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President Obama's Economic Plan; From "Bum Fights" to Recovery; Gibbs Rips Gingrich Over "Kenya" Comment; Democrats Pressure Pelosi to Keep Bush Tax Cuts

Aired September 13, 2010 - 14:27   ET

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

(PRESIDENT OBAMA EVENT SENT UNDER SEPARATE COVER)

ALI VELSHI, CNN ANCHOR: President Obama in the back yard of a home in Fairfax, Virginia, speaking to area residents, about 30 people -- area residents, small business owners. A pretty broad-ranging conversation that he's gone through.

He's talked about taxes. He's talked about credit and loans to small businesses. He was talking about landmark architecture. He's spanning the whole range.

Our senior White House correspondent, Ed Henry, is with us. He's been listening to that.

Ed, what was that meant to do? And did it do it?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good question, which is bottom line, this is kind of a throwback to the 2008 campaign. You'll remember in states like Iowa, when he was just kind of introducing himself to the American people, he was trying to say let's go back -- instead of door to door, let's go to the back yard, literally, and talk to real folks. Let them ask some questions. And this White House believes the more they can get the president in those kinds of situations, instead of standing around in Washington with other guys with suits on talking about this tax cut or that tax cut, actually go to the people who it's going to impact, they think it's better for the president, number one.

But number two, I think they're trying to get this message out there. The president -- I jotted down a couple of things. You know, "I know it's slow. I know it's hard." He was saying that in Cleveland last week as well, but "We've stopped the bleeding and I've never been more confident about the future."

They're trying to get him out there, Ronald Reaganesque, you know, future is bright despite all the calamity. I feel your pain, and yet it's going to get better.

And yet, I thought it was remarkable when you had that one gentleman who is involved in clean energy projects that the president was holding up, the president jumped on it and said, oh, you want to hire more people? Yes, I want to hire 20 more people. Why haven't you? Well, the banker just told me he can't give me any more loans, they don't want to give loans. VELSHI: Right.

HENRY: And you've been reporting on this. You know this better than anybody. There are all kinds of small business people saying, look, I'm ready to hire more people. I can't get the credit.

One reason why the president has been talking about this small business lending bill that's been tied up in the Senate for a few weeks now, he's hoping to get that passed this week or next. But I thought that was very interesting. Front and center, the president saying, look, let's create some jobs, and this guy saying, I'm ready to, but the banks won't let me.

VELSHI: Ed, does this get the president somewhere in terms of the criticism, as you mentioned, that he's been facing in the last few weeks -- that he goes to factories, he goes to sort of political events, but he does not do what Bill Clinton did, he does not do that "I feel your pain" sort of thing.

Does this achieve that for him?

HENRY: Maybe. I mean, he has tried, we should say. You know, the White House to Main Street Tour. He's been trying to get in people's living rooms and back yards. Maybe he can do more of it and maybe we'll see more between now and November.

But they do feel like it's making some headway because we were talking just about last hour John Boehner seeming to shift a little bit yesterday on CBS's "Face the Nation" and going more in line with the president's position. To be sure, Boehner saying, "Look, I want to extend all of the Bush tax cuts, including those for the rich." But when pinned down, he said, look, if it's only the middle-class tax cuts to be extended, I'm ready to do that.

Well, our congressional producer, Deidra Walls, has just gotten new information that in private, some Republicans are frustrated with John Boehner expressing that because they feel he shifted his position and undermined Republicans because now Speaker Nancy Pelosi is thinking about coming up with a stand-alone bill to just extend the Bush tax cuts for the middle class, something this White House would love to do to get the Republicans on record about. Ali.

VELSHI: All right. Ed Henry, thanks a million for following this with us. Ed Henry is our senior White House correspondent. We'll check in with you a little bit again, Ed.

Listen. Many school districts are starting the school year with fewer resources than they had last year. Our next guest district is starting with fewer schools. We talk to Kansas City superintendent about drastic cuts and some radical solutions. Coming up next.

(COMMERCIAL BREAK)

VELSHI: In "Chalk Talk," we continue to look at ways to "Fix Our Schools." And few school districts have experienced as many challenges over the last 30 years as Kansas City. In the late 1980s, the district got a $2 billion budget boost from a desegregation ruling, so it built this amazing magnet school. It was equipped with a huge aquarium, state-of-the-art theater, many other cutting-edge features. In its heyday, by the way, this district enrolled nearly 75,000 students.

But over the years the student body has dwindled. So has the district's budget. Earlier this year, the Kansas City school district caught our attention when its superintendent announced he would be closing nearly half of the schools in the district and cutting a third of the staff just to stay afloat. This month, about 17,000 students in the district returned to the remaining 34 schools, wondering how the school year would work, let alone be successful.

