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State of the Union and the Middle Class; Toyota Stops Sales Amid Recall; Interview With Deputy Press Secretary Bill Burton
Aired January 27, 2010 - 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: Time now for your top-of-the-hour reset.
I'm Tony Harris in the CNN NEWSROOM.
It is noon in Washington, where President Obama is nine hours from his first State of the Union Address. He will face Americans restless for change.
In Atlanta, a small bakery survives the recession. But can this business weather a sluggish economy? I will ask the owner about selling sweets in sour times.
And we will go to Haiti, where empty stomachs fuel desperation among the country's earthquake survivors.
Let's do this -- let's get started.
How is the country doing?
President Obama gives his assessment tonight in his first State of the Union Address. It is expected to focus on the jobs and the economy.
And a new poll shows that's a good strategy. In the CNN/Opinion Research Corporation poll, 61 percent say it is extremely important for the president and Congress to deal with the economy. Fifty-eight percent say unemployment. Less than half, 43 percent, say health care. A whopping 77 percent say economic conditions are the worst in their lifetime, 22 percent say they've seen worse.
We want you to weigh in on the president's State of the Union speech tonight. What do you want to hear about the jobs, about the economy?
Here's a response from Jameela, who says, "We need to hold our state and local politicians accountable as well. The president has made billions of dollars available to the states to put people back to work. Isn't that what he said he would do?"
Harold says, "There's little the president or Congress can do to increase the number of jobs available. It really depends on people feeling secure enough to spend money."
Great point. Please send us your thoughts, your comments. Just send them to my blog page, CNN.com/Tony. We will have more of your comments later this hour.
One key to what the president will talk about tonight can be found in an event earlier this week. You remember the middle class task force?
CNN's Personal Finance Editor Gerri Willis is here to explain.
And Gerri, you were here with us on Monday. Walk us through some of the proposals that we heard from the president coming out of that event.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, these were programs targeted at helping the middle class. Here's some of the things on the table.
Child care assistance would almost double the child tax care credit for families earning less than $85,000, even for families earning up to $115,000. They would get assistance, too.
And if you're a college graduate graduating into this awful economy, affordability is a big issue for grads. A new proposal would limit grad loan payments to just 10 percent of their discretionary income. It basically expands a program we've talked about on the show before, the income-based repayment program. It's estimated to cost the government $400 million to $500 million over 10 years to pay for this.
Another proposal out there would help to secure your nest egg by expanding the savers tax credit. It would match the first 50 percent of contributions for families earning less than $65,000. And the real good news here, it's refundable, so you don't have to file taxes to get the credit.
Another proposal would promote annuities and other forms of lifetime guaranteed income, 401(k) fees would be more fully disclosed. That's a very big deal. It's a big-time issue for savers. There's also a provision for elder care assistance, including more funding for caregiver support programs.
So, lots of benefits for the middle class here. Not clear on how we're going to pay for it.
HARRIS: Well, and what kind of punch will these proposals have if they're, you know, ultimately enacted, Gerri?
WILLIS: Well, you know, one of the biggest questions that experts have is, where is the funding coming for these proposals? The president is expected to address the deficit tonight, and maybe we'll get some more answers.
But personal finance experts do say these initiatives are really narrowly tailored to the middle class, really focused on these folks. Many of these provisions will, if enacted, help people who are struggling right now.
Of course, we'll be listening to the president's State of the Union speech, and I'm going to be talking tomorrow about the issues that affect your wallet out of that speech, and on "YOUR BOTTOM LINE" this weekend. We'll be talking all about it.
HARRIS: I can't wait. I can't wait to hear your take tomorrow.
Gerri Willis for us.
Gerri, thank you.
And we will talk live with White House Deputy Press Secretary Bill Burton in just a couple of minutes, right here in the CNN NEWSROOM. We're going to ask him what the president is going to say tonight about jobs.
Join the best political team on television for President Obama's State of the Union speech tonight. Our primetime coverage begins at 8:00 p.m. Eastern time, followed by the address at 9:00. Stay tuned for insight and analysis afterwards.
All this week, CNN is focusing on the president's biggest economic initiative so far, the $787 billion stimulus plan. The stimulus project digs in to how the money is being spent, who it is helping and who is abusing the program.
In just a couple of minutes, we will check in with Josh Levs at the stimulus desk to find out what they're working on for this hour.
You will also find in-depth coverage of this special initiative on our Web site. Just go to CNN.com/stimulusproject for details on how the program is and isn't working.
Taking heat on Capitol Hill, Treasury Secretary Timothy Geithner answering questions right now about the bailout of insurance giant AIG. Geithner was head of the Federal Reserve Bank of New York during that time. He defends not demanding concessions from big banks that received billions of taxpayer dollars from the bailout and he denies any involvement in a cover-up.
At times, the hearing seems a bit like a cross-examination.
