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President Obama Blasts Delay of Stimulus Plan; Setback for Stimulus Compromise; Nearly 600,000 Jobs Lost in January

Aired February 6, 2009 - 16:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, President Obama blasts the delay of his economic recovery plan as, in his words, inexcusable and irresponsible. His tough warning to Congress is getting more urgent as the unemployment rate explodes.

In the Senate right now, it's crunch time for a compromise on stimulating the economy. We're tracking what's in the bill, what's on the chopping block, and what it all means for you.

And riches to rags. More and more laid-off professionals are learning to live without their six-figure salaries.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

Right now, President Obama's putting even more energy and more bite into selling his economic rescue plan, and he's taking his pitch on the road as well. The White House announcing just a short while ago that Mr. Obama will travel to Indiana and Florida next week.

Let's go to our White House Correspondent Dan Lothian, who's got all the latest on the high-stakes developments -- Dan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right, Wolf. And you know today's jobless numbers giving the president more ammunition as he pushes Congress to take action on the stimulus bill. The president says this kind of economic erosion will only continue if the deal doesn't get done


LOTHIAN (voice-over): With a dark economic cloud hanging over his head, Mr. Obama turned up the pressure on Congress, sounding more like a candidate than a president.

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work.

LOTHIAN: New numbers adding to the urgency. Nearly 600,000 jobs lost last month, the worst in 35 years. Unemployment is now at 7.6 percent, the highest since 1992.

Against that backdrop, the president rolled out his Economic Recover Advisory Board, heavy hitters from GE, Oracle, Yale University, led by former Federal Reserve chairman Paul Volcker.

OBAMA: I created this board to enlist voices to come from beyond the Washington echo chamber.

LOTHIAN: But inside that Washington chamber, Congress is struggling with the economic stimulus plan, heated debate over the price tag and what should be in or out.

SEN. MITCH MCCONNELL (R), MINORITY LEADER: Republicans are ready to support a stimulus bill. That really hasn't been in question. But we will not support an aimless spending spree that masquerades as a stimulus.

LOTHIAN: Feeling the pressure to get the bill passed, the administration is now launching a full-court press. Next week, visiting towns in Florida and Indiana, areas that have seen a spike in unemployment.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: It's important to go directly to where people are hurting, whether it's Indiana or whether it's Florida, and discuss directly with them the price of inaction.


LOTHIAN: So the president will be holding town hall meetings in Fort Myers, Florida, and also Elkhart, Indiana. That is the town where he visited during the campaign back in August. They saw their unemployment rates go from about 5 percent to over 15 percent, and that's the kind of areas that the president believes can benefit from the stimulus plan and other government help -- Wolf.

BLITZER: Literally touch and go right now. Thanks, Dan Lothian, very much.

Let's go up to Capitol Hill. Our Senior congressional Correspondent Dana Bash has all the latest developments from the Hill.

What is the latest, Dana?

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: The latest is a potentially ominous sign for President Obama and his stimulus package. You know, they have been negotiating all day long, a flurry of activity here, and one of a handful of Republicans they had been hoping to get in order to pass this just dropped out.

CNN has learned that George Voinovich, the Republican from Ohio who has been hoping he could come up with the magic mix of spending, said after a meeting with Harry Reid, "I can't do this anymore," that there are too many philosophical differences with the Democrats, and that the overall number, about $800 billion right now, is too big. And again, this puts these negotiations and the stimulus package in potential jeopardy.


BASH (voice-over): All day long, a flurry of meetings behind these doors in the heart of the Capitol, the office of Senate Majority Leader Harry Reid. Centrist senators, White House officials and others going in and out of Reid's office trying to broker a deal to pass President Obama's economic stimulus package.

Reid took a brief break from his negotiations to lay out the stakes.

SEN. HARRY REID (D-NV), MAJORITY LEADER: If we fail, there's going to be a lot of blame to go around. As I've indicated, our entire country will suffer and the world will suffer. We are the economy that drives the world economy.

BASH: This final, urgent effort is all about convincing at least some of a handful of Republicans working on a bipartisan compromise to sign on. The goal is to slice nearly $100 billion from the more than $900 billion stimulus bill.

Democrat Ben Nelson, one of the negotiators, spoke with us after one of his many meetings.