Joining me now is John Covington. He's the superintendent of Kansas City schools. John Covington, thank you for being with us. Wow, you had a very interesting first half of this year at the end of the previous school year. Major cuts. What drove the cuts that you had to make?

JOHN COVINGTON, KANSAS CITY SCHOOL DISTRICT SUPERINTENDENT: Well, Ali, we were facing a $50 million shortfall. And if we had not taken drastic measures to reduce that, we would have been looking at a negative fund balance by October of 2011 of $6 million. So, we had to cut back. We had to streamline the budget to make sure that we were making better use of the useful -- the resources that we had available to us. Placing those resources where they belong, which is back in the classroom with teachers and students.

VELSHI: So, yours was the microcosm of what is going on in this country. You have got budget shortfalls. You have to rationalize your resources.

At the same time, you have students who not performing at an adequate level. Nine out of ten Kansas City graduates from high schools were unprepared for college-level math. Half of them needed help reading in college.

So, you're changing the system now at your elementary schools. You're using a standards-based system. Can you explain to me what that's about?

COVINGTON: Absolutely. When you consider the fact that when our students in the United States are compared with our international counterparts -- China, India, and other industrialized nations -- and we rank kind of middle of the pack. And then when you look here at Kansas City at our student population and see that they are not faring nearly as well, we had to do something very drastic to make sure the students were acquiring the knowledge and skill they needed to become what we call competitive on the economic -- or in the economic marketplace.

And so as a result of that, we went to a standards-based system where time becomes the variable rather than the constant. And we are moving Kansas City, Missouri School District away from that old paradigm of you do X amount of time in the first through 12th grades and then -- in nine months, and then you progress to the next level. We wanted to make sure the students were mastering the competencies and skills they need at one level before moving or progressing to the next level. And not only that, being able to demonstrate what it is they can do as a result of what it is they've learned.

So, that standards-based system is doing that for us, and it allows students to progress through levels rather than be tied to time.

VELSHI: So -- it sounds like an interesting idea, although it's different from other public schools. So, how doe that -- what is the net effect? Is it a student that would normally go from the ninth to the tenth grade find themselves in the ninth grade for two years? Or they have some courses that are ninth grade and some courses that are tenth grade? What's the net effect on students?

COVINGTON: We're starting the program, Ali, in five of our elementary schools. And the classes are multi -- they include multi- levels of students. And when students master the skills in one particular area, they don't have to wait on their classmates to move forward. They move forward when they're ready. And as a result of that, we can ensure that students are ready to tackle the rigor of the next level rather than be socially promoted to the next grade knowing full well that they're not ready to do so.

VELSHI: Very interesting conversation. You have a big challenge ahead of you.

John Covington, thank you very much for joining us. We'll keep in touch with you to see how this develops. It's an interesting change you're making. John Covington is the superintendent of Kansas City, Missouri schools.

As the school year gets underway, President Obama will delivering his back-to-school speech tomorrow, geared toward students and parents alike across the country. You can catch it right here on CNN at 1:00 p.m. Eastern. Then we'll have, as we always do when he speaks about education, a good hearty discussion about it right hereon this show.

Now, you know that question on job applications that ask if you have a criminal history? You check that box, you've lowered your chances of getting the job. If you're a minority and you check that box, wow, it's even worse. But now, some local governments want to change that. We're going to look at banning the box, straight ahead.

(COMMERCIAL BREAK)

VELSHI: It's a tough lot for a lot of people to get a job these days. But if you're black, male and you have a criminal record, you can imagine what the chances are. Now, some state and local governments are trying to change that by banning the box. Stephanie Elam explains.

(BEGIN VIDEOTAPE)

GENE MAYS, FORMER FELON: Here is a basketball. STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT (voice-over): Gene Mays knows all too well what a criminal record can do to a job search. Once the top of his class in high school, Mays dropped out of college and began selling coke to support his habit.

MAYS: Once I started doing cocaine, it just shot straight to the top as far as my priority list.

ELAM: In 1989, he went to jail for drug trafficking. He served his time, paid his dues. MAYS: October 7, 1997, and that's the day that I got clean.

ELAM: Flash forward a decade. Mays, now married and a father, was studying to become an electrician to better provide for his family.

MAYS: I did something that they said had never been done. And that was I got 100 on each of the 12 tests during my first year.

ELAM: Despite this, the city of Cincinnati revoked its electrician job offer.

David Singleton is Mays' lawyer.

DAVID SINGLETON, EXECUTIVE DIRECTOR, OHIO JUSTICE AND POLICY CENTER: The city looked at Gene, saw that he had two felony convictions in his past, and said therefore you can't work for the city. It didn't care about his rehabilitation. It didn't care that he was ranked number one in his class each of the five year of the electrician's training program.

