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Are We Really Creating Jobs?; Massacre in Juarez; Japan's Economy Takes Big Hits

Aired February 01, 2010 - 14:00   ET

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

T.J. HOLMES, CNN ANCHOR: OK. Great, great follow-up there, Drew. And, I mean, this stuff is -- just listening to some of that, because it was -- this project, they were raving about it and point to it as a success. We go back, and period, pointblank, these guys had jobs, weren't about to lose jobs. They just got transferred over to work somewhere else.

That's the truth, right?

GRIFFIN: The contractor, we called him back. He was actually quoted in a construction magazine saying we saved 10 to 12 jobs. I knew that wasn't the case when I first met him.

So, we called him back and he said, "No, I was misquoted. Maybe we saved a couple."

But the fact is, his guys were working. They were brought here to work on the bridge, and when the bridge is done they're going to work somewhere else. There were no real jobs saved or created.

HOLMES: And this ideas of these multipliers, I heard somebody mention the name 240 other jobs. How do you even begin to calculate that?

GRIFFIN: I think that you can't. It's a guessing game. And that's why we're seeing "saved and created jobs" becoming "saved jobs," becoming -- what are they now?

HOLMES: Funded.

GRIFFIN: "Funded jobs."

Here's what they would like to say. All right, CNN hires a reporter. A reporter needs a pen. Oh, so there's a job saved at the pen company. Right?

Oh, a reporter needs paper. Oh, well, there's a job saved at the paper company.

They just add on these things. It's not really true. You can't really measure it. The only way you can measure if jobs are growing or not growing is in the unemployment figures, which are still going up.

HOLMES: So, essentially, when somebody's standing in front of a camera telling a job was saved or created, or a job was not saved or created, it just depends on what side of the political aisle they're on, is what's going to come out of their mouth, essentially.

GRIFFIN: Yes. I think there were some jobs saved or created. I think the construction is not where you're going to measure it.

If you go to a town that was going to lay off teachers, and those teachers got money to stay on the job, that, I think, is a job saved. And rightfully so. But out here on the construction sites, very difficult to tell.

HOLMES: And the guy right up the road that owns that restaurant there.

GRIFFIN: Yes, he hasn't seen nothing.

HOLMES: Drew, that's a great follow-up. I know you'll continue to look at this, our Special Investigations Unit over there.

Great stuff. Great talking about it. Thanks so much, buddy.

We're going to take a quick break. We'll be right back.

(COMMERCIAL BREAK)

HOLMES: Spend and save. Those are the two competing priorities in President Obama's proposed 2011 budget.

We got our first look at it today, all $3.8 trillion of it. Over $100 billion of that would go for tax cuts and initiatives to create some jobs . The plan now gets kicked to Congress for some slicing and dicing.

Let's turn to Haiti now, where 10 Americans have been arrested, of course. And they could be tried in the U.S.

They are accused of trying to take 33 Haitian children out of the country without permission, without paperwork. They insist they are on a Baptist rescue mission, trying to do the right thing, they say. Haitian authorities say it's more like kidnapping, even child trafficking, but because their government is still crippled after last month's quake, a trial could actually happen here in the U.S.

Also, a female suicide bomber blended right in with crowds of Shiite pilgrims, blowing herself up at a checkpoint today in Baghdad. At least 41 people dead, 100 more wounded. The attack targeting the annual trek to Shiites' holy city of Karbala to mark a holy day.

Well, we'll turn now to a city that recorded more than 2,000 murders in 2009. Two thousand. Now time to record a lot more.

It's hard to tell one drug-related shooting from another, but the city we're talking about is Juarez, just across the Rio Grande from El Paso, Texas. But as we now hear from CNN's Rafael Romo, even in Juarez some killings stand out.

(BEGIN VIDEOTAPE)

RAFAEL ROMO, CNN CORRESPONDENT (voice-over): Even in a place as violent as Ciudad Juarez, the killing of young people apparently not involved in drugs are hard to understand, especially by grieving relatives. Sixteen young people died and at least 13 other were injured when a group of armed men stormed this house over the weekend in Ciudad Juarez, a border city across from El Paso, Texas.

