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How Can Broken Government Be Fixed?; Broken Government and Possible Solutions; Another Storm to Hit Northeast; Issa on Toyota Hearings

Aired February 24, 2010 - 12:58   ET

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

TONY HARRIS, CNN ANCHOR: And let's take you back to the Toyota hearing before the House Oversight Committee.

(JOINED IN PROGRESS)

UNIDENTIFIED MALE: -- I trust you. I may not trust everybody that I don't know, that I haven't seen, and I -- it goes a lot further, I think, with a lot of us, to hear, yes, that's something we need to guard against. That's something we need to be absolutely sure of. Because I can tell you, in other areas, our government does favor areas -- individuals and others -- with whom investments are made. That's just the bottom line. That's how governments work. That's human nature.

So I guess what I'm asking for is just a little recognition that that's something that we ought to be concerned about and we are.

RAY LAHOOD, U.S. SECRETARY OF TRANSPORTATION: I recognize that.

UNIDENTIFIED MALE: Oh, thank you.

REP. DARRELL ISSA (R-CA), RANKING MEMBER, OVERSIGHT COMMITTEE: Would the gentleman yield?

UNIDENTIFIED MALE: I would yield.

ISSA: Thank you.

Secretary, you earlier did note the investigation of the Cobalt that has been opened. In your opening remarks, first set of remarks, you talked about the members of NHTSA who went to Japan and shortcut an investigation by saving time and money and getting a voluntary cooperation early on, based on the end of '09 trip to Tokyo.

Is that right?

LAHOOD: Yes.

ISSA: So, we own 60 percent of General Motors. The Cobalt has had far more complaints on a very reminiscently similar problem to where you have a recall on the Corolla. Why aren't we getting that level -- or let me rephrase that. Are we doing this investigation in the slow road because General Motors is not willing to do what Toyota was willing to do when your people went to them last year? LAHOOD: Well, repeat the question.

ISSA: Well, wouldn't it save us money if General Motors would do what Toyota did and not make

UNIDENTIFIED MALE: ... willing to do what Toyota was willing to do when your people went to them last year?

LAHOOD: Well, repeat the question.

UNIDENTIFIED MALE: Well, wouldn't it save us money if General Motors would do what Toyota did and not make you go through the long investigation process on a car which has had far greater complaints and should be under the same scrutiny?

LAHOOD: Our job is to do an investigation. If we can get cooperation, we get it. If we can't, we use every tool in our toolbox to get to the bottom line, which is the safety of these cars.

UNIDENTIFIED MALE: How about our majority interest in General Motors? We own 60 percent of them.

LAHOOD: Ask me a question about it.

UNIDENTIFIED MALE: Well, are you willing -- are you willing to ask General Motors to cooperate as fully as Toyota did with the Corolla on a car which has had more complaints for a longer period of time?

LAHOOD: Yes.

UNIDENTIFIED MALE: Thank you.

UNIDENTIFIED MALE: Gentleman's time has expired. I now yield five minutes to the gentleman from Illinois, Congressman Davis.

UNIDENTIFIED MALE: Thank you very much, Mr. Chairman, and, Mr. Secretary, it's good to see you. It's good to see you in this role. And I want to commend you for the stellar job that you've been doing since having been appointed and confirmed.

Let me ask you, as you are aware, some believe that the uncontrollable, sudden acceleration problems are not being caused by pedal entrapment or sticky pedals, but by an electrical malfunction, either a software problem or electrical interference with some component of Toyota's computer systems. It is my...

ALI VELSHI, HOST: All right, I'm Ali Velshi. We've been watching the testimony of Transportation Secretary Ray LaHood at Congress. We're going to stay on top of this. We're also expecting the testimony of the president of Toyota, very shortly. And we will be on top of this.

I'm going to be with you for the next two hours today and every weekday. I'm going to take every important topic we cover and break it down for you, including this one. I'm going to try and give you a level of detail that's going to help you make important decisions about your voting, your spending, your safety, and security, and your security takes top billing today.

Here's what I've got on the rundown. From Tokyo to Capitol Hill, to Wall Street, middle America, all eyes are on Toyota right now. The top man, getting ready to testify to Congress, facing a barrage of questions. What did Toyota know? When did they know it? Do they have a handle on the problem? Do they even realize the full scope of the problem? And what if their fix for it doesn't work? We're checking under the hood.

Also on the rundown: President Obama has a plan to make America more competitive, and he's breaking it down this hour, to business leaders. But talk is one thing. Action is another. I want to know what you want to know. How is he going to make it work?

Also, if you want to know more about the president or Toyota, what do you do? You Google them. Well, today I'm going to "Google" Google. It's making all kind of waves outside the virtual world. I'm talking to the CEO live. May not be exactly what you think I'm talking about.

One of the things I want to talk to him about is something we've been paying a lot of attention to all week here on CNN, "Broken Government." We want real solutions. We want solutions from you, and we've invited you to do that through our submissions on Facebook.

CNN viewers voted in a poll, saying overwhelmingly that government is broken but that it can be fixed. And one of the solutions that we want to -- want to get to is the CEO of Google. How does he make that company run? And what would he do if he were instructing or advising the U.S. government? We're looking at lots of different perspectives on "Broken Government."

