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Focusing on the Agenda; Working with Congress; Playing to the Heartland; Stimulus Fraud; Ford Earns $2.7 billion in 2009

Aired January 28, 2010 - 09:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: Good morning, everybody. So glad that you're getting your day going with us. Here's what we're working on for you right now.

A big rigging, lies, bribes, payoffs. Sounds like something mafia good fellows would be doing. Guess what? It could be happening to your money. Crooks salivating your stimulus.

A suicide that's just hard to fathom. How is it that a 9-year- old doesn't want to live anymore, and knows how to end it all? We've got a lot questions about this story.

Plus, ESPN.com to ESPN.gone. See you, Shirley. An ex-NBA player's blog comes back to bite him. It couldn't happen to a nicer guy. Should have stuck with hoops and left Haiti alone.

We start with the president's message. A different emphasis than what we heard a couple of months ago, but we also got some of the old standards.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We face big and difficult challenges. What the American people hope, what they deserve, is for all of us -- Democrats and Republicans -- to work through our differences. To overcome the numbing weight of politics.

(END VIDEO CLIP)

PHILLIPS: Well, we've heard that talk before. Still looking for the walk. Breaking down the president's speech with Carol Costello in Youngstown, Ohio. Wanting to know if middle America is inspired, upset or just rolling its eyes.

Brianna Keilar is on the hill, Republicans there feeling a whole lot better than they did a year ago.

And the tune has changed a bit at 1600 Pennsylvania Avenue, too. Ed Henry at the White House.

And Ed, let's go ahead and start with you. You know, the president's drumbeat message has been health care, health care, health care, and now it's jobs, jobs, jobs. What gives?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Kyra, I agree with you. I mean we obviously knew beforehand that there was going to be a pivot to jobs. There's no doubt about that. The White House telegraphed it. But I was still stunned by how abrupt it was.

I think in the estimation of the president's supporters and top officials here, they believe that it was done deftly, it was done effectively, that this is the number one issue on the minds of many voters.

But on the other hand, you can already hear the president's critics on the Republican side saying, this is a speech that maybe should have been delivered months ago. Basically jobs, jobs, jobs all throughout the first 30 or 40 percent of his speech that went on for about 70 minutes, by the way. Pretty long.

And the issue of health care that he's staked much of his presidency on, at least in the first year, really did not come up until almost halfway through the speech. It was relatively short.

And it's going to be very interesting to see whether the plea he made about, look, we've come so far, don't give up now -- is that going to be enough to get lawmakers on both sides of the aisle to finally come to some sort of a compromise. Or are they just going to stay on jobs, which as you know, the Senate is going to debating next week. This jobs bill the president is pushing.

It's unclear yet whether they can really come together on health care -- Kyra.

PHILLIPS: All right, well, we'll talk more about that and also the Republican response to the shift.

Ed Henry at the White House, thanks so much.

In trying to reach common ground on a slippery, slippery slope. Take a listen.

(BEGIN VIDEO CLIP)

OBAMA: We cut taxes for eight million Americans paying for college. I thought I'd get some applause on that one.

(LAUGHTER)

(END VIDEO CLIP)

PHILLIPS: So was the president barking up the wrong tree? Trying to get Republicans to branch out?

CNN congressional correspondent Brianna Keilar, you know, Republicans smell blood in the water, Brianna. Their reactions last night proved that. Will they give it all on what the president wants to get done?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, you know, it's really hard to tell this soon, Kyra, but yesterday, ahead of the state of the union, we heard from the number two Republican in the House, Eric Cantor, and he said it wasn't just enough to hear a change of message from President Obama.

He also wanted to hear President Obama basically admit that economic policies over the last year have been wrong. Obviously that wasn't going to happen. It didn't happen. The acrimony was there before the speech. It's going to be there afterwards.

But what you have now is as Democratic leaders in the House and Senate try to move forward on a jobs bill, there's a reality check, and that is the reality of about a week and a half ago when they lost in the Senate, that 60th seat, Republican Scott Brown taking the seat of former Senator Ted Kennedy.

And so they realize that if they're going to pass a jobs bill, they're going to have to try to appeal to Republicans. So right now what the Senate is looking at, Kyra, is more of a scaled down jobs bill.