(BEGIN VIDEO CLIP)
REP. STEPHEN LYNCH (D), MASSACHUSETTS: When Hank Paulson pulled nine banks into a room and said you're taking bailout money, that was extraordinary action. OK?
UNIDENTIFIED MALE: The gentleman's time has expired. I must move on.
LYNCH: He could have done the same thing negotiating a better rate on behalf of the American taxpayer.
I yield back. TIMOTHY GEITHNER, TREASURY SECRETARY: If it would have been possible, he would have done it. Why would I want to be sitting here before you today, having to defend actions that look like they could have been avoided?
There is nobody who was part of that decision that would not have done that. It would have been impossible.
I try to be as careful as I can in explaining the reasons why it was not possible, but it comes down to this basic, tragic choice. If you are prepared to default, you can impose haircuts. If you can't accept the consequences of default, you do not have any leverage.
It would have been vastly more expensive to the American tax Bill. It would have been much more damaging to people you and I care about, people you and I wake up every day worrying about, if we had let that firm fail.
There was no choice between default and the restructuring of those contracts. And they left the taxpayers better off...
LYNCH: There was no shared sacrifice -- no shared sacrifice for Goldman Sachs and the American people.
(END VIDEO CLIP)
HARRIS: OK. Well, that was pretty good. We need more of that.
First, they recalled more than two million cars. Now Toyota has stopped sales on some of its most popular models.
Our Kyung Lah, in Tokyo, takes a look at the carmaker's accelerating problems.
(BEGIN VIDEOTAPE)
KYUNG LAH, CNN CORRESPONDENT (voice-over): In the hours following Toyota's stunning and unprecedented move in the U.S., Toyota's top brass in Japan remain tightlipped about its next move. Analysts were buzzing about the damage done to the automaker that stakes its reputation on quality.
CHRISTOPHER J. RICHTER, SR. ANALYST, CLSA: Toyota's brand reputation is built on a bedrock of product quality. This is a high- risk issue for them. They need to fix it. They need to fix it permanently, ,and they need to fix it fast.
LAH: The problem is the accelerator, that may unintentionally stick. Last week, Toyota recalled 2.3 million cars in the U.S., but now has told dealers to stop selling these eight models which represent more than half of Toyota's U.S. sales. Toyota also announced production in this Indiana plant would stop, as well as four others in the U.S. and Canada, for one week in February.
In a separate and earlier recall, Toyota recalled 4.2 million vehicles because floor mats could get jammed against the gas pedal. California investigators suspect that's what caused this accident last August in San Diego. Three people and a child were killed. Their Lexus sedan speeding out of control at more than 100 miles an hour.
Toyota's president, charged with pulling his company out of its worst financial crisis, now has to also try to repair its image in the critical and lucrative U.S. car market.
RICHTER: The timing is awful. I mean, the last couple of years, with having some quality issues, plus having the worst financial results in your company's history, it's not a happy set of events.
LAH (on camera): Analysts say closing the plants for a week could cost about $100 million, but as far as how much all of this could hurt potential sales, that is anyone's guess.
Kyung Lah, CNN, Tokyo.
(END VIDEOTAPE)
HARRIS: You know, I'm going to ask a member of the president's team what he plans to say to -- what the president plans to say to Americans tonight about the job crisis.
First, though, our "Random Moment" in 90 seconds.
(COMMERCIAL BREAK)
HARRIS: Boy, you are not going to believe our "Random Moment of the Day." You know, it is more aptly titled the "Awkward Moment of the Day."
A former Phoenix Suns forward -- his name is Paul Shirley -- blogs about Haiti. He writes, "Shouldn't much of the responsibility for the disaster lie with the victims of that disaster?"
In a mock letter to Haitians, Shirley asks, "Could you not resort to the creation of flimsy, shanty- and-shack towns?"
And then there's this -- "Could some of you maybe use a condom once in a while?"
ESPN announced today it will no longer use Paul Shirley as a contributing analyst.
We're back in a moment.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HARRIS: As we follow the impact of the stimulus this week, we're also checking in with small business owners about their prospects. I'm going to talk to a woman who is running a bakery in the midst of a recession.
(COMMERCIAL BREAK) HARRIS: We want to put the stimulus package in a broader perspective, even a global perspective. Today, our polling indicates widespread dissatisfaction with the stimulus package.
Fifty-four percent of Americans polled believe the stimulus helped just bankers. Forty-one percent say it helped business execs. Only 25 percent believe it favored the middle class. But it is important to remember where we were as a nation at the start of this crisis, which began long before President Obama took office.
We were hemorrhaging jobs at a record pace at the end of 2008. At the end, we had lost 2.6 million jobs. It was the highest level of job losses in 60 years.
The Bush administration even introduced its version of a stimulus plan to try to stop the bleeding. Remember those refund checks Americans got in the mail in the summer of 2008?
And that idea of a stimulus plan, well, it isn't just an American one. Several countries, including France, the U.K., Japan, even China, introduced versions of a stimulus package to beef up their economies.