I want to go to Facebook first of all, where we have been soliciting your very, very specific ideas about how you can fix what's broken in government. I want to start with this one. George says, very simply, "Take away their salaries and make them public servants again."

We got a bunch of these, but I want to talk about this with our panel, who we're bringing back. Christine Romans is in New York. Roland Martin is with us, and Bay Buchanan, as well. They've been with us every day talking about "Broken Government."

Bay, I want to -- I want to ask you about that one, right off the top. What -- what do you think about -- about the pay? Is this -- is this really part of the problem? I mean, in this world where what a lot of people think of are overpaid Wall Street executives, having been responsible for the financial crisis. Are we worried about how much members of Congress get paid? BAY BUCHANAN, CNN CONTRIBUTOR: No, I think the only reason there's a sentiment out there that they really aren't doing a job for whatever they're being paid, and, of course, the taxpayer pays them, so there's that discontent.

But I don't think the answer is their pay at all. I don't think it's excessive. And the last thing we need is for them to have to have part-time jobs, which would be a conflict of interest in many cases.

But I'll tell you where I think it's time, is dissent is to tighten the amount of time there in Washington: bring it here for two months, three months of voting, and you really tighten it. Then let them go back home and be part of their own community and find out what those guys are doing, how they really are tackling the problems.

VELSHI: Well, that's an interesting point. So I'm going to go -- before I go to Roland and Christine, I'm going to bring up Misty's comment, because it speaks to exactly what you just said.

Misty says -- we were asking for very specific suggestions about what you would do to fix government. You got to read this one. "How about doing a life swap, which could be would kind of like wife swap. They can come to my house, be a single parent to three great kids, cook, clean, be a full-time small business owner. They would be blown away if they would only see what frugal living can do for them."

Christine, you're one of these people who juggles work and a family, and -- and there is some of this sentiment that you guys out there -- and when I say "you guys," it could be Congress, it could be Wall Street -- you guys don't feel my pain and understand how I manage to get through life.

CHRISTINE ROMANS, CNN ANCHOR: That's why you're supposed to vote in people who you think represent your interests and have some experience in the real world.

I mean, look, Darrell Issa, we've been looking at him today. He's a Republican, the minority, the ranking member on that committee that we're watching for Toyota today. You know, he's a very wealthy man, self-made, a businessman. He made the Viper car alarms, you know. The guy who knows business, you know, and he's not just someone who's been a career politician.

There are a lot of other people sitting in there who have had jobs, who have -- there are mothers. There are parents. There are grandparents who are in Congress.

You know, look, I want to be clear here. It's not about the pay. I'm going to agree with Bay Buchanan. It's not about the pay. It's not that, you know, they need to live a frugal life. These people don't do it for the pay; they do it for the power. Maybe sometimes they do it at the beginning because they think they're going to change the world, but you know, then they get sucked up into the Washington beast. But this -- this -- I agree with Bay: this is not about -- this is not about pay. It's definitely about power. VELSHI: Roland, you're nodding your head in agreement. I don't understand how the three of you are agreeing on everything, but go ahead.

ROLAND MARTIN, CNN CONTRIBUTOR: Well, look, I mean, because, again, though, what the average person does not truly understand how people get sucked into a Washington, D.C., process. I mean, whether -- frankly, whether you're in politics, whether you're in media, people have no idea, really, how small this world is.

I think another example of how you can also change it is to demand that Congress actually live by the very rules they enact. It's amazing...

VELSHI: What do you mean by that? Tell me what you mean by that.

VELSHI: ... Congress will pass -- well, over the years Congress will pass civil rights statutes, but they will say, "Doesn't apply to us." They will actually make changes, where they're saying, "Well, fine, our health care, different from yours."

Congress has a very interesting way of making sure that their rules are different from our rules. And so -- look, Bay certainly knows about this here. And so what happens is, you set up a situation where, frankly, you're creating this different class of people who don't live the same way that we do, because they get special treatment, because they are members of Congress.

VELSHI: Bay.

BUCHANAN: You know, Ali, that's an excellent point Roland has. Just look at -- we're asking all of Americans to tighten their belts.

VELSHI: Right.

BUCHANAN: Cut staffs (ph). They've got layoffs. Why don't -- why don't we demand that Congress do the same? Cut some of that staff, require the congressmen to do more reading and finding out what's in those bills and not relying on staff members and do some, really, tightening of their belts. Let's see some real cuts in their budget, as America's suffering and doing the same.

VELSHI: I wonder if we can have -- we can have quizzes before you vote on a bill. You get quizzed on it so that you know what's actually in it. Hold on for a few minutes...

BUCHANAN: They won't pass that one.

VELSHI: Sure. We want to continue this discussion in just a second. We're talking about real solutions to "Broken Government." We're going to continue this conversation with our panel, and with others, with the CEO of Google, when we come back. Stay with us.

(COMMERCIAL BREAK) VELSHI: Continuing our coverage on "Broken Government." So many of you have responded that you think government is broken, stuck, frozen, whatever word you want to use, but so many Americans remain optimistic that we can actually fix things, we can actually improve things, we can make them more efficient.

So we want to talk to people who can actually give us some insight into how to do that. We picked the CEO of Google, Eric Schmidt. We want to ask him how he would change government to make it more efficient.

Our panel is still in New York, but Eric Schmidt joins me right now.

