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Campbell Brown

President Obama Meets With Nation's Mayors; Pressure Mounts on Senator Roland Burris; Mayors Bring the Stimulus Money Home; Some Governors Say No to Stimulus Money

Aired February 20, 2009 - 20:00   ET



The Obama administration tonight trying to calm fears that some of this country's biggest banks are in such bad shape, the government may have to take them over. And here's why.

Citigroup stock fell more than 22 percent today, to its lowest price since 1990. Bank of America stock also took a nearly 4 percent hit. Both banks have already taken tens of billions of dollars in bailout loans and yet tonight both banks and the White House say there's no need for a government takeover. Still, a lot of people very nervous right now. We are going to have fresh details from the White House on just what is going on.

And bullet point number two tonight: President Obama meets with 85 of the nation's mayors. These are the leaders who know how firsthand how bad things are in our communities. And, in fact, the mayors are about to get their hands on billions of dollars for rebuilding projects.

The president, though, had a stern warning for them today: He will call out anyone who is wasting our money. Listen.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: So now it falls to us to seize the possibilities of this moment and convert peril into promise. See to it that our cities and our people emerge from this moment stronger than they were before. Starting today, that's what you and I are going to do, together.

And I'm absolutely confident that our people will benefit and people will look back and say that this was a turning point, this was a moment where, in the midst of great crisis, leadership was shown and we created a -- a new platform for success for all Americans in the future.


BROWN: Now, tonight, mayors from across our nation are right here for a NO BIAS, NO BULL look at where the money really needs to go and whether they think it can turn this country around.

And bullet point number three tonight: a story still developing. Intense pressure is mounting on Senator Roland Burris to step down. You will remember he's the man who disgraced Governor Rod Blagojevich appointed to fill President Obama's U.S. Senate seat. But now Burris faces serious questions about what he may or may not have done to get the job.

First today, Illinois new governor, Pat Quinn, urged him to quit. Then White House spokesman Robert Gates said that Burris should take the weekend to -- quote -- "think about what lies in his future."

And now Burris' acting chief in staff has resigned. We are going to have more on that.

And bullet point number four tonight: The ripple effect washes over the fashion runway. This week, designers are strutting their stuff right here in New York. But in this kind of economy, who's going to buy it?


TIM GUNN, FASHION EXPERT: Do you think that people are going to be rushing to the stores? I wish. But this is a dreadful time.


BROWN: Fashion guru Tim Gunn helps us look at whether those designers are facing a whole new kind of tailoring.

But we start with tonight's top story, the president, the banks, and your money. Tonight, the White House is trying to downplay speculation that the government may have to take over and run some of this country's biggest banks.

Right now, those fears, nationalizing the banks, center on Citigroup and Bank of America. Their stock prices are down a whopping 90 percent in the last year. And their tailspin is so bad this week, it's dragging down the entire stock market.

Tonight, the White House is trying as hard as it can to calm everybody's fears.

Let's bring in senior White House correspondent Ed Henry for more on this.

And, Ed, tell us with you know.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Campbell, make no mistake about it. This was Robert Gibbs, the White House spokesman, trying to put out a very big fire on Wall Street.

Basically, as you noted, shares in Citigroup and Bank of America were being pummelled on these rumors all over Wall Street that maybe they would have to be nationalized, maybe they would have to be taken over by the government.

They finally started making up some of the losses, though, when Gibbs stepped up to White House the podium and said this to the White House press corps. (BEGIN VIDEO CLIP)

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: This administration continues to strongly believe that a privately held banking system is -- is the correct way to go, ensuring that they are regulated sufficiently by this government. That's -- that's been our belief for quite some time. And we continue to have...


HENRY: That was enough to calm things down for today.

But I can tell you, White House reporters were pressing him on, you know, why are you not flat-out saying we will not nationalize these banks? Be more clear. He said he was being clear and that he didn't need to go any further.

But you have to remember, I can't even remember how many times last year Bush White House officials would say, no, we're not going to bail out the auto companies, no, we're not going to bail out financial firms, and then they would do it down the road.

The bottom line tonight Saudi that they're not ready to nationalize banks tonight. But obviously if this problem were to get worse, that's always an option they have. But the statement from Robert Gibbs was enough today to calm down Wall Street -- Campbell.

BROWN: Ed, as we had mentioned earlier, the president also met with some of the nation's mayors today. He had some pretty stern words for them about how they should be spending, in his view, the stimulus money.

Let's listen to what he said.


OBAMA: I want to be clear about this: We cannot tolerate business as usual, not in Washington, not in our state capitals, not in America's cities and towns. We will use the new tools that the recovery act gives us to watch the taxpayers' money with more rigor and transparency than ever. If a...


OBAMA: If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. I want everybody here to be on notice that, if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.


BROWN: So, it seems like, Ed, he's really putting them on notice. What did he tell them behind closed doors today?

