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Senate Leaders Slamming Brakes on Rush to Overhaul Health Care System; Interview With Congressman Eric Cantor; Small Business and the Economy; Officer Defends Gates Arrest
Aired July 24, 2009 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: And good morning, everyone. It is Friday, July 24th, and here are the faces of the stories driving the headlines today in the CNN NEWSROOM.
Senate leaders slamming on the brakes in the rush to overhaul the nation's health care system. They meet this hour with President Obama.
Plus, hear from the Cambridge police officer who arrested a prominent Harvard professor at his own home.
And meet breast cancer survivor Andrea Ivory, going door to door to save the lives of other women.
Good morning again, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.
Just keep working. That's the message President Obama is expected to deliver when he meets with two key senators this hour on health care reform. It was part of the president's message during his town hall meeting yesterday in Ohio.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I just want people to keep on working. Just keep working.
(APPLAUSE)
I want the bill to get out of the committees. And then I want that bill to go to the floor. And then I want that bill to be reconciled between the House and the Senate. And I then I want to sign a bill.
And I want it done by the end of this year. I want it done by the fall.
(END VIDEO CLIP)
HARRIS: Senate Democrats say a vote won't happen before the August recess.
White House correspondent Suzanne Malveaux joining us.
And Suzanne, good to see you. Good morning. How is the president handling this delay?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Well, Tony, we just had a briefing, if you will. It was on the record, a gaggle with the White House press secretary, Robert Gibbs, and here's how he's explaining it.
He is saying that of course they're going to keep meeting, they're going to keep pushing here. We are going to see the president meet with Senate Majority Leader Harry Reid, as well as well as Senator Max Baucus of the Senate Finance Committee. Obviously, two very important key players in all of this.
I asked Gibbs whether or not the president is going to push for another deadline. He says not necessarily. He is going to listen to these two leaders, take in what kind of timeline do they see, where are the sticking points in all of this.
He was also asked, as well, is he reaching out to Republicans on the Senate Finance Committee? He says, yes, on a regular basis, that he has spoken with Senators Grassley, Lindsey, as well as Snowe. And then he also said in terms of whether or not it was a blow to this president. He said we didn't expect any kind of signing ceremony before the August recess, but clearly they're trying to push them along, that any kind of progress they can make in these weeks and months to come would be a good thing.
And then, finally, it was interesting that Chief of Staff Rahm Emanuel meeting with a group of Blue Dog Democrats, those ones who are fiscally conservative. Was asked about, well, how did that meeting go? What did he have to do? Someone asked, "How much of it was cracking heads or begging for support?" And Robert Gibbs said somewhere in between.
HARRIS: OK.
MALVEAUX: So, obviously, there's a little arm-twisting that's going on behind the scenes. Should also let you know that we're going to see the president traveling more and more in the days and weeks to come. A rally in Roanoke just being a couple of those places where he's going to be selling his message in a really personal way, making that appeal to the American people directly -- Tony.
HARRIS: OK, Suzanne. Here we go, bottom-line question on this. Does the president still believe he can get a plan?
MALVEAUX: He believes he can get a plan, but this is going to be -- it's tougher than they imagined here, Tony, as you know. And they are not sticking hard and fast with, like, the August recess. They realize they're pushing this back a little bit, they've got to give it some more time to breathe, but they are pushing to have something on his desk by the fall.
HARRIS: Our White House correspondent Suzanne Malveaux.
Suzanne, good to see you. Thank you. So, let's get the latest on what is and isn't happening with health care reform legislation.
Our congressional correspondent, Brianna Keilar, live from Capitol Hill.
Brianna, there is word going on. Is there a chance something will get done before the August recess?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Tony, the slowdown really revolves in the Senate around the Finance Committee. That's why the chairman, Max Baucus, is meeting with the president today.
And at the risk of sounding like a broken record, they're still working through some of those issues that we talked about before -- how to pay for it and exactly what's in the plan. And they just say they need more time. So, they're aiming to have some sort of agreement before this committee before recess, but we're just not sure if they're going to be able to do it.
And then there's a whole other ball of wax, Tony, when you talk about the House of Representatives. House Speaker Nancy Pelosi is dealing with really disparate groups of Democrats who have differing demands.
You've got the Blue Dog Democrats, the fiscal conservatives who have concerns about the cost and how to pay for it. Then we've heard pushback on the left from the Congressional Black Caucus, who is concerned that if the Blue Dogs get their way about the cost and cost cutting, that some programs, perhaps, for minority health care are going to be cut. And then even after that, Tony, you have got another group of Democrats who are pro-life who are concerned that abortion under this plan may be paid for through some taxpayer money, and they're really objecting to that.
So, we hear from House Speaker Nancy Pelosi she wants a vote before the August recess. But really, we don't know if that's definitely going to happen.
HARRIS: Boy, you paint a picture here.
How difficult is it for Speaker Pelosi to keep her Democrats in line?
