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Campbell Brown
President Obama Plans Spending Freeze; 150,000 Believed Dead in Haiti
Aired January 25, 2010 - 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.
Three big stories on our radar tonight, and we want to get right to it.
We have got some breaking news coming out of the White House right now. President Obama is proposing a major spending freeze. This is just two days before his State of the Union address. And it is pretty much a full-throated answer to those angry independent voters who elected a Republican in Massachusetts last week and a gift or probably more like a challenge to Republicans who have accused the president of burning through billions of dollars in his first year.
This is a big, big political gamble, and the question tonight is, will it pay off? The government is spending $787 billion of your money to lift the economy and put Americans back to work. Well, is it working? All week this week, CNN is your watchdog. We're going to tell you where the stimulus money went and whether it is having an impact.
And as we have every night, of course, we are also going to bring you the very latest news out of Haiti. Today, the government announced it believes 150,000 people perished in the quake. That is a huge number, obviously, no way to verify that number.
We are also tonight going to continue to spotlight the youngest, the most vulnerable survivors of the quake, and they are the orphans that you have seen so many pictures and so many images of and heard so much about. Amid all of this confusion, who is looking out for them? Anderson Cooper and some of our other folks are going to talk to us about that a little bit later.
But we are going to begin tonight with the big political play by the White House, President Obama's new show of fiscal restraint just in time for the State of the Union.
And senior White House correspondent Ed Henry is joining us right now. We have also got senior political correspondent Candy Crowley standing by and Ali Velshi, senior business correspondent, as well.
So, Ed, this just happened seconds ago out of the White House, I know, this announcement. Walk us through exactly what they're talking about, about what the president is proposing.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: That's right, Campbell. This is a big deal, because, basically, this is an attempt to move the president to the political center, try to burnish his fiscal discipline credentials.
New details we're learning about what he is going to say Wednesday night in that big State of the Union address. Basically, he's going to propose, according to senior officials, a freeze on discretionary spending, basically the spending Congress has at its disposal on domestic programs, the non-entitlements like Secret Service.
This is a big deal, and he wants to freeze that for the next three years, save $250 billion. He's going to exempt security money. He's going to make sure that the same levels of funding are out there for the wars in Iraq, and Afghanistan and homeland security and not touch that.
But this is going to be a big fight with liberals in his own party on Capitol Hill, because it's going to put on the table education, health care, all kinds of popular domestic programs, but right now especially coming out of the Massachusetts special election it might help this president to pick a fight with liberals in Congress who are seen right now by those independent voters that you mentioned as big spenders.
Secondly, he's going to try to call the bluff of Republicans, who keep saying they want to work with this president. He's going to try to meet them halfway in the State of the Union and say, look, you talk about fiscal discipline. I'm putting some real cuts on the table. Will you meet me halfway? -- Campbell.
BROWN: And, Candy, you probably remember this. During one of the presidential debates during the campaign, John McCain basically proposed this, and one of the guys on our staff dug up quote that Obama gave in response during the debate, that to do that would be the equivalent of -- quote -- "using a hatchet when you need a scalpel."
Those words no longer apply, clearly. What's changed? What's changed since then?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Campaigns are very different from running the country. I think we have learned that with every president that has ever taken office, that things change, that, in fact, we have already seen in the health care bill that a lot of things the president said, two main things that the president said about health care, he abandoned a while back.
So, this happens. And when you look at polling, what you find, you find that people are very disturbed about the amount of spending that comes out of Washington. Now, will this deal with the deficit? It won't. Most everybody will tell you, many, many economists say this is going to take a tax hike, something I can assure this president is not willing to do on anybody that makes less than $250,000.
So, it is a big symbolic event, but look at the things that Ed mentioned that are exempt, defense spending, homeland security spending, Medicare, Medicaid, Social Security. Those are the big- ticket items.
And we do know that the Education Department got a big influx of money from the stimulus. So, what the president has done as Ed said is perhaps he is picking a fight with liberals, but he's also making nice with the Blue Dogs, those conservative Democrats that wanted something like this. He may need them a little more right now for health care and other things, so it will come as welcome news to those conservative Democrats and to some Republicans.
BROWN: Well, as you said, political cover for key people at the moment, given the health care battle.
But, Ali Velshi, answer this very simple question. I think it's a simple question. Does this have any bearing on the economy? Does it mean anything?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, it does, and one of the bigger concerns that's growing, our polling is showing it, protests are showing it, votes are showing it, people are increasingly concerned about the debt and the deficit, the growing deficit.
Now, the federal budget right now is $3.5 trillion. This is less than $500 billion that we're talking about that he could even affect. That's not going to be eliminated. So the bottom line here is that it's about fiscal discipline. There have been a lot of complaints that this administration and this Congress does not have the discipline.
It's a bit of a drop in the bucket considering how much money we're spending. But for those people who think we needed more stimulus or we need another stimulus, that eliminates that, because the things that get affected by this are things like education, highway construction, space exploration, defense, foreign aid, things like that.
So, it is going to be -- I think Candy and Ed are both right. He could be spoiling for a fight for the liberals in the party and for those people who really think more money needs to be put into save this economy, not less.
BROWN: All right, Ali, Candy, Ed, thanks very much.
