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ANDERSON COOPER 360 DEGREES
Congressional Challenge; Travolta Extortion Plot; The First Lady Up Close
Aired January 23, 2009 - 2300 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: And tonight, President Obama challenging Democrats and Republicans alike to pass a plan for fixing the economy in the next three weeks, warning of political consequences if they don't.
Also tonight, with the economy in crisis and your 401(k) collapsing, Suze Orman joins us and taking questions about "Your Money and Your Future."
Later, extorting the Travolta family in the wake of tragedy. Two suspects in custody in connection with an alleged extortion against John Travolta and his family.
Plus, Michelle Obama speaks out telling marketers to leave her kids alone. We'll show you the Sasha and Malia dolls that have the White House upset.
We begin though, with President Obama today, calling top lawmakers from both parties to the White House and telling them in so many words to bust a move on his economic rescue plan.
And more bad headlines, layoff in American icon Harley Davidson and word that unemployment in California is approaching ten percent.
Again, as we mentioned personal finance expert, Suze Orman will join us shortly to answer your questions about the economy. Just go to our blog, AC360.com and follow the link to send in your question.
But first, the headlines, the "Raw Politics" and Ed Henry.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Trying to end his first week on a bipartisan high note over the economy, for the first time, President Obama called in leaders from both parties to say the $825 billion recovery plan is right on track.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What I think unifies this group is recognition that we are experiencing an unprecedented perhaps, economic crisis that has to be dealt with and dealt with rapidly.
HENRY: That show of unity completely different from a move the President made late in the day, signing a memorandum overturning a Bush policy that prohibited international family planning groups from using U.S. tax dollars to promote abortion. A decision that cheers liberal groups who support abortion rights and backed Mr. Obama's campaign but cast the President in a much more partisan light. So it was signed behind closed doors, a sharp contrast from earlier in the week when the President made a big show of signing executive orders ranging from shutting down the military prison at Guantanamo Bay to cracking down on lobbyists.
It is still early but obvious that this administration does not want to be pulled off a message of bipartisanship.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: He wants to hear ideas and hopes that Washington can put aside its partisan differences in order to get the American people what they deserve. And that is a package that will get the economy going.
HENRY: But the President is facing questions about whether the plan will really stimulate the economy with projects like $200 million for the National Mall, including new grass.
REP. JOHN BOEHNER, (R) MINORITY LEADER: We expressed our concerns about some of the spending that's being proposed in the House bill and the fact that it doesn't spend out very quickly.
HENRY: White House officials insist the plan will create up to 4 million new jobs in the President's two years. And Mr. Obama is playing hardball to get his way according to Democratic and Republican sources in the room.
When Republican Eric Cantor presented an alternative plan, the President said many of the GOP ideas will be included but they'll have to live without other provisions, adding pointedly about the election, "I Won," which may not sound so by bipartisan after all.
COOPER: Ed, what do we know about the mood at that meeting I mean, saying, I won, that was pretty tough?
HENRY: Yes, I am told by Republicans and particularly obviously they were not pleased by that because it was a reminder that it took a drubbing in the last election. And I'm also told that a few weeks back when Barack Obama was President-elect and he was on Capitol Hill, some of his chief aides were also reminding Republicans that he is very sky high in the polls right now. He's got the American people behind him.
So that they sort of stand in his way on the economy and other issues at their peril. So what's interesting is that the President, though, himself, is going up to Capitol Hill next week to meet behind closed doors with Republicans. So he's still trying to show that bipartisanship that he is reaching out to them.
But it sounds like behind closed doors, they're playing a lot of hardball and trying to remind Republicans, don't get in the way of this. It is sort of a locomotive. And he wants to push forward and get as much of this as he can. And it looks like it's going to be hard for Republicans to stop him. They'll pull out some of the provisions but he's going to have a large part of what he wants in terms of this economic recovery package.
COOPER: And part of the package is new grass for the Mall in Washington?
HENRY: That's right. The latest iteration of that has projects like that. And it's getting Republicans wondering whether it's really going to get the economy going. Is it really going to create jobs? And in fact the Congressional Budget Office on Tuesday put out a report that was pretty scathing about the economic recovery plan.
But nobody really focused on it in the media because Tuesday, of course, was the swearing in day. So it sort of got buried by the historic inauguration. And I think now that everyone starts taking a little closer look at all the details, they are going to wonder whether this plan really creates that many jobs -- Anderson.
COOPER: All right Ed, thanks very much. Ed Henry at the White House.
President Obama has already got an action on the massive bank bailout we know that; the senate last week freeing up another $350 billion worth. Mr. Obama has promised to put more strings on it than the Bush administration did.
As for the money already spent, new outrage this week over Bank of America, Merrill Lynch and massive bonuses and executive spending like a million dollar makeover for a banker's office.
Joe Johns tonight is "Keeping them Honest."
JOE JOHNS, CNN CORRESPONDENT: Those pesky Wall Street bailouts. $20 billion here and $20 billion there, and suddenly you are talking about real money, your money in fact, used for a giant bailout that's now endangered two of the nation's biggest financial companies.
The Feds contributed $20 billion to help pay for the marriage of Bank of America, the nation's biggest bank, with the financially devastated Merrill Lynch, the nation's biggest brokerage. But then it turned out Merrill lost another $15 billion last quarter alone. And shareholders didn't find out until after the deal was done.
