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The Situation Room
President Obama Slams AIG Bonuses; Lifeline For Small Business
Aired March 16, 2009 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: And, happening now: the president lashing out at big, fat bonuses at a company that's being bailed out by taxpayers. One Obama adviser says AIG is so greedy, it could win a -- quote -- "Nobel Prize for evil."
Small business owners say, we need a lifeline too. This hour, what the president wants to do for smaller firms. Will it save them from shutting their doors?
And the White House firing back at Dick Cheney, accusing him of being in a cabal with Rush Limbaugh and Republicans.
We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You're in THE SITUATION ROOM.
This is how much the insurance giant took in federal bailout money from all of us to date. Look at this, a whopping $173 billion. And now this is how much AIG wants to give out in additional executive bonuses, $165 million.
Listen now to President Obama today venting his anger and promising to crack down.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?
(END VIDEO CLIP)
BLITZER: All this week, CNN is committed to bringing you coverage we're calling "Road to Rescue." It's a survival guide to show you how we will rebound from this financial crisis, but, over at the White House today, a rocky ride.
Let's bring in our White House correspondent, Dan Lothian.
The president is deeply concerned about what's going on. Take us, Dan, behind the scenes.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, Wolf, what the White House is trying to do here is, they're trying to build confidence in the economic turnaround plan. And you saw a couple things that were unfolding over the weekend. First of all, there was really outrage building among taxpayers across the country when this story started coming out. And also on the Sunday morning talk shows, you saw that outrage as well.
So, the president really wanted to come out and have some tough talk today. The big question, though, that you're hearing from some people is why didn't the administration do something a lot sooner; why didn't they jump on this when they were extending that last lifeline, that $30 billion lifeline, to AIG a couple weeks ago, Wolf?
BLITZER: Dan, stand by for a moment.
Lawmakers are ready to grill AIG's chief executive about bonuses they call appalling.
Let's go up to Capitol Hill. Our congressional correspondent, Brianna Keilar, is watching this story.
Here's the question: What can Congress really do about this?
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: Wolf, they are brainstorming, but it's unclear what, if anything, lawmakers can do to force AIG employees to return this $165 million in bonuses.
(BEGIN VIDEOTAPE)
KEILAR (voice-over): AIG, the company that was too big to fail, is doling out bonuses to employees, even as $170 billion of your taxpayer money keeps it afloat.
On Capitol Hill, lawmakers are seething.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: This is absolutely appalling.
SEN. HARRY REID (D-NV), MAJORITY LEADER: These executive bonuses are beyond even outrageous.
UNIDENTIFIED MALE: The only thing free they may deserve is a free lunch and a free room in the Bastille.
KEILAR: But for all the outrage and despite the federal government owning 80 percent of AIG, legal experts say Congress and the Obama administration may be hamstrung, since the bonuses were negotiated before AIG first received bailout funds.
It's a bitter pill to swallow, but Congress and the Obama administration may have no choice.
ROSS EISENBREY, ECONOMIC POLICY INSTITUTE: These are some of the greediest people you can imagine. They have ruined this company by writing bad contracts, tremendous amounts of money, hundreds of billions of dollars of bad contracts, and now they're saying, pay us $450 million.
You know, it's almost unthinkable. It's so much money.
(END VIDEOTAPE)
KEILAR: One preliminary idea that Senate Banking Chairman Chris Dodd is talking about, Wolf, is writing a narrow tax provision that would only apply to those folks at AIG who have gotten this bonus, these -- these -- bonus, this money, this bonus money, and then taxing them so that the government could get that money back in the form of tax revenue -- Wolf.
BLITZER: Brianna Keilar on the Hill for us, thank you.
There are -- the people President Obama spoke to today, they are the owners of small businesses. They applauded his plan to try to stop AIG executives from getting bonuses, and this may help explain why. Over 99 percent of all companies in the United States are considered to be small businesses.
They're getting more than $15 billion in financial help from the federal government. By contrast, AIG is getting over 10 times more money from the federal government, in excess of $170 billion. Don't forget, AIG insures businesses all over the world, and, if it collapsed, it could drag the entire financial system down with it. That's why the federal government is pumping in so much money to AIG.
Right now, the White House is engaged in an all-out war of words, on one side, the former vice president of the United States, who is not known for biting his tongue, on the other, a White House that won't let Dick Cheney talk badly about the president.
Let's go straight to our senior White House correspondent, Ed Henry.
The former vice president spoke to our John King yesterday. He was very blunt and the White House not wasting any time in responding, Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right.
What's fascinating is, you will remember just a few weeks ago everyone was talking about how this was a kumbaya transition, both sides saying very warm things about each other. It's clear that, in John King's interview, Vice President Cheney decided to take the gloves off and Robert Gibbs did not waste any time responding when I asked him about it today. Take a listen.
(BEGIN VIDEO CLIP)
HENRY: One quick follow-up: Former Vice President Cheney was on "STATE OF THE UNION" yesterday. He had a lot -- a lot of criticism of this White House.
To boil it down, on national security, he said the president's policies were making the country less safe. And on the economy, he was charging that the president is taking advantage of the financial crisis to vastly expand the government in all kinds of ways -- health, education, energy.
