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CNN Tonight
Obama vs. Wall Street; Health Care Blowup; Dropping Tiger; Berlusconi Attacked
Aired December 14, 2009 - 19:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
JOHN ROBERTS, CNN ANCHOR (voice-over): Tonight, a Wall Street smack down. President Obama tells bailed out bankers to knock it off and step up.
BARACK OBAMA (D-IL), PRESIDENT OF THE UNITED STATES: I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.
ROBERTS: Will Wall Street listen?
Also, the Senate health care deal headed for a ditch and one man, Senator Joe Lieberman, doing the driving.
UNIDENTIFIED MALE: I have a real hard time supporting it. It runs the risk of adding to the national debt, of raising taxes.
ROBERTS: And Tiger kicked off the team. A big money sponsor says the Woods drama doesn't play with customers.
UNIDENTIFIED MALE: They have to move on and I think this is what Accenture is pretty much telling Tiger as well as the marketplace.
ROBERTS: His marriage aside, can Tiger save his lucrative financial relationships?
(END VIDEOTAPE)
ANNOUNCER: This is CNN TONIGHT live from New York. Here now, John Roberts.
ROBERTS: Good evening. And thanks for being with us tonight.
President Obama playing hard ball with Wall Street today. The president shamed top executives from banks to start lending again. The same banks that would not be around today, if not for government bailouts. His widespread outrage that Wall Street is now paying out massive year-end bonuses at the same time that Main Street is still reeling from record-high unemployment in a stalled economy. Ed Henry reports now on whether President Obama's tough talk will lead to action.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: John, the big question is whether all of this talk will lead to the bankers actually doing more lending. The president has been pressuring them throughout his first year in office, to little effect so far.
(BEGIN VIDEOTAPE)
HENRY (voice-over): The president's message to bankers was blunt. Taxpayers bailed you out. So now return the favor.
OBAMA: And America's banks received extraordinary assistance from American taxpayers to rebuild their industry and now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.
HENRY: But after channeling populous rage in ripping into the banks on CBS's "60 Minutes"...
OBAMA: I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.
HENRY: The president suddenly shifted his tone from combative to constructive after actually meeting with the heads of the nation's biggest banks.
OBAMA: So I urged these institutions here today to go back and take a third and fourth look about how they are operating when it comes to small business and medium-sized business lending.
HENRY: And yet the president has repeatedly pressed the bankers to fix their pay and lend more to consumers, dating back to his first month in office.
OBAMA: When I saw an article today indicating that Wall Street bankers had given themselves $20 billion worth of bonuses that is the height of irresponsibility. It is shameful.
HENRY: That's why White House spokesman Robert Gibbs faced a barrage of questions about whether the president got firm commitments this time.
(on camera): Today you're saying it was positive, constructive bankers came out, positive, constructive...
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think the meeting was positive. I think the president said the meeting was also quite frank. The president didn't hand out awards.
HENRY: But bankers like Richard Davis of U.S. Bancorp emerged saying they agreed with the president and all was fine.
UNIDENTIFIED MALE: (INAUDIBLE)
RICHARD DAVIS, U.S. BANCORP, CEO: Well we do agree but there's also a time and a place for lending to be a risk/reward measurement, right? So at the end of a recession, the qualifications of most borrowers are lower than they were at the beginning. And the banks right now more than ever, you don't want us to make loans that are not strong and well-suited for the consumer or for the small business.
(END VIDEOTAPE)
HENRY: A top White House official insisted to me the president's approach is getting some results with these bankers, pointing to the fact that Citigroup today announced it will be paying out bailout funds while Bank of America said that in 2010 it's going to be lending an extra $5 billion to small businesses beyond what it's already promised. But critics on the left already saying they've heard these promises from bank before. We'll see if they actually come true -- John.
ROBERTS: Ed Henry reporting for us tonight. President Obama giving low marks to the nation's bankers, but much kinder when asked about the job that he's doing. The president told Oprah last night that he deserves a solid B-plus for his first 11 months in office and if health care passed he would bump that up to an A-minus. Americans may not be so generous though. According to a new Gallup -- a Gallup daily tracking poll out today less than half, only 48 percent approve of the job that he's doing; 42 percent of those polled disapprove.
This just in tonight -- American taxpayers getting more of the billions in government bailout money back, Wells Fargo just announcing it will repay all of the $25 billion it took to stay afloat. The bank says it will use proceeds from a $10.4 billion issue of new stock.
Well Citigroup also has a deal to return 20 billion of the $45 billion it borrowed. The banking giant was on the brink of failure at the height of the financial crisis. Its rescue package was one of the biggest and the government currently owns 34 percent of the company.
President Obama, behind closed doors today, meeting with those top executives of bailed out banks. CNN's Poppy Harlow has got details about what really happened inside that room -- Poppy he was very strident on "60 Minutes".
UNIDENTIFIED REPORTER: Sure.
ROBERTS: What was the tone inside the room?
POPPY HARLOW, CNNMONEY.COM: A lot of tough talk on "60 Minutes" in that interview, John, but I spoke with one of the top bank executives in this country who was at that meeting, one of the few invited that actually had an ear to the president. And he said and I'll quote here, "the president did not give us the speech he gave "60 Minutes."