Now, Bank of America's stock has nose-dived. Stockholders are suing. And some are saying the federal government should have kept its nose out of the deal.
PETER MORICI, ECONOMIST, UNIVERSITY OF MARYLAND: Well, the Fed and Treasury wanted Bank of America to acquire Merrill Lynch to sustain stability and financial markets. What no one told Bank of America was just how sick Merrill Lynch really is, how large its losses would be and what kind of liabilities it would bring. JOHNS: On top of that, Merrill Lynch paid out $3 billion to $4 billion for early bonuses just before the merger. And Merrill Lynch's CEO reportedly sank $1.2 million into redecorating his office, including a $35,000 commode.
When Merrill's true financial picture started becoming clear and Bank of America started asking whether the merger was such a great idea, it went forward. But the Feds gave them another $20 billion plus $100 billion in loan guarantees. The bank explained on an investor conference call.
KEN LEWIS, CEO, BANK OF AMERICA: We just thought it was in the best interest of our company and our stockholders and the country to move forward with the original terms and the timing.
JOHNS: "Keeping them Honest," we asked former bank regulator Gary Townsend about it. He says it's clear the Feds were trying to avoid yet another big brokerage house failure that would further damage the global economy.
GARY TOWNSEND, FORMER BANK REGULATOR: The last thing that the government wanted was another catastrophe.
JOHNS: But economist Peter Morici says the government would have been better off if it had handled the problems at Merrill without making the deal.
MORICI: Merrill Lynch should have been fixed; it shouldn't have been forced into a shotgun marriage.
JOHNS: The Treasury Department told CNN it did not force the deal. That it was Bank of America that decided to acquire Merrill Lynch though there is little dispute that the government helped sweeten the deal. Treasury says rescuing the nation's financial system has always been the point of its bailouts.
COOPER: That was Joe Johns reporting. He's going to be joining us along with David Gergen and John Ridley after the break.
You can join the live chat happening now at AC360.com. Let us know what you think about all this bailout. Also check out Erica Hill's live web cast during the breaks tonight and send us your question for money guru, Suze Orman, also to AC360.com -- there she is standing by. We'll talk to her in a second.
Also ahead tonight, Sarah Palin looking for a book deal. Guess how many millions of dollars she believes her story of "maverickness" is worth. We'll tell coming up.
And later, the Travolta tragedy deepens; two suspects now in custody in a sad and bizarre alleged extortion plot. That and more tonight on "360." (COMMERCIAL BREAK)
COOPER: President Obama down in the White House press area getting a little testy and trying to keep a get-to-know you session from turning into a full-fledged Q and A.
And we on the other hand have a free rein here tonight. Let's talk strategy with senior political analyst David Gergen, John Ridley of National Public Radio and thatMinoritything.com and CNN's Joe Johns. Good evening, all.
David, President Obama has already issued a handful of executive orders now with leaders of both parties. Interesting meeting about it today where he said, I won, basically. What is your assessment of his first couple days in the office?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Anderson, it seems to me he is off to a very smart, smooth and almost flawless start. Reaching out today the way he did was -- goes far beyond the normal traditions. He is going to meet with the Republicans again next week.
But the questions remain about whether -- in fact I think they're growing about whether he can conquer the forces against him. I mean, the partisan divisions in Congress are now reappearing. California announced today that the unemployment rate there is at 9.3 percent, maybe heading over 11 percent this year. Analysts are saying that banks may be in line for losing another trillion dollars.
So there are huge questions about whether he can overcome what he faces. But overall, what he could do, he has done well.
COOPER: Joe, it's interesting when Republicans raised concerns about Obama's spending plan today he responded as Ed Henry said by saying, and I quote, "I won." Does that kind of bluntness, how do people respond to on Capitol Hill?
JOHNS: Well, the first thing I thought of was maybe it was a joke. People make jokes like that all the time. In politics, you laugh or whatever.
On the other hand, I'm sure there are people on Capitol Hill, particularly some of the old senate bulls have looked him straight in the face and said, "Hey, you have to be very direct and very firm with the Republicans or else you'll get rolled."
And there are a lot of people as well who also realize that any time in government when you go from a legislative job to an executive job there is sort of a learning curve. You stop making deals on Capitol Hill and then to use George Bush's term, you have to become a decider.
So that's something that Republicans are looking to him to do, to become that decider, to become that guy who is tough when he has to be. Otherwise, you know, they're going to try him. And he says he wants peace and good will and Kumbaya. And we'll just have to see how that works out on the Hill.
COOPER: John, how do you assess his first couple of days?
JOHN RIDLEY, NPR COMMENTATOR: I think it's been very good, I think they've been a couple a little non-traverses about whether or not he should have the media for the -- the do-over on the oath and things like that.
But what I'm impressed with is that he has been, as Joe said, the decider. When he signed his first bill basically closing the Guantanamo Bay or saying that it will be closed in the year, I think we said right after they close -- signed the bill he said let's do it, let's do this. And he's been doing it and been taking control over these first few days. It's impressive, I'm impressed.
AS David said, there's going to be a lot of dark clouds coming forward, but he's showing himself to be the President and I thing that's what people are looking for right now.
