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President Obama Pushes Economic Stimulus Plan; Baseball Star Alex Rodriguez Admits to Using Performance-Enhancing Drugs

Aired February 9, 2009 - 22:00   ET



Thanks very much, Wolf.

We begin with the breaking news: early reaction to President Obama's first prime-time question and answer, Mr. Obama making the familiar walk up to the podium, just back from Elkhart, Indiana, where unemployment is approaching 18 percent -- his economic stimulus plan passing a test vote today in the Senate, facing a final vote tomorrow.

The president, who will be selling the plan tomorrow is in Florida -- in Florida -- is considerably more popular, new polling, than either the package, the Congress or congressional Republicans, which may explain why he went before the nation tonight.

A lot to cover in the next two hours, including key details of what's actually in the stimulus plan, and, most importantly, when you might start seeing its effects.

We begin tonight at the White House with Ed Henry.

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: The president started the day in the heartland, Elkhart, Indiana, a place where unemployment has tripled in the space of just one year, a chance for the president, according to White House officials, to get outside of the beltway and show how the American people really are hurting.

And you heard him mention going out to the heartland throughout this press conference, trying to sprinkle it in. He ended the day back here at the White House in the East Room, facing the hot lights of the White House press corps.

He repeatedly tried to show that he wants to be direct with the American people about how difficult the crisis really is. And he was very blunt, as well, with the Republicans, saying that he does not want to go back to what he called the failed policies of the last eight years, saying he inherited many of the problems he's confronting right now.

Nevertheless, he still had a call to arms for both parties to come together, saying, now is the time to deliver for the American people.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine.

And if there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside-down because they don't know where their next paycheck is coming from.

And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to 4 million jobs, because that's what America needs most right now.

It is absolutely true that we can't depend on government alone to create jobs or economic growth. That is and must be the role of the private sector. But at this particular moment, with the private sector so weakened by this recession, the federal government is the only entity left with the resources to jolt our economy back into life.

It is only government that can break the vicious cycle, where lost jobs lead to people spending less money, which leads to even more layoffs. And breaking that cycle is exactly what the plan that's moving through Congress is designed to do.

When passed, this plan will ensure that Americans who have lost their jobs through no fault of their own can receive greater unemployment benefits and continue their health care coverage.

We'll also provide a $2,500 tax credit to folks who are struggling to pay the costs of their college tuition and $1,000 worth of badly needed tax relief to working- and middle-class families. These steps will put more money in the pockets of those Americans who are most likely to spend it, and that will help break the cycle and get our economy moving.

But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again, and it's only helped lead us to the crisis we face right now.


HENRY: Now, interesting reaction already coming in, in just the last few moments, from the House Republican leader, John Boehner, saying, his takeaway is that he appreciates the president continuing, at least in some of his remarks, to reach out to Republicans, Boehner saying he still thinks that Republicans on the Hill can work with the president.

But his complaint is that congressional Democrats haven't cut spending enough. So, what we see is, the Republican strategy is continue to try to divide this White House from congressional Democrats. The president, though, had an answer already for that in this news conference, saying that while Republicans may pick things out and think this bill is not perfect, this stimulus package, that the -- the key is to -- that inaction would make this crisis worse, so he wants action, even if this bill is not perfect.

He's going to take that message once again outside the beltway tomorrow. He's going to Fort Myers, Florida, somewhere that's been devastated, not just by unemployment, but also the housing crisis, another key piece of this crisis. It's also worth noting that, tomorrow, the president's treasury secretary, Timothy Geithner, is going to be laying out a whole separate, what the White House is calling a financial stability plan.

It's going to have a lot of meat in terms of dealing with the foreclosure crisis, dealing with what is sort of the second round of that TARP money, the bailout money, $350 billion, what's going to be done with that in terms of trying to bail out banks. There's going to be a lot of meat on the bones tomorrow -- Anderson.

COOPER: Ed, how much of a change in strategy is this for the White House? I mean, early on, he allowed the -- the House Democrats to write this bill initially, or the -- the initial version of the bill.

Clearly, now, the president seems to be a full-court press, trying to sell this to the American public.

HENRY: It is.

And the way they're trying to deal with it is to say, if you look at the substance of the -- both pieces of legislation, the House version and Senate version, in the words of White House officials, it's about 90 percent the same. There's 10 percent that's been cut out in -- in various ways.

But the core, the guts of this bill has a tax cut in the neighborhood of $300 billion that the president has been pushing. That means a $500 check for individuals, $100 -- $1,000 for families, if they're making under $200,000 a year.

It also has some of the renewable energy money the president wants, billions of dollars for that, that he thinks will create these so-called green jobs. It also has still some money for education, Pell Grants and the like, that, again, he thinks will be a long-term help, but also infrastructure -- information -- get the shovels in the ground to start creating jobs in the short run.

So, their strategy is to say, look, while people want to cut out individual projects here and there that are being cut out, some that the Republicans continue to say are wasteful, that 90 percent of -- of each version is essentially the same, and that, while not a large majority of Republicans certainly are coming forward, that enough in the Senate, three Republicans, came forward to agree on it, and they think that is what is moving forward -- Anderson.

COOPER: All right, Ed Henry at the White House -- Ed, we will check back in with you.

More now on the stimulus plan itself, to reiterate, a compromise package, as Ed was just pointing out, up for a Senate vote tomorrow, $838 billion, now different from the original Senate version, which different from the House plan, which is expected to change yet again once House and Senate negotiators hammer out the final legislation.

So, the question isn't really what's in it, but what's in it right now and perhaps up for grabs.

Candy Crowley with the rundown and the "Raw Politics."


CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The unemployment rate in Elkhart, Indiana, is over 15 percent. And the president had done his home work.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I know that a new overpass downtown would make a big difference for businesses and families right here in Elkhart.

CROWLEY: And overpass for Elkhart is not specifically in the stimulus bill. The federal government will give out the money according to a formula, but mostly governors will decide which projects get the federal money.

In all, the final stimulus package is likely to offer about $47 billion for everything from repairing and building roads and overpasses and rails to clean-water facilities, money for so-called shovel-ready projects.

DICK MOORE, MAYOR OF ELKHART, INDIANA: Send us the money. Send it right here to Elkhart, Indiana. We will be held accountable for it. We don't mind that at all. And we will put people to work, and we will put them to work in a hurry.

CROWLEY: The federal government will also give billions more to states designed to keep social services intact and state workers in their jobs. And you can count on more cash, unless you are among the wealthiest of Americans.

OBAMA: These steps will put more money in the pockets of those Americans who are most likely to spend it. And that will help break the cycle and get our economy moving.

CROWLEY: The broadest tax assist is a new two-year tax credit, $500 per worker, with the amount diminishing for people with higher incomes. It would begin showing up in June paychecks, with a reduction in withholding, about $20 on average.

Hoping to spur two industries in a world of hurt, the Senate bill would give a first-time homebuyer a $15,000 tax credit. It would also allow car buyers to deduct sales taxes and loan interest. There are also billions for existing education programs, from Head Start to student loans.

For the down-and-out, unemployment benefits will be extended and increased. Anyone drawing unemployment will have access to or subsidies for health care insurance. The idea is, whether it's cement for highway projects, $25 more spent in the grocery store, or a new car, it creates or saves jobs.

That's the idea.

OBAMA: I can't tell you with 100 percent certainty that every single item in this plan will work exactly as we hoped.

CROWLEY: But the administration expects most things will work, and the economy will grow again, sometime.

LAWRENCE SUMMERS, DIRECTOR, WHITE HOUSE NATIONAL ECONOMIC COUNCIL: But I'm not going to hold out for you the prospect that it is imminent. Perhaps it will be towards the end of the year. Perhaps it will be early next year.

CROWLEY: When all is said and done, whatever comes out of Capitol Hill will be the biggest spending bill in the history of the country.

Candy Crowley, CNN, Washington.


COOPER: So, let's talk strategy now with chief national correspondent John King, Pamela Gentry, a senior political analyst at BET network, senior political analysts Gloria Borger and David Gergen, and chief business correspondent Ali Velshi.

David, let's start with you. You have been at the White House for countless of these presidential news conferences. How did the president do?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I thought he did well, Anderson.

He -- he seized the bully pulpit in ways that presidents -- only presidents can do. And because there's so much curiosity in the country about how President Obama would do in his first press conference, I'm sure he got a sizable audience.

And -- and what he was trying to do is -- you know, the White House has been so preoccupied with just trying to get policy together and getting the administration started, that they woke up late to the fact that the critics were gaining -- gaining the upper hand about this particular bill, and that support was eroding among the public.

Even though his support is strong, as your poll shows, support for the bill has been eroding badly. And so he's been trying to go back on the offensive. He had those interviews, the interview with you, last week, going on the offensive tonight.

I think he did well tonight. And he's going to come back in a couple weeks with a -- a joint address to Congress. Well, he's -- he's trying to go up and get that bully pulpit moving for him, working for him. I thought he made a good appeal tonight. I don't think it was terrific. But I thought it was very, very good. And I think it's going to put pressure on the Congress. I think he's going to get a bill. There's going to be some contention, some fur flying in the next few days. But he's going to get a bill.

And, a few days from now, his -- his supporters will say, you know, he went and did that press conference. Then he got the bill. Isn't he -- isn't that a terrific start to his presidency?

COOPER: John King, what has this president -- and perhaps, most importantly, what have his advisers -- learned in the course of this entire negotiation, this entire drama that's been playing out?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: They have learned something. They have learned, if -- they have learned to recover quickly from mistakes, which is a trait they showed throughout the presidential campaign.

And they have learned, as David just noted, that a president has a unique ability to have the megaphone, not only of the White House, but of his travels. And there were a lot of Democrats last week who were urging the president -- when they thought the Republicans were seizing momentum, and picking at certain things in the legislation, and scoring points with the American people, raising doubts about the bill, there were a lot of Democrats quietly telling the White House, get the president out on the road. Get him out from inside the White House.

He took a little longer than some Democrats would have hoped. But the event you saw today, the event you will see tomorrow in Florida, and then the megaphone of a prime-time news conference, he is the best weapon they have. His personal approval ratings are so high, they believe that can overcome skepticism about policy proposals at the moment.

And there's -- even Democrats have a lot of doubt about a federal government spending nearly $1 trillion on stimulus, $700 billion, with more to come, on a financial bailout. So, the president of the United States -- and you see his poll numbers right there -- he is the best weapon the White House has. And now they're using him at full force.

COOPER: Definitely using at full force, and will for the next couple days.

I want to talk more with our panel ahead, Gloria Borger, and Pamela Gentry, and others, Ali Velshi also standing by.

Throughout this next two hours -- and we on are -- we are on for the next two hours, we want you to -- we want to be able to play for you, as much as possible, from this news conference tonight, assuming you missed it earlier or missed some of the finer points. We will be playing extensive sections over the next two hours.

You can also join the live chat happening right now at Let us know what you think about how the president did. Also, check out Randi Kaye's Webcast during the break. We will have more with our panel and more extended portions of the news conference, so you can decide for yourself how the president did.