All of the 16 fatal victims were between the ages of 14 and a 19, according to local police. And the grandfather of one of the teenagers killed is outraged.

JORGE, VICTIM'S GRANDFATHER (through translator): They should let people study and move forward. They shouldn't have been killed the way they were killed. They were kids that were studying.

My grandson was about to graduate from high school. Then I have another one who's at a more advanced level.

ROMO: Juarez police told CNN that as many as 15 gunmen arrived in seven cars with darkly-tinted windows in the early morning hours of Sunday, closing down streets and blocking exits. They then stormed into the party and began shooting as the group was watching a soccer game.

Relatives are now afraid about more killings of young people.

JORGE: And the others? What should we do? We support them until someone else comes and just, pow, pow, pow, they massacre them.

ROMO: Police have yet to establish a motive, but more than 100 AK-47 bullet casings were found littered around the crime scene. The AK-47 is a weapon of choice for Mexican drug cartels, and this border city is the battleground of the Sinaloa and the Juarez drug cartels.

(on camera): Last year, drug violence set a new record in Ciudad Juarez with more than 2,600 people killed. So far this year, the number of homicides already stands at 160, including seven people who were killed last Friday in different parts of the city in separate incidents.

Rafael Romo, CNN, Atlanta.

(END VIDEOTAPE)

HOLMES: We have been talking a lot about the Toyota recall. And with that recall now, the world's second largest economy is taking another big hit. Tough times in Japan.

(COMMERCIAL BREAK)

HOLMES: Millions of Toyotas being recalled. Sony lagging behind Apple. Japan Airlines filing for bankruptcy.

Japan is having a rough go the past six months. Our Kyung Lah takes a look at the country that's taking hits from all sides. (BEGIN VIDEOTAPE)

KIRAN CHETRY, CNN ANCHOR: Toyota is in a bit of a tailspin right now.

UNIDENTIFIED FEMALE: It's a major safety concern.

RICHARD ROTH, CNN CORRESPONDENT (voice-over): It is a public relations nightmare.

UNIDENTIFIED FEMALE: The gas pedal...

KYUNG LAH, CNN CORRESPONDENT (voice-over): This is the sort of global press that attacks the core of Toyota's identity. The worldwide recall for sticking accelerator pedals will cost the automaker hundreds of millions to fix, and millions more in the damage to its reputation for quality. But Toyota is just the latest Japanese corporate icon to lose its way.

Remember the Sony Walkman? Well, no one in the era of the Apple iPod and iPhone does either. Sony was once the giant in personal gadgets, but analysts widely agree it became too big, too corporate, and lost its focus.

Japan Airlines also grew and grew, so much that the its expenses gobbled up its profits. Corporate inflexibility, which led to planes with empty seats flying all over Japan, helped knock the once proud airline into bankruptcy just a few weeks ago, making it one of the country's biggest ever corporate failures.

(on camera): Do you see Japanese companies being as strong today, right now, as they were five, 10 years ago?

TIMOTHY KIRKWOOD, KIRKWOOD CAPITAL ADVISORS: I'd say across the board, no.

LAH: Tokyo-based financial adviser Timothy Kirkwood has seen the booms and busts of Japan's economy. In recent years, companies like Toyota focused on global expansion and branding and let go of what it's known for.

KIRKWOOD: There has been some outward-looking management that enjoyed the success of the global consumer spending boom that we have seen during the good times. But I think they were overly exposed to the downside. And I think that's what's causing the problems in Japan now.

LAH: It's happening as neighbor China is seeing an expanding economy set to overtake Japan this year. China is proving it can make Japan-like gadgets and cars cheaper. But as Nintendo has proven, Japan can be the world's capital of quality, innovation, and ingenuity, hard to copy anywhere in the world.