$30 to $40 billion, one source tells us, that pales in comparison to what $150 billion jobs bills that the House passed in December. And they're looking at things that will appeal to Republicans, like tax credits for new hires, and tax incentives to promote growth and new jobs.

That's what they're hoping will get them some Republican support. But we still have to wait for the details. We're not expecting them until next week. And then we'll really see if maybe there is going to be some Republican support on this, although the early signs are that it's going to be a really tough road -- Kyra.

PHILLIPS: It always is a tough road. Brianna Keilar, thanks so much.

And the reaction from the American people? Well, mostly positive. According to our new CNN Opinion Research poll, we asked a hundred speech watchers to weigh in. Forty-eight percent had a very positive reaction while 21 percent reacted negatively.

And of course, we want to know your thoughts on the president's speech. Log on to my blog, CNN.com/kyra. I look forward to reading some of your responses in the next hour of CNN NEWSROOM.

Well, what do you think? Were you nodding your head in agreement, shaking it in disbelief, rolling your eyes, grasping desperately for the remote?

We know what the politicians thought of the speech, so what do you say?

JACQUI JERAS, AMS METEOROLOGIST: I'm CNN meteorologist Jacqui Jeras. Schools are out and travel not advised across parts of Oklahoma. The latest on the ice storm that's developing in the area.

Plus in the northeast, we've got some snow and that's causing travel delays. We'll tell you where the worse of it is coming up in your forecast.

(COMMERCIAL BREAK)

PHILLIPS: There we definitely some icy stares at the speech last night, but they were nothing like the winter weather staring down on the southern plains.

Jacqui Jeras watching the radar. Hey, Jacqui.

JERAS: I'm getting icy stares, too, Kyra.

(LAUGHTER)

JERAS: People are not happy with the storm. Not that I blame them, I'll tell you that.

(WEATHER REPORT)

PHILLIPS: All right, thanks, Jacqui.

So how did the president play out in Peoria? Or how about Youngstown, Ohio? Well, that's where our Carol Costello watched the State of the Union speech.

CAROL COSTELLO, CNN CORRESPONDENT: Keep in mind, Kyra, Youngstown. It's a heavily Democratic town. Seventy percent voted for President Obama during the campaign in 2008.

They wanted last night to see the Obama of old. Bottom line, they did and they didn't.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Jim (INAUDIBLE) bar was packed for a Wednesday night. The crowd, middle class Democrats and independents, gathered here to knock a few back while they watch the president tried to reach out for them.

OBAMA: I have never been more hopeful about America's future than I am tonight.

COSTELLO: It was a good try, but...

UNIDENTIFIED MALE: Is he having a dream?

COSTELLO: His skepticism isn't surprising. Youngstown, Ohio hasn't seen signs the recession is easing. One-third of the people here live below the poverty level.

OBAMA: I never suggested the change would be easy or that I could do it alone.

COSTELLO: It's something people here understand, but distrust in government at all levels runs deep, even with some Democrats.

UNIDENTIFIED MALE: They should be embarrassed, the Democrats and the Republicans. They should be embarrassed what they're doing to us now. COSTELLO: In an attempt to ease that kind of anger, the president offered populist proposals like tax credits for child care and a cap on student loan programs. His most popular idea here, though, using money paid back by bailed-out Wall Street banks to help small businesses.

UNIDENTIFIED MALE: I think he means it, but can he get it done? That's the question.

UNIDENTIFIED FEMALE: It seemed as if he was trying to put a lot of sugar on a lot of things. It just seemed like he was jumping around on a lot of things and just trying to appease everybody.

COSTELLO: Still, others felt the president the kind of resolve they heard during his run for president. Especially when he called for an end to partisanship.

UNIDENTIFIED MALE: The civil war is over. We don't need another between the Republicans and the Democrats.

OBAMA: God bless you and God bless the United States of America.

(END VIDEOTAPE)

COSTELLO: As for whether President Obama managed to reach out to the middle class and convince it that it was on his side, well, the people here kind of liked his ideas because they were skeptical, wondering if the president could really get anything done. Kyra?

PHILLIPS: Carol Costello, thanks so much.

And the heartland weighing in, but what about the wordsmith? The guys paid to make politicians sound perfect? Did the president hit the high notes? Their take coming up in just about 30 minutes.

Toyota's recall goes global plus more cars pulled off the road in America. The world's number one automaker has to be looking in the rear view mirror.

