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ANDERSON COOPER 360 DEGREES
President Obama Chooses Republican For Commerce; President Pushes Stimulus Package
Aired February 2, 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: breaking news on President Obama's team, taxes, your money, and your future. He picks another Republican for his Cabinet. The Senate confirms the first African- American attorney general -- and new details of the tax troubles facing his choice to reform the nation's health care system -- all of this with the president meeting tonight with House and Senate Democrats at the White House, trying to figure out how to get more bipartisan support for his stimulus plan.
Ed Henry has all the breaking news at the White House -- Ed.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Anderson, as you mentioned, history made tonight -- Eric Holder confirmed as the nation's first African-American attorney general, that vote 75-21 in the Senate, overwhelming.
Meanwhile, senior officials here confirming to me that, tomorrow, the president will unveil a new commerce secretary, after a search that lasted several weeks. It will be Republican Senator Judd Gregg, the third person in the Obama Cabinet with Republican ties.
But this is important. Democratic hopes of getting Gregg's replacement to be a Democrat, so they might have 60 Senate Democrats, have a filibuster-proof majority, those hopes tonight have been dashed -- sources in New Hampshire telling our John King that there was a deal worked out in which Senator Gregg got a guarantee that the Democratic governor, Mr. Lynch, will basically appoint a Republican, Bonnie Newman, a former Gregg aide, to replace him in the Senate.
So, Democrats will not get that filibuster-proof majority. Meanwhile, Judd Gregg now poised to become a key economic adviser for this president. His bipartisanship in the Senate could be a big help for the president who right now is facing an uphill battle with his recovery plan.
HENRY (voice-over): The president rolled out an endorsement for his economic plan from Jim Douglas, Vermont's Republican governor.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What we can't do is let very modest differences get in the way of the overall package moving forward swiftly.
HENRY: But governors don't get a vote in the U.S. Senate. And Republicans there have two major problems with the stimulus package -- the first, they want more aid to homeowners.
SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: We believe, Republicans, that a stimulus bill must fix the main problem first, and that's housing. That's how all of this began. We think you ought to go right at housing first.
HENRY: White House spokesman Robert Gibbs said the president wants to deal with the foreclosure crisis in a separate package.
The second sticking point is so-called pork spending. So, Senate Democrats are dropping controversial provisions: $400 million for sexually transmitted disease prevention, $75 million for anti-smoking programs. Nevertheless, the president is getting static from some conservative Democrats.
SEN. BEN NELSON (D), NEBRASKA: There's an awful lot of spending in it that I think is questionable, marginally supportive of -- stimulative for jobs.
HENRY: The president called Democratic leaders to the White House for a status report. They left without talking to the TV cameras, sometimes a sign the meeting didn't go well. Democratic officials insist everything's fine, but there are now questions about how many jobs Mr. Obama is promising to create.
OBAMA: I have already directed my economic team to come up with an economic recovery plan that will mean 2.5 million more jobs by January of 2011.
HENRY: That was during the transition, 2.5 million jobs in two years. By his first weekend in office, the president jacked up the number of jobs to four million, but got squishy on the time frame.
OBAMA: It's a plan that will save or create three to four million jobs over the next few years.
HENRY: Then, this weekend, the president seemed to move the goalposts again.
OBAMA: This week, the House passed the American Recovery and Reinvestment Plan, which will save our create more than three million jobs over the next few years.
HENRY: But White House aides insist, the number is still up to four million jobs.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: I will go back and look at it, for purposes of this event, three to four million jobs saved or created. Again...
HENRY (on camera): Over two years, or...
GIBBS: Yes. I mean, we -- I will go back and we will clarify what all the different numbers are. But the bottom line is this. You have got a piece of legislation that creates jobs, you know?
HENRY (voice-over): But Republicans are now wondering whether the president has been hedging a little to scale back expectations.
OBAMA: Hello, everybody.
HENRY: And it was a dramatic day for another pick, Tom Daschle, whose nomination to be health secretary is now in some peril because of his failure originally to pay more than $100,000 in taxes.
Daschle went behind closed doors on the Hill this evening, passionately tried to make his case, plead his case for this job. He emerged very emotional, with various Democratic senators behind him supporting him. And, more importantly, this morning, the president, here in the Oval Office, said he absolutely is standing behind Tom Daschle for this job.
We have just gotten word in the last few moments, in fact, the Senate Finance Committee has now scheduled a hearing, a confirmation hearing, for Tom Daschle next Tuesday, so progress on that nomination, but he's still not out of the woods yet -- Anderson.
COOPER: You know, it's interesting. Ed, you hear the president. He says, there are just minor differences between Republicans and Democrats in the Senate bill. But then you hear from conservative Democrats in -- in your package and also from a lot of Republicans, and they seem to say there are fundamental differences.
It seems like, especially in the Senate now, it's going to be a tough road ahead. This president has started making sure that some of his Democratic colleagues are stripping out some of these spending provisions. But there are still a whole list of spending projects that Republicans are not happy with. They still want to try to tinker with the tax cuts.