Let me bring in CNN political analyst Roland Martin, and also Erick Erickson, who is the man behind the blog RedState.com, to a little bit talk more about this.
And, Erick, what you do you make of the news?
ERICK ERICKSON, EDITOR IN CHIEF, REDSTATE.COM: Well, I think the devil is going to be in the details here.
And I don't know that independent voters are going to buy it, because it's not really the discretionary spending people are upset about, although the stimulus is part of that. But it's the burgeoning health care plan. It's a lot of the plans that the Democrats don't see as discretionary, they see as necessary, that are driving the independents crazy right now.
BROWN: But does it -- as pure politics, does it give, as Candy was suggesting, some cover to those more moderates, to the Blue Dog Democrats, to the people -- the Olympia Snowes of the world, the more liberal Republicans who are going to be crucial if he's getting any kind of health care reform bill?
ERICKSON: I think it will probably give some of them some reassurance, but I'm not sure in the long term it will do good because it open up the attacks from the Republicans on another front, highlighting all the spending that the Democrats are saying isn't discretionary, but is still being spent and is questionable.
BROWN: Roland, what do you think?
ROLAND MARTIN, CNN CONTRIBUTOR: Well, first of all, here's what is going to happen. Obviously, Republicans will say, we welcome this, but they are going to want to double it or even triple it.
So, you're going to see that. Independents, as well as moderate Republicans, as well as moderate Democrats, they have been complaining about the rising deficit. But, look, the American people also, Campbell, are going to have to make a decision. The American people can't keep saying we want to see job activity, we want to see the government do something, keep asking for unemployment benefits.
Where is the money coming from? And so at some point they are going to have to stop asking for the government to keep putting money in and have to sit back and allow the private sector to do it themselves.
Now, this whole notion of covering from the left, look, he's been picking a fight with the left over health care, over abandoning the public option and other things. So, I don't buy this whole deal that somehow this is picking a fight with the left. But he will get lots of criticism, especially when you talk about education.
When you begin to talk about those kinds of issues, you are going to hear from the left and the right. So, watch the special interests begin to fight to make sure their stuff doesn't get cut. That's going to be the real gamble for this president.
BROWN: So, look ahead, both of you, if you will, Roland, you start, a little bit for me to State of the Union Wednesday. We also heard -- this news just broke a few minutes ago, so I wanted to focus on that.
MARTIN: Sure.
BROWN: But we also heard I thought sort of an interesting tone from the president today when he talked about America's middle class being under assault. I mean, that was the message, and it was a very populist sort of tone in terms of the rhetoric overall. Is that what he's going for? Did you notice a shift, Roland, and is that kind of the way he needs to reconnect with people, given what happened?
MARTIN: Absolutely, because he's talking to them.
Remember, he got 69 million votes. Senator John McCain got 59 million. So, he's really talking to those 10 million people. And Dr. Cornel West and others are saying this president, frankly, is ignoring the poor and others.
But, look, politicians want to focus on the middle class, and so he will target them. But, also, the president has to challenge Republicans as well, saying, look, not extending an olive branch, but say, wait a minute, I took some of your ideas on health care. They're in the bill. He should point those things out.
But he also has to look at his own party. They have, frankly, failed him because of their constant bickering and trying to go for the moon. You're not going to get it. And so he will no doubt speak directly to the issues of the people who are hurting the most.
But, Campbell, one important thing, this president is loathe to be emotional on some issues. In many ways, he's a technocrat. Reagan was strong, Clinton was strong, even Bush George W. Bush was strong at times when it came to directly appealing to people's heart, not their mind.
The president has to connect with them emotionally or he's lose them as Professor Obama. He truly must be President Obama speaking to their compassion and their concerns and for them to feel that he cares about their issues.
BROWN: Erick, let me ask you, though, specifically about health care, because was it -- Chris Dodd today said that he thought Democrats ought to take a break and just for a month don't even talk about health care. Leave it out of the speech seemed to be his advice. That's not going to happen, presumably. What do you think. Should they just put it on the back burner?
ERICKSON: I think they need to. And I hear from a lot of moderate Democrat senators and congressmen that they really want to stop talking about this issue. They think it's bad or them. It has become a fourth rail in American politics, which oddly enough lives up to the president's prediction from earlier this year -- or earlier last year that if they could do it now, they will never be able to do it.
And it looks like they are never going to be able to offer up a comprehensive public option health care plan. But the president shifting to the middle class is interesting, because in a lot of the polling that came out after the Massachusetts race, we find that the middle class feels like the Democrats are the ones who are attacking them.
And if the president is able to walk that back and kind of portray himself as helping the middle class, he's going to probably turn out OK. But he's reached the point already where he's become the butt of jokes on "Saturday Night Live" and other network programming,. The emperor has no clothes moment has already been passed, where the blame-Bush rhetoric, the jobs saved or created have all become late- night jokes. And he's going to have to turn the corner on this.
BROWN: Quickly, Roland.
(CROSSTALK)
MARTIN: He can't ignore health care, Campbell. He can't.
BROWN: No.
MARTIN: He can't ignore health care, because, look, he has a base. Remember, you have to also deal with your base. And so Senator Chris Dodd, he is not running for reelection. Of course, he's going to say whatever.
