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Obama Health Care Proposal; Fixing the Government

Aired February 22, 2010 - 14:00   ET

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

ALI VELSHI, CNN ANCHOR: Let's go to Dana Bash, because some of this is about the nitty-gritty of health care reform, and some is about how this will fly in politics and in Washington. On Thursday, the president wants bipartisan support on something. Any distance made in getting there, Dana?

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, what he did first and foremost -- let's just start with the Democrats, Ali. He said for the first time, he put out details of his own plan. And the main reason the White House wanted to do that is to get Democrats on the same page or at least try to do that, to try to bridge the differences between Democrats in the House and the Senate.

He effectively endorsed most of what was in the Senate bill and made some changes to it. And that means it might be a tough sell among House Democrats.

Let me put up for you a quote from the House Speaker, Nancy Pelosi.

She said, "I look forward to reviewing it with House members and then joining the president and Republican leadership at the Blair House meeting on Thursday."

Not exactly an endorsement there. I'm told by aides that she is leaving the door open, maybe leaving some wiggle room for the president on Thursday. But also, she is going to go, Ali, tonight to meet with her fellow Democrats in the House, and to try to figure out if there is really the stomach among Democrats to do this given the political climate and given the fact that at least Democrats in the House will have to make some serious concessions in order to try to push this through.

VELSHI: And that's a little more than half the problem. The other part of it is whether or not Republicans are at all interested in signing on to this.

What do you think about that? Has there been reaction yet from Republicans?

BASH: Oh, yes. There has been big-time reaction, and it is sizzling, scathing in what we are seeing ahead of this summit, in particular in reaction to the Obama plan.

Let's start with the House Republican leader, Ali, John Boehner. He said, "The president has crippled the credibility of this week's summit by proposing the same massive government takeover of health care based on a partisan bill the American people have already rejected."

Let's go on to the Senate Republican leader.

He said, "Congress can get started much faster if Democrats in Washington will just stop making bad partisan bills even bigger and start working with the Republicans on bipartisan reform."

So there you see the Republicans. I'm told by their aides they are still planning to go. There is even a staff meeting to try to start to work out the logistics for Thursday's summit later today. But you see they are not mincing any words.

They're saying that they believe that this is a sham. And the fact that the president put out a bill that was almost entirely based on the Democratic bills already going through Congress, and did make it a little bit bigger in terms of the price tag, they say, what's the point? We'll see what happens. Things could change when the cameras start rolling.

VELSHI: Yes. Between now and Thursday is a lot of time in Washington. Let's see how it goes.

Thanks for bringing us up to speed on that, Dana.

BASH: Thanks, Ali.

VELSHI: We'll be covering this all week for you, by the way, the lead-up to the health care summit.

All right. Let's bring you up to date with what I've got "On the Rundown" right now.

We're keeping a close eye on a high-profile terror case in New York City. A government source tells CNN that Najibullah Zazi is due in court sometime this hour and he's expected to plead guilty in an alleged plot to blow up bombs in New York subways.

Also "On the Rundown," Toyota is facing new allegations and new subpoenas. Internal memos show that Toyota staffers boasted about saving money by negotiating a more limited recall with the government. They called it "Wins for Toyota."

Also, the carmaker has been hit with two subpoenas over its brake and gas pedal problems, one from a federal grand jury, the other from government regulators.

And in Washington, President Obama unveils his own health care reform plan. This is what Dana was talking about. It would let the government block insurance company rate hikes it considers over the top.

All right. All this week we are talking about "Broken Government" here on CNN. Is it broken? How broken is it? And specifically, what can be done to fix it?

Let's talk about why we're focusing on "Broken Government" this week. This is coming directly from you.

This past week, we took a poll on broken government. Let's break down the results for you.

We were asked -- we asked if government is broken. Eighty-six percent of Americans surveyed said yes, they believe government is broken. Fourteen percent said no, they don't believe government is broken.

This isn't entirely new, but the numbers are a little tougher.

Let's take a look at the same poll taken back in 2006. Seventy- eight percent then said government is broken. Twenty-two percent said it's not.

Also got a number of comments on my Facebook page about broken government.

Rolando offers this: "These career politicians are out of touch with their constituents and are only concerned about getting re- elected and keeping the lobbyists happy. We should clean House and bring in new blood."

This reflects a recent poll we did which showed two-thirds of Americans think that sitting Congress members should be thrown out and new people elected.

John says on Facebook, "The proper fix has always been the vote and a citizenry exercising that right."

