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Economy Losses 125,000 Jobs; Pay Cut for State Employees; Deadly Attack in Afghanistan; Stimulus Working it's Hardest, Yet Unemployment Rates Continue to Climb
Aired July 02, 2010 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR:--Monday. Tony Harris picks it up from here.
TONY HARRIS, CNN ANCHOR: You have a wonderful holiday weekend.
PHILLIPS: I sure will.
HARRIS: See you next week.
PHILLIPS: Thanks, Tony.
HARRIS: Good morning, everyone. Live from studio 7 at CNN world headquarters, the big stories for Friday, July 2nd, the June report on jobs. The numbers fueled fears the economic recovery is stagnating. Plus, reinventing your career.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: The economy was the biggest factor for my reinvention.
(END VIDEO CLIP)
HARRIS: A worker trades his suits and ties for a uniform, the uniform of an emergency medical technician with no regrets.
And in West Virginia, a memorial service for Senator Robert Byrd who represented the state on Capitol Hill for 57 years. We will hear live from President Obama. Good morning, everyone. I'm Tony Harris. Those stories and your comments right here, right now in the CNN NEWSROOM.
For the first time since December, the economy is showing a monthly net loss of jobs. Employers cut loose 125,000 workers in June. Many of those positions were temporary census jobs. If there is a silver lining here and we looked long and hard and deep here, the private sector created an anemic 83,000 jobs. Enough people gave up their job search to push the overall unemployment rate down to 9.5 percent. The president emphasized the positive.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This morning, we received the June employment report. It reflected the planned phase out of 225,000 temporary census jobs, but it also showed the sixth straight month of job growth in the private sector. All told, our economy has created nearly 600,000 private sector jobs this year.
(END VIDEO CLIP)
HARRIS: Now, for the view of all this from Wall Street, let's go to Alison Kosik on the floor of the New York Stock Exchange. Alison, good morning to you. I got to tell you, most of the emphasis here is being put on the private sector number, not the headline number. Maybe you can explain this to us.
ALISON KOSIK, CNN CORRESPONDENT: Well, that's because, Tony, the private sector is definitely where we want to see that jobs growth. When you think about it, when the government adds a lot of jobs, especially lately, a lot of these jobs are temporary. Think about those census jobs that were phased out. Also, the government can really add jobs whenever it wants. It can run a deficit and then pay for it with a little stimulus money. But for businesses, they can't overspend or they'll go under. So, it's really some good news that we saw an additional 83,000 jobs added in the private sector, actually better than last month.
But I want to show you something. Take a look at this chart. In April, we saw 241,000 jobs were added. Economists say that's really the range that we need to be in. We need to be adding 150 to 200,000 jobs every month to start chipping away at the unemployment rate. And analysts are saying, we're not going to see that happen until the end of this year or the beginning of next, Tony.
HARRIS: Yes, and, Alison, so the economy is losing jobs, but the overall unemployment rate drops. Maybe you can explain the disconnect here.
KOSIK: Yes. I mean, you think, great, you know, the unemployment rate dropped, it's actually the lowest level in a year, and the drop in unemployment, though, is not because more people found work, it's because millions of people just dropped out of the labor force and are not being counted. These people, as you know, if you've ever looked for a job as I have, you get frustrated, you drop out of the market, and then you're not counted. And that's why you're seeing the unemployment rate drop like this.
As for stocks, they're dropping just a touch. The Dow right now down 45 points. The Nasdaq off 8. I talked to several traders today. They say a lot of this unemployment report that we got today was baked into the market. Not a huge surprise, though, expect to see some reaction Tuesday and Wednesday next week after the holidays -- Tony.
HARRIS: Bake in some gains here. All right. Alison, appreciate it. Thank you.
One other note on jobs, 200,000 California state employees could have their pay cut to the minimum wage this month. That's $7.25 an hour. Governor Arnold Schwarzenegger ordered the move after the state started a new fiscal year without a budget. He says it is a legal requirement. The man who writes the paychecks, the state controller, says he will ignore the governor's directive.
(BEGIN VIDEO CLIP)
JOHN CHIANG, CALIFORNIA STATE CONTROLLER: I'm just going to do the right thing by the taxpayers of California and the public servants of California. So, most important thing is in this difficult economic time, how do we protect the state treasury of California? So, I'm going to take that action to protect the treasury of California.
(END VIDEO CLIP)
HARRIS: If state workers see their pay cut, they will get back pay once a budget is finally approved. Stay right here in the CNN NEWSROOM. Professor Thomas Danny Boston from the school of economics at Georgia Tech joins us to talk about the jobs numbers in just a couple of minutes here.