Early numbers suggest job losses actually slowed in 2009. The first year of President Obama's presidency, and his stimulus program, in fact, the rate of job losses declined. And the nation gained jobs in November before taking a hit again in December.
Countdown to President Obama's first State of the Union speech now less than nine hours away. The economy and jobs expected to dominate.
Joining me now live, White House Deputy Press Secretary Bill Burton.
Bill, good to talk to you.
BILL BURTON, WHITE HOUSE DEPUTY PRESS SECRETARY: Hi, Tony. Good to talk to you, too.
HARRIS: You need to come on this program more often. I'm taking incoming here.
Senator Kent Conrad -- and they're all questions for you, my friend. Senator Kent Conrad yesterday offered up a statement on the challenges facing this president. I want you to have a listen, then I have got a question for you.
BURTON: OK.
(BEGIN VIDEO CLIP)
SEN. KENT CONRAD (D), NORTH DAKOTA: You know, if ever somebody was dealt a bad hand, it is this president. When you think of what he inherited the day he took office, I mean, it is really daunting. Runaway debt, he inherited that. A circumstance in which we were on the brink of a financial collapse, he inherited that. Two wars, he inherited those.
So, this president walked into about the worst imaginable set of circumstances.
(END VIDEO CLIP)
HARRIS: So, Bill, obviously, you would agree with that. But those challenges clearly created the opportunity for this president. And now it appears he has hit a bit of a wall here, brought home by the Massachusetts Senate vote.
Here's my question for you: what's the lesson from what happened in Massachusetts for the administration?
BURTON: Well, let me just start by addressing what Senator Conrad had to say.
You know, the country -- the president did inherit a bunch of challenges, but those aren't just the president's challenges. They're our nation's challenges.
And, you know, people look at who's up and who's down in Washington, who's scoring points on who, Democrats and Republicans. But the president's view is that he wants the whole country to succeed.
And that's why tonight what you'll hear from the president is a little bit about some of the things that we did last year to bring us back from the brink of financial crisis, but also about what his ideas are to create jobs and get this economy on a more sustainable path.
Now, there's a lot of anxiety out there...
HARRIS: Yes.
BURTON: ... because a lot of Americans are concerned and they're frustrated that the pace of progress is not happening fast enough in Washington. The president shares that frustration. He's going to talk about that a little bit tonight.
So, in terms of what we saw in Massachusetts and what we've seen in elections all over the country since 2006, is that the American people desperately want change in Washington. So, the president's going to talk about how we make progress on the economy, but also how we get Democrats and Republicans working together in order to make that important progress.
We can't let gridlock derail even the most obvious of things that people ought to be doing in Washington. So, I would stay tuned to hear from the president tonight on that.
HARRIS: OK. Let me follow up on a couple of points there.
BURTON: OK.
HARRIS: Clearly, the president didn't get health care done in time for this speech tonight. He wanted that. I mean, let's be honest about it. He wanted that. And we're talking about health care for the millions who are uninsured, for the people who have health insurance now but are a pink slip away, as you know, from losing it.
Talk to me about why the president didn't get this done.
BURTON: Well, I think that the president -- for starters, the reason that the president took on health care wasn't just because it's a hobby or because it was something that he wanted to get done. It's because out-of-pocket costs are rising out of control, premiums are out of control. Insurance companies can dump you from their coverage just because you get sick. They can stop you from getting coverage just because you have a pre-existing condition.
The president's view is that this is an urgent challenge. And unless we get costs under control, we're not going to be able to create jobs and grow the economy and get on the sustainable path he thinks we ought to be on in order to make this economy as strong as it can be. So, the president is going to talk tonight about what we need to do in order to make progress on that.
Now, the door has been open for Republicans to come in with their ideas, to tell us what their thoughts and concerns are about this and other issues. And the president is going to continue to leave that door open, because he thinks the best ideas come from all different sides.
HARRIS: Bill, I get that. You know I'm going to push back on this.
BURTON: OK.
HARRIS: There was a supermajority in the Senate and a wide majority in the House. And, you know, the president, look, fairly or unfairly, in the view of many, takes the hit on this. You know, we're going to be dealing with hard realities tonight.
Is the president dealing with the hard reality that maybe there was another approach to have taken with this? And what's the approach moving forward?
BURTON: Well, to the extent that the president thinks that this process could have gone a little bit smoother, or that maybe things could have moved faster, or things like that, I mean, the president certainly takes responsibility for anything that happens in this building, anything that we're working on, on Capitol Hill. But, you know, this -- when you've got 535 members of Congress and 300 million American people, like, the process isn't always going to be quite as -- isn't always going to run quite as smoothly as a movie script might chart it out to. But the president is focused on making progress, and that's more important than just where the poll numbers are or what the partisan snipe is. HARRIS: But you do have to gauge the political climate. And so the question is -- and you mentioned gridlock just a moment ago, Bill -- is it a mistake to think you can govern this country from the center?