Eric, thank you for -- for joining us. There are so many things that I think our viewers would want to talk to you about, because Google interacts with so many people on a daily basis, but I want to speak to you about something very specifically. And that is the criticism that our government is very inefficient.

How does a guy like you, who has a company that interacts with many, many millions of people every day and has to have an efficient operation, what advice would you offer government in terms of how they can make the operation of government more efficient?

ERIC SCHMIDT, CEO, GOOGLE: Well, you know, they don't really measure anything in government as best I can tell, and with modern technology, we can figure out exactly how many people are served by every bill. So, I would do that.

And then the other thing is I would do is use technology to know where all of these earmarks and special drafts and so forth come from. The health-care bill had something like 1,200 pages, all inserted by one constituents or another. I'd like to see how those things each got in there and why. We could easily have a much, much more coherent government if we measured it and knew how it was being put together.

VELSHI: And you have technologies at Google, and other great technology companies in America are working on things that sort of -- we don't really know, because it hasn't hit us yet.

Is there a technology out there that can really help us measure, track, really determine the efficiency of every dollar that is spent in government? Because we're having great trouble with that as we track stimulus spending, as we track earmarks. Here at CNN, it seems tough to do that.

SCHMIDT: Well, in our industry, we think that this is almost comical, because we can track everything down to the penny, to the cent, to the user, to the -- to the access. Modern computers are particularly good at that. And it's beside -- it makes me crazy to have all these conversations. Just ask. We can know who did what, where they went, what they did, and so forth with the money.

And if you look, for example, at the bailout, they're still arguing over where the money went! How can this possibly be true? VELSHI: We -- we put on Facebook and Twitter that you were coming to talk to us, and, you know, this is a big company. Google's a big company. As of the end of 2009, more than $40 billion in assets, $2.7 billion in liabilities. Boy, would we wish our federal budgets had that kind of ratio, and 20,000 employees. So very, very large company. Not as large as the federal government.

And as somebody said on Facebook, you don't have to deal with Congress; you don't have to deal with the House of Representatives and the Senate. How much of that hampers efficiency? And what would you even do about it?

SCHMIDT: Well, the framers of our Constitution specifically did not want a very strong, large, centralized federal government. They wanted the power to be in the states. We've gotten ourselves into a situation where, since we do deficit spending, the federal government has all the money, and the states don't have any money to experiment.

So, we're in a situation where the federal government has all the power and the money, but it's not organized around a single CEO or the presidency or what have you. Which I think is what's driving everybody crazy.

Most people I talk to want a stronger president, until the president does something they don't want, and then they want a stronger Congress. Our system has a set of checks and balances. Until we recognize that because it's always back and forth, it's fundamentally conservative, we'll always be criticizing it. It would be much better to let the experiments and the focus be occurring at a local and a state level and much more measurable and objectives outcome.

VELSHI: You used the term "experiments." This is actually a big part of Google's culture. It's something I really enjoy. And I wonder whether it would work in government. You actually give your employees a fifth of their time to experiment...

SCHMIDT: Right.

VELSHI: ... to noodle around, to find a new solution.

Bay Buchanan said a few moments ago, politicians should probably spend less time in Washington. Have them there for an intense period of time and then go back out and see what's really going on. I'm wondering if there's some learning that could shift from Google to Congress in terms of dedicating some of your time to learning a different way of doing things. Tell me a little bit on how it works at Google and whether that -- whether I'm off base here.

SCHMIDT: Well -- well, at Google, first, the employees are encouraged to spend 20 percent of their time working on things of their interest, which often are new and clever things, in the general area of Google's business. So we benefit. Many of our new products come from that.

In government's case, the problem is that the bureaucratic mindset prohibits innovation, and that innovation is, in fact, the solution to our problems.

So, my attitude about the health-care issues or the educational issues is, let's try ten different approaches of which at least nine will fail. But the one that works well, let's bet on that. Let's invest in it. Let's make it happen. And let's learn from that.

And because nobody really wants to take the risks and really wants to see a couple things fail and a couple of things succeed, we never fundamentally have a new breakthrough.

VELSHI: And I wonder whether us, we in the media, highlighting those nine that fail in a way that we don't do with companies like yours, may be part of the problem.

Eric, will you stay here for a bit?

SCHMIDT: Yes.

VELSHI: Hold that thought.

SCHMIDT: Absolutely.

VELSHI: Great conversation. I want to continue the conversation with Eric Schmidt, the CEO of Google. Christine Romans, Roland Martin, and Bay Buchanan have been listening in to that conversation, too. I want to get their take on it.

Stay with us. We're looking for real solutions to the real problem of "Broken Government" right here on CNN.

(COMMERCIAL BREAK)

VELSHI: Getting a check of top stories.

In Washington, former vice president, Dick Cheney, is out of hospital two days after suffering what his office calls a mild heart attack. A spokesman said Cheney is feeling good and will resume his normal schedule shortly. The 69-year-old has now suffered five heart attacks over the past three decades.

Pilot chatter could soon be monitored. The NTSB is recommending that voice recorders be checked by airlines, to make sure cockpit crews are focusing on their jobs. But pilot unions call that intrusive. The recorders have only been used in crash investigations in the past.