He said there was little disagreement in the room. Everyone stuck to their script. This was very uneventful. That was interesting to hear. And he also outlined four main points, folks, from the president. Let's go through them quickly so you can see what we're talking about here. He said listen we have to increase lending to small businesses.
We've heard that time and time again, John. He also said I want to see you, the banks doing more to keep Americans in their homes. I want to see you refinancing more mortgages. I want to see more mortgage modifications and also he said directly to them, watch your compensation packages. Be sensitive to American people out there. Be sensitive to what Main Street is thinking.
And finally, support my financial regulatory reform. Now apparently all the bankers are behind his financial regulatory reform push. However, when he talked about compensation, apparently there was a bit of pushback here, this bank executive told me, saying well listen, Mr. President, you have to understand that we have to retain our top talent. We've heard that before.
And also we have to be conscious that you know once we paid the TARP money back, we have to think, John, they can do what they want. What power does he have?
ROBERTS: Yes and on that point, as we just said a moment ago, Wells Fargo paying back the $25 billion it got from the TARP program.
HARLOW: Right.
ROBERTS: Citigroup paying it back as well, Goldman Sachs, JPMorgan Chase...
HARLOW: (INAUDIBLE)
ROBERTS: ... all paid it back. Most of these institutions...
HARLOW: Right.
ROBERTS: ... have paid back that money, so what leverage does the president really have?
HARLOW: None, legally, none. According to TARP, the legislation as it was passed last year, once that money is back into the hands of the government, he doesn't have any leverage. This was a call to bankers to saying we are watching you. I am watching you. I want to see you watch your compensation. Be sensitive. At the same time, you have the American Bankers Association coming out and saying listen, since TARP started, the 21 banks that got the most TARP money have lent $2.2 trillion.
That may be a fact but John, small business lending has fallen $10.5 billion when you look at April through September. So you can't ignore what's happening to small businesses. I will say that this banking executive said let's be clear here, Poppy, the amount of demand for loans that is coming to us has fallen. Americans are deleveraging. So we're hearing all of this call for loans, but they're saying fewer people are asking them for those loans and you have to listen to the bankers as well on that front.
ROBERTS: All right, well we'll see if they loosen up at all. Poppy Harlow tonight -- Poppy, thanks so much.
HARLOW: You got it.
ROBERTS: Word of another big bailout, this one in Dubai sent world markets higher today. Middle Eastern city state Abu Dubai agreed to a $10-billion rescue plan for its cash strapped neighbor. Dubai's once high-flying real estate market has seriously soured along with the global economy, lavish over the top development projects turned the glitzy financial center into an international symbol of decadence and a popular playground for the rich and famous. Dubai and Abu Dubai are the richest of seven emirates that make up the UAE.
The Senate's deal on health care reform has hit a potentially major roadblock, Connecticut Senator Joe Lieberman, the Democrat turned independent has become a linchpin to the bill's survival. And as Dana Bash reports for us now, if Lieberman cannot be swayed or appeased any health care overhaul may be dead.
(BEGIN VIDEOTAPE)
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT (voice-over): A political bomb potentially blowing up Senate Democrats' hopes that they were on the verge of compromise to pass health care.
SEN. JOSEPH LIEBERMAN (I), CONNECTICUT: This Medicare buy-in is frankly another way to try to get to a singer payer government controlled health care system.
BASH: Democratic sources tell CNN Independent Joe Lieberman informed Democratic leaders he would support a GOP filibuster to block health care if it allows 55 to 64-year-olds to buy into Medicare.
LIEBERMAN: It has some of the same problems the public option had. It runs the risk of adding to the national debt.
BASH: The problem is Democrats had hoped expanding Medicare was the key to getting liberal Democrats to accept a health care bill without a public option. But they likely need Lieberman's vote to pass health care. A Lieberman spokesperson tells CNN he made crystal clear to Democratic leaders last week he had deep concerns about the Medicare buy-in. But senior Democratic sources say leaders are furious, they feel caught off guard by his outright opposition.
I've always thought that Senator Lieberman was OK with the Medicare buy-in.
BASH: One reason? In 2000, Lieberman even campaigned for a Medicare buy-in as Al Gore's running mate. And in this interview three months ago, he acknowledged support for the idea as recently as 2006.
LIEBERMAN: What I was proposing was they have an option to buy into Medicare earlier. And again, on the premise that that would be less expensive.
BASH: Left leaning blogs are exploding with anger towards Lieberman, one Democratic senator told CNN this is just the latest example of Lieberman poking Democrats in the eyes from his support for the Iraq war to this speech at the Republican Convention.
LIEBERMAN: Senator Barack Obama is a gifted and eloquent young man, who I think can do great things for our country in the years ahead. But, my friends, eloquence is no substitute for a record, not in these tough times for America. (END VIDEOTAPE)
BASH: Now, John, this evening, there was a meeting of all Senate Democrats that included Joe Lieberman to discuss how to deal with this potential problem. All indications from sources coming out of that meeting is that it appears that Senate Democrats may actually drop this idea of a Medicare buy-in to appeal to and, frankly, to appease Joe Lieberman. We're waiting to hear from the Democratic leader, Harry Reid, who should come to the cameras in a few minutes.