SEN. BEN NELSON (D), NEBRASKA: The hope is that we will still pick up two more Republicans, and if we're able to do that, then I think we have sufficient numbers to get a vote and pass the alternative. That's sometimes the most difficult part of it, is closing when it's just down to one or two issues.

BASH: But as Democrats tried to woo the minimum number of Republicans needed to pass the bill, others are crying foul.

SEN. JOHN MCCAIN (R), ARIZONA: Now it's 15 Democrats, three Republicans. That's not bipartisan.


BASH: Now, whether or not that is bipartisan, that is the question. But I think the bigger question and really the biggest question right now, Wolf, is whether or not any of those three Republicans or Democrats they're talking to will sign on to this.

You know, the Democratic leadership, Harry Reid, said that he hoped to have a vote between 5:00 and 7:00 today. I just got off the phone with a Democratic source who admitted that just isn't going to happen right now. Things are basically stuck.

In fact, the Republicans are remaining in this group, they just wrapped a meeting in the Capitol, not saying very much. It's really unclear how they're going to come to that agreement, that very delicate balance, again, of cutting spending, cutting the right spending, but not too much that you'll lose some Democratic votes.

BLITZER: And that critical vote that Harry Reid wanted, Dana, to come up between now and, let's say, 7:00 p.m. Eastern, that would be to end debate. In other words, it would be a procedural vote, but that would require those 60 senators voting to end debate. Is that right?

BASH: That's right. Without question, no matter how they deal with this procedurally -- and there are a number of ways they can do that -- there is no question that there will need to be 60 votes to pass this, and that is why even though Democrats have a very large majority, they need Republicans to sign on. And that's why they're targeting those, again now, just three or four Republicans, why they need them to agree, why they need to find a compromise with those Republicans.

BLITZER: Yes, there are 58 Democrats, but Senator Ted Kennedy has been ill, as we know. He's not been showing up lately. And that's a further complication in reaching that magic number of 60.

Dana, stand by, because we're going to be going back to the Hill to get the latest.

In the meantime, let's check in with Jack Cafferty. He's here with "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: "How to Save Your Newspaper: A Modest Proposal." That's the cover story this week in "TIME" magazine. And in it, Walter Isaacson, the former managing editor of "TIME," the current CEO of the Aspen Institute, as well as my former boss here at CNN, writes how the crisis in journalism in this country has reached meltdown proportions.

Isaacson says we can now imagine a time when some big cities will no longer have a daily newspaper. Isaacson says last year, more people in this country got their news online for free than paid for it by buying newspapers and magazines. Isaacson says in order for newspapers to survive, they'll have to charge for content by way of subscriptions.

It's clear that with the decline of advertising dollars, newspapers now are in deep trouble. Publisher McClatchy reporting a $21.7 million loss for the fourth quarter. Other companies like "The New York Times," Gannett and Lee Enterprises all reporting lower profits during the same quarter.

Rupert Murdoch's giant media conglomerate News Corp., which owns several big newspapers, including "The New York Post," posted its biggest ever quarterly net loss this week, taking a write-down of $8.4 billion. A CEO of another struggling company, the Sun-Times Media Group, says he's going to resign at the end of the month, after his company announced last month that it will close a dozen weekly newspapers and ask union workers to take a pay cut.

So here's the question. How important is it to save America's newspapers?

Go to You can post a comment on my blog.

BLITZER: I'm biased, but I think it's very important. I know you do as well.

All right, Jack. Thanks very much.

A man who lost his son in the 9/11 attacks fears President Obama is about to make a huge mistake. I'll ask him about the meeting he's having with the president this afternoon and what they said about plans to close the Guantanamo Bay prison camp.

In California, state workers protesting a day off work without pay, but Governor Schwarzenegger warns they could have no jobs at all.

And would the president's economic rescue plan actually stimulate the economy, or would it just spend a lot of money? I'll ask the president's senior adviser, David Axelrod. He's standing by live.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Nearly 600,000 jobs lost in the month of January alone. That comes on the heels of almost three million jobs lost last year.

Our Chief Business Correspondent Ali Velshi is here.

The unemployment rate, what, it went up to 7.6 percent?


I mean, that makes January of 2009 the fourth worst month since we've been recording job losses. And by the way, the two top months were in 1945 and 1946 after the industrial complex sort of shut down after World War II.