In Littleton, Colorado, a middle-school community in shock after a 32-year-old man allegedly opened fire on campus yesterday, wounding two students. Jefferson County officials credit a math teacher with tackling the shooter before anyone else was hurt. The suspect, Bruco Eastwood, is due in court today. Of course, Littleton, Colorado, you'll remember is the site of the Columbine High School massacre.

Let's continue our conversation on "Broken Government." We've got our panel in -- in -- well, all over the place, actually. We've got Christine Romans. We've got Roland Martin. We've got Bay Buchanan. And in the bottom corner we've got Eric Schmidt, who is the CEO of Google.

I want to -- I'm asking Eric to hang on a second, while I go back to my panel with some very interesting points that I just took from -- from Eric Schmidt's discussion with me a couple minutes ago.

Bay, I'm going to ask you first. Eric points out two things: the permission to fail, the idea that they ask people at Google to come up with ideas, and they have the permission to fail, he said, in 90 percent of the time.

The other one is the culture of innovation that seems to be squashed by Washington.

Because I've been asking Eric, for those of you who just joined us to tell us what he would do if he were asking -- planning ways for the government to be more efficient.

What do you think of those, Bay?

BUCHANAN: I think they're absolutely correct. There's no question. I spent 2 1/2 years as treasurer of the United States in the government. The most common refrain I received in those years was, "We can't do it that way. We've never done it that way before." It is against the culture of those in government -- they do a good job. They -- they know what is expected of them, but they don't think outside the box. They don't come up with fresh ideas, try to be more efficient. They just stay right there, moving, plodding ahead.

That's the beauty of the private sector, and that's why we need government smaller and let the private sector do what they do well.

VELSHI: Roland.

MARTIN: You know, Ali, it would be absolutely -- here's what I would love for Google to do. I love Google's SMS technology, when I can simply text a ZIP code and get all the movies around the corner from where I live, so I can then go to the movies.

So, it would be great if Google could utilize their technology to make it easier for the people to know exactly who voted on what, exactly what's in a lot of these bills.

I've taken the time, and you have to go to this site and this site and really dig through all these layers. And so, if there's some way for the people, to be easier to know exactly what they're doing, so we can call them on the carpet when they come back to our districts. And so I think that's one great way.

And also being able to quantify, as he said, what is actually working. It kills me when we have the defense contractors who overspend 4 or 5, $600 million, and we have to pay for it, but then nobody makes them pay for it. I don't understand that.

VELSHI: Interesting, because we've been...

MARTIN: And it's the culture of Washington and, you know, that's how it goes.

VELSHI: You know, we've been working on it when I was doing the stimulus desk a few weeks ago. The government is really trying to be fairly transparent on that. But now I'm looking at earmarks this week. I got to tell you, shrouded in secrecy. This is remarkable.

MARTIN: Of course.

VELSHI: Christine, what do you think of Eric Schmidt's ideas?

ROMANS: Well, I love his idea, too, that you see -- had more transparency or you can see results easier in local -- your local responses and how your local government is doing. And I think that that's pretty interesting, as well, because that's really close to you. And I also think...

VELSHI: Roland has made that comment many times, that...

ROMANS: Yes.

VELSHI: ... your local services are what affects you most seriously in many cases.

ROMANS: Most -- and most directly in many cases. That's right. But where he also points out that's where we're the least active in our own political engagement.

President Obama making comments today about U.S. competitiveness, business competitiveness. The idea of our government being better on the competitiveness front and on the innovation front is very, very interesting. Because you do see a lot of the innovation. You see a lot of the great, nimble ideas coming from companies like Google.

And then we're talking about the stayed, old broken process that is, you know, the way our system works, as well. And the difference between -- the real difference between what it's like in a corporate suite and what it's like, you know, in a congressional office building, they're tied together, but they're very, very different, the way the culture is and the way that things get done.

VELSHI: Christine, I work with you seven days a week...

MARTIN: Ali, Ali...

VELSHI: Yes?

MARTIN: You should ask Eric. You can ask Erica, I mean, what about that? What about -- look, I look at Google Mail, look at, I mean, Buzz, all kind of different things. So what about the idea of having something that is tied to politics where you can type in a ZIP code, and it kicks you back your member of Congress, how they voted, did they ask for...

VELSHI: Eric's nodding his head.

I mean, I -- Eric, if anybody has got the technology, you guys do.

MARTIN: I would love to.

VELSHI: I don't know if government has invited you to do that, but the bottom line is this is -- the transparency and figuring out where money is and how it's spent is crucial.

SCHMIDT: But -- but isn't it obvious that the government -- it's our money. We should know how it's being spent. And the fact of the matter is the government...

MARTIN: But Eric...

SCHMIDT: ... has got to make all of that information available. And lots of -- and lots and lots of people are going to go and then assemble the information and put it together.

BUCHANAN: Shouldn't it be the government's responsibility to make that available to the public?

SCHMIDT: I mean, this is the question.

MARTIN: Hey, no, no, no.

VELSHI: Hold on, what are you saying?

(CROSSTALK)

MARTIN: No, I would love for Eric -- so Eric, so you've got a lot of information out there, but I would love for you to commit to have your guys, the folks there, actually work on a technology that is politics related to the federal government to access the information much easier utilizing your amazing technologies, with the one source via text or whatever. What about it?

SCHMIDT: Well, we don't do content. We make the tools. The government's got to make the site. They've got to actually publish the information. We can index it. You can find it. Everybody will get to it that way, because we have broad reach.

