
LAVANDERA: But Doug Ward smells the stench of stale river water from last year's flood in Cedar Rapids, Iowa.
(on camera): This has got to be painful to see.
WARD: It is. It's very painful to see. It was our life for 30 years.
LAVANDERA (voice-over): When the Cedar River spilled over its banks, Ward's driver in drown in almost ten feet of water. Almost a year later, the drive-in sits in ruins. The root beer mugs still muddied.
WARD: A lot of them are older mugs. Older designs.
LAVANDERA: Ward doesn't know if rebuilding here is worth it. If people don't come back, who will loan him the $900,000 need to rebuild the drive-in. Even changing locations will cost more than a million dollars. It's a painful decision.
WARD: If the neighborhood was normal, we would have this place up and running again. If we decide to move somewhere else, though, we have to let it go.
LAVANDERA: The flood also destroyed Ward's church and his home just a few blocks away. He estimates rebuilding the house will cost $75,000. And he doesn't have insurance.
WARD: This was the living room.
LAVANDERA: FEMA gave him $28,000 toward home costs, but for now Ward and his wife live in a trailer six miles away. It's not the same.
(on camera): Does this feel like home at all?
WARD: It doesn't to me, no. It just doesn't.
LAVANDERA (voice-over): Since 1948, the Wards drive-in has been a landmark in Cedar Rapids time check neighborhood, a fixture for people cruising down Ellis Boulevard in antique cars, a throwback to the 1950s. The drive-in evolved over time, but it defined the personality of this working class neighborhood.
MARK STOUFFER HUNTER, CEDAR RAPIDS HISTORIAN: It's almost like our little Eiffel Tower.
LAVANDERA: To Cedar Rapids historian, Mark Stouffer Hunter, Doug Ward's story is why this road is the boulevard of broken dreams.
(on camera): The idea that he might not be able be -- put the business back here.
HUNTER: Yes, it hurts because it's happening not just in this neighborhood but all over the neighborhoods that were affected by the flood.
LAVANDERA (voice-over): Getting loans to rebuild the drive-in isn't easy. So far he's qualified for a $350,000 disaster loan, but mush more is still need. Ward says each passing day brings more financial pressure.
WARD: Within a month or two we'll have to find something else to keep us above water and if we don't get something else going here...
LAVANDERA: He doesn't know what kind of job he'll find. Doug Ward misses the job he loved. Serving his friends a frosty root beer.
Ed Lavandera, CNN, Cedar Rapids, Iowa.
(END VIDEOTAPE)
HARRIS: And make sure you don't miss tonight's special event, "CNN MONEY SUMMIT: MONEY & MAIN STREET" hosted by Anderson Cooper and Ali Velshi.
Logon to Facebook to RSVP and then watch tonight 8:00 p.m. Eastern right here on CNN.
The recession and you. How big a hit do you take during this downturn may depend on your age.
(COMMERCIAL BREAK)
HARRIS: President Obama in Albuquerque, New Mexico pushing credit card reform at a town hall meeting.
Let's listen in.
OBAMA: Thank you so much. What a wonderful welcome. It's good to be back in New Mexico .
(APPLAUSE)
It's always nice to get out of Washington for a while...
(APPLAUSE)
... and come to places like Rio Rancho. (APPLAUSE)
The climate is nice, the conversation is nice, people are nice. It is just wonderful to be here.
We've got a few special guests that I want to acknowledge here. First of all, a great friend, one of the finest governors in the country -- please give it up for Bill Richardson.
(APPLAUSE)
Lieutenant Governor, Diane Denish.
(APPLAUSE)
Secretary of State, Mary Herrera.
(APPLAUSE)
State Treasurer, James Lewis.
(APPLAUSE)
State Auditor Hector Balderas.
(APPLAUSE)
We've also got Joe Garcia, President of the National Congress of American Indians.
(APPLAUSE)
Got Rio Rancho Mayor, Tom Swisstack.
(APPLAUSE)
We've got some members of Congress who couldn't be here today, but I just want to acknowledge them because they're doing a great job. Senator Tom Udall...
(APPLAUSE)
... Senator Jeff Bingaman...
(APPLAUSE)
... and Representative Ben Lujan.
(APPLAUSE)
And I want to thank Chris for the wonderful introduction and for her wonderful family who are here. Please give her a big round of applause.
(APPLAUSE) Now, the last time I came here was 10 days before the election.
(APPLAUSE)
We were over at the University of New Mexico .