(COMMERCIAL BREAK)

PHILLIPS: Top stories now, the world's largest automaker taking another hit. Toyota recalling another 1.1 million cars due to sticking gas pedals and bad floor mats. It's also recalling cars in Europe and China. Toyota already stopped selling eight models in the U.S. because of these problems. You can get the full list of the cars affected, CNN.com.

Word leaders meeting in London right now on the future of Afghanistan. Afghan president, Hamid Karzai, asking for half a billion dollars to set up Taliban fighters with jobs and homes, but only if they promise to stop fighting. They're also discussing troop levels for both the U.S. and NATO.

Will he stay or will he go? Wall Street watching Capitol Hill closely today. The Senate is set to vote on whether Fed chairman, Ben Bernanke, gets to keep his job. His term runs out this weekend. No Fed chairman nominee has ever been turned by the Senate, by the way. This vote could be the closest ever.

Your tax dollars at work and also at risk. We're going to look at the stimulus money. Is it creating all sorts of opportunity for the wrong people? An exclusive report at the search for scammers.

(COMMERCIAL BREAK)

PHILLIPS: All this week we've been tracking the tax dollars that make up the government stimulus program. Some of the projects have created jobs, others merely raising eyebrows.

CNN's senior correspondent Allan Chernoff investigates searching for scammers in this exclusive report.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): Kentucky construction magnet Leonard Lawson on trial this week for allegedly bribing a state official during the past decade to win big projects, but that didn't stop Lawson family companies from winning $24 million in federal recovery act contracts.

Lawson Companies should have been suspended for bidding for stimulus work within 45 days after Leonard Lawson was indicted. According to a Department of Transportation rule, even though he plead not guilty. But it took the department 10 months to act after the Lawson firms had won the contracts.

REP. EDOLPHUS TOWNS (D-NY), OVERSIGHT & GOVERNMENT REFORM COMMITTEE: When people see folks getting away and getting contracts even after they've been indicted, that to me does not help in terms of us to get rid of waste for an abuse.

CHERNOFF: Auditors for the inspector general of the Department of Transportation warned there is a perfect storm for contractors intent on defrauding the government, given the billion in Recovery Act dollars that Washington is doling out.

CNN has learned that federal investigators already are finding evidence of bid rigging and Recovery Act contracts for the Federal Highway Administration. Prosecutors are examining cases where contractors appear to have been colluding with each other to win road improvement jobs, repaving and expanding streets and highways.

No criminal charges have been filed yet, but the Department of Transportation inspector general has 25 criminal investigations under way, a dozen of which have been referred to the Department of Justice for prosecution. Other cases involve what the government calls disadvantaged business enterprise fraud. Companies owned by minorities or women bidding for contracts, then after taking a cut, passing the work to a nonqualified contractor.

Inspectors general at all federal departments and agencies are aggressively searching for stimulus fraud. Certain that corruption will infect the recovery act spending.

WAYNE MICELRATH, EPA ACTING ASSISTANT INSPECTOR GENERAL: Fraud will occur. Typically we see false statements, false claims, bribery (INAUDIBLE), conflict of interest, anti-trust violations.

CHERNOFF: The latest stimulus fraud score card 10 months into the Recovery Act, 470 audits, 106 active investigations, and 25 cases accepted for prosecutorial review.

And investigators say they're only just beginning. Every department is training federal, state and municipal workers in fraud detection. Anticipating that corrupt contractors view Recovery Act funds as a potential goldmine.

(END VIDEOTAPE)

PHILLIPS: Allen Chernoff now joining us live from New York.

Now you found another case of stimulus money not going where it should, right, Allen?

CHERNOFF: Exactly. It's happening this morning, as a matter of fact, Kyra. $27 million contract here in New York state. The controller Thomas Dinapoli is voiding that contract. He'll be doing that today. It's for a company called L & L Painting. They had a deal to paint highway viaducts and also ramps.

And the problem is, apparently the company has ties to a firm that had settled charges, paid $350,000 fine because it allegedly had been involved in misrepresenting itself as one of those disadvantaged businesses that we referred to in the case.

So this is just another case, the controllers are saying New York state has not been tight enough in making sure the people winning contracts are legit, that they really should be getting this federal stimulus dollars.

PHILLIPS: So how certain our government watchdog of stimulus money is going to be tied up in fraud?