KEILAR: Oh, I mean, obviously, it is so hard, and that's really why the discussions that we've been covering on the House side have been between Democrats, Blue Dogs, for instance, meeting with Rahm Emanuel and Speaker Pelosi yesterday. And Tony, this of course creates an opportunity for Republicans to really, you know, hit them for the fact that they're not getting along.
And here is my show and tell of what they've got out that they keep lugging down to the House floor. This is a flow chart. You can see, it's quite a mess of a flow chart.
HARRIS: Yes, it is.
KEILAR: This is put together by Republicans. They say this is the House Democrats health plan. And they say this is you, the patient. This is your doctor, and this is all the stuff you'd have to deal with in your health care system.
As you can imagine, Tony, Democrats say this is an exaggeration. They say they're actually taking some of the red tape out of the situation, and they are floating their own version of a flow chart. They're putting this out there. You can see -- let's see if it's coming up.
HARRIS: Yes, it will come up here in a second.
KEILAR: All question marks. And they put together their own flow chart. That's because House Republicans at this point do not have a bill put together, and we don't know when they're going to have one put together. So, it's the battle of the charts here on Capitol Hill.
HARRIS: All right. I think we got our order a little turned around, but I think we all get the point, Brianna. Boy, this is something. What a debate.
Brianna Keilar on Capitol Hill for us.
Thanks, Brianna.
Health care reform certainly a hot topic for CNN's Ed Henry. On his radio show today, Ed is talking on the phone now with Republican Congressman -- let me just double-check that. He is. He's not on the phone yet, but we believe any moment that he is going to be speaking with Republican Congressman Eric Cantor, the House minority whip.
When we get word that that conversation is actually taking place, we will get back to Ed Henry.
And a little later, I will actually talk to our senior White House correspondent after he wraps that interview, and we'll check in with him in about 30 minutes or so.
You know, when it comes to health care reform, we've been asking this question all week: What are you willing to give up? And the responses have been absolutely huge. Can't thank you enough for participating.
If you would, keep the comments coming. Just go to our blog.
This is our show blog. Just go to CNN.com/Tony, leave a comment, and we will share some of your comments or responses, your thoughts, your views, your opinions, a little later in the program, right here in the CNN NEWSROOM.
Who should be the nation's top watchdog when it comes to credit cards and mortgages? A live picture now -- OK -- of the House Financial Services Committee. Where is everyone?
They're squaring off there today. Treasury Secretary Timothy Geithner and Federal Reserve Bank Chairman Ben Bernanke testifying back-to-back when the session gets under way. Geithner wants a newly created federal agency to handle consumer protection duties, and Fed Chairman Ben Bernanke says, hold on just a second here, he wants those responsibilities to stay with the Fed.
All right. Your retirement accounts a little fuller today.
The Dow closed above 9,000 yesterday for the first time since January, and the highest since November. The S&P and Nasdaq also up a bit.
Earnings optimism triggered the big surge on Wall Street. Stocks are taking a bit of a breather today. As you can see right now, boy, a little profit-taking going on right now. The Dow is down 53 points.
We will check in with Susan Lisovicz at the New York Stock Exchange in about 30 minutes.
Professor versus police. The Massachusetts officer in the middle of an arrest controversy speaks out -- what he has to say about arresting a professor in his own home.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: Right now we want to get to our Senior White House Correspondent Ed Henry. He's on the phone with Republican -- what did we just lose? Did we just lose Ed? Did we just lose Eric Cantor?
Well, let's do this -- let's listen in. Maybe Ed Henry is reflecting on the conversation he had with Eric Cantor. Let's just sort of listen in for just a moment here.
(JOINED IN PROGRESS)
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: ... but broader. How is this being applied? Is it being applied by police organizations across the country? What can the Obama administration do to stop it?
I thought he'd keep his answer pretty general, but to weigh in and then give a lot of details about what he believes happened that night in Cambridge, Massachusetts, after saying he didn't know all the facts, was surprising. But even more surprising was the fact that he said he believed the Cambridge Police acted stupidly.
The president is usually very careful with his language. He's especially careful when he talks about race issues. You'll remember he just was at the NAACP last week.
And so, sitting in the front row of that news conference there, I was stunned that the president used the word "stupidly." We've now seen some police organizations coming out saying they think the president went a little too far.
But we've got Representative Eric Cantor now on the phone, the Republican whip in the House. And we want to talk about health care.
How are you, sir?
REP. ERIC CANTOR (R-VA), MINORITY WHIP: Ed, I'm doing great. I'm actually on the floor of the House. If I have to run, it's because a vote has been called. But good to be with you.
HENRY: I understand.
Where are we -- let's cut right to the chase. Where are we in this health debate and where are Republicans? Are you willing to now work with the president since this debate is at a crossroads, try to find a bipartisan solution, or are you going to take the path of someone like Senator Jim DeMint, who's saying this is a chance to break the president?
CANTOR: Well, no, listen, Ed. I think that pretty much to a person in the House, that no one wants to accept the status quo, and we do want health reform that works. And I think that is where we are. We are at a crossroads. And the plan that President Obama has put forward simply is not going to make it across the finish line.
