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Tough Times for Toyota; Youngstown Waits for Work; Afghan Taliban Turned Into Allies?

Aired January 28, 2010 - 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: It is Thursday, January 28th. And here are the top stories for you right here in the CNN NEWSROOM. The president arrives in Florida this hour to put the main theme of his State of the Union speech into action. That's jobs, jobs and more jobs.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I really do think that this job has helped me find kind of my calling.

(END VIDEO CLIP)

HARRIS: Stimulus dollars at work. The Conservation Corps hiring workers to care for our national forests and parks.

And 15 days under the wreckage of Haiti's earthquake. A teenager survives in a crumbled bathroom on water from the tub.

Good morning, everyone. I'm Tony Harris and you are in the CNN NEWSROOM.

Drive a Toyota? A lot of you do, and a lot of you are probably wondering what to do now that the automaker is recalling even more vehicles.

Melissa Long has been looking into it. M.L., we hear dealers aren't the only ones pulling Toyotas off the road today. What's up with that?

MELISSA LONG, CNN CORRESPONDENT: No longer the dealers, Tony. You're right.

Some rental car companies are now making the big decision to pull the Toyotas from their fleets. Now, that's just for now.

One is the company that includes Alamo, Enterprise and National. The umbrella above those companies, Enterprise Holdings. Also, Avis -- that's a separate company -- announcing it is going to temporarily remove some 20,000 Toyotas from the rental lots.

Now, there are two recalls. Keep this in mind, two recalls causing concern. They're both, however, related to acceleration.

First, we want to be sure you're aware of the new vehicles that were added to the earlier safety recall. They were added late yesterday.

Here's the list: 2008 to 2010 Highlander; 2008-2010 Corolla; the Venza for '09 and 2010; the Matrix, '09 and 2010; and the Pontiac Vibe. You're scratching your head -- why Pontiac? It's included because of a partnership between the car companies, and look at the styles. The Vibe and the Matrix, they're very similar vehicles.

This adds 1.1 million vehicles to the 4.2 million that were recalled back in November. You remember that story. We have a list to all those vehicles on our Web site, CNNMoney.com.

OK. The problem all about the gas pedal getting stuck on the edge of a removable -- again, removable floor mat. So that's one recall. What about the other one announced last week, related to accelerator pedals that could get stuck on their own?

This is called sudden, unintended acceleration. Something you certainly don't want. This recall is affecting three of the company's biggest sellers -- the Camry, the Corolla and the RAV4. That's an SUV.

Big question, you're scared, what do you do if you suddenly could accelerate in your vehicle? Deb Feyerick took a drive with an editor of "Popular Mechanics" magazine to show you.

(BEGIN VIDEO CLIP)

DEBORAH FEYERICK, CNN CORRESPONDENT: So you're driving. The car all of a sudden begins to accelerate. So, you take your foot off the pedal and jump on the brake with both feet or one foot?

LARRY WEBSTER, EDITOR, "POPULAR MECHANICS": It doesn't matter. Just press the brake as hard as you can with all your force, and then move the shift lever from drive to neutral, and then turn the car off.

FEYERICK (voice-over): It's not smooth, but as we see, it definitely works.

(END VIDEO CLIP)

LONG: Not smooth. Again, not smooth, but it is working.

HARRIS: Wow.

LONG: However, Tony, obviously this would be maddening, very frightening for some of the people who have Toyotas that are parked in their garages and driveways.

(BEGIN VIDEO CLIP)

CARL WOODALL, TOYOTA BUYER: What's going to happen when someone is at a stop sign or going through, and the gas goes like that, and they don't know to put it in neutral or they lose control and they hit some kids at a bus stop?

PAUL PETONICK, TOYOTA BUYER: They cannot expect us as consumers to drive a car that they're no longer willing to sell.

(END VIDEO CLIP)

LONG: So that was Paul. Paul lives here in Georgia. And Paul says he bought the Camry because he always believed in the brand. The company has certainly had a storied history.

Now he says he wants his money back on that car. And Tony, he says that's simply the right thing for this company to do.

HARRIS: Wow. All right, Melissa. Great information there.

You know what? Let's take this to the dealership level. So, what are dealers doing about all of this?

Earl Stewart with Earl Stewart Toyota in Riviera Beach, Florida, is taking a break.

And we appreciate it, Earl, from all of the customer calls to talk to us.

First of all, look, let's start this way, Earl. I've been overseas for a while, I just got word of the first recall, a second recall. I give you a call and I say, "Earl, what do I do?"

What are you telling me?