ELAM: Singleton successfully fought to get Cincinnati to ban the box, removing the criminal history question from its job applications. Employers are still free to ask the question later in the hiring process. The point is to give ex-offenders a chance at an interview.

SINGLETON: It's not felon first, employment programs. What it is, is it's giving people a fair shot to compete for jobs where they are qualified.

ELAM (on camera): So this box issue, is it more of an issue for people of color, for black men?

SINGLETON: Statistics bear out that if you're a person of color, you are more likely to be the focus of the police. You're more likely to wind up in the criminal justice system.

ELAM (voice-over): This summer Connecticut joined Minnesota and New Mexico in banning the box on state job applications while Massachusetts and Hawaii banned all employers from using the box. Massachusetts State Representative James Miceli is against softening the laws.

JAMES MICELI, MASSACHUSETTS STATE REPRESENTATIVE: I want to give everyone access to all of the information regarding someone's criminal record that they can get. Why not disclose everything up front? ELAM: But Victor Garcia, a professor of surgery in Ohio believes there is a direct correlation between unemployment and the young people who end up in his emergency room.

VICTOR GARCIA, SURGERY AND PEDIATRICS PROFESSOR: Chronic joblessness is a direct cause for the growth of the illegal or informal economy and with that is a culture of gunshot wounds.

ELAM: Now clean for nearly 13 years, Mays is working for a transit company but he never did get that electrician's job. MAYS: Once a felon, always a felon. So that's what generally leads a person back to the life of crime because they feel like once they committed a crime, that it's no use now. What I hope can come out of this is that those same individuals that were thinking like that can now have a sense of hope.

ELAM: Stephanie Elam, CNN, Cincinnati.

(END VIDEOTAPE)

VELSHI: Okay. Today's "Mission Possible." Rufus Hannah used to be homeless. He was exploited for a series of underground videos - you may know them -- called Bum Fights. They showed homeless people performing dangerous stunts in return for beer and vodka.

Barry Soper is a businessman who befriended Rufus Hannah. Now, they have written a book about the experience. It's called "A Bum Deal," and they join me now.

Thank you guys for being with me. I appreciate you joining us. Let's talk about this for a second. Barry, you met Rufus even before he was involved in bum fights. Tell me how you guys know each other.

BARRY SOPER, BUISNESSMAN WHO BEFRIENDED RUFUS HANNAH: Yes, Ali. One day I was walking my property of the apartment complex that I own, and all of a sudden I saw a homeless man standing in front of my Dumpster. And I wasn't very kind because the day before, someone had defecated right in the same area and I had to clean it up.

So, on this particular day as I walked to the homeless man, I told him to get the heck out of here, I'm calling the damn police. He started telling me he's a veteran and tried to going to his wallet. I said I don't care if you're a veterinarian. I want you out of there.

But inside the dumpster was another homeless man who is scavenging for cans. He jumped up and really scared me and that happened to be Rufus Hannah and told me I was ruining his canning route. I got them to leave and they went back in their shopping cart and start moving.

As I got closer to my office, an older gentleman named Mr. Harkins who is 90 years old like an old Baptist minister had me come over there and sit by him.

And during this time, I told him about the homeless guys I just removed from my property. He told me no uncertain terms that Jesus wouldn't like me, and I'd better change my ways and I better hire them immediately --

VELSH: Wow!

SOPER: -- not knowing I was Jewish. As they got closer, I offered both Rufus and Donny employment. As long as you're there at 10:00 tomorrow, you have a job and to my surprise at 10:00 the next day --

VELSHI: There was Rufus.

SOPER: Rufus and Donny were there.

VELSHI: Hey, Rufus, you've been working for a long time. You were a carpenter, I believe. You were a construction worker. You went off into the Army. You got injured in the Army. You came back and things started to go wrong for you.

Now, you actually counsel the homeless. What do you tell people who are homeless? What of your experience can you share with them that helps them out?

RUFUS HANNAH, WAS CALLED "RUFUS THE STUNT BUM" WHEN HE APPEARED IN "BUM FIGHT" VIDEOS: I like to tell them that people -- I believe one of the first things is, you know, if you see a homeless person, don't just ignore the person. There's a story behind everybody, every person.

And I like to get comfortable with that person and see what their story is and it just kind of feel my way and take it from there. I don't like to put pressure on the person. I like for the person to be comfortable and be able to talk and express what their feelings are.

VELSHI: Barry, what's the book about? Is it the book about your relationship with Rufus or is it something that helps people help the homeless? Tell me what it is.

SOPER: It's a combination, Ali. It starts out Rufus having beer in a baby bottle and goes into when I meet him and how I get to know him when he starts working for me as a human being, not as a dehumanizing person. It really made a difference in my life.

And I think the book really shows as down as you can get. Rufus was a way, way down. He was victimized terribly where today he cannot drive a vehicle. He has to use mass transportation because of his double vision, his equilibrium problems because of bum fights.