So, it's time for us, really, to start to work together and to really listen to the American people. I mean, they, first of all, don't understand why it was so important to rush in to passing a plan when you're talking about such a transformational bill. And so, you know, it does give us an opportunity, I think, to allow families across this country to begin to understand what's at stake and what it means when we say health care reform.
HENRY: But I want to push you on that, Congressman Cantor. You're saying you do want to work with the president, you do want to find reform. And yet, yesterday, one of your colleagues, Roy Blunt of Missouri, a very powerful Republican, said the Republican leadership is not going to present a health care alternative.
So, how can you say you want to work with the president, you want to find a solution, if the Republicans are not offering their own bill?
CANTOR: But we've got plenty of alternative bills out there. I mean, this is where I think some of the confusion lies, is that the Republican alternatives are numerous.
And what is the common thread throughout the bills that have been proposed by our side is, number one, we do want to preserve the ability for people to keep a health care plan if they like it. And number two, we do actually want to bring down costs without sacrificing the kind of choice of health care and quality that the people of this country have become used to.
And we just don't believe that you can do that by allowing there to be a government takeover of health care. And that, really, I think, is what has held up the progress on the other side of the aisle, because there are enough Democrats who agree with Republicans that a government takeover is not where we should be going.
HENRY: Now, the president insists it's not a government takeover. We'll talk about that in a moment, but I want to talk to you about the cost issue, where conservative Democrats are really pushing back against this White House.
What is the Republican solution to pay for health reform? If you're not in favor of the surtax that the House Democrats have come up with, what is the Republican plan?
CANTOR: Well, the first and most gaping omission from the Democrats' formula for paying for this bill is the lack of medical liability reform. There are estimates that if we put in some type of protection to keep the litigation at a reasonable level so that we don't have the frivolous lawsuits, so that doctors won't have to be practicing defensive medicine, that we can save in some estimates $300 billion.
Unfortunately, there's been no discussion of that by the president or those on the other side. So, that would be a significant avenue for us to begin to save some costs.
We also have in mind the ability for providing incentives for individuals to purchase health care in the same way that we provide incentives for employers to do so. If we give that incentive and boost it, what we'll see is the ability for folks to choose the kind of plan that they want and their family needs, and not have to go in and purchase and have the government subsidize plans that are even richer than what people would choose on their own, so begin to bring down prices in that way.
HENRY: But Congressman, if you've got all these ideas -- and I know you say you've got all different bills that different people put together, but why hasn't the Republican leadership on the Hill said, OK, let's take all these ideas you have to pay for it, to bring down costs, and put it one bill, and actually have an alternative to this president? Because I remember in the Bush years, when I was covering the Bush White House, time after time the Bush White House and Republicans on the Hill like you would say the Democrats have no alternative, for example, to President Bush's Social Security reform plan. It was just, no, no, no.
You guys are throwing stones at the president, but where is your plan?
CANTOR: Ed -- no, listen, we have plenty of plans. We have a plan out there. We have legislation out there. I mean, this is just sort of a false argument here.
HENRY: But then -- pardon me one second, though. I don't want to be rude, but Roy Blunt yesterday said the Republican leadership is not going to present -- I know there are individual bills out there, but you're not going to present one leadership alternative. CANTOR: We will have a bill, and we have bills. I mean, this is what I don't understand about the question. We have bills. There is a Republican plan out there.
As you know, the Democrats determine the way in which a piece of legislation comes forward. The Energy and Commerce Committee has now shut down because of so much bipartisan opposition to the bill that was before that committee, and so we've got to -- we've got to realize from the Democrats how it is that we can even present a plan. Will it be in the form of an amendment? Will it be in the form of a bill?
I mean, we have several bills out there with pay-fors, with a vision and direction for where we need to go. And the differences are very, very clear.
Number one, no government plan in terms of the Republican version. Number two, we want to make sure we don't provide a tax, impose a tax on small businesses in one of the worst economic times that we have seen. And number three, we want to make sure that people are allowed to keep what they have and that we preserve what's good about this system, and try to address and fix that which is not working.
HENRY: I want to ask you about the politics, as well.
I mentioned Republican Senator Jim DeMint saying this might be Obama's Waterloo, that you might be able to break the president. Talk about the politics. Are Republicans sitting back here, letting the Democrats fight it out, because you think you may end up picking up seats in the House and Senate and this will be a repeat of what happened to Bill Clinton in 1994?
CANTOR: Listen, Ed, you know, health care is too personal for every man, woman and child in this country for us to play politics with health care. And that's why it's so important we take our time. That's why it's so important that the American families who are going to be impacted by this, which is every single one of us, understand, talk to their doctors, see what's at stake.
So, you know, look, you could look at it in terms of if they pass one of the bills, if they pass a bill coming out of the House, that would be extremely bad policy. And frankly, bad politics, because it doesn't reflect what the American people want. If you see that they are unable to bring their plan to the floor, maybe that gives us a shot at trying to push some good policy to effect good reform.
