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ANDERSON COOPER 360 DEGREES
Big Banks Under Fire; Congress Reaches Compromise Deal on Economic Stimulus Package
Aired February 11, 2009 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Tonight, the biggest dose of emergency medicine the economy has ever seen, more money than most of us can imagine in a package, for better or worse, assembled at warp speed, just two weeks and change for House and Senate lawmakers to hammer out an economic stimulus package that even many opponents want to succeed.
Just ahead tonight, personal finance expert Suze Orman on how to survive the current crisis, but, first, Dana Bash on the plan finalized late today for boosting the economy out of it and how it will affect your bottom line.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT (voice-over): Most Americans will get a tax cut, $400 for individuals, $800 for families. It's less than President Obama campaigned for, but enough for Democrats.
SEN. HARRY REID (D-NV), MAJORITY LEADER: More than one-third of this bill is dedicated to providing tax relief for middle-class families, cutting taxes for 95 percent of American workers.
BASH: Two popular tax breaks are still in, but scaled back. First-time homebuyers now will get a tax credit of up to $8,000. And people who buy new cars, they will get a deduction for the sales tax on their purchase.
But the biggest chunk of this $789 billion bill is government spending. The only three Republicans who signed onto this massive stimulus package demanded big bucks for job-creating infrastructure projects, and they got it, $150 billion for everything from highways and light-rail to water and sewage projects.
SEN. SUSAN COLLINS (R), MAINE: That is the most powerful component in this bill to create jobs.
BASH: States in dire economic straits are big winners in this stimulus deal, too. They will get $90 billion to help pay for Medicaid and $54 billion for education and other services.
Funding for education was a last-minute snag in the frenzy to cut a deal, and House Democrats lost their battle to create a program to build new schools, but did get more money for states to modernize existing schools in disrepair -- the price of compromise. REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: What we had in the bill that we wish was still -- we wish that that was still there, but the fact is, is that there's plenty there to create the nearly four million jobs that the president has set as our goal.
BASH: Still, a lot of House Democrats are pretty angry that they had to compromise on education funding. In fact, I spoke with one Democratic lawmaker tonight, who said that he wants to read the fine print to make sure they didn't completely -- quote -- "sell out on that issue."
But this legislation isn't even written yet, Anderson. They're reading it -- writing it overnight all night tonight, because Democratic leaders still say that they hope to get this passed the House and passed the Senate and to the president's desk in the next couple of days.
COOPER: All right, Dana Bash on Capitol Hill -- Dana, thanks.
President Obama enjoying himself tonight with the first lady at Ford's Theater -- you see them there -- for a celebration of Abraham Lincoln's 200th birthday.
Mr. Obama is now on record telling people to judge him on the economy, to hold him accountable four years from now for what he is doing today. Fair or not, he knows, between the stimulus bill and the new bank bailout, he pretty much owns the problem now.
The "Raw Politics" tonight from Ed Henry at the White House with late reaction -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Anderson, before he attended that event, the president put out a written statement congratulating lawmakers in both parties, thanking them for coming together on what he called a hard-fought compromise.
This is a plan he has promised will create between three and four million jobs, the president adding in that statement it's also a plan that will "provide immediate tax relief to families and businesses, while investing in priorities like health care, education, energy, and infrastructure that will grow our economy once more. I'm grateful to the House Democrats for starting this process and for members in the House and Senate for moving it along with the urgency that this moment demands" -- a victory clearly for this president very early in his term.
But it's not like he can celebrate for long. This is just the first of many steps he is planning take to deal with this crisis. The second step, of course, was unveiled yesterday by Treasury Secretary Timothy Geithner, basically try a bank stability plan, bring some more accountability and transparency to that TARP bailout program from last year.
But the problem is that Wall Street reacted very negatively. They felt there was not enough detail in the plan. And, so, now we're even hearing from some Democrats on the Hill that they feel there's not enough meat on the bones.
You have Barney Frank, a top Democrat in the House, saying, where's the housing relief plan? What are they going to do about the foreclosure crisis? That's something a lot of Democrats were expecting. And, so, right away, even though the president is celebrating this victory, he realizes, clearly, that he's going to have to jump in and deal with these other parts of the crisis if he's really going to move it forward -- Anderson.
COOPER: Ed, do we know when we're going to hear more from Tim Geithner on his plan?
HENRY: We don't. I mean, everyone has been pressing him. He was on the Hill today for the second straight day. He was pressed about, when is the foreclosure crisis details going to be coming? The administration has said it would be a $50 billion plan to deal with the foreclosure crisis. But they haven't been given details about it.
And Democrats like Barney Frank have been saying, $50 billion is really a drop in the bucket. And, so, there is no timetable right now. All -- when I pressed Robert Gates at the briefing today, he said soon you will get details on the foreclosure crisis.
But, obviously, Democrats in particular are now pressing this president for more. They see the stimulus as just a down payment on a lot more work that needs to be done -- Anderson.
COOPER: A lot more money. All right, Ed, thanks.
While lawmakers are finalizing the stimulus, Wall Street executives were also on the Hill apologizing for making it all necessary, eight banking bigwigs called to account for, in the words of many lawmakers, cratering the economy, then taking hundreds of billions in bailout dollars, without much to show for it, beyond bonuses, new corporate jets, and other outrages.
Based on what we saw today, it is possible they still do not get it.
Tom Foreman is here with the highlights and lowlights of their testimony -- Tom.