And, as we mentioned, a lot of Republicans now want to try to deal with the foreclosure crisis in this package. That's a fundamental difference with this White House. They want to do it with a second financial rescue package in the middle of the month that's going to be hundreds of billions of more dollars. So, all of this is colliding, and it's an uphill battle right now for this president -- Anderson.
COOPER: All right, not what was expected, I guess, earlier on.
Ed Henry, at the White House, thanks.
President Obama wants a bill signed by President's Day, two weeks from now, slower than he had planned, but practically warp speed for Washington. Just to underscore the urgency, more jobs cuts today, Macy's today announcing 7,000 layoffs, Chrysler offering buyouts to all blue-collar workers, construction spending down for a third straight month -- more reason, said the administration, to get a move on.
But, first they have to face some very real and very "Raw Politics."
Here's Candy Crowley.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): There is possibility.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You and I together will change this country, will change the world.
(CHEERING AND APPLAUSE)
CROWLEY: And there is governance, re: the stimulus plan.
OBAMA: there are still some differences between Democrats and Republicans on the Hill between the White House and some of the products that -- that's been discussed on the Hill.
CROWLEY: The balance of power, executive vs. legislative, does not lend itself to speed. But with Democrats in control of Congress and the White House, it will be a happy conclusion for the new president, eventually.
JENNIFER DUFFY, MANAGING EDITOR, "THE COOK POLITICAL REPORT": So, it probably won't be quite on schedule. But my guess is that they will have a bill that -- that Obama can claim credit for.
CROWLEY: Lawmaking is tricky business, with each end of Pennsylvania Avenue confident and protective of its powers. That's why the White House approaches the House-written, House-passed stimulus bill so inscrutably.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: The president is pleased with the package that passed the House.
CROWLEY: Actually, that would be kind of pleased.
GIBBS: Undoubtedly, that package will be strengthened and changed some through the process.
CROWLEY: There is little public cajoling, but sources say that, on the phone and behind closed doors, the Obama team is urging Senate Democrats to -- quote -- "narrow the target," remove some of the spending that critics say won't stimulate the economy, and add more infrastructure, jobs-producing public works projects, like roads and bridges.
After a Senate vote, a conference committee takes the House and the Senate bills to make it one bill. This is the stage where the White House often weighs in on what it must have and what it must have out.
The president told NBC, that's where he thinks he can pick up bipartisan support.
(BEGIN VIDEO CLIP, "THE TODAY SHOW")
OBAMA: We are going to see substantial support. And people are going to say, this is a serious effort.
(END VIDEO CLIP)
CROWLEY: Even as the White House quietly pushes the Senate, it is calling reinforcements to the line. That massive list of Obama voters has turned into a lobbying/reelection tool.
This week, the Democratic National Committee sent an e-mail from the president urging supporters to hold economic recovery house meetings to learn and talk about the plan.
And that gets to why, in the end, President Obama will get most of what he wants, if not when he wanted it.
DUFFY: A president's power is derived largely through their popularity. So, as long as voters are happy and believe he is powerful, then he is.
CROWLEY: Right now, in the balance of power, the president has more.
COOPER: Candy, so, he's dealing with Republicans, he's also dealing with Democrats, both, on this issue. Do we have any indication of how he's playing this? I mean, does he end up playing hardball with both sides?
CROWLEY: I mean, he certainly can. Nobody gets to be president of the United States without knowing how to do that.
And we have seen, for instances, when he has. When he went up to get the second $350 billion of the rescue package, he said to the Senate Democrats, listen, if you don't give it to me, I'm just going to veto your bill, and I will win.
When he was with Senate -- House Republicans, I believe, and they objected to a tax cut that he had, he said, well, you know, I won, so I'm going to have to overrule you.
So, there are some reminders about who the president of the United States is. I think that one assumes that the president doesn't play hardball, because he has sort of a laid-back personality. But, inside those meetings, I think he makes it pretty clear what he will do if he doesn't get some of the things that he's intent on giving.
COOPER: All right. Fascinating. Candy, thanks.
A quick program note: I'm going to be signature down with President Obama at the White House tomorrow. You will see the full interview tomorrow night on 360.
Up next: What's going to happen with the stimulus? David Gergen, Gloria Borger, and John Ridley weigh in.
In a moment, you, too, can also weigh in. Right now, join the live chat at AC360.com. And, as always, check out Erica Hill's live Webcast during our commercial breaks.
Also tonight, bailed-out banks aren't just giving them big bonuses. They're also throwing big parties. Did you hear about the five-day big-bucks Super Bowl party? Guess who sponsored it? Bank of America. You know, as in the bank that's getting $45 billion of your money because of all the bone-headed choices they made? So, is this another one? We're "Keeping Them Honest" tonight.
And, later, Olympic legend Michael Phelps apologizing to his fans for smoking pot. The question now, how will his sponsors take it once the smoke clears?