We all know that "no" is not a governing strategy. It's an opposition strategy. But isn't the takeaway from this health care reform effort, that perhaps nice guys don't get health care reform, and certainly not in their time frame?
And I'm wondering, moving forward, is this a moment where the president puts on brass knuckles and says, look, we've got to get this done, and however tough I need to be to get it done, however heads I need to bust to get this done, we need to get it done?
BURTON: Well, there certainly is going to be a message from the president that the Congress needs to work together to actually make progress and that we can't be slowed down by the partisan bickering. There's no doubt about that.
HARRIS: OK.
BURTON: But the president -- anybody's who has been watching the president over the course of the last three years, since he started this campaign, his campaign on February 10th of 2007, knows that he's not about ideology. For him, it's less about right and left, and it's more about whether or not you're moving forward or you're moving backwards. And right now, at this moment, as America faces one of the toughest economies that it's faced in its history, the president thinks that it's more important than ever that we move forward and not get caught up in that ideology that's going to slow progress.
HARRIS: All right, Bill. Appreciate it.
BURTON: All right, Tony.
HARRIS: I can't wait to hear what the president has to say tonight. Thanks for our time. Appreciate it.
BURTON: Thank you. Thank you very much.
(NEWSBREAK)
(COMMERCIAL BREAK)
HARRIS: Got to tell you, all this stimulus was supposed to cost around $787 billion. Not anymore.
Josh Levs -- Sonya (ph), we're on television. We're going to talk to you in just a second.
Give me a two-shot here. Can I get a two-shot here?
Sonia (ph) is just talking and talking.
We're on television. UNIDENTIFIED FEMALE: OK. I'll wait.
HARRIS: Let's get to Josh Levs. He's at The Stimulus Desk.
JOSH LEVS, CNN CORRESPONDENT: She can come over and talk to me.
HARRIS: She's ready to go.
LEVS: Yes. Tell her she can come on over here.
(CROSSTALK)
HARRIS: Yes, all right. I've got something for you afterwards, as a matter of fact, Mr. Levs.
LEVS: Oh, yes?
HARRIS: Yes, yes, yes. You'll love it, too.
LEVS: All right.
HARRIS: Show us this number here.
LEVS: So, you were saying that -- we've been saying all week...
HARRIS: Seven hundred and eighty-seven billion dollars.
LEVS: ... and for months, right -- and it is no longer.
So take a look at this. So, this is the figure we've been giving you for a long time now about the cost of the stimulus plan that passed last February. And what we're now being told is that it's actually $862 billion.
So, let me talk to you about what happened here.
The nonpartisan Congressional Budget Office, this is where the government gets a lot of its figures. This is what people go by.
Well, what they're saying is their new projection for how much this will ultimately cost has jumped pretty big time. And I'll show you why. There are three major reasons why -- let's see if I can actually get this time.
Here. There are three major reasons why it's going up.
First of all, we have to remind people, the stimulus isn't just for projects. And Tony, you and I talked about this. It pays for a lot of programs out there, some entitlements...
HARRIS: Yes.
LEVS: ... including unemployment. So, unemployment benefits, they are playing out a lot more because unemployment is higher than the CBO thought it was. Hence, billions of dollars more. The next one's kind of tricky, food stamps. They're paying part of the cost of food stamps out of this. And because inflation isn't doing what they thought it would, it's actually costing them a lot more to pay all those food stamp benefits.
And finally this, which in a way is a good thing. It's the Build America Bonds. The government has been selling these bonds, Tony, in order to get some of that money for stimulus programs, and a lot of people are buying them. That means the government is getting money.
But bonds are government debt, so the success of that program adds billions of dollars more. And that is why now this total has jumped $75 billion. They're saying it's up to $862 billion total.
HARRIS: Boy. All right.
So, Josh, we understand several people who benefited from the program will actually be in the House gallery with the first lady tonight.
LEVS: That's right. Yes, we have a graphic for you here about it.
This is an electric vehicle program, and there's a guy named Don Karner.
Show that graphic for a minute.
I'm going to take you over to the computer that we're looking at here. There you go.
This is actually the Web site of the agency that is going to be represented there tonight. They've gotten $100 million in funds, and they have up here some images that they've made of what they're working towards, these electric vehicles, what they want to create.
Basically, it's an 11-city pilot program. And Tony, they've gotten $99.8 million.
I'm going to scroll down this Web site, ETECEVS.com. And when we get down here, this is the guy who's going to be sitting in the first lady's box, Donald Karner.
So, they got $99.8 million to do this program, and we can show you the graphic here. Fifty permanent jobs will ultimately be created -- that's what they're saying -- by the time all of it's spent, all of it's up and running.