So, I have a lot of questions about this economy and how it is affecting your life, your family, and of course, as always here, we want to hear from you. We need your contributions to the program. What are your frustrations with the current economy? What are your frustrations? I know there are plenty. If you wish, share your stories with me at CNN.com/Tony or you can get those phones ringing right now. Call me at 1-877-742-5760.
And checking the day's other big stories, Taliban militants launch a deadly attack on a U.S. aid agency compound in Afghanistan. Government officials say at least four people were killed and 20 others were wounded. They say suicide bombers blew themselves up at the gate and gunmen stormed the compound. The attack comes as General David Petraeus arrives today to take command of U.S. military operations in Afghanistan.
In Northern Mexico, 21 people are dead following a shootout between suspected members of dueling drug cartels. It happened early Thursday in the Mexican state of Sonora. Police there say they hope to find out what prompted the gun battle from the arrests of nine survivors.
Day 74 of the Gulf oil disaster. Now that hurricane Alex is history, crews are hoping to get back to cleaning up the oil. The storm shut down skimming operations and the government's point man says, some smaller boats may have to stay in port through the weekend. The storm also postponed a benefit concert by Jimmy Buffett until July 11th. Buffett talked with our Anderson Cooper about the oil disaster.
(BEGIN VIDEO CLIP)
ANDERSON COOPER, CNN ANCHOR: when you first heard about the disaster, did you think it would last this long?
JIMMY BUFFETT, MUSICIAN: I knew -- you know what, I just thought, you know, I've been in show business a long time, and I know liars when I hear them, you know? And I, you know, that thing couldn't have blown up without, you know, I thought they were lying in the beginning, that was just me personally. COOPER: So, when you heard a thousand barrels?
BUFFETT: Total lie, that's what I thought.
(END VIDEO CLIP)
HARRIS: OK, taking command in Afghanistan, General David Petraeus reporting for duty today. Live with a report from Kabul.
And this holiday weekend, many beaches will be packed. Our Bonnie Schneider is keeping an eye on the beaches along the Gulf Coast. We'll talk to Bonnie in just a couple of minutes. You're in the CNN NEWSROOM for a Friday.
(COMMERCIAL BREAK)
HARRIS: You know, most of us learn how to swim as children. But few of us will ever make swimming a career. Diana Nyad did just that in the 1970s, breaking records as a marathon swimmer. Now at 60 years old, she is going back to achieve the one goal she almost, almost reached. Dr. Sanjay Gupta has our "Fit Nation" report.
(BEGIN VIDEOTAPE)
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): Diana Nyad starts her day with a swim, but it's no ordinary swim.
DIANA NYAD, PROFESSIONAL MARATHON SWIMMER: The longest pool swims I do are about six hours.
GUPTA: six hours. And that's an easy day.
NYAD: I started going down to Mexico and the Caribbean and every other week and doing long, eight, ten, 12, 15 hour swims.
GUPTA: Diana is preparing for the swim of a lifetime.
NYAD: About a year ago now, I'm turning 60, but I hadn't swum in 30 years, nowhere at anytime except in the ocean, paddling on a board. And I was driving my car one day, and I looked in the rear view mirror just looking at the cars behind me and I caught my eyes, and I thought, wait a second, you know what, there's one thing you actually could go back for. And that's the dream swim that I didn't accomplish back in the day, which was Cuba to Florida. So, I'm doing it this summer at 60.
GUPTA: A 103 miles, in the ocean, in the elements. In 1978, the marathon swimmer's first attempt was played by rough seas, painful jellyfish stings, delirium and bone-chilling cold. But this time --
NYAD: I will admit to you, I'm scared to death. And in other ways, I'm very confident. I've left no stone unturned in training. I look at the weather and I look at the team and I look at the shark devices, and so, I'm ready, but will it all happen? It's a big unknown, and it's kind of unnerving. GUPTA: But is it physically possible for someone to swim the 103-mile distance? Consider this, the world record holder in long distance ocean swimming, Diana herself, successfully swam 102.5 miles from the Bahamas to Florida. But after all, that was more than 30 years ago. Still, Diana says her body is ready.
NYAD: I'm going to have in my spirit a mantra that says no matter what happens, unless, I'm truly taken down by a shark or a hurricane pops across Africa, I am going to stay in until I walk up on that -- crawl up on the Florida shores.
GUPTA: And the only thing that could stop the whole operation now, the deep water horizon oil spill.
NYAD: I follow that oil spill every single minute.
(END VIDEOTAPE)
HARRIS: Wow. And for more information on ways you can live a healthier life, just go to CNN.com/fitnation.
(COMMERCIAL BREAK)
HARRIS: Big Fourth of July weekend for everybody. I got -- we need to check the beaches, the forecast there, but maybe we start with what's left, right, the remnants of Alex.