And the latest on the octuplets, what we're learning -- and it is potentially heartbreaking -- about the woman who gave birth to eight babies, with six other kids at home -- that and more tonight on 360.
(BEGIN VIDEO CLIP)
OBAMA: I heard from Republicans and Democrats the need for action -- and swift action. And that's what we have been trying to do in moving this package forward.
(END VIDEO CLIP)
COOPER: As we follow breaking news, another Cabinet appointment, again a Republican, Judd Gregg for commerce secretary, President Obama today minimizing the partisan differences on how to fix the economy, naming another Republican to his team in a deal that preserves a GOP seat in the Senate, pushing Democrats to do what it takes to get the job done.
Now, he's trying to do the soft sell to get votes, while the Democratic Party is running attack ads in local markets across the country targeting Republicans for digging in their heels.
We're talking strategy now with senior political analysts David Gergen and Gloria Borger, along with National Public Radio commentator John Ridley, founding editor of thatminoritything.com.
David, what do you make of this? Is President Obama in a better position this week, or are they -- are they kind of backsliding on the stimulus?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I think they're backsliding some. I did not agree with Ed Henry's assessment that he has an uphill battle.
GERGEN: I did not. I think Candy Crowley was closer to the mark, saying, he's very likely to get this. The -- he -- the -- the crisis is urgent. And he has a lot of popular support. So, I think he has the presidential authority, the clout, so to speak, to get this done.
I do think, Anderson, the time has come for some tough choices on his part. He has got to be -- if he wants to get Republicans, he's going to have to cut some things out of this package at the -- in the Senate. He's going to have to tell the House Democrats, I'm sorry, we're going to jettison this and jettison that in the interest of getting a bipartisan package. And, by the way, I need -- I have got a couple loose conservative Democrats I need to get, too, and we have got to jettison some of this.
I do not think he can get there by just simply adding on and getting the bill up above $900 billion.
COOPER: Gloria, have House Democrats done him a disservice by -- Claire McCaskill, I think, gave an interview Friday, you know, essentially saying that they made it easy for Republicans to throw stones at this thing by putting in, you know, funding for -- for a variety of things, the -- resodding the -- the National Mall, et cetera?
GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Right.
I think -- I think she's right. In a way, I would say that the Republicans have won the spin wars on this, if you will, because they have been able to cherry-pick things out of the bill passed -- passed by House Democrats that they say are more sort of social and cultural reengineering.
You know, you have had eight years of pent-up demand among House Democrats, who want to really add programs back that they haven't been able to -- to fund in years and years, and this is a way for them to do it.
And it's given the Republicans an opportunity to say, look, we don't want to fund contraception, which was pulled out of the House bill, and the -- the other measures that Ed Henry spoke about. So, I think Claire McCaskill is right.
I think the president has to decide now. He's going to have to take a side, and he's going to have to tell those House Democrats no on certain things. And we're -- it's going to be very interesting, because we're going to have to see where the president stands on the specifics.
John, it's interesting. As we heard, Democrats dropped two provisions in the bill, funding for HIV prevention, also recently just anti-smoking initiatives, which Republicans had taken issue with, among other things, except there's still a long list of items that the Republicans say are wasteful spending.
How much do you think the president is going to have to concede to them?
JOHN RIDLEY, COMMENTATOR, NATIONAL PUBLIC RADIO: I think he's going to have to concede a good deal.
But, in a way, I'm not sure that concede is the right word. There is a lot of not necessary, not immediately necessary, spending in this package.
But the reality is -- and I think Gloria hit a very good point in what she said, but Obama needs the Democrats more than he needs the Republicans. You can see that in the House vote. He didn't get a single vote. The fact is that there were some tax incentives and tax breaks that were in there that Republicans wanted, but they still didn't give him a single vote.
The reality is, Obama wants to get this through. He wants to get this signed. So, don't worry about the Republicans now. When it gets to the Senate, as it is now, it's a smaller group, a more collegial group. You can see some of the conservative Democrats, which I think Obama will pay attention to, this bill is going to start to take some real shape and some real form.
But, right now, the Democrats matter a little bit more.
BORGER: But I would argue he wants to get it through in a certain way, because he came to Washington to change the tone.
BORGER: And whether that means he gets 10 Republican votes in the Senate or 30 Republican votes in the House -- when Bill Clinton passed his first budget in 1993, he had to do it all alone with Democrats. And that set a very partisan tone in Washington.
COOPER: So, David, well, if that's true, then why -- why did he let it get this far? I mean, if he -- if he -- if he knew that there were things in this which were clearly just kind of giveaways to special interest groups, why let it get that far in the House?
GERGEN: I think, Anderson, that they found that, in order to get Nancy Pelosi and her team on board, they had to concede or allow certain things to get in the bill that, ideally, they would not have put in their themselves. And they have...
COOPER: So, he doesn't have the power to just tell Nancy Pelosi, look, you know...
GERGEN: I think that they always felt they would work it out as the process went along.
They wanted to get a big thumping victory in the House, which they got, and then work this out in the -- in the Senate and in the conference. They -- they would scrub the bill, so to speak.