Later: the first lady also selling the stimulus plan. We will tell you about her own plan to introduce herself to the federal government one department at a time.

And, tonight, we're on the scene of the unspeakable disaster in Australia -- stories now emerging from the ashes of survival in the face of deadly flames moving too fast to flee.

We will be right back.



OBAMA: I can say with complete confidence that endless delay or paralysis in Washington in the face of this crisis will only bring deepening disaster. I can tell you that doing nothing is not an option.



COOPER: The president today in Elkhart, Indiana, where unemployment has tripled in the past year alone. He visits Fort Myers, Florida, tomorrow -- people there already starting to camp out, camping out yesterday morning for tickets. Clearly, he's still got huge popular support. The question now, can he translate this popularity -- his raw popularity -- into political clout back in Washington?

Let's talk to -- again with our panel, John King, Pamela Gentry from BET, Gloria Borger, David Gergen, and Ali Velshi.

Gloria, I want to play for our viewers something that the president was asked tonight. He was asked about some of the language he's been using. He's termed -- you just heard him say disaster. He's also used the word catastrophe. One reporter asked him whether that was sort of undermining his credibility, using those -- those stark terms.

Let's listen to his answer.


OBAMA: What I have said is what other economists have said across the political spectrum, which is that, if you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of.

So what I'm trying to underscore is what the people in Elkhart already understand, that this is not your ordinary, run-of-the-mill recession. We are going through the worst economic crisis since the Great Depression.

We've lost now 3.6 million jobs, but what's perhaps even more disturbing is that almost half of that job loss has taken place over the last three months.


COOPER: What exactly do you think he's trying to do here? I mean, beyond -- is he trying to also steal some of the language back, or the message back, from the Republicans, who basically were in charge of the message last week?


He's trying to make the case that this has to happen now, that there is no time for Congress to negotiate endlessly, that he's been using the phrase, ever since last weekend, Anderson, that a crisis could turn into a catastrophe.

And I think it's part of the job he's doing as president to -- to make his case to the -- to the American people that this isn't business as usual anymore, in many ways. And that's why this package has to be so large. And that's why the government is getting so involved, and that he didn't ask for this, and he inherited it.

And, by the way, I was talking to someone at the White House today. And I said, gee, I remember back, like, a month ago, when you folks at the White House were talking about creating 2.5 million jobs. And he said, yes, I remember that, too. Now we're up to saving or creating four million jobs, because we have lost that many. And, so, we have had to add to that number.

COOPER: It's interesting, Pamela, to hear the language this president was using, some pretty tough talk about Republicans in all of this.

PAMELA GENTRY, SENIOR POLITICAL ANALYST, BET: Yes, I think he's creating the ads for 2010 in the same thing.

I mean, if there are people who are looking at running against some of these Republicans who are staunchly opposed to this, and they are really in districts that are suffering greatly, I think some of these sound bites we're going to hear again in the ads that come out. So, I think that he's laying a path to getting to -- not only to what he wants, but I think he's also thinking a little bit ahead to the future.

COOPER: Ali, do we have a timeline? I mean, has -- has the president said, you know, we will be able to see -- or economists said when we are going to be able to see actual results once this thing passes?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: The White House has put out a -- sort of a graph that says, without the stimulus plan, unemployment will go higher, and it will take longer to solve than with the stimulus plan. But, even with the stimulus plan, we haven't seen the worst of it yet. We may bottom out over the course of the next two months in terms of the actual number of net jobs lost in a month. Remember, when we talk about 600,000 jobs being lost in January, that's the total number of jobs created minus the number of jobs lost. There are virtually no jobs being created.

So, the argument here is that the government can encourage the creation of jobs. The government doesn't ultimately create jobs on its own, unless they're government jobs. But it creates an environment in which businesses will put the money into -- into creating jobs.

But, Anderson, why would anybody in this country put the money into creating a job or hiring new people if they don't think anybody is going to spend any money? And that's the problem we're in right now, that, unless it looks good for the American consumer, unless they think that they have saved up enough money, and there's a job for them in the next few months, they're -- they're likely to hold on to their money very tightly. And, as a result, you're not going to see job creation.

COOPER: David, I want to play for our viewers something that the president also said in this news conference, talking about the Republicans and about their record over the last eight years. Let's listen.


OBAMA: It's a little hard for me to take criticism from folks about this recovery package, after they have presided over a doubling of the national debt. I'm not sure they have a lot of credibility when it comes to fiscal responsibility. Having said that...


COOPER: David, the president was saying that -- that part of his outreach to Republicans, part of this bipartisan effort he was trying, was -- was something he was sort of trying long-term, and he said he wanted to -- quote -- "build up trust over time."

Is that just trying to put a good face on -- on this? Was it a failed effort, his reach-out to Republicans?

GERGEN: Well, it failed in this example, in this case.

You know, when you look at the number of Republicans in Washington, between the House and the Senate, I think there are now 219 Republicans in the House and Senate combined. Altogether he got, what, three out of 219. So, you can hardly say he has succeeded in trying to make it more bipartisan.

But I do think he has gotten points for trying with the public, as a CNN poll demonstrates. And I do think, over time, as he said, it will build up. But I want to underscore one thing, coming back to what Ali -- Ali was talking about. His risk tonight, Anderson, is that the economic situation is getting worse by the week. You know, the head of the International Monetary Fund said over the weekend that Western industrialized nations are now in a depression.

The White House has disagreed with that assessment. But there's no question it's getting worse. And the big issue overhanging this huge stimulus package is eventually going to become, is it actually enough?