BONNIE SCHNEIDER, AMS METEOROLOGIST: That's right. Still rain from Alex for Texas, and we could be seeing at least another inch, maybe up to three in some parts of Texas. Houston is under a flash flood watch and that will continue straight through the afternoon hours because you can see just a steady flow of rain in Houston. We have seen it in San Antonio as well Galveston. Here's a look at some of the watches and warnings, you could see the highlights in brighter green indicates we have warnings. And that's mainly in Southeast Texas due to Alex's nonstop flow of moisture.
And if that's not enough, see this little L right here? You guessed it. We are monitoring an area of low pressure developing just to the south of the panhandle of Florida. The National Hurricane Center says it has a low chance of developing into a tropical cyclone, less than 10 percent. But it's still worth monitoring because we're getting that influence of moisture, stormy weather across the beaches of the panhandle of Florida. And also not just there, but through areas into South Florida we've seen quite a bit of rain.
Let's go back to the beaches as Tony mentioned. We want to talk about the advisories. No swimming across many of the beaches, some are closed in Alabama like Ft. Morgan. Sometimes, you can go to the beach, you just can't swim, but you can sit there if you want to take in the sunshine. The problem is this weekend. It's going to be pretty stormy in the Alabama beaches. Same for Mississippi. Advisories are posted. Some are closed. Gulf shores is closed. But we do have some advisories that say just use caution, and certainly, avoid any contact with oil that goes without saying, but it's a good reminder. All right. Panama City Beach, Florida, catered tar balls, but the beach is open there. Advisories are posted in Pensacola and Destin and Fort Walton Beach. Use caution, avoid oil. Keeps reminding everybody that as well. Don't try to touch it. Looking at the country as a whole for Independence Day, I have some very good news. We got some good-looking fireworks here on our weather forecast, but hot temperatures, Tony, across much of the northeast. Philadelphia, I was looking at a high about 98 degrees on Independence Day. It's going to be a hot one there.
HARRIS: Yes. Welcome to our world here in Atlanta. Pretty hot and steamy here.
SCHNEIDER: For sure.
HARRIS: have a great weekend.
SCHNEIDER: You too.
HARRIS: Yes. General David Petraeus reporting for duty in Afghanistan. He arrived within the past hour to take command of U.S. military operations there. CNN's Atia Abawi joins us now live from Kabul. Atia, I'm wondering what we can expect as General Petraeus takes over. I mean, the plan stays the same, doesn't it?
ATIA ABAWI, CNN CORRESPONDENT: That's what everyone is saying right now, Tony, the plan will stay the same. That General Petraeus was actually working with General Stanley McChrystal last year when they put in place this counterinsurgency strategy here in Afghanistan. He helps bring it about in Afghanistan. So, everyone is talking that the plan will stay the same. But the reality is the relationships will change. General Petraeus does have a very big challenge ahead of him. He's a very -- a general that has many merits to him right now.
He has seen to have success in Iraq with CENTCOM. But even he said a couple of years ago, that Afghanistan would be the tougher fight. And now here he is, he landed within the hour. You heard his helicopters go by, and his biggest challenge at the moment will be building these relationships, particularly with the Afghan government, especially with President Hamid Karzai, because these two men have to be partners and have to be partners in the eyes of the Afghan people. What we saw with General McChrystal before his departure was that connection and that relationship where they took it out to Kandahar.
They took it out to Kunduz. They took it out throughout the provinces of Afghanistan to show a united front to win over the Afghan people again. And there's no secret that there are -- there is tension between the Karzai administration and the Obama administration. And General Petraeus, big challenge right now is to develop that same relationship that President Karzai had with General McChrystal.
HARRIS: Yes, and the tension seems to come down to one word, corruption. The general arrives on the heels of a really deadly Taliban attack on an aid compound. Maybe you can share the latest on that. ABAWI: Well, the very grim warning here, Tony. It happened around 3:00 a.m., according to the Kunduz governor up in Northern Afghanistan. He said that six Taliban gunmen wearing suicide vests were able to enter this aid compound. It's a subcontractor for U.S. AID. One of the men detonated his vest at the gate, making an opening for a car to come in, a car with explosives that also detonated. The four remaining Taliban gunmen stormed the building, but with the government said, save the lives of many people with the fact that they heard what was going on.
They ran up to the roof of the building and locked themselves up there, but in the end, five people still died, Tony, including three foreigners and two Afghan nationals. The foreigners included a German citizen, a British citizen, and a Filipino citizen.
HARRIS: Oh, boy. All right. CNN's Atia Abawi for us in Kabul, Afghanistan. Atia, good to see you. Thank you.
And while we are bringing you news from around the world, we are also watching what' hot online. Ines Ferre is surfing the web for us. Ines, good morning.