COOPER: David, what hasn't gone so smooth sailing in New York politics is the whole Caroline Kennedy kafuffle. Now, Kristen Gillibrand is going to replace Hillary Clinton in the senate, we learned that today. We've also learned she was apparently Secretary Clinton's preference for the job all along. Was this thing just handled badly?
GERGEN: I think it did, yes, it was handled badly both by the people around Caroline Kennedy and by some of the people frankly around Governor Paterson. When they started putting knives in her yesterday, that was most unattractive and I think overshadowed this appointment of this new senator today. And by all accounts, the new Senator is going to be strong. She is a centrist. She is NRA, she belongs to the NRA, but she's also the first New York senator ever who favors gay-marriage.
So she is an interesting choice for the Senate but it has been a real circus getting here, hasn't it?
COOPER: John, what do you think really --- do you think we will ever know what really happened?
RIDLEY: Do I think -- I don't know. I think there are a lot of rumors out there. I mean, my assessment is, look, Caroline Kennedy was someone who was a very, very private person. She probably got excited like a lot of people did, being around Barack Obama, feeling that need for change, real and idealized and coming out and finding out it's not easy.
You can't just walk into politics. I believe she just got tired of it and wanted to turn around, whether they are real issues in terms of some of the scandals that have been alleged. I think it is more of, is it worth it, putting herself and her family through all this public scrutiny to have this job.
And at the end of the day, no, it is not.
COOPER: Joe, one more question on the economic front. The Obama White House says they're going to vet spending more than the Bush administration did. But with this thing moving so fast, they want to get this thing going. How much vetting, how much examination is there really going to be if they are spending $200 million on re-sodding the Mall in Washington?
JOHNS: Yes, it's going to be real hard. And there are a lot of people in the Hill who are very concerned about that, particularly the way the TARP has been spent so far. Deep concerns on the right and the left and that is exactly what this President, Barack Obama, does not need.
He does not need that what I use to call when I covered the Hill "The Halloween Coalition" of Democrats on the far left and Republicans on the far right getting together for different reasons to ditch ideas that the President brings to the Hill.
So he has to work that out. And one of those ways is going to be to find some quick, sharp, clean accountability that everybody can live with.
COOPER: It's been a fascinating week --
GERGEN: Anderson --
COOPER: Yes, David just go ahead --
GERGEN: Yes, just a very brief footnote. What's been interesting is how much these symbolic mistakes really matter. When those automobile executives flew in on those jets, it just killed Detroit thing. And then, we have a million dollars spent on those office redecorating, that's a huge blow against TARP. And now, this thing about Capitol Hill and the grass, give me a break.
They cannot allow this kind of stuff to creep into bridges to nowhere to creep into this stimulus package.
COOPER: Yes, Joe Johns, David Gergen and John Ridley, thanks and have a good weekend. I hope you all get some sleep after this long week.
GERGEN: Thank you.
COOPER: A reminder, David Gergen is blogging for us. You can see his latest post sizing up Mr. Obama's first week on the job at AC360.com right now.
Up next, he promised to be tough on Al Qaeda and Pakistan. Now -- word of the first missiles strike of he new administration. Details on who was targeted ahead.
After that, Suze Orman taking your questions, talking about how to survive, maybe even prosper -- dare we say that -- in tough economic times.
And later, yet another strange appearance by Governor Rod Blagojevich, this time he's channeling cowboy movies and you wonder why we just can't quit him?
(BEGIN VIDEO CLIP)
PERVEZ MUSHARRAF, FORMER PAKISTAN PRESIDENT: Nobody in Pakistan is comfortable with strikes across the border; there is no doubt in that. Public opinion is very much against it but as far as this issue of the new President -- President Obama having taken over and this continuing. But I've always been saying that policies don't change with personalities. Policies have national interests and policies depend on an environment.
(END VIDEO CLIP)
COOPER: Pakistan's former President, Pervez Musharraf, reacting to the two missile strikes inside Pakistan that killed 17 people. The bombings the first under President Obama came as he ordered Gitmo closed.
Now, the Pentagon released new figures this month, claiming that 61 former detainees released from Gitmo are confirmed or suspected of, in their words and I quote, "returning to the fight."
Today, Al Qaeda released this video of a former Gitmo prisoner. They even labeled this man, Gitmo prisoner 372 on the video. They say he was released to Saudi Arabia and he has now become an Al Qaeda leader in Yemen, according to U.S. Intelligence. And U.S. Intelligence officials believe he was behind the deadly bombing of the U.S. Embassy there last September.
So it all leads to a question, is closing Gitmo a bad idea? Let's "Dig Deeper" with National Security Analyst, Peter Bergen.
Peter, when the Pentagon says 61 detainees have returned to the fight, what exactly do they mean by that?
PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, when you parse that statement a little bit, they say that 18 detainees have engaged in terrorism since they've released them. Some 36 are suspected of doing so.
But returning to the fight in Pentagon terms could be engaging in anti-American propaganda, something that's not entirely surprising if you have been locked up in a prison camp for several years without charge.
COOPER: So of the 61, they are talking about some of them have just said bad things about the United States?
BERGEN: That is right. And they haven't been very -- in May of 2008, they released a statement saying that 37 had engaged in terrorism. And they released a list of names, about a dozen names of people who had engaged in terrorism, half in places around the world, half in sort of anti-American activities.