The president talked tonight about a hole in the economy over the next 12 months of a trillion dollars. At best, this stimulus package is only going to fill up about $400 billion of that trillion-dollar hole. In other words, there's a lot of the hole that's not covered. That's the fear, that this may not be enough.

COOPER: And there's a lot of very smart economists who say it's not enough at this point, and, in fact, this negotiation has just made it worse.

We're going to have more from our panel ahead, David Gergen, John King, Ali Velshi, Gloria Borger, Pamela Gentry, and a whole host of others.

Up next: how the House and the Senate stimulus plans differ and the challenges of coming together on a compromise. It is not going to be easy.

Also, throughout the next 90 minutes or so, more from the news conference, at length, in-depth, unedited.

And, later, the wildfires in Australia and a search for the people responsible. That's right, the Australia prime minister now calling it a case of mass murder.

And for the first time, a look at the California octuplets and some of their names. This strange story just gets stranger -- when 360 continues.



OBAMA: Not only are we creating jobs now, but we're creating the infrastructure for the jobs of the future.


OBAMA: Now -- now, let -- let me be clear. I'm not going to tell you that this bill is perfect. It's coming out of Washington. It's going through Congress.


(END VIDEO CLIP) COOPER: President Obama today in Elkhart, Indiana, taking his case directly to the people, and also taking questions from them.

Mr. Obama's grassroots sales pitch comes as -- as another round in the stimulus battle is looming. It may be the ugliest round yet. The bill the Senate is expected to pass tomorrow will cost $838 billion. The House plan was $819 billion, similar price tags, but, beyond that, some serious differences.

We want you to know what the differences are, so you can make up your mind about what you support.

Dana Bash now takes us "Up Close."


DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): The hundreds of billions of dollars are roughly the same, but the differences between the House and Senate stimulus packages are huge. And it's setting up some very tough negotiations, Senate Democrats...

SEN. MAX BAUCUS (D), MONTANA: This is a compromise across the aisle in the finest tradition of the Senate.

BASH: ... vs. House Democrats.

REP. JAMES CLYBURN (D), SOUTH CAROLINA: If it stays the way it is, then it's all a little bit more challenging for us.

BASH: So, where's the rub? In a word, spending.

In the Senate, the only way Democrats could lure Republican votes to pass the plan is by slashing some $100 billion in spending, including $870 million to fight the pandemic flu and $122 million for Coast Guard cutters.

But House Democratic sources tell CNN they are extremely upset that a big chunk of the Senate's spending cuts are from Democratic priorities, the biggest, education. For example, the Senate sliced $40 billion in funding to the states, money for local officials to avoid cutbacks in education and other services.

The Senate also eliminated $19 billion for school construction, and cut Head Start, early-education funding, in half, from $2 billion to $1 billion.

House Speaker Nancy Pelosi warned the cuts her fellow Democrats agreed to in the Senate do -- quote -- "violence to their economic goals." Other House Democratic leaders tell us they agree.

CLYBURN: Sure, part of this compromise does violence. But I don't -- what's wrong with funding Head Start? And, so, what's wrong with funding higher education?

BASH: What's wrong with that, say the only three Senate Republicans who support the Senate compromise, is, education spending doesn't create jobs.

SEN. SUSAN COLLINS (R), MAINE: Some of these programs, while they're worthy of an increase in funding, simply do not belong in an economic stimulus bill.

BASH: In fact, most Senate Democrats do not want to cut spending in education, but went along with it for the sake of compromise.

SEN. AMY KLOBUCHAR (D), MINNESOTA: I don't agree with everything that's in it and everything that came out, but, literally, we can't afford to wait any longer to get something passed.

BASH: The challenge now for the White House is that, if House Democrats insist on those spending programs, the president's economic plan could be in jeopardy.

COLLINS: If the bill comes back from the conference committee with a lot of wasteful spending reinserted or if it comes back in excess of the $800 billion, it will not have my support.

BASH (on camera): If President Obama loses Republican Susan Collins' support, he won't have the vote to pass his stimulus package. It's just that simple. And, right now, House Democrats are not giving in.

So, it's an open question how Mr. Obama convinces his fellow Democrats, in his words, not to let the perfect be the enemy of the good.

Dana Bash, CNN, Capitol Hill.


COOPER: So, what's it going to take to hammer out a compromise, in the face of these huge differences? Our panel weighs in next.

Also ahead: first lady Michelle Obama on the move. What role is she playing in trying to sell the stimulus package? We will tell you that.

And baseball's Alex Rodriguez admitting he used steroids when he played with the Texas Rangers, coming clean, but leaving a permanent stain on his record. Even President Obama weighed in tonight. Hear what the president said about A-Rod ahead.



OBAMA: More than 90 percent of the jobs created by this plan will be in the private sector. They're not going to be make-work jobs, but jobs doing the work that America desperately needs done.

Jobs rebuilding our crumbling roads and bridges, repairing our dangerously deficient dams and levees so that we don't face another Katrina. There will be jobs fixing the wind turbines and solar panels and fuel-efficient cars that will lower our dependence on foreign oil. And modernizing our costly health-care system that will save us billions of dollars and countless lives.

They'll be jobs creating the 21st century classrooms, libraries and labs for millions of children across America. And they'll be the jobs of firefighters and teachers and police officers that would otherwise be eliminated if we do not provide states with some relief.


COOPER: President Obama from his first primetime news conference earlier this evening. Let's talk strategy with our panelists.

Joining me now, Democratic strategist and political contributor, Paul Begala; Republican strategist and political contributor, Ed Rollins; Democratic National Committee advisor, Jamal Simmons; and Republican -- Republican consultant and political contributor, Alex Castellanos.