INES FERRE, CNN CORRESPONDENT: Good morning, Tony. This is what so many of you are intrigued by, an alleged Russian spy, well, her ex- husband says that he had his suspicions. You're watching the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: We got the late details now on the Gulf oil disaster, day 74. Skimmers are hoping to get back out on the water today and start collecting crude again. They have been sidelined since Alex whipped up big waves across the Gulf of Mexico. Despite the storm, a top government official says drilling on a relief well is ahead of schedule, just 600 feet to go.
Other top stories we're following for you, Taliban militants attacked a compound housing American contractors today in far Northern Afghanistan. Two suicide bombers blew themselves up at the gate allowing four other attackers to rush inside. After a six-hour fire fight, four people in the compound were dead as well as all six Taliban.
And in Charleston, West Virginia, right now, a memorial service for the state's long-time senator, Robert Byrd, who died Monday at age 92. President Obama and Vice President Biden are attending.
(COMMERCIAL BREAK)
HARRIS: For the more than 30,000 U.S. troops injured in Iraq and Afghanistan, coming home may offer little rest for the weary. But this week's CNN hero is helping rebuild their lives. Dan Wallrath spends his retirement giving injured soldiers a place to call home.
(BEGIN VIDEOTAPE) SGD. ALEXANDER REYES, ARMY: Baghdad ended up being a hell of a ride. I sustained a very severe blast injury. My life just came to a complete halt.
DAN WALLRATH, CNN HERO: How are you doing? How is everything, you look sharp today.
REYES: Thank you.
WALLRATH: I have been doing custom homes for 30 years. One of the most important things for a family is a home. I want you to read the sign for me.
REYES: Future home of Sergeant Alexander Reyes, United States Army.
WALLRATH: Congratulations.
Giving these folks a new home that means the world.
UNIDENTIFIED FEMALE: Thank you. That's all I can say.
WALLRATH: My name is Dan Wallrath. Five years ago I had a friend of mine call me, friend of his. His son had been injured in Iraq.
UNIDENTIFIED MALE: This is the day after he graduated from boot camp.
WALLRATH: He showed me pictures. His victim was a big strapping Marine. He showed me the picture of Steven in the hospital. It just broke my heart.
UNIDENTIFIED MALE: Stephen was wheelchair-bound. We were going to have to remodel.
I had no idea how I was going to pay for it. Dan just said, we are going to take care of it.
WALLRATH: We remodeled that home. I realized this is not an isolated case. Went back to my builder buddies and said we have to do something.
We build homes for returning heroes from Iraq and Afghanistan. The houses are mortgage-free. It changes the whole families --
Welcome home.
This is just a new start so that they can move forward. These young men and women are doing this for you and me.
(END VIDEOTAPE)
HARRIS: So far, Dan Wallrath and his organization have completed the homes of seven injured veterans and begun construction on five more. Each home is given completely free of charge. To see how Dan found his inspiration while remodeling the home of a wounded veteran, I love that we're doing this or if you'd like to nominate someone who you think is changing the world, here's what you do, just go cnnheroes.com.
Millions of Americans out of work and out of benefits, some just giving up, not even looking for a job right now. So, what is going on with this economy? Our favorite professor on the move right now, Thomas Danny Boston breaking down all the numbers for us in just a moment. You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Pictures, information, insight you won't find anywhere else. CNN NEWSROOM with Tony Harris, anything can happen.
So, today's government unemployment report shows a net loss of jobs in June. We're talking about 125,000 to be precise here. That's the first monthly net loss in 2010. Many of the jobs had vanished were temporary census positions. Looking just at the private sector, companies created 83,000 jobs. New jobs for sure, but not nearly enough for a recovery, tight? It's lackluster at best.
Georgia Tech Economics Professor Thomas Danny Boston is with us. Danny, good to see you as always. What are your thoughts on the jobs report?
PROF. THOMAS "DANNY" BOSTON, GEORGIA TECH: There is not much to be excited about in this jobs report. I mean, you can look beneath the surface and look beneath the surface and, you know, you go from one number to another number and the numbers just don't look good.
HARRIS: 83,000 jobs created in the private sector. That's tepid at best, isn't it, when you need what, 110, 120,000 jobs a month.
BOSTON: We need about twice that number.
HARRIS: Twice that.
BOSTON: Twice that.
HARRIS: OK. So, give me your short-term, long-term analysis on what is going on with the American employment picture right now.
BOSTON: All right. And it is divided into two parts, the short and the long-term. And in part what we're struggling with is these long-term consequences of the globalization of the economy. And a lot of the unemployment that we see right now would actually even be there even if we did not have this financial meltdown.
HARRIS: So, minus the financial meltdown, we would still see a lot of the employment issues that we're seeing now?
