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Campbell Brown
President Obama Unveils Housing Rescue Plan; Interview With Suze Orman
Aired February 18, 2009 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: Hey there, everybody.
President Obama is betting the house on it, your house.
Bullet point number one tonight: The president rolls out his $75 billion plan to help stop foreclosures, chockful of financial incentives to help borrowers and lenders work together.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Through this plan, we will help between 7 and 9 million families restructure or refinance their mortgages so they can avoid foreclosure. And we are not just helping homeowners at risk of falling over the edge, we are preventing their neighbors from being pulled over that edge, too, as defaults and foreclosures contribute to sinking home values, and failing local businesses, and lost jobs.
But I also want to be very clear about what this plan will not do: It will not rescue the unscrupulous or irresponsible by throwing good taxpayer money after bad loans.
(END VIDEO CLIP)
BROWN: But already tonight, leading Republicans are raising red flags. We're going to look at what's really involved and just who the plan will actually help.
Bullet point number two tonight: You have sent in your video questions for personal finance expert Suze Orman. Tonight, she is here live for a NO BIAS, NO BULL look at your money in our studio, the very one and only. And she's got answers we can all use right now. We're looking forward to that.
And bullet point number three tonight: a remarkable and unexpected wake-up call from Attorney General Eric Holder. Believe me, this is not your average political speech about Black History Month. Take a listen.
(BEGIN VIDEO CLIP)
ERIC HOLDER, U.S. ATTORNEY GENERAL: Though this nation has probably thought of itself as an ethnic melting pot, in things racial, we have always been and we, I believe, continue to be, in too many ways, essentially, a nation of cowards.
(END VIDEO CLIP)
BROWN: He didn't stop there. Neither will we. You will hear a lot more from Attorney General Holder "Cutting Through The Bull" tonight.
First, though, the massive mortgage fix President Obama spelled out today in Arizona. The president says his plan helps families who have played by the rules, but also anyone who's become part of this vicious cycle, a cycle that often begins with the unexpected, like a layoff.
(BEGIN VIDEO CLIP)
OBAMA: A lost home often begins with a lost job. Many businesses have laid-off workers for a lack of revenue and available capital. Credit has become scarce as markets have been overwhelmed by the collapse of security-backed -- securities backed by failing mortgages.
In the end, the home mortgage crisis, the financial crisis and this broader economic crisis are all interconnected. We can't successfully address any one of them without addressing them all.
(END VIDEO CLIP)
BROWN: Our chief business correspondent, Ali Velshi, has been digging into the details of the president's plan.
He is breaking it down for us tonight.
So, Ali, walk us through it. How is this thing going to work?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Campbell, this is salvo number two in this administration's counteroffensive to this recession.
The first, number one, was yesterday. The stimulus plan that President Obama signed into law, that was the first and the biggest part of his whole plan. The second part is today, this housing plan that the administration says will keep between seven million and nine million Americans in their homes. Number three is going to be a plan to deal with the banks and the credit situation.
We started to see that last week with Treasury Secretary Tim Geithner. We're waiting for a fuller and more complete plan. Now, today's housing plan, here's how it breaks down. It basically attacks two problems. One is it deals with those Americans or at least some of them who can't pay, those who are more than three months late on their mortgages and are in foreclosure.
Basically, it provides an incentive, a carrot, not an obligation, to banks to modify some of those subprime loans to try and make some of them more affordable, bringing the affordability down to a place where homeowners can try and keep paying their mortgages and stay in their own homes. But there's a stick along with this carrot. And it is that the administration says it will work with Congress to allow bankruptcy judges to remodify loans, to actually change of the value of a loan if you have a mortgage that is much bigger than the value of your house. So, that's got the financial community worried. The idea is that maybe that will force them to modify those loans.
Now, for those people who can continue to pay their mortgage, but their mortgage is higher than the value of their home what this bill will do is it will allow Fannie and Freddie to refinance even if that -- the house is worth more than the mortgage by about 10 percent. There are still a lot of people that won't help. But it will help some people refinance at a low mortgage rate, even if the mortgage is worth more than the house.
It will also allow people to refinance at lower monthly mortgage payments at some point -- 38 percent of your mortgage is what you can pay comfortably and stay in your house. If a bank lowers your payment to 38 percent of your monthly income, the government will step in and bring it down to 31 percent.
The idea behind that is, it creates greater home affordability and will keep people in their home for longer. So, it's a significant plan. And there's no question it will go some distance toward helping the problem. It may simply not be broad enough for those people who are in the worst trouble.
And really what we need to do is stop these foreclosures, so that home prices stop going down.
BROWN: So give me your bottom-line assessment. Overall, it's a step in the right direction? It's going to do the trick? What do you think?
VELSHI: Yes, well, it's kind of like the stimulus bill, right? It's big and it's going to do some things well, but it may not be enough. This is one of those situations. It may not be enough.
The issue here is this administration is trying to force the hand of the banks to say, do this on your own, do this voluntarily. There's some hint here that more government action will come and it might force banks to do things, if they don't make their own decisions.