And so he has to touch on health care and pivot to economic issues, but he can't leave that in the dust because if he ignores his base, he's really in trouble.
BROWN: All right, Roland Martin, Erick Erickson, guys, thank very much.
MARTIN: Thank you.
ERICKSON: Thank you.
BROWN: Of course, the president's biggest legislative lift during his first year, pushing through that $787 billion stimulus, a lot of money. Voters want to know where it went and if it's really rebuilding our economy. All this week, CNN separating fact from fiction on this issue. Ali Velshi has read the whole thing.
Seriously, he read the whole thing, Ali? He's standing by.
VELSHI: I have the whole thing. I have the whole thing.
BROWN: Oh, yes. You get through a few pages a day?
VELSHI: It's about nine big binders. It's nine pages of binders -- nine binders about this big. And we are tracking down the projects, where all the money went. Right now, we have tracked more than $1.75 billion out of the $787 billion. But the week is new.
What you want to know is how this has affected the economy and how this has affected jobs. When we come back, I will show you the dispute that's going on about how many jobs have been created by the stimulus bill as soon as we come back, Campbell.
(COMMERCIAL BREAK)
BROWN: If there is one number keeping Barack Obama up at night, got to be the number 10, as in 10 percent unemployment, a figure that we hadn't yet hit one year ago when the president signed his giant $787 billion stimulus bill.
He said it would jump-start the economy, it would get Americans working again, but did it? Well, today, CNN launches the Stimulus Project. All this week, our team of journalists are following the money, holding the government accountable.
And we're going to with the White House. Over the weekend, top aides gave conflicting accounts of just how many jobs the stimulus has created. Listen.
(BEGIN VIDEO CLIP)
VALERIE JARRETT, SENIOR PRESIDENTIAL ADVISER: The recovery act saved thousands and thousands of jobs.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: That saved or created a million-and-a-half jobs.
DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: Now, the Recovery Act the president passed has created more than or saved more than two million jobs.
(END VIDEO CLIP)
BROWN: All right, so not exactly in sync. Today, the White House tried to clean up the mess.
(BEGIN VIDEO CLIP)
HENRY: Does that add to the confusion for the American people trying to figure out did this stimulus work or not if you have got three different answers about what it's done?
GIBBS: Well, again, the report that came out two weeks ago from the Council on Economic Advisers gave the number of 1.5 million to two million in jobs -- 1.5 million to two million jobs saved or created.
(END VIDEO CLIP)
BROWN: So chief business correspondent Ali Velshi has been working the phones a little bit on this one.
White House giving us a little fuzzy math here, Ali. Hopefully, you can give us a few facts on this. What is the bottom line, Ali? How many jobs created and why the conflicting numbers?
(CROSSTALK)
VELSHI: All right.
The only real number we have right now is by the Council of Economic Advisers. And those are jobs that are reported to have been created by companies that have received stimulus money -- 640,000 is the number that we have.
But let me explain to you why the math might be fuzzy, 640,000 direct jobs. Now, let me just break this down for you simply. These are 16 people who got direct and indirect jobs. Let's say there's a construction project, right? So, these are construction workers. These are truckers from the cement factory. These are suppliers to the construction firms, 16 direct and indirect jobs from a particular project, and they're all getting government money for this project.
Now, these 16 people are working on a highway project, and they got to eat. So, all of a sudden, the local pizzeria, the local dry cleaner, the local bowling alley, they start to have to hire people. And for every 16 jobs, this is one calculation that's been put out by the White House, but for every 16 indirect and direct jobs, nine induced jobs are created.
Induced jobs are jobs in the environment, jobs created in the economy that are not paid for by this money, but this money that these people earn goes over here and creates more jobs. So, if you look at it that way, if you say that the number of jobs reported are 640,000, you add another 360,000 to it, that's what the extra nine people would be if you multiply it that way, all of a sudden you have one million jobs.
And the 640,000 is just until the third quarter of this year. So, we're still waiting for the final quarter. When you estimate that, that's where you push that number above a million. I don't know if this math is true, Campbell, whether 16 direct and indirect jobs actually creates nine induced jobs, but, if you do that kind of math, that's where you start to get the numbers that are bigger.
Why three people who all work in the White House can't have the same number when they're talking on Sunday talk shows is a little beyond me, but the bottom line is that's how you might get numbers that are higher than the official numbers that we're hearing about.
BROWN: All right, so, Ali, kind of bottom-line us. We're going to do a much more in-depth discussion on this with our panel in a second, but give us your bottom line on whether ultimately you believe that it's working, whether the stimulus is working.
VELSHI: Well, I have to tell you I want to answer that question and I want to answer it later in the week, Campbell, because what we have got is 17 hours a day. We're making phone calls to the companies that have received this money asking them how they have spent it and how many jobs are created.
So, I don't want to take a thumb-suck at it right now. I'm going to give you a real sense of it toward the end of the week as to whether this is working or not.
BROWN: We shall be waiting. Ali Velshi -- thanks, Ali. Appreciate it.
VELSHI: OK.
BROWN: So, when it comes to the stimulus, does the public buy what the White House is selling? Well, the short answer to that is, no, frankly.