Michael says, "I know I can say for myself that I'm tired of excuses for things not getting done."

And Kim says, "The government's not broken. Schools are open, people are getting Social Security checks, snow is cleared, cops are busting people for speeding."

"Is the Congress in gridlock? Yes."

"Is it polarized? Yes."

"Are they corrupted by money? Yes."

"Is any of this new? No."

Let's bring in our panel: Roland Martin, Christine Romans, Karen Tumulty and Bay Buchanan join us now to discuss whether or not it's broken.

We had this conversation with Christine Romans an hour ago.

Bay, I want to bring you in.

We're still -- we're going to be doing this all week on all our shows. So I want to get to the bottom of it.

You have seen a lot of politics in this country. Is it more broken now than before, or are people just more dug in? What exactly is the problem we're facing right now?

BAY BUCHANAN, FORMER NATIONAL TREASURER: Well, I think what's happened is the American people themselves have really come alive and said no more, no more. And they are so involved in the process that they have shaken up Washington and really caused a freeze on Washington itself.

What's amazing is that you have a president and a Democratic Party that is in charge of this town, with a huge majority in both the House and the Senate, and yet he can't go get through any of his policies. He can't get through the health care, he can't get cap and trade, he can't get through immigration reform.

And why? It's because that other group, the American people, have said no more, that's not where we want to go. And so, as a result, everything is frozen in place.

VELSHI: Karen, let me ask you this.

ROLAND MARTIN, CNN CONTRIBUTOR: No, they haven't.

VELSHI: Hang on, Roland. I know where you're going. I'm coming to you. I won't miss you.

Isn't that what government is supposed to do? Isn't that why we have a Senate that can block legislation?

Do you think it's broken or do you think government is working right now?

KAREN TUMULTY, NATIONAL POLITICAL CORRESPONDENT, "TIME": Well, I think it's definitely not working right now.

You know, when I first came to Washington, it was the 1980s. And one of my formative experiences as a reporter was covering the 1986 tax bill. It was a huge piece of legislation.

Incredibly, you know, interest groups were at each other's throats, and yet we saw this extraordinary working relationship between a Republican president, Ronald Reagan, a Republican Senate Finance Committee chairman, Bob Packwood, and a Democratic House Ways and Means chairman, Dan Rostenkowski. I can't even imagine this kind of working relationship ever developing in the system as we see it now.

VELSHI: Roland?

MARTIN: You know I'm laughing because, let's see, Bob Packwood resigned for sexual harassment; Dan Rostenkowski went to jail because of corruption. But, hey, they were great people who came together and got things done. Ali, you know what? Bay talked about the American people stopping this. Now, first of all, you have a segment of folks there. But look at the numbers in terms of turnout. That's the real issue.

Even when you look at New Jersey and Virginia and Massachusetts, when you look at the mayoral elections in Atlanta, in Houston, in Greenville, North Carolina, in New York, you still only have 18, 19, 20, 21 percent of people turning out. The fundamental problem we're facing is not necessarily just the government being broken, but people being broken, people not standing up and a rising up in significant numbers.

We have too many Americans who are whiners and complainers. When you look at the re-election rate of members of Congress, it is at 90 to 95 percent.

So how can the American people say, oh, they are not doing their job when the American people keep sending them back every two years?

VELSHI: Christine, one of the problems that we are facing -- go ahead. Go Christine.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: You know, Roland, I just think people see a fundamental unfairness though. They look and they see their elected officials. They believe or they listen to what they say on the campaign trail.

They may have good ideas and good positions, and they get to Washington and there is a reality about how Washington works. And some of these good people are just swallowed up by the process.

I mean, look over the past couple of years. Is there any -- I mean, 86 percent of people say government is broken. They have seen banks rewarded for bringing us to the brink of disaster after being bailed out by taxpayers. They see credit card laws that had to be changed last May that didn't go into effect until today. You know, I mean, people are kind of sick and tired about the way it works.

I'm not surprised about that 86 percent number, but I will tell you, Ali, that there have been times over the past 10, 15, 20 years when we have also said look, the government is really broken. And when it gets to be so bad like this, there is always a shift. Things swing the other direction, and that's sort of the political process. Isn't it?

VELSHI: OK.

When we come back, we're going to take a look at some very specific examples of where that shift has taken place, who's done it in the past. If you're the president of the United States, what you have to do, listening to all this advice, what you actually have to do to turn things around.