But I think Gloria makes a -- a very good point. And that is, in the process of doing this, they have -- they have sort of lost the so- called spin war. I think the Republicans have cherry-picked. And I think one of the reasons he's asked to see you tomorrow, and others in the press...
COOPER: There were others as well.
GERGEN: ... is that he wants to go on the offensive in trying to help people understand why the overall package is still a good idea and why it's urgent.
In other words, he wants to rally the country behind him through that.
BORGER: And, remember -- and, remember, early on, Anderson, when -- when some of his financial folks had to go up and meet with Democrats a couple of times, because I believe that the original idea for their plan that they came up with was a little more bare-bones than what the House had in mind.
GERGEN: It was.
BORGER: And then the House added on a bunch of stuff to this.
Now, you could argue, at some point, maybe he should have negotiated with the Democrats. They probably figured they would rather wait and do it down the line.
COOPER: David, go ahead.
GERGEN: I was going to say, there is, at base now, a growing argument about whether, in trying to do two things at once, he went one too far.
And that is, he's trying to stimulate immediately, but he's also trying to do all these -- get started on all these long-term plans, like, you know, rebuilding schools and doing the energy grid and that sort of thing. And, increasingly, the argument is, why don't you focus on the stimulus and do the rest later?
I think he will get most of his long-range stuff. But that's the pressure he's now under.
COOPER: John, if the vote in the Senate turns out to be like the vote in the House, what do you think that does, moving forward, for this president?
RIDLEY: Well, I just think it's a little more difficult if it's almost a partisan -- partisan vote in the Senate, because, again, you see the senators trying to work together, and they're trying to work this out, and -- and form this bill a little bit more.
Again, I think, with the House, it was just get it through. But this -- as David said, this is where the scrub begins. If it doesn't work out here, it could still go through. But I do think, then Obama looks like he really cannot get these folks to work together, even if he gets what he wants, moving forward.
BORGER: And -- and let -- and let me add that it's also risky on the Republican side a little bit, because, if there are no Republican votes for any kind of a stimulus package, and a year or so going down the line, the stimulus package actually works, then Barack Obama will get all the credit, and the Democrats will get the credit, and people will say, where were the Republicans?
So, this isn't without risk for the Republicans.
COOPER: We have got to leave it there.
Gloria Borger, John Roberts, David Gergen, thank you. Appreciate it.
Coming up; Why did a bailed-out bank spend millions on a five- day fiesta at the Super Bowl? The explanation and some outrage ahead. We're "Keeping Them Honest."
Also, the world's fastest swimmer trips up outside the pool -- Michael Phelps caught on camera smoking pot. He says he's sorry, but what are his deep-pocket sponsors saying? Find out tonight.
And Michelle Obama's first solo appearance as first lady -- find out where she went and what she sees as her role in the new White House.
(BEGIN VIDEO CLIP, OCTOBER 14, 2008)
HENRY PAULSON, FORMER U.S. TREASURY SECRETARY: Today, we are taking decisive actions to protect the U.S. economy. We regret having to take these actions. Today's actions are not what we ever wanted to do, but today's actions are what we must do to restore confidence in our financial system.
(END VIDEO CLIP)
COOPER: That was back in October. It seems like a million years ago, former Treasury Secretary Henry Paulson back in October talking about the massive bailout package Congress had just approved, billions of your tax dollars, money intended to be emergency first aid for banks in danger of flatlining.
But some of those big banks that gladly accepted your tax dollars still do not seem to get it. And it's not just big bonuses that we're talking about. Bank of America, for instance, just held a supersized Super Bowl event.
Tom Foreman tonight is "Keeping Them Honest."
TOM FOREMAN, CNN CORRESPONDENT (voice-over): Even before the players hit the field, taxpayer watchdogs were crying foul over a massive Super Bowl event.
(BEGIN VIDEO CLIP)
ANNOUNCER: The NFL Experience presented by Bank of America is coming to Raymond James Stadium.
(END VIDEO CLIP)
FOREMAN: That's right, Bank of America, the same bank that bought Merrill Lynch and received 45 billion of your tax dollars just to stay afloat, sponsored this five-day celebration of football just outside the stadium.
TOM SCHATZ, PRESIDENT, CITIZENS AGAINST GOVERNMENT WASTE: It shows that the bank doesn't get it. They're out there sponsoring the Super Bowl, and they're not spending the taxpayers' money properly. There's no accountability. There's no transparency. And nobody knows if it's worthwhile.
FOREMAN: Bank of America insists, it was worthwhile to back this event.
UNIDENTIFIED MALE: You took a couple spills.
UNIDENTIFIED MALE: Well, that's how it is in football.
FOREMAN: Sure, the program was aimed at kids, but, by promoting things like credit cards to their parents, Bank of America expects to take in $10 for every $1 spent on this sponsorship.
Bank officials say they made this deal months ago. They did not use bailout money for it. And, in any case, they have got to take part in revenue-raising events if they are to pay back taxpayers. It's also the official bank of baseball and NASCAR.