EARL STEWART, OWNER EARL STEWART TOYOTA: Well, I'd tell you to bring your car in, Tony. The first thing we need to do is determine -- even though it's a recalled model, some of are manufactured in Japan by Denso. And these are perfectly fine.

These are on the Camrys. Some are manufactured by CTS, which is a manufacturer of all the affected mechanisms.

The next thing I'd ask you to do is bring the car in so we can physically inspect your accelerator mechanism. And there are symptoms which are easily determined before you have a stuck accelerator pedal.

It's a sluggish depression and it's also sluggish coming back. And we can tell very easily if there's something that might be going to happen, and prevent it from happening by taking you out of the car. In my case, I'm giving free loaners to my customers if we suspect there's a problem.

HARRIS: Oh, that's terrific.

Is this a problem with newer model Toyotas or older model Toyotas?

STEWART: Well, that's a great question, because it's a wear and tear problem, Tony. It's not something that's a defect from the get- go.

The mechanism wears. And after tens of thousands of miles, this is when the problem, the potential problem, does occur. If you've got a relatively new vehicle -- and I saw earlier a gentleman on your show who was saying if they're afraid to sell a new car, why are they asking me to keep my car that I'm driving? The new cars actually are not a danger at all, even the ones in the recall, until they get some wear and tear on them.

The reason Toyota said OK, let's freeze sales and stop production is so they can do the fix, get the part that they need to install to repair the mechanism right away. If they continue to sell the cars, they'd be scattered all over. And as you know with recall campaigns, only about 70 percent of the people respond. They want to get all those cars fixed in the plants and in the dealerships before they go out on the road.

HARRIS: Got you.

Have you driven the car with the problem? And, if so, can you describe it?

STEWART: The problem is we can't find a problem. I've sold over 10,000 of these models. I'm a large volume dealer, between 3,000 and 4,000 cars a year, and we have over 10,000 on the road.

We've had no customer complaint on a single sticky accelerator. We've expected hundreds of these since the recall campaign.

We only found one that was on a truck yesterday, a Tundra, where one technician said he thought it was a little sluggish, the other technician said he thought it was fine. I've talked to dealers all over the country, and I know of no dealer that has seen a vehicle that had the symptoms of a sticking accelerator. None of them have had sticking accelerator at all.

HARRIS: So, how worried are you that folks will become so frustrated with the situation that they won't come back to your dealership, that this recall has created really an opportunity for American car companies -- look, if I'm Tony Harris Ford and I'm next to you in the auto mall, I'm trying to crush you right now.

Are you concerned?

STEWART: Absolutely, I'm concerned. I think Toyota has got a very strong brand image. They have the highest reputation for quality. They also are a very large manufacturer.

And, you know, they're the 800-pound gorilla. We're the target, we're the big guy on the block. And when the big guy stumbles, the competition jumps right on top of you. And we're definitely concerned about that.

General Motors is doing a special promotion now, if you'll trade in a Toyota. And I don't blame them. You know, they're trying to go after number one, and I'm hoping that the Toyota brand, established over many, many years, is strong enough to withstand this problem. But we made a mistake, we're trying to correct it, and it is a matter of concern. HARRIS: All right.

That's Earl Stewart with Earl Stewart Toyota in Riviera Beach, Florida.

STEWART: It's North Palm Beach, actually.

HARRIS: North Palm Beach? Appreciate it. Earl, thanks for your time. Appreciate it.

STEWART: Yes. Thank you.

HARRIS: American carmakers are wasting no time, as you just heard from Earl, capitalizing on Toyota's troubles, and it could mean a deal for you. Susan Lisovicz will have more details coming up in just a couple of minutes.

You know, it is all about the jobs. The president lands in Tampa this hour, taking his message from his State of the Union Address to the streets.

He will direct $8 billion federal stimulus dollars toward building a network of high-speed rail corridors. The projects will connect dozens of cities across the country, including Tampa and Orlando. The president says construction will generate new jobs and economic activity over the next four years.

Here's what he had to say about it all last night.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: From the first railroads to the interstate highway system, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains or the new factories that manufacture clean energy products.

Tomorrow I'll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. There are projects like that all across this country that will create jobs and help move our nation's goods, services and information.

(END VIDEO CLIP)

HARRIS: What are Republicans saying? Senator Orrin Hatch says the president must be -- quoting here -- "completely stone deaf" by continuing a "blame it on Bush, Washington knows best" strategy.

The president's rival for the White House echoed that last night on CNN's "LARRY KING LIVE."