BOSTON: Absolutely. What the financial meltdown did was to simply put us in a kind of a shock therapy. But corporations, major corporations, mid and small size businesses, they are in need of an adjustment. And what they did is took the opportunity of the financial meltdown to make the adjustment to displace millions of workers. That they have no intentions of bringing back on board. So, that's the way that they --
HARRIS: That they have no intention of bringing back on board.
BOSTON: Most of those businesses and I've interviewed many of the CEOs, they say that even when things turn around, they're still going to go with the workforce that they have and supplement that with new forms of technology that can allow them --
HARRIS: And what are we calling a permalancers and part time workers who are just getting more hours and they don't come with the benefit costs?
BOSTON: Right, right, an increasingly large percentage of the workforce.
HARRIS: I remember the days we were talking about 5 percent unemployment as full employment. I'm hearing people suggesting that we could be talking about 7 percent, 8 percent unemployment as being full employment. That doesn't -- come on, that doesn't even make sense.
BOSTON: Easily, easily. I think 7 percent is probably at the low end, at least for the next couple of years we will be there.
There will be, now, again, I don't want to paint a picture of total gloom and doom --
HARRIS: Yes.
BOSTON: -- but things will turn around because one of the good things that is happening in the economy is that we see an acceleration in the rate of productivity and a new investment, particularly in technology. And those things ultimately have spin-offs that create new jobs, but it takes time for those jobs to work themselves through the economy.
HARRIS: OK, you're talking about other shocks to the system here, which really are undermining people's confidence in the economy. Talk about some of those.
BOSTON: Right. Well, you know, the odd thing is that if you look back a month, two months ago, the economy was really braced for a recovery that was more robust than most people had predicted. And then all of a sudden, at the beginning of May, we seem to have run into a brick wall. We saw a precipitous decline in consumer confidence and in business confidence.
And a lot of it is brought on by the fact that we have these shocks to the economy. Now what a shock means is that the normal pattern of spending and investing doesn't occur, all right? One of the shocks is creating a lot of uncertainty is just this persistent European debt crisis.
HARRIS: Yes, yes. BOSTON: Another one is the Gulf oil spill.
HARRIS: That crisis -- crisis after crisis, shock after shock.
BOSTON: Right. And interestingly, I was in Connecticut the other day and, of course, you know I -- I have a house on the Gulf shore.
HARRIS: I do. I do, yes.
BOSTON: The interesting thing is folks in Connecticut were as depressed about with a what was going on in the Gulf Coast as the folks in the Gulf Coast. And so, those things added together create a pessimism in terms of outlook which is not conducive to growth.
HARRIS: Well we're talking about anywhere from -- what? -- 14 to 17 million people who are underemployed or out of work now. If this is going to take some years to turn around -- that's what seems to be what you're describing to me, a system that's going to take some years to fix for us to recover -- what do these people do? What are these people going to do?
BOSTON: It's a struggle. It is going to be a real struggle. And we are going to -- we are entering a new period of austerity and it's going to affect large sectors of the workforce. And so, we're going to have to struggle along.
But one of the things we have to do, I think, and one part of the president's plan was to invest more in green technology.
HARRIS: Yes, yes, yes.
BOSTON: We have to invest in education. Those kinds of things will allow us to position the workforce for the new environment. And short of that then, you know, we'll have just persistent kinds of both social and economic problems.
HARRIS: Enough with the trade agreements. Protect America, protect American workers. Enough with the NAFTAs and the -- enough!
BOSTON: Well, you know --
HARRIS: Protectionism.
BOSTON: No, protectionism was in part responsible for the Great Depression. We don't want to get into that. If we start that, then our partners will start that. What we have to do is be able to compete. We have to do the same thing we did when the Russians said we will bury you and we decided that we're going to develop a focus on engineering and science and technology that that will not happen.
HARRIS: We have to compete.
BOSTON: That's what we have to do. We have to do. Have to compete.
HARRIS: Great talking to you. Great holiday weekend. My best to the family.
BOSTON: All right, very good.
HARRIS: So I have obviously a lot of questions about the economy and how it is affecting you, your life your family. As always, I want to hear from you. What are your frustrations, right now, your frustrations with the current economy. If you would, share your stories with me at CNN.com/Tony or you can give me a call. Want to get the phone lines going here -- 1-877-742-5760, give me a call right now.
President Obama today announced almost $800 million in spending from the stimulus to build broadband around the country. Now that's got to be a good thing. That announcement coincided with today's jobs report that brings little hope to the unemployed, at least right now.
So what happened to all of the hundreds of billions of dollars in the stimulus? Josh Levs is here. And, Josh, you have a special guest from our Money Team.