CHERNOFF: They're certain of it. There is no doubt that, look when you're spending hundreds of billions of dollars, it's going to attract fraudsters. It's just a matter of finding out about the cases, doing the investigations, and then going ahead and doing the prosecutions.

Now this is all going to take time. That's why we don't have any criminal cases just yet. But you can be certain that they will be coming. Kyra?

PHILLIPS: Great reporting. Allan Chernoff, thanks you so much.

And tomorrow on "AMERICAN MORNING," for desperate job seekers, the recession has meant changing careers. We're going to introduce you to one unemployed man who could afford to do that thanks for the stimulus money. And tonight on "CAMPBELL BROWN" at 8:00 Easter, no stop lights no how paved roads and no stores.

So how is this small town in Alaska getting $15 million of your money? And then on "AC 360," the NAPA wine train got more than $50 million in stimulus money.

Two powerful senders are furious but the locals say they just don't understand why, so who's right? THE STIMULUS PROJECT, all this week, only on CNN at CNN.com/stimulus.

All right, let's take you over to the stimulus desk now. What do you say? Our colleagues, hard at work, tracking how your money is spent. In just a few minutes, Don Lemon preview's President Obama's announcement today with a nationwide system high-speed rail. Put recovery on the fast track? He'll tell us.

(COMMERCIAL BREAK)

PHILLIPS: Treasury secretary, Tim Geithner, appearing on Capitol Hill, and angry that lawmakers get their money's worth at his expense. Both Democrats and Republicans ripped the government's bailout of big banks and financial firms that Geithner says doing nothing would have been even more costly.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: Thousands of more factories would have closed their doors. Millions more Americans would have lost their jobs.

The value of America's 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)

PHILLIPS: And members of the House also reeled against the bailout of insurance giant AIG. And the money that was done secretly funneled to the banks. Geithner says he had no direct role in those deals or in hiding them from the public.

President Obama told the nation that jobs are his number one priority, and today, we've got more evidence why it's such a concern. Yet another disappointing report in the midst of all that, Susan Lisovicz at the New York stock exchange with the details on how it's probably already affecting the mood on Wall Street.

Hey, Susan.

SUSAN LISOVICZ, CNN CORRESPONDENT: Hey, Kyra. Well, it's a big disappointment. No question about it. But they're so much news out this week. A lot of cross currents. Let's get to that headline. Another 470,000 Americans joined the unemployment line last week. That's down from the week before. But the decline fell short of estimates. And so we are expecting a higher open, not because of that, because of some strong earnings reports.

Consumer projects makers, Colgate, and Procter & Gamble both said sales improved last quarter. A good sign of consumer spending.

They're earnings also topped expectations.

You want to talk about earnings? Let's talks about a real aberration here. Ford Motor made nearly $3 billion last year. That's Ford's first annual profit in four years. And compare this to a record-loss of nearly $15 billion the year before.

The automaker benefited from cost-cutting, of course, and strong sales of the fuel efficient Fusion and Escape SUV. Ford expects to be profitable this year as well. The big three are looking to capitalize on Toyota's massive recall. GM is offering $1,000 rebates and zero percent financing on many GM vehicles if you're currently a Toyota customer.

And as the opening bell rings, well, we will look at some numbers. Ford shares are up three percent on those nice results. But Toyota shares that trade here, once again, no surprise, Kyra, are down two percent. And we are some seeing green arrows for the Dow early on.

Kyra, we will be back.

PHILLIPS: All right. See you soon, Susan. Thanks so much.

LISOVICZ: You're welcome.

PHILLIPS: Well, President Obama is in Tampa, Florida, later today. He is going to be announcing $8 billion in stimulus money for several high-speed rail projects. One of those projects is in California. Don Lemon on the stimulus desk, running the numbers.

So what do you think?

DON LEMON, CNN CORRESPONDENT: Kyra, you know, this is your backyard.

PHILLIPS: That's right. My hometown.

LEMON: Yes.

PHILLIPS: I wish, actually, I wish that there was a train. I always wanted one. From San Diego to L.A. would have made things so much easier versus driving through that L.A. traffic.

LEMON: Yes. And, you know, a lot of people travel back and forth, right, along California, the PCH -- what is it...

PHILLIPS: PCH. LEMON: PCH, Pacific Coast Highway.

PHILLIPS: Right.