HENRY: He was very blunt. And we're told basically the whole point of this was that the president was trying to make clear that the American people are watching all government officials now, from the president on down to the mayors and others.

And they need help desperately. And they want to make sure that this stimulant legislation that was just signed into law this week, $787 billion, will actually filter down to them.

And what senior White House officials say they are concerned about is that mayors and others putting in money for bridges to nowhere, some other egregious projects that will wind up being, you know, lampooned on the late-night talk shows. That would undermine the president's signature achievement.

Today, he's basically ushering in -- celebrating the anniversary, I should say, of the first month ending of his presidency. The last thing he needs is for his signature economic recovery plan to be undermined by wasteful projects. That's why he put out this warning. He set up a Web site,, that basically the American people can go track these projects. He's hoping that some accountability, adding some sunlight to all of this, will keep local officials in line -- Campbell.

BROWN: All right, Ed Henry for us from the White House tonight -- Ed, thanks.

HENRY: Thank you.

BROWN: And as we mentioned also, tonight, we have asked mayors from different sized communities across the country to join us for our NO BIAS, NO BULL look how at that billions in stimulus money could change things in your home town.

So, right now, let's follow the money, which gets what, how deep in the hole are they, and when exactly will you start to feel some of it where you live.

Tom Foreman is in Washington. He is going to break it all down for us -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Hey, Campbell, we have got a few examples here.

Let's look at the big picture here -- $787 billion in the American Recovery and Reinvestment Act will be distributed to all of the states to fund projects and create jobs.

Let's look at one of the biggest, out here in California. It's getting a total of $26 billion. Good thing, because San Diego down here expects a budget deficit of $54 million this coming fiscal year -- 1.5 million people call San Diego home. And they need the money for road repairs, sewer lines, transportation projects, things like that.

Mississippi, down here in the South, will get $2.3 billion of the stimulus. But check this out. Greenville's operating at a budget surplus. So, that town's 42,000 citizens hope to further improve their situation by picking up some of the estimate 8,000 new jobs that Mississippi hopes to create with the stimulus money.

We move on to North Carolina, just over $6 billion expected to go there, money that will help Charlotte, for sure, with almost three quarters of a million residents. They're going to fight their county's budget deficit of about $90 million.

And one more stop, Pennsylvania -- $16 billion are coming to the Keystone State. It's largest city is Philadelphia. And it's working what could be a staggering $1 billion deficit over the next five years something like that. But the stimulus money could help the state create an estimated 26,000 jobs -- Campbell.

BROWN: All right, Tom Foreman for us tonight -- Tom, thanks.

So, how exactly will all those billions get from Washington to where you need it in your neighborhood? Tonight, that is the question our panel of mayors from across the country is trying to sort out for us. We will ask them how the stimulus will solve two of the biggest problems they're facing, unemployment and the mortgage mess, when we come back.


BROWN: As always, we're "Cutting Through The Bull" tonight.

And as we see just what cities and states hope to get from the stimulus, we're going to be keeping a close eye on what those on the front lines of turning our economy around are up to.

To America's mayors. Already, your list of so-called shovel- ready projects, while full of worthy and vital needs, also contains plenty of items that make one think you might be shoveling something else.

Las Vegas, we love you, but do you really need $2 million for neon signs along Las Vegas Boulevard, as if anyone had trouble finding your fabled city in the dark?

Lincoln, Nebraska, put in for $3 million for an environmentally- friendly clubhouse at a municipal golf course.

In Lewiston, Maine, they want to use the funds to build not one, but two dog parks for $50,000.

And Saint Cloud, Minnesota, is asking for 150 grand to make the lettering on its street signs larger.

Now, those cities and others defend such creative use of the money, often saying it means jobs or revitalizing rundown neighborhoods. But it seems to me that, if these mayors have any plans to seek higher office or keep the one they have now, they are going to need to give a tad more scrutiny to where the money flows, especially in this environment.

We have already seen some on Wall Street blow any goodwill by living high on the hog while taking bailout money. Unlike the CEOs, mayors are accountable to the voters. They and we will be watching. We hope you're smart enough to know the real priorities in this country.

Use those jobs and revitalization efforts to fix our bridges, rebuild our roads, make our storm drains, our levees strong, keep our police and fire departments ready to respond to any call, because now you have got money. And what you don't have are excuses.

So, we want to bring in some of the very people who are on the front lines, who are going to have to turn this money into action.

And joining me tonight, the mayors of four very different cities. Democratic Michael Nutter is the mayor of Philadelphia. Republican Patrick McCrory is the mayor of Charlotte, North Carolina. Heather McTeer Hudson is a Democrat and the mayor of Greenville, Mississippi. She's joining us from Washington tonight. And we haven't forgotten the west. Republican Jerry Sanders is the mayor of San Diego, California.

Thank you all very much for taking the time to be with us tonight. I appreciate it.