JOSH LEVS, CNN CORRESPONDENT: I do. Yes, you know, Tony, you were just talking about the difficult picture for the unemployed in America now. I want everyone to understand how dramatic this is.
This ugly unemployment rate we're still seeing hovering up toward 10 percent, even being above nine is just insanely high, well that is happening at the same time the stimulus is pretty much giving us the biggest bang for its buck that it ever going to give us. So we are having this high unemployment rate at the same time that the stimulus is pretty much operating in overdrive.
And here to help explain that is Tami Luhby from CNNMoney.com. Tami, you've got a great story out there today that says that --
TAMI LUHBY, SENIOR WRITER, CNNMONEY.COM: Thank you.
LEVS: In fact, I'll show everyone the headline, I got it open behind me. It's right up right now on CNNMoney.com, I encourage everyone to check it -- "The big bang is over."
So talk to us about this. It is an $862 billion project, how much has the stimulus done for us?
LUHBY: Right, well, the stimulus has turned around the economy so far, at least that's what the administration has said, but what is interesting is that right now it is really picking up. We're hitting the peak of the stimulus spending.
In the first year of stimulus, a lot of it was going for entitlements, you know, helping the unemployed, those on food stamps as well as giving the states a lot of money. But now is when the projects are really going to ramp up. You're going to see a lot more hard hats out there, you know, with stimulus recovery act signs on them.
(CROSSTALK) LUHBY: But at the same time -- at the same time the economy is starting to falter.
LEVS: Yes, and that's the problem. Let me show everyone the spending that I've got open behind me.
This is how much of the stimulus that has already been spent -- you have 57 percent of the tax benefits have already gone out; 60 percent of the entitlement funds have gone out; 43 percent of the contracts, loans and grants have gone out. So there is still some money out there to fund the jobs, but, Tami, the big picture here is that this is the most we're ever going to get out of the stimulus. That even right now with 9.5 percent unemployment, you're talking about the stimulus operating at a time that is operating so high without it -- I guess there's two ways to see it. One, without it unemployment could be worse; but two, a lot of people saying, wait a second, why is unemployment so high if this was -- it is doing what it is supposed to do.
LUHBY: Right, and you know, this summer will really be the telling sign of what happens at the end of the summer with the stimulus because, you know, it is sort of a now or never deal there. It is at the peak, we'll see a lot of stimulus projects this summer and if unemployment doesn't go down, then, you know, we'll see == this is pretty much what stimulus is going to give us.
LEVS: Why is it then? Why isn't the stimulus turning around the economy? Why isn't it giving us a lot, lot, lot more jobs? Why is unemployment so high if the stimulus is operating at the highest level it ever will?
LUHBY: One reason is because of the states are really still struggling terribly. The stimulus was only really supposed to fill maybe 30 percent, 40 percent of the budget gap and get them -- see them through. But the state budget holes are just horrendous, they're billions of dollars. And so they're going to be laying off teachers, police officers, et cetera, and it's just a drag on the economy in general. Their spending is not -- they have basically cut all of their spending except for stimulus spending and it's really not picking up the economy.
And as well as private sector jobs. You know, the stimulus was supposed to help the private sector stimulate the private sector and carry the economy through until the private sector picked up, but the private sector isn't picking up.
HARRIS: Tami, Tami, Tami, I want to know why. I mean, I keep hearing that, you know, there are investors with money sitting on the sidelines. Are investors in the private corporations just allowing the government to spend while they sort of hang on to their dollars, play it close to the vest? What is going on here with private sector employment?
LUHBY: Right, well, the companies, well, we are seeing a ramp up in manufacturing. It wasn't as strong as they hoped recently, but manufacturing is ramping up. Those are a lot of the early signs. But the companies will not really start to increase their output until they see consumer demand. So right now what they're trying to do is they're really trying to use the workers that they have, pay them overtime, you know, get them to do what they want, but they're not going to hire until they see the consumer coming back and they haven't had the confidence that the consumer is back.
HARRIS: One more. Josh, one more.
Tami, what is the real promise for jobs and jobs growth in the green sector?
LUHBY: That is going to take a long time to work out. You know, that's what a lot of people are talking about, but it's going to take time for the green sector to, you know, really make a dent in the economy in the employment picture.
HARRIS: So are we talking about the established sectors having to pull us out of this? Are we talking about housing, manufacturing? Is that what it's going take?
LUHBY: Well, manufacturing, it is --
(CROSSTALK)
HARRIS: Financial services?
(CROSSTALK)
LUHBY: The green sector will help and it will probably replace some of the sectors that are not coming back ever, but it is certainly not going to be the be all and end all of the economy in the future. Really important to spend on new technology, but, you know, I wouldn't look to it as a savior.