(on camera): Still, "Keeping Them Honest," Bank of America will not say how much the whole package cost. We do know it is in addition to the existing $10 million sponsorship deal they have with the NFL.
(voice-over): So, even amid the celebration, some lawmakers are not very happy, suggesting this sponsorship was at least a bad play at a sensitive time.
Tom Foreman, CNN, Washington.
(END VIDEOTAPE) COOPER: Just ahead: an update on a story that stunned a city -- a man assaulted in broad daylight in front of a grocery store -- it was all captured on camera -- then left lying on the sidewalk, ignored for 20 minutes by everyone who passed by. We have new details coming up.
Also ahead: After giving birth to octuplets, a California woman sets her sights on fame and fortune. She's she's hired an agent -- all the new developments just ahead.
Plus: the X-rated surprise that some Super Bowl viewers got yesterday. Were you one of them? How did porn make it onto the screen in the middle of the game?
We will be right back.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, WIFE OF SENATOR BARACK OBAMA: I am a product of your work. I wouldn't be here if it weren't for the public schools that nurtured me and helped me along.
(END VIDEO CLIP)
COOPER: Michelle Obama today speaking out at a meet-and greet, her first solo public appearance as first lady.
Coming up, what did today's visit say about the role she may play in the White House?
First, Erica Hill joins us with a 360 bulletin -- Erica.
ERICA HILL, CNN CORRESPONDENT: Anderson, at the State Department, Secretary Hillary Clinton taking the oath of office again today, a ceremonial swearing-in. The official oath, of course, was administered last month.
She -- Joe -- Vice President Joe Biden on hand to administer that symbolic oath in front of a room full of VIPs and, as you can see, former President Clinton and her daughter, Chelsea.
The State Department today, by the way, warning of continuing terror threats against Americans worldwide, saying al Qaeda and its affiliates continue to plan attacks against U.S. interests -- now, the warning comes the same day an American U.N. official was kidnapped in Pakistan in a brazen daylight attack.
This video of a beating caught on a surveillance camera, we're learning, has died. This video shows what happened after the man was attacked in broad daylight in downtown Washington. It's -- it's really disturbing. Nothing happened. The man actually laid on that sidewalk for 20 minutes before anyone even called for help. There are two suspects now in custody. President Obama today calling Iraq's president and prime minister to congratulate them on this weekend's generally peaceful provincial elections. More than half of Iraq's nearly 15 million registered voters turned out. Prime Minister al-Maliki and several secular parties appear to have made gains. Preliminary results are expected this week -- Anderson.
COOPER: All right, Erica, time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption for a photo that we put on our blog, a caption better than one that we can come up with.
So let's take a look at the photo. As Erica just told us, secretary of state there, Hillary Clinton, with Vice President Joe Biden, just before she repeated the oath of office again today, this time publicly at the State Department. Former President Bill Clinton and Chelsea Clinton, of course, looking on.
Our staff winner tonight, Candy Crowley, no less. Her caption: "You know that whole, 'I could have been secretary of state thing?' Just joking."
(SOUND EFFECT: LAUGHTER)
HILL: I liked it. That's really good.
COOPER: And our viewer winner is Charles in Harbor Springs, Michigan. His caption: "Hey, Bill, would you say that Michael Phelps is inhaling?"
COOPER: Yes. He doesn't forget, Charles. Charles, your "Beat 360" T-shirt is on the way.
Up next, we'll talk about Michael Phelps, caught smoking pot. What happens when the smoke clears, though, and the flames die down? What are Michael Phelps' sponsors saying? We'll tell you.
And we're learning much more about the mother of the now-famous octuplets. She's planning her media debut and wants to make a lot of money. The details in our 360 follow-up, coming up.
And at the top of the hour, breaking news in the Obama administration. The president naming his pick for commerce secretary. And the first African-American attorney general is confirmed. We'll bring it all to you.
(BEGIN VIDEO CLIP) MICHAEL PHELPS, OLYMPIAN GOLD MEDALIST: This has been an amazing four years. I went through ups and downs, through, you know, broken bones. I've had by no means the perfect four years. But, you know, I was able to get everything done that I wanted to do.
(END VIDEO CLIP)
COOPER: It certainly was. At Beijing, Michael Phelps walked away with a record eight gold medals. He became a global brand with millions pouring in, in endorsements.
Tonight, his value as a brand may be in jeopardy. The 23-year- old swimmer, one photograph has surfaced showing him smoking pot. Phelps says it will not happen again.
It's not the first time, though, he's had to apologize for inappropriate behavior. But this time the picture and the story have been seen around the world.
Gary Tuchman has the latest.
GARY TUCHMAN, CNN CORRESPONDENT (voice-over): Michael Phelps excels at swimming. But he's getting pretty good at apologizing, too.
PHELPS: I have already learned from this experience. I will pass this along to others who even think about making the same mistake that I made.