(on camera): Analysts believe Toyota can take the knocks and recover as long as Tokyo's boardroom takes a hard look at itself and gets back to basics. Kyung Lah, CNN, Tokyo.

(END VIDEOTAPE)

HOLMES: And before we move on, we always keep an eye on the markets.

The Dow up a bit today. You see it there, up about 85 points.

One sign people are keeping an eye on today, Toyota. We just heard from our Poppy Harlow, up several percentage points today, after they announced that they do in fact have a fix in place for those 2.3 million recalled Toyotas.

So, we're keeping an eye there. And certainly we'll continue to follow up with what's happening on Wall Street.

Well, it's safe to say Iran's president probably keeps an eye on what's happening in the rest of the world. Some are saying, though, you might want to keep an eye on what's happening right here at home, Mr. President. He's still got plenty of opposition and is still defiant.

(COMMERCIAL BREAK)

HOLMES: Well, a harsh blow to global arrogance. Iran's president says that's what his nation will deliver on the anniversary of the Islamic Revolution. It's coming up on the 11th, but some say he might want to look inward, especially at Iran's still defiant opposition movement.

Our Reza Sayah has more.

(BEGIN VIDEOTAPE)

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT (voice-over): They've been beaten, arrested and sentenced to death. Dozens have been killed. Yet, Iran's opposition movement remains defiant, posing the biggest challenge ever to the Islamic republic in its 31-year history. But questions remain.

How widespread is this movement? Who exactly are its leaders? And does it have the power to bring political change to Iran?

It's impossible to say if the opposition movement represents Iran's majority. Iran's hard-line leaders say the movement is insignificant, but their protests show they have strength in numbers, able to draw hundreds of thousands to the streets and cities throughout Iran.

The demographics of the movement have expanded as well, analysts say. Men, women, rich, poor, even religious conservatives now taking part in the call for change, says Iran expert Karim Sadjadpour.

KARIM SADJADPOUR, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: What we've seen over the course of the last seven months is that with the passage of time, the legitimacy of the regime has only been further diluted, and the ranks of those who sympathize with the opposition has only increased.

SAYAH: Analysts say the movement has carried on without a clear leader. Early on, defeated presidential candidate Mir-Hossein Mousavi seemed to lead the charge, but no longer is this a protest against the vote he lost. The movement now, a shapeless blend of different factions with demands ranging from regime change to a freer, more open society.

Columbia University professor Hamid Dabashi calls it a civil rights movement.

HAMID DABASHI, IRANIAN STUDIES PROFESSOR: For the first time in modern history, and not just in the history of Iran, we have a civil rights movement that people are its leaders. Of course, Mr. Mousavi, Karoubi, et cetera, are also representative of this movement, but not its leaders.

SAYAH: Some experts say the absence of a clear leader is precisely why the regime can't crush the opposition movement. After all, who does the government go after when it's not even sure who's leading the charge?

So far, the movement hasn't been able to spark political change, but a recent television debate where state-run media invited an opposition supporter to speak is, perhaps, the regime's first acknowledgment, this is a movement that cannot be ignored.

(END VIDEOTAPE)

HOLMES: Want to give you a look at some of the top stories we're keeping an eye on.

More than 40 people killed in Baghdad today by a woman wearing a bomb vest. It happened in the midst of a procession of Shiite pilgrims in a tent set up to search women and girls. More than a hundred others were injured.

Well, American Baptists who tried to take 33 children out of Haiti may face trials, but in the U.S. Haiti's government insists on prosecuting the group for alleged child trafficking, but the Americans say they were on a mission of mercy.

Last hour, CNN's Karl Penhaul told us some of the children have living parents and other living relatives as well. But those parents and relative telling our Karl Penhaul they gave the Americans the OK to take the children, hoping the kids would have a better future in America.

Also, President Obama today unveiled his spending plan for the rest of this year and the fiscal year to come. It's a mix of economic stimulus and deficit dampeners with a bottom line of $3.8 trillion. It estimates a jaw-dropping deficit of $1.6 trillion this year, $1.2 trillion next year.