How do you respond to those kind of allegations from the former vice president?
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, I guess Rush Limbaugh was busy...
(LAUGHTER)
GIBBS: ... so they trotted out the next most popular member of the Republican cabal.
(END VIDEO CLIP)
BLITZER: Go ahead. I was going to say, it's a very tough statement that he had. How was it received by the press when he said that? Because you were right in that room. You asked him that question.
HENRY: Two interesting points.
First of all, on the substance, what Robert Gibbs was trying to say and what he went on to say is, that look, if Vice President Cheney is really that concerned about 240 detainees, these terror suspects at Guantanamo Bay, why didn't the Bush administration try them, bring them to justice over the course of the last six-and-a-half, seven years?
So, that was on the substance. But in terms of the politics, what's fascinating is that Robert Gibbs clearly feels that dragging both Dick Cheney and Rush Limbaugh back into this debate is good politically for this White House.
I can tell you, a lot of Republicans on the other side are telling me privately, though, they wonder whether this could blow up in the White House's face after the president spent so much time talking about changing the tone, number one. But, secondly, also, this White House has been saying it wants to be focused on solutions moving forward. The more they get drawn into the battle back and forth, sometimes, that can backfire a little bit -- Wolf.
BLITZER: Dick Cheney yesterday also told John King he loves Rush Limbaugh. So, maybe that gave the White House a little opening on that front.
HENRY: Absolutely. And they want to respond. They want to defend this president, obviously. We asked the question and they feel like the vice president took some shots, so they want to respond.
BLITZER: Yes. You get hit, you hit right back.
All right, thanks very much, Ed Henry.
Let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Jay Leno had a funny line about Rush Limbaugh. He said he ought to be put in charge of the Food and Drug Administration, because if there's anybody in America who knows about food and drugs, it's Rush Limbaugh.
(LAUGHTER)
CAFFERTY: If you're looking for a job that's recession-proof, well, here's one where the customers don't talk back.
"Newsday' reports that interest in funeral careers is skyrocketing. The mortuary science program at one Long Island community college has seen inquiries increase 15 percent in recent months and enrollment for last fall doubled from the year before.
One program official says that 80 percent of graduates wind up employed in the funeral service industry. They earn about $50,000 a year after completing a one-year residency.
Human resource experts suggest some other careers worth pursuing during a recession. They include health care, energy, education, public safety, accounting, military, and debt collection. Some companies that are actually hiring right now include RadioShack, AT&T, Sears, Kmart, KinderCare Learning Centers, and Interim HealthCare.
There's no question a lot of people are looking, too. The nation's unemployment rate hit 8.2 percent last month. And some fear the jobless rate could go to double digits this year -- 4.4 million jobs have been lost since this recession started in December of 2007.
Meanwhile, a new CNN/Opinion Research Corporation poll shows worries about unemployment have tripled over the last year -- 36 percent of those surveyed now say unemployment is the top economic issue. A majority of people have lost confidence that they could find a good job at their current salary if they had to.
Here's the question. What are the best kinds of jobs in a recession? Go to CNN.com/caffertyfile, and you can post a comment on my blog -- Wolf.
BLITZER: A lot of people would like to know.
And all this week, Jack, we're trying to help them deal with these kinds of questions. Thanks very -- thanks very much.
CAFFERTY: Sure.
BLITZER: The man who swindled investors out of virtually everything is about to see what it's like to have virtually nothing. The government wants Bernard Madoff's multimillion-dollar homes and pricey possessions.
And South Carolina's governor, Mark Sanford, doesn't want to use stimulus money the way it was meant to be used. He wants to use it for something else. The White House response? A flat-out no.
And, attention, small businesses. The president says help is now on the way. (COMMERCIAL BREAK)
BLITZER: Check this out, the mug shot of Wall Street's biggest swindler ever, prosecutors planning to seize some of the most lavish examples of Bernard Madoff's stolen fortune. The thousands of people he cheated have been demanding that Madoff and his family know what it's like to lose everything, like so many of them did.
Let's bring in our senior correspondent, Allan Chernoff. He's working the story.
All right, so, what does the government want?
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Wolf, the government wants to recover everything that the Madoffs have.
Now, Ruth Madoff, Bernard Madoff's wife, has the bulk of the family's assets in her name. Even so, legal experts say the government should have little problem seizing it all, the homes, the boats, even the family jewels.
(BEGIN VIDEOTAPE)
CHERNOFF (voice-over): Bernard Madoff swindled investors out of their life savings. Now he's about to lose his.
In pleading guilty, Madoff gave up more than his freedom. He agreed to forfeit anything he made off the criminal enterprise. That includes his four homes in Manhattan, Montauk, Palm Beach and France, all the fine art and furniture in them, worth nearly $10 million; a $39,000 Steinway piano; a silverware set worth $65,000; and Ruth Madoff's jewelry, valued at $2. 6 million. There are four cars, two Mercedes, a BMW and a Volkswagen. And $17 million at Wachovia Bank.
In all, more than $120 million in assets, most of it in Ruth Madoff's name.