Stay with us. Presidential historian Nick Ragone will be with us in just a minute. We'll continue this conversation with our team about broken government and how to fix it. (COMMERCIAL BREAK)

VELSHI: All right. I want to continue our discussion on broken government. Is it broken? And if so, how do you fix it?

And today we're looking at it through the perspective of the president. All we'll change perspectives. We'll look at it through Congress, through political parties, and through the eyes of those who have actually succeeded in being bipartisan in their jurisdictions.

But right now we are talking about the president, so I want to bring in Nick Ragone. He's a senior public relations executive in New York. He's also the author of several books about politics and government and presidents.

And I want to say to you, Nick, our guests, our contributors here, Roland, Christine, Bay and Karen, have all referred to times when things have been better in terms of change. They have been tough, they have been partisan, but there have been presidents. they cited Ronald Reagan, you cited Bill Clinton having changed in becoming more bipartisan. You've even cited Richard Nixon.

If you are President Obama, you clearly know all of this. You know that times are tough and things are very bipartisan in Washington.

What is the president doing well and what does he have to do more of?

NICK RAGONE, ATTORNEY AND PR EXECUTIVE: Well, first of all, I agree with Karen's point earlier. I know Roland made light of it a little bit, but the fact that Rostenkowski and Packwood came together to pass that legislation, historically that's been the case.

I mean, divided government doesn't mean it's broken government. Parties have come together.

What's different now, it seems like, the sort of relationships which historically have acted as a sort of lubricant to allow the different parties to work together just doesn't seem to be there anymore. And I know the president made an effort to reach out to Republicans earlier in his term and sort of create those relationships, but the atmosphere just seems to be so poisonous, that I'm not sure that even works anymore.

The only other option really for the president, historically presidents have done their best when they have gone right to the people. They go to the states and the districts that really matter, those congressional and senators that really matter, and lobby the people directly and try to make change that way. And I think it might be time for the president to go about doing that, because I'm not sure that -- you know, to Karen's earlier point, I'm not sure it's going to get any more civil.

VELSHI: All right. Let's ask Bay Buchanan about this. Bay, Nick outlined sort of two views. One, go right to the people, get really aggressive about that. Or, number two, go to -- you know, compromise more in Washington with other people.

What do you think about that?

BUCHANAN: Well, I think there is no question that he has to go to the people. That is what's holding this up.

He is trying, Washington is trying to force policies, jam them down the throats of the American people. They have told them time and again, we do not want this health care bill. We don't want it.

They are doing every way possible to send the message to Washington. And he keeps saying, well, I've got a good idea -- we're going to vote on it again, we're going to bring it back under the table.

He needs to say, listen, I got your message, I see what you mean. You want me to focus on jobs. You want an earmark-free jobs bill that will just create jobs, and that's all.

A clean bill, that's what they want. Or they want tax cuts that will take the burden off the American people and their businesses so they can start to thrive there and take care of their own families. But he can't keep jamming things.

It's the arrogance of Washington that I believe is the problem. And as a result of that, the people don't trust those in Washington.

VELSHI: Roland?

MARTIN: No, Ali, the problem that you just heard, a clearly partisan -- the issue is the House has actually passed 200 bills. Those bills have not gotten through the Senate. None of these bills are crossing the president's desk.

Now, Bay keeps saying they don't want it, but what the hell were they voting for when he was elected? Health care was a primary issue of his campaign.

Now, the problem though is not even for the president Republicans. It's Democrats.

You have an 18-vote majority in the Senate, you have a 78-vote majority in the House. So, really, what happens is, clearly, the American people put a Democratic president in the White House. They put Democrats in the House and Senate. Maybe the problem is Democrats need a little blue pill as political Viagra to learn how to lead, because right now they're impotent. That's the problem we're facing.

VELSHI: Karen, let me ask you this. Karen, because when we talk to you and we talk to Nick, you're citing previous times when a president reached across the aisle to other people.

Why does this Democratic president -- or until now, in the last year, why has this Democratic president had to reach across the aisle when he has got majorities in both houses?

TUMULTY: Well, I think that there are two jobs that the president and only the president can do. One is to bring some clarity as to precisely what his goals are. And I think this health care bill is a good example. I mean, people didn't know, is this a bill to cut costs, is it a bill to cover the uninsured?

MARTIN: Right.

TUMULTY: These are actually some conflicting goals.

And the other thing that only the president can do is to build consensus. And this also has failed to happen at this point.