HENRY: OK. Well, how committed are you to it then?
The president yesterday said, OK, the Democrats no longer want to meet this August deadline that he put out there, but he says he still wants to get this done in the fall, September, October. Are you committed to also getting it done? Whatever it is -- we don't know, it's still working through the committee progress, as I said -- but are Republicans committed to coming up with a deal with this president this fall? CANTOR: OK, Ed. I'm going to have to run and vote in a second, but, absolutely, we are committed to trying to work towards a bill that actually produces the kind of health care that we want, not a government takeover of our health care system.
HENRY: Congressman Cantor, I know you've got to go vote on the House floor. We appreciate you joining us and we'll have you back soon.
Thank you, sir.
You can join the conversation: 1-877-266-4189.
You heard right there from Eric Cantor, very powerful on Capitol Hill, that Republicans are committed...
HARRIS: OK. This is -- boy, this has been very interesting.
Eric Cantor, House minority whip, and Ed Henry. A lot of issues raised there by Ed. He did a terrific job on that.
We're going to talk to -- here's what -- our original plan was to talk to Ed in about 20 minutes or so, but we're going to see if we can put this together pretty quickly here, take a quick break, and see if we can bring Ed into the discussion, if we can bring our congressional correspondent Brianna Keilar in on the discussion of some of the points raised by Eric Cantor in that really good interview just moments ago with our Ed Henry.
Not sure that we can pull all this together, but we're going to try.
We're back in just a moment. You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Wow. We have been able to pull part of this together.
Our CNN senior White House correspondent Ed Henry talking health care reform on his program "44 With Ed Henry" just moments ago on CNN Radio. And Ed is with us right now.
And Ed, terrific job with Eric Cantor.
Can you hear me OK?
Oh, we're still trying to make the connection.
HENRY: Welcome back to "44."
I think Tony Harris now trying to talk to me on CNN television.
How are you, Tony?
HARRIS: Beautiful. All right. So I've got you. I can hear you. And you can hear us just fine? HENRY: Excellent, yes.
HARRIS: OK. So, here's the thing -- the only Republican -- look, the idea of a bill, a Republican bill in the way that you know a bill takes shape from your days as a congressional correspondent, that's not what's been offered by Republicans to this point, correct?
HENRY: That's right. And I didn't want to be rude to Congressman Cantor, but I wanted to press him on that point, because that's our job.
HARRIS: But he has been saying -- he said to you that, we have bills.
HENRY: And there are individual bills out there. He is correct that individual Republican congressmen -- Paul Ryan from Wisconsin, for example -- they have come up with different kinds of plans. But there's been no one Republican alternative that the leadership, which is really what matters -- because what individual members do -- until the Republican leadership like Eric Cantor, number two behind John Boehner in the House Republican leadership -- until he steps up and says, look, this is our bill, this is our alternative to the president, it doesn't really mean very much.
I think, on the other hand, we also need to point out, and I will right now, this president also has really not come up with an Obama plan.
HARRIS: But here's the thing, Ed, because there is a very deliberate -- it seems to me -- and look, you're covering hem every day -- strategy here. Look, Clinton health care was shot down in part from some of the analysis I have been reading and listening to because it was this plan. Here is our plan, and we're going to -- look, you're going to pass this.
HENRY: You're absolutely right. They're trying to learn -- Rahm Emanuel is the White House chief of staff now.
HARRIS: Right. And we worked on Clinton health care; right?
HENRY: Absolutely. And he learned that lesson, there's no doubt about that. You're absolutely right.
But the question now is, did the pendulum swing too far. Did this White House try to be too different, so different from Bill Clinton, that instead of giving details all the details up front with what became known as "HillaryCare," did they go the other way too far and say we're not giving you anything? And instead, the president, again, even at that news conference Wednesday night...
HARRIS: But some would say he is allowing the body that is responsible for crafting legislation to do its job.
HENRY: He is. And the White House is right about that. This is the legislative process. It ain't pretty. You've heard the thing of how -- two things you don't want to see being made, sausages and laws. It's an old saying. It's kind of trite, but it is true. And we're seeing it play out in the House and Senate right now.
Nevertheless, this is a president with a bully pulpit. He's a president with -- even though we've been talking bout his polls dipping a little bit, he's still pretty high right now, mid to high 50s, at the very least, depending on which poll you look at in approval rating. He could drive this to a conclusion if he started getting more specific, and that's the push and pull.
(CROSSTALK)
HENRY: Democrats are saying we want more details.
HARRIS: Yes. Exactly. You're absolutely right.
So, I'm wondering, what are House and Senate Democrats pushing the president for that to this point he has been unwilling to give them in terms of real specifics? And let's be clear about it -- we're talking about how to pay for this.
HENRY: Right. Mostly how to pay for it, but also how all of this is going to work.