But that is what we are hearing from Democratic sources that in that meeting it seemed to be -- seemed to be agreed upon that they would probably move that way and accept the fact that at least in the short term, they would not get this very important issue for liberals. Now again, this is what we're being -- that's what's being indicated by sources. We'll see what Harry Reid has to say in a few minutes.
ROBERTS: All right, Dana Bash, standing by for a potentially important development there. Thanks Dana. We'll get back to you just as soon as we hear something.
Coming up, tough talk from President Obama, but will Wall Street step up? Also politics can get pretty nasty, but in Italy it got downright bloody, Italian President Silvio Berlusconi battered and sent to the hospital.
And some sponsors teed off by the Tiger drama, one of the big ones is bailing on Woods. Will the others follow?
(COMMERCIAL BREAK)
ROBERTS: We're watching on Capitol Hill right now for potentially important development regarding the Senate health care bill. There's Senator Chris Dodd, who's talking right now. We just heard Senate Majority Leader Harry Reid a couple of moments ago. No news at this point, but they're talking about what could be the future of the bill as Senator Joe Lieberman, Independent from Connecticut is saying, that he will not support a bill that expands Medicare so that people 55 years of age and older can buy into it. We'll keep monitoring this and we'll flag you right away if there's any news made. So far, nothing, though.
Tiger Woods starting to feel the financial fallout from the controversy surrounding his personal life. One major sponsor has already dropped the world's best golfer. Other sponsors are assessing their relationship with Woods. This all comes just days after Woods admitted to infidelity and announced that he is taking an indefinite break from professional golf. Mary Snow reports now on what it all means for the Tiger Woods' brand.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Tag Heuer, what are you made of?
MARY SNOW, CNN CORRESPONDENT (voice-over): Time may not be on Tiger Woods' side when it comes to luxury watchmaker Tag Heuer. As his personal problems sideline Woods from golf for an indefinite period, the company tells The Associated Press that it's reassessing its long-term relationship with the golf great. Gillette says it's limiting its role in their marketing.
UNIDENTIFIED MALE: He can see us.
SNOW: But consulting firm Accenture cut its ties with Woods dropping ads like this.
UNIDENTIFIED MALE: Go on, be a Tiger.
SNOW: Accenture says sports marketing veteran Michael Neuman had a bigger risk than some other sponsors, as Woods was the center of their sales pitch.
MICHAEL NEUMAN, AMPLIFY SPORTS AND ENTERTAINMENT: They're not household names. Sometimes they can create almost overnight connect ability with consumers when they choose an athlete like Tiger to associate with.
SNOW: Nike, Woods' bigger sponsor is different.
UNIDENTIFIED MALE: I'm Tiger Woods.
UNIDENTIFIED FEMALE: I'm Tiger Woods.
UNIDENTIFIED MALE: I'm Tiger Woods.
SNOW: Along with its ads, Nike has a golf line strongly relying on Tiger Woods. Nike is reiterating he has the company's full support.
DAVID DUSEK, DEPUTY EDITOR, GOLD.COM: Nike golf being a $650 million portion of the Nike entire company has founded itself; its whole identity really centers around Tiger Woods and what he does on the golf course.
SNOW: And his absence on the golf course in the past has put a big dent in ratings. Nielsen found tournament ratings dropped nearly 50 percent when Woods was out for six months in 2008, recuperating from knee surgery. And when he returned, Nike capitalized on it.
UNIDENTIFIED MALE: Hi, guys.
UNIDENTIFIED MALE: Hey, Tiger.
UNIDENTIFIED MALE: Welcome back.
UNIDENTIFIED MALE: Good to see you.
UNIDENTIFIED MALE: You, too (INAUDIBLE).
SNOW: But returning to golf after this leap isn't likely to be as easy. How can Woods re-brand himself? We asked Ann Green who does research for advertisers. ANN GREEN, MILLWARD BROWN: For a little while, he has to go quiet and he does need to go about ensuring that he focuses on his own brand and managing his own brand in the sense of getting his personal life together and also ensuring that when he does come back to the game that he is at the top of the game.
(END VIDEOTAPE)
SNOW: And some marketers we spoke with today say this whole episode is likely making companies think twice about the risks of signing multimillion dollar endorsement deals with celebrities -- John.
ROBERTS: It's just really incredible when you think of all the money that's involved here and the trickle down effect that one athlete can have.
SNOW: One athlete on this sport and in Nike's case, all of its products that are linked with golf are so dependent on him.
ROBERTS: Unbelievable. Mary Snow, thanks so much. We're going to have much more on the Tiger Woods' brand later on in the program. We're also going to examine the impact of Tiger's troubles on professional golf itself.
Overseas Italian Prime Minister Silvio Berlusconi remains in a Milan hospital after being attacked over the weekend. Berlusconi was campaigning for a local politician when a man struck him with a metal replica of the Milan Cathedral. The controversial prime minister is facing fraud charges and is in the middle of a messy divorce. Our Paula Newton reports even in a country known for its passionate politics, the attack came as quite a shock.