(APPLAUSE)
Tens of thousands of you showed up, it was a gorgeous night, stars were out. And I told you then that if we wanted to steer ourselves out of our economic crisis, if we wanted to bring about the change we needed, then I needed your help. I needed you to show up one more time.
And, New Mexico , you delivered.
(APPLAUSE)
QUESTION: We love you!
OBAMA: I love you back.
(APPLAUSE)
You delivered because you believed that after an era of selfishness and greed, we could reclaim a sense of responsibility from Wall Street to Washington to Main Street . You believed that in a time of great inequality, we could restore a sense of fairness to our economy. You believed that rather than go back to the pursuit of short-term profits and a bubble-and-bust economy that led us to this point, we could build an economy based on sound ideas and solid investments, hard work, in order to secure a long-term prosperity.
So, New Mexico , I've come back today to tell you that's exactly what we've begun to do.
(APPLAUSE)
Since the very first day that I took office, we have acted boldly and swiftly across all fronts to clear away the wreckage of this painful recession and to start laying a new foundation for prosperity.
We passed the most ambitious economic recovery plan in our nation's history to jumpstart job creation...
(APPLAUSE)
... and get our economy moving again -- a plan that has kept teachers in the classroom and class sizes from increasing; a plan that will save or create 22,000 jobs just in New Mexico, mostly in the private sector; a plan that made good on the middle-class tax cut that we promised...
(APPLAUSE)
... a tax cut that's already begun to appear in paychecks for 700,000 working families across New Mexico.
(APPLAUSE)
We made historic investments in the kind of clean energy that's led to an influx of cutting-edge companies creating new jobs and new opportunities right here in this state.
We've made productive strides towards fixing the health care crisis that I know has hit especially hard here -- strides towards reform that brings down costs; that give Americans the freedom to keep their doctor or plan that they already have, and choose a new doctor and a new plan if they want to; that finally gives every American access to quality, affordable health care.
(APPLAUSE)
And already we've got millions of children across the country that have health care right now under the children's health care bill that we signed since I've taken office.
(APPLAUSE)
So I believe we're moving in the right direction. Step by step, we're making progress. Now, we've got a long way to go before we can put this recession behind us. And New Mexico is doing better than many states. But it's tough out there. But we do know that the gears of our economy, the economic engine, are slowly beginning to turn.
In the meantime, though, I know that there are so many Americans who are hurting right now. You got hundreds of thousands who've lost their jobs just last month. Millions are working jobs that don't pay enough to cover the bills. Millions more see increasing portions of their income going towards paying down debt. They're Americans struggling to cope with the rising cost of putting things like their mortgage, their tuition, their medical bills -- even their food and gas bills -- on their credit cards, because they feel like they're going underwater. But they're quickly finding out that they can't dig their way out of debt because of unfair practices. And that's what I want to talk about today briefly.
We're talking about folks like Chris Lardner. She and her husband work hard; they're doing well. They have a wonderful small business. But she wrote to me last week and you just heard her story. Her husband's business is in Albuquerque ; two of their children are in college. When one tuition payment that was mistakenly charged to a credit card put her over the limit, her credit card company more than tripled her rate to nearly 30 percent. And she made a simple point in the letter that she wrote to me. She said: "If we conducted business this way, we'd have no business," she wrote. "And if this is happening to us, I can only imagine what's going on in homes less fortunate than ours."
You all know what Chris is talking about. I know. I remember. It hasn't been that long since I had my credit card, sometimes working that a little bit.
(LAUGHTER)
We're lured in by ads and mailings that hook us with the promise of low rates while keeping the right to raise those rates at any time for any reason -- even on old purchases; even when you make a late payment on a different card. Right now credit card companies charge more than $15 billion a year in penalty fees. One in five Americans carry a balance that has been charged interest rates above 20 percent. Sometimes they even raise rates on outstanding balances even when you've paid your bills on time.
Now, I understand that many Americans are defaulting on their debt, and that's why these companies claim the need to raise rates. One of the causes of this economic crisis was that too many people were living beyond their means with mortgages they couldn't afford, buying things they couldn't pay for, maxing out on credit cards that they couldn't pay down. And in the last decade, Americans' credit card debt has increased by 25 percent. Nearly half of all Americans carry a balance on their cards, and those who do have an average balance over $7,000.
So we have been complicit in these problems. We've contributed to our own problems. We've got to change how we operate. But these practices, they've only grown worse in the midst of this recession, when hardworking Americans can afford them least. Now fees silently appear. Payment deadlines suddenly move. Millions of cardholders have seen their interest rates jump in the past six months.