A new CNN/Opinion Research polls shows nearly two-thirds of Americans say the stimulus money has been wasted. Only 36 percent think that it has benefited the economy. And, what's more, 63 percent say the projects in the stimulus bill were picked for purely political reasons and aren't helping the economy at all.
Along with the big picture, we're also zeroing in on what's happening at the local level, and, tonight, Bozeman, Montana. They got $60,000 in taxpayer stimulus money and they used it to fix up a tennis court. Is that what recovery looks like -- when we come back?
(COMMERCIAL BREAK)
BROWN: The Obama administration is pouring billions of dollars of stimulus money into communities across the country. All this week, we are using the full resources of CNN to see if it's actually working and creating jobs for you.
That's why our David Mattingly pulled out his cold weather gear and he headed for, of all places, some tennis courts in Bozeman, Montana. Take a look.
(BEGIN VIDEOTAPE)
DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Winter in Bozeman, Montana, people don't play a lot of tennis.
(on camera): You had the court cleared off for us.
Whoa.
JEFF KRAUSS, MAYOR OF BOZEMAN, MONTANA: We did have the court cleared off. Watch it. It will be slick.
MATTINGLY (voice-over): I came here to Bozeman to find a city on thin ice over how it's spending stimulus money, $50,000 to erase all these cracks and potholes in a city tennis court.
(on camera): What was your reaction when you read the paper and saw that project?
GOV. BRIAN SCHWEITZER (D), MONTANA: I said to my wife, I will be danged. Look what they're doing in Bozeman.
MATTINGLY (voice-over): Montana Governor Brian Schweitzer wants to make Bozeman an example of how not to spend stimulus money. Putting a rubberized surface on a crumbling tennis court was not part of Schweitzer's plan targeting roads, water, and energy efficiency.
(on camera): What did Bozeman do wrong here?
SCHWEITZER: What they violated that rule of common sense. There ought to be a little guy in your head that wags his finger at you and says, wait a minute, we might want to rethink this thing.
MATTINGLY: At one point, Governor Schweitzer even decided to pay a surprise visit on the Bozeman City Commission, so he showed up at their regularly scheduled meeting to tell them publicly and face-to- face this is not how he wanted stimulus dollars being spent. But that meeting did not go well.
SCHWEITZER: Sir, I will explain it to you again.
KRAUSS: No, you don't need to explain it again. We already heard your side of the story.
MATTINGLY: Bozeman Mayor Jeff Krauss said the state legislature decided public recreation projects were fair game for stimulus money. About a dozen other Montana cities are doing the same thing.
(on camera): Can you stand on this tennis court right now and say to the American taxpayers all over the country that this was $50,000 well spent?
KRAUSS: Darn right.
MATTINGLY: The big picture of stimulus, though, was to create jobs, to maintain jobs. Are you doing that with this project?
KRAUSS: It is creating some instant jobs, some instant work for people all around the country. The product is manufactured in Saint Louis, so it's putting Americans to work.
MATTINGLY (voice-over): We looked into that and contacted the Minnesota company contracted to do the Bozeman courts. We were told it will be hiring just two local workers to handle the installation, a two-day job.
(on camera): Two Americans to work from Bozeman now.
KRAUSS: From Bozeman. Well...
MATTINGLY: And this is an outside company, a company that's outside Montana.
KRAUSS: This is federal money, OK? This is federal money. It's not state money. It's not Bozeman money. So if it's employing people in Saint Louis, if it's employing a person in Minneapolis, it's federal money. We're Americans. It's Americans going to work.
MATTINGLY: Where did you go wrong? Do you have any regrets?
SCHWEITZER: Well, I was nervous as a long-tailed cat at a rocking chair convention when the legislature left town without putting each one of these project line item and said we're just going to block grant it to the cities and counties. And, so, at that point, we lost control of $20 million of the $850 million.
MATTINGLY: Is this project a waste of the stimulus money?
SCHWEITZER: It's not a waste of money, but it is not the appropriate use of money.
MATTINGLY: Regardless, the Bozeman tennis courts and their new stimulus-funded rubberized surface are expected to be ready for use this spring.
David Mattingly, CNN, Bozeman, Montana. (END VIDEOTAPE)
BROWN: So, the bottom line, in Bozeman, a $50,000 stimulus injection created exactly four temporary jobs, two in Montana, two in Minnesota, none of them lasting more than two days.
Well, tonight, a White House spokesman trashed the Montana tennis project, saying -- quote -- "it was picked by local officials and it was under their say. If we had had a say, we would have said no."
So, is the stimulus working for average Americans? Tomorrow night, we are going to have an exclusive interview with Earl Devaney, the man the president picked to police the stimulus plan.
Still ahead tonight, "A.C. 360" investigates why stimulus money is going to so many companies that have a history of law-breaking.
And, then, tomorrow on "AMERICAN MORNING," we are going to show you some of the good news from the stimulus money. One family has food on their table because of it.
The Stimulus Project, all this week on CNN and at the CNN.com/stimulus.
Coming up next, with unemployment at 10 percent, where are the jobs, and is the $787 billion helping people get them? We are going to take a closer look at that.
(COMMERCIAL BREAK)
BROWN: President Obama knows when it comes to the economy he's on the ropes a little bit these days. Today, he declared the middle class -- quote -- "under assault" and promised to fight for their interests.