Let's turn to some weather here in just a moment

How long will the ice and snow across much of the country linger? Our Chad Myers tracking it all. He's got the answers.

Oh, he actually has a map up. He usually his Facebook page or something he's messing with.

So good to see you actually looking at weather, Chad.

We'll see you in a second, buddy.

(COMMERCIAL BREAK)

(WEATHER REPORT)

HOLMES: Well, coming up here, we have, of course, and been talking about Haiti an awful lot. And we will continue to do so, in Haiti, where the numbers have been absolutely staggering. We're talking about 100,000 people dead after that quake.

How do you even begin to give last rites? We journey with one priest.

(COMMERCIAL BREAK)

HOLMES: Haitians, as you may know, are an intensely religious people. Right now, many of them clinging to that more than ever. It's not really easy in a disaster zone. For example, how do you give last rites to the thousands of people killed in last month's earthquake? We're talking about over 100,000 people. Well, our Joe Johns follows one priest.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): Thousands buried in this new, mass grave for the first time with a Christian blessing. Haiti's Catholicism stretching out to this wasteland -- blessings, prayers, holy water. David Rouzier, a local businessman, saw the mass graves on CNN's "AC360," hired the diggers and brought the priest.

(on camera): What went through your head when you saw the report?

DAVID ROUZIER, FOOD FOR THE POOR: Well, that this was not reflective of Haiti. We have tremendous respect for our dead. We build them graves that are sometimes more sumptuous than our own homes. And so this is a fluke and I felt that it was only right for us to give them a proper Christian burial. And so we did.

JOHNS (voice-over): The priest he brought, Father Rick Frechette of Connecticut, a well-known American priest who has lived in Haiti for 20 years. Father Frechette and others say this has long been a dumping ground for bodies and before the quake he came out here once a week to say prayers for the dead, but he wasn't prepared for this.

RICK FRECHETTE, CATHOLIC PRIEST: So the bishop came and got me and said, my god, this is unbelievable. And we went out there together in order to have the blessing, the incense, the prayers and the chants for the dead. And -- but they were -- we couldn't do it in any other way except to bring backhoes because there were just piles of them. So we were just trying to make right a situation that was very wrong and we do that every Thursday anyway.

JOHNS (on camera): We don't know how many people are here. By one estimate, something like 2,500 or so; could be more, could be less.

(voice-over): Locals tell us this area has been a dumping ground for bodies since the days of Haiti's dictators. Now, though, a final resting place with dignity for victims of the Haiti earthquake.

Joe Johns, CNN, Port-au-Prince.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

HOLMES: All right, the stimulus was supposed to do a lot of things, of course -- save jobs, get the economy moving again. But Josh Levs, over manning the Stimulus Desk for us right now could also be making us safer. That sounds pretty good.

JOSH LEVS, CNN CORRESPONDENT: Yes, this is an interesting project. You know, we have been looking into 57,000 different projects that got a chunk of that funding. The binders right here have information about them. We have a crack team that's been going through them like crazy trying to get information about all of them. And one is all about your airport security, which is pretty striking to us. It was interesting when we looked at this.

As we know -- and let me emphasize something, this actual project goes way before December with the latest concern after the failed Christmas Day terror attempt. And I will show you on this graphic here, this screen, how much we're talking about. $77 million and about 200 jobs created based in a company in Bedford, Massachusetts.

And I want to tell you what they're doing and what this is all about. So I have the web page on the computer behind me. It's Reveal Imaging. And let's refresh this, you can get a sense of how they operate. Reveal Imaging is this company and when they say they are doing is helping develop the next generation of explosives detection, T.J. So taking the funding, they are working on this new technology and they say they are working with other companies as well, subcontractors, and could create the next technology to keep us safe at airports. So we have that for you.

And speaking of technology, T.J., I have an update for you. One more fact on something you and I talked about last hour, which is that NASA Constellation Program we had been talking about.

HOLMES: Yes.