Campbell, there are a lot of people very upset about this however, because there's nothing in here for people who didn't overextend themselves, who didn't make -- haven't missed their payments and aren't in danger of foreclosure.
BROWN: So, we will probably be hearing a lot more about that as well.
VELSHI: Yes.
BROWN: Ali Velshi for us tonight -- Ali, thanks. And we want you to get involved in the conversation. Send in your I-Report questions now to CNN.com/Campbell. Ask Ali Velshi about the economy and how to cope. He's going to be here tomorrow night to answer. And we will also be opening up our phone lines. That's tomorrow night.
As the president pointed out today, the foreclosure crisis strikes far more than just the homeowners caught in the middle, but that's where it all begins.
And our Tom Foreman looks at the ripple effect of the president's plan.
(BEGIN VIDEOTAPE)
(CHEERING AND APPLAUSE)
OBAMA: Thank you.
TOM FOREMAN, CNN CORRESPONDENT (voice-over): One primary target of the president's plan is three million to four million families at risk of defaulting on their home loans because of a lost job or ballooning mortgage payments, but who cannot refinance at a lower rate because their house is underwater.
That means its value has dropped so much, the family owes more than the house is worth.
(on camera): Let's say a family in this house, for instance, is having trouble meeting the monthly payment. They bought it for $200,000. It's now worth much less than that, so it is underwater. They have some income. And they have scraped up monthly payments so far, but they don't have enough equity to refinance this deal.
So, what do they do? This is the president's solution. The lender and the Treasury Department, working together, would adjust the interest, so that the monthly payments would be about a third of that family's income. That leaves them enough money to buy food, gas, clothing, the basics needed to keep them engaged in the economy.
The lender and the borrower could each get up to $1,000 a year to keep those payments current. And this whole adjusted-payment schedule would stay in place for five years, long enough for it to sink in and settle down, hopefully.
But what about the guy next door? What does he get, the guy over here, who always pays on time and who's not in trouble? Well, I will tell you this. He does not get any money. But, the White House says, he will get protection, because, if this house is foreclosed on, his home value could plummet.
(voice-over): And the ripple effect goes on. With no cheap houses sitting around empty, demand for building goes up, and the local construction company starts hiring, instead of firing, same story at the building supply shop, same story at the gas stations, restaurants, shopping malls, and more. At least in theory, one family gets direct help; many families benefit -- Campbell.
(END VIDEOTAPE)
BROWN: Tom Foreman for us tonight.
And we are just getting started. Finance expert Suze Orman is here live tonight to answer your many questions about money.
Plus:
(BEGIN VIDEO CLIP)
HOLDER: It is an issue that we have never been at ease with. And, given our nation's history, this is in some ways understandable.
(END VIDEO CLIP)
BROWN: Tough talk about race in America from our new attorney general. Today, Eric Holder said, when it comes to things racial, we are -- quote -- "a nation of cowards."
And first lady Michelle Obama said she wanted to open up the White House more often to regular people. Well, today, she did just that.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BROWN: On this program, we are all about "Cutting Through The Bull." And, for once, somebody in Washington is, too.
Today, Attorney General Eric Holder went well beyond paying lip service to the nation's annual observance of February as Black History Month. It would have been easy for him to simply praise African- Americans, whose sacrifice helped pave the way for our democracy, or to point to the triumph of both President Obama's election and Holder's own nomination and confirmation as the first black attorney general in U.S. history.
But, instead, Holder used his speech at the Department of Justice to demand that Americans confront our unfinished business on the uncomfortable subject of race.
Let's listen.
(BEGIN VIDEO CLIP)
HOLDER: Though this nation has proudly thought of itself as an ethnic melting pot, in things racial, we have always been, and we, I believe, continue to be, in two many ways, a nation of cowards. Though race related issues continue to occupy a significant portion of our political discussion, and though there remain many unresolved racial issue in this nation, we, average Americans, simply do not talk enough with each other about things racial. It is an issue that we have never been at ease with, and given our nation's history, this is in some way, understandable. And yet, if we are to make progress in this area, we must feel comfortable enough with one another, and tolerant enough of each other to have frank conversations about the racial matters that continue to divide us.
As a nation, we've done a pretty good job in melding the races in the workplace. We work with one another, we lunch together. And when the event is at the workplace, during work hours, such as this, or shortly thereafter, we socialize with one another fairly well, irrespective of race.
And yet, even this interaction operates within certain limitations. We know by American instinct and by learned behavior that certain subjects are off limits, and that to explore them risks, at its best, embarrassment and, at worst, the questioning of one's character.
And outside the workplace, the situation is even more bleak, in that there is almost no significant interaction between us. On Saturdays and Sundays, America, in the year 2009, does not, in some ways, differ significantly from the country that existed almost 50 years ago.
This is truly sad.
This will be, at first, a process that is both awkward and painful, but the rewards are, I believe, potentially great. The alternative is to allow to continue the polite, restrained mixing that now passes as meaningful interaction, but that in reality, accomplishes very little.