And in an interview with ABC News, the president said he will press on with his agenda, regardless of the political costs. Take a look.
(BEGIN VIDEO CLIP, ABC NEWS)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The one thing I'm clear about is that I would rather be a really good one-term president than a mediocre two-term president. And I -- and I believe that.
You know, there's a tendency in Washington to think that our job description of elected officials is to get re-elected. That's not our job description.
(END VIDEO CLIP)
BROWN: One thing that could certainly determine President Obama's fate in that department, the success or failure of his $787 billion stimulus. But with record high unemployment and just today there are more troubling housing news, the simple question tonight is, is it working? Is the stimulus really working, and especially is it creating jobs?
And with me now to try to answer that question our panel of experts. Chrystia Freeland is the U.S. managing editor for the "Financial Times." Lakshman Achuthan is managing director of the Economic Cycle Research Institute. And Ryan Mack is president of Optimum Management. He's with us as well.
Chrystia, let me start with you on this. We passed the stimulus. What? It's been about a year now almost exactly. Where are the jobs?
We've still got unemployment at 10 percent and that was a huge part of the problem. The White House is sort of saying or hoping, I guess, that it would never go above eight, and so expectations may be a little out of whack. But the number is at ten, where are the jobs?
CHRYSTIA FREELAND, U.S. MANAGING EDITOR, FINANCIAL TIMES: I think expectation management was clearly terrible. But to answer your simple question is the stimulus working, I think the answer has to be yes. And the reason is we have to remember, as you said, Campbell, a year ago that's when this was all happening. And a year ago it really was a possibility that the whole world starting with the United States would be plunged into a second Great Depression.
Things are tough now, especially if you're part of that 10 percent without a job, but things are not that dreadful. And the economy is starting to recover. So in terms of averting absolute crisis, which is where we were a year ago, yes, it has worked.
BROWN: But in terms of the jobs -- and I know part of this is timing because a lot of this money is only kicking in this year. So, when are we -- is it this year that you are going to see those numbers come down, Lakshman, and then people are going to feel a little bit better about things?
LAKSHMAN ACHUTHAN, MNG. DIR. ECONOMIC CYCLE RESEARCH CENTER: Well, the recession actually ended last summer, and the recovery has been going on since then. It will continue through this summer at least. And that will bring with it jobs.
You already have GDP growing, production growing. Incomes actually are growing. Sales are going up. Jobs will go up with that. Those are all key kind of measures of the economy outside your window.
You will have jobs growth, but I submit that it's not all because of the stimulus. I think we can point to areas where the stimulus has helped out. State and local governments, infrastructure jobs, clearly the stimulus has done things there. And you've covered that. However, that pales in comparison to what the business cycle can do when it starts to recover in terms of producing jobs. You'll start to see that in the months ahead. The real big thing which you touched on this --
FREELAND: Had there been no stimulus, where would we be now?
BROWN: Would it have all just happened anyway?
ACHUTHAN: Yes, I think --
BROWN: I mean, a fair question?
ACHUTHAN: Well, yes, I think a lot of it would have happened anyway, and the point I'd like to make --
BROWN: To your point, wouldn't you have had all of these localities like going under? We would have seen in California repeated over and over?
ACHUTHAN: I agree, state and local governments you would have had more job losses and you wouldn't have the infrastructure job gains that you're having related directly to the stimulus. However, the expectations point you were making was excellent because we lost seven million jobs. Are we really thinking that the stimulus package is going to give us seven million jobs? No matter how you slice it, that's not happening. It's the business cycle that has to turn.
(CROSSTALK)
BROWN: Let me -- hold on, Let me let Ryan jump in here on the same point.
RYAN MACK, PRESIDENT, OPTIMUM CAPITOL MANAGEMENT: At the end of the day, we do have to temper our expectations a little bit. I think the president at the beginning might have -- not have said enough that, you know, the eight percent unemployment projection, I don't think anybody outside of the administration thought that we are going to stay only at eight percent. I think double digit was expected by almost every economist out there.
I do feel that obviously the stimulus might have been rolled out a little bit too slow. They should have, might have focused a little bit more on shovel-ready projects as opposed to a lot. We have a lot of things being spent on tax rebates, unemployment insurance, social security checks that we really can't figure out exactly how many jobs are those that are going to be created by that. But at the same time, we do have a lot of police officers who are working, not only construction workers who are working now. And additional things that are getting into the economy, so it is working somewhat.
FREELAND: But to pick up on Ryan's point, there was a certain amount of damned if you do, damned if you don't.
MACK: Right.
FREELAND: Because you've just said the stimulus was rolled out too slowly, which I think is a really strong argument. On the other hand, we just heard the governor of Montana essentially saying it was rolled out too quickly and there wasn't enough time to specify which projects it should be spent on.
ACHUTHAN: There's a huge illusion here, though, which is that the stimulus can steer or direct the business cycle. As it happens, the stimulus came out at the beginning of this year. As it happens, the business cycle was already on the road to recovery at that time. BROWN: You talk about them like they're not interconnected.
ACHUTHAN: Well, they're not actually. I think they're not connected.
FREELAND: Don't you think, Lakshman, that we were in -- the whole world economy was in this incredibly fragile state.