(BEGIN VIDEOTAPE)
(CROSSTALK)
PAULA NEWTON, CNN CORRESPONDENT (voice-over): Watch this video as the attack comes in from the right-hand side. There it is, the Italian prime minister taking a hit in the face, staggering back a bit. And then the full force of the blow recorded moments later. Silvio Berlusconi emerges defiant with blood dripping, a broken nose, two broken teeth, visibly shaken at what was supposed to be a support of political rally. Instead, he went straight to hospital, where doctors say he will remain until at least Tuesday.
DR. ALBERTO ZANGRILLO, SAN RAFFAELE HOSPITAL (through translator): It was not easy for the prime minister. He was shocked. He was upset. No doubt, he had an interrupted sleep and it's just like he had woken up from a nightmare. He was most upset.
NEWTON: Italian police confirm 42-year-old Massimo Tartaglia has been charged with aggravated assault and they add he has a history of psychiatric treatment. The wounds were apparently caused by a sturdy replica of a Milan Cathedral that Tartaglia pitched at Berlusconi's face, inflicting deep cuts. And still, Italy's interior minister says...
UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)
NEWTON: ... security followed all the rules before adding Berlusconi has a right to get close to supporters. This is a democracy. Berlusconi's aides say he is shaken, wondering why anyone would hate him this much. He woke up asking for the papers and saw these gruesome pictures and headlines, Italians wondering if this was a simple security breach.
UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)
NEWTON: He has so many gorillas around him, so many men she says. It's strange this man could succeed at hurting him. But it's comments like these that are worrying the Italian government.
UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)
NEWTON: On a humane level, I feel badly about this, she says. But speaking politically, he deserves what he got. That attitude went viral on Facebook and other websites before the Italian government said it would try to shut down that commentary, saying it incited violence. Italian politics are notoriously fractured. Berlusconi taking this one on the chin from the left, the same political side his aides say can be blamed for inciting this shocking attack of a 73- year-old man.
Paula Newton, CNN, London.
(END VIDEOTAPE)
ROBERTS: And just a quick update -- we are watching that press conference with Senate Majority Leader Harry Reid and others on the health care bill. No news was made there. They said that they're still going to wait for the Congressional Budget Office to come up with the spending, and at least a cost estimate on the bill before they say anything else. But again, Senator Joe Lieberman's threat hanging out there, that he will not support the bill if it includes that provision to expand Medicare, so much more debate on the health care reform bill coming up.
And coming up on this program, the recession and the reality. Is the end of our economic misery in sight? We'll take you to one southern community struggling with thousands of job losses.
And is Tiger a man without a professional future? He says he's working on his marriage. His sponsors are jumping ship. And he's out of the game, at least for now.
(COMMERCIAL BREAK)
ROBERTS: Strong words from President Obama in a "60 Minutes" interview, calling Wall Street bankers fat cats. Well, today the whole (inaudible) showed up at the White House to hear from the president directly. According to one inside source, he was far less strident in his language today, basically telling the bankers, we bailed you out. Now it's time for you to give back. So will they?
Joining us now is the former chairman of the Securities and Exchange Commission Arthur Levitt, he's the senior advisor to the Carlyle Group, also and adviser to Goldman Sachs. Arthur Levitt good to have you here.
ARTHUR LEVITT, FORMER SEC CHAIRMAN: Good to be here.
ROBERTS: So the president was urging banks to be good cooperate citizens, to increase lending, to support new regulations for the banking industry. Is he likely -- are they likely to listen to him?
LEVITT: I think that's what presidents have to do. He has got to call for the bankers to do more lending and to act like good citizens. I don't think he will persuade them very much. The real game is being played in the Congress where regulatory reform is coming out of the House Finance Committee and then soon to go to the Senate Banking Committee. I think the president, motivated by huge public anger at the banking industry, had to say on "60 Minutes" and today in the White House, bankers, get with the program. Will they get with the program? Probably not as a result of that, but there will be a lot of pressure on them.
ROBERTS: What's the relationship between President Obama and -- and the bankers? As you said, he called them fat cats on "60 Minutes" last night; probably the language was much different. At least one inside source said it was during the meeting today. But do they think highly of him? Are they inclined to listen to what he has to say based on the relationship?
LEVITT: The industry respects the power of the presidency. Do they fear him? Do they think that he's going to take away their benefits, whatever they may be? They're looking at the Congress. They're looking to see what Chris Dodd and Barney Frank do. They understand the game. They know that the president will wile away at them publicly. They know that Larry Summers and Tim Geithner will criticize them publicly, but that's probably as far as it will go.
ROBERTS: Well at least...
(CROSSTALK)
ROBERTS: At least one bank's CEO seemed to be saying the right things today, Richard Davis, the CEO of Bancorp, came out after the meeting -- after the stakeout position outside of the West Wing and spoke with reporters. Let's listen to what he said.