LEVS: A lot of projects we have been hearing about including some funded by the stimulus are educating young people to learn about green energy so they can go on to develop things. A lot of that is very long-term picture. And that's unfortunately, you know, part of the struggle right now. Before that starts to turn around the economy, there is a lot of steps along the way, Tony.
HARRIS: Well, Tami, appreciate it. Good to see you. You do terrific work, by the way.
LUHBY: Thanks, Tony, you too.
LEVS: Thanks, Tami.
HARRIS: And, Josh, see you next hour.
LEVS: You got it.
HARRIS: Long-term unemployment hits a new high, but Many Americans are turning it into a real opportunity here. We need to focus on those folks. An ad man finds a new way to chase an old dream. We're back in a moment.
(COMMERCIAL BREAK)
HARRIS: OK, a CNN oil alert. On day 74 of the disaster in the Gulf, EPA administrator Lisa Jackson returns to the Gulf today. She will hold a town hall meeting in New Orleans and tour parts of Pensacola, Florida.
Meanwhile, the cap on BP's undersea well appears to be bouncing around, raising the possibility that less oil is being captured. A BP spokesman blames high winds for the wobbling.
Other top stories for you -- General David Petraeus has arrived in Afghanistan, taking over command following the deadliest month of the nine-year war. Last night, the House approved $37 billion to fund the fight in Afghanistan.
And live pictures here, the memorial service, a celebration of the life of Senator Robert Byrd. There you see President Obama, Vice President Joe Biden, and is that former President Clinton there as well? OK. The ceremony underway at the state capital building in Charleston, West Virginia. Byrd rose from Depression-era poverty to become the longest-serving U.S. Senator in history.
(BEGIN VIDEO CLIP)
SEN. ROBERT BYRD (D), WEST VIRGINIA: My memory is as good as it ever was, and it is stock full of recollections about the poor people of West Virginia -- how they were laughed at, they were the laughingstock. Yes, I'm a hillbilly, proud of it, proud of it. But I knew what the people of West Virginia sent me to Washington for. They sent me to Washington to represent them.
(END VIDEO CLIP)
HARRIS: Wow.
President Obama wants to connect more rural areas to the Internet. He announced the plan today to spend more than three quarters of a billion dollars of stimulus money to bring broadband to less populated regions. The White House says the investment means thousands of new jobs.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Broadband can remove geographic barriers between patients and their doctors, it can connect our kids to the digital skills and 21st-century education required for the jobs of the future, and it can prepare America to run on clean energy by helping us upgrade to smarter, stronger, more secure electrical grid.
(END VIDEO CLIP)
HARRIS: You know 18 months ago, Mark Musicuous had his own advertising agency along with a pretty high paycheck but the economy changed all of that, forcing him to rethink his career path. Today he couldn't be happier.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: OK guys. We have a call.
UNIDENTIFIED MALE : Please clear the main. Ambulance coming through.
MARK MUSICUOUS, EMT: Central park medical unit is a volunteer unit. I'm responsible for attending to people who are either very, very sick or very, very injured. My name is Mark Musicuous and I'm a New York State Emergency Medical Technician. I've been an EMT just about a year.
I like it a lot. Extremely rewarding and challenging. The economy was the biggest factor for my reinvention. For about 16 or 17 years I was in TV and films. I had a pretty good career. I also started up my own ad agency back in 2002.
The end of 2008, we saw the handwriting on the wall and unfortunately the economy just didn't cooperate. And I decided that I was going to pursue a passion that I've always had.
I wanted to take a look at this. It is basically a minor abrasion. I think we can just treat it in the ambulance. Financially it is not the best option right now. But I'm hoping that it leads to, you know, something much bigger and better.
I don't really mind trading in the suits and ties for this gear. The money certainly is nothing like it was. 18 months ago. But it is just a different way of life. Anytime you can help people, that's probably a greater reward than any monetary reward. I don't have any regrets at all that that period of my life didn't happen exactly the way I wanted it to. \
Because what I'm doing right now is so incredibly rewarding and so incredibly challenging that I feel very lucky I'm able to do it.
(END VIDEOTAPE)
HARRIS: You know lots of questions about this economy. How was it impacting you, your life, your family, the way you think about yourself these days.
If you could, just take a moment and maybe articulate some of those frustrations about the current economy with us. Share your stories. CNN.com/tony. Or you can give me a call. Want to get phone lines going here as well. It's 877-742-5760. 1-877-742-5760. We would like to get the phones going. CNN.com/tony.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) SEN ROBERT BYRD (D) WEST VIRGINIA: I may be an old man in years, that's all right. So was Moses, quite an old man, I suppose.
(END VIDEO CLIP)
HARRIS: From his hard scrapple beginnings in coal country to the stately halls of Washington. West Virginia's late Senator Robert Byrd, the longest serving senator in history, being remembered right now in the West Virginia Capitol of Charleston.