You should not have to worry that when you sign up for a credit card, you're signing away all your rights. You shouldn't need a magnifying glass or a law degree to read the fine print that sometimes don't even appear to be written in English -- or Spanish.
(APPLAUSE)
And frankly, when you're trying to navigate your way through this economy, you shouldn't feel like you're getting ripped off by "any time, any reason" rate hikes, and payment deadlines that seem to move around every month. That happen to anybody? You think you're supposed to pay it this day, and suddenly -- and it's never on the end of the month where you're paying all the rest of your bills, right? It's like on the 19th.
(LAUGHTER)
All kinds of harsh penalties and fees that you never knew about.
Enough is enough. It's time for strong, reliable protections for our consumers. It's time for reform...
(APPLAUSE)
... it's time for reform that's built on transparency and accountability and mutual responsibility -- values fundamental to the new foundation we seek to build for our economy.
Now, this is not an issue I just discovered recently. For years, I've been a proponent of strengthening consumer protections when it came to credit cards. As a senator, I fought predatory lending and credit card abuse. And I called for what I called a Credit Card Bill of Rights. Last month, I met with the leaders of the major credit card companies to discuss these and other reforms that I believe will better protect the nearly 80 percent of American households that use credit cards.
And we didn't agree on anything -- everything as you might expect.
(LAUGHTER)
That was a slip of the tongue here.
(LAUGHTER)
We didn't agree on everything...
(LAUGHTER)
... but we did agree that any reforms we can shouldn't diminish consumers' access to credit. I also think there's no doubt that people need to accept, as I said before, responsibility that comes with holding a credit card. This is not free money. It's debt. And you shouldn't take on more than you can handle. We expect consumers to make sound choices and live within their means and pay what they owe in a timely manner.
Banks are a business, too, and so they have a right to insist that timely payments are made. But what we also expect is that our institutions act with the same sense of responsibility that the American people aspire to in their own lives. We expect that when we enter into an agreement, that agreement is reasonable and transparent. We expect to pay what's fair, not just what fattens growing profits for some credit card company. This is America , and we don't begrudge a company's success when that success is based on honest dealings with consumers. But some of these dealings are not honest.
(APPLAUSE)
That's why we need reform.
We need reform that restores some sense of balance. We need a new equilibrium where credit is flowing, where lenders can succeed, where consumers don't find themselves in a bad situation that they didn't anticipate. This kind of reform is especially needed during this economic crisis. And as I've said all along, it should adhere to four basic principles:
First, there has to be strong, reliable protections for consumers -- protections that ban unfair rate increases and forbid abusive fees and penalties. The days of "any time, any reason, anything goes" rate hikes and late fees, that must end. That must end. (APPLAUSE)
Second, all forms and statements that credit card companies send out have to be in plain language, in plain sight.
(APPLAUSE)
No more fine print, no more confusing terms, no more hiding the truth. We're going to require clarity and transparency from now on.
Third, we have to give people the tools to shop for a credit card that meets their needs without being afraid of being taken advantage of. So we're going to require firms to make all their contract terms easily accessible, and we're going to give consumers the information they need to do some comparison shopping. And we'll require firms to offer at least one simple, straightforward card that offers the strongest protections along with the plainest terms and prices.
And finally...
(APPLAUSE)
... finally we need more accountability. Instead of abuse that goes unpunished, we need to strengthen monitoring and enforcement and penalties for those who engage in deceptive practices that take advantage of families and consumers.
(APPLAUSE)
And we also need to clean up practices at universities to protect students from getting stuck in debt before they even get started in life. That's important.
(APPLAUSE)
Now, the Federal Reserve has already issued some new rules that would change some of these practices, and I'm grateful to them for doing so. But I'm also pleased that Congress has begun to act. Two weeks ago, the House passed credit card reform legislation that follows these principles by a wide bipartisan majority, and I thank them for that.
And New Mexico , you should be proud that you've elected people, as I said before -- Ben Ray Lujan, Martin Heinrich, Harry Teague...
(APPLAUSE)
... who stood up for you by voting for that bill.
(APPLAUSE)
Even as we speak, the Senate is debating its version of the bill, and I know your senators, Jeff Bingaman and Tom Udall, stand on your side, too.
(APPLAUSE)
So I'm calling on Congress to take final action to pass a credit card reform bill that protects American consumers and send it to my desk so that I can sign it into law by Memorial Day. There's no time for delay.