LEVS: All right, so this is this space program that was supposed to bring man back into space. This was NASA's big project, a quarter billion in stimulus funding has been spent on it. Under President Obama's latest budget it's being scrapped. The White House says it's not an efficient program, they're going to put money into another program.

Well, now we are hearing from NASA that they are going to be putting $50 million in stimulus money now into whatever this new technology is going to be. So they are saying this is a new chunk of stimulus funding they're going to be using to develop the new technology.

Of course, as we know, still plenty of questions out there. How much of the other technology was wasted? Of all the work that went into that, that quarter billion dollars, how much of that technology will now never be used and was put to waste?

HOLMES: So wait, do I have this right, Josh? We're talking about 50 million in addition to the 250?

LEVS: So the 250 was spent on the old technology.

HOLMES: Old stuff. Now another 50?

LEVS: Now they're saying they have $50 million in stimulus money that they're going to be putting into the new technology, and they're saying five companies already know they're going to be getting it. The companies are saying that they believe it could create up to 5,000 jobs when they put that money to work in creating the new technology that will hopefully get people into space. So that's what NASA is saying about that one right now.

In case you're wondering, this figure next to me is how many dollars we here at CNN have looked into out of that massive $862 billion stimulus pile. We have now put $10.3 billion of it under CNN review. So not too bad, pretty good broad representative sample. We're doing pretty well there, T.J.

HOLMES: Yes, but not nearly as much as NASA just wasted it appears. No, NASA, we'll see what happens to the Constellation Program.

All right, Josh, thank you very much. We'll take a look at the top stories.

More NFL players pledging to donate their brain and spinal cord tissue for concussion research. Among the latest to step forward, Pro Football Hall-of-Famer Mike Hanes and current Chicago Bears linebacker Hunter Hillenmeyer. The move comes after recent reports suggest that repeated concussions can lead to serious long-term health problems.

It's the news Toyota owners have been waiting to hear. Toyota says it's developed a fix for those sticky gas pedals in millions of recalled vehicles and new parts are already on the way to dealers. The company is getting in touch with customers this week to let them know when to bring in their cars for repair. And President Obama submitted his nearly $4 trillion budget to Congress this morning. It's two competing goals -- slowing runaway deficits and increasing spending in a bid to lift the country out of recession. Among the items, $53 billion in tax cuts, $50 billion in job creating measures, plus a spending freeze on several programs.

Well, you do not want to go anywhere. Coming up next, Ed Henry. That's really all I need to say, right? Stay with us.

Stay with us.

(COMMERCIAL BREAK)

HOLMES: All right, our White House correspondent Ed Henry apparently got lost on the way to work and ended up in New York some kind of way today.

Hey there, Ed. You're getting a break from D.C., getting out of D.C. there.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Just got to get out of town every once in awhile otherwise you just get this "Potomac Fever" they call it.

(LAUGHTER)

HOLMES: Well, you've had it for some time. Good to see you, good to talk to you, as always.

The president, meanwhile, he's sitting down, doing some talking. This is his first sit-down, I guess you could call an interview, since the State of the Union, but he's not gives it in the traditional sense of sitting across from a Wolf Blitzer or a Larry King or some other anchor. He's talking to -- I guess -- a YouTube correspondent?

HENRY: That's right. Or T.J. Holmes for that matter. But instead, he's doing a YouTube town hall. It just wrapped up, it went about 35 to 40 minutes. And I think what's significant about it is this is a chance for the White House, as you said, to continue to try to push the envelope on new media, try to use unconventional outlets. They look at what happened on Friday, when you talk to top White House aides, when he went sort of head to head with House republicans at their retreat, opened it up to cameras during the Q&A. They think this puts the president in a good light.