BRADLEY SIMON, FMR. FEDERAL PROSECUTOR: It would be a little hard to separate her money from the criminal enterprise. At the end of the day, in my view, the government's going to take every penny.
CHERNOFF: Liquidating Madoff's company could raise millions more for victims of the fraud. But the total still amounts to a tiny fraction of the $65 billion that Madoff investors thought they owned.
Victim Miriam Siegman believes Madoff must have more hidden away.
MIRIAM SIEGMAN, MADOFF VICTIM: I think there's a huge possibility that there are all kinds of accounts and there's money that has been sloughed off into other entities.
CHERNOFF: And the government says it's continuing to search for more assets to help victims recover some of the money they lost.
(END VIDEOTAPE) CHERNOFF: For good measure, the government told Madoff before his plea that it intends to seize more than $170 billion. Good luck finding that amount -- Wolf.
BLITZER: Yes, good luck, indeed. All right, thanks, Allan.
Let's bring in our Internet reporter, Abbi Tatton. She's looking into Madoff's multimillion-dollar properties.
And they're all over the place.
ABBI TATTON, CNN INTERNET REPORTER: Wolf, they're both sides of the Atlantic, coming to $22 million in total.
And we have been looking at what the government is after in Google Earth. First of all, this is Madoff's New York City apartment, Upper East Side, penthouse apartment valued at $7 million. Then there's the weekend getaway in the Hamptons, an oceanfront property here, $3 million right on the beach.
But then there's also the $1.5 million in contents, in furniture in this one house alone. Then the most expensive house, Palm Beach, Florida, also on the water. It has its own dock, $11 million there. And if that wasn't enough vacation property, let's go across to the French Riviera, where there's a $1 million condo, quite modest, you think, until you look just down the road, and then you see what's anchored at the marina nearby, a yacht worth $7 million that the government is also going after, one of four yachts and boats, Wolf.
And Madoff named them all Bull, would you believe?
BLITZER: Bull, like in -- as in bull market?
(CROSSTALK)
TATTON: That's -- exactly.
BLITZER: Or bull, some other kind.
TATTON: Whatever you would like to call it.
BLITZER: Yes, that's what we know. But there could be other stuff hidden away as well.
TATTON: If you look at the list of assets, it goes on and on.
BLITZER: Abbi, thanks very much.
The Federal Reserve chairman, Ben Bernanke, suggests the recession could end this year.
Poppy Harlow of CNNMoney.com shows us what to look for, the signposts, on the road to rescue.
And they're responsible for most new jobs in the past decade. President Obama tells us why small businesses are the heart of the American economy.
Plus, a nuclear-armed ally makes a major compromise and pulls back from the brink of possible disaster.
(CROSSTALK)
BLITZER: As we mentioned, this week, we're covering the money meltdown that's changing your life, as only CNN can. We're calling it "The Road to Rescue: The CNN Survival Guide."
Who will fix this economy, where are the jobs, and when will this recession end?
Listen to the Federal Reserve chairman, Ben Bernanke, answer that question.
(BEGIN VIDEO CLIP, "60 MINUTES")
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: But we do have a plan. We're working on it. And I do think that we will get it stabilized, and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year. And it will pick up steam over time.
(END VIDEO CLIP)
BLITZER: All right, let's bring in Poppy Harlow of CNNMoney.com.
You heard the Federal Reserve chairman, Poppy, say that the system will be stabilized. Here's the question. When will we actually see some signs of that?
POPPY HARLOW, CNN CORRESPONDENT: You know, there are some things you want to look out for, Wolf, because we're in a deep recession. The road to recovery is going to be long. You heard the Fed chief saying that on "60 Minutes" last night.
But he has said, time and time again, you have to look at the financial sector. The banks have to get on solid ground before we are on the road to recovery.
And that means more than just one or two months of profit, like we heard from Citigroup and Bank of America last week. That means quarter after quarter of sustained profitability at these banks and let the American people know that the big banks are not going to fail. That's where they need the confidence.
Bernanke -- very interesting -- he said: I care about Wall Street for one reason, and one reason only. Because what happens on Wall Street matters to Main Street lending. In one word, that is why. Wall Street is critical to lending, not only to businesses large and small, but to individuals for home loans and everything in between.
They need to be able to lend -- to get loans from these banks. And, also, investors lends to businesses by investing in these businesses, Wolf, in the stock market. So, when investors feel confidence, then the businesses can get the loans that they need. Those are two critical signs -- Wolf.
BLITZER: Well, what else would indicate the economy, Poppy, is rebounding?
HARLOW: You know what? Housing. Anyone could guess that, because it's at the crux of this crisis. We need to see a stabilization of at least of home prices, so they are not falling month after month after month, so we don't see more and more and more foreclosures.
If people feel confident in their home, they're going to feel confident in their life. That's going to make a big difference.
And then jobs -- the reason you see jobs down the road here a little bit is because, in the industry, we call this a lagging indicator. What we see is unemployment will peak near the end of a recession, or even a year or two after a recession ends. So, you should know, folks if the job picture gets worse and worse, keep in mind, the economy and the stock market may be recovering, even though the job picture looks grim, Wolf.