So, 1974 was the only month in which -- one of the months in 1974. It was the only one that was worse than January. This is pretty severe.

We've lost 3.6 million jobs since this recession started. And this is the issue -- these companies are shutting down, you know, a lot of their lines. They're laying people off in advance of how bad it could get. And every time you lay one more person off, that's one more person who's not a consumer and who's not paying taxes. So it kind of makes the situation that much worse each time.

So that's the issue we're facing right now.

Is this the worst of it? A lot of economists are speculating that we've got maybe two or three more months of layoffs at this rate, and then we might find that we're bottoming out. The issue is, Wolf, as you know, recessions end. How long before this one ends?

What does bottoming out mean? Will we lose another two or three million jobs before it's over? That's the big question.

BLITZER: It's going to get worse, presumably, before it starts to turn around. At least most of the economists say that.

Yet, on top of all the horrible economic news today, the markets go up. How does that happen?

VELSHI: A very strong day. In fact, the Dow closed up almost 220 points. That's almost a three percent gain. Why? Because on Monday, we're expecting the treasury secretary, Tim Geithner, to announce what is going to happen with the second half of the bailout. Now, this is hard to follow because we're dealing with the stimulus package, we may see passage on that. But the bailout, $350 billion of the $700 billion still remains to be spent, and clearly some of that money or much of it is going to go to banks. And as a result, people have been selling and driving down the price of bank stocks who are buying in and covering their short positions, and that's the kind of rally you saw in the market today.

BLITZER: All right. We'll say on top of it with you, Ali. Thanks very much.

Let's go out to California right now. There are a lot of people suffering right now. And even those who work for the state government, many of them have now been told, take a day off and don't get paid.

Let's go to Ted Rowlands.

What's going on where you are, Ted?

TED ROWLANDS, CNN CORRESPONDENT: Well, Wolf, we're at a DMV office in downtown Los Angeles -- 168 DMV offices across the state closed down today. A lot of upset customers expecting to do business, and a lot of upset workers that would like to be at work.


CROWD: Open, open, DMV!

ROWLANDS (voice-over): Upset at being forced to take the day off without pay, some state workers showed up in protest outside closed offices.

FRANCES DAVIS, CALIFORNIA STATE EMPLOYEE: It is all about budgeting. It's going to be hard, but, you know, they don't want us here.

ROWLANDS: Starting today, 90 percent of California's state offices will be closed on the first and third Friday of each month through June of 2010. More than 238,000 government workers will see an almost 10 percent pay cut.

State employment offices, along with hospitals and prisons, will remain open. Those employees, like Darrel Davis, will still have to take the pay cut in exchange for days off at some point down the line.

DARREL DAVIS, CALIFORNIA STATE EMPLOYEE: I just have to make ends meet. You know, I just have to find other means of income to pick up the slack.

ROWLANDS: Governor Arnold Schwarzenegger, who ordered the furlough, says the alternative is layoffs. The state is expected to save a total of $1.3 billion. California's financial woes are exacerbated by the fact that state lawmakers are locked in partisan gridlock and can't come up with a state budget to address a staggering $42 billion projected budget shortfall.

DAN MITCHELL, UCLA ECONOMIST: Well, there's always enough cash coming in to sort of pay off the bonds and kind of keep the interest payments flowing. You can do that, but it's a question of you've got all these other -- you've got schools, you've got prisons, you've got, you know, all these other kinds of obligations. All kinds of social insurance and health care and all kinds of things. And, you know, the further you go, the worse it gets.

ROWLANDS: Things are so bad in California, the state is holding back people's income tax refunds, and there's a plan to withhold payments to counties for social service programs.


ROWLANDS: And Wolf, a lot of states are having problems. California is worse in the sense that there's no budget. So there's no real plan to deal with the budget deficit.

Lawmakers, whose job it is to come up with a budget, will not be taking a pay cut. They are supposedly still working, but they haven't gotten much accomplished, and it is starting to make a lot of people very upset in this state -- Wolf.

BLITZER: California, a lot of folks there in deep trouble right now.

Ted, thank you.

From six-figure checks to unemployment checks, startling riches to rags stories. You're going to want to hear how people who virtually had it all are now surviving with virtually nothing.

And his life was forever touched by terror. Now he says one of President Obama's terror policies is a mistake, and he's speaking directly to the president about it. I'll speak with him.