(END VIDEO CLIP)
BROWN: Pretty provocative stuff. The attorney general says we all need to have frank conversations about racial matters.
So, let's do it.
Joining me right now, CNN political analyst Gloria Borger.
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Let's have one right now.
(LAUGHTER)
BROWN: Let's have one.
(LAUGHTER)
BROWN: Political analyst Roland Martin and special correspondent Soledad O'Brien, who reported and hosted CNN's groundbreaking series "Black in America."
Welcome, guys. Roland, let me start with you. What did you think of what he said? Are we a nation of cowards?
ROLAND MARTIN, CNN CONTRIBUTOR: Absolutely.
A couple of years ago, I gave the Martin Luther King Day speech in Wilmington, Delaware, and it was a group of students, black, white, Hispanic, Asian, from all over. And they were talking about how they live in this multicultural world, and how everything is wonderful.
But then I asked them, who do you go to lunch with? And they all just were silent. And then I said, who comes into your home? And it was amazing how they talked about, in a forced environment like school, that they all get along, but when they made the choice of who they ate lunch with and who was ever in their home, then they realize they were living in segregated worlds.
We have segregated schools. We have in terms of neighborhoods, churches. And so we have this nice little coexistence. But he's right. We don't want to be forcefully honest about where we stand when it comes to issues of race.
BROWN: So, how do you break that cycle? I mean, you can't legislate it, Soledad.
SOLEDAD O'BRIEN, CNN SPECIAL CORRESPONDENT: No, I don't think he's asking to legislate it.
I think what he was saying was, take this Black History Month, which, frankly, I think a lot of people roll their eyes and say, oh, the shortest month of the year actually gets to be the month devoted to black people -- and let's actually have an honest conversation, where you can say what you're really thinking and I get to say what I'm really thinking, and we can talk about some of the issues that are out there.
I think what he was saying was, this is an opportunity. It's going to be painful and it's going to be awkward, to quote him from his speech, but you really can't make progress. And you're looking at demographics, where -- let's throw Latinos into the mix, too -- the country is not going to be majority white in the year 2050. So, we're going to hit that moment and not too far in our future.
And if we don't start having some real conversations -- you know, people will often say, I don't see color. And they think that that's a compliment in some way.
I think, why not? Why don't you see color? What you need to do is see color and respect people for who they are, regardless of color. "I don't see color" means you have very bad eyesight and you have a problem visually, truly.
BROWN: Right.
Gloria, one of the things I know that you said that made his comments today sort of all the more surprising was that Eric Holder is pretty much the consummate Washington insider.
BORGER: Right. He certainly is. And he is a careful man. After all, he's a lawyer and the attorney general now.
So, it's interesting, Campbell. You talk to a lot of white people today, and in response to the word coward, OK, and they will say that it was needlessly provocative, and that he should not have used the word coward, that maybe he should have used the word fearful.
And then you talk to a lot of African-Americans, as did I around our office today, who said, well, that's exactly the word he should use, because he was trying to get people to pay attention, and we wouldn't have paid attention if he had used the word fearful, because that's a word we use all the time. So, I think...
MARTIN: Thank you. Correct.
BORGER: So, I think he was trying to be provocative on purpose. He now has a platform. He is the first African-American attorney general.
He is going to have a very aggressive office of civil rights in his department. And I think what Eric Holder was trying to do -- yes, he's a careful man. Yes, he's an insider, but he also comes to this job as a bit of an outsider and wanted to start that conversation.
MARTIN: Campbell, here's how you start this whole thing.
(CROSSTALK)
BROWN: Yes, go ahead, Roland.
MARTIN: I go to Salem Baptist Church in Chicago. And the Reverend James Meeks got with Bill Hybels of Willow Creek, Reverend Meeks, the largest black in the church, Bill Hybels, the largest white church in the state.
And they began to trade choirs and trade youth groups and trade members. And they began to preach at each other's churches. They had this whole reconciliation deal going on. They even have members of both churches actually getting together and looking at buying homes in a particular neighborhood to coexist.
And they say, we cannot celebrate the same Jesus, but sit here and operate in separate environments. And, so, people have to make the effort to say, you know what, I go to lunch with white folks every day or I go to lunch with black folks every day. I'm going to start going to lunch with some of my other co-workers to find out about them. I'm going to invite them into their home.
The person, the individual has to take the effort to say, I want to learn about somebody else, as opposed to just being forced because I sit next to them at work.
(CROSSTALK) O'BRIEN: And you have got to add one thing, which is, and you have to respect what the other person has to say. You have to say, I hear you, and now here's my take on this.
BROWN: Let me ask you -- or get your take on, because -- on something else that got a lot of attention today, because the timing is interesting. And it was a cartoon in "The New York Post."
And take a look at it. We will show it to people right now. It spoofs the chimpanzee attack in Connecticut, saying, "They will have to find somebody else to write the next stimulus bill."
But, obviously, a lot of people see this as a racial attack on the president. "New York Post" has said it's broadly mocking Washington with the cartoon.
What did you think when you saw it, Soledad?