What the president cannot do, if he's not LBJ, is to essentially function as a chief legislative strategist. And that is where this whole thing has gotten bogged down. For the last six months, the story has been nothing but process. And the American public, it's hard to stomach.

(CROSSTALK)

VELSHI: I think that's true. That applies in court cases. It applies in the economy.

MARTIN: Because they're not reading.

VELSHI: Christine, one of the problems we've got, if you look at our polls, the biggest issue out there remains the economy. Within that, the biggest issue remains jobs. And coming up fast is the issue of debt and deficit.

How is it in a government like this, where we are focused on process and quick changes and development, does this government tackle these longer-term, bigger issues that it has to?

ROMANS: And look, it needs more consensus, more bipartisanship, and even more pain from the American people to solve these longer-term problems. Ironically, the short-term problems we're trying to solve are only going to make our long-term problems worse. And the backdrop of all of this is, as you know, are jobs.

As long as people in this country don't have flexibility in their job, don't have an economy that's delivering for them the ability to get a job or move up in their job, there's going to be discontent. As long as there's discontent, they're still going to think the government is broken. And that's going to be, you know, wind at the face of the president and Congress trying to tackle any of these big issues.

VELSHI: Bay, your final thought on that?

BUCHANAN: Yes. He can do plenty. The president can do plenty.

One, Social Security and those entitlements. Get a blue-ribbon panel, Democrats and Republicans, just like Reagan did, and say it's an up-or-down vote when it goes to the Senate. And get something done so the American people can see, OK, they've got some guts back there.

Secondly, if he's serious about jobs, take the reins of power here. Stop acting like a spokesman for the Democratic philosophy.

Look what he could -- eight million American jobs are held by illegal immigrants. He can solve that in six months. How about the foreign workers coming into this country? Every single month, tens of thousands of foreign workers given working visas. He can put a freeze on that.

VELSHI: Karen, is he...

BUCHANAN: He can save 10 percent across the board...

(CROSSTALK)

MARTIN: I'm sorry, Ali.

Bay, you want a blue-ribbon panel with Social Security when the Republicans wanted a deficit reduction panel, and then when he proposed it they still said no? Now, come on.

VELSHI: But I think Bay is talking about -- hang on.

(CROSSTALK)

MARTIN: Let's just be honest. Republicans still want to say no.

VELSHI: I think Bay's talking about -- Bay, if I'm not mistaken, you are talking about what the president has done with the deficit. Go outside Congress if Congress isn't fixing this.

BUCHANAN: Yes. Absolutely go out. Take charge.

I'm with you, Roland. Look, if Republicans won't work with you and you're the president, get it done. And the American people will respond to that.

Move aside from this partisanship. He could tell every agency -- no matter what, every agency, 10 percent across the board cut this year, except for ones that I personally exempt because it's defense or something like that.

And show the American people, I'm in charge. I'm putting all this nonsense aside. I'm getting what I can get done without Congress. Then I'm going to the American people and telling them, you better talk to...

(CROSSTALK)

VELSHI: But you're two in a room with the president. We'll get this all solved.

Nick, I want to ask you, who's done this best? You've studied president after president. You've studied presidents most people didn't even know were presidents. If President Obama is looking to take a lesson, who should he look to?

RAGONE: Well, look, I think Bay hit it with Ronald Reagan. In the early '80s, I mean, he went to the people, he went to southern Democrats, boll weevils, we call them. He got his tax cuts through in a very hostile Democratic Congress.

Look, the other example is, look at the Republicans of 1994. The Contract with America worked because it was very clear, it was very concise, it was very prescriptive. And they went to the people and campaigned on it very simply. And I think if the president was smart, he would take a page out of that book and come up with a few simple things, very understandable, outline them and go right to the people. Go over the Congress and go right to the people and get them done.

VELSHI: All right, guys.

MARTIN: Nick, you didn't get the memo? Republicans use bumper stickers, Democrats use paragraphs. That's part of the problem.

VELSHI: Roland's always on, by the way. The issue is whether we just turn the volume on or not. He's always going.

MARTIN: That's right.

VELSHI: Listen, what a fantastic discussion.

Nick, thanks for joining us. We appreciate your perspective from a historical perspective.

Roland, Bay, Karen and Christine will be joining us all this week talking about broken government. And remember, our focus here is what to do about it. We're not just talking about broken government, we're talking about how to fix it all week long, right here on CNN.

When we come back, we'll continue our coverage.

Stay with us. You're watching CNN.

(COMMERCIAL BREAK)

VELSHI: All right. Checking the headlines.