TOM FOREMAN, CNN CORRESPONDENT: Yes, Anderson, for all the things they don't agree about on Capitol Hill right now, here is something they pretty much do agree on, that you can have a pinata party by beating up on all these rich bankers. And that's mighty popular with voters right now, so they went at it with vigor.
The eight big financial bosses who showed up for this ceremonial flogging represent firms that took bailout money. And, collectively, these guys personally earned just short of $191 million in 2007, eight guys. Still, loans for normal Americans from their banks remain hard to come by. And lawmakers want to know why.
(BEGIN VIDEO CLIP)
REP. MICHAEL CAPUANO (D), MASSACHUSETTS: Start loaning the money that we gave you. Get it on the street. And don't say, oh, well, we're not using that money for bonuses. Come on.
REP. NYDIA VELAZQUEZ (D), NEW YORK: So, can you explain why your institutions are finding money to fund a multibillion-dollar merger that will produce 19,000 job losses?
REP. GARY ACKERMAN (D), NEW YORK: When the press makes inquiries as to what you did with the first tranche of money that we gave you, many billions of dollars, your answer is, it's none of your business.
CAPUANO: But basically you come to us today on your bicycles after buying Girl Scout cookies and helping out Mother Teresa, telling us, we're sorry. We didn't mean it. We won't do it again. Trust us.
America doesn't trust you anymore.
(END VIDEO CLIP)
FOREMAN: The bank bosses argued that they really are making more loans, many more than they would have without this bailout money. But credit standards have tightened up. And they say that's all part of making the market work better. Still, they admit this is a learning process.
(BEGIN VIDEO CLIP)
VIKRAM PANDIT, CEO, CITIGROUP: We need to do a better job of acknowledging and embracing the new realities. Let me be clear with the committee. I get the new reality. And I will make sure Citi gets it as well.
(END VIDEO CLIP)
FOREMAN: Considering the current mood among the voters and Congress, Anderson, that may not be a bad idea.
COOPER: All right, Tom, thanks.
We want to know what you think about the banks, Congress, the president, and the plans for getting us out of the recession.
Join the live chat happening now at AC360.com. Check out Randi Kay's live Webcast during the break. She will be talking with Suze Orman. There she is right now.
A little later one, Suze is going to take your e-mails, how to survive, even prosper in tough economic times. For that, go to AC360.com, follow the link.
But, up next, our panel weighs in on the politics at this crucial moment for all of us, David Gergen, Joe Johns, Candy Crowley.
Also tonight, get a look at Michelle Obama as you have rarely seen a first lady before, on the cover and pages of "Vogue" magazine. We will show you the pictures before it hits the stands.
And the octuplets' mom, she started a Web site asking for money. But notice anything familiar? Is she trying to become Angelina Jolie, even getting plastic surgery? Her answer and more -- tonight on 360.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Look around us. Look at this construction site right where we're standing. We're surrounded by unmet needs and unfinished business in our schools and our roads, in the systems we employ to treat the sick, in the energy we use to power our homes.
And that's the core of my plan, putting people to work doing the work that America needs done.
(END VIDEO CLIP)
COOPER: President Obama today at a highway construction site in Northern Virginia -- Mr. Obama saying the economic stimulus plan would create or save 100,000 jobs in the commonwealth.
Let's talk about the plan and the politics with senior political analyst David Gergen and correspondents Joe Johns and Candy Crowley.
David, it's a done deal. What's the lesson in this moving forward for -- for President Obama?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: The lesson is, it's going to be very hard to get things through Congress. There's going to be no rubber-stamp up there. These three Republicans had the whip hand on this negotiation. And I think that's why the bill wound up much closer to the Senate bill than the House original version, and why so many House Democrats are unhappy.
But there's also a positive lesson, I think, here, Anderson. And that is that, for many Americans, there's going to be a lot more infrastructure bill -- in this -- in this bill than there was in the original bill. Some of the bad things have been scrubbed out. There has been a process here of real scrutiny of it.
And I -- I think that's a healthy thing in a democracy. I think many -- many -- I think this bill is going to withstand scrutiny, despite its many flaws and despite the big, big question of whether it's large enough. Many Americans are going to like this bill better than what they first saw.
COOPER: Joe, I guess there are some who would say, you know, if -- if liberal Democrats and conservative Republicans both are upset by it, then this is sort of maybe somewhere in the middle, and maybe that's not too bad a thing.
JOE JOHNS, CNN SENIOR CORRESPONDENT: Yes. I mean, that's about right, because, when you think of the Republicans, on the one hand, there are a lot of people who are saying, Barack Obama said he wanted our vote, but, on the other hand, he really didn't take the extra step of sort of cutting and pasting the language that we wanted inside the bill, so conservative Republicans upset.
Then, a bunch of Democrats, even some in the Black Caucus, people who are very proud about the fact that Barack Obama is now president of the United States, are complaining because certain things came out, you know, the stuff for education and so on. So, that's about right.
When you get people on both sides griping, and you still have enough votes to pass a bill both in the Senate and the House, get it to the president's desk, a lot of people will say, perhaps that's a good sign.
COOPER: And, Candy, it's fascinating to see the president out selling this thing and acknowledging, I think it was today, essentially, look, this is my problem now. If -- if this doesn't work, four years from now, I will be voted out of office.
It's also interesting to see him on the side of a highway in Virginia, you know, kind of rolling up his sleeves and -- and being the face of this.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Sure.