(APPLAUSE)
It's time to get it done. There's no time for delay. We need durable and successful flows of credit in our economy, but we can't tolerate profits that depend on misleading working families. Those days are over.
Because more than anything, this economic crisis has reminded us we're all in this together. We can't prosper by putting off hard choices, or by protecting the profits of the few at the expense of the middle class. We're making steady progress moving from recession to recovery, but we want lasting prosperity. And that means that we have to ensure that the legacy of this moment is an American economy that rewards work and innovation, that's guided by fairness and responsibility, and that grows steadily into the future.
(APPLAUSE)
So, New Mexico , I know there will be setbacks. I know that this is going to take some time. Some of you are going to continue to struggle for a while. We're doing everything we can. But here's what I also know -- if you're willing to do your part, if our companies are willing to do their part, if those of us in Washington are willing to do our part, if we all work together, then I promise you this: Years from now, you will be able to look back at this moment as the time when the American people once again came together to reclaim their future and bring about a new and brighter day.
(APPLAUSE)
Thank you, everybody. Thank you.
(APPLAUSE)
So I didn't come here -- I didn't come here just to make a speech. Whenever we visit a community we want to do a little bit of a town hall, give people a chance to ask questions. Obviously we've got a lot of people and I won't get through every question, but I'm going to try to get through as many as possible.
And we're going to go boy, girl, boy, girl. (Laughter.) Or girl, boy, girl, boy. And I'm going to go around the room. If you can raise your hands when you have the question, and there are people with microphones in the audience, so wait until you get the microphone -- everybody can hear your question that way. And introduce yourself so we know who you are.
And I'll start with this young lady over here. Yes.
QUESTION: Oh, thank you. Thank you, Mr. President. I work for one of the large corporations here. But I talk to a lot of people about health care. My question is, so many people go bankrupt using their credit cards to pay for health care. Why have they taken single-payer off the plate?
(APPLAUSE)
And why is Senator Baucus on the Finance Committee discussing health care when he has received so much money from the pharmaceutical companies? Isn't it a conflict of interest?
(APPLAUSE)
OBAMA: Well, as you know, I campaigned vigorously on health care reform, and I think that we have a better chance of getting it done this year than we've had in decades. I am optimistic about us getting health care reform done.
Now, health care is one-sixth of our economy, so it is a complicated, difficult task. And Congress is going to have to work hard. And everybody is going to have to come at this with a practical perspective, as opposed to trying to be ideologically pure in getting it done.
Here are my principles in terms of health care: Number one, we've got to control costs across the system, because if we simply insured everybody under the current system, we couldn't afford it -- we'd go broke. The fact of the matter is, is that families are seeing their premiums go up -- skyrocket each and every year. Businesses are getting crushed by the rising costs of their employees' health care. And the federal government -- Medicare and Medicaid -- is going broke. That's the single biggest driver, by the way, of our deficits.
I want everybody to be clear about this, because driving in I saw some folks who were saying, what are you going to do about debt, et cetera. Listen, by far the biggest contributor to our national debt and our annual deficit is the costs of Medicare and Medicaid -- as well as the other entitlement, Social Security -- defense, and interest on the national debt. That's the lion's share of the federal budget.
The things you read about in the newspapers and you see on TV about earmarks -- I want to get rid of earmarks, but the truth of the matter, they're only 1 percent of the entire budget. Most of what's driving us into debt is health care. And so we've got to drive down costs.
Now, here is some good news. There are ways that we can drive down costs, because we just have an inefficient system. If we emphasize prevention and wellness programs; if we help...
(APPLAUSE)
... if we -- so that we're reimbursing doctors and providers not just for treating people after they get sick but for helping people stay well if we use medical technology to reduce error rates and ensure electronic medical billing so when you go to the hospital, you don't have 15, 20 forms that you have to fill out over and over and over again.
There are simple things that we can do that will save us money, so we need to focus on cost, that's number one.
Number two, I think that it is very important that we provide coverage for all people, because if everybody's got coverage then they're not going to the emergency room for treatment.
(APPLAUSE)
And right now, if you've got health insurance, the average family is paying about $900 a year in additional hidden costs because you're subsidizing the folks who are going to the emergency room.
And so you'd be better off with a system that might cost the federal government overall a little bit more -- and we do have to pay for that -- but that would lower your premiums so that you don't have these hidden costs, because it's cheaper to treat a child for asthma with an inhaler than it is to have them go to the emergency room and take up a hospital bed. So that's the second principle.