In southern Afghanistan, allied forces are saying sorry and starting an investigation after a NATO air strike reportedly killed 27 civilians. A senior U.S. source says NATO believed it was targeting Taliban insurgents. The Afghan cabinet calls the air strike unjustified.

And it was rough while it lasted, but a strike by Lufthansa airline pilots has just been suspended until March the 9th. This was day one of what was billed as a four-day walkout and hundreds of flights were canceled. Flights on Lufthansa's partner airlines, United, Continental and others, were messed up by the strike, too. Strike talk is back on the table at British Airways, however. Union leaders say about 80 percent of cabin crew members want to walk out over job conditions and staffing issues. Nothing will be decided until Thursday, when union members will meet.

We'll keep you posted. You might remember these guys were going to strike over the holidays, but the airline got a court injunction to stop it.

And Toyota is facing new allegations and new subpoenas. Internal memos show Toyota staffers boasted about saving money by negotiating a more limited recall with the government. They called it "Wins for Toyota."

Also, the carmaker has been hit with two subpoenas over its brake and gas pedal problems. One from a federal grand jury, the other from government regulators.

When we come back, we are going to go off the radar with Chad Myers. He's got the first hint of why there could be a late start to the hurricane season this year. You'll want to hear it.

(COMMERCIAL BREAK)

(WEATHER REPORT)

VELSHI: We're going to talk a little about history. It's 100 years for the NAACP in this country. Believe it or not, that organization had a few glass ceilings to break, and they've broken two of them.

We're going to tell you about some history at the NAACP when we come back.

(COMMERCIAL BREAK)

VELSHI: It's February and we're celebrating Black History Month here at CNN. The National Association for the Advancement of Colored People, known as the NAACP, was founded this month back in 1909. It's the nation's oldest, largest and most widely recognized grassroots- based civil rights organization. There are more than half a million members and supporters throughout the United States and worldwide. The mission of the organization is to ensure the political, educational, social and economic equality of rights of all people and to eliminate racial and racial discrimination.

Now, a 44-year-old healthcare executive, Roslyn Brock, has been tapped to chair the NAACP. She is both the youngest person ever to hold the position and the first woman to hold the position. One of her goals in leading one of the oldest civil rights groups in the country is to try and bring in some new blood.

Listen to it in her words.

(BEGIN VIDEO CLIP) ROSLYN BROCK, NEWLY APPOINTED CHAIRWOMAN, NAACP: My goal and my mission as chairman of the board of the NAACP is to ensure our policies, our programs and our politics are relevant to a new generation of human and civil rights advocates.

I want to be able to get the word out that the NAACP is alive and well and that we are a multicultural, multiracial organization. And it is our goal to extend a broader net to encourage all Americans who believe in life, liberty and the pursuit of happiness to come and join us.

(END VIDEO CLIP)

VELSHI: Brock is a former NAACP vice chair. She fills a seat that was left vacant by Julian Bond, he's a renowned civil rights leader who is stepping down after 10 years in the post.

And in London, the Brits have held their version of the Oscars, they call them the Baftas. The intimate and intense war drama "The Hurt Locker" came out on top beating the blockbuster "Avatar" to take six prizes, including Best Picture. Katherine Bigelow got Best Director, winning out over "Avatar" director James Cameron who, by the way, is her ex-husband. "The Hurt Locker" depicts a bomb disposal squad in Iraq.

Battle on the ice, by the way. The U.S. men show Canadians how to play their own game. We'll check in with our man at the Winter Olympics when we come back.

(COMMERCIAL BREAK)

VELSHI: Let's get some good in-depth coverage into the Vancouver Games right now. Mark McKay is there for us, for CNN.

Mark, let's first of all talk about that win last night. The U.S. win over the Canadians in men's hockey.

MARK MCKAY, CNN CORRESPONDENT: Well, many would call it -- at least Americanwise -- a mini-miracle on ice, Ali; Canadians would call it a disaster.

But since we are speaking of miracles on ice, you know, Ali, 30 years ago today was the United States up against the Soviet Union in Lake Placid, New York. The Winter Games of 1980, the U.S. squad had virtually no change going into this match. The United States wins it. They beat the Soviet Union, goes on to win gold. It is "The Miracle on Ice."