I mean, look, he is the face of this. And there's a lot of things happening when a president has a town hall meeting or a photo opportunity, whatever you want to call it. And one of the things is that he's out there with his power base, and that is the American people. That's where his political capital is. And he's out there going: I get you. I understand you. Meanwhile, these people are back in Washington, you know, and I'm just pushing and pushing them.
So, it sort of attaches him to the American people: I'm on your side.
So, there was a lot of that in his trip to Indiana and in his trip to Florida, now in his trip to Virginia, just kind of reinforcing: You and I are in this together, and I'm going to move old-time Washington and get things done.
COOPER: David, can the president keep that up, though, being the one constantly out there every day, you know, whether it's this or -- or the -- the Geithner package or whatever else is coming down the pike?
GERGEN: Absolutely not.
And I think that he's in danger of being overexposed. He's certainly in danger of being the only person who seems to carry the ball publicly for them. And, Anderson, 24 hours later, after the financial bailout package announcement yesterday, I think, as the dust is settling a little bit, it appears that the administration is in more trouble on this than even we thought last night.
There are many people on Capitol Hill now who are skeptical about the contents of the package. They're not sure they trust what they're hearing from the Treasury Department. There are many people on Wall Street and well beyond who think that this initial effort may put his presidency at some peril.
So, even as he's won his victory tonight -- and he is winning a big victory on the stimulus bill -- this financial bailout, which is much, much bigger, after all -- we have got a -- you know, it's almost three times bigger than -- than the stimulus package -- he's got some real problems there, and he's going to have to scramble now to pull that out.
COOPER: Joe, are you hearing that as well?
JOHNS: Yes, absolutely. This -- this president is going to have a tough row to hoe.
And when you think about the other things coming down the pike, he has a lot of tough choices to make yet. And -- but it still all depends in some ways on what happens with the stimulus, what happens with the Troubled Assets Relief fund.
Some people say, you look down the road, perhaps the economy starts turning the corner late this year, early next year, Barack Obama will be able to go out and say, hey, it was because of what we did, even if the stimulus really hasn't even started making its way into the economy yet.
And -- and, for that, of course, some congressional Republicans might pay. But, sure, Barack Obama's got a lot of stuff on his plate here. And he has -- he has taken some hits on this thing.
COOPER: Candy, I mean, he's facing something probably no president in our lifetime has faced, I mean, the challenges, just the economic challenges alone.
Are the mistakes they have made just kind of the growing pains of -- of adjustment or something more fundamental? I mean, how much trouble are they in?
CROWLEY: I don't -- look, I don't think at this point they're in that much trouble.
He got pretty much what he needed. Honestly, if a president that came in with the kind of popular vote margin, an electoral margin that he had, couldn't get what he wanted right out of the box, that's an administration in trouble. This is how the balance of power works.
I do think that David and Joe are right, that the whole financial bailout package will be tougher. But part of that, yes, is that -- that Timothy Geithner, the treasury secretary, came out with a less- than-reassuring appearance, shall we say, yesterday in the news conference and later on the Hill, but also because, you know, a trillion-and-a-half dollars begins to sound like real money, and because there is this -- as one lawmaker I talked to today called it, he said, I just have this nauseous feeling all the time that no one is exactly sure how to go about this. And I think it's true, because it's such a big problem, no one really has ever dealt with it before. So, part of what President Obama is dealing with is that he's basically saying: Trust us. We will do it right.
And, if -- if they aren't doing it right, the price is pretty darned high, not just bottom line, but also to the country and the economy at large.
COOPER: Well, David, economists are still arguing about the Great Depression and what really brought us out of that. I mean, so, the idea that anyone really knows exactly what steps to take, I mean, that's just -- there's no way anyone does.
GERGEN: That's exactly right, Anderson.
I think one thing -- one of the things that distinguishes this recession from almost any one that I have seen in the last 40 years has been the fact that nobody knows how to get out of it. Nobody has the answers.
But, when you're elected president, you know, they expect you to have the answers. When you put your treasury secretary out with a plan, they expect him to have the answers in the plan.
And if -- and if people begin to feel that this isn't quite working -- I don't think Barack Obama is in any political trouble right now. I think he's in great shape with the American people. I think he may be in deeper economic trouble.
COOPER: Well, if he's in deeper economic trouble, then we all are in deeper economic trouble.
David, Candy, Joe, we're going to leave it there. Thanks.
Up next here: A Wall Street executive at a failing firm promise big money to the screwups who tanked the company, then tell them, hey, whatever you do, don't call it a bonus.
And that's not all. We're going to show you what New York's attorney general says was going on at Merrill Lynch, their maneuvering, he says, to pay out millions in bonuses -- yes, bonuses -- including $121 million to just four people. We're "Keeping Them Honest."
Also, nine deaths from his company's peanut butter, nine deaths from this guy's peanut butter, the CEO in front of Congress, his accountability moment. So, what did he do? Well, when you see it, you will understand why lawmakers went ballistic.
And, later, Suze Orman answering your money questions at AC360.com. Send them to us. She will be here when 360 continues.
(BEGIN VIDEO CLIP) ANDREW CUOMO, NEW YORK ATTORNEY GENERAL: How do you pay a CEO a performance bonus when by definition the institution was failing? What did they do to deserve that money?
And this is not a little bit of money, $20 million, $30 million. Seven hundred people were made millionaires by Merrill Lynch, while the taxpayers are paying through the TARP program.
(END VIDEO CLIP)
COOPER: New York Attorney General Andrew Cuomo blasting Merrill Lynch for giving huge payouts to hundreds of employees as it was piling up massive losses last fall.