Ed Rollins, I want to talk to you about -- about what the president said went wrong with his bipartisan approach. First of all, I want to play for our viewer what he said when asked about it.


OBAMA: When I made a series of overtures to the Republicans, going over to meet with both Republican caucuses; you know, putting three Republicans in my cabinet, something that is unprecedented; making sure that they were invited here to the White House to talk about the economic recovery plan, all those were not designed simply to get some short-term votes. They were designed to try to build up some trust over time. And I think that, as I continue to make these overtures over time, hopefully that will be reciprocated.


COOPER: In the end, when we look back at this whole process, is this going to be seen just as politics as usual, or is there any -- is there anything different about the way the president approached this?

ED ROLLINS, REPUBLICAN STRATEGIST: Well, the tone is very important. And it's very much like Reagan. Reagan basically had partisan battles with Tip O'Neill and everybody else, but the tone was always at a higher level. I think, to a certain extent Republicans are not attacking him in a vicious manner and shouldn't. And obviously, he's not attacking them.

Whether they're going to come to an agreement or not, I doubt it. Equally as important, this is the first step. You have a banking bailout tomorrow. You don't have anything past last year's budget. You have 9 of the 13 appropriation bills for 2009 still to go. You have the entire appropriations process to go through this year. Both of those bills are a trillion, trillion and a half dollars shortfall. You've got a lot of money to spend here, and Republicans are going to continue to complain about that. COOPER: Paul Begala, does the president have anything to be optimistic about in terms of the relationships with Republicans in the house and Senate over the long term?

PAUL BEGALA, DEMOCRATIC STRATEGIST: I think he does. But again, he's got to be more of a realist and a pragmatist. I think that's what he has learned already, in just his first few weeks as president.

I mean, he did go -- and you saw his answer there to Chip Reid. His bipartisan bone fides are extraordinary. Putting three Republicans in the cabinet, meeting in private at great length with the House Republicans, then the Senate Republicans.

They even -- get this. They did this in the Senate. One of the biggest differences between the House bill and the Senate bill is that Senate Democrats agreed to add $70 billion to do what in Washington we call the AMT patch. That's the -- it's the tax policy that would confront people who used to be rich. That's alternative minimum tax. And now it covers middle-class people. It's very expensive to fix.

It has no stimulative effect. It's good tax policy, and it's good budget policy. But it has, according to the nonpartisan, nonprofit tax foundation, it is neither timely nor targeted, they wrote. And it makes no economic sense as stimulus.

So why was that in there? Well, a powerful Republican in the Senate, Charles Grassley, among the most respected Republicans in the United States Senate, wanted it in there. He got it in there. And he still didn't even vote for the bill.

So my goodness, when you give the Republicans $70 billion of tax policy that doesn't actually stimulate the economy, and then you get no votes for it, you know, you start to say, "Well, I'll win without style points."

COOPER: Alex, it's interesting. I mean, you look at the CNN/Opinion Research poll. A lot of Americans seem to agree with what Paul is saying. Seventy-four percent of Republicans thought Obama was doing enough to cooperate with Republicans. Do Republicans run a risk by doing this -- or of the insurgent strategy? They're saying they're taking cues from the Taliban now.

ALEX CASTELLANOS, REPUBLICAN STRATEGIST: I don't think it's going to work that way. But the bipartisan mantle is of tremendous political value. If you really want to attack your opponents, you seize the bipartisan ground and then you beat the heck out of them with it.

COOPER: Do you really believe that's what the president was doing?

CASTELLANOS: It's a very useful partisan tool to appear to be nonpartisan.

COOPER: So you don't buy the president's... CASTELLANOS: The president -- the president is actually doing the very effective, he sees the high moral ground here with that. And Republicans do have some risk of that, which is -- and the way they deal with it is say, "Hey, look at the issue itself." Is do you, America, think there's too much spending and not enough tax cuts in here? Yes.

Do you think these one-time tax cuts are really tax cuts? Well, they're not. You know, if you throw somebody a life preserver once, they're not going to pass it along in stormy seas to somebody else. These are one-time tax refunds, not tax cuts.

So Republicans are going to litigate the issues. Democrats are going to say Republicans are not being bipartisan enough.

JAMAL SIMMONS, DEMOCRATIC STRATEGIST: No, no, no, no, no. The Republicans just -- no, no, no. Like my 2-year-old niece. She's 2 years old. Only word she knew how to say.

The reality here is that the president had extended himself and bent over backwards to try to be generous to Republicans. Like you said, he's brought -- he's got three Republicans in his cabinet. He's -- 90 percent of the jobs are private sector jobs. They check out -- no earmarks. Stripped out the pet projects that everybody was upset about. He's really taking this on. We don't even know if Judd Gregg is going to vote for this plan. I'm sort of curious to see if that will happen before it gets...

ROLLINS: He's not. No. He declared he was not going to vote for anything.

COOPER: Right.

SIMMONS: Democrats are not happy about that. You'd think that the least he ought to do if he's going to get a job in the administration is vote for the administration's bill. That's another -- that's another topic.

But I think the issue here, though, is that the president has bent over backwards. Republicans have got to sort of extend a hand back or else they're going to be regarded as just a no chorus. And the Americans are going to blame them if they start losing their jobs.

COOPER: The president's tone has gotten stronger. Let's listen to some more of what he said tonight.


OBAMA: What I've been concerned about is some of the language that's been used suggesting that this is full of pork and this is wasteful government spending, so on and so forth. First of all, when I hear that from folks who presided over a doubling of the national debt, then I just want them to not engage in some revisionist history.