O'BRIEN: I think it is clearly racist. I think that think that they're -- anytime somebody wants to portray a black person as less than human -- and this is done historically, from early days of the nation -- of this nation -- you portray them as a chimpanzee. That is so classic.
So -- and that not only is that -- that cartoon is not even clever. It is not even clever. So, it's clearly -- it's not sort of racist. It's just clearly racist.
BORGER: Stupid.
(CROSSTALK)
BROWN: And we're almost out of time, guys, but that was what struck me about it. I mean, it's not like people didn't think of this reference or recognize this reference or understand it, Roland.
MARTIN: Right. It's because we know our history.
Now, he had put Congress on the chimpanzee's chest and further explained it. But to say, well, it's a chimp and the Congress and the stimulus. Sorry. You're not buying it. We know it when we see it. And so people need to understand it. And "The Post," they continue to make excuses.
(CROSSTALK)
BORGER: I found it offensive, Campbell, to me. It was offensive to me.
BROWN: Across the board.
O'BRIEN: Bad.
BROWN: All right, guys, to Gloria, Roland, and Soledad, thanks so much. Appreciate it.
MARTIN: Thanks a lot.
BROWN: and Let me mention a programming note, too. Soledad is here. And you can see a special encore presentation of her documentary, "Black in America." That's next Wednesday and Thursday nights at 8:00 p.m. Eastern right here on CNN.
Today, at the White House, the first lady coupled her ongoing effort to charm her new Washington neighbors with a lesson in black pride and music, too.
Before we get to that, though, the White House faces what could be its first international crisis. We're looking at whether the president is sending enough troops to Afghanistan to hold back the growing threat from the Taliban and al Qaeda.
(COMMERCIAL BREAK)
BROWN: The Obama administration is quickly pushing ahead with its new strategy for the war in Afghanistan. Yesterday, the president approved a significant troop increase. And, today, the general in charge of the campaign said he expects those troops to be there for the long haul.
(BEGIN VIDEO CLIP)
GEN. DAVID MCKIERNAN, COMMANDER, U.S. FORCES IN AFGHANISTAN: And I just reinforce what I said, that this is not a temporary force uplift, that it's going to be sustained for some period of time. I can't give you an exact number of the year that it would be. But I have said I'm trying to look out for the next three to four to five years.
(END VIDEO CLIP)
BROWN: There are currently about 38,000 U.S. troops in Afghanistan. The president approved sending 17,000 more troops to the region, at least 8,000 Marines and 4,000 Army troops expected to be deployed by summer, with another 5,000 forces going in at a later date.
That will bring the total of U.S. military presence in Afghanistan to 55,000 troops.
And joining me right now for some perspective on all of us is this CNN world affairs analyst Fareed Zakaria. He's the host of CNN's "FAREED ZAKARIA GPS."
And, Fareed, you have written a lot about this. And you have written that the U.S. in your view needs to refocus its strategy in Afghanistan. Frankly, how does this troop increase play into that?
FAREED ZAKARIA, CNN WORLD AFFAIRS ANALYST: I think what's going on here, Campbell, is everybody keeps saying Afghanistan is not like Iraq, except that a lot of the people in the military really do in their hearts believe that there are many lessons to learn. In Iraq, what we realized was that the population centers were insecure. People felt scared. And, as a result, the bad guys took control of a lot of it. What they're trying to do now in Afghanistan is replicate the success of Iraq, bring some more troops in, secure the population centers, secure the main transport lines. And that will change the political dynamic.
It worked in Iraq. And the idea is that this might work in Afghanistan. It's probably not as many troops as you need on a kind of theoretical basis, but it's a pretty close approximation.
BROWN: Is there a region? I mean, where should they be deployed? Is there a focus, I guess?
ZAKARIA: Well, it's a very good question.
Basically, what you're trying to do is get at core population centers and the transportation networks, the main roads. But you also have to keep in mind where the enemy is. So, it's mostly in the south and a little bit towards the east. There's a province called Helmand, where you will see a lot of them.
I talked to President Karzai on my program last Sunday. And I asked him, where do you think the troops should be? And he basically said, in Pakistan, because the real problem, he argues, is not in Afghanistan. It's in Pakistan.
Now, that's the real complication of this whole strategy. I think they're doing the right thing. I think this is what you should do. But if you don't solve the problem, and you can see it right there across the border, if all the bad guys just go across the border in the night, you have to invade another country every time you want to get something done.
BROWN: Which complicates things greatly.
You have advocated something that is very controversial in some of what you have written. You think the U.S. ought to be talking to the Taliban.
ZAKARIA: I think that we sometimes don't understand what the Taliban means.
And, remember, Afghanistan is, I think, the fourth poorest country in the world. The Taliban in some villages, in some towns are the guys who are in charge. And they're in charge because they're the tough guys or they're -- you know, it's not an ideological issue. It's an issue that they happen to be in charge. They have patronage.