Now, Cuomo laid out the size and the scope of the bonuses in a letter to Congressman Barney Frank. Now, Frank's House committee is the one that grilled those eight bank executives today that we showed you earlier to see how they're spending all the bailout money they have received.
Now, we learned new details today about exactly what happened at Merrill Lynch, their bonus boondoggle. And we think you should know how this company has been spending some of your money.
Joe Johns has the latest.
JOHNS (voice-over): Allegations that Merrill Lynch gave big- money bonuses to top people, even when it was broke, even with the federal government kicking in billions for its merger with Bank of America, and even with the prosecutor breathing down its neck.
CUOMO: I think it's an egregious wrong for people to now get multiple-million-dollar bonuses for failed performances.
JOHNS: New York Attorney General Andrew Cuomo says that, as far back as October 29 last year, he started asking Merrill Lynch what plans they had to give executive bonuses. He says Merrill just stated their bonus policy, but didn't say who might get them.
Weeks later, instead of giving a prosecutor the information he asked for, Cuomo says Merrill secretly moved up the bonus payday, a grand total of $3.6 billion. Cuomo says $121 million of it went to just four people. The next four got a combined $62 million. The next six split $66 million, all paid early, just before its merger with Bank of America, with the government kicking in $45 billion of your dollars to sweeten the deal.
The fallout? Merrill's CEO was quickly pushed out the door. And B-of-A's CEO told Congress today his company had no power to stop the bonuses.
KEN LEWIS, CEO, BANK OF AMERICA: I do know that we urged the Merrill Lynch executives involved in -- in this compensation issue to reduce the bonuses substantially, particularly at the time. And we didn't have -- we had no authority to tell them what to do, just urge them what to do.
JOHNS (on camera): And one more outrage today over big payouts -- "The Huffington Post" obtained a tape of a conference call on which Morgan Stanley financial advisers were told they would get so-called retention awards to stay at the firm, but they were also told not to call them bonuses, now a loaded word.
(BEGIN AUDIO CLIP)
JAMES GORMAN, CO-PRESIDENT, MORGAN STANLEY: There will about be a retention award. Please do not call it a bonus. It is not a bonus. It is an award. And it recognizes the importance of keeping our team in place as we go through this integration.
(END AUDIO CLIP)
JOHNS (voice-over): Morgan Stanley says, retention awards are loans, but people don't have to pay them back if they stay at the firm. It also says they will be paid out of profit.
But, since taxpayers have kicked in $60 billion to keep the soon- to-be merged Morgan Stanley and Smith Barney afloat, some people are asking, what profit, and aren't they really coming out of taxpayers' pockets instead?
Experts we spoke with all said, merging firms often commit money to keep their people from taking their clients and business to competing firms.
(on camera): Believe it or not, even after Wall Street's meltdown, there's a bidding war going on. Morgan Stanley says, it's been losing several hundred advisers a month, and that's why it needs retention awards, even after the firm received $60 billion of your money.
Joe Johns, CNN, Washington.
COOPER: All right.
Also on Capitol Hill today, a hearing on the deadly national salmonella outbreak. This was unbelievable. A House subcommittee released e-mails showing that the owner of the peanut company traced to the outbreak knowingly urged his workers to ship bacteria-tainted products, and complained that shipping delays were costing his company big money.
Today, we learned that another person has died due to this outbreak, bringing the total number of deaths to nine. With that as the backdrop, anguished family members testified, demanding action.
(BEGIN VIDEO CLIP)
JEFF ALMER, SON OF SALMONELLA VICTIM: Their behavior is criminal, in my opinion. I want to see jail time, and I want to see them serve nothing but the putrid sludge they have been trowelling out.
LOU TOUSIGNANT, SON OF SALMONELLA VICTIM: We have blind faith that, when we go to a grocery store, the food there is also safe. It clearly is not. Do not let the death of my father, the seven others and the hundreds sickened be in vain. Please do your job.
PETER HURLEY, FATHER OF SICKENED CHILD: People would be in utter outrage if they heard of a police officer putting a loaded gun to someone's head, pulling the trigger, and, then, in the horrific aftermath, say, "I was just hoping that the bullet in the chamber wouldn't fire."
(END VIDEO CLIP)
COOPER: Well, the owner of the peanut processing company showed up, as ordered, to testify, but he didn't say much.
Take a look.
(BEGIN VIDEO CLIP)
REP. GREG WALDEN (R), OREGON: It seems like, from what we have read, you were willing to send out that peanut base that went into these ingredients.
And I just wonder, Would either of you be willing take the lid off and eat any of these product now, like the people on the panel ahead of you, their relatives, their loved ones did?
STEWART PARNELL, PRESIDENT, PEANUT CORPORATION OF AMERICA: Mr. Chairman and the members of the committee, on the advice of my counsel, I respectfully decline to answer your questions, based on the protection afforded me under the United States Constitution.
(END VIDEO CLIP)
COOPER: Stewart Parnell pleaded the Fifth on every question asked, but we wanted you to see that, because we think you should see what he looks like and you should know his name.
Coming up, personal finance expert Suze Orman joins us. She's answering you questions about your money, your future, how to survive the economic storm still raging.
You can send her questions to AC360.com. Check the link there.
Also ahead, a dramatic reunion -- the pilot who pulled of the miracle on the Hudson, Captain Chesley Sullenberger, delivers a personal thank-you to another hero that day.