That's a big thing that not everyone knows, but it's critical to understanding how all this plays out.
BLITZER: Are we seeing any other positive signs? Are we seeing any positive signs in some other areas?
HARLOW: We -- we are.
We want to bring you the good news, too. Take a look here at the retail sales numbers, folks, a little decline in February. What's key? Better than expected. And the January reading, retail sales were up nearly 2 percent. Americans are spending money again, little by little. It's the American way to shop.
Even though it's fallen off a bit lately, two-thirds of our GDP relies on consumer spending. That's some good news. And, also, there's a little good news in the jobs picture, Wolf, a leveling off at least of those jobless claims -- send it back to you, Wolf.
BLITZER: All right, Poppy -- Poppy reporting on the road to recovery.
One governor, meanwhile, who has opposed the president's economic plan still wants to use some of that stimulus money, but his way.
Let's bring in our national political correspondent, Jessica Yellin, to explain what is going on.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: It's a big fight, Wolf. Governor Mark Sanford of South Carolina is taking the strongest stand against the stimulus of all the nation's governors. Now that President Obama has nixed his request for a waiver, he's still not taking no for an answer.
(BEGIN VIDEOTAPE) YELLIN (voice-over): South Carolina Governor Mark Sanford thinks the stimulus is bad policy.
GOV. MARK SANFORD (R), SOUTH CAROLINA: If you borrow from Peter to pay Paul, you still owe Peter. There is no free lunch. We don't think it's a good idea to spend money that you don't have.
YELLIN: So, he asked the White House for permission to use about a quarter of the stimulus money headed to South Carolina to pay down the state's debt. The White House says no go.
In this letter, the Obama administration explains, the president doesn't have the authority to overrule Congress, which decided that stimulus money is meant to prevent layoffs, spur economic activity, and make critical investments in education.
(BEGIN VIDEO CLIP, DEMOCRATIC NATIONAL COMMITTEE AD)
NARRATOR: South Carolina is facing tough times. But Governor Sanford is playing politics, instead of doing what's right.
(END VIDEO CLIP)
YELLIN: Now the Democratic National Committee is going after Governor Sanford. The governor has called for that ad to come down.
South Carolina has the second highest unemployment rate in the nation, 10.4 percent. Many of the state's Republican lawmakers are now at odds with their governor. They say South Carolina needs that stimulus money. And Democratic critics accuse Sanford, who's considered a future presidential candidate, of trying to make headlines to position himself for higher office.
REP. JAMES CLYBURN (D), SOUTH CAROLINA: His own personal political agenda is being put ahead of the people who elected him to office, and it's an absolute shame.
YELLIN: To that, the governor says:
SANFORD: I think that, if you don't want to debate the merits of the stimulus package itself, you instead talk about motives.
(END VIDEOTAPE)
YELLIN: Now, the state legislature can still vote to override the governor's decision, but only after the governor has exhausted all his options.
Wolf, his office has just announced that they will send another request letter to the president tomorrow, which will further extend this process. They're giving it one more shot -- Wolf.
BLITZER: I suspect the answer is going to still be the same.
YELLIN: No, yes.
BLITZER: OK. Thanks very much, Jessica.
We have heard the president call bonuses for a bailed-out company outrageous, but did the insurance giant AIG do anything illegal? The company now facing a deadline.
The White House is firing back at Dick Cheney over something he said right here on CNN.
And President Obama explains at length how he wants to help small businesses have their shot at the American dream.
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now: Wall Street is back in negative territory after its big four-day surge last week. The Dow Jones average finished the day off seven points. Some analysts say the measured easing in stocks after such a big rally is actually healthy.
The New York attorney general is demanding that AIG produce a list of executives who received bonuses. The troubled financial giant which took in billions in bailout money paid out $165 million in bonuses last week alone.
And kudos today to Pakistan from the Obama administration for reinstating a fired chief supreme court justice. The State Department says the move brought Pakistan -- and quoting here -- "back from the brink."
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
President Obama says small business owners are struggling in this recession, so, today, he announced he's throwing a lifeline to the people. The president says, start, businesses, by first saying, let me take my shot.
(BEGIN VIDEO CLIP)
OBAMA: Small businesses are the heart of the American economy. They're responsible for half of all private sector jobs. And they create roughly 70 percent of all new jobs in the past decade. So small businesses are not only job generators, they're also at the heart of the American dream. After all, these are businesses born in family meetings around kitchen tables.
They're born when a worker takes a chance on her desire to be her own boss. They're born when a part-time inventor becomes a full-time entrepreneur or when somebody sees a product that could be better or a service that could be smarter and they think, well, why not me?
Let me try it. Let me take my shot.
(END VIDEO CLIP)
BLITZER: The president also spoke about small businesses being trapped in a vicious cycle, partly because of what's happening regarding selling loans in the secondary market.
(BEGIN VIDEO CLIP)
OBAMA: Today, unfortunately, there aren't nearly as many secondary buyers for these kinds of loans, even when they're guaranteed by the Small Business Administration. So community banks cannot bring in the funds necessary to provide as many loans. And, as a result, we've seen a precipitous drop in lending to small business.