And, yes, they're vaguely Islamist or Islamic fundamentalists. It doesn't mean they're going to wage a global jihad against us. It doesn't mean that they're global jihadi terrorists. I say we should talk to those guys, because really they're -- one of the things we are going to have to get good at is understanding, what is the difference between somebody who is a very religious, you know, Muslim, who we would regard as kind of reactionary, and somebody who wants to wage war against us?
The guys who don't want to send women to school, I mean, I don't agree with them, but I don't need to go to war against them. I'm going to be funding women's education programs to deal with them.
But then there's a small group of people who you need to wage war against. The Taliban comprises both groups. You know, there are some conservative Islamic types, who have all kinds of reactionary views that I don't like. And a small group of them want to wage war against us. I say isolate the killers and let's go after them.
Talk to the other ones. Figure out if there's some way we can get them to be neutral. We -- again, we did this in Iraq. This is precisely what we did in Iraq.
BROWN: That they're trying to replicate. We will see how the strategy evolves under this new administration.
Fareed Zakaria with us tonight, appreciate your time, as always.
ZAKARIA: Thank you, Campbell.
BROWN: And when we come back, bloodcurdling are the words usually reserved for horror movies. Shocking to say, though, it also applies to a 911 call for emergency help. Listen.
(BEGIN AUDIO CLIP)
SANDRA HEROLD, FRIEND OF VICTIM: Send the police. Send the police.
DISPATCHER: What is the problem there?
HEROLD: The chimp killed my -- my friend.
(END AUDIO CLIP)
BROWN: Tonight, we have the latest medical update on the survivor of that attack -- when we come back.
(COMMERCIAL BREAK)
BROWN: Well, we have been hearing from you so many questions for Suze Orman. And she's here to answer them tonight.
First, though, Gary Tuchman joining us with "The Briefing."
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Campbell, hello to you. We have developing news tonight.
Tornado warnings have been issued for several counties in northern and central Georgia. Already this evening, storms have produced quite a lightning show here in Atlanta.
There's word of runs on banks in Antigua in Mexico, but investors were turned away after the SEC froze assets of financier R. Allen Stanford. He's the head of Stanford International Bank and is charged with bilking $9.2 billion out of customers by claiming unrealistic returns on investments. Stanford does business in several U.S. cities and around the world.
There are also reports tonight that Stanford, known for living a life of luxury and keeping close contacts with members of Congress, owes more than $212 million in back taxes.
The Connecticut woman mauled by a chimpanzee is making what doctors call slight progress after more than seven hours of surgery by four teams of specialists, including plastic surgeons. Police have now released the chilling audio from Monday's 911 call.
(BEGIN VIDEO CLIP)
HEROLD: He's killing my friend!
DISPATCHER: Who's killing your friend?
HEROLD: My chimpanzee!
DISPATCHER: Oh, your chimpanzee is killing your friend?
HEROLD: Yes! She's -- he ripped her apart, hurry up! Hurry up please!
DISPATCHER: There's someone on the way.
HEROLD: With guns, please. Just shoot him!
(END VIDEO CLIP)
TUCHMAN: Hard to listen to that. When officers arrived, they shot and killed the 200-pound chimp named Travis after it attacked them.
An Alabama high school basketball tournament turned violent after a foul was called. Members of the two teams started fighting during the incident, then fans came down and started throwing punches as well. Eleven juveniles were detained, but no one was arrested. The team that won the game could be disqualified from the finals because of the brawl.
It's just a game, folks.
BROWN: Yes, clearly. Gary Tuchman for us tonight, Gary, thanks.
Finance expert Suze Orman here tonight to answer your I-Report video questions. Plus, late this afternoon, the first lady hosted a first class reception at the White House, one that her newest young friends won't soon forget. It's in tonight's "Political Daily Briefing."
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) VEDA PANDYA, 4th GRADER, ROGERS MAGNET: Dear President Obama, I am so glad you are our new president. I saw your speeches on television. Congratulations.
One thing I was concerned about is the economy. Also, a lot of people are getting laid off. Everyone in my state, Connecticut, is hoping that you will bring the economy back up. The stock market is bad. Hopefully you will have better control over the stock market.
I hope you can fix this problem. You rock, Barack. Sincerely, Veda Pandya.
(END VIDEO CLIP)
BROWN: That's Veda Pandya of the international school at Rogers Magnate in Stamford, Connecticut.
All over the country, children writing letters to President Obama. To send us your letter, look for the I-Report link on our Web site, CNN.com/campbell.
He has only been the junior senator from Illinois for about a month, but already, Roland Burris is being called on to resign. Erica Hill is here with that and a whole lot more in tonight's "Political Daily Briefing."
And Erica, you know, Burris, I guess was defending himself again today against these allegations that he lied. He wasn't completely forthcoming about fund-raising for Blagojevich.
ERICA HILL, CNN CORRESPONDENT: Right. Coming out he talked to the press again today and he said, look, I welcome any investigation you have into my actions. Adding that if he had actually done anything wrong, he said he would be "too embarrassed to stand up in front of anybody." And he is clearly standing up in front of everybody.