UNIDENTIFIED MALE: Thank you, Campbell.

UNIDENTIFIED MALE: Thank you. Good to be here.


UNIDENTIFIED MALE: Happy to be here.

BROWN: Mayor McCrory, let me start with you, because I know you're worried, you're concerned that all the spending decisions are being made by your governor right now behind closed doors.

PATRICK MCCRORY (R), MAYOR OF CHARLOTTE, NORTH CAROLINA: Well, that's what's happening right now.

And my main concern about the stimulus package is that so much of the money is going toward short-term what is now defined as shovel- ready projects. And I personally think most of the stimulus project and money should go toward long-term infrastructure, like roads, like transit, like water and sewer, that would benefit generations to come, because generations to come will be paying for this bill.

But the current definition of shovel-ready gives a temptation just to get money out to short-term projects, like some of those you have mentioned, where I don't think there's long-term benefit. And so I was glad to hear the president make a statement today.


BROWN: But isn't part of that, though, is that those shovel- ready projects mean you can get people to work and get jobs, create jobs almost immediately, and have more of an immediate impact.


MCCRORY: It does mean that. But I think some of that only means it's in construction jobs.

And I think if we pick more long-term jobs, we include architectural jobs, engineering jobs, planning jobs, environmental jobs, and I think that's our danger. We need to look at long-term infrastructure projects. And I hope that is what most of us do.

Mayor Sanders, I want to go to you for a second.

But, before I do, let's all listen to a little bit more of what President Obama said today. I want to get your reaction.


OBAMA: If a federal agency proposes a project that will waste that money, I will not hesitate to call them out on it and put a stop to it. I want everybody here to be on notice that, if a local government does the same, I will call them out on it and use the full power of my office and our administration to stop it.


BROWN: Do you agree? I mean, this goes to the point that Mayor McCrory was just making. Do you agree with that sentiment? Or how do you feel about it? It's a bit of a threat.

JERRY SANDERS (R), MAYOR OF SAN DIEGO, CALIFORNIA: Well, I welcome the scrutiny. And I think it's absolutely necessary, because we have seen a lot of money go out in the past in federal projects and federal money, and it's not used wisely and it's squandered.

In San Diego, we have got a budget deficit, but none of the money that we're talking about in the stimulus package will go towards solving that. We actually have a regional planning agency. We have about $7.5 billion in shovel-ready projects where the environmental work has been done, where the engineering has been done, the architectural has been done.

We tax ourselves a half-cent on the sales tax for roads and highways and freeways. And that's exactly what this money will go toward, at least on the infrastructure side. So, these are long-term investments that will benefit the San Diego region well into the 2050s.

BROWN: Mayor Hudson, I know you met with President Obama today. Did you hear what you wanted to hear from him?

HUDSON: You know, it was interesting.

First, Campbell, let me clarify one thing. It was noted that Greenville was at a budget surplus. We are at budget. I don't know anybody who is at a budget surplus at this point.

(LAUGHTER) HUDSON: The city of Greenville is working right at that budget. And we want to make sure that that is clear.

I did hear some of the things that I wanted to hear. But, at the same time, there were still some things that weren't made clear. I also serve as the president of the National Conference of Black Mayors. And the majority of our member mayors are in communities that are considered rural communities.

And, so, there's got to be a lot of discussion about how these funds will funnel down to the rural communities, where the working people in the United States of America are. I know, in Greenville, Mississippi, a number of our projects are infrastructure projects that are going to put people to work. I can't think of any better way to make this economy turn around than to allow people to work on the projects, the roads, the sewers that serve their own homes.

And that's exactly what we intend to do. And so I know there's going to be some further discussion on this. And certainly I'm looking forward to being a part of that discussion. But we have got to talk about how some of these smaller communities are going to be able to access funds speedily and get our projects done just as quickly as everyone else.

BROWN: Mayor Nutter, before we take a break, let me go to you for something a little more specific.

I know you're requesting I think $15 million to repave the runway at your airport. I mean, walk us through sort of how specifically this is going to directly help your people. Map out, if you will, the ripple effect.



Philadelphia International Airport, the 2008 J.D. Power Customer Service Award-winning airport, the longest runway hasn't been repaved since 1990, almost 20 years now, Campbell.

If we repave that runway, it's going to enhance services in Philadelphia. It's a $15 million project. It will create 235 jobs. And the Philadelphia International Airport is the economic engine for Southeastern Pennsylvania. It's an absolute winner and it's needed right now. And we can put that project up and running in 120 days.

But it has a long-term impact, which I think addresses Mayor McCrory's concern. But it's a project that is ready to go and will have long-lasting impact.

BROWN: All right, guys, stick around, because we have got a lot more questions for you.

And here's a statistic we're all talking about here. By one estimate, there are 19 million houses sitting empty here in the United States. So, what about foreclosures? How do the mayors think that we can turn the stimulus -- that the stimulus billions can turn all that around?