The SBA typically guarantees $20 billion in loans annually, but this year lending may fall below $10 billion. Even businesses with impeccable credit can't access loans. So entrepreneurs and their employees pay an enormous price. But the whole country pays a price, as well, because less lending leads to fewer jobs and lower spending, which leads to less lending -- a vicious cycle that delays our recovery.
And small businesses don't just provide jobs, they provide the innovations that help us lead in the global economy. Smaller companies produce 13 times more patents per employee than large companies.
Now, think about it. Hewlett-Packard began in a garage. It was a small business. Google began as a research project -- a small business. The first Apple computers were built by hand one at a time -- small business. McDonald's started with one restaurant.
(END VIDEO CLIP)
BLITZER: That said, the president laid out some specifics of his new plan.
(BEGIN VIDEO CLIP)
OBAMA: My recovery plan, as has already been noted, raises the guarantees on SBA loans to 90 percent and eliminates costly fees for borrowers and lenders that can be too costly in a recession. And these changes are being implemented now, fulfilling a campaign promise that I made.
And the recovery plan also includes a series of tax cuts for small businesses and tax incentives to encourage investments in small business. And the Treasury Department has launched the Consumer and Business Lending Initiative to help unfreeze the credit markets.
I've also proposed, as part of my budget, that we reduce to zero the capital gains tax for investments in small or start-up business, expanding and making permanent one of the tax cuts in the recovery plan. And my budget, as part of our health care reform efforts, calls for tax credits and other assistance to help small businesses offer coverage to their workers.
So we've already done a lot, but we've got to do more. And none of these steps will be effective unless we unlock the credit markets that are denying small businesses the loans they need to grow.
Therefore, as part of my financial stability plan, the Treasury Department will begin purchasing up to $15 billion of SBA loans through the Troubled Asset Relief Program, or TARP. We will immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks.
(END VIDEO CLIP)
BLITZER: Let's take a closer look at some of the reasons why small businesses are among the biggest drivers of the economy. In terms of workers, for example, a small business typically has 500 or under.
How many small businesses are there?
About 99.7 percent of all companies are considered to be small businesses.
In terms of paychecks, small businesses pay 45 percent of total U.S. private payroll.
And then there are the jobs. Small businesses have generated up to 80 percent of new jobs every year over the last 10 years.
Our Mary Snow is taking a closer look at some of the struggles these businesses face. And they're pretty significant -- Mary.
MARY SNOW, CNN CORRESPONDENT: They very much are, Wolf. And a bookstore owner here in New York says this is the kind of news he's been waiting for. He doesn't know if the administration's initiatives will, in the end, help him, but he was already on the phone today trying to find out.
(BEGIN VIDEOTAPE)
PETER SOTER, OWNER, MORNINGSIDE BOOKSHOP: Are you from New York?
SNOW (voice-over): With one eye on selling books, Peter Soter keeps his other eye on the president's plan to help small businesses. Soter says it could the last hope for keeping his 5-year-old bookstore open. He's recently thought about closing it.
PETER SOTER, OWNER, MORNINGSIDE BOOKSHOP: There is a possibility that we say forget it. I've got two young kids and start out. But I really -- it scares the -- it scares me. I really don't want to start all over again.
SNOW: Soter says two banks in recent months have turned him away for loans. He says he contacted the Small Business Administration for help in December and has been sitting tight, looking towards the president to help boost lending.
In recent months, he's laid off one employee, is now down to eight, including him and his wife. He's cut back on inventory, relied on credit cards, even borrowed money from friends.
SOTER: And friends have been very kind. But you can only do that for so long before it becomes you're not borrowing from friends -- you're -- you're abusing a friendship, you know? And, really, I just don't want to do that.
SNOW: Soter wants to apply for a $100,000 loan from the Small Business Administration and says it's hard to watch massive government bailouts and think of millions ending up paid out in bonuses to AIG employees.
SOTER: It's killing me. It's killing me. It hurts me, because I'm not looking for a lot of money here to make a business work that has -- you know, that employs people, that is a good member of the community, that is important. You know, bookstores are good things.
(END VIDEOTAPE)
SNOW: Just how many loans are going out?
The administration says the Small Business Administration backed $20 billion in loans last year and so far this year, it's on track to back half that amount -- Wolf.
BLITZER: Mary Snow, thanks for that report.
Dick Cheney versus the Obama administration -- the former vice president lashing out at the handling of the economy. The White House, though, firing right back. The best political team on television weighs in.
Also, AIG takes billions in bailout money while handing out big bonuses.
Jeanne Moos finds a lot of people are hopping mad about that.
(COMMERCIAL BREAK)
BLITZER: We get very differing views from the former vice president of the United States, Dick Cheney, and the White House press secretary, Robert Gibbs.
Listen to this clip from yesterday's "STATE OF THE UNION" with John King, when he had an exclusive interview with the former vice president.
(BEGIN VIDEO CLIP FROM "STATE OF THE UNION")
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: They also make the case that they are beginning to restore a confidence in the markets that they say was lost in your administration.
Is that how you see it?
DICK CHENEY, FORMER VICE PRESIDENT OF THE UNITED STATES: I worry a lot that they're using the current set of economic difficulties to try to justify a massive expansion in the government and much more authority for the government over the private sector. And I don't think that's good.