I mean, you had the president yesterday starting to talk a bit more about insurance reform instead of just health reform, because the White House is realizing that they focused a lot of their argument early on the 46 million, 47 million people who don't have insurance. The millions of us who do have insurance are saying, OK, but what's in it for us? Are you just going to raise our taxes in order to cover more people?
Are we going to lose our insurance potentially? Are we going to have to change plans? Are we going to pay more?
People have all of these questions.
HARRIS: Which gets us back to the question we've been asking all week of, what are you willing to give up? What compromises are you willing to make in your coverage, in your plans right now, to ensure -- is health care a basic right for Americans?
HENRY: That's the big question. And the president, the other night, when you asked what are Democrats looking for in the House and Senate, a little more guidance from the president. He was very broad- brush.
If you go back to the very first question at that news conference from Ben Feller of The Associated Press, he tried to push him on specifics, some details. And the president fell back mostly on principles -- I want a lower cost, I want to cover more people. And Democrats up there are saying we need some more detail. We need to push this along because, yes, he's got to leave some of this to the congressional process, but at some point, as you well know, Congress could keep talking and talking and talking, and there may not be action.
And they've already missed one deadline. The president yesterday lost that fight. Harry Reid said we're not going to get it done by August, so...
(CROSSTALK)
HARRIS: Let's go down -- no, I love the give and take, and I'm sorry, because I don't want to lose you and I know you've got callers lined up. But hopefully we're pumping up the phone bank.
HENRY: Hey, that's great. We've got -- Jamal Simmons is going to be on in a moment. He just sat down.
HARRIS: Terrific.
HENRY: He's going to be joining the conversation. We had Republican Eric Cantor. Now we're going to hear from Democratic contributor Jamal Simmons as well.
HARRIS: OK. So here's my last question for you. And again, you've got two hats here that I'm asking you to wear here at the same time here.
When you're asking Eric Cantor about reform and how to pay for it, and all these issues that you asked him in that interview, the first area he went to was tort reform, right?
HENRY: Right.
HARRIS: All right. So, make the argument that Cantor is making about tort reform, and then let's be clear about this. The CBO does not score -- am I correct here? -- the savings that you get from -- that you believe you're going to get from tort reform, correct?
HENRY: They have not scored it to my knowledge yet, because I have not seen -- I think what you're seeing there is a political issue because the Democrats who have the trial lawyers as one of their big allies are not big in favor of tort reform. So that hasn't been a big part of the Democratic initiative, so the Republicans are trying to push that.
Now, Eric Cantor may be right that that could squeeze some savings out of here. I ran out of time with him, but my next question was going to be, tort reform may be helpful, but it's not going to get you $1 trillion.
HARRIS: It doesn't -- exactly.
HENRY: It's just not going to not pay for it. It may pay for some of it.
And you're right; that is the big issue for both sides. And the bottom line is the president has not put out an Obama plan yet, so we have to press him on those details. And the Republicans keep saying they want health reform, but as you heard me pressing Eric Cantor, the Republicans have not really laid out a plan.
And just yesterday, Roy Blunt, one of the top Republicans, said we don't really need a plan now. We're going to let the Democrats work this out.
Well, are the Republicans serious about reform? That's a big question.
HARRIS: And aside from tort reform, how do Republicans pay for it? Whatever their plan is, whatever their bill suggests, we don't know, do we?
HENRY: We've heard what they're against. They are very much against the surtax in the House, that the House Democrats have. They're against some of the tax increases that Senate Democrats are looking at.
Now, there have been some Republicans like Chuck Grassley, in fairness, who have been saying, and is at the table of the Senate Finance Committee, very powerful, saying maybe we need to change this deduction, the deductibility on some of the Cadillac health care plans, the insurance coverage people have. Again, that hasn't been decided yet. They're still at the table, they're talking.
And the other big thing right now, if you look at the clock, it's just about now in the Oval Office the president is meeting with Senate Majority Leader Harry Reid and Max Baucus, the chairman of that Senate Finance Committee. That is key.
HARRIS: Ed, that's terrific. Tell Jamal I apologize. First of all, tell him I said hello. And I apologize for cutting into his time.
HENRY: People can join us on the radio. Jamal will be here. 1- 877-266-41289.
Thanks, Tony. Have a good weekend.
HARRIS: Yes. "44 With Ed Henry."
Appreciate it, Ed. Talk to you soon.
HENRY: Thank you.
HARRIS: All right. A knock on the door that could save your life. It's the CNN Hero of the week.
(COMMERCIAL BREAK)
HARRIS: OK. Cafe owner Monique Hayward says after fighting the good fight, she's finally shut down her business. We've been checking in with this Oregon entrepreneur ever since the bottom fell out of the economy. We like her an awful lot, that's for sure. She's absolutely a terrific friend to the program. Monique was this year's winner of the "Portland Business Journal's" 40 under 40 list.
Monique, we're sorry to hear about this.
MONIQUE HAYWARD, FORCED TO CLOSE CAFE: Yes, it's unfortunate, but it was certainly the right thing to do, Tony.