That you can make a major change, you can make a difference in another person's life. I think that's what the book talks about, how Rufus, with all these problems, was able to make this remarkable change.

I always thought it would be the other homeless gentleman, Donny Brennan, because he -- Rufus and I never got along very well. Till one day I was bringing him some hamburgers, which I had them in the motel for about two weeks.

And as I brought these hamburgers in, Rufus said, what is this in & out, you never talk to me. I said I never thought you could talk.

HANNAH: That's my main point --

VELSHI: Go ahead, Rufus.

HANNAH: Yes, from the beginning, you know, I did not like Barry. I did not like Barry at all. I mean, I felt like he was up to something and I just didn't trust people in general. And it took time for me to feel comfortable even to confide in Barry.

VELSHI: Well, that's excellent. That's a great part about the story. It's very much why we do this particular segment, to show how everybody's perspective can change and how people can change.

Guys, thanks very much for joining us. I hope the book does very well. Rufus Hannah and Barry Soper, the authors of a new book, and it's our pleasure to talk to you guys.

All right, for more information on how you can help the homeless yourself to my blog cnn.com/ali. We've got links there about what you can do.

Some Democrats are pushing Nancy Pelosi to keep all those tax cuts for the rich in place. What's that about? Senior White House correspondent Ed Henry back with the Ticker when we come back.

(COMMERCIAL BREAK)

VELSHI: It is time for a "CNN Equals Politics" update. What have we here? CNN senior White House correspondent Ed Henry with the hour's political headlines.

Ed, what's crossing the political ticker right now?

HENRY: I can do "The Stakeout." I can do the ticker. I'll do whatever you want.

VELSHI: You really are versatile.

HENRY: Very versatile. White House spokesman Robert Gibbs firing back at Newt Gingrich who suggested over the weekend that the president has what he called a "Kenyan: anticolonial world view.

Robert Gibbs saying on "Good Morning America" today, he doesn't even really know what it means, but he assumes that Newt Gingrich is trying to appeal to the fringe of the Republican Party. That's hot on the ticker right now.

Pelosi under pressure as well, Speaker Nancy Pelosi, some good reporting by our congressional producer Deidra Wallace on the ticker, basically moderate Democrats in the House are writing a letter to the speaker saying we're not in favor of just extending the middle class tax cuts. We want to extend all the Bush tax cuts at least temporarily.

They're nervous if you don't raise the tax cuts for the rich, it will end up raising taxes and wind up hurting the economy further. Interesting because as we were talking about John Boehner last hour, some Republicans frustrated with his comments over weekend. It's not all neat and clean for leaders in either party.

It's not like all the Republican support just extending all of the Bush tax cuts and all the Democrat support just the middle tax cuts. There's a little pressure on leaders in both parties because some of these candidates are all over the map.

Finally new year, no budget. Don't worry, it's not happy New Year just yet, it's only upcoming October 1st. As you know, the start of the fiscal year for the government, it turns out congressional Democrats who are in power right now are not going to have a budget in time for October 1st so they have to do it on an ad hoc basis.

We should say Republicans when they were running the chambers also had those issues, but it makes you wonder if neither party can get a budget in place by October 1st maybe that's why sometimes we have some of these spending issues there, Ali.

VELSHI: Ed, wonderful to see you in this role.

HENRY: You know, look, I'll do almost anything for you?

VELSHI: You were excellent.

VELSHI: But I won't do the quest segment, whatever that thing is.

VELSHI: I do appreciate though -

HENRY: I do want to know -

VELSHI: Yes, go ahead.

HENRY: I want to know who the voice is? I want to know who the voice -

VELSHI: Yes, I know, but we can't tell you about that.

HENRY: Who is the voice?

VELSHI: Thanks for asking, Ed. Catch you tomorrow. Ed Henry.

All right, your next CNN Equals Politics update is just an hour away. It's a word that you probably heard before. It sounds almost profane but don't worry. You won't have to cover your ears. "Wordplay" is up next.

(COMMERCIAL BREAK)

VELSHI: Time now for "Wordplay." We're drilling down on a term that's used in, well, drilling. I'm talking about fracking. It's the EPA actually holding a contentious hearing about it today.

So fracking is a shorter form -- kind of a nickname for hydraulic fracturing. It's a method of extracting natural gas and oil from rock layers deep underground. So what happens is a well is drilled, but the rock is not porous enough to allow gas or oil to escape freely.

So millions of gallons of water and chemicals are blasted down the line to open up cracks or fractures in the rock. What's got people concerned the potential for groundwater contamination from some of those hardcore chemicals. Drilling companies say they take precautions against that. There's not a lot of agreement on that though.

Rick Sanchez with "RICK'S LIST" is up after the break.

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