(BEGIN VIDEO CLIP)
RICHARD DAVIS, CEO, U.S. BANCORP: We're under the microscope to show every step that we take to do a better job of listening to customers, paying attention to their needs and being more available than we have been in the past, so I think the productive conversation allowed us to align our thinking and be more in line with each other as we talk to the American public about being party to this recovery. We haven't done a very good job of saying that. (END VIDEO CLIP)
ROBERTS: He went on to say that his company was willing to take a look at -- reexamine every loan that's out there, every loan that's been declined. He seems to be saying the right thing, but does he really get it and what about the others?
LEVITT: I think they all get it, but you know better than anybody this is standard White House fare. Bring the executives in, then troupe them out in front of the cameras and have them to say wonderful things about what went on in the Oval Office. Now it's business back to usual. So I don't think we're going to see a massive sea change. This was a polite, public relations meeting. The bankers understood what was being said. I think they'll try to help. They said the right things. It fed to the populist furor that's going on in the country and now back to the Congress.
ROBERTS: What about these huge compensation packages, these bonuses. Earlier this year the president called them irresponsible. He again urged banks to rein in these compensation practices. Goldman Sachs for its top 30 executives says you'll get stock. It takes five years to vest the stock. It's also at risk. It's based on performance, but there are still hundreds of other people who work in that company who will get bonuses, average across the company, $700,000, some of those will be in the multiple millions of dollars and most of these banks have now paid back TARP money, so does the president have any leverage over them at all?
LEVITT: I think the president does. And I think that Ken Feinberg has done a very good job of jaw boning. In every board room of every financial services company they are thinking very carefully about what to do. Goldman Sachs paid out stock that doesn't vest for some years. That's as good as it can get. I mean that diminishes the amount of...
ROBERTS: But again, only for their top executives. There are plenty of other people in the lower tier that will get millions of dollars in bonuses.
LEVITT: That has yet to be determined, in terms of how that will be paid. I would guess that their pay, their compensation will be in a different form than it has been in the past. So I think the jaw boning of the president and the administration has been useful. You cannot legislate compensation. That's impossible. Putting that aside, they've done the very best they could have.
ROBERTS: We'll see what happens. Arthur Levitt, good to talk to you tonight -- thanks for coming in.
LEVITT: Good to be with you.
ROBERTS: Appreciate it.
So is the recession finally over? If you're out of work, the likely answer is no. And conflicting responses coming out of the White House are not all that reassuring. One adviser to the president insists that the recession is history. Another aide says well that's just not the case.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, DIRECTOR, NATIONAL ECONOMIC COUNCIL: It will take time. A year ago the question was would we have a depression. Today everyone agrees that the recession is over and the questions are around how fast we'll recover.
UNIDENTIFIED MALE: In your mind, this recession is not over?
CHRISTINA ROMER, CHAIR, COUNCIL OF ECONOMIC ADVISERS: Of course not.
(END VIDEO CLIP)
ROBERTS: So, who's right? With the economy on the rocks, people are still struggling in small towns all across the country. Ali Velshi has taken the CNN Express across the country to see how people are coping. Tonight in South Carolina, Ali, what are you hearing from people there?
ALI VELSHI, CNN CORRESPONDENT: Well, certainly on that discussion about whether or not we're still in a recession, John, it seems kind of academic on the ground. I'm hearing from small business people who are talking about access to credit and loans. I'm hearing about taxes. There's a lot of discussion about the effect of health care on small businesses. We're hearing from people who are having difficulty with mortgages, a discussion you were just having. Of course, the number one issue of all, John, you know what it is. It's jobs. So, I'm not really hearing a lot of people saying that they're spending a lot of time discussing whether or not the recession is on or not. But one of the things that's different today than a year ago, heading into the holiday season last year, is that there isn't the same sense of panic. There's a sense that people are saying, I don't really know that the administration is going to help get us out of this thing and I don't really know that I should trust Wall Street to do so. I'm going to start trusting my own instincts and dealing with things that I can control.
Last night I was in Asheboro, North Carolina, where I met a woman who worked for the North Carolina Zoo for over 25 years. She lost her job and she decided she's going back to school to retrain as a teacher. She is now middle aged and training as a teacher. Listen to our discussion.
(BEGIN VIDEO CLIP)
VELSHI: How do you like being a student at this point in your life?
LORRAINE SMITH, STUDENT, RANDOLPH COMM. COLLEGE: You know what? I love it. My classmates are so good. Most of them are quite a bit younger than I am, but I'm learning new things and I learned how much life experience you do accrue over a lifetime. I don't think any of us ever stop enjoying learning new things and my professors have been terrific. So, I have really had a ball. My husband will tell you I do one night of school, eight nights of homework, but I'm having a good time.
(END VIDEO CLIP)
VELSHI: One night of school, eight nights of homework, I don't think I ever had a ratio like that, John. Just one of the types of ideas that I'm hearing from people how they're coping about the end of this recession and how they'll make 2010 hopefully better than 2009, John.
ROBERTS: It's good to see people being proactive. You're so smart, Ali, you don't need to do homework.
VELSHI: Oh, I only hope that were true, John.
ROBERTS: Ali Velshi tonight. Thanks.
Coming up, Tiger loses a stripe, a multimillion dollar endorsement deal now gone, a victim of scandal. Could others be far behind?
Also, companies continue to suffer and shed jobs. One sector not hurting from the lack of growth in this economy, the government.