Plus, this:


GUNN: It's important to tell people that fashion can take you out of your doldrums, can take you into another place, can excite you.


BROWN: Models on runways everywhere in New York right now. It's Fashion Week. So, we ask "Project Runway" guru Tim Gunn about the economy and the ripple effect of all that when we come back.


BROWN: You I-Reporters out there have been sending in some very probing questions and some pretty pointed comments, too.

Here's one from I-Reporter A.C. Ramirez of Moody, Texas. Take a look.


A.C. RAMIREZ, I-REPORTER: Maybe it's time to revisit the minimum wage in America and see about increasing that, because the average person that, you know, is just at minimum wage or above is living paycheck to paycheck and really struggling to pay their bills.


BROWN: The scariest thing about a really bad economy it that it generates chain reactions. Lose your job and you begin to lose your grip on a whole lot else, like your home.

Before we get back to our panel of mayors, Tom Foreman is back to break down what their communities are facing and how the government is trying to help -- Tom.

FOREMAN: Yes, Campbell, President Obama's economic offensive is aimed at creating jobs and stopping foreclosures across the country. So, let's focus on our mayors' towns.

In San Diego, they're dealing with a 7.4 percent unemployment rate. And California was hit quite hard by the housing crisis. There were more than 17,000 foreclosures in San Diego alone last year.

Over in Greenville, the mayor faces almost 11 percent unemployment. That's pretty high, but here's a silver lining. The entire state of Mississippi has a very low foreclosure rate. Last year, there were only 2,364 foreclosures there.

Unemployment in Charlotte is almost 9 percent, again fairly high. The big employer there, the troubled Bank of America Corporation, has its headquarters in Charlotte. So, for North Carolina, creating and keeping jobs is the high priority to help stem the 8,300 foreclosures try had last year.

And, up in Philadelphia, relatively steady unemployment rate of 6.4 percent, below the national average. And the foreclosure rate is pretty good, too, for such a big city, less than 8,000 year -- Campbell.

BROWN: All right, Tom, thanks again for that.

We're back now with our panel of mayors. We have got Democrat Mike Nutter of Philadelphia, Republican Patrick McCrory of Charlotte, North Carolina, Democrat Health Hudson of Greenville, Mississippi, and Republican Jerry Sanders of San Diego.

Mayor Nutter, I have got to ask, what's your secret here? Why are foreclosure rates so low in Philadelphia?

NUTTER: Well, Campbell, we have a great program that we actually shared with President Obama and his team.

There were 7,900 foreclosures last year, still an increase over 2007. So, we're not pleased about that. But what we have been doing is doing an extensive amount of outreach. We have a hot line for people to call. We have housing counselors available.

And we have had tremendous cooperation from the courts and banks, legal services, getting people in before the foreclosure takes place, reconciliation conferences, and making sure that we can save people's homes. We have saved 600 homes so far.

We're looking to expand this program nationally. And President Obama's team has asked us for additional information. So, we have been pretty fortunate. But that is still far too many foreclosures in the city of Philadelphia.

BROWN: Mayor Sanders, I have got an I-Report here that is kind of directed to you. This is from our I-Reporters in Oklahoma. Listen to this.


BLAIN DAPPER, I-REPORTER: The states like New York and California, who have serious, serious systemic financial problems, aren't going to recover whatsoever by this program. They're not going to create any new jobs, either. And I will tell you why.

You all -- your states already have serious infrastructure projects that are in progress right now that they cannot afford. This money is simply going to go to complete those projects.


BROWN: So, Mayor Sanders, is he right?

SANDERS: Well, actually, that was one of the things that I went back to Washington, D.C., last week, with Mayor Villaraigosa and Mayor Chuck Reed from San Jose. And we talked about having language put in the Senate bill on the stimulus to make sure that the state of California could not supplant the moneys being brought forward. They had to go for new projects and also to expedite projects.

So, we were aware of that. We want to make sure the structural difficulties in the states don't impact the dollars that come down to the cities. So, we wanted to make sure these have to go for new projects or speeding up the projects.

BROWN: Mayor Hudson, I know you have said that there's too much focus on urban areas, that rural communities, like yours, are also suffering.

Just give us a sense of what the first thing is you want to spend the money on.

HUDSON: Well, we have such a significant problem with infrastructure and what we need to do in terms of roads and sewers.

And if the nation wants to take a look at how to work through a recession, look at the Mississippi Delta. We have been doing it for generations now. We have learned how to do more with little.

And so, as we get more, we're able to put that into the projects that we know are going to return economic dollars for us. For example, we have Mars Food USA in Greenville, Mississippi. They depend upon the highway system for their trucking.

They're adding jobs in Greenville, Mississippi, because we know we're going to able to improve that highway infrastructure, so they can increase their revenue and their product. And that's the type of things that rural communities are able to do.