ACHUTHAN: And if you look back, I agree.
FREELAND: Had that money not been spent and not only the stimulus...
(CROSSTALK)
ACHUTHAN: At the time -- wait, you have to set the --
FREELAND: ... but also the Federal Reserve pumping cash into the economy.
ACHUTHAN: I agree. I'm glad you brought that up because the timeline here -- the timeline.
FREELAND: Had you not had those two things happening, and not just the United States but also China, also Europe. Then I can say we would be in a terrible state right now.
ACHUTHAN: Chrystia, you're bringing up great points, but when did all of these happen: When did all of these happen? In early 2008 --
FREELAND: It happened --
ACHUTHAN: In early 2008, you had 150 billion stimulus, sank like a stone. No one even wants to talk about it.
FREELAND: The financial crisis hadn't started yet.
BROWN: All right.
(CROSSTALK)
ACHUTHAN: The recession had started.
MACK: I think Bernanke did an excellent job in terms of pumping additional capital in order to keep the capital system flowing. But at the end of the day, the private sector is, and I have to agree with that point, isn't going to have be the one to kind of pull us out of this job creativity. You know, if you look at the government as almost like -- if you're a shipping -- if you're a boat that's shipping, you have a hole in the boat. And someone comes along and says let me take some gum and plug it up. It's only going to be a temporary fix until the water starts coming in.
FREELAND: Yes, but don't forget -- but don't forget --
MACK: The government is actually the gum, but the private sector is going to do --
FREELAND: Kiran, had the government not stepped in, don't you think there's a real danger we would have been in a vicious cycle?
MACK: Absolutely. We're going to be a lot worse. It would definitely be a lot worse.
FREELAND: Business would not have had the confidence to invest?
MACK: A lot worse.
FREELAND: I couldn't agree with you more. A vicious cycle -- a vicious cycle is a business cycle. You make an error --
FREELAND: But business cycles can be tipped over by government action in one way or other.
ACHUTHAN: The reality is the recession began --
FREELAND: It's not like reality, Lakshman.
ACHUTHAN: The recession began at the beginning of '08. In the fall of '08, you bailed it out. We have to get the timeline correct here.
BROWN: And the good news is everybody, they're going to be here all week. Don't forget to tip your waitress.
ACHUTHAN: All right.
BROWN: Many thanks. Ryan, Chrystia, Lakshman, we will be seeing a lot this week. Thanks to all of you.
CNN as we have mentioned has assigned hundreds of anchors, correspondents, producers, editors, photo journalists to track down what happened exactly to the stimulus money. And you're going to find out a lot more online at CNN.com/stimulus.
And coming up next, personal finance expert Suze Orman takes a look at the stimulus spending on Main Street. Is it working in her view? You'll hear right after this.
(COMMERCIAL BREAK)
BROWN: Tonight and all this week, we are fact checking the billions of dollars spent in stimulus money. And one woman who's been watching pretty closely what's been going on is finance expert Suze Orman, host of the Suze Orman show on CNBC. She's also the author of "women * Money: Owning the Power to Control Your Destiny."
I spoke with her earlier.
(BEGIN VIDEOTAPE)
BROWN: The stimulus, $787 billion.
SUZE ORMAN, FINANCE EXPERT: Yes.
BROWN: Did it work?
ORMAN: Listen, we are still here talking, so it worked in that a year ago, a little bit over a year ago we had a distinct probability that we were going to fall off the place here. We were just going to go for it. I think if we had --
BROWN: It was a true crisis?
ORMAN: It was a true crisis. In my opinion if we had let AIG fail, we would have seen a depression worse than the '30s. You know, when I sat here and I said, it is a true possibility that we're going to see bread lines and everybody went, you're being so dramatic, it was a true, true probability that something horrific was going to happen.
Therefore, we're not there. We're a long ways from that happening, but we're still not out of trouble. So it worked in terms of keeping us from going all the way down. Is it working in terms of jobs and things like that? Not as well as I think it should.
BROWN: How do we get over this hump?
ORMAN: We're going to have to really deal with that, because you know, we're looking at this. And unemployment is all over. The way they figure unemployment isn't exactly the way that it should be figured.
Is it countered if you're looking for a job? You're not looking for a job? So unemployment is actually truthfully a lot higher than this 10 percent that we're saying that it is. Somehow we're going to have to figure out how do we create jobs in a way that makes sense. We're also going to figure out how do we pay this back?
How do we pay this kind of money back? And so we have problems. We have a global economy. We have China. We have Iran. We have a global crisis as well as, you know, a financial crisis that's possible. So he's got his hands full. President Obama has his hands full. I most certainly do not have the answers to that.
BROWN: A lot of people though talking about a second stimulus. Is that something that you think is --
ORMAN: I think we might need, believe it or not, a second stimulus, because I don't think we have the money to support ourselves the way that we still need to be supported. I wish we did. I wish everything was great. But I think we probably are going to need a second stimulus.
BROWN: And what are the chances of that happening? I mean, we may need it, but it's also trying to convince Congress if that's what the administration decides to do.
ORMAN: Well, it will depend on what happens with the health insurance, all of that. Where is all that going to come from? So a lot of what's happening now will be dependent on which bills pass and how much are they really going to cost.