So, all of that is now going to add to our new total, which we can zoom into on the big board behind me, Tony. When you add in that $100 million and the 50 permanent jobs they're talking about, we can update our Stimulus Desk total for what CNN has now looked at, $3.5 billion of the stimulus that's funding, Tony, we have now taken a look at here at the CNN Stimulus Desk, and we're just getting going.
HARRIS: Nice. All right, Josh. Thank you. LEVS: Thank you, you guys.
HARRIS: You might call this the little bakery that could. Entrepreneur Sonya Jones (ph) is one busy woman baking up goods with her son since, what, 1997, in an historic Atlanta neighborhood. But her small business took a pretty big hit with the recession.
We caught up with eight months ago when she was struggling. Before we get an update, here's her story.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT (voice over): Better publicity than this, a president tasting a southern chef's sweet potato cheese cake.
(on camera): When you have the president in your shop, it puts you on the map.
SONYA JONES, OWNER, SWEET AUBURN BREAD COMPANY: Exactly.
ROMANS (voice-over): That was 12 years ago. Today, photos of that memorable moment are plastered all over Sonya Jones' quaint bake shop. A shop located in one of the most historic streets in America, the Atlanta neighborhood where Dr. Martin Luther King Jr. lived and preached, sweet Auburn.
That cheesecake quickly became her recipe for success, from Rachael Ray to "Southern Living" Sonya and her 23-year-old son Bobby turn out hundreds of tasty treats every day, catering events and selling to whomever walks through their door. But the Sweet Auburn Bread Company saw some not-so-sweet times last year. The recession hit hard.
JONES: A lot of people did not have the holiday parties. The question at times was, do I continue? I mean that was a question.
ROMANS: But instead of folding, Sonya found strength in crisis.
JONES: That's the thing, when it gets tough, the tough get tougher. It was a time to really look back at my business, to re- evaluate my business, evaluate my weaknesses, my strengths and really what were the customers really asking for.
ROMANS: She is now making up for that drop in business. First, she upped her variety, but downsized her sweets.
JONES: During the tough times, people want their comfort food and their comfort desserts, you know? They may not want a whole pie, but they may go for the sweet potato tart.
ROMANS: Second, she brings her product to the people, sending her son to local farmers' markets almost every day. And, third, she's dabbling in online social networking.
(END VIDEOTAPE) HARRIS: OK. The baker herself, Sonya Jones, joining me now.
So, eight months later, how's the business going?
JONES: It's going good. It's going great, yes.
HARRIS: Yes?
JONES: It is.
HARRIS: Tell me about it.
JONES: Well, at the time, I think I was waiting on my loan to get more equipment.
HARRIS: OK.
JONES: So, since I've received the equipment. It's in there, double-stack ovens, the additional mixer, proof box, cooler. So, that has enabled me to really expand my business more.
HARRIS: What story were you able to tell the bank that ultimately convinced them that you were a good risk in a down economy so that they made the loan that enabled you to expand and be more efficient in your business? Because as you know, there are a number of entrepreneurs who are having a very, very difficult time with their bank.
JONES: I know.
HARRIS: What was your story?
JONES: Well, I went through the Atlanta Development Authority. And I think...
HARRIS: So you got some city help?
JONES: I did, yes, exactly. And I think they knew me. But I was persistent.
HARRIS: Yes.
JONES: Actually during the down time, after the effects of the hurricane, I took a class, took a small business administration for emerging businesses. And they just made me re-look at my business totally. And it was a time...
HARRIS: And helped you?
JONES: It helped me because it made me look back at my business. Part of that soul searching that I was doing.
HARRIS: Tell me about that. Because I think it's so important for so many people. You get to a place where all of a sudden you're not doing as well as you used to. Your business is struggling just a bit and now you've got to reassess. So what did you learn about your business? What did you learn about yourself as a businesswoman in that process?
JONES: Well, first of all, I had to detach myself from it, because it's an emotional thing. It's my baby, you know.
HARRIS: Yes. Yes.
JONES: And just really looked to see, was it a viable business? Was it -- is it something that people really, truly wanted? And, fortunately, during these rough times, people want this comfort food that I serve.
HARRIS: Right, right, right.
JONES: So -- and then that was a big plus. I looked at that. I said, you know, people want this stuff. They still want it, you know?
HARRIS: Right, right.
JONES: And so I just had to make a way -- devise certain ways to keep it something that they could afford, you know...
HARRIS: Yes.
JONES: And I actually went out to markets to bring it to the people because since we were shut down a couple of months...
HARRIS: Right.
JONES: The retail, the storefront traffic has slowed down a bit.
HARRIS: Are you a good businesswoman?
JONES: I think I am an excellent businesswoman.
HARRIS: You'd better have answered that way, you know that, right?
JONES: Well, you know what, I've stuck it through. I mean a business -- I didn't just give up.
HARRIS: Persistence, yes.
JONES: Persistence. You know, and, again, like I said, I stepped back to look at it, I mean, for real, do I keep this going or do I, you know...
HARRIS: Right. All right, what's your address? What's your address?