VELSHI: All right. Hold on, folks. I want to -- I've got a couple of other. Sorry, Eric, I'm going to come back in just a moment. I've got to get a break in here. I want to finish that discussion about what Google can do to make our lives better.

I also have some -- some more comments that I want you to guys to chime in on, about how specifically we can make government better. Let's take a quick break. We'll come back with more "Broken Government." We've got our panel. We've got the CEO of Google right here, telling us how we can make government more efficient. It doesn't get better than that. Stay right with us.

(COMMERCIAL BREAK)

VELSHI: Hi, if you just joined us, we're in the middle of a fantastic conversation right now. We've got our "Broken Government" panel, who's been with us every week [SIC]. My colleague and co-host from "YOUR $$$$$", Christine Romans; Bay Buchanan; Roland Martin; and the CEO of Google, Eric Schmidt, who Roland is trying to buttonhole into solving the government's problems for us.

Great to have you all back here. I want to ask you -- I want to provide -- and I know, Eric, we're not using Google platforms for this. I've been putting stuff on Facebook, so you'll forgive us for that. But we're getting a lot of comments.

I've got a comment from Luke, who says -- we've asked for specific solutions to defreeze the brokenness of Washington. He says, "Performance pay! Base their pay on the prosperity of the economy."

Now, that's an interesting one. Christine, I want to go to you first, because you and I work together seven days a week. I suspect you are not going to think this is a great idea.

ROMANS: No. But, you know, on Wall Street, we call it pay for pulse, not pay for performance, right? Just showing up, you get paid for performance.

And whose idea of performance? I mean, some of these -- I guarantee you there are plenty of people in Washington who think that they have done a good job and they've delivered for their constituents, yet have they delivered their for their constituents' grandchildren with all the debt that they're racking up? And the very shortsightedness at which so many decisions are made.

So I agree with the idea. I mean, I think it really matters to people, the idea of taking money away from these guys, you know? But, again, I don't think it's pay.

VELSHI: Right.

ROMANS: I think it's power. It's power that drives things in Washington. It's not about money, at least not their money.

VELSHI: Roland, you're all about -- you're all about responsibility. Why not? Why not performance being a test of whether you know what the legislation is or your ability to show up to vote? What should we be measuring them on?

MARTIN: Again, first of all, it goes back to how do you measure it, who is doing the measuring and then what happens? Let's just be honest, the ballot box is the greatest stick we have. That's how you actually determine who should go, who should stay.

But here's one thing I would like to see, and I have not seen it. You had Republicans who said they didn't like the stimulus bill, but when it was passed, they still requested money. Same thing with Democrats. Okay.

But I want to see people in congressional districts who are tired of rising deficits, actually go to the members of Congress and say, do not apply for those funds. Or give the money back. See, what happens is the people will say, oh, we don't like this, but you have never heard the people say, give the money back. And so, challenge them to say, fine, go --

VELSHI: Right, we had.

MARTIN: Earmark? Well, send the money back.

VELSHI: I'll be fair. We have seven members of the Senate, 35 members of the House of representatives who make a habit of not taking earmarks, but you're generally right. We don't generally have a lot of people saying we won't take the money. They just don't like that it gets spent that way.

Eric, one of the points you made right at the beginning of our conversation, is you are in the business of being able to measure everything. So, if you are going to link something to performance, how do we measure it in the government?

ERIC SCHMIDT, CEO, GOOGLE, INC.: Well, rather than arguing over the amount of money we've got right now, why don't we instead try to figure out how to make some more money by creating some more jobs? What I would do is have a long-term incentive tied to government performance about private-sector job creation. It's easy to measure.

All of the bills, like the stimulus bill, which is really about creating jobs, this is what people care about in America today. What you would do is measure it every month and the congressional people would get together and try to figure how to create more. Right now, they do that and all the losers who are not creating jobs lobby and they get more money for themselves. It's not -- the incentives are not aligned. You do this if you focus on job creation.

VELSHI: That's a good point. I think everybody -- our polling bay, everybody agrees with job creation, if everybody got a job, none of these things would seem like problems to us. We wouldn't feel Washington so broken.

BAY BUCHANAN, FORMER NATIONAL TREASURER: Absolutely. I think there's a sentiment growing in the country that's a real concern -- it should be a real concern for the Democrats, and that is not that they are not creating jobs, but maybe that they don't know how to. There's competence issue here. They're not knowledgeable in how to do this because they've been waiting around and it's not turning up that way.

And that, I think, is a really a great concern for the whole country. Because we have to have people making decisions in this town that will create those jobs. And if it doesn't work, the country is going to be in much worse shape as years go by.

VELSHI: Big surprise, Roland appears to have a idea here.

ROMANS: That's the key. They make the decisions to create the jobs, they don't create the jobs on their own. Ali, hat's clear, when they stand up and tell you they are going to create 250,000 jobs, every American voter knows they can't create 250,000 jobs -- can create the conditions that business like Google and other innovators create jobs. If Washington pretends it can do it on its own, it has a little bit too much arrogance. VELSHI: Roland, hold that thought. You guys always have something good to say, but I got to pay the bills around here. So, hang on for a second. We're keeping this conversation going because you are all fantastic, and you're answering the call of coming up with solutions, solutions, to broken government. Everybody knows something is broken. We want solutions, and those four on your screen are giving you better stuff than you've heard in a long time. Stay right with us.