G. TUCHMAN: That was Phelps' comment four years ago after being arrested for driving under the influence in Salisbury, Maryland. And now, after being photographed inhaling into a marijuana pipe, reportedly this past November, he's asking for forgiveness again.
"I am sorry. I promise my fans and the public it will not happen again."
One group of fans paying especially close attention: his sponsors, who are making him a very rich man.
ROBERT TUCHMAN, SPORTS MARKETER: For a typical appearance for Michael Phelps to appear for a couple hours at a cocktail party or a trade show, you were looking upwards of $175,000 to $200,000.
G. TUCHMAN: Robert Tuchman is an expert in the athletic endorsement field. He matches his corporate clients with the appropriate athlete.
R. TUCHMAN: Right now I certainly wouldn't be advising clients to -- to get in bed with him and get involved with him. I think that, you know, really they have to kind of wait and see, as well. Just like clients who are already involved with him are kind of doing right now, as well.
G. TUCHMAN: Controversies for celebrity athletes come in many different varieties. The Los Angeles Lakers' Kobe Bryant lost most of his endorsements after being charged with sexually assaulting a hotel employee.
KOBE BRYANT, LOS ANGELES LAKERS: I didn't force her to do anything against her will. I'm innocent.
G. TUCHMAN: The case was dropped after a settlement. And though Bryant is again a top level endorser, he hasn't climbed back to where he was before the scandal.
Michael Phelps' current sponsors are so far staying put, and some have come out with statements, Speedo swimwear saying, "We will do all that we can to support him and his family." And Omega watch makers exclaiming it remains "strongly committed" to the swimmer.
Experts agree that the brand of Michael Phelps will certainly rise as we get closer to the 2012 summer Olympics, where he's expected to compete, provided he doesn't have to take a dip in the apology pool once again.
Gary Tuchman, CNN, Atlanta.
COOPER: Well, a lot of people weighing in on the blog about this. Join in. The live chat happening now at AC360.com.
Up next, the latest on the controversial mother of newborn octuplets. Did the single mom, who now has 14 kids in all, do it for fame and fortune? Wait until you hear the job she's looking for. And we'll dig deeper on the subject with Dr. Sanjay Gupta about how the babies are doing.
And later, the first lady begins to take charge. Michelle Obama, her first public event today on her own. What causes will she champion? Find out tonight.
COOPER: One week ago tonight, an event that got worldwide attention. A single mom in Southern California who'd already had six kids gave birth to octuplets. Dr. Sanjay Gupta is going to join us in a moment to talk about their condition, or what we know about it.
But first, a growing concern and controversy over their mom. Tonight, a ton of new information to tell you. She's hired a PR firm, a public relations firm, and is looking to sell her story for millions, apparently. She's also said to be considering a career as a TV expert on child care.
Randi Kaye has the 360 follow.
RANDI KAYE, CNN CORRESPONDENT (voice-over): She may turn out to be the ultimate working mother. With 14 children all under the age of 8, the California octuplets' mom now wants a job. Not just any job, but a career as a child-care expert on television. This public relations CEO says, not so fast.
RON TOROSSIAN, CEO, SW PUBLIC RELATIONS: I think that this woman is delusional in thinking that she's going to become a star or become rich simply because she's having a lot of children.
KAYE (on camera): Thirty-three-year-old Nadya Suleman hasn't been employed for years. "The L.A. Times" reports she was once a psychiatric technician but stopped working after she was injured on the job. She became a student, the paper says, and started having babies. Lots of them.
(voice-over) The octuplets are all from the same sperm donor. But why would a single mother who already has six children want to deliver eight more?
JEFF GARDERE, CLINICAL PSYCHOLOGIST: It's quite possible that she hasn't found real success or significance in her life. This is something that she feels that she can do right. I think this is a woman who's looking at being good at being a mother and being good at having a lot of children. And this puts her in a very significant and important place in our present history.
KAYE: But what about the babies' future? With 14 mouths to feed and eight new bottoms to wipe, not to mention all that medical attention preemies require, the unemployed single mom may not be able to provide for them.
Her parents bailed her out once already when they bought her a small home in 2007 but soon filed for bankruptcy and had to move in with her.
The mother of 14 hasn't even left the hospital yet. But she's already hired a publicist who told us her client is the most sought- after mom in the world right now. The publicist says she's been bombarded with offers for everything from book deals to TV shows, including some paid interviews and various business proposals.
Media outlets report the mega mom is looking to land millions in commercial endorsements and media interviews.
GARDERE: It seems to me that this is a woman who has a very unique way of thinking, which may not be rooted in reality.
KAYE: The octuplets' grandmother, Angela Suleman, told "The L.A. Times" her daughter "is not evil, but she is obsessed with children. She loves children. She's very good with children. But obviously, she overdid herself." Then added, "I wish she would have become a kindergarten teacher."
Randi Kaye, CNN, New York.
COOPER: I don't know if you caught our guest who said that she had a unique way of thinking not rooted in reality. I think that's very -- he's being polite there.