Now, is it a miracle here in Canada? Well, a mini miracle. The United States hasn't won anything yet. They've yet to win a gold, silver or bronze in men's hockey, but they certainly got a big confidence boost beating Canada on home soil 5-3. Brian Rafalski with two goals in this match on Sunday night. Ryan Miller with 42 saves for Team USA. The United States goes in as the top seed in the quarterfinal round. Canada's hockey gold, that road hit a pothole last night. It is going to be rough the rest of the way. Team Canada meets Germany on Tuesday. They could very well meet Russia before they even get to the medal round.

Women's hockey, the United States doing well in that event as well, Ali. They will take on Sweden later today in a semifinal match. Of note, Mark Johnson is the head coach of the U.S. Women's team. He was a member of "The Miracle of Ice" squad in 1980.

VELSHI: That's right. You had a great story on that. We'll be watching that carefully. Also, ice dancing finals tonight.

MCKAY: That's right. Pacific Coliseum -- it all comes down to this, the finals in ice dancing. And Canada has a chance to win a gold there, but so does the United States. They have a chance to medal. The Canadian pair of Tessa Virtue and Scott Moir on top going into the free skate tonight. The United States very much in medal contention. In fact, Meryl Davis and Charlie White currently sit in the silver medal spot. Ben Agosto and Tanith Belbin just off the podium in fourth.

So that's all the skate for tonight, Ali.

VELSHI: I can barely walk on ice, never mind do those kind of moves. Mark, great to have you there. You're having a good time. We'll check in with you, we'll keep checking in with you.

Mark McKay in Vancouver covering the Winter Games for us.

Checking in on top stories.

In Afghanistan, fallout from a NATO air strike yesterday that killed 27 civilians, among them, women and children. U.S. officials say they had specific intelligence that a Taliban convoy was heading toward coalition forces. NATO has ordered an investigation.

Former "Growing Pains" actor Andrew Koenig is missing. A family statement says he missed his flight home to L.A. from Vancouver. The statement also suggests Koenig was suffering from depression at the time of his disappearance.

And President Obama today put forward his own blueprint for healthcare reform. The 10-year compromise would cost nearly $1 trillion, it would allow the government to deny or rollback huge increases in insurance premiums. This is all ahead of healthcare summit he's holding with republicans and democrats on Thursday.

And in New York, terror suspect Najibullah Zazi was scheduled to be in court this hour. A government source tells us he's expected to plead guilty to an alleged bomb plot. We're also hearing that Attorney General Eric Holder plans to hold a news conference on the case from the Justice Department at 5:00 Eastern. We'll watch for any developments.

Well, times are tough, but so are Texans. We'll head out to Austin in just a second for today's "Building Up America Report." The CNN Express is there, we'll check in with them

(COMMERCIAL BREAK)

(WEATHER REPORT)

VELSHI: Thank you so much, Chad.

He's talking about Texas cause Austin, Texas is where our CNN Express is. Tom Foreman with the CNN Express and "Building Up America," a series that we're going to be bringing to you regularly, talking about how people are dealing with this economy and trying to change things for themselves.

Tom, you're in my home away from home -- the bus, I mean, not Austin.

TOM FOREMAN, CNN CORRESPONDENT: They're all asking about you. They all keep asking about you here, Ali. They keep saying, where's the bald guy with the cowboy hat.

VELSHI: Yes, that would be me.

FOREMAN: I think they're talking about Dick Cheney.

(LAUGHTER)

VELSHI: How's it going out there?

FOREMAN: This really is a great place to be, Ali. I'll tell you why, I mean, you know this, you're a money guy. The simple truth is Texas has really done some pretty remarkable things during the course of this recession to not do as badly as other places, and Austin is a place that's done very, very well. Some people are forecasting that this is one of the regions that will lead back as the whole nation tries to come out of this recession. They know how to build up America here and if you ride around town you can easily see why.

Take a look.

(BEGIN VIDEOTAPE)

FOREMAN (voice-over): At Ginny's Little Longhorn Saloon, the crowd is always happy when Dale Watson is on the bandstand. And they should be, not only is he a bonafide country music legend who lives here, but also their community is building up its economy even while the recession is holding much of the country down.

UNIDENTIFIED FEMALE: I don't feel like we have felt it as much.

FOREMAN: Dale's fans have an idea why.

UNIDENTIFIED MALE: A lot of different types of businesses here.

UNIDENTIFIED FEMALE: People support their local businesses, small businesses. RUSSELL WILLIAMS, ECONOMICS STUDENT: Businesses want to come here because it's a tax haven. And that creates a growth during these periods of recession.