And can this story get any stranger? A lot of people are talking about the apparent resemblance between Nadya Suleman, the mother of the California octuplets, and actress Angelina Jolie. They both like kids, but is all this just a coincidence?
We will be right back. (COMMERCIAL BREAK)
COOPER: We're in the middle of a financial tsunami, and even with a stimulus package and bank bailouts, there are no guarantees it's going to get better any time soon. To survive the crisis, you need the best advice around. It's your money, your future we're talking about.
Here to help, Suze Orman, at personal finance expert and CNBC host, out with a new book, "Suze Orman's 2009 Action Plan."
Appreciate you joining us. Thanks very much.
SUZE ORMAN, AUTHOR, "SUZE ORMAN'S 2009 ACTION PLAN: KEEPING YOUR MONEY SAFE AND SOUND": Any time, Anderson.
COOPER: What do you make of these CEOs and -- and the bonuses they're giving out? I mean, the flip side of the argument is, look, in order to retain good people, they need to be able to be competitive with salaries and bonuses.
ORMAN: And where are they going to go if people don't have the money to pay them to go somewhere? If they're paying them with taxpayers' money, I think it is atrocious. I think every single bonus should be given back. I think it absolutely is highway robbery.
You don't even want to hear about how I really feel about it on national television.
ORMAN: The truth of the matter is, it's a -- it's a travesty, and they should all be ashamed of themselves.
COOPER: You said on this program in January that nothing is going to recover until we can solve what is happening with the real estate problem.
ORMAN: And I still believe that.
COOPER: Do you see any solution to the real estate problem in -- in Geithner's plan or...
ORMAN: Here's the thing. Is that I think it was a mistake when President Obama came out, and he said, "Details will be tomorrow," meaning yesterday. And then Geithner comes out and he had no details.
Now, I think they just should have said, "You know what? This is seriously complicated. Nobody knows how to solve this. I inherited this problem." He's been saying that a lot. To just simply say, "It's going to take time for us to figure this out, and we don't have the solution quite yet." Then nobody would have been disappointed. I don't think they should rush this, because it is a serious problem.
Stimulus, I'm glad it passed. We'll see what happens there. But the real details now have to be in the TARP, because the TARP is what's going to save real estate. And again, I will say until real estate is solved, until foreclosures are stopped, until the people that are underwater, 50, 70, 80 percent in their homes, until there is a solution for those people -- not the people who are going to buy new homes; the people who have homes today -- we have serious problems.
COOPER: The people who are paying their mortgage payments, even though it's more than the value of their house, should they condone that?
ORMAN: Listen, they should do it, because they owe the money. However, if you look at it strictly financially, not an ethical decision, what sense does it make when you bought a house, $600,000. You did nothing wrong. It wasn't your problem. You have a $600,000 mortgage, because you got 100 percent financing, and the house is now worth $100,000, $200,000.
Tampa, Florida, all throughout Tampa, that's the situation. You have people who are buying the exact same home as you for $200,000, and you're paying property taxes on $600,000. You're paying insurance on $600,000. And nobody wants to talk to you.
So what do these people do? They stop paying their mortgage. They stay in the house until they're foreclosed on. They then save that money. They then go and have somebody else buy the exact same house for them for $200,000. Doesn't make any sense, does it?
COOPER: You've been answering a lot of e-mail questions already during our Web cast with Randi Kaye. You're going to answer some more e-mail questions on the other side of this break when we come back. Also, during commercials.
We'll have more with Suze ahead, answering your e-mails: AC360.com. Follow the link there to ask Suze a question.
Also tonight, fashion and the first lady. Mrs. Obama on the cover of "Vogue" magazine. You seen this, Suze?
ORMAN: I'm seeing it now.
COOPER: There you go. Only the second first lady to get the cover. Who was the first? Find out, ahead.
And later, the octuplets go online. Their mom has a new Web site, showing pictures and, yes, asking for money. Increasingly, though, some are wondering if she thinks she's Angelina Jolie. Hear what she says about that, coming up.
COOPER: All right. We're back with Suze Orman, the personal finance expert, here to answer your questions on how to keep your job, your money, your home during these rough times. All right. So here's a question from Tana about college savings: "We put money into mutual funds for our daughter's college fund. We've lost more than half of the money. We will need the funds in the fall of 2010. Should we cash in now or wait?'
ORMAN: Well, you've got to cash in now, my dear. Tana, rule of thumb. How many times have I said it here. Money that you need within five years is money that does not belong in the stock market. You cannot chance it. You'll see these markets maybe go up, maybe go down. 2010? That's just a year away. Out of the market now, girlfriend.
COOPER: Cindy from Florida writes, "We're a family with two young kids. I have a master's degree but can't find a high-paying job. My husband got laid off five months ago. We've been desperately looking, can't find a job for him either. We bought our house for only $200,000 when it was valued at $460,000. Now the value is at $200,000, but we can't even pay the mortgage/interest/insurance and taxes. If we go into foreclosure how do we stay off the streets -- with hardly any income, we can't even pay rent?"
ORMAN: Here's the thing. You're looking for a high-paying job. Didn't I just hear you say that? You can't look for a high-paying job today. Today, the fact that your husband's not working, you are to look for any job, anywhere for any income in any place that you can. What keeps you off the streets? You do and your ability to make money.
However, you better be planning. If you both have lost your job and you have absolutely no money, you better be talking to friends, family members right now -- and I'm very serious about this -- as to who are you going to move in with if you have absolutely no money? You'd better be checking it all out right now, I'm sorry to say.