BROWN: Let me ask you specifically about the administration's mortgage program, because it was supposed to help people avoid foreclosure. Only about 31,000 homeowners got any help from that program. What happened?
ORMAN: I have it to tell you, while it's easy for us to blame the administration, I'm going to blame the banks once again. The banks don't want to deal. The banks did not set it up so they could communicate with their customers.
So for instance, I have a driver. No big deal. My driver did a home loan modification. I helped him with Wachovia. Wachovia now is bought by Wells Fargo. Wells Fargo doesn't want to honor his home loan modification anymore. So now they're saying sorry, we're not honoring this. Now his payments have been late. Now his FICO score is down the tubes. Now he doesn't know what to do. And so he's like, why should I pay any more, Suze? I don't care.
So the confusion out there is making it so that good, honest people that wanted to stay current in their mortgages, they don't care anymore. Because the financial institutions are not returning their calls, it is as confusing as can be. The administration did not make it any easier. They just came out and they said this is going to solve the problem, and it did not solve any problems. They need to revamp this from the get-go. It was a total, abysmal failure.
BROWN: So what should -- I mean, what does revamping mean? I mean, if the banks are really the problem, how do you deal with that?
ORMAN: It means setting up somehow so that -- I don't know, to tell you the truth. I wish I had an answer for that.
BROWN: How to hold them accountable.
ORMAN: I don't know. Because half of the loans aren't even with the banks anymore. So it's not just the banks, it's the servicers, it's everybody. So because we were allowed to do certain things that we never shouldn't have been allowed to do when it came to these mortgages and selling them off and all these things, we're in the situation that we're in today.
BROWN: Suze Orman, appreciate you talking to us about this. We still have a long way to go, don't we?
ORMAN: Long way to go.
BROWN: Good to see you.
ORMAN: But we will get there.
(END VIDEOTAPE)
BROWN: And as we told you, every day this week CNN is going to be following the stimulus project. Tomorrow, I'm going to talk to Donald Trump. He certainly knows plenty about creating jobs, creating wealth, whether he thinks the stimulus is working. You'll hear his opinions coming up tomorrow.
When we come back, we're going to talk about Haiti, shift gears a little bit, and talk about some of the new fears that orphans are dealing with in Haiti. Concerns tonight that kids with parents still alive could be put up for adoption by mistake. Anderson Cooper investigating that part of the story in Port-au-Prince when we come back.
(COMMERCIAL BREAK)
BROWN: Coming up, we are going to go to Haiti where CNN's Anderson Cooper is following the growing orphan problem there. But there is other must-see news happening right now, and Mike Galanos is here with a look with tonight's "Download."
Hey there, Mike.
MIKE GALANOS, HLN PRIME NEWS: Hey, Campbell. First off, at least 36 were killed today. This is three suicide car bombings in Baghdad. And the blast took place within minutes of each other near major hotels just outside the fortified Green Zone. At least 71 other people were wounded, and the high-profile attacks come just six weeks ahead of Iraq's national elections and no one has yet claimed responsibility for these blasts.
Osama bin Laden claims he's behind the failed Christmas Day airline bombing and is threatening new attacks. Al Jazeera television aired a one-minute audio message purportedly sent from bin Laden addressed, quote, "From Osama to Obama."
The Al Qaeda leader calls the alleged Nigerian underwear bomber a hero and says the U.S faces fresh strikes because of its support of Israel. Now intelligence officials doubt that bin Laden actually orchestrated that plot.
Well, the U.S. Navy has joined the search for survivors of an Ethiopian Airlines plane that crashed off the coast of Lebanon this morning. The plane was carrying 90 people when it plunged into the Mediterranean Sea in a fireball just off of the coast of Beirut. Twenty-three bodies have been pulled from the water. Officials think the crash was probably caused by bad weather and not terrorism.
Finally, this one on a lighter note. The dancing continues on Bourbon Street today. That's the hometown of New Orleans Saints, won the NFC championship. They're going to the Super Bowl for the first time. And today, New Orleans police said last night's huge celebration was peaceful with no property damage. Saints beat the Vikings in overtime. Again the victory particularly sweet coming less than five years after the city was devastated by Hurricane Katrina.
And, Campbell, I figure a lot of players talked about that, how special this is, how much it means to that city.
BROWN: To a lot of us from Louisiana.
GALANOS: Yes, exactly. BROWN: It means a lot. Mike Galanos, we're very excited. Go Saints. Thanks, Mike.
GALANOS: Thanks, Campbell.
BROWN: "LARRY KING LIVE" starts in just a few minutes. Larry, what do you have for us tonight?
LARRY KING, HOST, "LARRY KING LIVE": Campbell, we're going to talk about the thousands of Haitians who've lost limbs in this earthquake. How do they survive with limited Medicare?
Now, Heather Mills, herself an amputee, will be here with a heartfelt appeal. She's going to go back and forth with Sanjay. Sanjay will be at a hospital. We'll talk about amputees and how they get new limbs.
And we're going to introduce you to two American families who've been reunited with the children they were adopting before the earthquake hit. And one of those adorable little boys is right here in the studio with us.
And a year after the $787 billion stimulus passed, is it working? We'll debate it all ahead on "LARRY KING LIVE" -- Campbell.