LEMON: Like people do in the northeast, right, on the Amtrak or what have you. So that's going to be interesting. So that $8 billion you mention, $2.25 billion is going to go to this project. This project is going to go from -- here, it is right here. It's going to go from there, from Anaheim all the way up to San Francisco. They say it's about 2.4 hours, just two hours and 40 minutes to do it. So let's check the total.

We're going to add our total here. $2.25 billion to this total, and there you go. So we are working on, and we've gotten information for about $7 billion of projects for that.

Let's take a look at this right now, real quickly, before we go to that. Look at that. That is The Golden Gate Bridge. Isn't that beautiful. Is that the Golden Bridge -- yes, courtesy of our affiliate...

UNIDENTIFIED FEMALE: Bay Bridge.

LEMON: The Bay Bridge -- sorry -- courtesy of our affiliate KGO, and actually it's dark out there. So, Kyra, if you were still there, living there, you would probably be sleeping right about now. And there you go.

You look at this. This is a really high-speed rail, right? But this is sort of the old trains that you see there. There is the Amtrak. But, hey, take a look at this new animation, Kyra. It's like the Jetsons.

This is what they think it's going to look like. How cool is that? Pretty cool, right?

So, listen, I want to go here and talk to Jessie. She has been working on this, getting information. So it's a lot of money. California is in a recession, the country is in a recession, how are they going to afford this. I understand that there are some matching funds in California, but it's not. It's like a $42 billion that it's going to end up being?

UNIDENTIFIED FEMALE: Right, exactly. So what we're learning, we've been reaching out to the White House and doing some research on this, and I'm going to do a recap for you how it's all going to work.

So the $8 billion is just part of a larger $13 billion initiative. And that seems like a lot of money, right?

LEMON: Yes. It is a lot of money.

UNIDENTIFIED FEMALE: We are talking about billions here.

LEMON: Right. UNIDENTIFIED FEMALE: But it's going to take more than that to get some of these projects completed. So there is a plan. And what the White House is saying is that the states will invest some of their money. And as you mentioned, California is matching the award that they have gotten. And then they are going to open it up for some private investment as well, because they're going to need a lot of money to get these projects completed.

LEMON: All right, Jessie, we have to run on this thing, like tens of thousands of jobs it's supposed to create. Here's a -- there you go. There is the total, Kyra. And I'm going to toss it back to you. We have to run. But let's hope it creates some jobs, and it gets people there, in your, you know, neck of the woods, to and fro much better.

PHILLIPS: There we go. Love it. All right, Don, thanks.

LEMON: Bye, Kyra.

PHILLIPS: Well, tomorrow on AMERICAN MORNING, for a desperate job seeker, the recession has been changing careers. You're going to meet an unemployment man who could afford to do that, thanks to the stimulus money. And tonight on "Campbell Brown," 8:00 Eastern, no stop lights, no paved roads, no stores, so how is this small town in Alaska doing as it gets $15 million of your money.

And then on AC360, the Napa Wine Train got more than $15 million stimulus dollars. Two powerful senators are pretty furious about that, but locals say they just don't understand why. So who is right? The stimulus project all this week only on CNN and CNN.com/stimulus.

Truly another incredible story of survival out of Haiti. Trapped for 15 days. That's how long French rescuers believe that a 16-year- old girl was entombed in the rubble right here. The girl's neighbors who thought she was dead alerted the rescuer team after hearing a voice in the rubble. Well, these rescuers found that girl dehydrated, weak. She had low blood pressure. A helicopter took that teen to a French medical ship offshore. And we have good news to report, right now she is in stable condition.

(VIDEO CLIP)

PHILLIPS: Well, music healing Haiti. The first donations from the "Hope for Haiti Now" fund will be distributed next week. $66 million had been raised so far. That money includes sales of the "Hope for Haiti Now" album. The live performances from last Friday's global telethon. That album had been purchased for download in the U.S. more than 171,000 times through Sunday. It's become the first digital-only album to debut at number one on the billboard charts.

(VIDEO CLIP)

And a love song for Haiti. Gospel singer, Kirk Franklin, and his crew joining us with their talents. All for the people of Haiti. We will have a conversation about faith with Kirk Franklin, and he's going to sing for us, live, right here in the next hour of the CNN NEWSROOM.

I'll tell you what, it's going to be a nasty day for the southern plains, right? It's all about the ice, Jacqui?