(COMMERCIAL BREAK)

VELSHI: I want to take one more run at this with our panel. We have a fantastic panel assembled. Christine Romans, on the right, she is my -- not on the political right, on the top left of the screen...

ROMANS: I'm in the middle! I'm right in the middle!

VELSHI: Yes, you're just on the top left of my screen. My co- host from "YOUR $$$" every Saturday and Sunday.

Roland Martin and Bay Buchanan, CNN contributors with a great deal of experience. Snd in the bottom corner, Eric Schmidt, the CEO of Google.

Eric, Christine said a couple of moments ago government doesn't create jobs -- other than government jobs. It creates an environment for people like you to create jobs. So, tell me now, we've got a jobs bill that just passed the Senate today. Tell me a question that so many people asked us: how best can government create jobs in this environment? Because if you solve that problem, you said it yourself, you solved most of our problems in the economy.

SCHMIDT: Well, again, let's emphasize what Christine said, that what we want are private-sector, new jobs created. We don't want government make-work programs. That's how the wealth of the country -- the country is invented, if you will, it's created.

And the way to do that is to encourage innovation in the private sector, to focus on new technologies, new businesses, export-oriented businesses, businesses where we can be the global leader in. There are many ideas in government to do this.

The problem is that everybody is focused on the wrong thing. We need to focus on new, private-sector created jobs that pay very nice, high taxes, to fund our deficits.

VELSHI: I want to pick up on something that Bay said with you --

MARTIN: Ali --

VELSHI: Hold on a second, Roland. Because you said this, too, Roland. You said Google is a big $40 billion-plus company, facing, I'm sure, some of the problems, Bay, said that our government may be too big.

How do you manage that? Because Google was not that long ago, and when you joined the company, still an upstart, still this funky, new, creative thing, how do you deal with it, as you become bigger? And by definition, does that make you less efficient with every new employee you get?

BUCHANAN: Is that to me --

SCHMIDT: You can become more efficient at scale. Go ahead.

VELSHI: Go ahead, bay.

BUCHANAN: You know, I think this is an excellent point. That what -- how do we create those jobs? How does government do it? We've done it before. We did it with Reagan. We did it with Clinton. It's small businesses that will hire the people. We've got to look at the small businesses. How do you give them the incentive to start being able to grow again and hire again?

And I think it comes, clearly, with taxes and regulations are places you have to look. Cut their taxes. Reduce their burden, and give them some room to be innovative and creative. And that's where we'll start up this engine again.

VELSHI: Eric, talk to me. You were saying something about scale.

SCHMIDT: Ali, what I was going to say was, roughly two-thirds of the jobs that are newly created are created in small businesses, so she's exactly right. What small businesses right now need more than anything is access to credit. The banking system is producing credit for the larger firms, people like Google and others, but not for the small and medium-sized businesses whose credit is more questionable in their eyes. That needs to get fixed, and it needs to get fixed very, very quickly. That's where a lot of this problem's going to get solved.

VELSHI: Roland, you've been champing at the bit.

MARTIN: And that's why I'm trying to get Eric to create some of these jobs to address all of this government money. So, Eric, you can start right now by creating high-salary jobs. folks can pay taxes so we can track our government money. It's a great public service, Eric. Come on, you have billions of cash, go ahead, throw a couple of million at this project.

BUCHANAN: He's not profitable because he throws his money around!

SCHMIDT: I'll be happy to spend lots of money to try to get the government information into the public hands on their Web sites and other things. I think it's a great use of our resources.

VELSHI: The big takeaway, Eric, you assuring us that you're in the business of measuring and searching and finding, and you're telling us that all the technology exists to make our ability to track where money is spent and how jobs are created much, much easier than it is right now. That's a good point.

SCHMIDT: Absolutely.

VELSHI: Christine, this is a good point that you made, because one of our respondents, one of our viewers said, pay them for performance and until we know how to measure that performance, that will be a big issue for us.

ROMANS: Right. That's absolutely right. We don't know -- performance in their eyes is different than performance in our eyes. Just like performance on Wall Street is different than performance in the Wall -- Main Street eyes. It's in the eyes of the beholder, I guess, and pay for performance would be nice if we knew what the goals were and how they met them.

VELSHI: All right, I'll say good-bye to our panel that has been helping us every day, and will continue to this week. Christine, Roland and Bay, and I'll bring Eric back for a quick Roland-free zone conversation about what more he can help us with.

MARTIN: I'm glad you're pushing him, Ali!

VELSHI: I like it. It's all good.

We'll be right back with a little bit more of the CEO of Google and his fantastic ideas to try to help the government become more efficient and measure what it's doing. You're watching CNN. We'll be right back.

(COMMERCIAL BREAK)

VELSHI: While we're having this fantastic discussion about fixing broken government, I want you to know we're still paying very, very close attention to the testimony going in -- going on at Capitol Hill. That's the Transportation secretary, Ray LaHood, who is testifying about what the Transportation Department and NHTSA knew about Toyota, how they managed these recall issues.

Very shortly, the CEO, the worldwide CEO of Toyota from Japan will be in front of Congress. We'll be monitoring that very closely for you as well.