Now, this brings to the last principle, and so this touches on your point, and that is, why not do a single-payer system.
(APPLAUSE)
Got the little single-payer advocates up here.
(APPLAUSE)
All right. For those of you who don't know, a single- payer system is like -- Medicare is sort of a single-payer system, but it's only for people over 65, and the way it works is, the idea is that you don't have insurance companies as middlemen. The government goes directly...
(APPLAUSE)
... and pays doctors or nurses.
If I were starting a system from scratch, then I think that the idea of moving towards a single-payer system could very well make sense. That's the kind of system that you have in most industrialized countries around the world.
The only problem is that we're not starting from scratch. We have historically a tradition of employer-based health care. And although there are a lot of people who are not satisfied with their health care, the truth is, is that the vast majority of people currently get health care from their employers and you've got this system that's already in place. We don't want a huge disruption as we go into health care reform where suddenly we're trying to completely reinvent one-sixth of the economy.
So what I've said is, let's set up a system where if you already have health care through your employer and you're happy with it, you don't have to change doctors, you don't have to change plans -- nothing changes. If you don't have health care or you're highly unsatisfied with your health care, then let's give you choices, let's give you options, including a public plan that you could enroll in and sign up for. That's been my proposal.
(APPLAUSE)
Now, obviously as President I've got to work with Congress to get this done and...
(LAUGHTER)
There are folks in Congress who are doing terrific work, they're working hard. They've been having a series of hearings. I'm confident that both the House and the Senate are going to produce a bill before the August recess. And it may not have everything I want in there or everything you want in there, but it will be a vast improvement over what we currently have.
We'll then have to reconcile the two bills, but I'm confident that we are going to get health care reform this year and start putting us on a path that's sustainable over the long term.
(APPLAUSE)
That's a commitment I made during the campaign; I intend to keep it.
All right. We've got -- it's a man's turn. This guy right here. This guy right here -- big guy. Yes, right here.
QUESTION: Hello, President Obama. I work with AFT New Mexico, and also with the AFL-CIO.
(APPLAUSE)
And I'd like to ask you, what would the Employee Free Choice Act do for New Mexicans and throughout the United States ? And mine is kind of like a two- question -- and the second one is, how can you help us get this bill passed?
OBAMA: Okay, let me talk about the Employee Free Choice Act. One of the things that I believe in -- and if you look at our history, I think it bears this out -- even if you're not a member of a union, you owe something to unions, because...
(APPLAUSE)
... because a lot of the things that you take for granted as an employee of a company -- the idea of overtime and minimum wage and benefits -- a whole host of things that you, even if you're not a member of a union, now take for granted, that happened because unions fought and helped to make employers more accountable.
(APPLAUSE)
The problem that we've seen is that union membership has declined significantly over the last 30 years. And so the question is, why is that? Now, part of it, the economy has changed and the culture has changed, and there hasn't been a very friendly politics in Washington when it comes to union membership. But part of it just has to do with the fact that the scales have been tilted to make it really hard to form a union. So a lot of companies, because they want maximum flexibility, they would rather spend a lot of money on consultants and lawyers to prevent a union from forming than they would just going ahead and having the union and then trying to work with -- and collectively -- allow workers to collectively bargain.
So there's a bill called the Employee Free Choice Act that would try to even out the playing field. And what it would essentially say is, is that if a majority of workers at a company want a union then they can get a union without delay -- and some of the monkey business that's done right now to prevent them from having a union.
Now, I want to give the other side of the argument. Businesses object to some of the provisions in the Employee Free Choice Act, because one of the things that's in there is something called card check, where rather than have a secret ballot and organize a big election, you could simply have enough employees, a majority of employees, check a card and that would then form the union. And the employers argue we need to have a secret ballot.
I think that there may be areas of compromise to get this bill done. I'm supportive of it, but there aren't enough votes right now in the Senate to get it passed. And what I think we have to do is to find ways in which the core idea of the Employee Free Choice Act is preserved, which is how do we make it easier for people who want to form a union to at least get a vote and have a even playing field -- how do we do that, but at the same time get enough votes to pass the bill. That's what we're working on right now. I think it's going to have a chance of passage, but there's still more work to be done.
(APPLAUSE)
All right, it's a young lady's turn. This young lady right there. You, yes.
(LAUGHTER)
QUESTION: Hello, President Obama. Our family, we're small business owners, and we're seeing a marked decrease in revenue due to customers having less discretionary income. Are there any plans to help small businesses ride out the storm?