(END VIDEO CLIP) (BEGIN VIDEO CLIP)
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I think not taking economic advice from Dick Cheney would be maybe the best possible outcome of yesterday's interview.
(END VIDEO CLIP)
BLITZER: All right. Let's discuss yesterday's interview and more with our senior political analyst, Gloria Borger; our CNN political contributor, Steve Hayes, of "The Weekly Standard;" and Roland Martin, our CNN political contributor. They're all part of the best political team on television.
It's -- you know, the vice president hit the president -- the former vice president, I should say -- and the White House hit right back -- Gloria.
GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes. I think it's to be expected. Look, there was an election and part of the election was a referendum on George W. Bush and Dick Cheney's economic policies. And the vote was a resounding no. And so Gibbs hit back hard.
It's very interesting to me, though, that he decided to kind of link Dick Cheney with Rush Limbaugh, who's been somebody else they've been lambasting lately. Obviously, they think, in their polls, this will work for them.
BLITZER: You know, I was intrigued, Steve -- and you know the vice president very well. You've written a lot about him, the former vice president -- why he decided, just 50 days into this new administration, to go out on a major Sunday show, "STATE OF THE UNION," and deal with a long interview like this, as opposed to his boss, the former president, sort of staying in the background.
Why do you think he decided to go out and basically accuse the president of the United States of undermining Americans' security?
STEPHEN HAYES, SENIOR WRITER "THE WEEKLY STANDARD": Well, I think he feels very strongly about the issues. There's no doubt about that. You know, this is somebody who made these arguments, sometimes to the detriment of his standing in public opinion polls.
I think he feels strongly about these issues. He's never worried terribly much about those opinion polls, but he wants to make sure that somebody is making an argument on behalf of the policies that he believes -- and I think I believe -- a lot of people believe -- kept us safe for the final seven years of the Bush administration.
BLITZER: A lot of Democrats believe, Roland -- and I don't know if you're one of them -- that this is great news for the Democrats, Dick Cheney going out there, becoming a voice of the Republican Party right now and lumping him in with Rush Limbaugh, if you will.
ROLAND S. MARTIN, CNN POLITICAL ANALYST: Well, considering I'm not a Democrat or a Republican, frankly, I can offer this perspective. The bottom line is, of course, if you are a Democrat, you want to see former Vice President Dick Cheney out here talking. He's one of the most unpopular public officials in history.
I also thought it was hilarious, though, to hear Cheney talk about linking or using of the economic crisis to expand the agenda. It's like, I'm sorry, this is the same guy who used 9/11 to talk about invading Iraq.
So I bet he knows something about that.
But look, the bottom line is, if you are a Democrat, you want to see him out there, because all he is going to do is add another voice to this whole cast of characters who, frankly, are trying to lead the Republican Party.
HAYES: Yes. But the way that -- the way that Gibbs attacked Cheney from the podium today, I thought was very striking. I mean this is an administration, as Gloria points out, they were elected, so they have a right to defend their policies, for sure.
But Gibbs attacking Dick Cheney by going after his -- his rating in public opinion polls from the White House podium, this is not the change of tone that Barack Obama promised.
BORGER: You know, it's also...
MARTIN: Actually -- actually, it speaks to credibility. He was saying look, this guy is not credible to even talk about this issue.
BORGER: Well, it also occurred to me in watching this how quickly we've moved on. You know, it used to be that Dick Cheney was Darth Vader. And now AIG is Darth Vader. So, you know, this -- this may have been an effort by Gibbs to kind of refocus us back to the original -- the original bad guy, because this administration is going to be in the position not where it defends AIG, but they have to bail out companies like AIG, which are considered the bad guys...
BLITZER: You know, it's...
BORGER: ...by most people.
BLITZER: And that's a nice segue, Gloria, to these new...
BORGER: Thank you.
BLITZER: ...CNN/Opinion Research Corporation polls that just came out today. The president very popular. His job approval numbers remaining in the 60s. In most of the areas, the American people like what he's doing, except in two areas. We asked how is Obama handling problems facing auto companies -- 46 percent approved, 49 percent disapproved. And on the question, how is Obama handling problems facing banks, 47 percent approved, 52 percent disapproved.
Gloria, does he have a problem...
BORGER: Yes, he does... BLITZER: ...in these two areas?
BORGER: He does. Look, first of all, President Obama is more popular than his policies in these two particular areas.
When you look at those polls and you're in the White House, you're going to take the long view and say, OK, let's see where we are a year from now.
But I was talking to an economist today who said, look, at a certain point, there's a tipping point here. You have to be very careful, if you're the president, because while you want to distance yourself from these companies, you still have to bail them out and you cannot be seen to be part of the problem.
And the whole thing with the AIG bonuses, which is a problem for the White House, is that they said there was going to be accountability. And they didn't know about these bonuses. So that's an issue.
BLITZER: You know, and, Steve, the more the White House slams AIG for the bonuses, the more they undermine support for what the White House itself says is essential -- bailing out AIG.
HAYES: Yes, I think they find themselves in a pickle.