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), ARIZONA: Well, I appreciate the president's call for bipartisanship. I appreciate his support for our efforts in Iraq and Afghanistan. But it seems to me he quickly lapsed into the BIOB. That's "blame it on Bush" routine that has grown a little tiresome.

And I had hoped that he had heard the message in Massachusetts on health care, and that is, stop, let's start all over, and let's have some real bipartisan negotiations. Obviously, he didn't get that message.

(END VIDEO CLIP)

HARRIS: All right. The president's pledge to make jobs his top focus in 2010 should lift spirits in Youngstown, Ohio, today. The once booming steel town has an unemployment rate approaching 15 percent.

CNN's Carol Costello is there.

CAROL COSTELLO, CNN CORRESPONDENT: Keep in mind, Tony, Youngstown is a heavily Democratic city. Seventy percent voted for Obama in 2008. That's what they wanted to see last night. They wanted to see the Obama of 2008.

Bottom line, they did and they didn't.

(BEGIN VIDEOTAPE)

COSTELLO (voice-over): Jim Karkoski's (ph) bar was packed for a Wednesday night. The crowd, middle class Democrats and Independents, gathered here to knock a few back while they watched 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 these middle class people and make them believe that he was on their side, well, they liked his ideas but they're skeptical. They would have preferred a concrete plan. They want jobs -- Tony.

HARRIS: All right, Carol. Appreciate it. Thank you.

Jobs, the economy, health care, the war on terror, all topics in the State of the Union speech last night.

Did you hear what you wanted to hear from the president last night? If you would, log on to CNN.com/Tony -- that's our blog page -- and leave us are comments. We will air some of your thoughts in the next couple of hours.

The Taliban in Afghanistan, can they be turned into allies? The world gathers to figure out what happens next in a country American troops are fighting for.

And Jacqui Jeras is tracking a very dangerous ice storm in the Plains. We're going to talk to Jacqui in just a couple of minutes.

But first, here is the latest on the Dow, the New York Stock Exchange now.

Wow, what a sell-off, triple-digit sell-off. We are down 115 points.

We are following these numbers. It's important to do. What's going on here with the markets? We'll talk with Susan Lisovicz about it coming up in the CNN NEWSROOM.

(COMMERCIAL BREAK) .

HARRIS: Reaching out to the Taliban with a $500 million pay for peace plan, that's what Afghanistan's president is pitching today at an international conference in London. He wants the global community to pick up the tab.

CNN is committing its vast resources to bringing you all aspects of this important story. We have Atia Abawi in Kabul, Barbara Starr at the Pentagon, Richard Roth at the United Nations, and Jill Dougherty and Paula Newton in London.

We are going to talk to Paula in just a couple of minutes. She is actually attending a news conference right now, at this hour.

But before we do all of this, let's get you a bit of the backstory now from CNN's Atia Abawi.

(BEGIN VIDEOTAPE)

ATIA ABAWI, CNN INTERNATIONAL CORRESPONDENT (voice-over): An explosive response to an offer of reconciliation. A fierce battle raging in the heart of Kabul. Taliban spokesman Zebidala Mujahid (ph) says the attack was meant to show the world that the group cannot be bought or divided.

Mujahid (ph) told CNN hose who joined the ranks of the government do not represent true Talibs to begin with. "When they talk about moderate Taliban, these types are not a part of our group," he says. "It's something that the Americans have made up. When they speak of dialogue, they are not talking to us."

That's actually something the Afghan government and international community would agree with. They say they are not negotiating with the extremist, but rather going after moderate Afghans who have been forced to fight for economic reasons.

RICHARD HOLBROOKE, U.S. SPECIAL ENVOY TO AFGHANISTAN: You know, you can't go around just killing everybody who supports the Taliban out of mistaken views and being misled. Most of the people fighting with the Taliban are not ideologically supporters of Mullah Omar or al Qaeda.

ABAWI: Here, at Afghanistan's National Independent Peace and Reconciliation Commission, spokesman Sherjan Josafit (ph) tells us they have been hard at work for the last five years, even without the support of the international community. The commission has worked to reintegrate more than 9,000 former Taliban fighters and insurgents.

Sherjan is one of them and still supports elements of Taliban ideology, adamant the Americans leave. But he feels supporting the new government is for the greater good.

"We are still the sons of Afghanistan," he says. "We want to build our country in a way that is modern, but also in keeping with our own heritage. When we realize that disagreeing with our government isn't for the greater good, we have to negotiate."

But the situation is still fragile. And Monday's events in the Afghan capital prove that the road to reconciliation will be long and bloody.

Atia Abawi, CNN, Kabul.