BROWN: OK, Larry. We'll see you in just a few minutes.
We are also going to follow-up on the story there we were talking about in Haiti. A new worry now, hundreds of thousands of orphans there. How do officials make sure that those sent abroad are truly orphans?
Anderson Cooper is here with the questions being asked on the ground in Port-au-Prince when we come back.
(COMMERCIAL BREAK)
BROWN: Turning now to Haiti, where tonight the government is estimating that 150,000 people may have been killed in the earthquake nearly two weeks ago. Of course, that number is really impossible to verify. We also learned today from the State Department that 59 Americans are confirmed dead, 37 others presumed dead.
Meantime, Secretary of State Hillary Clinton says the administration is looking at whether to allow more Haitians to come to the U.S. now legally. Meantime, there is another growing crisis in Haiti, figuring out how to protect the children who could be giving up for adoption by mistake or even worse. And Anderson Cooper has been working on this part of the story all day in Port-au-Prince for us.
Anderson, what did you find?
ANDERSON COOPER, HOST, "AC 360": Campbell, UNICEF is basically raising kind of the alarm saying that they're concerned that the large numbers of kids who may have been orphaned or right now at least unaccompanied, that may just be separated from their families, that they may fall victims to traffickers, people who are trafficking them for shady adoptions in the United States or Europe, people who are trafficking them for sexual exploitation, or even to turn them into domestic servants elsewhere in Haiti and here with families or in the Dominican Republican or elsewhere.
So they're very -- they want to be very careful and try to get a hold on just how many kids we're talking about, because at this point nobody knows how many unaccompanied children there are. You see them everywhere. You see them in camps, you see them in hospitals, but trying to figure out who really is an orphan, and who is not, who may be just separated from their loved one or one parent died and they can't find the other parent, that's what UNICEF groups like the Save and Children and the Red Cross are going to be working on over the next weeks and months. But they say it is a critical situation right now, trying to make sure these kids are protected wherever they are so that they're not literally stolen.
We've met a number of doctors who are very concerned about this who literally say, you know, in addition to their worrying about the medical needs of the kids they're treating, they are keeping an eye out for any kids that might be taken by some distant relative or some stranger.
BROWN: It's so terrifying. And, Anderson, more generally now the Haitian government says that they are basically stopping rescues or attempted rescues, and really just focusing on the recovery now. But are there still teams out there that are still searching for survivors?
COOPER: Well, I talked to one member of the Fairfax County search and rescue team who's actually up at the Montana Hotel and has been for many days. They say they have not got a positive indication of life in the last six days. That's using specially trained dogs, that's using, you know, high sensors, high frequency listening devices. They are still up there. They are still working, but they have brought in heavy equipment to kind of move some of these large pieces of rubble that, you know, when you're doing search and rescue, you're just boring small holes. They are bringing in heavy equipment, which is certainly a sign that this is evolving. They would not say point-blank they are no longer in a rescue mode. He wouldn't say he's fully in a recovery mode. He said they're still holding out hope. They're still there on site if they get a sign of life. But it's certainly, you know, it has not been very positive in that location, and you really don't see the same amount of rescue crews around town kind of working.
BROWN: All right, Anderson Cooper for us from Haiti tonight. But to that point, we should mention a startling discovery over the weekend. As the official rescue was called off, one man was pulled from the rubble alive after 11 days. When we come back, we're going to have his pretty incredible survival story.
(COMMERCIAL BREAK)
BROWN: This weekend as we just told you, the mission in Haiti moved from rescue basically to recovery now. But even after that announcement, one man was pulled out alive. This is after 11 days. And or correspondent Hala Gorani has what is a pretty incredible story. Take a look.
(BEGIN VIDEOTAPE)
HALA GORANI, CNN CORRESPONDENT (voice-over): It was the survival story rescuers called a miracle. Wismond Jean-Pierre (ph) pulled out alive from the rubble of a building after being trapped for almost 12 days.
And this is Wismond today in a French hospital.
Were you afraid that nobody would find you? I asked. "No. No, never," he replies. Still weak but overall healthy.
This is a family story. Wismond's brother Enzu (ph) visits him in the hospital. He never lost hope. He got the attention of rescuers when he heard his brother cry out for help.
From the hospital, we offer Enzu (ph) a ride back to his house, an underground shack. He moved here with his wife and four children when the quake destroyed their home. They share this space with cousins and other family members. There's no electricity. They use flashlights in the tiny living area.
In the hallway, we show the family tape of Wismond's rescue. Enzu is seeing this for the first time. His wife cries.
"I thought he was dead," she says. But after the dramatic rescue, the good news story of Wismond's survival against the odds comes the grim reality of what lies next, of what the future holds.
"I have no hope," Enzu says. "You want to leave?" Where to, I asked? "To anywhere, but here."
Wismond will come to live here after he is discharged from the hospital in a few days. He flirted with death underground for 12 days. And when he comes out, it's an underground shack that he and his family will try to rebuild their lives.
Hala Gorani, CNN, Port-au-Prince, Haiti.
(END VIDEOTAPE)
BROWN: And that is it for us for now. Thanks for joining us.
"LARRY KING LIVE" starts right now.