HARRIS: Yes -- 40 under 40. That sounds like a nice award. What's it about?
HAYWARD: Oh, the "Portland Business Journal" recognizes local entrepreneurs and business people who are under 40 for their accomplishments and achievements in the local area, and I just happened to be one of those this year.
HARRIS: Well, you -- then that means you were expected to be a success here. You weren't expected by that business journal to be shutting down your business. And in your note to us, you talked about what you call the final nails in the coffin. What were they?
HAYWARD: Sure. Yes, essentially what happened was that the unemployment figures that came out at the end of June, beginning of July that showed that the economy was still going to be recovering very slowly, that we're going to be losing a lot of jobs, and every economist worth his weight got on television and got on radio and said we're in for a long, painful, slow recovery really just took the bottom out of consumer confidence. And that had an impact on me almost immediately going into the Fourth of July holiday weekend.
HARRIS: Have you -- were you ever a successful business? I know you had the cafe and bar open, what was it, four years, four and a half years?
HAYWARD: Yes, almost four and a half years.
HARRIS: Were you ever a successful business?
HAYWARD: Yes. We actually had really good, strong revenues the first two years, but the last couple of years, we were right on the front end of the subprime mortgage fiasco and then of course the financial crisis that followed very shortly thereafter. Because the restaurant has a lot of dependence on consumer confidence and discretionary income, we just saw it before anybody else.
HARRIS: Boy, that's a -- we're looking at some of the pictures. That's a good-looking shop.
HAYWARD: Thank you.
HARRIS: Man, I am sorry this has happened to you. I'm wondering, did the banks, you know -- we're learning that so many businesses really, really, really depend on banks for lifeblood here. Did the banks stop lending to you?
HAYWARD: Well, the banks were never really there for me in the beginning. I've had some bank financing, but when I tried to refinance to consolidate my loans and to make better sense of the interest rates and get better lines of credit, I just couldn't ever get that deal done. In fact, just a couple days ago, I was trying to work with a bank on an SBA loan, and that came back declined as well because of, quote, unquote, "low liquidity ratios." That's just code for low cash flow and no collateral.
HARRIS: Yes, yes. If you had it to do over again, what would you do differently?
HAYWARD: Well, I think that I probably would have had more money in the bank, so to speak, just to make sure that I had enough to survive the downturn. I think those of us who launched businesses, you know, in the 2003, 2004 time frame did not have this really tough recession on our radar screen. I mean, this thing just really snuck up on us, I think.
HARRIS: Yes. What are you going to do now? What's next.
HAYWARD: Well, I certainly still have my day job, and that's taken up a lot of my time, of course. I continue to focus on that. I have book that I recently released called "Divas Doing Business: What the Guidebooks Don't Tell You about Women Entrepreneurs." I'll be promoting that. And I'm speaking and talking about my experience and mentoring other entrepreneurs in the process.
HARRIS: One door closes, another door opens.
HAYWARD: It sure does.
HARRIS: What's the single takeaway you would pass on to other entrepreneurs who are thinking about opening a small business in this business climate?
HAYWARD: Well, in this business climate, I would say make sure that you are well-positioned to survive through the downturn. It's really tough right now as we're just discussing to get credit, to have the banks be on your side. I would urge caution right now and just have people really try to figure out if their business is really going to survive through all of this over the next six to nine months or even a year.
HARRIS: Yes. Monique, it's great to see you again. I'm sorry to hear about the business. Something -- you're going to be just fine.
HAYWARD: Oh, no, don't be sorry.
HARRIS: No, I was going to add, I think you're going to be just fine. Did you write a blog for us or are you going to write a blog for us?
HAYWARD: Oh, if you would like, I certainly could contribute to that.
HARRIS: I would. I would. I want people to benefit from your experience. So, write us a blog.
HAYWARD: OK. HARRIS: What the address again? I can't remember this doggone thing -- CNN.com/tony. But you've got my e-mail address, don't you? Just send it to me, and we'll get this on our blog, all right?
HAYWARD: OK. I will certainly do that. I appreciate the invitation.
HARRIS: And all the best. Thanks, Monique.
HAYWARD: OK. Thank you.
HARRIS: Your questions answered. Our personal finance editor Gerri Willis joins us live now from New York City with your top tips, answering your e-mails.
Gerri, good Friday to you. Good to see you again.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hi, Tony. Good to see you.
HARRIS: You want to dive in the e-mail bag here?
WILLIS: Let's go, baby.
HARRIS: Let's do it.
WILLIS: Let's do it. It's Friday.
HARRIS: All right, our first question -- you're right. Our first question comes from Diane, who writes, "How are people able to get their student loans down to 2 percent? And two of my children have student loans, and we'd be very interested to know this."
Thank you very much. You got help here, Gerri?