(END VIDEOTAPE) HARRIS: A change of heart about terror trials in New York. We are catching you up on our top stories in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: The stimulus program is all about creating jobs, and last night, in his State of the Union Address, the president singled out a Philadelphia company that manufactures energy-efficient windows.

(BEGIN VIDEO CLIP)

OBAMA: I talked to the window manufacturer in Philadelphia who said he used to be skeptical about the Recovery Act until he had to add two more work shifts just because of the business it created.

(END VIDEO CLIP)

HARRIS: Wait for it. Wait for it. Don Lemon is at The Stimulus Desk.

DON LEMON, CNN ANCHOR: I thought you were going to do it yourself. I like this rummaging around here for the quote, for the delay.

HARRIS: Yes. So, Don, this is a success story?

LEMON: It is a success story, Tony. And I'm going to talk to someone who's involved in this success story who was actually a skeptic at first.

So, very quickly, we're going to talk to the guy who -- the window company he's talking about.

Let's take you to Philadelphia, or Philadelphia -- as they say, Northeast Philly. So let's try the Google Earth, exactly where it is. There we go, Northeast Philadelphia. That's where we're going to take you.

All right. The name of this company, Tony, is Northeast Window Corporation. Right?

HARRIS: Yes.

LEMON: Northeast Window Corporation.

So, here's -- we want to explain what happens here. So, it takes a while before this money sort of trickles down from HUD. And I'm going to show you how.

So, the government has given $13.61 billion to help with housing. So then that money is given from the federal government to HUD, $13.61 billion. The Federal Housing Authority there gets $126.1 million. And then it goes down to this manufacturer, Hunter Roberts, who contracts out people like Northeast Building Products Corporation, and then they get the money. So, joining me right now is the person who was spoken about in that State of the Union last night. And his name is Alan Levin. He is the CEO of this company.

Your dad started this company back in 1975. This is all you knew. I want to ask you about, how did it feel once the president, you know, mentioned you? How did you feel about that?

ALAN LEVIN, CEO, OWNER, NORTHEAST BUILDING PRODUCTS CORP.: We were shocked. We were absolutely shocked when we heard the president mention our company. We were given a heads up earlier in the day that it may be mentioned, but you can't get much bigger than President Obama. So we were very thrilled.

LEMON: So you've been contracted out. What you're going to do is probably 2,000 windows, you're going to weatherize them for 400,000 units for the Philadelphia Housing Authority. Right?

LEVIN: Yes, that is correct.

LEMON: OK. You were a skeptic at first of this stimulus money.

LEVIN: Well, I was worried. You know, it seemed like the company was a little bit in turmoil when President Obama took office. We were concerned about mortgaging our children's future. It just seemed like numbers that most people can't fathom, talking hundreds of billions of dollars. And we weren't exactly sure how it was going to work.

LEMON: Last year you had 185 employees. And this year?

LEVIN: We're up to 285 currently.

LEMON: OK. Yes. That's going to be part of our total.

I just want to say some personal things about after this. But you said not only has it helped with jobs, and what have you, but because there is a rebate -- you called it a 30-30 program -- the government has given, it's also helped your business.

LEVIN: That's actually been probably a bigger part of the effect on our industry.

LEMON: The tax credit.

LEVIN: Yes. There is a 30-30 tax credit which basically is, if your U value is below a .30, or your solar heat gain is below a .30, it's almost a super energy-efficient window, you can get up to 30 percent of the cost of the window back, up to $1,500.

LEMON: So that's helped because people are calling you now saying, hey, I need my windows repaired, I want them weatherized. And it's a tax credit, so they do it.

Are you happy about this again? LEVIN: We think it's phenomenal. Some of our largest dealers -- we have a very large dealer locally, and they market it very heavily, and it really helps spur on business.

LEMON: Well, listen, congratulations to you for having being mentioned. I just want to say thank you to you. I'm going to let you go.

Say hello to your 15-year-old daughter, Sydney (ph), your 13- year-old son, Austin (ph), your wife, Fran -- Tony, who was, by the way, his high school sweetheart. They have known each other for 24 years and they have been married for 18 years.

So thank you so much. We appreciate you joining us.

So, Tony, look, it is good news.

HARRIS: Oh yes. Oh yes.

LEMON: This is a success story, I just want to tell you. So, $400,000 that goes there, 100 jobs it created. But he's doing much better, his business, because of the tax credit. So a success story.

HARRIS: Absolutely. And thanks for bringing that to us.

LEMON: All right, Tony.

HARRIS: That's very good.

All right. Don Lemon for us at The Stimulus Desk.

Let's do this now -- let's get you caught up on our top stories.