(WEATHER REPORT)

PHILLIPS: Thanks, Jacqui.

The president taking swings, trying to hit a home run in the state of the union.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I thought I would get some applause on that one.

(END VIDEO CLIP)

PHILLIPS: And it was a swing and a miss. Was it a set back or a set up for the future?

(COMMERCIAL BREAK)

PHILLIPS: All right. Our top stories. A 5-year-old girl who lost her father in a California subway shooting will get a $1.5 million settlement. Oscar Grant's killing last year in Oakland was caught on cell phone video. That video showed a transit officer pulling his gun and shooting Grant in the back, while another officer held him down. The Bay Area Rapid Transit System agreed to the settlement. A murder case remains open.

Iran's leaders coming down hard on post-election protestors. Eleven people had been sentenced to death for rioting. Two of those sentences already carried out. Anti-government protest broke out after the disputed June presidential election and flared again in December. Witnesses say at least seven people were killed in the latest demonstrations. The Iranian government has denied its security forces were responsible for those deaths.

Just keep your eyes on the dump truck, right there on the Turkish Highway. The truck's dumper in the out position hits a pedestrian bridge, knocking a man to the road below. Get this, the man survived but he is injured. Two other people on the pedestrian bridge were not hurt. That trucker said the dumper moved while he was driving the truck.

Taking the president to task. Speaking to the American people and Congress. Did he hit a high note? Or was it sour?

And this day in history. 1986, the explosion of space shuttle "Challenger," 11:38 a.m. Eastern, 73 seconds after launching. Seven crew members were killed when a seal on one of the rocket boosters failed. Do you recall where you were on this day?

(COMMERCIAL BREAK) PHILLIPS: So did he sell it? The president had a lot of big plans in the state of the union speech, but did it really hit the mark?

Michael Cohen, former speech writer for Bill Richardson and Chris Dodd, and author of the book, "Live from the Campaign Trail." And then we've got John Avlon, senior political writer for TheDailyBeast.com. Also author of "Wingnuts: How the Lunatic Fringe is Hijacking America."

I just love that title. He's also written speeches for Rudy Giuliani. Michael, let's start with you. Since I had a chance to talk to you yesterday, about how would you write the speech after you heard it? The president kicked off with jobs, jobs, jobs. Good move? Did it surprise you? Did it grab your attention?

MICHAEL COHEN, AUTHOR, "LIVE FROM THE CAMPAIGN TRAIL": Well, I mean, I think no one would confuse last night's speech with great oratory. It was not a poetry there. But I thought the message was right. There was a real connection. I thought he was able to make between his policies and the pain people are feeling on the country.

I think in that sense, what was affecting the speech is the set of tone. It sort of reflected a note of confidence and optimism from the president, which he needed to do. I think, also, -- it also kind of made him clear that he was sort of the guy in Washington looking out for the middle class. He really wants to perceive his self or claims his self as being. I think in that sense, he was actually pretty effective.

PHILLIPS: So as a speechwriter, Michael, was there a line that resonated with you, a moment that resonated with you?

COHEN: I thought -- in my mind the most surprising thing of the speech was when he actually went to criticized the Supreme Court directly to their space for the decision they recently made on campaign finance. That, to me, was the feistiest point that he got to. But, also, I mean, basically, pushing Democrats saying it's no time to run to the hills. Now that's kind of rhetoric the Democrats needed to hear. I think the voters needed to hear that the president was not going to back away from his principles.

PHILLIPS: OK. We hear feisty and we hear rhetoric.

John, what do you think? I mean, critics -- a lot of critics were saying, "Oh now you're going to talk about jobs? Where was that a year ago?

JOHN AVLON, SENIOR POLITICAL WRITER, THEDAILYBEAST.COM: Well, I think a lot of people listening at home were wishing this was speech they heard a year ago from this president. You know what he had to do politically reconnect with independents and moderates and the middle class.

And I think he did that to a large extent. He condemned the cynical culture of hyper-partisanship that still hold Washington hostages and there were soaring moments of rhetoric.

But this is not really a moment for rhetoric. This is about of building a record, policy positions that actually appeal. He made steps in that direction, but there is still a huge creditability gap the president needs to clear.

The special interests on the far right and the left and populous anger among independents, at big business and big government, that's the retain he needs to reverse this year.