(COMMERCIAL BREAK)
ROBERTS: Tiger Woods has already lost one major sponsor, and that could be just the beginning. But it's not just Woods who loses endorsements because of his sex scandal. The PGA tour, in its entirety, could also suffer. That was the subject of a "Saturday Night Live" skit this past weekend with Tim Finchman, the commissioner of the PGA tour.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I think the PGA tour will be just fine without Tiger Woods. And you know what? The sponsors? Well, they are excited, too. And the PGA tour, no Tiger, no problem.
(END VIDEO CLIP)
ROBERTS: So, what does this all mean for the Tiger Woods' brand and professional golf? Here with some possible answers are Kurt Badenhausen. He's the associated editor of Forbes magazine, and Howard Bragman, a leading public relations expert of "15 Minutes PR." Gentlemen, thanks for joining us.
Kurt, you know Tag Heuer, one of the big sponsors of Tiger Woods, the watch company says it will spend the next few weeks reassessing its relationship with Tiger sending a more ominous note than it did earlier today. Gillette limiting its role. It happened with Accenture. Do you expect there to be a flood of defections now in the corporate world?
KURT BADENHAUSEN, FORBES: I think you could see more companies walk away from Tiger Woods. I think he will hold on to Nike, Electronic Arts. They both built big businesses around Tiger Woods and are looking long term at being partners with him for another 10, 20 years. Other companies, it wouldn't surprise me if they started walking away.
ROBERTS: Howard, when Accenture pulled out, the quote was the company has determined he is no longer the right representative for their advertising. Of all the words you never thought you would hear about Tiger Woods.
HOWARD BRAGMAN, PUBLIC RELATIONS CONSULTANT: You know, the only person who hates all this controversy more than Tiger Woods are the sponsors. Corporate America has had enough controversy. I can tell you, having represented a lot of blue chip companies, they hate it. And they want to get out of there as quickly as they can, John. And this is just them saying, you know what? There's a lot of other people with a lot less hassle who can represent our brand. We'll turn to them now.
ROBERTS: At this point, we do not know how long he will be out of golf, Howard. We don't know what, quote, indefinite means. What's your sense of this from a PR perspective? Will he be able to come back?
BRAGMAN: Well, first of all, look at what he has done to date, almost all of his decisions have been bad from a PR perspective, from the duplicitousness from the beginning to the way everything has been handled very badly. That being said, we're a very forgiving country. If he apologizes, if we buy it, if we believe he's sincere and if he plays golf well, most importantly, we will allow him to come back. That's the kind of people we are, which is a good thing.
ROBERTS: There it is at a personal level. Kurt, from a broader perspective, Tiger's time-out, what kind of effect will it have on the PGA? When he was out for his knee surgery for six months ratings were down as much as 50 percent.
BADENHAUSEN: Exactly. It all comes down to how long he's going to be out. If he misses two, three tournaments it's a blip on the screen. If he's out for a full year, it's a big year for the PGA tour. They've got 12 title sponsorship deals up. Those are $8, $10 million deals to sponsor a tournament. They're trying to renew those deals. Financial companies are out. Car companies are out. They're not spending money right now. They need a healthy Tiger Woods to boost ratings. Ratings as much as double when Tiger Woods is in contention.
ROBERTS: There's a trickle down effect not just for the PGA but all the players in the PGA. My colleague Kyra Phillips was talking with Amy Alcott earlier today. Here is what she said about the affect that Tiger Woods has had on some of his colleagues.
(BEGIN VIDEO CLIP)
AMY ALCOTT, PRO GOLFER, LPGA: Many of the top golfers will tell you, he has, you know, padded their pocketbooks in a big way because he's been the guy who's really changed the face of golf.
(END VIDEO CLIP)
ROBERTS: So, Howard, Tiger Woods stands to lose potentially tens of millions of dollars because of this. What about the other golfers? Cumulatively, what could the dollar effect be on all these other players?
BRAGMAN: Certainly there could be a big loss. For the top golfers there's an opportunity that they haven't had in the last decade since Tiger's -- or slightly less since Tiger has been around that maybe somebody will do something shocking and hire somebody other than Tiger Woods as a spokesperson. Hopefully, they're looking at the glass half full right now and they're talking to companies and saying, Tiger Woods is not the only player in this game. And look at me. Look at my family. And look at my clean record. And maybe you should consider me. So, hopefully, they're looking for other opportunities. Certainly it's going to hurt the game overall. Maybe individually, there can be some winners.
ROBERTS: You know Kurt, we played that bit from "Saturday Night Live" at beginning of this. They went on to talk about exactly what Howard was talking about. Hey, we've got plenty of other stars, we've got David Ogilvy, all these other people, great athletes but none of them have the cache of Tiger Woods.
BADENHAUSEN: Absolutely. It's a lot like Michael Jordan on top in the NBA. He brought in that casual viewer that boost ratings. On CBS and NBC and the Golf Channel they're paying almost $300 million for golf this year. If they don't have Tiger Woods playing, ratings are going to be down. Advertisers aren't going to be paying up for golf events. It's a very important year for the PGA. It's hurting right now. Look at the LPGA. They will have 24 events next year. They had 34 last year. PGA doesn't want to see that happen.