So when you boil it down, the actual number of people whose names we know are about eight out of the 520 that have been released. So a little above one percent that we can actually say with certainty have engaged in anti-American terrorism or insurgents' activities since they've been released.
COOPER: This is important because the Pentagon is saying the recidivism rate is 11 percent, that 11 percent of the people who are held at Gitmo have now returned to terrorism or terrorist attacks or returned to the fight as they say. You're essentially saying that's just not the case?
BERGEN: Well, given the information they've released publicly, my calculation, it's more like one or two percent. If the Pentagon releases more information about specific people, I think it would be impossible to potentially agree with them. But right now, that information isn't out there.
COOPER: What's the recidivism rate of U.S. prisons? Do you know?
BERGEN: It's like 66 percent for people in American state prisons who re-offend within three years of being incarcerated with a serious crime, so American prisons re-offended at a very high rate. The Gitmo detainees from what we know have offended at very low rate.
COOPER: So a lot of the people who were actually put in Guantanamo, Donald Rumsfeld famously said they are the worst of the worst. That just wasn't true? I mean, a lot of them were just people who had been handed over? In fact, the majority were just handed over by folks in Afghanistan and who received their bounty for handing them over, right?
BERGEN: Indeed. I mean, the worst of the worst. I think that at this point we know that a lot of people in Guantanamo don't qualify as being the worst of the worst. Certainly there are people there, Khaled Sheik Mohammed, the operational commander of 9/11, who does qualify for that description.
But the 800 people or so who have gone through there, I would guess 60 of them might really qualify for the worst of the worst if you are being generous.
COOPER: 60 out of 800?
BERGEN: That would be my calculation.
COOPER: All right, Peter Bergen appreciate it. Peter, thanks very much.
Peter is also blogging for us. You can see his latest post on Guantanamo detainees by going to AC360.com.
Still ahead, the economy is tanking. How do you hold on to your money? Personal finance expert and bestselling author, Suze Orman, answering on your questions. Click on the link at AC360.com to get your question in.
Also tonight, selling Sasha and Malia: Michelle Obama drawing the line at dolls named after the first daughters. Can she stop them? Details ahead on "360."
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm looking forward to having conversations with all the leadership here about how even as we move quickly and aggressively on the recovery package, we are also starting to put in place the kinds of reform elements, oversight, transparency, accountability, that's going to be required in order for the American people to have confidence in what we are doing.
(END VIDEO CLIP)
COOPER: President Obama today, stepping up pressure on Congress to pass his economic recovery plan by mid-February. The urgency cannot be greater; the economic news could hardly be bleaker. We're talking about "Your Money, Your Future." All of that at stake.
Something personal finance expert, Suze Orman, knows better an almost better than almost anyone. Her new best-selling book is "Suze Orman's 2009 Action Plan: Keeping your money safe and sound." We've been posting questions for at AC360.com. She joins me now.
Suze good to have you on the program.
SUZE ORMAN, PERSONAL FINANCE EXPERT: Good evening, sir.
COOPER: So the President and lawmakers are jockeying over what the $825 billion stimulus package should be. What would you like to see them spend these billions of dollars on? What do you think would help consumers most?
ORMAN: I have to tell you, in my opinion nothing is going to recover until we can solve what is happening with the real estate problem here in the United States of America. When you add to that, the problem of unemployment, now we have real problems, Anderson, because unemployment, you don't have a job.
You don't have a job, you don't have a paycheck. You don't have a paycheck, you can't pay your mortgage. You can't pay your mortgage, more houses go into foreclosure.
So until we can solve that problem, we have serious problems. So I hope that they go back to the original TARP. Where what that money was supposed to be used for and can we just start dealing with these foreclosures and these mortgages that are under water.
COOPER: Yes, I knew in California, unemployment there is close to 10 percent, may grow up to 11 percent, at some point -- staggering numbers across the country. What would you advise for someone who loses their income but still has a 401(k)?
ORMAN: Well, if you have lost -- let's say you haven't lost your income. Let's say you've lost your job, which means you've lost your income. You have to understand that there are certain rules that apply to you depending on your age.
If you are 55 years of age or older in the year that you lost your job, be very careful about removing money from a 401(k). Because you can take any money out of your 401(k) without the 10 percent penalty if you are 55 or older in the year you've lost your job.
If you are younger and you are not going to be 55 or older in that year, do an IRA rollover because the diversification in a 401(k) is really very bleak. Do an IRA rollover at a discount brokerage firm where you can buy many types of investments that would make far more sense than what you could get in a 401(k).
COOPER: All right, I want to get to some of these emails right now. Lilibeth from Edmons, Washington writes, I told my friend about your advice to have an emergency fund that will cover eight to 12 months of expenses. When she heard this she couldn't believe it. She said she has two kids, and mortgages and other bills to pay and wanted to know how someone like her can save to have an emergency fund especially in this economy?
ORMAN: Well, you better cut your expenses, girlfriend, because here is the problem. If you lose your job, it's going to take you eight months to one year to get another job. We are at 7.2 percent unemployment nationally. You just said in California, we're at nine percent overall.