At first he called it fitting. Now Mayor Michael Bloomberg is having doubts about 9/11 terror trials in New York. He said security could cost a billion dollars. Bloomberg says it would be great if the feds could find a cheaper location.

The Senate is expected to vote today on Ben Bernanke's re- nomination as Federal Reserve chairman. Democrats predict Bernanke will get a second term, but a sure thing looked iffy for a while last weekend. The tide of anger at Wall Street prompted some senators to announce they'd vote no.

An ice storm is already shutting down interstates and threatening to do more damage. Our meteorologist Jacqui Jeras is on the story. I promise we're going to talk to Jacqui right out of the break.

(COMMERCIAL BREAK)

(WEATHER REPORT)

HARRIS: The big Toyota recall could mean a better deal for you if you're car shopping right now. We've got details.

(COMMERCIAL BREAK) HARRIS: So as we told you at the top of the hour, Toyota's massive recall gets bigger with each passing day it seems. Now the automaker is expanding it to include another one million vehicles, delivering another painful blow to Toyota's once stellar reputation.

Susan Lisovicz is at the New York Stock Exchange with details. Susan, I don't think we can overstate the point here, so I'll put it in the form of a question to you. How important is reputation in the car business?

SUSAN LISOVICZ, CNN BUSINESS CORRESPONDENT: It's everything, Tony. Let's face it, a car is a big-ticket item, one of the biggest expenses you'll make. It's not like buying a necktie -- and yours is fantastic, by the way, Tony.

And you know, people don't buy Toyotas because they're sexy or they're cool. They buy them because, you know, they're reliable and they offer quality for the money that you're going to spend and because they're considered safe.

Also when you compare it to Detroit, Detroit wasn't delivering the goods for years, so it really solidified Toyota's reputation. That reputation is now damaged.

I don't know about you, Tony, but the concept of a stuck accelerator is scary.

HARRIS: Oh, absolutely.

LISOVICZ: And, you know, so Toyota right now is in full-blown crisis management. And you know over the years I've had the experience of following a lot of companies who are in crisis management. There's a classic rule -- address the problem quickly, fix the problem quickly and then move on.

What is moving is Toyota shares that trade here. They're down 3.5 percent; they fell 2 percent yesterday. And the market, the sell- off that we're seeing overall is accelerating -- the Dow, the Nasdaq and the S&P 500 each down at least 1.5 percent.

HARRIS: Well, you help us keep an eye on that. That's a big sell-off.

You know, it didn't take long for U.S. automakers to try to capitalize on Toyota's problems. Isn't that the case?

LISOVICZ: That's right. I mean the cold, hard truth in business, Tony, is that gains often come at the expense of others, and that's one of the reasons why Ford was able to record its first annual profit since '05. It benefited from the bankruptcies of GM and Chrysler. Now Detroit has the rare opportunity to lure customers away from Toyota. GM is offering $1,000 and 0 percent financing for current Toyota owners and there are reports that Ford is offering $1,000 off if you trade in a Toyota.

It's ferocious out there in the automotive world, Tony. HARRIS: Yes, it really is.

Susan, very quickly, what's driving this sell-off? It's not Toyota, is it?

LISOVICZ: No, no, no, no.

HARRIS: Is it -- what's that about?

LISOVICZ: There's a lot out there. There's a couple of earnings that disappointed. Qualcomm, which makes chips for cell phones, its CEO said, well, it sees the recovery as weak and we have more evidence of that. We had initial jobless claims. The president was talking about jobs. Initial jobless claims fell from the week before, but not as much as The Street expected. And also, big-ticket items known as durable goods, we saw a marginal increase. Everyone was expecting a much bigger increase.

In other words, it's out there, the recovery is weak and so you see in the sell-off accelerate.

HARRIS: All right, I had to find out. Susan, appreciate it. See you next hour.

You know, it's not a sure thing, but it appears likely the Senate will reconfirm Ben Bernanke as chairman of the Federal Reserve; the vote later this afternoon. Bernanke, as you know, a lightning rod for anger over those Wall Street bailouts.

CNN senior congressional correspondent Dana Bash live now from Capitol Hill. And, Dana, any fireworks so far?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: You know, so far not. We are expecting about an hour of debate before that vote takes place, and this is the first critical vote, the vote that Ben Bernanke will have to get over to get 60 votes.

And what really has been stunning if you think about it, since this is President Obama's nominee, is how hard it has been to get those 60 votes, particularly because of democratic opposition. And that democratic opposition grew exponentially last week after the Massachusetts Senate race and the voters there seemed to be saying that we are very, very angry, not just at Washington but Wall Street. And a lot of these democrats are hearing populous anger back home and saying, well, is it the best thing to vote for the guy who was in charge of the Fed at a time when everything went south? Maybe not.