FOREMAN: With a strong base of steady jobs and government, higher education and the private sector -- this is, after all, home to Dell Computers -- Austin is hanging tougher. While nationwide unemployment is around 10 percent, Austin's is closer to seven. While foreclosures continue to rock many communities, real estate analysts are predicting Austin will be one of the country's strongest markets this year.

UNIDENTIFIED MALE: Number one meat chili was Gold Medal Chili.

FOREMAN: And while in many places gloom has prevailed, here in even something as simple as the Annual Chili Cook-Off at the Jewish Community Center, you can find people pulling together in the face of adversity, across religious, ethnic and economic lines.

ROBERT CULLICK, AUSTIN RESIDENT: There's 1,000 reasons to be separate, right, and to separate ourselves into disparate groups. And the great thing about this community is that we're finding all sorts of reasons to be together.

FOREMAN: Back as Ginny's, that's a sentiment Dale Watson shares.

(on camera): It's not that the recession hasn't hit here. It has hit here, but the town has reacted to it differently.

DALE WATSON, MUSICIAN: I'll give you that. Yes. It definitely has hit here, but we don't feel it as much because I think we support local businesses more here and that goes from Dell Computers to Joe's Coffee Shop downtown.

FOREMAN (voice-over): Big and small, it's all connected, and that is part of what has kept Austin swinging.

(END VIDEOTAPE)

FOREMAN: We're going to be looking into the details of all of that this week, Ali. But I have to tell you, I think there's something more to it. I want to bring up a picture from the past here. Many people say like the swallows returning to Capistrano, this, the bald man in the cowboy hat, was a harbinger of better times.

(CROSSTALK)

VELSHI: Right where you -- that's in Austin. The CNN Express seems to like Austin a lot. We cross through there a lot. A few years ago I did a big long trip there prior to the primaries. That was the map that we did when we were there.

But you're right, your story touches on the fact that Austin is a microcosm of all of these things -- education, technology, a lower unemployment rate and throw in a little bit of live music and some excellent food, you're kind of set. Speaking of excellent food, Tom, you know, I was invited to judge that kosher chili cook-off about a year ago when I was there. The schedule didn't allow for it. Looks like --

FOREMAN: They were disappointed.

VELSHI: -- looks like, yes, you're the guy now. You're the kosher chili expert.

FOREMAN: You let them down in a big way. They have great big "No Ali" signs with a cross through it now because you didn't show up. But me, I'm a hero.

VELSHI: What's the -- what's the mood now? Texas is one of these places unemployment rate is lower, people are moving there. Home prices in many parts of Texas are actually increasing. It's largely thought of as a prosperous place. In the midst of the broken government and Americans thinking everything is going to hell in a hand basket, what's your general sense of the economy from people you have talked to there?

FOREMAN: The general sense I have, Ali, I think you have hit the nail on the head. So many places you go, people just feel overwhelmed by all the bad news. You don't sense that here. You have -- people here seem to be a little bit more like the nation was probably three or four years ago where people were aware that things weren't going great, but there is still a sense of, well, it's not going to be that bad. We'll still do well and we'll keep moving ahead.

And people here seem to have a greater sense of hope about the fact that, yes, they have to tighten their belts a little bit, they have to be careful, but that they can move forward. If they have to sell their house, they will be able to sell it. If they lose a job, they'll be able to find another one. It may take a little longer than usual, but they don't seem to have the hopelessness that some areas have.

And it comes back to exactly what you said, Ali. Many people here talk about the broad base of business they have here. It's not all about cars, for example, or all about the insurance industry. It's about a lot of different things and many people say there is a favorable tax environment here for these times. Now there are people who have complaints about it for other purposes, but in these times they're saying the tax environment -- no income tax, state income tax -- is a big thing that encourages business to move here and makes people want to live here.

VELSHI: OK, so the point of what you are doing this week is in conjunction with the rest of our coverage quite separately on fixing broken government. You're talking rebuilding, you're talking about ideas, and you're going to dig really deep into why Austin works and by extension why a lot of Texas works. Tom, you will be with us every day. Give the bus a big hug for me. I miss it, but you're carrying the responsibility well.

Tom Foreman on the CNN Express, "Building Up America" for us. Listen, brand new credit card rules -- some may call them safeguards -- are in effect right now. They have come into effect today. Poppy Harlow is standing by at CNNMoney. She's got the things you need to know about the new credit card rules when we come back.

(COMMERCIAL BREAK)

VELSHI: We cover stories, we wonder how many people that story affects. Sometimes it doesn't affect you, but you just want to know about it. But with respect to the credit card changes that take effect today, it really does affect many of you.