And the question I would ask people as part of a poll is what exactly are these plans?
I mean what is the plan for the banking industry?
I'm still unclear.
What is the plan for the auto industry?
I don't know.
Here yesterday, you had the Obama administration arguing, in effect, that they were contractually obligated to pay the bonuses. They quickly ditched that. And today, the president came out and blasted AIG for the bonuses, having found a new villain.
And then you have the Robert Gibbs attack today on Vice President Cheney.
I think this feels like a White House that's flailing a little bit. They don't know quite what to hit so they're striking out at everything.
BLITZER: Very quickly, Roland.
MARTIN: Hey, Wolf, here's the problem. The bottom line is, in terms of what's happening with the auto companies or even the banks, frankly, none of us know. Congress doesn't know. The White House doesn't know, because no one knows in terms of how to value anything. You don't know if you want to help G.M., if they're going to die. You don't know if you're going to sit there and try to help some of these banks who can't even value any assets. That's the problem.
And so everybody is in a state of flux trying to figure out what in the world is going on.
BLITZER: All right...
MARTIN: Let's just be honest about it.
BLITZER: We've got to leave it there, guys.
(CROSSTALK)
BLITZER: See you tomorrow.
Thank you.
MARTIN: Steve, but you'd still be elected but you still may not know.
BLITZER: All right. We'll continue this in the commercial break, guys.
Thanks very much.
Jack Cafferty is asking what are the best kinds of jobs in a recession?
Jack and your e-mail -- that's coming up.
And what if a giant company took taxpayers' bailout money and then passed out big bonuses?
Well, taxpayers are sounding off and Jeanne Moos is listening.
(COMMERCIAL BREAK)
LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Coming up at the top of the hour on "LOU DOBBS TONIGHT," President Obama demanding AIG stop using taxpayer money to pay what he called outrageous bonuses to top executives. But President Obama does not call for the resignation of those executives or its board.
Also, federal prosecutors say they will try to seize tens of millions of dollars of assets owned by Bernie Madoff's wife. The government taking much more aggressive action against the Madoff family than AIG, even though, in my opinion, both AIG and Bernie Madoff are, well, they're basically the same kind of investment operators.
And troubling new evidence that the federal government has utterly failed to introduce tough new security measures to stop terrorists from obtaining U.S. passports. We'll have that story. And I'll be joined by three of the country's best economic thinkers. They'll tell us, among other things, how President Obama can actually get this economy moving right away.
Join us for all of that and more at the top of the hour.
THE SITUATION ROOM with Wolf Blitzer continues in one moment.
(COMMERCIAL BREAK)
BLITZER: Let's get right back to Jack Cafferty for The Cafferty File -- Jack.
CAFFERTY: The question is what are the best kinds of jobs in a recession?
Jay writes: "Repo man, liquor store owner, grief counselor, gun salesman, food stamp issuer, family sized cardboard box maker, fake Canadian health care I.D. Card manufacturer, drug dealer and tell it like it is cable TV pundit."
Jayne writes: "Congressmen, obviously -- perks, plane rides, pay raises, no accountability and on and on."
Bruce in Minnesota: "Are you kidding? That's a no-brainer. An AIG executive, of course. Just take all your customers' money home in a sack and then wait for a bailout. In the end, AIG will give you millions more just to stick around."
Mary writes: "The job I currently still have."
Jamie says: "Federal government jobs, especially related to national security. If you want job stability and benefits, being a Fed is the way to go. Plus, you get hazard pay if you go to Iraq or Afghanistan."
Chris writes: "Health care. People will always be sick, stupid or unlucky."
Barbara in North Carolina: "Any job that pays Americans and cannot be outsourced or filled by more green card holders."
Randi, in Maryland: "I ain't saying, Jack. I don't need the competition."
Nick writes: "Obviously it wasn't the job that I had."
And Matt writes: "I'd like your job -- security, good salary and a real shot at Blitzer's job. With your new book, you don't need the money. And I think it's time you considered some shuffle board in Florida."
If you ever see me playing shuffle board in Florida, just shoot me.
If you didn't see your e-mail here, go to my blog at CNN.com/caffertyfile and look for yours there among hundreds of others. Wolf, I have no interest in your job. You work entirely too hard.
BLITZER: I know. (LAUGHTER)
BLITZER: All right, Jack.
We'll talk tomorrow.
Thank you.
CAFFERTY: OK.
BLITZER: All this week, CNN is digging deeper into the economic crisis and how it's affecting you.
What do you want to ask our experts about the economy?
Submit your video questions to iReport.com/situationroom.
Taking billions in bailout money with one hand, paying out big bonuses with the other.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT: Word association -- AIG, bonuses.
UNIDENTIFIED MALE: (EXPLETIVE LANGUAGE).
Do you want me to say something you can say on the air?
(END VIDEO CLIP)
BLITZER: Taxpayers are screaming, Jeanne Moos is listening.
(COMMERCIAL BREAK)
BLITZER: Here's a look at our Hot Shots coming in from our friends at the A.P.
In Moscow, a man takes a break from playing the accordion to warm his hands.
In Mexico, a soldier guards a police station near the border.