WILLIS: Absolutely. You know, this is amazing, this 2 percent, and we have got a ton of e-mail from folks wondering the same thing. Look, if your children have older variable rates, Stafford or Plus loans that were issued before July 1st, 2006, and they haven't been consolidated, you may be able to consolidate these loans and take advantage of this 2 percent interest rate.
And isn't that luscious? I mean, can you imagine 2 percent money? That's fantastic.
But if you have loans that were originated after that date, your interest rate will be the weighted average of all your loans combined. So, you're looking at 6 to 8.5 percent, somewhere in there. So, it all depends on the timing of your loan. For more info, contact your lender.
HARRIS: Hey, I think -- as I read this next question, I think your necklace is bouncing off of your microphone, and I don't want anyone distracted. I'll let you adjust that while I read this next question here. All right, next question comes from Joan. Joan writes, "How do you get a credit rating when you have no credit history? What things should I be considering, Gerri, before going ahead?"
WILLIS: Well, the truth is, you'll need to get a credit card in order to start creating your credit history. So, to start, become an authorized user on somebody else's credit card. An authorized user is someone who uses somebody else's credit card without being responsible for the bill.
And a lot of people do this to help their children or maybe spouses get better credit. Shop around for the best credit card terms at cardratings.com or creditcards.com and make sure once you get that credit card you always pay your cards on time -- Tony.
HARRIS: All right, got one more question here from Faye, "What is your advice on reverse mortgages for seniors over 83 who need more income to maintain? What are your thoughts here, Gerri?
WILLIS: Well, you know, Faye, a reverse mortgage is simply a loan against your home that you never pay back for as long as you live there. You're essentially taking equity out of your home, and these products are a good idea if you have a lot of equity and you're not going to go anywhere.
But there can be fees associated with this kind of loan, a lot of fees. Best place to go for info, aarp.org. They have some great info on these loans. For more info, of course, and if you have questions, send them to me at gerri@cnn.com.
HARRIS: Hey, wait a minute. Have we talked at all this week about "YOUR BOTTOM LINE?" I love your show.
WILLIS: No, we, sir,...
HARRIS: Can you tee it up for us?
WILLIS: ... we have not. Yes, OK, 9:30 a.m. Saturday morning, join us right here on CNN for "YOUR BOTTOM LINE." We're talking about bank fees, what's going on there. It's a sticky situation for a lot of people. How to save money by the calendar and, of course, we're talking about health care, as well. So, join us 9:30 a.m. Saturday right here on CNN.
HARRIS: Awesome. Gerri, good to see you. Good Friday.
WILLIS: My pleasure.
HARRIS: Have a great weekend. We'll see you next week.
WILLIS: Thank you.
HARRIS: And check out our SPECIAL REPORT, the work done by our Money Team. The CNN Money Team is absolutely -- you can't do any better than this. Great advice on the financial crisis and expert analysis. Just go to CNNmoney.com. We're back in a moment. (COMMERCIAL BREAK)
HARRIS: On Wall Street, the Dow is trading above 9,000, and there is more talk of an economic recovery. But we're not seeing improvement when it comes to commercial real estate, and that has real repercussions, both good and bad, for everyone. Susan Lisovicz at the New York Stock Exchange with details.
Good Friday to you, Susan. Good to see you.
SUSAN LISOVICZ, CNN CORRESPONDENT: Good to see you, Tony. And everybody's been talking about commercial real estate the next shoe to drop. We've told you the famed Watergate complex in Washington, D.C., failed to attract a bidder last week. We've told you some shopping malls are going bankrupt.
Now we're also seeing some hotels that can't make their mortgage payments, and luxury hotels are among those hit hardest. The Four Seasons in San Francisco defaulted on a $90 million loan. Check it out. It's a five-star hotel. The standard room there, Tony Harris, goes for 500 bucks a night.
HARRIS: Oh, that's it? Come on!
LISOVICZ: Sure, no worries. St. Regis Monarch Beach in Los Angeles defaulted on its loan. There you're looking at it. This is where, oh, all sorts of, you know, fat cats, corporate fat cats have held gatherings. Also, five- star hotels in Phoenix, Las Vegas, New York are also defaulting -- Tony.
HARRIS: Whoa, so, if the hotels default, does that necessarily mean they're in danger of closing?
LISOVICZ: Well, not always, Tony. A lot of times it's a step taken to force the lender to renegotiate the loan. Problem, of course, is that occupancy rates are way down, so it means deals for you.
The average luxury room price fell 12 percent this year compared to 7 percent for midpriced hotels. CNNmoney.com has more on this story, includes picture gallery. Check it out. You might be able to negotiate prices.
And Wall Street also coming down. We've had a great run.
HARRIS: Yes.
LISOVICZ: Microsoft shares down 9 percent, and you're seeing it weigh on the Dow right now, down 28 points but still above 9000, Tony.
HARRIS: Like it, like it, like it. Susan, good to see you. See you next hour, but if I don't because of craziness -- you know, it's a newsroom -- have a great weekend.
LISOVICZ: Have a great weekend.
HARRIS: Yes, you, too.