(END VIDEO CLIP) COOPER: Ed, I mean, you hear that from a lot of Democrats, saying how can Republicans -- talking about, you know, complaining about budget deficits, when over the last eight years...

ROLLINS: Well, remember the last two -- remember, the last two, the Democrats have control of the Congress, which is the only place the money gets spent.

But more important, I'm willing to take the rap for the last eight years. This man is now going to triple the national debt in about two years. We're now spending trillions, no longer billions. We have spent --the Federal Reserve has given $4 trillion to the banks in the last two months.

This is a trillion-dollar bill. There'll be another trillion- dollar bill. There's two trillion-dollar deficit bills moving through the appropriation. We will be -- we now owe $10.7 trillion in debt. We will promise you by the end of this administration, unless we turn this thing around, and another $10 trillion...

COOPER: President Obama, though, says, "Look, I inherited this. This is not..."

ROLLINS: Then his successor will inherit the next deficit.

SIMMONS: And if we don't do it, we've got -- and if we don't do it, we've got research organizations that are saying it could be 9.6 percent unemployment, 11 point something percent unemployment. We've got to do something to stop the slide.

CASTELLANOS: There's a fundamental dishonesty here. "George Bush spent too much. He spent like a drunk. Oh, my God, it was terrible. But by the way, don't listen to them. They have no credibility. We're going to spend much more."

SIMMONS: Wait a minute. Alex, there is...

COOPER: Paul, go.

BEGALA: There is -- Barack Obama, of course, trained at the Harvard Law School knows this, that there's a doctrine in the law called equitable estoppel. Unclean hands. If you come to the court having committed the same act you can't very easily accuse somebody else of doing it.

In other words, whereas Abe Lincoln, a pretty good lawyer from Illinois himself, used to say, the Republicans remind me in this case of the guy who murdered his parents and then pleaded for mercy from the court on the count that he was an orphan.

You know, the Republicans caused this. We had a Republican House, Senate and White House. They passed through an economic philosophy that Democrats opposed. It was focused on deregulation and tax cuts for the very rich, and it led us into this disaster. This -- the house is on fire, but it's a case of arson. Now, here's Fire Chief Obama coming in, and the arsonists are blocking the fire trucks. I can understand if he were a little frustrated. Because as we say in the Catholic church, it takes the Republicans a lot of chutzpah to be even making the argument on the economy today.

COOPER: If I heard that once, I've hard that a thousand times from Catholic priests.

Paul, we've got to take a short break. We'll have a lot more from our analysts ahead.

Very real fires happening in Australia we want to tell you about. The prime minister says it's a case of mass murder, deliberately set. We'll have details on that.

And the strange story of the octuplets. It is just getting more tawdry and bizarre. The mother is speaking out. The grandmother is speaking out, calling her own daughter unconscionable for having had eight children who she can't support, because apparently she's not even been supporting the last six. All the details ahead. We'll be right back.



TOM FOREMAN, CNN CORRESPONDENT (voice-over): Even if the stimulus package passes quickly, job recovery may be slow. The Congressional Budget Office, in a report on the House version, said only about 15 percent of all that spending for government buildings, green industry and more will occur in fiscal year 2009, which ends in September. Thirty-seven percent will come in fiscal year 2010, and the rest later.

CBO says the process may be made even slower by regulations, environmental studies, and the calendar. Big road repairs, for example, in northern states usually happen only in warmer weather. Bottom line, jobs will likely rebound, but it's probably going to take awhile.


COOPER: Tom Foreman with the reality check on how long it might take to see results from the stimulus plan.

Let's dig deeper with our panel. Joining me again, John King, Gloria Borger, Pamela Gentry, David Gergen, and Ali Velshi.

David, as Tom just pointed out, job growth is going to be slow if at all. The president said tonight if people want to judge him, they should judge him on job growth. That's a pretty tough barometer to be judged by.

GERGEN: It sure is, Anderson. He used the world "jolt" tonight. This stimulus package was going to jolt the economy. It may not do that for a long time for many Americans, partly pointed out by Tom Foreman.

Earlier this evening I was with Paul Krugman, the columnist for the "New York Times" as well as Nobel Prize winner in economics. He pointed out, Anderson, that in the last two recessions that, actually, the unemployment rate kept climbing after the recessions ended in both cases for several months.

In other words, the end of the recession did not mean that unemployment would start going down. It took -- it just kept on going. And then it started going down later. So we may be climbing out of this -- this really -- this bad contraption well before jobs start returning in those numbers. That's the real challenge for the president, both politically and substantively.

COOPER: And Ali, I've read some of the economists' -- you know, the ones who've formed this whole plan.


COOPER: They can't guarantee any number of jobs being created.

VELSHI: No. And to David's point, jobs are a lagging indicator. The stock market, for instance, tends to be leading. In other words, the stock market will move up on expectation that the next six months will look good. The jobs market will continue to decrease even after we've really felt the worst of it. So that's an important point.

Guarantees, there are none. And in fact, even in the White House's most optimistic outlook at the stimulus, we still go higher with unemployment, we still lose more jobs.

And Anderson, if we're losing 600,000 a month, you know, like this last month, even if we use only 250,000 in March and 300,000 in April and, you know, 250,000 in May, you can see how this trend goes. We could be down another 2 million jobs or more before the end of the year. That is the most important thing that this administration has to turn around, in my opinion, more important than housing.

But it's ultimately a confidence game. People have to believe that the government is going to set the table for job creation, and then businesses go and create those jobs themselves.