One potential drawback today, though, is that at the last minute it was sort of discovered that they were just using White House cameras, sort of government-run cameras. And that's why CNN, we should be transparent, ended up not carrying this live. In part, because it was not -- there were not independent cameras in there. They would not let the traditional U.S. pool of TV networks in to actually do this. So I think they pushed the envelope on new media, that can be good for them to kind of get their message out, especially with the big budget out today. But there are limits to that sometimes, because it's going to end of limiting the coverage if they don't let our cameras in. HOLMES: That's the question there. We talk about limiting the coverage here on air, but he wants to find a way to speak directly to people. I mean, people are actually -- he's Taking questions from YouTube users, but how small -- I mean, do they get their bang from the buck when you have millions upon millions watching the man on TV or might be watching when we do a press conference or something like that? But to do it this way, maybe it's great and he can say he did it, but do you get your bang for it?

HENRY: That's the age-old question. We saw throughout last year, the White House was pretty upset when you talked to them behind the scenes about how many pundits were out there saying, this guy's overexposed, he's out there too much. I think the bottom line when you talk to senior White House officials is they think, look, if he's getting out there pushing the message we want, whether the pundits are shooting it down or not, they're happy.

And what we saw today, what I was watching of the YouTube town hall, he was laying out the two key priorities of the budget, which is on one hand deficit reduction, trying to make tough choices, as they say at the White House, while at the same time talking about the investments he's making in energy, billions more in education, for example. Sort of competing priorities there, if you will, because he's spending a lot more money on some things, trying to cut back on others, T.J.

HOLMES: You just mentioned that budget, that's the big issue there. You've got to raise that deficit, you've got to keep spending, but you're trying to cut in some ways as well. But you're going through the budget, 3.8 trillion, how many billion of the 3.8 trillion that have you gotten through so far? I know you just only got a hold of it this morning.

HENRY: Yes, we have bits and pieces. A couple that I wanted to highlight for you that are kind of fun. Sort of, you know, the president talks about making tough choices, where are we going to save money, some of the small ticket items. For example, they will no longer have paper paystubs at the Treasury Department. There are more than 100,000 employees, apparently they were still getting the old pay stubs, they weren't doing the direct deposit. They say that will save $1.5 million in 2011 alone.

HOLMES: That's something.

HENRY: So Tim Geithner now, the Treasury secretary, is going to get direct deposit just like you and I would get at CNN.

And then this one I really love -- $6 million they will they're going to save by having the Bureau of Public Debt do a more efficient job of counting our debt. So by doing a better job of counting debt they're going to save money. It's sort of a convoluted Washington way of basically, because of the Bureau of Public Debt has a lot of meetings with some of their employees to figure out and strategize how much debt we have, they're going to do more teleconferencing now. It obviously does sound like a good idea, but they say they're going to save $6 million by doing a better job of counting the debt. Sort of a long way of saying there are a lot of tough choices ahead.

HOLMES: I wonder if we kept looking for little creative ways, there's got to be a ton of little ways like that, maybe save a million here, a million there and maybe we could get the deficit down. That's interesting you brought those up.

We got one more we got time to get here, and I couldn't let you go here. I didn't realize you and Scott Brown had this in common.

HENRY: We do.

HOLMES: A lot of people may know about his centerfold, if you will, in "Cosmo." And we don't have your picture of you from your "Cosmo" days, but still he was talking about this not long ago.

HENRY: Just yesterday.

(BEGIN VIDEO CLIP)

SEN.-ELECT SCOTT BROWN (R), MASSACHUSETTS: My grandmother saw it, she laughed. You have to have a sense of humor about yourself. It was "Cosmo." It wasn't "Playgirl," it was "Cosmo." You know, Burt Reynolds, Arnold Schwarzenegger, John Davidson, David Hasselhoff, also did it and I'm the only non-famous person who did it back then.

(END VIDEO CLIP)

HOLMES: Is he never going to be able to live that down?

HENRY: You know, it's something that is going to dog him I bet. Barbara Walters was asking about it yesterday on ABC.

I don't have any confessions to make, regardless of what you were doing in the lead-in there, T.J., to back me into a corner.

HENRY: It was scripted. It was all scripted.

HOLMES: Yes, it wasn't your fault.