Professor vs. police. A Massachusetts officer in the middle of an arrest controversy speaks out. What he has to say about arresting a professor in his own home. That's next.
(COMMERCIAL BREAK)
HARRIS: You know, it is the hot topic just about everywhere. The policeman, the professor and the president. Sergeant James Crowley's arrest of Harvard Professor Henry Louis Gates Jr. at his home for disorderly conduct. Gates calls it racial and wants an apology. President Obama said police acted stupidly, but Cambridge's police chief is backing his sergeant. Reporter Kim Khazei of affiliate WHDH sat down with Sergeant Crowley.
(BEGIN VIDEOTAPE)
SGT. JAMES CROWLEY, CAMBRIDGE, MASS. POLICE DEPARTMENT: I was a little surprised and disappointed that the president, who didn't have all of the facts, by his own admission, then weighed in on the events of that night and made a comment that, you know, really offended not just officers in the Cambridge police department, but officers around the country.
KIM KHAZEI, WHDH-TV CORRESPONDENT (voice-over): Sergeant James Crowley, sitting down with "7 News," reacting to President Barack Obama's comments about the day he arrested Harvard Professor Henry Gates, and talking extensively for the first time what happened at the Cambridge house.
CROWLEY: I asked him if he could step outside and speak with me, and he said, "No, I will not." And again, words to the effect of, "What's this all about?"
And I said, "I'm Sergeant Crowley from the Cambridge Police Department. I'm investigating a break in progress. And he responded, "Why, because I'm a black man in America?" in a very agitated tone. And, again, I thought that was a little strange.
KHAZEI: Sergeant Crowley saying after getting a call about the break-in, he was just trying to protect Gates as well as himself.
CROWLEY: There was a report that there was two individuals. I see one, and it could be him, so where's the second person? Or there's two people in the residence that he doesn't know are there.
Either way, I wasn't expecting his response, which was, "That's none of your business." To me, that's a strange response for somebody that has nothing to hide, is trying to cooperate with the police.
KHAZEI (on camera): So, did he come out and speak with you?
CROWLEY: I was leaving. As I reached the porch, I could -- I was aware that now he was following me because he was still yelling about racism and black men in America, and that he wasn't somebody to be messing with. KHAZEI: Sergeant Crowley says he warned Gates he was acting disorderly, and when he didn't calm down, he arrested Gates. The professor wants an apology, but the sergeant says he will not set that precedent for police officers. He regrets the event and wants to let his story be heard.
CROWLEY: The amount of negative things that are untrue that he was saying about me at least warranted a response and allow people to see that I'm not a monster or the bigot or racist that he has portrayed me to be. This is me.
(END VIDEOTAPE)
HARRIS: The police officer had gone into Gates's home to check on a possible break-in. Now, coming up at Noon Eastern, Cambridge police unions will hold a news conference. We will bring that to you live. The organizations are backing the police sergeant.
(COMMERCIAL BREAK)
HARRIS: I'm just trying to figure out what -- oh, I'm sorry. So, here's the thing. We had an option. We could do weather with Rob, or we could talk about the perfect game pitched yesterday. Hello?
ROB MARCIANO, AMS METEOROLOGIST: And more important things this time of year, the boys of summer doing some big things.
HARRIS: Doing their big things. So, Chicago, let's take you to Chicago. Is this the final out we're going to see here? Mark Buehrle, left-handed pitcher. Yes, this -- there's the ground ball to the shortstop. There it is. And what do we have here, Rob?
MARCIANO: Perfection. We've got...
HARRIS: Twenty-seven batters.
MARCIANO: Right. No...
HARRIS: And that's the minimum.
MARCIANO: No errors. No walks.
HARRIS: Yes.
MARCIANO: No hits.
HARRIS: But do we have the play from the top of the ninth that really saved -- the catch. The center field catch.
MARCIANO: The stealing of the home run.
HARRIS: Yes, yes, yes. We don't have that?
MARCIANO: We don't have it. It was fantastic. HARRIS: Because this thing was -- and he was masterful, right? I was trying to figure out what his out pitch yesterday, and we -- neither of us got a chance to see this game.
MARCIANO: No.
HARRIS: Right? And I don't know if he's a flamethrower or he's got a mix or if he's got that cut slider, you know.
MARCIANO: He's good.
HARRIS: And he's real good.
MARCIANO: He's real good, and they're telling us to wrap up. But with the three seconds I have left, happy birthday. Tomorrow's a big day for our boy Tony. It's a big number, and you...
HARRIS: It is a real -- yes.
MARCIANO: And you look fantastic (INAUDIBLE).
HARRIS: But I'm wearing it well, right?
MARCIANO: You look fantastic.
HARRIS: Well, that's why you ended up here.
MARCIANO: Have a good weekend.
HARRIS: That's -- yes. Thank you, Doc.
We've got a whole other hour here.
MARCIANO: Send him your wishes.
HARRIS: We're back. We've got to go. Got to go. Bye!
(COMMERCIAL BREAK)