ROBERTS: As Howard was saying, America is a very forgiving society. Everybody loves a comeback story, particularly in golf. John Daly had at least five of them. Can Tiger Woods come back?
BRAGMAN: Absolutely. Tiger can come back. Golf is a very attractive demographic, wealthy demographic that spends a lot of money on cars, on watches, on golf equipment. Tiger will be toxic for 2010, most likely 2011, but he could have a 20-year career ahead of him. So, a comeback story would be bigger potentially than even this.
ROBERTS: Finish us off with a quick thought, how are. If you were advising Tiger Woods, what would you tell him to do right now?
BADENHAUSEN: Ignore the sponsors and the PR implications. Take care of your family. Take care of your life. Take care of your marriage and get a very thick skin, John.
ROBERTS: All right. Sounds like that's probably what he's in the process of doing. Howard Bragman, Kurt Badenhausen, thank you.
Coming up, not all fat cats feed on Wall Street. Welcome to easy street in Washington, the number of federal workers making six figures has rocketed during the recession. (COMMERCIAL BREAK)
ROBERTS: Unemployment is at 10 percent in this country with more than 15 million Americans out of work, most of them in the private sector. While the jobs in private industry are scarce, one sector keeps on hiring, the federal government. As Lisa Sylvester tells us now, government workers' salaries are sky rocketing.
(BEGIN VIDEOTAPE)
LISA SYLVESTER, CNN CORRESPONDENT: Sammy T's Restaurant in Fredericksburg, Virginia is one of the few places in town that is hiring.
LIZ FEDOWITZ, RESTAURANT MANAGER: Within the first day or the second day, all day long there's applicant after applicant coming in.
SYLVESTER: Fredericksburg is seeing its highest unemployment rate since 1992. While jobs are scarce and paychecks shrinking in many corners of the country, one sector that doesn't seem to be reeling from the recession, the federal government. Congress jus boosted the base budget for some of its federal agencies by 12 percent and according to data from the Federal Office of Personal Management, the number of federal workers now earning six-figure salaries went up as the economy went down. In 2009, nearly 20 percent of the federal workforce earned $100,000 or more. That's up from 14 percent in 2007. Congressman Jason Chaffetz is not too pleased with those numbers.
REP. JASON CHAFFETZ (R), UTAH: That doesn't count their other benefits like medical insurance, those types of things. It just sends the wrong message. There's no way to justify it to the American people. They're struggling yet the federal government is adding 10,000 new jobs -- new jobs every month. It's just absolutely out of control.
SYLVESTER: The Federal Manager's Association represents government executives and supervisors. The group declined an interview with CNN but a spokesperson said those $100,000 plus salaries are actually on the low end, that in the private sector the same workers, who include lawyers, doctors and PhD holders, could make 26 percent more. But other figures indicate the private sector just isn't what it used to be. Today's average salary in America is just about $40,000, while the average federal worker is making more than $70,000.
(END VIDEOTAPE)
SYLVESTER: And congress just approved a 2 percent raise for all federal employees. That is, however, the smallest pay raise they've received since 1976. John?
ROBERTS: Still all in all, not bad for government work. Lisa Sylvester, thanks.
Up next, two members of the house financial services committee tell us what they think about President Obama's behind-closed-door meeting with top bankers. Stay with us.
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ROBERTS: As we reported earlier, the president was talking tough, in public at least, about fat cat bankers. The president urged banks to start lending again to small businesses and to support financial reform legislation. Will the banks listen? I'm joined by two members of the House Financial Serves Committee, Congressman Thaddeus McCotter, Republican of Michigan and Congressman Brad Sherman, Democrat of California. Let's start off, the president basically saying to the bankers, we bailed you out. Now it's time to give you back. Do you have any faith that the banks will be good corporate citizens here?
REP. THADDEUS MCCOTTER (R), MICHIGAN: I think first the president should stop calling them fat cats. People like cats. I don't know that you want to put that on the bankers. The second part of it is that the president supported the T.A.R.P., the president voted for the T.A.R.P., the underlying premise was it would free up money for Main Street, keep people working. People like Brad and myself voted against it, knowing it wouldn't work. Today we see that it hasn't worked. Now the moral suasion on the president's part I think can only be helpful. I'm not going to knock him for that but you have to look at the underlying premise of T.A.R.P. which at the present time is recapitalizing these financial institutions and knowing that when financial institutions recapitalize, they're not going to be putting out money and incurring more liabilities. That has to change.
ROBERTS: Congressman Sherman, do you agree that the T.A.R.P. hasn't worked? There are plenty of people associated with the program say it has worked.
REP. BRAD SHERMAN (D), CALIFORNIA: I voted against it twice. At the same time I think it had some benefits. It was originally sold to us as the purchase of toxic assets that's where the "t" comes from. Yet, unfortunately, Secretary Paulson was lying to us when he told us what he was doing with the money. He ended up buying preferred stock rather than toxic assets. I think it's ultimately because Paulson was lying to us and ended up doing something smarter than what he told us he was going to do that the total cost of the program is going to be less than we originally expected. I think it's been of some benefit. What we have to do now is take some action so we have small business lending. One key element there is to let credit unions make small business loans. I think that could provide over 100,000 jobs and we wouldn't even have to have a meeting at the white house.