We are places that people want to have a good quality of life, have a good education, not be in the hustle and bustle of cities. And you have got a lot of good hardworking people, especially in Greenville, Mississippi.

And, so, I know that it can work. And there are rural mayors, rural mayors all over the nation that feel the same way. We just need to know how are we going to be able to best access these funds quickly and put them to work in our communities?

Let me also say, and add this one point. In regards to it being a watchdog effect for us, we welcome that, and the reason being, we're mayors. We see people in the supermarket, in the beauty shop, at church, and they ask us about the projects that we have going on.

And, so, we know what it's like to work with our communities and share with them on a regular basis.

BROWN: Right.

HUDSON: We hope that the nation takes note of how well we do this, so that they can see what we need to do in the future. BROWN: If I can quickly go to you, Mayor McCrory.

City budget tends to lag a couple years behind in terms of their -- the effect they're having, given the overall economy. Does that mean that things are going to get worse for you before they get better, do you think?

MCCRORY: Well, most city budgets depend on such things as property taxes, where, in my state, the state budget is dependent upon the income tax, along with the federal government.

So, I do think it could get worse amongst city budgets in the near future. And that's why we started six months ago with a hiring freeze. And we're making some pretty big cuts right now.

I think one of the issues, frankly, cities and states and the federal government are going to have to review is really their long- term operating costs, because that is the biggest problem on all our ledgers, is the ongoing operating costs, especially with the longevity pay of government employees regarding benefits and long-term retirement and 20- and 25-year pensions, which we can't afford anymore.

And that's what we have got to make sure we don't put the stimulus money toward. I agree with the rural mayor that we need to put it with an infrastructure, because that will bring more jobs and more industry in the long run.

BROWN: All right. We're going to take another quick break. We will be back with a lot more when we come back.

Stay with us.


CAMPBELL BROWN, CNN ANCHOR: We're back with our mayors, and to all of you, I just want to do a quick lightning round and get your take on really what the one thing is. And I know a lot of you have said infrastructure, but the one thing is that you really need from this stimulus package?

And let me start with you Mayor Nutter if you can be specific.

MAYOR MICHAEL NUTTER (D), PHILADELPHIA: Sure. Campbell, this is all about jobs. You have 58 different funding sources, surface transportation program, that's jobs. The weatherization program, that's jobs. The green economy program, that's all jobs. And we have projects ready to go in every one of those categories.

So there's been a lot of discussion about concerns that somehow the money is spent. You have regulations. You have regulations that you have to adhere to get any project approved.

BROWN: Right.

NUTTER: Probably about a state and a federal agency, so a lot of concern about this. I respect what the president said. It's the right thing, but this is what we do for a living. We spend people's dollars, spend them right and spend them well. This is all about jobs and that's all this program is about, and I can't wait.

BROWN: Mayor McCrory.

MAYOR PATRICK MCCRORY (R), CHARLOTTE, N. CAROLINA: Transportation money for transit and roads. Education dollars for school buildings and water and sewer projects, not real sexy things, but projects which will have a long-term impact on our city and our region.

BROWN: And Mayor Hudson.

MAYOR HEATHER M. HUDSON (D), GREENVILLE, MISSISSIPPI: You said be specific. I'm going to tell exactly what we need.

We need Nelson and Eureka down in Greenville, Mississippi. Tennessee gas road, the Bowman (ph) Boulevard ditch. We need our schools to be redone and that the window efficiency to be done. The intersection of Reid (ph) and Main Street.

We can name projects in Greenville, Mississippi that are already ready to go and that we're going to put the money into, so that the people in our community can see exactly what we're doing and can see the benefit of it.

BROWN: And finally, Mayor Sanders, what about you?

MAYOR JERRY SANDERS (R), SAN DIEGO: Well, we'd like to see money for our new clean tech cluster. We've created 146 new companies in San Diego around solar power, solar energy. That would be a huge bonus right there.

Plus infrastructure dollars for our border. $300 billion a year passes through San Diego's border from Mexico. We're doubled tracking the lanes in San Ysidro and building a new border crossing. We could use the money for that.

BROWN: All right. I want to thank all four of our mayors. Really appreciate your time tonight, all of you.

And we're going to move on to another aspect of this crisis. We want to talk about what if a governor won't take the stimulus money? It's happening. We'll talk about that.


BROWN: Talk about looking a gift horse in the mouth. Some Republican governors are saying thanks, but no thanks to billions of dollars in stimulus money already allotted to their states. Are they taking a stand on principle or is there just old fashioned behind-the-scenes politics at play?

National political correspondent Jessica Yellin has our report on the governors who just might say no.


JESSICA YELLIN, CNN NATL. POLITICAL CORRESPONDENT (voice-over): Louisiana's Bobby Jindal, call him "Governor No." He's got a $1 billion budget crunch and rising unemployment in a state already devastated by Hurricane Katrina. Now he says he'll take some of the stimulus money, but he's turning down $98 million worth and he could reject more.