But I think, in all seriousness, what he needs to do obviously now is sort of turn the corner once he's sworn in in about a week or so. You know, the old stories are out there maybe on the negative side perhaps about a centerfold. On the positive side, he had this sort of everyman image with the pickup truck during the campaign. All that's not going to matter if he's not a good legislator, if he falls down on the job. All the media hype in the beginning will all come down to how much substance. He has a big task ahead.

HOLMES: I'm told -- I didn't know ahead of time, but I'm told that on this on the show you and Ali have a tie competition.

HENRY: Yes, I'm looking at yours.

HOLMES: You see this one all right?

HENRY: You know, that's pretty good. It's pretty patriotic. You know, I would wear that on the 4th of July. I'm not sure about now, but...

HOLMES: Not sure about a Monday?

HENRY: I think mine's pretty good. Oh, you know, I even have a little pocket square, I'm going to reveal it now.

HOLMES: If you're going to a Barney concert, sure that's a great look.

HENRY: Oh, Barney. All right, that's it. You're better than Ali at that, the insults. I like it.

HOLMES: See, I didn't know, man. You didn't have to insult my tie, come on.

HENRY: I'm just kidding you.

HOLMES: All right, Ed. Always good to see you, good to talk to you. Just wait for the tie tomorrow, my man. I'll talk to you soon, buddy.

President Obama's new $3.8 trillion budget is out now. You can find out what it means for college student and space workers.

(COMMERCIAL BREAK)

HOLMES: All right, we are keeping an eye on the budget. The president just submitted his $3.8 trillion budget, so everybody's poring over it on Capitol Hill, including our Candy Crowley and Dana Bash. We gave Candy Crowley the last 2.8 trillion to look over and Dana's looking at the first trillion, so we're going to start with Dana.

Dana, this is huge -- its massive, important, but how exciting is it really behind the scenes to see these lawmakers going over this stuff?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: T.J., you know, you're not in Washington, but the fact that you are calling the budget exciting really warms the hearts of those of us that are in Washington.

And I'm going to take this out cause I'm hearing myself a little bit, but I want to show you something that is really, I think, a new look at what is going on here. With our Capitol Hill team we do, I think, a pretty good job talking to our sources and telling you what's going on behind the scenes. But right now I'm in the House Budget Committee hearing room, and I'm actually going to take you behind the curtain. Behind the curtain and I am going to walk through here into the anteroom.

Earlier today, I was talking to Kyra on the air and there were staffers, democratic staffers just starting to go through the president's budget and they had the chairman with them. Well, they have cleared out, they have gone off to their own offices, but we are going to go in and talk to the director, the staff director of the House Budget Committee.

And I'm going to knock on the door. Hey, Tom?

THOMAS KAHN, MAJORITY STAFF DIRECTOR, HOUSE BUDGET COMMITTEE: Hi, Dana. Come on in. How are you doing?

BASH: This is Tom Kahn. You talk about behind the scenes, this is maybe the power behind the democratic thrown.

Look, Tom, you have been going through -- I'll come around here -- you've been going through with your staff all of what the president has proposed.

KAHN: That's right.

BASH: And one thing that we have been trying to emphasize is, yes, this is the president's proposal, $3.8 trillion, but it is here in Congress -- this is where the power of the purse is. So what have you been finding and what are you trying to do to prepare to brief other democratic members of the House?

KAHN: Well, we're doing a couple things.

First off, for example, we're putting together a report that we're going to be sending out tonight that is a detailed analysis of the president's budget. We're going to actually do it in two parts -- one tonight and another one in four days. We just got the budget this morning and it's like going through many, many phone books. So that's the first thing we're doing.

Then secondly, I'm going to brief about 250 democratic staff at 4:00. We've got a whole bunch of slides.

BASH: What's the headline? When you brief the staff, what's the first thing you will tell them about what the president wants from them with regard to spending the government's money?

KAHN: I think two things, Dana. Number one, that our economy is beginning to recover and we have to keep the recovery going by putting in tax cuts and spending that will keep jobs growing. Jobs growing is number one. And then secondly, being able to control the deficit, starting to bring down the deficit. Those are the two things that are most important.