In Iraq, Kurdish children perform during a ceremony remembering those killed by a gas attack ordered by Saddam Hussein more than 20 years ago.
In Rome, a man wearing a Roman costume promotes an upcoming match.
Some of this hour's Hot Shots.
Politicians are venting about the AIG employee bonuses -- courtesy of you, the taxpayers.
Jeanne Moos takes the issue to the streets in her Moost Unusual way. (BEGIN VIDEOTAPE)
MOOS (voice-over): If you're thin-skinned and work for AIG, you might want to leave the room for a minute.
(on camera): We're doing word association today. AIG, bonuses.
UNIDENTIFIED MALE: I think they suck.
UNIDENTIFIED FEMALE: Disgusting.
UNIDENTIFIED MALE: Undeserved.
UNIDENTIFIED FEMALE: Waste.
MOOS: AIG, bonuses.
UNIDENTIFIED MALE: It's (EXPLETIVE LANGUAGE).
(LAUGHTER)
UNIDENTIFIED MALE: Do you want me to say something you can say on the air?
MOOS: No.
(voice-over): There was way more we couldn't say online.
(BEGIN VIDEO CLIP FROM YOUTUBE.COM)
UNIDENTIFIED MALE: Pain (EXPLETIVE LANGUAGE) million dollar bonuses plus (EXPLETIVE LANGUAGE) bonuses to these (EXPLETIVE LANGUAGE) morons.
UNIDENTIFIED MALE: We're pissed off.
(END VIDEO CLIP)
MOOS: "Burn in hell," "crash and burn." On Twitter: "If tweets could kill." One person mused about using a carrot peeler to "flay the rats in charge at AIG." It sort of makes an animated cartoon calling them fat cats seem almost complimentary.
(BEGIN VIDEO CLIP FROM YOUTUBE.COM)
UNIDENTIFIED MALE: And the time has come to take to the streets in the form of a mob bearing torches and march upon these corporate palaces.
MOOS: The stink over bonuses...
RICHARD QUEST, CNN CORRESPONDENT: We are going to have to just do this.
MOOS: ...could be sniffed from cable news to "The View".
(BEGIN VIDEO CLIP FROM "THE VIEW," COURTESY ABC)
WHOOPI GOLDBERG, CO-HOST: But you cannot bend us over this way. You have got to talk to those people and say that you are not going to give them all that money, because they don't deserve it. Oh, they think (INAUDIBLE) AIG is in the toilet.
(END VIDEO CLIP)
MOOS: AIG rage is the new road rage. Even a buttoned-down Obama economic adviser took the verbal spanking over the top.
AUSTAN GOOLSBEE, WHITE HOUSE ECONOMIC ADVISER: It's almost like these guys should have gotten the Nobel Prize for evil.
MOOS: Talk about a bonus, you can almost melt down the gold if the banks collapse.
On the Web, AIG commercials are coming in for scorn.
(BEGIN VIDEO CLIP FROM AIG COMMERCIAL)
WOMAN: Did you have a nightmare?
UNIDENTIFIED CHILD: No, I'm worried about this family's financial future.
UNIDENTIFIED MALE: Buddy, we're with AIG.
UNIDENTIFIED CHILD: Oh.
(END VIDEO CLIP)
MOOS: That now less than reassuring thought got dubbed over in a YouTube parody.
(BEGIN VIDEO CLIP FROM YOUTUBE.COM)
UNIDENTIFIED MALE: Buddy, we got a federal government bailout.
UNIDENTIFIED CHILD: Oh.
(END VIDEO CLIP)
MOOS: Greed is good these days -- good to attack.
(BEGIN VIDEO CLIP FROM "REAL TIME WITH BILL MAHER," COURTESY HBO)
BILL MAHER, HOST: If we killed two random, rich, greedy pigs -- I mean killed, like blew them up at halftime at next year's Super Bowl...
(END VIDEO CLIP)
MOOS: The real killers are those now ironic old slogans.
(BEGIN VIDEO CLIP FROM YOUTUBE.COM) UNIDENTIFIED MALE: AIG -- insurance, financial services and the freedom to dare.
(END VIDEO CLIP)
MOOS: How dare you?
UNIDENTIFIED FEMALE: Dirty, dirty.
MOOS: Jeanne Moos...
UNIDENTIFIED FEMALE: Very dirty.
MOOS: ...CNN...
UNIDENTIFIED FEMALE: Dirty, dirty, scoundrels.
MOOS: ...New York.
(END VIDEO TAPE)
BLITZER: I'm Wolf Blitzer in THE SITUATION ROOM.
Up next, "LOU DOBBS TONIGHT" -- Lou.
DOBBS: Thank you, Wolf.
Tonight, President Obama demands AIG stop using taxpayer money to pay what he called outrageous bonuses to top executives. But President Obama doesn't call for the resignation of those executives, its CEO or the company's board. Tonight, I will do so.
And tonight, federal prosecutors also say they will try to seize tens of millions of dollars of assets owned by Bernie Madoff's wife. The government taking much more aggressive action than the Madoff -- against the Madoff family than AIG, even though, in my opinion, both of them are, in effect, run the same way in the same business.