COOPER: Ashley has a question about debt: "I'm a full-time student who's taking our subsidized loans and receiving financial aid, yet college seems to be costing more than I can keep up with. Any advice on how to stop from drowning in debt as graduation approaches?"
ORMAN: Ashley, you have to be very careful, because at least you're lucky; you have a subsidized loan, which means the government is paying the interest on those loans while you're going to school. As soon as you graduate, be very careful. Those loans are going to have to be started to be paid back. Loans cannot be discharged in most cases in bankruptcy. If you get in trouble, you'll tend to let them go, and when $20,000 will go to 40 to 80 to 100. And guess what? Then they'll come knocking at your door, and then you won't have any choice but to pay $1,000 or $2,000 a month.
If you have a student loan, you need to make it your No. 1 priority to pay it when you graduate. If you don't know what you're going to do, if you're all confused, stop going to school right now and accumulating student loans until you're clear about your future.
COOPER: Really? Stop going to school?
ORMAN: I have to tell you, people are getting into such student- loan debt, some people, when they lose their job, they go back to school.
COOPER: That's right.
ORMAN: The answer, if they have to go back with a student loan, not here, not now. Not in this economy.
COOPER: Wow. Tournice (ph) writes, "I would like to buy a house this year, and I was told that I should not completely pay off my credit card. They said that the banks would look at this as a lot of money I could potentially use. Is it better to have the balance at $0 or to have some balance on the card?"
ORMAN: No, it's better to have a balance of zero. It's always better not to have any credit-card debt whatsoever. Remember, 30 percent of your FICA score, approximately, is made up of your debt-to- credit ratio. The debt is what you owe to your credit limit they've given you. The less credit-powered debt you have, the less -- the better your pay score. Are you kidding? Pay it off.
COOPER: Here's a tough one. Christa asks -- these all make me so nervous -- "I'm 56 years old..."
ORMAN: Are you sure it's them or me?
COOPER: Well, no. No, it's them. It's -- I mean, it's -- I mean, so many people going through this stuff.
"I'm 56 years old and have lost one third of my retirement savings. Am I still young enough to kick back and wait for the economy to rebound or should I be doing something specific to salvage what I have left?
ORMAN: Listen, it doesn't make any sense, everybody. And I keep telling you this. If you bought something at, let's say, $100 a share, and now it's $50 a share, and you're just going to hold it in the hopes that it's going to go back to $100 a share, I don't know. I think you need to sell it right here. Otherwise, you should be buying more, if you're keeping it. You need to be buying more so that your average cost base -- this is 150. Your average cost base now would be 75. It's just got to go 50 to 75 for you to break even.
So if you're not willing to buy more shares of what you currently own, you have to, in my opinion, sell what you already have.
COOPER: Quick one. This is from Maundi (ph). She says, "I'm trying to negotiate with banks for reduced rates to start paying off debts. Debtors would prefer me to fail first and miss payments. Then they're willing to provide assistance, rather than, in the first place, make it possible for me and consumers to pay off balances. Instead, ever since I've contacted them, they've increased my rates from 28 to 34 percent, making it impossible for me to catch up."
ORMAN: Isn't that a travesty? You know, at a time in life when all the bankers and credit-card companies should be helping every single one of you, they should be lowering your interest regardless of the trouble you're in, to help you get by.
Now in their wisdom, what are they doing? They are revoking your credit cards, rescinding your credit lines, increasing your interest rates to 32 percent. I'm telling you, bankers, you are making it impossible for anybody to pay their debts. They're going to stop paying it, and you are going to be the ones to blame. Can we just lower these people's interest rates? Do me a favor. They're giving bonuses. They're raising interest rates. They're doing all these -- they're out of their mind if you ask me.
COOPER: Do you feel like they don't get it?
ORMAN: They don't get it at all. They think, you know, somebody pays off a credit card. They shut down their credit card, because God forbid they should charge on this credit card again. It's -- people are trying to help themselves, Anderson, and the banks are not making it easy.
COOPER: You ever seen anything like this?
ORMAN: No, I've never seen anything like it. And I have to tell you, it worries me.
COOPER: Suze Orman, thanks. Appreciate you coming in.
A quick reminder: before we move on, about an hour none of us really can afford to miss. Next Tuesday, 11 p.m. Eastern, the "CNN Money Summit." I'll be joined by Ali Velshi and a panel of experts with CNN Money and "Fortune" magazine. Our premiere edition of it became a primetime sensation. You told us you wanted more. We're delivering and taking your questions. Send them already to AC360.com.
Up next, we brought you the breaking news of tornadoes in Oklahoma last night. Now we know the extent of devastation. Details coming up.
And have you noticed the mother of octuplets looks strangely like Angelina Jolie? Is that a coincidence? Hear what she says about the resemblance and why she's asking you for money.
And the first lady of fashion, Michelle Obama, only the second first lady to grace the cover of "Vogue." We'll show you the photos before they hit newsstands. Right back.
COOPER: "Thank you from the bottom of our hearts." That reads the -- this was the text on Nadya Suleman's official Web site, says. The mother of octuplets has an online page now, showing off pictures of her newborns and asking for donations. There's a little heart- shaped space in the middle where contributions can be made. She also takes all major credit cards.
Even if you don't want to give her money, taxpayers may already be helping her support her growing family. Also tonight, the uncanny resemblance between the octuplets' mom and Angelina Jolie. Is that just a coincidence, or does she actually want to be like the actress?