BASH: And again, the key is that the president might want all of the things in these many, many books that he sent up here. Doesn't mean he's going to get them.

KAHN: Well, the old saying is that the president proposes and Congress disposes. I don't think that's true now we have a democratic Congress and president. We're going to look very, very carefully at what he proposes and our bosses, the members of Congress, will make their own independent judgment as Congress always does. They will not buy all of this hook, line and sinker.

BASH: Thank you very much, Tom. KAHN: Thank you for coming.

BASH: Thanks for letting us in.

And so, T.J., that just gives you a sense of what's going on in this particular office. This is a very important office, because I said, it is the office of the staff director of the House Budget Committee. But things like this, this is going on all over. Members of Congress and more importantly their staff there looking through this, trying to figure out what's what and more importantly, especially when it comes to democrats what they can and can't support with regard to the spending cuts, T.J.

HOLMES: Who wouldn't find that exciting?

(LAUGHTER)

Dana, thank you.

I know Candy Crowley finds it exciting. This is exciting stuff going on there. Obviously, I'm not in Washington. So no, nobody finds this exciting, but it's important stuff and he made a few good points there. These competing ideals, you're trying to find a way to bring deficits down, but you got to spend money to get us out of the economic mess we're in.

Where do they even start? And I guess, how much of this that the president submit does he actually have a chance with, if you will? What are the obvious places where there will be agreement on Capitol Hill?

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, it depends on what your definition of "agreement" is. Do you mean getting passed? I think that you really have to look at the direction of the budget, where it is writ large. And here's where it is writ large, the president wants more money put into education. That ought to be popular enough to get it through Capitol Hill is things like college grants for poorer students. He wants more money sunk into primary and secondary education, also ought to be popular.

The jobs creation portion of it where he puts more money into infrastructure, more money for states to build thus creating jobs, that's going to be tougher simply because, remember, not only is the budget a very important political document, it's a very important political year. So It is a mix that where there budget and politics meet you will hear lots and lots of arguing probably up and through the November elections.

HOLMES: All right.

So our Dana Bash, we appreciate you showing us that exciting look behind the scenes. Also, our Candy Crowley, the new anchor of the show that John King is going to be leaving, "STATE OF THE UNION." So thank you both, we'll be talking to again real soon.

BASH: Can I throw in a yippee here for Candy? HOLMES: Of course you can.

CROWLEY: Thanks, Dana.

HOLMES: We're all saying yippee.

BASH: Very excited.

HOLMES: Going to take a quick break now.

(COMMERCIAL BREAK)

HOLMES: I know you can't wait. It's almost that time. You don't have to wait much longer. Rick Sanchez is coming up.

Rick, the guy just go the new show. How is Ali on vacation already?

RICK SANCHEZ, CNN ANCHOR: Let me tell you something, Ali Velshi put in long hours last week. He was doing everything associated with the stimulus bill. And I saw him at 6:00 in the morning and one night I saw him close to midnight after being on Anderson Cooper's show. So, he wasn't getting a lot of sleep. So, you know what, let him have a day off.

HOLMES: I'm crying for him over here. I really am, Rick.

(LAUGHTER)

SANCHEZ: We all put in long hours. Let me tell you about this budget. This is important, because there is a lot of conversation about the fact that it's a big number, T.J.

HOLMES: Yes.

SANCHEZ: But it really is a question of why is it a big number? Is it a big number because one side or the other is being irresponsible in their spending habits? Or is it a big number because we just have needs that need to be met? We'll try to break it down for you.

Also, let me tell you this, unbelievable video that we were just able to get out of parts of Asia. It's a riot. You'll see it. It's Kashmir, by the way. You will see it in a little bit.

HOLMES: In just a little bit. In just a minute actually.

People have been waiting. You don't have to wait much longer. Ladies and gentlemen, I give you the Rick Sanchez show, "RICK'S LIST."