GOV. BOBBY JINDAL (R), LOUISIANA: We'll have to review each program, each new dollar to make sure that we understand what are the conditions.

YELLIN: He says the stimulus cash will eventually stop flowing from Washington, burdening his state with new long-term cost Louisiana just can't afford.

Jindal's not alone. In South Carolina, Governor Mark Sanford is also playing Hamlet, unable to decide if he wants those stimulus funds. One of the most powerful lawmakers in South Carolina called that a slap in the face to the African-American community, arguing the governor is only questioning funds that will go to black neighborhoods.

REP. JAMES CLYBURN (D), MINORITY WHIP: And now the governor says I don't want to accept the money. That's why I call this an insult. That's why I said this is a slap in the face because a majority of those counties are, in fact, inhabited by African-Americans.

YELLIN: Governor Sanford's office quickly denied that charge. He has said the federal money just comes with too many strings attached.

GOV. MARK SANFORD (R), SOUTH CAROLINA: There are real strings attached that I think actually hamper your ability to implement the use of this money.

YELLIN: In all, six Republican governors are contemplating a no. The others are in Texas, Mississippi, Idaho and Alaska. Yes, Governor Sarah Palin hasn't made up her mind.

(on camera): Are these governors standing on principle or playing politics? At least three of them are considered future Republican presidential contenders. Louisiana's most famous mayor is accusing his governor of putting ambition first.

MAYOR RAY NAGIN (D), NEW ORLEANS: I think the governor of the state of Louisiana is a Republican. I think he's been tapped as the up and coming Republican to potentially run for president the next time it goes around. So, he has a certain vernacular and a certain way he needs to talk right now.

YELLIN (voice-over): Jindal will get a high-profile platform to make his case when he delivers the Republican response to President Obama's big speech to Congress on Tuesday. Jessica Yellin, CNN, Washington.


BROWN: It's worth noting that there's still a way for mayors to do an in-run around their governors. A provision in the stimulus bill allows state legislatures to vote to take the cash even if their governors have turned it down.

We want to bring right now one of the nation's most outspoken governor, Brian Schweitzer of Montana, a Democrat. He's joining us live from Washington where the nation's governors are meeting tomorrow.

Welcome to you, governor. Good to see you.

GOV. BRIAN SCHWEITZER (D), MONTANA: It's great to be with you.

BROWN: So what do you think of these governors who might turn down the stimulus money? A good call?

SCHWEITZER: You know, they're taking federal dollars right now. This is actually only increasing about 20 percent over the dollars that they're getting. That's why somebody going out to eat and saying, well, I'll have the salad. I'll eat the steak, I'll have the potatoes, all the vegetables, but you know what? I won't have the last bite of cake. They're already taking billions of dollars, and this is just politics because if they really don't want federal dollars and they really don't want the strings that are attached, why didn't they turn the rest of the dollars away? This is really only increasing about 20, 25 percent of the dollars they're already getting.

BROWN: Your state, just as an example, is actually running a surplus right now, so why, I mean, some people are going to ask -- why should you, for example, be getting extra money from Washington? I mean, did you ever consider turning it down for that reason.

SCHWEITZER: No, because these dollars are going to go right into the same pipelines of the dollars that are already coming from Washington, D.C. About a third of the dollars that we will get in Montana will go directly into highways and bridges. And that's actually just going to accelerate the rate at which we were going to fix those roads and build those bridges.

It's going to be used to green the schools that we have, the federal and state buildings, and that would make a permanent annuity for the state of Montana for this entire country. We will make this country more efficient. We will create millions of jobs for people who have been throwing out of jobs that were building houses. Now, those same carpenters, electricians and plumbers will be working in schools and federal buildings to make them more efficient. Decrease our energy consumption by 20 percent every year for the next 30 years, it's a great investment for America.

BROWN: Let me ask you, though, you're a Democratic governor of a Republican state. Do you think your constituents are in sync with Washington on the trillion plus dollars that they're throwing at this problem?

SCHWEITZER: Well, most people recognize that this will create jobs. Most people recognize it will make their roads safer. It will make their schools and federal buildings more efficient. So people are supporting this because, frankly, these are dollars that were coming to the states anyway. We've just accelerated by a little bit, maybe a year the dollars that would have come next year and the year after.

BROWN: Let me just finally ask you, once again, about the surplus in your state because it is pretty amazing considering that most states are really in crisis right now. What advice can you share?

SCHWEITZER: Well, I guess I can just say as governor, when the times were good, I said no to some additional spending. Now, not all states are run the same way but in Montana, we didn't spend every nickel we had. My grandpa told me a long time, he said, you know, there's three bad years for every good year, so if you've got some good years, put some money aside. That's what we did in Montana.