Randi Kaye has the latest. (BEGIN VIDEOTAPE)
NADYA SULEMAN, MOTHER OF OCTUPLETS: Hi, Maliah. Your eyes are open.
RANDI KAYE, CNN CORRESPONDENT (voice-over): You didn't have these babies, but you may be paying for them. That's their mom, Nadya Suleman, on NBC's "Today Show" with her octuplets. But behind the kisses and the coos is a mountain of bills. At 33, Suleman is single, unemployed, and now, the mother of 14 children. She had six others before the octuplets were born.
"The L.A. Times" reports Suleman is $50,000 in debt from student loans, the very loans Suleman has said she plans to use to help support all her children while she gets a master's degree and a job. She'll have to pay back those loans, but here's where you come in.
You see, Suleman had originally told NBC she wasn't getting any government aid. But we've learned she is. Her publicist told us she gets $490 every month in Food Stamps. That's in line with what Suleman is now saying. Asked once again about living on welfare, NBC says Suleman admitted she's been collecting Food Stamps for the last year and a half.
SULEMAN: No, I'm not living off of any taxpayer money. If I am, if it's Food Stamps, it's a temporary resource. And it's even cash (ph). And it's every month, (UNINTELLIGIBLE), only $400 (ph).
KAYE: Her publicist also told us that three of Suleman's six older children get government disability assistance. But she told NBC it's temporary for two of them, because their disabilities are minor.
(on camera) Suleman told NBC that she's receiving about $600 a month from the government for each of her three disabled children. That's about $1,800 plus $500 more in Food Stamps, a total of $2,300 a month.
(voice-over) Suleman's publicist has said offers for book deals and more are rolling in, which will help pay the bills. But in the meantime, the mother of 14 has set up this Web site. Yes, it thanks people for their support, but right there on the main page, a little pink heart with a note: "Click here to make donations."
COOPER: By the way, that very nice house it looked like they were living in, she's not actually living there. That was just for a couple days.
KAYE: Yes. Apparently, the family had some death threats. And even the publicist had some death threats, so they moved out for a couple days. But now they're back.
COOPER: That's what they say.
KAYE: Yes, that's what they say. COOPER: And what about -- there's this talk about the Angelina Jolie connection. I mean, clearly, she looks like either -- I don't know if that's natural or, you know, she's had some work done or what.
KAYE: Well, we've shown the picture a couple times. We can take a look at the picture again. There you see. Now, that is Nadya Suleman on the screen's left and...
COOPER: I don't think...
KAYE: I don't know. It's...
COOPER: They're being kind.
KAYE: No, she apparently -- NBC asked her about this, and they visited her again yesterday. And she said that those are her lips. She has never had any plastic surgery. She's not trying to be Angelina Jolie. She doesn't want to look like her. She's more worried right now about taking care of these 14 children of hers. That is her top priority.
COOPER: That's her answer. All right. Randi Kaye, thanks. Appreciate it, Randi.
Also following some other stories for us tonight in the "360 Bulletin" -- Randi.
KAYE: I'm back. That is right. In South Central Oklahoma, the damage from yesterday's deadly weather is now clear, and a massive cleanup effort is underway. Tornadoes and severe storms pummeled houses in their path, killing at least eight people and injuring dozens. Tonight, thousands of homes remain without power.
New York regulators say the wife of accused swindler Bernard Madoff pulled more than 15 million bucks out of a Madoff-related brokerage firm in the weeks before her husband's arrest in December. He is accused of running a Ponzi scheme that may have cost investors $50 billion.
A hero's welcome tonight from one hero to another. On "LARRY KING LIVE," Captain Chesley "Sully" Sullenberger, the pilot who pulled off the Miracle on the Hudson, met one of the boat rescuers who helped get everyone on board to shore. Take a look.
(BEGIN VIDEO CLIP)
CAPTAIN CHESLEY "SULLY" SULLENBERGER, PILOT: I've been waiting for three weeks to do just this, to say thank you. Which, of course, is totally inadequate. But that's all I can say, is you -- I got the passengers to the surface. The flight attendants got them out. And you saved them.
(END VIDEO CLIP)
KAYE: And a 360 follow. Henrietta Hughes, the homeless woman who asked President Obama for help at a town-hall rally in Florida yesterday is getting a flood of support. Local housing officials say they've stepped us efforts to find Hughes and her son a place to live. And the wife of a state lawmaker has offered Hughes a house in a nearby town, rent free.
COOPER: That's nice for her family.
KAYE: Very nice.
COOPER: All right. Randi, thanks.
Time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption better than one we can come up with for a photo that we put on our blog every day.
So tonight's picture, banking executives testifying before the House Financial Services committee. They were grilled about how they were using the billions of bailout funds they've received.
Our staff winner tonight is Jack, who actually sent in his caption from his sick bed. How great is that?
His caption: "No, Mr. Chairman, you're wrong. We have indeed made cutbacks. For example, none of us is wearing pants."
(SOUND EFFECT: BOING)
KAYE: He must be on some pretty good medicine.
COOPER: He's completely dosed up.
Our viewer winner is Wyatt from Rochester, New York. The second night in a row we've had a Wyatt win. His caption: "How long is this going to take? We've got $50 million planes to buy."
(SOUND EFFECT: DRUM BEAT)
COOPER: Wyatt, the "Beat 360" T-shirt is on the way. Congratulations.