JONES: We're on 234 Auburn Avenue.
HARRIS: Right. And what's the website?
JONES: Sweetauburnbread.com.
HARRIS: Awesome. And what do you hear -- want do you want to hear from the president tonight? First State of the Union Address. What do you want to hear on the economy and jobs?
JONES: Well, I really like that he's really getting stern with the bankers. Things he's been putting out. I've heard from (INAUDIBLE), which I love, it's like music to my ears about small businesses -- small business loans to small business. So I just think he has to continue to reiterate that to people.
HARRIS: Yes.
JONES: It's a trickle-down thing and I think as people see businesses like mine that's actually reaps the benefits of these things that are growing, I'm going to hire a couple of full-time people.
HARRIS: That's what I want to hear.
JONES: Several part-time people. I wish I could hire more full- timers, but...
HARRIS: Can you do benefits? Can you do health at all?
JONES: Not yet, but I'm working on that...
HARRIS: You are?
JONES: Because I need more full-timers to do that, you know?
HARRIS: OK. All right.
JONES: But we're going to grow. Now we're actually getting ready to go into Whole Foods in about...
HARRIS: Whole Foods?
JONES: Yes, hopefully in the next 30 days. So that's a great expansion.
HARRIS: What did you bring me here?
JONES: Well, you know, the signature sweet potato cheesecake. And these are the little ones. This is one of the changes that I've made doing my soul...
HARRIS: Oops, sorry. I just stuck my finger right...
JONES: During my soul searching, you know?
HARRIS: I guess that one's mine. Yes.
JONES: Yes, so the individual-size potato sweet cheesecake. The sweet potato muffins are very popular.
HARRIS: Yes.
JONES: And these two items are actually going to Whole Food. Red velvet is very, very popular. And I think my oatmeal raisins are the best oatmeal raisins around. OK.
HARRIS: You're awesome. We're going to check back with you in about eight months to see where you are with your business, all right?
JONES: OK. Great. Great. Thank you. I appreciate it.
HARRIS: Awesome. Sonya, good to see you.
JONES: Thanks a lot, Tony.
HARRIS: Thank you for being here and thanks for the sweets.
JONES: OK. Enjoy your goodies.
HARRIS: You better believe it.
JONES: Share.
HARRIS: Huh.
Still to come, the president gets a chance to make his case in the State of the Union Address tonight. How will his opponents respond? We'll get to that side of the story in just a moment.
(COMMERCIAL BREAK)
HARRIS: President Obama assesses the state of the union tonight. Polls indicate most Americans would tell him it is not so good. The president and Democrats are getting the blame. Advantage Republicans. Let's talk to CNN political editor Mark Preston.
And, Mark, good to talk to you.
We got the Democrats' side a bit earlier from Bill Burton. You've been on the phone with Republicans all morning. What are they saying ahead of tonight's address?
MARK PRESTON, CNN POLITICAL EDITOR: Well, you know, to coin a phrase that has been said many, many times, it's the economy, stupid.
HARRIS: Oh, yes.
PRESTON: For Republicans, Tony, they have really grasped upon this issue. Jobs, jobs, jobs and paying down the debt. Now, I'll tell you, talking to Republicans, today, they say they've finally seen the light. They understand that that is what is going to get them to win more seats in the House and the Senate come November.
They won the Virginia governorship because their candidate at the time talked about the economy. They won the Massachusetts special election just a few weeks ago because they talked about the economy and health care. So, expect to hear that from them soon after President Obama's speech tonight.
HARRIS: Well, I hear the talk, but what's the walk? Is it -- is it just -- is there a plan coming? Something other than tax cuts? PRESTON: Well, you know, if you talk to Republicans, they've said all along that they have delivered plans and, of course, you know, I'll leave that up to others to decide if those plans are actually something you can put into action. But, you know, one Republican said to me today, Tony, look, we can go out there and tell President Obama we can work with you on many issues, at the same time we can criticize him because the fact is, Democrats are in control of Congress and President Obama is, of course, a Democrat.
HARRIS: Yes.
PRESTON: But expect them to talk about tax cuts, of course. And they want to take this unused TARP money that the big banks haven't used and they want it to pay down the debt. So they expect that to be heard, you know, in the coming days.
HARRIS: I wonder in paying down the debt -- I get part of that argument -- but I wonder if paying down the debt creates jobs.
Mark, there will be two responses. One official and one unofficial. Let's talk about the unofficial response first.
PRESTON: Well, of course, Joe Wilson, who to many of our viewers, Tony, remember for shouting two words that have put him in the history books of "you lie."
HARRIS: Yes.
PRESTON: He is doing his unofficial response, Tony. He is going to do a live response on Facebook about 30 to 45 minutes after President Bush -- President Bush, President Obama delivers his State of the Union Address. You know, he really is a darling of the right, of conservatives. So I would expect that a lot of people will be logging on to his Facebook page to hear what Joe Wilson has to say tonight.