BROWN: All right, good advice.

Governor Schweitzer, good to see you. Thanks for coming on.

And we want to know what you all are thinking at home? What do you want to hear from President Obama about the economy? Tell us your story. Upload your video iReports to

In just a moment, Erica Hill is going to be here with tonight's "Political Daily Briefing." Pictures you have not seen from President Obama's rock-star reception north of the border. See why Canada is still swooning after our commander in chief's quick trip.


BROWN: Time for Erica Hill and the "Political Daily Briefing" which begins tonight with the growing clamor of voices directed at embattled senator, Roland Burris. Let's all the shouting about.

ERICA HILL, CNN CORRESPONDENT: Oh, my, the voices are getting louder, aren't they? Right before the weekend, pressure is building in the Land of Lincoln and it is coming from the top.

Democratic Governor Pat Quinn is the latest public official to call for Burris' resignation.


GOV. PAT QUINN (D), ILLINOIS: I would ask my good friend, Senator Roland Burris, to put the interest of the people of the Land of Lincoln first and foremost, ahead of his own and step aside and resign from his office.


HILL: The White House isn't taking sides in this saying only today that Burris should take the weekend to think about what his future holds. Meantime, CNN has confirmed that Senator Burris is acting chief of staff, Campbell, has resigned without explanation.

BROWN: The saga continues here.

HILL: Yes, it does.

BROWN: Also, tell us about this apparently miscommunication between a top cabinet secretary in the White House.

HILL: I don't think we were all in the same page for this one, perhaps, or the same road it maybe. Campbell, we all had to pay to park, right? If you had to pay a parking ticket, but actually pay for the miles that you drive? Probably not.

Transportation Secretary Ray LaHood, though, told the "Associated Press" yesterday, you know, one way to make up the budgetary deficits for our roads and highways, get rid of that national gas tax in favor of a mileage tax. In that interview, LaHood said, "We should look at the vehicular miles program where people are actually clocked on the number of miles that they traveled."

And as you can imagine, the idea of your car outfitted with a GPS chip to track the car's miles by satellite not exactly a huge hit. Similar programs have been tested in some states and face a lot of pushback from privacy advocates. Today, the president's spokesman put a screeching halt to that idea.


ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I don't believe the president has -- I can weigh in on it and say, that it is not and will not be the policy of the Obama administration.


HILL: Yes, soon after that, the DOT released a similar written statement shooting that program down. May want to check with (INAUDIBLE).

BROWN: Ouch. That was a little harsh.

OK, miscommunication aside, though, the White House had good reason to be very happy today.

HILL: Yes, I mean, talk about this. Just about a month into the office, the American people apparently seem to like what they see with their new leader. A new CNN poll out today finds 80 percent of those polled think President Obama is a strong leader. Sixty-seven percent approved of the job he is doing.

When it comes to reaching across the aisle, though, just 46 percent believe that he can actually end the bipartisan gridlock in Washington.

We do know, though, the president, of course, pretty popular in Canada. Yesterday was his first international trip as president, and the White House releasing some new photos today of that visit north yesterday.

The pictures were taken and chosen by the White House. We should point out they are posted on the Web site as part of the slide show of the White House Web site, not CNN Web site.

BROWN: Good to know. Erica Hill for us. Erica, have a great weekend.

College students and police have been squared off against one another for days now at the campus of New York University down in Lower Manhattan today. Finally, the protest ended. It was pretty messy. We're going to tell you about that when we come back.


BROWN: Call it rescission chic. Dress to impress. Our time to tone it down a little.

Well, we're going to look at the ripple effect of fashion of and finance in a moment. But first, Gary Tuchman has tonight's "Briefing" -- Gary.

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Hi, Campbell. New York City police clashed today with dozens of NYU students who had barricaded themselves in a school cafeteria. The dramatic confrontation ended three days of student protests, over among other issues, the cost of tuition and the school's investments. Many of the demonstrators have now been suspended.

At least two people are dead and dozens hurt in Sri Lanka, where rebels attacked the nation's capital of Colombo from the air. They dropped bombs in a government tax office near the headquarters of the air force which may have been the intended target. The military shut down one of the planes. The other crashed into a building. The government had previously claimed that it wiped out the ability of the Tamil Tiger rebels to strike from the air.

Even with the new state budget, California is facing a new economic crisis because of the weather. We could all pay the price. Some of the state's largest farms may have water delivery cut off because there hasn't been enough rain or snow this year. The farmer say that means the price of their crops will go up and the states' 40,000 jobs could be wiped out with a billion dollars in lost revenue.

And Conan O'Brien says farewell to his New York studio audience this evening as he heads west to take over "The Tonight Show" from Jay Leno in June. NBC is moving Leno to a prime time spot. O'Brien will go head to head what "The Nanny" replaced at the Peacock Network back in 1992, David Letterman.