Up next, Michelle Obama making a statement, a fashion statement. She'll be on the cover of "Vogue" magazine. Tonight, we'll give you a sneak peak at the photos.
And the 8-year-old boy who's become an Internet sensation after a visit to the dentist and his reaction to -- well, something. It's our "Shot of the Day."
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY: You have to do what's right for you at any given time, and that's going to change, from week to week, from month to month, from year to year. The question that I hate most that we ask young people is "What are you going to be when you grow up?' And the truth is, I still don't know, and I'm 45 years old. (END VIDEO CLIP)
COOPER: I don't know either. A lot of people probably can relate to that. Michelle Obama speaking today to business students at Howard University.
Since moving to the White House, the first lady has been busy making the rounds of federal agencies and schools. People want to know what she has to say, certainly, and also what she's been wearing. Next month, her style and substance come together when Mrs. Obama graces the cover of "Vogue" magazine. We got our hands on a copy.
Once again, Randi Kaye with an up close look.
KAYE (voice-over): Michelle Obama is so in vogue she's on the cover of "Vogue."
ANDRE LEON TALLEY, "VOGUE": It's big. This is big. This is history.
KAYE: "Vogue's" Andre Leon Talley wrote the article. Famed photographer Annie Leibovitz took the pictures for the March issue. On the cover, the first lady in hot pink by designer Jason Wu.
Inside, at the window, a sleek black Narciso Rodriguez dress. On the couch, a J. Crew sweater set.
TALLEY: She is constantly, I'm sure, taking notes, organizing on legal pads for her family and for her life. So that's a very natural picture.
KAYE: Mrs. Obama isn't the first first lady to grace the cover of "Vogue." Hillary Clinton did, back in 1998. She appeared in two issues of "Vogue." So did Laura Bush. The first first lady to be featured in the magazine was Lou Hoover, back in 1929. All but one, Bess Truman, have sat for a "Vogue" portrait since, though Jackie Kennedy in 1961 wasn't photographed: she was sketched.
What makes Michelle Obama cover-worthy?
TALLEY: She represents power. It's the power issue. She represents the sense of (UNINTELLIGIBLE) in our times and our culture. The first African-American first lady of our nation.
KAYE: Like Jackie Kennedy's trademark style, Mrs. Obama's free spirit seems to have captured the nation, as Jay Leno quickly learned.
JAY LENO, HOST, NBC'S "THE TONIGHT SHOW": I want to ask you about your wardrobe. I guess about 60 grand? Sixty, 70,000 for that outfit?
M. OBAMA: Actually, this is a J. Crew ensemble.
LENO: Really? Wow. KAYE: Talley describes the first lady's look as, quote, "totally American. The clothes do not wear her," he says. "She wears the clothes."
TALLEY: She's not afraid of clothes. She's not afraid of strong color. She's not afraid of silhouettes. She knows who she is, and loves having fun with her clothes.
KAYE (on camera): What this first lady wants, he says, is for women to have fun with their clothes. Don't take fashion too seriously, even if you are on the cover of "Vogue."
Randi Kaye, CNN, New York.
COOPER: Randi Kaye has got to be the hardest-working person in the news business today.
Randi, how many -- how many stories did you do today?
COOPER: Three. Unbelievable. Well done.
"The Shot" is next. From the dentist chair to the back seat. Have you seen this, an 8-year-old's post-op performance. Find out. That's how I feel.
We've got the viral video and the remix ahead. Don't you feel like that.
And at the top of the hour, a done deal. Congress reaches an agreement on the massive financial stimulus package. The Kid may be revealing about this. The latest developments from Washington ahead.
COOPER: Randi, tonight's "Shot." The kid who went to the dentist. The clip has been seen by millions on YouTube. Eight-year- old David, he's in the back seat of his family's car, a little woozy after having a tooth pulled and being given some sort of medication. He's still a little out of it. Take a look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: That felt good, didn't it?
UNIDENTIFIED MALE: It -- is this real life?
UNIDENTIFIED MALE: Yes, this is real life.
UNIDENTIFIED MALE: OK. Now -- OK, now I -- I have two fingers (ph).
UNIDENTIFIED MALE: Good. UNIDENTIFIED MALE: I have four fingers.
UNIDENTIFIED MALE: Four fingers? No, don't put that in -- don't put it in your mouth. OK?
UNIDENTIFIED MALE: I can't see anything.
UNIDENTIFIED MALE: Yes, you can.
(END VIDEO CLIP)
COOPER: My favorite part is when he screams. I hope that -- wait. Here it's coming.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Stay in your seat.
UNIDENTIFIED MALE: (screaming)
(END VIDEO CLIP)
KAYE: We've all been there, haven't we?
COOPER: Yes. That's the original version of "David after the Dentist." David and his dad, who filmed the antics, posted online. He thinks this is hysterical.
As we've seen with Christian Bale's rant, viral videos spawn new incarnation, especially dance remixes. David is no exception. Check this out.
(BEGIN VIDEO C LIP)
(END VIDEO CLIP)
COOPER: There's one point where he says, like, "Is this forever?" And his dad's like, "No, it's not going to be forever. Don't worry."
KAYE: Why is this happening to me?
COOPER: Yes. Amazing. You can see all the most recent "Shots" on our Web site at AC360.com.
Coming up at the top of the hour, you'll get a little woozy from the sheer dollar figure, $800 billion. That will make you scream. We'll tell you what's in the new economic stimulus plan, what's gone from it and what it means to all of our future. That and more when 360 continues.