HARRIS: All right. And one final one. Bob McDonnell, I guess he's giving the official response. Is he thought to be a potential presidential candidate in a few years?
PRESTON: Well, you know, Tony, Bob McDonnell, of course, he won the Virginia governorship back in November. He is seen as this rising star. You know, somebody who potentially could run for president in 2012, if not 2016. 2012 might be a little bit too early for Bob McDonnell, but 2016 could be within his sights. In addition, he could be an attractive vice presidential candidate, Tony, if others were to run for the nomination and they'd look at somebody who comes from the state that Obama won in 2008 and they think that they can take that back.
So Bob McDonnell will deliver that speech tonight. A lot of eyes will be on him. You know, it was just year ago where Bobby Jindal, the Louisiana governor, delivered a similar address after a big national speech by President Obama. Bobby Jindal, who was considered a 2012 candidate, didn't fare so well. So a lot of people will be looking to see how McDonnell does tonight. HARRIS: Right. Mark, can't wait for your analysis tomorrow. Mark Preston for us in Washington.
And this just in to CNN. We have confirmed there is gunman on the campus of Northwestern University. On the line with me now is Alan Cubbage, a spokesman for the university.
And, Alan, if you would, give us an assessment. What's going on?
ALAN CUBBAGE, NORTHWESTERN UNIVERSITY (via telephone): Sure. There has been a report that we got approximately a little after 10:00 a.m. this morning of a man seen with a gun in his waistband on the -- in the Rubloff building on the Chicago campus of Northwestern University. This is in our campus that's on -- in Chicago, not the main campus in Evanston, but the Chicago campus.
The building is where we have our law school and our medical school, classrooms, offices, et cetera. It's right on Lakeshore Drive. And there was a man seen -- reportedly seen with a gun in his waistband on the 11th floor in the elevator of that building.
There have been no threats. There's been no injuries. University Police and Chicago Police are currently searching the building. The building is locked down. The university has communicated to all of its community to stay behind locked doors until police come and, you know, let you out.
HARRIS: Well, Alan, the building has been locked down. Has it been evacuated?
CUBBAGE: No. At this time, the people are, you know, behind locked doors in the building. And, again, Chicago Police and University Police are searching the building.
HARRIS: OK. All right, another question. You mentioned at the top here that there is a report of a gunman having been seen with a -- a person having been seen with a gun. Now, a report is different from a confirmation. Have you been able to confirm that there is a gunman on this campus?
CUBBAGE: We have a report from one individual who reported seeing it. That's all we have at this time.
HARRIS: That's all we have. OK. You know what, let's leave it there until you have additional information. Because, obviously, police are on the scene and are working it. And your advice to anyone obviously is to stay away from the area, but also to -- the advice to folks is to stay inside the building until their particular area has been cleared, correct?
CUBBAGE: That's correct. We've communicated both with the initial report and an update just sent out a couple minutes ago advising people that, you know, the police are continuing their search. There have been no injuries. No threats have been reported. And then sending out an updated description of the gunman.
HARRIS: Do you have that now?
CUBBAGE: Yes. Here's the updated description. He is described as a white male in his 20s, approximately 5 foot 9 inches tall, brownish-blond hair, wearing a buttoned-down shirt, blue jeans and a black jacket.
HARRIS: OK, Alan, appreciate it. We will stay in touch with you. If you get additional information, just hit "send" and get it to us and we'll get it on the air for folks.
And that is Alan Cubbage, he is a spokesman for Northwestern University. There's an incident on the Chicago campus, right there on Lakeshore Drive, a report of a person with a gun. We will continue to follow developments on this story, of course, for you.
Got to tell you, a lot of the world's economic elite in Davos, Switzerland, right now. What are they doing? We're going to check in with our CNN Money team in Davos in just a minute.
(COMMERCIAL BREAK)
HARRIS: What's ahead for the global economy? That's what a lot of smart people are trying to figure out right now in Davos, Switzerland. The World Economic Forum now underway there. CNNMoney.com's Poppy Harlow got the ticket to ride. She has the latest from Davos.
And, Poppy, what's hot there in what looks to be pretty cold Davos?
POPPY HARLOW, CNNMONEY.COM: Well, Tony, we're a year out sort of from what is deemed the depths of the financial crisis. The theme here in Davos at this World Economic Forum is rebuild, redesign and rethink. And what they're talking about is the entire global economy.
The president of France, Nicolas Sarkozy, just wrapping up his statements today. He came on with a bang in his opening statement saying, we have to work together because all of us formed this crisis. Over leveraged banks playing with money of others as if it was their own. We will be irresponsible if we leave this world to our children.
Very strong words there in support of financial regulatory reform, which I thought was very interesting, just hours away from President Obama's own State of the Union Address. The president of France there speaking out to the banks.