COOPER: So Pamela, in terms of what the president is going to be doing, they are really now going full bore to try to sell this plan. Whether or not the president completely believes in this plan 100 percent or not doesn't seem to matter at this point. He has no other option but to try to sell it and make it work.

GENTRY: And he's been -- he's been going nonstop. I mean, he started with the radio address, you know, all the way through this press conference. And then just a few moments ago, I received an e- mail that they're going to have sort of these town meetings. They're asking all these folks who worked in their campaigns to do 50 states, 50 meetings, to come together, discuss what they want to see in the stimulus, how it's going to work, how they're going to lay it out, how they'll move it forward. So I think he knows his bully pulpit is working. But one of the things he has to do now is he's going to keep everyone involved that has been with him this far and then let them think that they have an invested [SIC] interest in getting this -- this legislation...

COOPER: So making use of the mailing list he has?


COOPER: Making use of all those supporters?

BORGER: Fifteen million?

GENTRY: Yes, about 15 million.

KING: And they had him last weekend. We went down and taped on. It was in Northern Virginia. Chili for Change. Had a chili meeting.

I walked into a Starbucks in Washington, D.C., on Saturday. There were about 30 Obama supporters sitting around, many of whom with their laptops, talking about, "How can we put pressure on the Congress."

To the point that David and Ali just made, and you're dead right in saying that the president set the standard of jobs. It's a tough standard. When you travel, I've been in industrial states the last few weeks. And the domino effect of this is stunning, because you meet people who've been laid off from their work, and they say, you know, "I went for a job interview the other day, and I saw my neighbor from three doors down. You know, I didn't know. They're at the same job interview." People are lining up. They can't get jobs that pay anything near what they get paid.

And when that happens, what happens to the town? The pizza place goes out of business. Dry cleaners go out of business, because people aren't spending extra money, as well. And they're looking around, Anderson. They say they simply can't find the jobs.

I was with a couple, married couple at Caterpillar, both laid off from their jobs at the same time, husband and wife. They have three kids, a mortgage, two cars. The husband's in the National Guard. He said that she can't find a job, his wife, in the next two months, he'll volunteer to go to Afghanistan.

BORGER: But you know, the president tonight put himself on the record. He said, "I'm going to create jobs. The credit markets are going to start operating..."

COOPER: Create or save.

BORGER: Create or save. Went up from 2.5 million to 4 million. The credit markets are going to start operating efficiently. and you're going to see signs that the economy is going to stop contracting. And he's now on the record saying that -- that this is what his stimulus package is going to do. COOPER: John King mentioned Afghanistan. Ed Henry, CNN's correspondent, asked the president about troop levels in Afghanistan. Let's listen.


ED HENRY, CNN CORRESPONDENT: You've promised to send more troops to Afghanistan. And since you've been very clear about a timetable to withdraw combat troops from Iraq within 16 months, I wonder what's your timetable to withdraw troops eventually from Afghanistan?

OBAMA: With respect to Afghanistan, this is going to be a big challenge. I think because of the extraordinary work done by our troops and some very good diplomatic work done by Ambassador Crocker in Iraq, we just saw an election in Iraq that went relatively peacefully. And you get a sense that the political system is now functioning in a meaningful way.

You do not see that yet in Afghanistan. They've got elections coming up. But effectively, the national government seems very detached from what's going on in the surrounding community.

In addition, you've got the Taliban and al Qaeda operating in the Fatah and these border regions between Afghanistan and Pakistan. And what we haven't seen is the kind of concerted effort to root out those safe havens that would ultimately make our mission successful.


COOPER: John King, it's remarkable to think on top that, of all this other stuff in terms of the economy he has to deal with, there's, of course, all the other issues that every president inherits. How can he do all of this? I mean, at some point, what -- does foreign policy just kind of lose out?

KING: Welcome to the job. I don't mean that with any disrespect or cynicism. But remember, back in 1992 Bill Clinton ran a campaign in which he said he would focus like a laser beam on the economy. And every president leaves a note for the incoming, for your successor. And George H.W. Bush left a note for President Clinton saying, "I know that's what you campaigned on. What you're going to quickly learn in this job is that every problem in the world crosses your desk."

And you're talking about something President Obama knew was in his inbox. How quickly can he get out of Iraq. Her promised her in the campaign to increase troop levels in Afghanistan. He will have, even though he promises a foreign policy that makes more friends at a time when many countries around the world were alienated or just tired of George W. Bush at the end, he's going to have the same problem George W. Bush had.

When he calls the Canadians or the French or the Germans and says, "Help me out. Send more troops to Afghanistan," guess what? At least the first answer is, "I don't think so."

This is a very deep inbox, and those are the issues we know about. Every president is surprised, usually pretty quick.

BORGER: You know, tonight in this press conference he said, "I didn't expect to have to do an $800 billion stimulus package as my first act when I became president of the United States." He told the American public that. This isn't exactly what he had in mind.

He knew that the economy was issue No. 1. But he didn't know he was going to have to do this, and he didn't know it was going to get ratcheted up so fast.


GENTRY: And I think he's staying on task with it. Because that's -- he's meeting with Senator Clinton. He's continuing to keep the foreign policy out front. And he's continuing to talk about it.

COOPER: It's not just Senator Clinton. Joe Biden seems to be operating on foreign policy, as well. Up next, we'll talk about that.

Just ahead, get ready for the new big bailout. Several banks received hundreds of billions of dollars. Now Obama -- President Obama and his team have a plan to get them more. We're "Keeping Them Honest" on the plan.

Also, say it ain't so. A-Rod, Alex Rodriguez, confessing to taking steroids. And the president reacts to the admission. We'll tell you what the president said.