So that's why this is so tough, and let me show you some of the arguments. In fact, one of the main arguments against him from somebody who has been fighting his renomination and reconfirmation for a very long time and that is independent Senator Bernie Sanders of Vermont.

(BEGIN VIDEO CLIP)

SEN. BERNIE SANDERS (I), VERMONT: The American people want change in the way our financial institutions run. The American people want change at the Fed, and I believe the American people want a new chairman or chairwoman at the Fed. Now is the time to say to the American people we hear you, we are going to bring about change. We are going to deny the reappointment of Ben Bernanke as chairman.

(END VIDEO CLIP)

BASH: Now, it looks if the democratic leadership is right, if the White House is right, that that will not happen, that the Senate will not deny that second term to Ben Bernanke. By the way, his first term is up on Sunday so they are really running up against the clock.

And the biggest reason is what you were talking about with Susan Lisovicz, the stock market. The argument that the White House has been making and Bernanke supporters have been making to their fellow democrats is, look, I understand that you want to react to populous anger, but the argument they're making is the worst thing you can do right now for Wall Street is to vote down the Fed chief. That would just send Wall Street and the stock market into a tailspin, which is not exactly what the economy needs right now. So that's been their biggest argument in favor of giving Ben Bernanke that second term.

HARRIS: Our senior congressional correspondent Dana Bash for us. Dana, appreciate it, thank you.

BASH: Thank you.

HARRIS: Health care reform, the president says Americans want it. The republican governor of Virginia says Americans already have the best system. Hmm. We are fact-checking.

(COMMERCIAL BREAK)

HARRIS: Top stories now.

Just one word to describe it -- miserable. A big winter storm is slamming the Southern Plains today before it heads to the East Coast. Parts of Oklahoma and Texas could get up to 10 inches of snow. There is also freezing rain and high winds in the mix.

In Wichita, Kansas, testimony is expected today from the man who confessed to killing a high-profile Kansas abortion provider. Scott Roeder is accused of shooting Dr. George Tiller in the head. Roeder has pleaded not guilty to first-degree murder, his lawyers are expected to seek a manslaughter conviction.

Getting back to President Obama's State of the Union Address, this time focusing on health care. The president waited until halfway through his speech last night to mention the contentious issue. Let's look at that and the Republican Response.

(BEGIN VIDEO CLIP)

OBAMA: Here's what I ask Congress, though -- don't walk away from reform. Not now, not when we are so close. Let us find a way to come together and finish the job for the American people. GOV. BOB MCDONNELL (R), VIRGINIA: All Americans agree that we need health care system that is affordable, accessible and high quality. But most Americans do not want to turn over the best medical care system in the world to the federal government. Republicans in Congress have offered legislation to reform health care without shifting Medicaid costs to the states, without cutting Medicare, and without raising your taxes.

(END VIDEO CLIP)

HARRIS: Checking the facts here. A CNN Opinion Poll Research Corporation poll from earlier this month shows 54 percent of Americans favor a health insurance option administered by the federal government that would compete with plans offered by private health insurance companies; 46 percent oppose it.

Now that's a majority of Americans wanting some sort of public option, so where does the debate go from here? Joining me live now from Arlington, Virginia, Jean Cummings, assistant managing editor for Politico.com.

Is that a promotion for you, Jean?

JEAN CUMMINGS, ASSISTANT MANAGING EDITOR, POLITICO.COM: Thank you.

HARRIS: And from Washington, CNN deputy political director Paul Steinhauser.

And Paul, let me start with you. The president handled the issue of health care last night with a bit of humor. What do you think of the way the president handled that portion of the address and where does the debate go from here?

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Tony, you said it right off the bat there. He waited over half an hour to even talk about health care. Jobs, the economy, that was the first 25 to 30 minutes of the speech. When he finally got around to talking about health care, there weren't a lot of details in there. You play that good sound bite from the president saying we're so close now, don't give up, but there weren't a lot of details of where to go from here.

And one of the reasons may be is they don't have a lot of great options since the democrats lost their supermajority in the Senate. It's going to make it a heck of a lot tougher. There's a debate now ongoing -- do they go big or stay big or do they try to go smaller and just pass a few of the more less controversial and more popular parts of health care. So it is interesting.

Tony, I'll say one thing, we took a poll of people who watched the speech, CNN Opinion Research Corporation. And Americans who watched the speech, our poll indicates, are divided on whether the president is going to get anything done on health care reform.