Of course, here you have top bankers around the world telling us, at CNN, that they do not think that the president's push for increased financial reform that he proposed with Paul Volcker last week is the right move at this point in time when our economy is still so fragile. So you have the backlash from the bankers. And then on the other side, you have a number of politicians, including the head of the House Financial Services Committee, Barney Frank, who is here as well. So a very interesting mix of economists, executives and also politicians. I spoke with a renowned economist, Nouriel Roubini, known to many around the world as Dr. Doom. He's been very pessimistic about the state of the economy. He said he actually thinks we need more bank regulation. Take a listen to that.
(BEGIN VIDEO CLIP)
NOURIEL ROUBINI, CHAIRMAN, ROUBINI GLOBAL ECONOMICS: I feel that we're back to business as usual in the financial system on banks, you know. They're taking risks. So we need to try to curb the excess in the financial system. I think that we're not doing enough. I mean people are worried about over regulation. I think this is of under regulation.
(END VIDEO CLIP)
HARLOW: All right. So he thinks we need more bank regulation. Obviously a controversial topic, Tony. I'd expect to hear quite a bit from President Obama on that tonight in his State of the Union Address.
HARRIS: Terrific stuff.
HARLOW: And it is certainly the key topic here in Davos, Tony.
HARRIS: All right, Poppy, appreciate it. Thank you.
Boy, when we come back, we're going to talk to our Christine Romans. The Treasury Secretary under fire. It is hot on Capitol Hill. We're back in a moment.
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HARRIS: Man, oh, man, taking heat on Capitol Hill. Treasury Secretary Timothy Geithner answering questions, getting grilled right now, about the bailout of insurance giant AIG. Christine Romans is monitoring the hearing and she -- am I characterizing this correctly here, Christine?
CHRISTINE ROMANS, CNN CORRESPONDENT: Yes, yes. And he just wrapped up after two and a half hours of at times testy exchanges with Democrats and Republicans on this Congressional Oversight Committee panel, Tony. And I'm going to tell you, what's at issue here is AIG, the bailout, why some of these other banks got paid fully, 100 percent, for their exposure to AIG with taxpayer money and was there some sort of a cover-up. Timothy Geithner says he had no role whatsoever in some of these decisions and how -- what to disclose about the AIG bailout.
But to some of these Congress people, they just didn't buy it because Timothy Geithner was running the fed, the New York Fed, when all of this happened. Listen to this exchange.
(BEGIN VIDEO CLIP)
REP. STEPHEN LYNCH (D), MASSACHUSETTS: It just stinks to the high heaven what happened here.
TIMOTHY GEITHNER, U.S. SECRETARY OF TREASURY: And I under...
LYNCH: And I don't like the obfuscation. And to top it all off, the disclosure was not there. The disclosure was not there at the proper time to tell the American people and tell this Congress what is going on. And that is just inexcusable. And it makes me doubt -- it makes me doubt your commitment to the American people. It makes me doubt Mr. Paulson's commitment to the American people. And I think the commitment to Goldman Sachs trumped the responsibility that our officials had to the American people.
(END VIDEO CLIP)
HARRIS: Wow! Wow!
ROMANS: Congressman Lynch was talking about Henry Paulson.
HARRIS: Yes.
ROMANS: He was the former Treasury secretary. He's actually testifying right now. He's also defending the bailout of AIG, saying, look, I didn't want to do this. I also had no role in deciding how much money -- who -- you know, what bank was going to get paid for this. But we had to rescue AIG because the whole economy would have buckled under this.
And Timothy Geithner, I just want to play this piece of sound for you, Tony, because Timothy Geithner, the current Treasury secretary, he reminded people sort of what the point was of rescuing AIG. You know, a year on, some people have forgotten, some of these Congress people may have forgotten just how dire it was. This is what would have happened if AIG had been allowed to go under.
(BEGIN VIDEO CLIP)
GEITHNER: Thousands of more factories would have closed their doors. Millions more Americans would have lost their jobs. The value of Americans' houses and savings would have fallen even further than they did at that time. People would have rushed to take their money out of banks. It would have brought about utter collapse. I don't know a better way to say it than that.
(END VIDEO CLIP)
ROMANS: And, Tony, the Treasury secretary says he did not have a role or any involvement in the New York Fed, which he ran...
HARRIS: Wow.
ROMANS: The New York Fed's decision to not disclose part of this AIG bailout to the public.
HARRIS: All right, let's do this. That is really hot stuff. Let's talk about this more tomorrow. Can we do that, Christine?
ROMANS: Sure. We can.
HARRIS: Awesome. Awesome, awesome.
All right, let's get to break. We've got to get to Ali at the top of the hour. You're in the CNN NEWSROOM.
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HARRIS: All right. Let's take it to the next level. CNN NEWSROOM continues right now with Ali Velshi.
ALI VELSHI, CNN ANCHOR: Tony, the only way to take you to the next level is when they let us do more TV together.
Tony, have a good afternoon.