PHILLIPS: You know, you bring up an interesting point John and I didn't really think about this when you talked about the fact that he focused on the independents. I mean, Scott Brown won the seat in Massachusetts, long-time held by the Kennedy's there, the Democrats. And a lot of people said well, he didn't run as a Republican, he ran more of that independent-type, he didn't even say on his Web Site that he was a Republican. It was the "people's seat" he kept saying.

So is Obama sort of catching on to that, is maybe this is the way I kind of get everybody back on my side as target that independent idea?

AVLON: Well, ironically, that's the way he campaigned in '08. And that's what he began to rediscover last night, is the rhetoric of his '08 campaign.

You know Scott Brown's election should have been a massive wakeup call to both parties. And we've bought so much into this red state, blue state divide in American politics which is essentially a lot.

And Massachusetts is stereotyped as a liberal state, but guess what, it's 51 percent independent. In America there are more independents than there are Democrats and Republicans. Independents are the largest and the fastest growing segment of the electorate. So it's only right.

You know, Congress is definitely held hostage by -- and polarized by extremes on both sides. The American people are not. So it's the role of an American president to connect with that center and lead that center and make the case that he is not here to lead the country to the left, to the right but to move it forward.

That's the winning message in America.

PHILLIPS: So Michael, when you were writing speeches, was that on your mind? Not necessarily, ok, I've got to write a Democratic focused speech. Did you ever think, we got to kind of hit that independent vibe?

MICHAEL COHEN, AUTHOR, "LIVE FROM THE CAMPAIGN TRAIL: Sure. I mean, I think every sort of -- every politician kind of wants to find that middle ground. And I think somebody said that's what Obama tried to do yesterday. And in a way cast himself not sort of as a partisan Democrat and even though he did make some digs at the Republicans, but really as somebody who was sort of fighting for the middle class. And you've seen this now for 20 years now. Politicians always want to say they are fighting for the middle class and I think that in some sense is the message he tried to get across yesterday.

The problem is it's going to be hard to get that agenda passed through a Congress that has become pretty obstructionists over the past year or so.

PHILLIPS: Sure.

COHEN: So I think that's where it might be difficult for him. I think though, he set a tone of somebody who really is out there fighting for these policies. Whether he can get it and make it actually work that's going to be harder thing to hit.

PHILLIPS: Right and that's a great point. That's where a lot of the criticisms lies as ok, what are Democrats and Republicans now going to do and will there be any negotiation or is that you know all for me and that's it.

Michael Cohen and John Avlon, thanks guys.

COHEN: It's a pleasure.

AVLON: Thank you

PHILLIPS: So what did President Obama have last night for small business owners? We're going to see what's in it for them right after the break.

(COMMERCIAL BREAK)

PHILLIPS: President Obama focused much of his speech last night on shoring up the economy. CNN personal finance editor Gerri Willis here with what was said about those important pocketbook issues. What was your take, Gerri?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, hey there, Kyra. Yes, a lot about small business. Why? That's because small business is an important jobs generator. And with ten million people out of work in this country it's critical to get small business back on track.

One of the most interesting things he proposed was using $30 billion paid back by Wall Street bailouts to help community banks give credits to small businesses.

New tax break for businesses that hire; essentially what they would do is allow small businesses not to pay payroll taxes -- this is about 7.65 percent of wages that go to social security and Medicare. That would be capped at $105,000. Having that break might encourage some small business owners to actually hire. And that's what we want to see in this economy.

Obviously tax incentives for investing in new equipment and plants; this is something that a lot of administrations have done, pretty typical stuff. Eliminating capital gains on small business investments; this is interesting because when you invest in a small business, you expect your returns to be taxed. This would allow you to sell that investment and not pay taxes. It's another incentive to get people investing in their communities, investing in businesses.

And then of course we talked about the tax breaks for job creations.

So a long list of things for people who want to start a new business. This is probably going to be -- if these go through this would be one of the best years ever to start a small business because you're going to get help with hiring, help with buying equipment. You'll be able to write that off faster if these things actually move through Congress.

But keep in mind this has a lot of appeal both to the left and to the right -- Kyra.

PHILLIPS: All right. Cost of college also a major theme, Gerri, and it created a lot of rounds of applause.

WILLIS: That's because everybody has college kids. I think probably people in that room...

PHILLIPS: Or students -- or kids getting ready.