(BEGIN VIDEO CLIP)
SEN. ROLAND BURRIS (D), ILLINOIS: I ask you today to stop the rush to judgment. You know the real Roland. I've done nothing wrong. And I have absolutely nothing to hide.
(END VIDEO CLIP)
HILL: Now, meantime, fellow Illinois Senator Dick Durbin confirming today the Senate Ethics Committee is investigating Burris. When he was asked today directly whether he agreed to fund raise for the former governor while under consideration for President Obama's Senate seat, Burris referred to his prepared statement saying he won't respond to "those types of questions." In fact, he may not be responding to many questions at all heading forward because he also said today he would no longer, Campbell, be engaging with the media.
BROWN: Oh, that's disappointing.
HILL: Sad, isn't it?
BROWN: Much lighter note here, first lady opening up the White House today to local school kids.
HILL: Absolutely. A lot of very excited kids. And no controversy here at all.
Mrs. Obama greeted with loud cheers from the roughly 180 Washington, D.C. sixth and seventh graders. Also in the crowd there, the kids of some White House staffers. There were all there to join Mrs. Obama for an event marking black history month.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY: I encourage you not only to focus on the famous names that you read in the history books, or that you see on TV, but I want you to also think about the extraordinary people who live in your own world, the folks in your own lives, parents, grandparents, yes, teachers -- all those folks who play important roles in black history and American history every single day.
(END VIDEO CLIP)
HILL: Sweet Honey in the Rock, an African-American female a cappella group, was also on hand. Mrs. Obama actually said this is one of her favorite. Take a listen.
(BEGIN VIDEO CLIP)
MUSIC: I got my education is the key to the future.
(END VIDEO CLIP)
HILL: It was sweet. At some point, they took some shots of the kids in the crowd, and you can see some of them sort of jamming along and singing.
Also in attendance there in the front row with Mrs. Obama, first daughters, Sasha and Malia, sitting between mom and their grandmother, Marian Robinson. And on their way out, Mrs. Obama actually shook each child's hand or in many cases as you see here, offered up a hug.
BROWN: Ah, that's so sweet.
HILL: Very sweet.
BROWN: Now we know the president was in Arizona today. But we understand that when he got there last night, there was this rather large gift waiting for him in the lot.
HILL: You might call it huge, and I really don't think it would be overstating the case. Size 23 to be exact would be the size.
Phoenix Suns center Shaquille O'Neal couldn't be at the airport to welcome President Obama, so he sent a stand-in, his shoe, autographed. Phoenix Mayor Phil Gordon's 9-year-old son Jake, you see him there, actually did the honors for Shaq. The president, as you can see, did a little side by side comparison with his own footwear.
That's insane, by the way.
BROWN: Is that real?
HILL: Look at the size of that shoe. My dad wore a size 13, and I thought that was big. And then I see the 23.
BROWN: Yes. OK, Shaq, he's a big guy.
HILL: Yes.
BROWN: Erica Hill for us tonight. As always, Erica, thanks.
HILL: Thanks.
BROWN: If you could ask Suze Orman one question about money matters, what would it be? How about this?
(BEGIN VIDEO CLIP)
JOSE: Hi, Suze. My name is Jose. I just bought a house for a 30-year mortgage. I would like to make advance payments where I can lower my interest -- my principal. Is this possible?
(END VIDEO CLIP)
BROWN: Good question. Suze's here to answer that and more of your questions in just a few minutes. Stay tuned.
(COMMERCIAL BREAK)
BROWN: Pretty often when you see Barack Obama, you also see David Axelrod. He is currently White House senior adviser and the man many insiders credit with masterminding the president's successful election campaign. So we know him or we think we do. But what most people don't know is the moving story of a powerful force in David Axelrod's life.
I spoke the other day with his wife Susan Axelrod about their daughter, Lauren, whose life has been shaped since infancy by epilepsy, a condition her mother has turned into a cause.
(BEGIN VIDEOTAPE)
SUSAN AXELROD, PRES. & FOUNDING MEMBER OF CURE: I found her in her crib, blue and limp. And I had no idea what was happening. She went into seizure, which I had never seen a seizure.
I had no idea what was happening. Arms stiffened. Eyes rolled back. And immediately took her to the emergency room, where she had another of these episodes and they told me this was a seizure. They put her through, you know, endless brutal tests, spinal taps and put her on a lot of medication.
BROWN: You founded an organization known as CURE, Citizens United for Research in Epilepsy. And it's what you did, turn your struggle in action.
AXELROD: Yes. And you know, the power of meeting other people who are going through the same thing, it's a very lonely diagnosis because people don't talk about epilepsy. You know, a lot of time they'll talk about seizures. They won't call it epilepsy. But eventually, we started to meet other parents who were going through this, learning of stories that were better than our stories, that were worse than ours, but a lot of people, you know, millions of people that are really living the lives that we were living. And there's power in that. And there's comfort.
BROWN: Why isn't more money devoted to it, more organizations built around it, in the same way you do see with cancer, with breast cancer?