There are protections coming in to crack down on marketing to college kids, but there might be some new fees as well. This isn't all good news. Let's bring in Poppy Harlow from CNNMoney.com, who has been covering this very closely.

Poppy, what do you got?

POPPY HARLOW, CNNMONEY.COM: Ali, I'm so glad you mentioned the new fees, because that's really what's happening here. Since this legislation passed in May, there were a matter of months before it kicked in, because it didn't kick in until today, and you've been getting those statements from the banks saying, oh, we're adding on this fee or we're upping this interest rate if you want to accept it. What is expected, Ali, is that there will be over $86 billion that banks will get as a result of those fees from credit cards this year. That's up more than $7 billion from a year ago.

That said, you should be happy about what's happening today. Let's go through some of the main, main protections you now have. They cannot increase the interest rate on your existing balance. They cannot make that higher, you can pay it off at your current rate.

Another thing they can't do is they can't increase your rate without giving you 45 days' notice. So you have a month and a half to turn down that rate if you don't want the increase. This is supposed to, according to Pew, according to their credit card studies, save consumers $10 billion a year annually. That is good news.

However if you are a college student, it's not going to be as easy to get a credit card because this legislation focuses in on college students. Let's take a look at what it does for people that are 21 and under. First of all, credit card companies can't market on your campus. They can't go anywhere near your campus and give out the T-shirt or the teddy bear or the water bottle to try to get you to sign up for a credit card.

Also, if you're going to sign up and you're under 21, you have to have a cosigner that has good credit or you have to prove through your bank account that you can actually pay off your balance.

And, Ali, what that all adds up to, is it's harder to get a credit card, but you know what? Eighty-four percent of college students have a credit card, their average balance, Ali, is over $3,000. That is why we're seeing this change being made. It makes sense, Ali.

VELSHI: All right, there are some cards and people for whom these new protections will not apply?

HARLOW: That's exactly right. This all banks on something called the Truth in Lending Act, and what this legislation does is it adds on to that. Well, that only applied to consumer credit, so there are loopholes here. Let's take a look at them.

First of all, corporate cards are not going to be part of this at all. Another person that has to watch out is anyone that is two or three months late on their payments. You're not going to be protected because you're late on your payments by that amount of time. And also, Ali, you know this well, any risky borrowers. You have bad credit? Well, you know what? This is when the credit card companies are more likely to come in and say, forget it. We're not going to give you any more credit.

And I also think, Ali, that this has not gotten a lot of attention, but guess what? There's not a cap on interest rates for credit cards. So you could get a credit card with a 40 percent interest rate. I talked to Senator Menendez of New Jersey today, they were holding a press conference outside talking about this. And he said, well, we wanted to get that through, but we just couldn't get it through Congress. But that's something to keep an eye out for, I think, very much so, when you talk about the fact that banks can charges any interest rate they want.

(CROSSTALK)

VELSHI: Yes, I saw something the other day with 70 percent or 79 percent interest rate?

HARLOW: Yes, unbelievable.

VELSHI: So again, doesn't save you if you don't handle your credit well.

Poppy, great to see you as always. Poppy Harlow at CNNMoney.com, you can watch her all the time on all the big stories.

When we come back, I'm going to tell you a little but more. I'm going to give you some thoughts on this story we covered, the Philadelphia-area school district that gave laptops to students with webcams, and may have been looking into what they were doing on their free time.

Stay with us. I'll have more on that when we come back.

(COMMERCIAL BREAK)

VELSHI: Almost time for "RICK'S LIST" so it's time for me to wrap things up with "The X-Y-Z of It" today.

Last hour we told you about the Pennsylvania-area school district that's being sued and investigated by the FBI, the Lower Marion School District. One high school student said administrators spied on him using the webcam and security software on his school-issued laptop. A superintendent says, no way, they only use the software to find stolen computers, although they did it 42 times.

He does admit they should have told parents and kids this technology was loaded on the laptops that they were taking into their homes. Really? You think? The feds are breathing down your neck about potential wiretapping crimes and guys like me are on TV talking about it and it all could have been avoided with a note home and one of those permission slips you guys love so much.

Was a crime committed here? I don't know, and when it comes to the Internet privacy, this one isn't the end of the world. But I do give the school district a failing grade on the old common sense test. Send a note home. And for those of you with those little laptops, put a piece of tape over the camera.

Let's give it over to "RICK'S LIST."