Where are you going to get a job? Therefore, you better have that money in order to sustain you so it's not how are you going to do it, how can you afford not to do it? You have got to figure out a way while you have income coming in to make sure that you are safe and sound in case you lose a job. You don't have to be wondering about how you are going to feed your children.
COOPER: Colleen from Little Rock asked, "I was wondering where you recommend I sell my old gold and silver jewelry? What do you think about those places you send gold to on TV commercials and on the Internet or do you recommend going to a jeweler locally?" Any suggestion?
ORMAN: I would go to the jeweler locally. I wouldn't send anything in the mail or on television. Are you kidding? Go where you see the person and have them weigh the gold, get the money. Leave the door.
Now is not a bad time. Gold is on a rise again here. We are almost at $900 an ounce. We might be coming close to a time that if you want to sell it, now might not be a bad time to do so.
COOPER: Another e-mail viewer, Peggy asks, is 62 years of age too old to purchase a home? I make $50,683 a year in salary. Is buying a home a smart move?
ORMAN: It is not much money you are making this year. How long are you going to make that money? Because if you buy a home now, you have to remember, chances are you are going to have a mortgage for 30 years. Not only do you have a mortgage, you have property taxes, insurance, maintenance. Homes are expensive. So, therefore, it is not, can you afford it this year? Can you afford it for many years to come? Once you buy a home today, chances are, if you turn around to sell it, you might not be able to sell it so quickly. You have to be able to hold it for at least three to five years or I wouldn't be buying a home right now.
COOPER: All right. We've got to take a short break. Suze is going to be taking more of your questions. Just ahead on "360." You can send them in at ac360.com
Also ahead tonight: Sarah Palin has described herself as the ultimate political outsider. But guess what. She has hired a high-powered Washington lawyer to sell her memoirs. Wait until you hear how much she is hoping to get.
Plus, as the first family starts to feel the heat of the public spotlight, Michelle Obama sends a strong message to back off when it comes to her daughters. What line was crossed and who crossed it? We'll tell you ahead.
COOPER: These numbers are as bad as they look. Unemployment at a 16- year high; expected to get worse. Last year's job losses, the highest since 1945.
We are back with personal finance expert, Suze Orman. Her new book is "Suze Orman's 2009 Action Plan, keeping your money safe and sound;" already a best seller. You have been posting questions for her on our blog. Let's get to some of them right now.
Faith wants to know about a CD about to mature. She asks, "My husband and I are about retirement age. We have a $60,000 CD coming due next week. What do we do with the money? Suze.
ORMAN: I have to tell you, if you are already in retirement age, I would not be entering the markets here. They are still too dangerous. They are going to go up and down. Why not just get yourself another CD. Be very careful, however, because remember, the $250,000 of FDIC insurance ends at the end of this year and goes back to $100,000, unless they have changed it.
Don't go be putting that money into a CD. Let's say you have $300,000 don't go locking it up past the end of this year if it is over $100,000 because, again, you could find yourself in trouble.
COOPER: All right, Carrie has a question about refinancing and she puts a lot of figures in this one. She says, "I have a 30-year fixed mortgage at 6.25 percent. I have a credit score of 780. Own my car, one credit card which I pay in full each month. No debt at all except for my mortgage, $250,000 in investments available to use, over $350,000 in 401(k), a salary of $40,000 a year. I was trying to refinance to get a lower interest rate I was declined because they said I did not have enough assets. Is this the norm now?
ORMAN: Well, it's the norm possibly at the bank that you went to, to get that loan. There are banks. This is the whole problem we are talking about. TARP -- we are giving money to the banks. The banks still aren't releasing it into the system. So people like this that should be qualifying for a loan, they are not getting a loan.
It may be that particular bank that you went to. I would be trying another bank if I were you. Sounds to me like you are doing just fine.
COOPER: Robyn writes, "My husband and myself at one time had about six months of emergency funds available. He lost his job for 20 months. I was able to keep us afloat. He has been working now for six months with a reduction in salary. I am having trouble getting savings built back up. I am having trouble building savings built back um. Should I reduce my 401(k) deduction and place the extra money in savings?"
ORMAN: Here's the thing. I would do that if I were you, I have always said -- I've been saying this for years now -- only contribute to your 401(k) plan up to the point of the match.
After that, you shouldn't be contributing anyway. Should you reduce it below the point of the match to save for savings? No, that you should not do. If you are contributing above the point of the match, stop it. And do that for savings. Otherwise, keep going just like you are.
COOPER: Here is a problem that a lot of viewers wish they had.
This is an anonymous viewer who writes, "I am a 50-year-old single woman who will be acquiring a great deal of money, $50 million in the near future. Other than hiring my fathers financial adviser and an attorney, what steps would you take in keeping the money safe? I am thinking of putting the majority of it in gold and a portion of it in income property? What are your views?"
ORMAN: Oh, well, that's just wise. Gold is one of the most speculative investments out there. Have you lost your mind?
This is what I want to remind you. You are never, ever to forget what happened with Bernie Madoff. So many people got taken by him who had $50 million, $100 million and so forth. So just because you have a lot of money doesn't mean you get to keep that money. You better get educated right now before you inherit that money. I would be looking into municipal bonds, general obligations bonds that are backed by the tax revenues of the state or the municipalities. In gold, I don't think so.