We don't know yet their names, the kids. But we know the octuplets, six boys, two girls, are in stable condition and receiving donated breast milk and a nutritional supplement. They could be in the hospital for up to three months.
Let's talk now with chief medical correspondent, Dr. Sanjay Gupta.
Sanjay, this woman's mother said her daughter had far fewer than eight embryos transferred and that they multiplied. Does that make sense to you? Does that seem like a likely scenario?
DR. SANJAY GUPTA, CNN CORRESPONDENT: Well, not likely, but it can happen. I mean, about four to five percent of the time -- this happens more often with natural birth -- the embryo splits at the time of implantation into the uterine wall. And that's how twins are formed, about 4 to 5 percent of the time.
So it's possible that fewer embryos were planted; they subsequently split, making up eight, possibly, Anderson.
COOPER: Are any laws or guidelines set up to monitor the number of embryos a doctor can -- can transfer?
GUPTA: Well, there are guidelines, as opposed to laws, as you point out. You know, and it's really based on a conversation between the physician and the patient. But also on the woman's age.
So, for example, the American Society of Reproductive Medicine says below the age of 35, when a woman is more fertile, more likely to take those embryos to term, that they usually implant no more than two embryos, for example.
Thirty-eight to 40, it's typically no more than four. After 40, where it's less likely to take them to term, they say no more than five. So you can implant more. But again, these are just guidelines.
And Anderson, one thing I should point out is that they were speculating on why there were so many babies here. Was it IVF or some sort of stimulating medication? We know now that it was IVF. We just want to show you really quickly what we're talking about here.
We're talking about, obviously, an egg that is fertilized by a sperm. And that happens, obviously, outside the body. And then subsequently, several of these fertilized eggs now are put up in a catheter through the cervix into the uterus. A lot of people may know this. You just take a look there and you'll see that catheter going up.
And you'll see, in this particular animation, eight separate fertilized eggs being released. And that is what, you know, we think may have happened with this particular woman.
Over time, they grow, obviously, after they implant into the uterine wall. And I think it's worthwhile looking at the sort of next images here as you see what it looks like for a woman's uterus to have eight babies in the uterus.
GUPTA: I thought that was a remarkable picture. I wanted you to see it, as well.
GUPTA: They -- the babies were delivered by Cesarean section. As you may know now, Anderson, it took about five minutes to get all the babies out.
COOPER: How much does -- you know, there's extensive medical care required. They may be in the hospital for three months. How much does all this cost?
GUPTA: It's very expensive. I was looking into that very issue. And for a good chunk of that stay they're often in what's known as a NICU, or neo-natal ICU. And the cost can be hundreds of thousands of dollars.
To take care of babies who are born preterm, it can cost, you know, billions of dollars for all babies across the country every year. So this is a very expensive cost.
Not the mention the practical things. As you know, Anderson, we're expecting our third child. I mean, just the number of diapers. We're calculating about 25,000 diapers over a year for these eight children, 90,000 wipes. The donated breast milk and formula, as you mentioned. It is expensive, both in the hospital and out of the hospital, as well.
COOPER: Is it -- the doctors responding -- the doctors who delivered this said she showed up already with these babies inside her, so it wasn't their choice. But I mean, ethically, what is their responsibility? Do they just have to comply with the mom's wishes? How does this play out?
GUPTA: You know, I think -- I think it's mainly based on this conversation between the -- between the physician and the patient. Look, there are no particular laws or guidelines even for the number of natural births a woman can have.
So when it comes to IVF, it's more of this conversation, again, based on these sort of rough guidelines that multiple births can be dangerous not only to the babies, but to the mom, as well. Children who are born too early and too light with not enough birth weight are at risk for developing problems with their brains, their eyes, their lungs later on in life, even.
So this is a medical issue as much as it is an ethical issue.
COOPER: No doubt, though, we'll be finding out more in the days and weeks ahead. Sanjay, appreciate it. Thanks.
Next on 360, Michelle Obama's first major public event. How does she see her role as first lady? We'll take you up close tonight.
And later, how did 30 seconds of porn show up in the Super Bowl? That's right, porn. Plenty of viewers are asking that question tonight. It's our "Shot," coming up.
And at the top of the hour, breaking news, President Obama's commerce secretary pick. The name in the "Raw Politics," ahead.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY: Arne wanted me to talk a little bit about myself. But I always sort of feel like after two years of the campaign, you know -- you know everything.
(END VIDEO CLIP)
COOPER: Well, we do, and maybe we don't. Michelle Obama at the Department of Education today, her first big public speech as first lady. She's vowing to fix thousands of schools and make sure millions of kids get the help they need in the classroom.
She has stepped into a very traditional role. But from her style and the issues that matter to her most, TO the way she protects her daughters, Mrs. Obama may be redefining what it means to be first lady.
Up close tonight, here's Erica Hill.
HILL (voice-over): Michelle Obama is slowly coming out as first lady. Today in one of her first public speaking events since the inauguration, she made it clear: this meet and greet at the Department of Education is just the beginning.