WILLIS: Exactly. Right, right. So what the president is talking about -- and this is very interesting -- he wants to cap student loan payments at 10 percent of discretionary income. So think about it. People who have just gotten into the marketplace, the jobs market right now, trying to get a job, maybe they're getting no job at all, maybe they're getting a job that doesn't pay what they need, they would be able to pay less and that would be a big break for them.

The question is how long does that last? Are we willing to bankroll college students for a long time?

Also, of course, he's also talked about doubling the child care tax credit which would be essential to middle class families, a really big help for people out there. So he's trying to appeal both to small business and middle class families, really trying to get some traction on Main Street.

Mainly, as you know, I think there's been a lot of concern about some of his previous proposals. This is retuning that appeal, trying to see if he can get some traction also with Congress. Next week the budget, of course. That discussion starts Monday. That's when the real deal will be on the table.

PHILLIPS: All right, Gerri. We'll be following all the deals.

There's a lot going on this morning.

Our crews are bringing you the details too. Let's check in with our correspondents beginning with Ed Henry at the white house -- Ed. HENRY: Well, Kyra, you may hear some of the noise behind me. That's because on the south lawn the president, Marine One, getting ready to head out of town to go to Tampa for a town hall meeting.

A lot on the line coming out of the State of the Union; can the president really pivot the jobs and can he save that health care bill? We'll have that at the top of the power.

LEMON: And the president there -- Ed talked about leaving to go to Tampa; he and the vice president announcing $8 billion in stimulus money to try to ramp up the high speed rail system in the country. We're going to dig deeper on where that's going and how much jobs -- how many jobs, if any, this is going to create.

JERAS: And schools out, businesses are closed, streets turning into ice skating rinks. The latest on the ice storm in the southern plains is coming up in the next hour.

PHILLIPS: Also a love song for Haiti. The gospel industry says it's their version of "We are the World". The biggest stars taking part, and one of them, Kirk Franklin, he joins us next hour.

(COMMERCIAL BREAK)

PHILLIPS: All right. I want to take this opportunity to give Des Moines, Iowa, a bit of a shout out. You deserve it after all the smack talk from Seattle.

(BEGIN AUDIO CLIP)

UNIDENTIFIED MALE: We are sending you to see the coolest bands in the crappiest of towns.

(END AUDIO CLIP)

PHILLIPS: Oh, yes. It's a radio contest in Seattle. The cool band, the Black Eyed Peas; the crappy town, poor Des Moines. So mean. Come on, Des Moines, the city that gave us Harriet from "Ozzie and Harriet" and that guy who played Major Healey (sic) on "I Dream of Jeannie".

The Iowans are taking it all in stride though. Des Moines plans to treat the winner like royalty: find dining, posh hotels, sending them back to Seattle with a message, "Des Moines isn't crappy." Come on, Seattle, it has four Starbucks locations.

And a family that tokes together stays together? Norman Rockwell painting it's not. This family time is at one Nebraska time where father and sons are bonding over the bong. Police say a man and his two teen sons were toking it up taking videos and posting them on YouTube. The boys are 17 and 19 and they're looking at misdemeanors. Dad -- well, he's a real smart 43; he's in much more trouble: child neglect and drug charges.

Go ahead, call him Shirley, just don't call him a contributor to ESPN.com anymore. The sport site dunked former NBA player Paul Shirley over some non-basketball but intentionally foul things that he wrote about Haiti. Shirley wrote that he wouldn't be donating to relief efforts there, and he had this message for Haitians, quote, "Could you not resort to the creation of flimsy shanty and shack towns and could some of you maybe use a condom once in a while?" Nice, Shirley.

Well, we want to know what you thought of that so here's what some of you are saying. Go straight to the blog.

From Layne, "Only an utterly pathetic person would write and publish something like this. Obviously Paul Shirley is a miserable person. He should be ashamed of himself."

From D.K., "Paul, you actually make some good points, they should have had a well thought out plan on how to rebuild the country but please don't judge them until you go there and spend a year there with them.

And from Mark, "Although this guy's comments are insensitive, the fact that the country of Haiti was in a dire state before the recent catastrophe is true. The fact that the people of Haiti are in need of international help now is not in question. It would have been more effective if the international community would have offered help before a catastrophe hit."

Remember we want to hear from you. Just log on to cnn.com/kyra and share your comments with me. I sure appreciate it.