COOPER: Suze, how long do you think this is going to last? Someone the other day said it is going to get worst before it gets worst? When do you think it gets better?
ORMAN: Yes, well haven't I said this before? I think it's going to be bad for about two or three years and then we get on firm footing. And then it will be until 2015. I have said that now for the past year. Until I think there is hope restored throughout the entire United States. We are in serious difficulties, serious problems, even the president said, we are in a dire situation. You don't use the word dire if it's not dire. This isn't easy. We have banks, unemployment, real estate, everything going. People, be very, very careful here.
COOPER: Suze Orman, good to have you on as always. Thanks, Suze.
Up next, allegations of extortion; two suspects are in custody in the Bahamas for trying to profit allegedly from the death of John Travolta's son. We'll have the details.
And Illinois Governor Rod Blagojevich speaks out about the old west, stealing horses and hangings. It's a round-about explanation of why he is not getting a fair trial, in his words. One, frankly, we are still trying to understand.
(BEGIN VIDEO CLIP)
OBIE WILCHCOMBE, TRAVOLTA FAMILY FRIEND: John Travolta knew his son was a special child. He nurtured the relationship; he gave him love, demonstrated publicly at all times. We saw the pain and this weekend has been very difficult for the Travoltas. It is going to be a very difficult time.
(END VIDEO CLIP)
COOPER: Difficult time made much worse today by shocking new developments in the aftermath of 16-year-old Jett Travolta's death. An extortion plot uncovered as Bahamian police arrest two, including a local politician, in an alleged plot to extort millions from the Travolta family, a family still reeling from the loss of their son earlier this month.
Randi Kaye now has the latest in tonight's Crime and Punishment report.
RANDI KAYE, CNN CORRESPONDENT: Callous and cold hearted but police in the Bahamas say it is true. Bahamian police tell CNN they are investigating an attempt to extort money, possibly millions of dollars, from John Travolta and his wife, Kelly Preston, as they mourned their teenage son. Police would not confirm details of the alleged extortion plot.
16-year-old Jett Travolta died suddenly January 2nd while on vacation with his family in the Bahamas. He had a fatal seizure and struck his head on the bathtub. He'd suffered from seizures for years. Medication didn't help.
The Bahamian assistant police commissioner tells CNN they have two people in custody who are assisting them with the investigation. A source close to the investigation says the two are considered suspects. And a senior police official told reporters those in jail include a Bahamian senator and ambulance driver, Tarino Lightbourne. Lightbourne shared Jett's final moments with the tabloids including personal details about how John Travolta was crying and praying as he fought to save his son's life. He said Travolta performed CPR on his and cradled him in his arms after he died.
KAYE: Travolta's friend, former Bahamian minister of tourism, Obie Wilchcombe was reportedly also at the police station to help authorities determine what to charge the suspects with. After Jett's death, Wilchcombe told CNN, he escorted Travolta to the morgue.
WILCHCOMBE: His words were, "That is my son." Then, he asked for some moments, he and his wife, to spend with Jett. They stayed in the morgue for several hours.
LISA BLOOM, ANCHOR, "IN SESSION": It can be hard to prove because usually what we're talking about are words, words that are just uttered verbally. There may be different witnesses conflicting as to what those words were.
KAYE: the actors' lawyers did not return calls but reportedly told the newspaper, "Regrettably in a time of terrible grief, there are often a few individuals who attempt to make false claims in hopes of making millions of dollars. We will never let that happen."
Randi Kaye, CNN, New York.
COOPER: It's hard to believe.
Still to come, new drama when Illinois governor, Rod Blagojevich steps up to the mike.
But first, Erica's here with the "360 Bulletin" -- Erica.
HILL: Anderson, divers have now recovered the left engine of the US Airways plane that made an emergency landing in the Hudson last week. They used a crane to lift it out of the icy river, put it on a barge today which took it to New Jersey.
The Rwandan army has arrested Congo leader, Laurent NKunda, but it wasn't easy. He resisted arrest, fled and was even caught after he crossed the border into Rwanda. The UN now hopes that arrest will lead his rebel soldiers to join government forces and to put a halt to most of the fighting in the eastern Congo.
You knew she couldn't stay away long. The "L.A. Times" reporting Sarah Palin is now trying to get as much as $11 million for her memoir, you'll remember after the election. There were figures as high as $7 million. The Alaska governor and former GOP VP candidate is teaming up with the same lawyer that brokered book deals for President Obama, former president Bill Clinton and now secretary of state Hillary Clinton -- Anderson.
COOPER: Wow, $11 million, that's a lot. That's more than I think all those others got.
HILL: Indeed it is.
COOPER: Anyway, we'll see.
Now, Illinois governor, Rod Blagojevich -- there's a book deal in here somewhere. He has got the hair but not the timing. The Oscar nominations came out yesterday, he missed the cut. But what a performance today in a Western, no less. Facing an impeachment trial on Monday, the governor today railed against the proceedings by way of an extended metaphor; reaching all the way back to those thrilling days of yesteryear.
So watch with us as the Lone Ranger rides again.
(BEGIN VIDEO CLIP)
GOV. ROD BLAGOJEVICH, (D) ILLINOIS: I like old cowboy movies. I want to explain how these rules work in a more understandable way.