And later, tonight's "Shot." Famous and no longer faceless, we're seeing the octuplets for the first time. And wait till you hear what Grandma has to say about her own daughter. Right back.



OBAMA: I don't think it's accurate to say that consumer spending got us into this mess. What got us into this mess initially were banks taking exorbitant, wild risks with other people's monies based on shaky assets.


COOPER: Blaming the banks for fueling the worst economic crisis since the Depression, a very blunt remark from the president tonight, coming just hours before the Treasury Department unveils a new banking bailout plan. We know it's going to be expensive. We know it's going to cost taxpayers hundreds of billions of dollars. The question, of course, is will it work?

Joe Johns tonight is "Keeping Them Honest."


JOE JOHNS, CNN CORRESPONDENT (voice-over): Hold onto your wallet. They're rolling out part two of bailout for the banks. It's called TARP, the Troubled Asset Relief Program, which under President Bush was widely criticized, to put it mildly, because no one knows what happened to that first $350 billion of your money.

Granted, it almost certainly avoided a complete financial meltdown. Problem is, congressional watchdogs revealed that treasury shelled out $78 billion more for bank assets than they were worth, which we didn't find out about, until, well, last week.

ELIZABETH WARREN, TARP CONGRESSIONAL OVERSIGHT PANEL: Taxpayers frankly need to be outraged, because treasury needs the message loud and clear. And the message is, you tell us the truth. You describe what it is that you're doing. And then we can participate in that decision-making process.

JOHNS: An Obama administration official tells us the new financial stability plan should open up the flow of credit, leverage private capital, and impose new conditions on the money.

Doug Elliott of the Brookings Institution says those conditions will be tough.

DOUGLAS ELLIOTT, BROOKINGS INSTITUTION: Clearly, the mood of the public and the Congress says that there needs to be that kind of accountability.

JOHNS: The government says to expect something new, too: a plan to get banks to sell and private investors to buy those bad loans undermining confidence in the financial system.

(on camera) The idea: treasury would guarantee a bottom price for these toxic assets to make sure they can sell. And if the assets turn around and make money, the buyer keeps the gains.

ELLIOTT: If you have private investors making the pricing decisions and using their own money, and then the government participating alongside, that's a much cleaner way of doing it.

JOHNS (voice-over): The Obama administration also plans on committing at least $50 billion to help homeowners avoid foreclosure, which was supposed to happen the first time around.

ELLIOT: Fifty billion to $100 billion would have a real leverage effect. Because what you're talking about doing is using that money to fund interest-rate reductions, or reductions in principal, or payments to the mortgage servicers.

JOHNS: All that said, you haven't heard the last of TARP. Analysts say it's likely there will be a need for even more money later this year.

Joe Johns, CNN, Washington.


COOPER: More money, more money. We're following some other big stories making news tonight. We've got some video of the octuplets, as well. That in a moment. First, Randi Kaye joins us with a "360 Bulletin" -- Randi.


We begin with a stunning steroids admission from A-Rod. Baseball star Alex Rodriguez said today he did take performance-enhancing drugs from 2001 to 2003 when he played for the Texas Rangers. In an interview with ESPN, the now Yankees slugger apologized.


ALEX RODRIGUEZ, NEW YORK YANKEES: I'm just proud that I'm here sharing my story. Regardless of what the union -- this is no one's fault. It's my fault. I'm responsible for it. And I'm deeply sorry for that.


KAYE: The steroid confession reached the White House tonight. In his presidential news conference, President Barack Obama sounded off on Alex Rodriguez.


OBAMA: I think it's depressing news on top of what's been a flurry of depressing items when it comes to Major League Baseball.


KAYE: Also in Washington, a gift-wrapped reception for the first lady. Michelle Obama spoke to federal employees at the Department of Interior today, where she was presented with a shawl. Mrs. Obama touted the president's economic plan. She also pledged the White House would work closely with the Native American community.

And in Australia, an act of mass murder. That's from the prime minister, who says some of the 400 wildfires in the southeastern part of the country were deliberately set. At least 170 people have been killed. More than 800 homes destroyed, Anderson.

COOPER: Terrible. Randi, thanks.

It's time now for "The Shot." It's one that many folks have been waiting for, for a while: Our first glimpse of the octuplets. Today, Nadya Suleman guided NBC News cameras into the neonatal ward to meet her eight newborns. Take a look.


NADYA SULEMAN, OCTUPLETS' MOTHER: Hi, Maliah. Your eyes are open.

This is Noah. And he is -- he's doing well. He's really well. He's not on oxygen or anything. He's the blond one. He's the tiniest one that was a troublemaker. And that's why they had to deliver early.

This is Baby C, Isaiah. You recognize my voice?

Mariah, D. Hi, sweetie. I wish I could be here all day.

You're F. He's Jeremiah. And he is under the lights for jaundice. Hi, little guy. I love you. I want to hold you. I'm going to come back and hold you.

Hi, Josiah. I wish I could stay a long time, a long time, all day long, but I can't.


COOPER: Suleman, who has six other kids, says it was her dream to have a large family. She calls the father of the octuplets a, quote, "friend."

The grandmother of the octuplets had harsh words for her daughter, saying she has no means to support 14 boys and girls. And "The L.A. Times" is reporting that Suleman is already on public assistance and receives Food Stamps.

I don't know if you say it, Randi, her grandmother said that it was unconscionable for her daughter to have done what she did.

KAYE: I did see that, Anderson. But you know, you look at those children, those babies, and you can understand. You just want to hold them. They were just absolutely adorable.

COOPER: Yes. You can see all the most recent Shots on our Web site at