AXELROD: I think that people, because -- half or a little more of people with epilepsy are able to live fruitful and productive lives, the message that's been communicated is served on their behalf, that you can live well with epilepsy. Those people don't want to be discriminated against, so they haven't come out as advocates. They haven't come out and spoken comfortably about their own disease.
And so, we're left with this really large number, one million to two million people in this country alone who have devastating seizures and nobody has spoken out for them.
BROWN: Talk to me about Lauren today, how she's doing what she's doing.
AXELROD: Well, she is one of the really, really lucky people who was responsive to a new medication that came on the market nine years ago. And she has been seizure free ever since, which I never thought I would ever hear myself saying.
BROWN: Wow. And you -- I'll be honest, though, you say it with hesitation, like --
AXELROD: Oh, yes, oh, yes. When the phone rings at a bad time of night...
BROWN: Yes.
AXELROD: ... when I hear a noise that is reminiscent of all the noises that I used to hear with seizures...
BROWN: It comes back.
AXELROD: ... it comes back really quickly. And everything that you feel in every pore of your body comes just rushing back.
(END VIDEOTAPE)
BROWN: You can learn a lot more about epilepsy and the organization that was founded by Susan Axelrod and many of these parents. Visit www.cureepilepsy.org for more information. Tonight as we've been telling you, we have the best financial advice around. She is here. Suze Orman here to answer your questions.
Also, more on President Obama's new plan to fix the mortgage crisis. That's coming up a little later on "LARRY KING LIVE" as well.
(COMMERCIAL BREAK)
BROWN: You don't need to tell us that making ends meet is top of mind these days. You don't need to tell the president either. He seems to have a pretty good idea of how freaked out everybody is. And here's how he put it today.
(BEGIN VIDEO CLIP)
OBAMA: Perhaps somebody loses a job in the latest round of layoffs. One of more than 3 1/2 million jobs lost since this recession began. Or maybe a child gets sick, or a spouse has his or her hours cut.
In the past if you found yourself in a situation like this, you could have sold your home and bought a smaller one with more affordable payments, or you could have refinanced your home at a lower rate. But today, home values have fallen so sharply that even if you make a large down payment, the current value of your mortgage may still be higher than the current value of your house. So no bank will return your calls. And no sale will return your investment.
(END VIDEO CLIP)
BROWN: Joining us now to help lower your financial blood pressure we hope is Suze Orman. She is the host of "The Suze Orman Show" on CNBC and author most recently of "Suze Orman's 2009 Action Plan: Keeping Your Money Safe and Sound."
Good to see you.
SUZE ORMAN, FINANCE EXPERT: Can you believe we're finally doing this?
BROWN: I know, it's so great to have you here.
ORMAN: I know.
BROWN: But before we get into questions and we got a million of them...
ORMAN: Yes.
BROWN: ... just give me your take on what you think about the president's plan, the mortgage plan. Is it a good idea? Is it going to work?
ORMAN: Well, number one, I think he presented it wonderfully today. That's a lot of something when that happens. Number two, it doesn't cover quite enough. It's a good start. However, it's only for conforming, so it's cuts out all those people in California that have jumbo loans, isn't going to address them.
If your bank isn't getting TARP money or you're not refinancing, Fannie Mae, Freddie Mac, your bank may not be part of this. So there are many things that we don't know yet, we will not know until March 4th. By then, he's got all the qualifiers.
Are you going to have to pay to refinance? Well, if you have a bad FICO score, will you be able to refinance? If you're seriously underwater, will you be able to refinance? I think it's going to be no for all of those.
So, there's a lot of things, Campbell, that we don't know yet, and I still think it doesn't do anything for those people who are severely underwater. I still think they should adjust the revamp, everything and brought all the prices down at once.
BROWN: One of the concerns you have heard a lot of people frankly express today is that they fear it will reward people who bought homes they knew they couldn't afford.
ORMAN: Yes, but I think it's more complicated than that because you had people that bought a home. Maybe they could afford it when they bought it, but then because of everything going on, maybe they lost their job or they had to take a job cut or their hours were reduced and now they no longer can afford it. It's not -- it so simple to say that we're all trying to scam the system or not. Well, it's not that way. People are good people. People are honest.
Sure, there's a few scammers out there. Who cares about them? But overall, people want to stay in their house and until we solve this housing crisis, nothing is going to turn around. So we better solve it one way or the other, even if that means we solve it for those who scammed the system.
BROWN: All right. Now, that's frankly the area where, as you can imagine, a whole lot of our questions were. So, let's start with one on housing and listen to this.
(BEGIN VIDEO CLIP)
HARMON: Hey, Suze. My name is Harmon (ph). I'm wondering about the economy this year. Will it be easier to get a house this year? Should I wait six months, a year? Like can you give me some advice on that?
ORMAN: Harmon, here's the answer to that. It is easier to get a house this year. Why?
Number one, house prices have decreased dramatically. Depending on where you're going to buy one, you may be getting an incredible deal.