Some of the images of the service. In attendance, President Obama, Vice President Biden, as you know, Byrd died Monday at age 92. President Obama expected to speak at this morning's service. We will monitor the event and we will take it live as it unfolds.
We are back in a moment. You're in the CNN newsroom.
(COMMERCIAL BREAK)
HARRIS: You know, at least one out of five kids in the United States is overweight, and that number continues to grow. We will continue to look at obesity in children and the health cost of weight related chronic disease. That's coming up in the next hour "CNN NEWSROOM:.
Plus, Essence Magazine's 16th annual Music Festival kicks off in New Orleans at the Superdome today. We will find out who the headliners are, Janet Jackson, Janet Jackson. And talk with Essence Editor in Chief Angela Burt-Murray as the magazine for African America Women celebrates a pretty big milestone.
(COMMERCIAL BREAK)
HARRIS: President Obama sets off a renewed debate over immigration reform. In his speech seen here live yesterday in the "CNN NEWSROOM", the president defended efforts to secure the border, and took aim at Arizona's new immigration law.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's not just that the law Arizona passed is divisive, although it has fanned the flames of an already contentious debate. Laws like Arizona's put huge pressures on local law enforcement to enforce rules that ultimately are unenforceable. Today we have more boots on the ground near the southwest border than at any time in our history. Let me repeat that. We have more boots on the ground on the southwest border than at any time in our history.
(END VIDEO CLIP)
HARRIS: Arizona's governor says her state took action because the federal government hasn't. Governor Jan Brewer promises to defend the immigration law, and she challenged the president on border security.
(BEGIN VIDEO CLIP)
GOV. JAN BREWER (R), ARIZONA And I say to the president of the United States, do your job. Secure our borders.
As for me, I'm not surrendering. I'm going to continue to do everything in my power to protect this state. No apologies, no quitting, no retreat. And I'll tell you something else. We're not going to pick up the tab either.
(END VIDEO CLIP)
HARRIS A Pew Center study finds almost 4 million children born in the United States have at least one parent is an undocumented immigrant. CNN's Thelma Gutierrez finds out what can happen when that parent is deported, forcing these citizen children to make an impossible decision.
(BEGIN VIDEOTAPE)
THELMA GUTIERREZ, CNN CORRESPONDENT (voice over): Julie Quiroz is American. She was born in Washington state. In one day, she says she lost everything. Her friends, her school, even her country. Last year, immigration agents arrested her two older brothers and her mother, Anna (ph), who was working ill legally, cleaning hotel rooms to support four children.
JULIE QUIROZ, FAMILY WAS DEPORTED: I was there when they handcuffed her. I was there when they took her down.
GUTIERREZ: It happened on her mother's birthday, and the day of her elementary school graduation.
QUIROZ: Once you get there, you're shocked.
GUTIERREZ: Julie's family was deported to Mexico city. She and her little sister Cherise (ph), also a U.S. citizen, had no choice but to follow.
(on camera) Did you ever feel like you belonged in Mexico?
QUIROZ:: I never belonged. I don't belong there.
GUTIERREZ: Did you ever have friends there?
QUIROZ: I had -- no one.
GUTIERREZ : How did you do in school?
QUIROZ: Really bad. Just come home, sit down, cry. Mom, I can't do it.
GUTIERREZ : Why?
QUIROZ: I can't read or write Spanish.
GUTIERREZ (voice over): At 13, she was a stranger in a foreign land.
QUIROZ: I felt like there's no more dreams for me.
GUTIERREZ : Then Joe Kennard, a land developer from Texas, heard about Julie's plight, and the 3 million other American kids who have an undocumented parent like Anna (ph),Julie's mom.
JOE KENNARD, JULIE'S GUARDIAN: You can make the argument that she deserved what she got, because she was an adult, she made the choice, she knew the consequences, et cetera. But why the children? They're innocent. And they're born here. They're U.S. citizens.
GUTIERREZ: The Kennard's reached out to Julie's mother in Mexico and said Julie could live with them in Texas and enroll in school. Julie's mother made the incredibly painful decision to implore Julie to go. An unbearable decision to leave her family for her country.
QUIROZ: The thing I like about Texas is that it's so beautiful, wonderful.
GUTIERREZ: She now lives with Joe's family near a lake. She finished ninth grade, and is adjusting to all the changes. When she is alone, she says it still hurts.
QUIROZ: I want to be my mom's arms.
GUTIERREZ: The dream that keeps her going, now determined to become a lawyer to fight for kids who are forced to endure painful separation. Thelma Gutierrez CNN, Waksuachi, Texas.
(END VIDEOTAPE)