ROBERTS: When it comes to banks, Congressman McCotter, is there anything congress can do to force banks to lend? Should congress even be involved?
MCCOTTER: One of the things we should look at as Brad pointed out is ways that we can get credit unions to continue to help us with this. They've been very smart citizens throughout and trying to make business loans and loans for consumer purchases. Community banks are under enormous pressure from federal regulatory agencies. Community banks, which did not cause the problem in terms of these regulatory agencies coming in and demanding they sell many assets, mark them down, sell them at firesale prices and then try to desperately recapitalize. In my home state of Michigan that's very difficult for them to step up to the plate. With the larger banks, the government should be heading in a direction of realizing we cannot have a highly centralized, highly bureaucratized banking system in the United States. What that will do is starve the capital for innovative ideas and for an entrepreneurial based economy. One of the solutions that I think would be most helpful is to cap their outstanding liability levels they can have to 2 percent of GDP, as Simon Johnson, who used to work for the IMF and is a liberal has pointed out, that would diminish the chance for too big to fail, and diminish if not entirely eliminate the risk of the taxpayers for those institutions doing what they did last fall.
ROBERTS: What about the broader topic, Congressman Sherman of regulatory financial reform? The bill was passed in the house. It's now in the senate. It will be taken up next year, identifying firms that are too big to fail, subject them to new oversight measures. Will this fix all the problems?
SHERMAN: It will hardly fix all the problems. The key thing is that investors should give money to banks only if they have good balance sheets and prudent policies. They shouldn't rely upon the federal government to either somehow rescue them if they make a bad decision or prevent them from making a bad decision. I agree with Thad that we should break up institutions that are too big to fail. This bill we just passed in the house chiefly with Democratic votes gives regulators the right to do it but I would agree with Thad that a 2 percent on total liabilities to Americans. That is to say you shouldn't owe Americans more than 2 percent of what this whole country produces in a single year would be a good absolute limit on the size of these banking institutions.
ROBERTS: Congressman McCotter, as you know, the banking industry is lobbying heavily against new regulation. There's a sense among some people at the very least that Wall Street doesn't seem to learn lessons or ignores lessons it should learn. Paul Krugman in the "New York Times" had an interesting column on Sunday in which he quoted, quote, it's difficult to get a man to understand something when his salary depends on not understanding it.
MCCOTTER: I think that would tie in with your last story about the raises for government workers at the very time that people on Main Street in the private sector are losing their jobs. What you have to remember, John, is with this situation, government has helped to contribute to this problem. With the bill before us, I believe it creates a system where you have a permanent bailout in place with one individual or a couple of individuals with the ability to make a discretionary determination as to whether something is too big to fail or whether it's not and how to deal with it. I would like to see the cap on the 2 percent of liabilities, a mandatory breaking up of institutions that are too big to fail to go past that, that would diminish the government's messing around in the private sector, but also provide certainty that no one could put the taxpayers in this situation again. ROBERTS: All right. Congressmen Thad McCotter and Brad Sherman, thanks for joining us tonight. Really appreciate you coming in.
This just in, two senior Democratic sources tell CNN that senate Democrats are headed toward dropping the compromise idea to allow 55 to 64-year-olds to buy into Medicare because of opposition from independent Senator Joe Lieberman. Senate Democrats had an emergency meeting to discuss the issue, which threatens to derail the health care reform plan. Although a final decision was not made at that meeting, a second Democratic source says it is likely a final decision could be made at a meeting on Tuesday of all Democrats with the president at the white house. Again they may be dropping that provision in the senate bill to allow people 55 to 64 years old to buy into an expanded Medicare program.
Coming up at the top of the hour, Campbell Brown joins us now. She's here now to tell us what's in store. Hi Campbell.
CAMPBELL BROWN, CNN ANCHOR: Hi there John Roberts. Tonight we're going to begin our special series called "Band of Sisters." It's the stories of women who risk it all for their country. We're going to talk about why women warriors are facing a new battle after returning home from war and why it's so hard for them to get the help they need.
Plus, is this the end of privacy? Facebook is under fire for its new policy. And the Supreme Court is deciding who gets to read your text messages. Is there any part of your life that you can keep a secret? We'll get into that as well. John?
ROBERTS: Looking forward to all of that, Campbell. We'll see you in a few minutes.
Coming up next, a Christmas gift for hundreds of our troops.
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ROBERTS: As more troops head out to war there's a king-sized gift for members of the Maine Army National Guard so they can spend the holidays at home. Author Stephen King and his wife, Tabitha are donating $13,000 towards the cost of getting the troops in Camp Atterbury Indiana back home to Maine for Christmas. Soldiers are scheduled to depart for Afghanistan in January and we certainly wish them the best.
Thanks for being with us tonight. I'll see you tomorrow morning on "AMERICAN MORNING." Among our stories, are cat scans causing cancer? Join us.
Up next, Campbell Brown.