HARRIS: Really?

Jean, weigh in on this. How did the president handle the health care portion of the speech last night?

CUMMINGS: Well, I think that the humor was good. I think that that helps break the ice up in the room and on the issue itself.

It is a difficult road ahead. I do think that the White House has persuaded most democrats that to pass nothing, to walk away from a year's worth of work will be more politically devastating than passing something. So I think something will come out of the Congress, but it is very unclear and very murky about how they proceed, because the House has got the liberals and the moderates very divided right now.

HARRIS: Let's pivot here to national security. Here is the former mayor of New York, Rudy Giuliani, on "AMERICAN MORNING."

(BEGIN VIDEO CLIP)

RUDY GIULIANI, FORMER MAYOR OF NEW YORK CITY: The biggest part of the speech I was disappointed with was national security, which he mentioned for --- it almost seemed to me like a footnote, like an afterthought. Very little time spent on it, nothing substantive said about it. The only thing he actually said about national security is he's going to bring the troops home from Iraq in August of this year, but of course he was going to close Guantanamo by January of this year.

(END VIDEO CLIP)

HARRIS: OK. So the president's critics are saying not enough of the speech was on national security.

Jean, let me start with you on this one. How did he do, in your view, on the national security portion of the speech last night?

CUMMINGS: Well, clearly it was very brief, surprisingly so. We're used to State of the Unions under the Bush administration that were heavily focused on those kinds of issues. And really the president almost seemed to turn a page on both of the wars, noting the dates in which both of them are scheduled to end. So he was almost trying to turn a corner on both of them.

I think, though, that as much as that might bother Rudy Giuliani and some others who may care much about foreign affairs, that is not what the average voter wanted to talk about last night. They wanted to talk about jobs and the economy and the president put his emphasis on that. I think ultimately it was the right call. Probably could have done more on national security, but it was right to emphasize domestic economic issues.

HARRIS: Paul, did you want to weigh in on this at all before I move on to the next issue here?

STEINHAUSER: Good points there from Jean. He spoke for about nine minutes on international events and a much smaller portion was purely on fighting terrorism.

You know, you played that sound bite from "AMERICAN MORNING" from Rudy Giuliani. Right after the speech last night, the president's address, Bob McDonnell, the governor of Virginia, gave the GOP response and he at criticized the president for how they're handling the suspected terrorists and treating them not like military combatants so there was criticism right off the bat. But as Jean said, the number one thing on the minds of Americans is jobs, is the economy.

HARRIS: Absolutely.

So, Jean, let me go to this, I thought this was a stunning moment last night. The president rebuking really a SCOTUS decision in front of the justices. Justice Alito appears to at least cringe, he seems to be mouthing something. So here is the president, and this is the context for this, responding to the court's decision to allow corporations to spend money on political ads.

Jean, what was your reaction to that moment?

CUMMINGS: Well, it was amazing to me that...

HARRIS: Did we lose Jean?

And Paul?

OK, Paul. What was your reaction to that moment?

STEINHAUSER: It was -- you know, a lot of people have been talking about this. I think of anything from last night's State of the Union Address, this is going to be the most talked-about event.

It was interesting that the president basically called out some of the justices, the five conservative justices who voted on campaign finance. They were sitting right in front of him there. And it was also -- maybe it wasn't as big a moment as the "you lie" moment from Congressman Wilson from South Carolina from that primetime speech last fall, but it was very interesting to see the reaction from Supreme Court Justice Alito.

Remember, this was a sweeping decision which opened the flood gates now to allow corporations to put as much money as they want when it comes to campaign ads. The president right off the bat after that decision, Tony, he wasn't happy with it and he still isn't happy with it.

HARRIS: OK, Paul, appreciate it. And our thanks to Jean Cummings as well from Politico.

President Obama has not been shy about it. He has ripped the Supreme Court for its recent ruling on campaign finance law and you heard it last night in the State of the Union speech. Now today, that unusual criticism spread to the Senate floor. Have a listen.

(BEGIN VIDEO CLIP)

SEN. PATRICK LEAHY (D), VERMONT: I cannot remember a time in my 36 years here in the Senate when I've come on this floor to criticize even decisions I disagree with, but this one I am because it goes to the very core of our democracy and it will allow major corporations who should have laws written to control their effect on America instead control America. That's not the America I grew up in.

(END VIDEO CLIP)

HARRIS: All right. So is the stimulus package really working? Are you cynical about whether it is creating jobs? You're about to meet some people who think they can prove the cynics wrong.