There was an old saying in the old West; there was a cowboy who was charged with stealing a horse in town. Some of the other cowboys, the especially the guy whose horse was stolen, were very unhappy with that guy. One of the cowboys said, let's hang him. The other cowboys said, before we hang him, let's first give him a fair trial and then we will hang him.
Under these rules, I'm not even getting a fair trial. They are just hanging me.
(END VIDEO CLIP)
COOPER: It gets better. Keep watching. Roll the tape.
(BEGIN VIDEO CLIP)
BLAGOJEVICH: If the cowboy who was charged with stealing a horse was charged with doing that in town, but in fact, on the date and time that he apparently stole the horse in town, he was on the ranch with six other cowboys herding cattle and roping steers. And then he expects when he his day comes, he can bring those cowboys to say it wasn't because he wasn't in town, he was on the ranch herding cattle. Even if he could bring those cowboys to say that, under these rules, under 8-B (ph) it wouldn't matter.
(END VIDEO CLIP)
COOPER: Now who was on the ranch? Anyway, I got lost in there.
Hanging day is Monday. Watching this in the office today, we kind of felt like we've seen this somewhere before. We couldn't remember where it was and then we remembered where: Robert Blake's impromptu press conference after being found not guilty of murder. Take a look.
(BEGIN VIDEO CLIP) ROBERT BLAKE, ACTOR: But before that, I'm going to go out and do a little cowboying. Do you know what that is? No, you don't know what that is. Cowboying is when you get in a motor home or a van or something like that and you just let the air blow in your hair. And you wind up in some little bar in Arizona someplace and you shoot one- handed nine ball with some 90-year-old Portuguese woman that beats the hell out of you.
(END VIDEO CLIP)
COOPER: One-handed nine ball with a one-legged (sic) Portuguese woman who beats the hell out of what?
HILL: You can only find them at a bar in Arizona. That's why you have to go there.
COOPER: Interestingly, Erica, the Blagojevich-Beretta connection doesn't end there. Take a look.
In fact, we may have found the origins of the Blagojevich hairstyle, bringing the '70s back, one governor at a time.
HILL: I like it.
COOPER: There you go.
Up next, the teddy wear was named after Teddy Roosevelt. Well, now there are dolls named after members of the Obama family. Michelle Obama understandably not happy about it, but can she do anything about it? Especially the dolls named after her kids.
And tonight's "Shot" from this morning's Regis and Kelly. I was sitting in for Regis and had to match wits with Kelly. I'm a Jeopardy champion but it didn't go so well for me. Not at all. In fact, it was rather embarrassing.
We will have all the gory details ahead.
COOPER: A knockoff of Michelle Obama's inaugural gown is already being sold on the Internet; it's almost to be expected. The First Lady has a style magnet back really on the campaign trail was when that happened.
But the maker of Beanie Babies is getting no slack from the White House. Take a look at his two newest dolls called Marvelous Malia and Sweet Sasha. That's what the company named them. The company insists the Obama's young daughters are not the inspiration.
Mrs. Obama, a Harvard Law School graduate is having none of it. Her spokesperson fired off a statement calling it inappropriate to use the Obama girls for marketing purposes.
As for Mrs. Obama she can't really expect privacy as First Lady, but is she in danger of becoming a different kind of fashion victim? Don Lemon is "Up Close."
DON LEMON, CNN ANCHOR, "NEWSROOM": Michelle Obama -- First Lady or the new "It" girl. Page after page of an Internet new search of her name, the first few hundred articles, all about her clothes. And a whole lot of Americans aren't happy about that obsession.
UNIDENTIFIED FEMALE: It's completely superficial.
UNIDENTIFIED FEMALE: I would like to see the media definitely emphasizing the community and cultural aspect of who she is.
LEMON: So why the focus on frills and fashion for a woman who has led a most substantial life? Princeton University, Harvard Law School and a resume that rivals her husband's?
First lady historian and author, Carl Anthony.
CARL ANTHONY, FIRST LADY HISTORIAN: I think it's the lack of balance which is dangerous because it's in the early days that that persona gets set. And oftentimes the media doesn't depart from that.
LEMON: However, if the White House is ready to roll out the serious side of Michelle Obama, it's hard to tell.
Let's call the first lady's press office.
UNIDENTIFIED FEMALE: You've reached Mrs. Bush's press office, please leave your name, number and a detailed message.
LEMON: Oops, a little update need.
White House spokesperson, Robert Gibbs, says so far, Mrs. Obama appears to be taking it all in stride, focusing first on making sure her daughters are settled into the White House.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I know the family's moved now three times in only a few weeks. If you know them and you know their family, they've had a routine for a long time. This is a monumental testament to Michelle.
LEMON: I'm sure the First Lady will get a new greeting on her answering machine soon. But right now the White House says that Mrs. Obama will have a very limited, if any, public schedule until she feels that her children have acclimated to school, living in Washington and the White House.
Don Lemon, CNN, Washington.
COOPER: Still ahead tonight: when will I learn? Every time I go on Regis & Kelly, I somehow end up as the punch line in our "Shot"? What did I do this time to deserve this? I did a lot. I made a lot of mistakes. That's next.
HILL: Anderson, you were a guest host on "Regis & Kelly" this morning. I love it when you do that, by the way.