He's doing exactly what I do when I get off the set. O'Brien will be replaced in the 12:30 a.m. Eastern time slot by Jimmy Fallon.

Here's something cool, Campbell, that actually what Conan is doing he's chopping off the set because he's auctioning off some of the props for charity on eBay. And right now, the last day, look, his tie that he's wearing in tonight's show is going for over $2,000.

BROWN: Wow. That's good idea.

TUCHMAN: Yes, that's great.

BROWN: All right. Gary Tuchman for us tonight. Gary, thanks.

So fashion forward or fashion backward. The ripple effects of the money mess are wreaking havoc on the runways.


TIM GUNN, FASHION EXPERT: To spend an excessive amount of money on these niceties on clothing (ph), they're not necessities. It just doesn't seem appropriate in this day and time.


BROWN: Tim Gunn never one to shy away from blunt answers on fashion helps us sort it out.


BROWN: In times like these, why would anybody care about this year's color, this year's silhouette, this year's fabric? Because the fashion industry employs 175,000 generating $10 billion in wages a year, $1.6 billion in tax revenues. Fashion's big business here in the Big Apple, but the ripple effect can be felt in every shopping mall and main street, from coast to coast.

Erica Hill has the story for us.


ERICA HILL, CNN CORRESPONDENT voice-over): Fashion week is traditionally all about excess. Over the top designs, extravagant parties. Celebrities everywhere you turn. But with much of the globe caught in an economic downturn, one of the biggest trends to come out of fashion week 2009 could be restraint, much of it off the runway.

HITHA PRABHAKER, FASHION & RETAIL ANALYST: There weren't very many parties. Usually, it's a big, happy, sort of festive time. People are having lunch parties. People are celebrating, you know, book launches, Web site launches. You're not seeing that as much.

HILL: It's a ripple effect Tim Gunn, Liz Claiborne's creative director and a fixture on "Project Runway" noticed this week in things like food, flowers and wine.

GUNN: To spend an excessive amount of money on these niceties on clothing (ph), they're not necessities. It just doesn't seem appropriate in this day and time.

HILL: One of the most obviously niceties to get the ax, car service.

CHRISTIAN SIRIANO, FORMER "PROJECT RUNWAY" WINNER: I saw, you know, a lot of taxis, less car services.

GUNN: Why did we have one car for every person? Or why do we have a car at all? I'm subway all the time.

HILL: With 100,000 people expected over eight days, fashion week can bring in a lot of cash for the city of New York -- if they spend.

While the company behind the event says attendance hasn't changed, one local deli says they've seen a 15 to 18 percent drop in business this week compared to last year. But the manager declined to be interviewed on camera. Still, it's not all doom and gloom under the infamous white tents. After all, this is about fashion.

SIMON COLLINS, PARSONS THE NEW SCHOOL FOR DESIGN: I think recession is off to the time where greater creativity is your force to think harder about what you're doing. You can't fold back on a big, splashy romantic (ph) show with loads of window dressing.

HILL: Convincing Americans to buy may not be easy. Retail sales were off for six straight months before posting a one percent uptick last month, the height of post holiday sales. And despite major reductions, even the holiday season was a bust.

JCPenney today said sales fell nearly 10 percent in the quarter ending January 31st. And earlier this month, Macy's announced 7,000 job cuts on top of eleven store closings.

FERN MALLIS IMG FASHION: I think every designer who wants to stay in business has made a concerted effort to really focus on who their customer is and what store they want to sell to. Everybody wants to be business next season.

HILL: Everyone including emerging designers, like the winner of "Project Runway" season four, Christian Siriano, who sees opportunity in the downturn.

SIRIANO: But I think also if you're new and fresh and coming up, that companies and sponsors still want to invest in you early on and they're excited about you.

HILL: The hope is that consumers will be excited, too. An answer that comes this fall when these collections hit the stores.


HILL: Now, Campbell, there was some positivity here. A lot of people say, hey look, you know, the beginning of week started out with a lot of black, then we moved in there was a lot of color. People were very optimistic. But I actually spoke with Stacey Bendet from Alice and (ph) Olivia, which is a small line based here in New York, and she said while her company is doing pretty well, they are concerned because traffic is down.

BROWN: Right.

HILL: The one good thing she said, though, that could come out of this is, so the market is oversaturated, so people have to learn to be better at their business.

BROWN: Right.

HILL: And there's going to be some weaving out.

BROWN: Yes. A lot of it. All right. Erica Hill for us tonight. Erica, thanks.

We'll be back right after this.


BROWN: That is it for out. Don't miss our "CNN Money Summit" hosted by Anderson Cooper. That's tonight at 11:00. And Monday on NO BIAS, NO BULL, Lance Armstrong is here with me live, and you can begin uploading your i-Report questions to Lance at

Have a good weekend everybody.

"LARRY KING LIVE" starts right now.