But for now, I just want to go back for a moment to Eric Schmidt. He's the CEO of Google, joining me from New York. As part of our commitment to you, we said we would shine a very bright light on what many people think of as government being broken. I jumped into a conversation, we've had a great conversation, Eric. But I didn't really ask you do you think government is broken?

SCHMIDT: Of course, it is, because it's so incredibly inefficient. I think we have to recognize the system is inefficient because the incentives are set up that way, and the incentives need to be fixed. We had a good conversation about incentivizing around jobs. If you're a government bureaucrat and you take a risk, you can lose your job. But if you do exactly what you're told, you're not going to lose your job. So, no wonder the government bureaucracies are so conservative. They never try anything new. VELSHI: You have a system at Google. I've been to your workplaces. They are created for creativity, that sort of values the worker that way. Can we make government, can we make the big operations into something -- I don't mean you have to have lounges and cooked food all the time. But what I mean is, can we make government in to the sort of environment that does provide an incentive to do things differently, not lose your job, not be punished for coming up with an idea without losing your job?

Those nine out of ten ways that your staff comes up that might fail -- how do we make that acceptable and okay?

SCHMIDT: The people I've dealt with in government are actually pretty good. They're pretty sincere about what they're trying to do, but they're trapped in a failing system. They are trapped in a system where they can't do what they think is best for the consumer, by law, by regulation, or because of lobbying or what have you.

So, I think a little bit more of a flexibility model, where people can experiment things, at least on the edges, and try new things. You could imagine, for example, that every aspect of government had to have the current thing they're doing and one new idea that they're testing. And if that one new idea really works, it will replace the current system. If you just mandated that, you'd get lots of creativity out of the folks that work for us in our government.

VELSHI: To what degree does crisis stifle that? And I asked you this, too, because you have constant crises at Google: a product that may not have the uptick that you wanted, the E.U. looking at antitrust actions. There's always something that seem the like it's going to dominate your day, your week, or your month.

SCHMIDT: Well, you know, our government can react very quickly in a crisis. Look at the stimulus bill, which was done in a three- week period. $800 billion in 3 weeks, boom, they're done. We've seen other situations where we've been attacked.

So, we can rally together and act very quickly. I think crisis focuses the mind.

I think the most important thing to do is to establish a culture of innovation. Jobs are created in the private sector by new ideas, not existing ideas. There are lots of new ideas that are being suppressed by one reason or another that I want to hear, and you do, too.

VELSHI: You made a comment a little while ago about innovating and creating industries in the United States that are exportable. Boy, we all want to know what those are, because we've lost manufacturing jobs because of things we used to make that we were exporting, we don't make anymore, and it's not likely that a lot of those jobs are coming back. What is the exportable industry of the future in America?

SCHMIDT: There's no question the largest area there is going to by in the rebuilding the America's energy infrastructure. We have a huge investment in all of the technologies of -- of traditional technologies. We're beginning to grow our investments in renewables, investment in rebuilding America's energy infrastructure would help us with respect to security, make us less dependent on oil, create a lot of American jobs, especially contracting and manufacturing jobs, insulating homes. All of those programs, I think really, really do well.

The other area that's likely to do extremely well is an area called advanced manufacturing. Advanced manufacturing means the use of computers to make very, very sophisticated, high-end mechanical things. A country that does this particularly well, is Germany. And, by the way, Germany right now has a huge credit surplus. We could do the same.

VELSHI: And that is likely. We can take our displaced workers in the United States, somehow train -- I mean, you're trained as an engineer. We can't necessarily take a 45-year-old autoworker and make them an engineer? Does this trickle down? Does this mean jobs for a lot of people as opposed to just for highly trained engineers, software engineers and developers?

SCHMIDT: It means jobs for millions of people. Because in order to do advanced manufacturing, you need the assembly line of the future.

There are many examples for this where, for example, in Michigan, autoworkers are being retrained to do what they did, but on technologies that are exportable and innovative that no one else has. There's every reason to believe we can create millions of manufacturing, high-wage jobs, both blue-collar and the white-collar supervisory jobs that would really help us and really help replace some of the jobs lost in the global competitiveness we're seeing today.

VELSHI: Eric Schmidt, what a great conversation. Thank you for being here and coming up for some great ideas that you're taking from your own company. I would recommend you get out of the building as fast as you can before Roland tries to catches up with you and tries to pin you down on something.

(LAUGHTER)

SCHMIDT: Thank you very much, Ali.

VELSHI: My pleasure to have you on. Eric Schmidt is the CEO of global -- of Google -- God, can you imagine getting that name wrong? Of Google here, telling us how he can make -- or some suggestions he has on making the government a little more efficient.

We'll check in with Chad Myers. We do have some weather blowing into the Northeast again. There are some places in the South that are getting snow, we've got more blizzards coming in to the Northeast. When we come back, we'll have a conversation with Chad. Stay with us.

(COMMERCIAL BREAK) VELSHI: Let me check in with some top stories we are following here at CNN.

The Senate has passed a bill aimed at creating more jobs. The main focus is giving the businesses tax breaks for hiring the unemployed. The $15 billion measure would give also states more money for hiring. The bill now moves to the House, which could take it up as early as Friday.

Also on the Hill today, Fed chief Ben Bernanke telling Congress action has helped to jump start the economic recovery, but he remains worried about the unemployment rate, which is near 10 percent.