COOPER: I'm pleased to do it.
HILL: For several reasons. The two of you competed on a quiz on germs which frankly didn't go very well for you. So for anyone who missed it, here's a quick look.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Kelly is right.
Anderson, b, Kelly is right again.
Kelly is right again.
Kelly is killing you.
(END VIDEO CLIP)
HILL: Killing may be an understatement. She mopped the floor with you, my friend.
COOPER: She destroyed me. She destroyed me. They claim a dog's paws are cleaner than a woman's hands. I don't -- I still don't believe it. I can't get over that one.
HILL: Yes, I can see you were upset about that. You did tie on one answer, I think. Frankly, for a Jeopardy champion, I thought you would have done a little bit better.
Here's the good news. You have a chance to redeem yourself. A couple more questions from the very same doctor who put together those. And here to quiz you or participate in the quiz again, I believe we have Kelly Ripa on the phone?
Kelly are you there?
KELLY RIPA, HOST, "REGIS & KELLY": Hi, Erica, hi, Anderson.
COOPER: Hi, Kelly.
HILL: Thanks for calling in, we appreciate it.
RIPA: Oh, my gosh, it is my thrill and pleasure as somebody who's beaten a Jeopardy champion.
HILL: Well, let's see if you can do it again.
RIPA: Ok, I will try my hardest.
HILL: Here are the questions. Number one -- I feel like we need music. If food is fallen on the floor, you may safely eat it if it has been, a, less than five seconds, b, less than 15, c, less than 30, or d, it's not safe no matter how long it's been on the floor.
RIPA: C, less than 30.
COOPER: I'll say D.
HILL: Anderson, you're right.
Kelly, I didn't give him the answer.
COOPER: I'm coming back.
RIPA: I totally disagree with that.
HILL: That's because you're a mother. It's easier to just feed them the food anyway.
RIPA: It's so much easier.
COOPER: All right, so that's one for me.
HILL: One down, two more to go. What's the germiest surface in your house? The toilet seat, the kitchen sink or the living room floor.
We'll let Kelly go first.
RIPA: I'm going to say the kitchen sink.
COOPER: I agree with Kelly on that one, the kitchen sink.
HILL: You are both correct. Excellent work.
Finally, is it better to, a, wash your hands and then dry them on your pants, or, b, not wash your hands at all? Anderson?
It's a tough one, isn't it? You're thinking, how dirty are the pants?
COOPER: It's a trick and I'm overthinking which was what killed me this morning. I'm going to say A.
RIPA: I'm really -- I'm not sure. So I'm going to just oppose Anderson and say B.
HILL: Well, Anderson Cooper, you were right; 2-1. Kelly, I think it was nice of you to let him win by the way.
RIPA: Listen, sometimes we all have to take a fall like those nice people did on Jeopardy when they played against Anderson.
COOPER: The sad thing is, you were so ahead of me this morning that you still beat me even if I came back tonight. HILL: The other thing that's sad is that Kelly Ripa sadly will not be winning this. It's not Wolf Blitzer bookmark. But I had a Lou Dobbs made. He actually comes with chopsticks on the back so you can sort of make them walk around your desk.
RIPA: Is that really true. I'm traveling this weekend. I'm taking Wolf Blitzer with me everywhere I go and photographing him in odd positions.
HILL: Wolf will love that. You know, we put it on the show today. You scored big points with him, Kelly.
RIPA: Oh, my gosh. Does David Gergen ever ask for me? That's what I want to know.
HILL: We can't shut him up about you.
COOPER: You like Gergen? I don't know why I'm stuttering now.
RIPA: I love me some Gergen. You know how I feel.
HILL: Are you a little jealous that she wants to know about the Gergenator?
COOPER: I'm just tired. I was beaten so bad this morning it's been hanging over me all day.
RIPA: Anderson absorbs his germs through his skin. Be very careful when you're around him.
HILL: I'll stay far away. Kelly thanks again. Have a great weekend.
COOPER: Hey have a great weekend. Thanks.
RIPA: Thank you, guys.
COOPER: Thanks Kelly.
HILL: Hard to top that, isn't it?
COOPER: That was funny.
HILL: What do you think? Maybe some "Beat 360" winners?
COOPER: Let's do that.
HILL: Let's continue the trend.
COOPER: Our daily challenge to viewers to come up with a caption better than the one that we can come up with. Here's the picture. Take a look at the picture, shall we? It's -- it's this year's International Circus Festival in Monte Carlo. But we don't need to tell you that, Wolfgang Lauenberger (ph) and his team of nine dogs are apparently a crowd favorite. We can see why.
Our staff winner tonight, Joey, his caption: Fido tries to cut in during one of the --
HILL: Just read the screen --
COOPER: I can't even read it. I feel so bad.
HILL: No, I meant the people at home. It's been too long of a week for you.
There you go, Joey won --
COOPER: Fido tries to cut in during the one of official inaugural doggy balls (because he can). All right.
Our viewer winner is Ryan from Los Angeles. His caption, "These dogs are competing in the new reality show, 'Who Wants to be the White House Dog?'" Ryan your "Beat 360" t-shirt is on the way. Congratulations.
That does it for "360." Thanks for watching. Have a great weekend.
"Larry King" starts right now.