Number two, if it is your first home, according to the stimulus that President Obama just signed the other day, first home meaning that you've maybe sold a home three years ago and you're going to buy another one now, or you've never purchased a home, you will get an $8,000 tax credit that does not have to be repaid. $8,000 tax credit is a big deal, Harmon. You might want to look into it.
We're also currently at the lowest interest rates that we've been in 30 years. So, if you have at least 10 to 20 percent to put down, you have a good FICO score, you have the money to afford a home, there are deals out there. Boyfriend, go and see, if you can find one.
BROWN: All right, Harmon. Let's stop. Before we take a quick break, let me get one more in on mortgage -- another mortgage question.
(BEGIN VIDEO CLIP)
JOSE: Hi, Suze. My name is Jose. I just bought a house for a 30-year mortgage. I would like to make advance payments where I can lower my interest -- my principal. Is this possible?
(END VIDEO CLIP)
ORMAN: Yes. Here's the thing that you have to understand. When you already have a mortgage, even if you put more money towards that mortgage, your mortgage payments, especially if it's a fixed rate mortgage, will stay the same. So it's not like it's going to help you.
You have a $200,000 mortgage and you're paying $1,200 a month and you put $100,000 towards that mortgage, you're still going to be paying $1,200 a month unless you refinance the whole thing as you put more money into it to lower your payment. So it's not going to help you that way.
Are you going to stay in the house forever? If so, you might want to do it. If you're not and you're going to sell sooner than later, I would not be paying down my mortgage here if I were you.
BROWN: All right. Stay with us, everybody. Suze Orman is sticking around. We'll be back with a lot more with Suze right after this.
(COMMERCIAL BREAK)
BROWN: We're back with financial expert Suze Orman. And I think Ryan has the $64,000 question. Listen to this.
(BEGIN VIDEO CLIP)
RYAN: My name is Ryan Garfin (ph). I just want to know when the economy's going to turn around.
(END VIDEO CLIP)
ORMAN: Oh, Ryan. Ready? Let's see. My crystal ball says what? Here's what I think is going to happen. First of all, you have to remember, the economy and the stock market are different entities. So you may see the stock market go up and down. That doesn't mean the economy has recovered.
I think the economy, however, is going to react like the stock market. You're going to sometimes feel like it's been recovered and then it's not. I think it's going to be two or three years before we're on firm ground.
And as I've said in many of the things that I've written, I do think it will be 2015 before every single person, including the animals, have hope again. But I do think we're going to get there. It's just not going to be as easy as people think.
BROWN: You know, you were telling people I think even before this crisis began, you know, live with less, save more.
ORMAN: Yes.
BROWN: Is that the silver lining here is that we're all going to be sort of forced into doing that?
ORMAN: Yes. We're going to be forced to be a society of values again where we define ourselves by who we are versus what we have, because what we have isn't going to be much for the majority of people out there. So people need to get, this is very, very serious.
I know we don't want to think that way or talk that way. It's serious. However, we have now started to turn it around. I will take President Obama at his word.
BROWN: Next, we've got Robin, I-Reporter from California, a single unemployed mother of two. Let's listen to Robin.
(BEGIN VIDEO CLIP)
ROBIN: Hey, Suze. This month I'm planning to pay off my entire credit card bill and have a zero balance. Yes, I'm so excited. But I've been told by a few people that -- including my banker, that if you have a zero balance on your credit card account, that it actually hurts your credit. Is that true?
(END VIDEO CLIP)
ORMAN: Would it surprise you if I told you what your banker told you was absolutely wrong? It seems to me they have a history, bankers, of telling people things that are wrong.
No, it doesn't hurt your FICO score. That is what it's legitimately known as, your FICO score. In fact, you want to have a zero balance on your credit card right now. Thirty percent of your FICO score is made up of something called your debt, what you owe to your credit limit ratio. If you don't owe anything, the lower your debt to credit limit ratio, the higher your FICO score. Girlfriend, don't carry any balances on your credit cards, but don't close them down either. And stop listening to that banker of yours.
BROWN: Well, I'll say. Let me spend a minute on retirement accounts because it has a lot of people scared right now. This is a question I believe we got from Minneapolis. Let's listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hi, Suze. My question is in these economic times if your money is better spent in your IRA, your 401(k), or if you should put it in the stock market when you can buy low.
(END VIDEO CLIP)
ORMAN: Well, you know, I'm a little confused about your question because is your money better within an IRA, what do you think you can do with money in an IRA?
Within an IRA, hopefully you have at least 10, 20, 30 years or longer. You could be investing in the stock market within your IRA. So your question is a little confusing to me, but here is the bottom line.
If you have time on your side, at least ten years or longer, and you're in a 401(k) or retirement account and you have money, OK, you could be investing here, but you better have time on your side because if you don't, you're better off keeping the money safe and sound.
BROWN: All right, stay with us. Suze Orman will be right back.
(COMMERCIAL BREAK)
BROWN: Suze Orman, thank you so much. So good to have you here, appreciate it.
And that's it for us. We will see you tomorrow night for our NO BIAS, NO BULL live call-in on the economy. See you then.
"LARRY KING LIVE" starts right now.