(COMMERCIAL BREAK)

HARRIS: All right, as we mentioned earlier, Afghanistan's president is reaching out to the Taliban with a $500 million "Pay for Peace" plan. He is making that pitch today at an international conference in London. He wants the global community to pick up the tab.

Let's get to our Paula Newton, our international security correspondent, in London. And, Paula, any news out of the news conference this hour?

PAUL NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT: Well, the news really is something that we've known for a long time. You know, Tony, in this town, no one wants to say this, but this is the Afghanistan exit strategy.

And what they are doing is they have a military plan in place and this kind of -- some people are calling a bribe, some people are calling an investment -- it works along the lines of a program that worked during the Sunni awakening in Iraq, and that's that you try to split the Taliban. Meaning, you pay off 50 percent to 80 percent of the low-level militants and you try and reconcile, bring to the peace table, the top elements of the Taliban. But at the same time, if that doesn't work, they have that surge of soldiers in there, mostly U.S. soldiers, working in the south, and they say that it will entice the Taliban to get to the table.

But what's clear here, Tony, is that we are moving towards an exit plan. You know, they're already talking about the end of this year, transitioning a lot of the security for the country, province by province, to Afghan National Army and the Afghan police, and that is what is key here. That's what this conference is all about -- Tony.

HARRIS: OK, Paula, appreciate it. Paula Newton for us in London.

You know, it is astounding, 15 days -- 15 days in the rubble -- and a teenage girl emerges alive. We will have her story in the next hour of the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: So, here's what we're working on for the next hour of CNN NEWSROOM.

People without jobs reacting to the president's State of the Union Address. Find out what they're saying now.

And we will bring your reaction to apple's new iPad. All you techies, you want to bash it or buy it?

(COMMERCIAL BREAK)

HARRIS: We are talking about billions of dollars in stimulus money, pumping up projects across America. One of those projects puts young Americans to work and helps with their college costs. Here's CNN all-platform journalist Jim Spellman.

(BEGIN VIDEOTAPE)

JIM SPELLMAN, CNN CORRESPONDENT (voice-over): Following the stimulus money has led us to the Lincoln National Forest in New Mexico, where members of the Southwest Conservation Corps are beginning their day. The SCC is a 12-year-old nonprofit that puts young people to work maintaining public lands in national forests and parks. Now they're expanding with stimulus money.

Here's how it works. Young people ages 18 to 25 sign up of tours of two to four months. They travel around the southwest in teams of eight doing conservation projects like clearing trails and fixing up campsites.

(on camera): The Southwest Conservation Corps will receive about $4.2 million in federal stimulus funds. They say they'll use that money to create over 600 seasonal jobs.

(voice-over): This theme is one of the first put to work by the stimulus money.

(on camera): This is Genevieve, she's 25 years old, she's been in the Southwest Conservation Corps about three months now. Like most of the people here, she makes about $275 a week and she earns money for tuition through AmeriCorps.

GENEVIEVE TUCKER, SOUTHWEST CONSERVATION CORPS: It would be nice to be paid more, but it's more important to me to actually want to get up and go to work in the morning. I really do think that this job has helped me find kind of my calling.

Like, I would love to take it to the next level and help educate people about how conservation and things like that works, that way these lands will be around for years to come.

SPELLMAN (voice-over): Josh Burt is a field coordinator for the Southwest Conservation Corps. He said Tucker's attitude represents a big part of what the program is about.

JOSH BURT, SOUTHWEST CONSERVATION CORPS: We're creating people who care about conservation in the future. We're creating the world's future conservation leaders.

SPELLMAN: One of those future leaders may well be Juan Corralla. He grew up in a tough, Arizona border town. Trouble, in the form of gangs, was all around him.

JUAN CORRALLA, SOUTHWEST CONSERVATION CORPS: I've been arrested. I've, you know, been incarcerated before.

SPELLMAN: He says his work with the SCC has changed him. Now he hopes to have a career in the forest service.

(on camera): What does this job mean to you?

CORRALLA: This is just everything right now. Just the whole new world for me when I'm here. It's just easier for me to stay put and be positive.

SPELLMAN (voice-over): When the work day is done, the crew heads back to camp. They sleep in tent and dine under the stars. There are no TVs, no Internet, no boom boxes, so they make their own music, glad to have their slice of the federal stimulus.

Jim Spellman, CNN, in the Lincoln National Forest, New Mexico.

(END VIDEOTAPE)

HARRIS: That is good stuff.

If you've got a tip on a stimulus project in your area, you would like us to investigate, we want to hear from you. Just give us a call at 1-800-CNN-NEWS.