At the Olympics in Vancouver, an emotional moment on ice. Canadian Joannie Rochette took third place in the women's short program last night. Her inspiring performance followed the sudden death of her 55-year-old mother from a heart attack on Sunday. She will battle for gold in the free skate final tomorrow.

I want to tell you what is going on with weather right now. We have a blizzard moving in the next 48 hours. We have pictures across the country and you have -- I think we can we pull these up. Can we, Michael? Put them on the screen? There we go. The one on the left is Washington, D.C., that is the White House. On the right, Central Park, the view from Time Warner center where CNN is.

The only snowflakes you can see on your screen are in the animation behind it. It is looking good and calm. That is going to change. There's going to be more stuff happening here.

Let's look at Texas. If you are from or in west Texas, wow, five inches of snow. I have to say that the Texans are getting used to this, and they have reason to buy a lot of snow shovels this year, and they have use of them. That big storm -- there is a big storm coming and a combination of this storm that is in Texas, plus another one that has hit the South and the Midwest.

That is as far as my amateur weather reporting can go, so let's bring in the big guns right now. Chad Myers, what do you think? I'm just doing this to make you proud.

CHAD MYERS, AMS METEOROLOGIST: I thought you were filling time. I didn't know. Nice job, Ali.

(WEATHER REPORT)

VELSHI: Yep.

MYERS: I will tell you what that means from the computer model and why this storm is going to stick around for a long time. I don't know why it calls ate nor'easter, anyway. Because it is coming from the Southeast.

VELSHI: Is that what you are going to tell us later?

MYERS: Absolutely. VELSHI: I got a question for you. Looking back at the Northeast over there, are there variables to make it a blizzard or no blizzard snow versus rain, or are they going to get a lot of snow?

MYERS: They're going to get a lot of snow. Boston, probably because of the waving water that comes in and the land coming around. This is from Gloucester all of the way down to the Cape will be rain because of the ocean, keeping the water and the air warmer.

Then back out here to the -- by the time you get to the Berkshires, that is all snow and all snow west of there as well. We are already seeing snow coming down in some places today, and that means that the cold air is already in place. That cold air is in place and you are seeing the low cloud cover and significant airport delays at many of the major airports today. So if you have a flight, log in an dmake sure it is on time.

VELSHI: And you know I have interest on the weekend, because once again, I am flying. Good to see you, my friend. We will check with you on the off of the radar and find out about the nor'easters.

Listen, when we come back, we want to go to Brianna Keilar who is listening very closely to the testimony on Capitol Hill about Toyota. That is Ray LaHood, he's the Transportation secretary, talking now. Later, the president, the worldwide president of Toyota is going to testify, and Brianna is on it, so we will tell you what we know. Stay with us.

(COMMERCIAL BREAK)

VELSHI: Toyota hearings on Capitol Hill are into the second day. Yesterday, we heard from the U.S. president of Toyota. Later on today, we will hear from the worldwide president, but we have been hearing from the transportation secretary, Ray LaHood.

Brianna Keilar is watching all of this closely for ounce Capitol Hill, and she is with one of the people who is doing most of the questioning. Brianna, bring us up to speed.

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Well, Ali, right now, we are awaiting Akio Toyoda. It's really a matter of minutes before he appears. That is the headline grabber of the day, the head of Toyota global.

But they are focusing this committee on Ray LaHood, the secretary of transportation, and talking about the federal regulators and did they miss the ball on this. I am here with Congressman Darrell Issa, who is the top Republican on this committee.

One of the things that is pretty striking is that we heard from Ray LaHood. We have not heard from the head of the National Highway Safety and Traffic Agency. I know this bothers some Democrats and Republicans, but especially Republicans.

REP. DARRELL ISSA (R), CA: Well, that bothers us. Secretary LaHood justified that since he'd only been on the job for 40 days, he was not prepared to answer questions. And Secretary LaHood said that he would answer the questions. As you know, most of the questions we want answered, he said he will give us those answers on the record. And so I believe strongly we will have both current and past NHTSA officials back again with those questions and answers so that we can get a full discovery of why NHTSA dropped the ball for so long on this and perhaps other safety issues.

KEILAR: And obviously, you have the majority to have the subpoena power to bring in and just to schedule witnesses. When do you think this might happen? How soon.

ISSA: The chairman has already said he'd like to do it within a week to include Bush administration NHTSA folks and others, and we expect it could be pushed up to one week. But in the next week to two weeks we expect answers from Secretary LaHood and the witnesses back.

KEILAR: And real quick, you talked to Akio Toyoda before this hearing. What did he tell you?

ISSA: Well, he was deeply apologetic for Toyota failing live up to the high standards that he believed his family had always lived up to, and he pledged to make real, fundamental changes so that they would be the best in safety and not questions in safety.

KEILAR: All right. And we'll be hearing that from him soon. Congresman Issa, thank you very much. Ali, back to you.

VELSHI: Brianna, we will stay on op of this. We're going to be watching to see Akio Toyoda comes in, what he's got to say and whether or not Toyota is on top of the issue of the acceleration, whether it's a mechanical or electronic problem. I know you're on top of that. We will check back with you. Brianna Keilar, on Capitol Hill right now.

When we come back, we will bring you up to speed on the latest headlines and continue the fantastic discussion of how to fix the freeze in Washington. Stay with us.

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