OBAMA: I'm going to spend the next several weeks or months, however long it takes, going from agency to agency just to say hello, to learn, to listen, to take information back where possible. But truthfully, my task here is to say, "Thank you and roll up your sleeves," because we have a lot of work to do.
HILL: But the big question still unanswered two weeks in is how that work involves Mrs. Obama.
OBAMA: What can I do that is useful in -- with this role?
I spent a lot of time focusing on working the challenges of work/family balance with women and families.
HILL: Her office tells CNN, working parents will be one of three main projects for the first lady, along with helping military families and boosting volunteerism, though they're not offering any specifics. Fitting, perhaps, for the woman who has often reminded the country, family is her top priority. OBAMA: I joke that my first job is going to be mom in chief.
HILL: Originally, the president's wife was more of a hostess overseeing state dinners and White House tours.
OBAMA: Walk around, touch some stuff. Just don't break anything.
HILL: But that role has evolved, and the public has come to expect more.
ROBERT THOMPSON, SYRACUSE UNIVERSITY: Being first lady in the United States of America in the 21st century has got to be one of the most frustrating jobs to hold. Because, for one thing, it isn't even a job. For another thing, it has no job description. But for a third thing, you are constantly being evaluated as to how well you're doing.
HILL: Hillary Clinton's efforts to shape health-care policy and her office in the West Wing didn't win her glow regular views.
For her part, Mrs. Obama has said she is taking some cues from Laura Bush. But there's no doubt, she'll be walking a fine line.
THOMPSON: She can very, very credibly now approach a number of issues, anything having to do with family, in many ways women with regards to work and family. She is a living embodiment of many of the issues that have still yet to be worked out.
HILL: Experience she'll need to handle all of those expectations.
COOPER: Expectations and interest. I don't think there has been a first lady in, you know, recent memory who so many people are fascinated by. They're always a point of interest, but unlike her.
HILL: Absolutely. And it's the entire family, as we've seen. And that -- one of the things Robert Thompson was saying to me and a few other first lady historians have said is that's really a point in her favor, is that she garners so much interest and on such a wide range. Kids as young as 10 and 15 want to know what the first lady's doing.
That this could really help her achieve whatever she decides her ultimate goal is as first lady, whatever she wants to work on. That could really help her achieve those goals.
COOPER: All right. All right, fascinating. Erica, thanks. Appreciate it.
Again, a reminder: I'll be sitting down tomorrow with President Obama at the White House. You can see the full interview tomorrow night on this program, 360, starting at 10.
Coming up, "The Shot." Next, sex and the Super Bowl. The game interrupted by porn. The story and the apology ahead.
And at the top of the hour, breaking news: President Obama tapping a Republican to be his commerce secretary. It happens on a day the first African-American U.S. attorney general is confirmed.
COOPER: For tonight's "Shot," the x-rated surprise for some Super Bowl viewers. Folks watching in Comcast Cable in Tucson, Arizona, were treated to more than just a football game. A hard-core scene from a porn suddenly appeared. And boy, did it appear.
Here's the music. Here's the screen grab. We can't show you anything more than this. The clip ran for about 30 seconds. We're talking half a minute of "boom chickawa boom."
Viewers -- I don't know. "A bow chickawa wow-wow."
COOPER: Thank you, Erica.
Viewers called in. They were not happy, although maybe one or two drunk guys were.
HILL: I think there were probably a couple of guys who were like, "Yes!"
COOPER: Comcast -- all right, enough music. Comcast apologized...
HILL: But it adds so much.
COOPER: ... and is looking to -- I love that we just had porn music on hand, like, ready to go. Erica, all right.
HILL: Everybody? Come on.
COOPER: They're looking into whether someone intentionally tampered with their feed of the Super Bowl. All right.
HILL: I'm not even sure that that's porn music.
COOPER: I don't know what it is.
HILL: It's sort of like '70s.
COOPER: It's very '70s.
HILL: A little -- yes. Don't come a-knockin'.
COOPER: You can see all the most recent -- all the most recent "Shots" at AC360.com.
All right. Thank you.
Coming up at the top of the hour, more breaking news on President Obama's cabinet and how he's selling his economic plan.
Later, the hangover from a massive party sponsored by a bank getting tens of billions of your tax dollars in bailout money. Are they kidding? Are they crazy? We're "Keeping Them Honest."
COOPER: Tonight, breaking news on President Obama's team. Taxes, your money and your future. He picks another Republican for his cabinet. The Senate confirms the first African-American attorney general. And new details of the tax troubles facing his choice to reform the nation's health-care system.
All of this with the president meeting tonight with House and Senate Democrats at the White House, trying to figure out how to get more bipartisan report for his stimulus plan.
Ed Henry has all the breaking news at the White House -- Ed.
ED HENRY, CNN CORRESPONDENT: Well, Anderson, as you mentioned, history made tonight. Eric Holder confirmed as the nation's first African-American attorney general. That vote 75-21 in the Senate, overwhelming.