Stay with us. You're in THE SITUATION ROOM.



BLITZER: President Obama's warning the economic crisis could become a catastrophe if Congress doesn't pass a rescue plan first. We're going to get to hear the president's desperate appeal, unfiltered. That's coming up.

But in the meantime, let's bring in CNN's Mary Snow. She's working this story as far as the jobs losses are concerned.

What's going on, Mary?

MARY SNOW, CNN CORRESPONDENT: Well, as we all know, that these drastic job cuts, Wolf, are forcing millions of Americans to readjust their lives. For some, it means drastic changes after living on six- figure salaries. Here are some of their stories from the front lines of the economic crisis.


SNOW (voice-over): Eric Bell doesn't expect much sympathy.

ERIC BELL, FMR. FINANCIAL SERVICES MANAGER: People all say, you know, poo-poo on him, he was making $100,000. I was making $100,000. You know, I worked hard to get to that $100,000. And I'm going to work hard to get it back up there.

UNIDENTIFIED MALE: I was earning approximately $125,000 a year.

SNOW: Ed Wright (ph) and his wife Lea (ph) traded this West Hollywood apartment for a 35-year-old Airstream trailer they found on Craigslist after he lost his job at an insurance brokerage.

UNIDENTIFIED FEMALE: We went from, like, you know, 1,500 square feet to about 300 square feet.



SNOW: They get $1,800 a month in unemployment benefits and live on his parents' farm in Oregon.

UNIDENTIFIED MALE: One minute you're driving down Wilshire Boulevard, the next we're cleaning up after goats and horses.

SNOW: But change can also be for the better. Eric Bell found more time to play with his 5-year-old son after he lost his job last May. He posted a story on CNN's iReport as part of his networking strategy, which he says has worked much better than the hundreds of resumes he's sent out.

BELL: You see this written all the time, you've got to network. So I changed by strategy and my focus for this job search, this career exploration period in my life, to networking.

SNOW: Eric's networking has paid off. He stopped collecting unemployment checks of $900 a month last week when he got a temporary contract position with a health care firm.

ANTHONY SINGH, FMR. FINANCIAL ANALYST: Hey, Mark (ph). How is it going?

SNOW: Anthony Singh has also sent out several hundred resumes in the past year since he lost his six-figure job at Lehman Brothers. He's been in banking most of his life, but now, as he's collecting unemployment checks of $1,600 a month, he's open to a new field.

SINGH: I'd be willing to change probably to health care, for example, or pharmaceutical or even agricultural industries.


SNOW: And Anthony Singh, who you just saw right there, says like so many people, he's willing to uproot his life in New York and just go wherever he can find a job at this point. He's been looking for over a year now

BLITZER: Yes, when you're desperate, you do what you've got to do to get a job and pay the bills, put some food on the table.

All right. Thanks very much, Mary. Pretty depressing stuff.

President Obama's warning that the economic crisis could become a catastrophe if Congress doesn't pass a rescue plan, and do it very quickly. You're going to hear the president's desperate appeal in his own words.

And the president's choice to head the CIA tries to convince senators that the past is past.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now, President Obama steps up pressure on Congress to pass a massive economic stimulus package, but is it the best fix for the economy? We'll talk about that with chief economist and co-founder of

President Obama wants to send thousands more combat troops to Afghanistan, but behind the scenes there is growing concern over whether the U.S. military can handle an inevitable increase in the wounded and where they'll be treated. Barbara Starr has that story.

Plus, a hazy issue for the Obama administration. Will the new president stop federal raids on medical marijuana providers? Some say he's not carrying through on a campaign pledge.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

President Obama seems to be doing just about everything he can to get his economic rescue plan passed ASAP. And that includes sharpening his tone and rolling out a new advisory board led by the former Federal Reserve chairman Paul Volcker.

Listen to Mr. Obama's newest urgent appeal for action.


OBAMA: If there's anyone anywhere who doubts the need for wise counsel and bold and immediate action, just consider the very troubling news we received just this morning. Last month, another 600,000 Americans lost their jobs. That is the single worst month of job loss in 35 years. The Department of Labor also adjusted their job loss numbers for 2008 upwards, and now report that we've lost 3.6 million jobs since this recession began. That's 3.6 million Americans who wake up every day wondering how they're going to pay their bills, stay in their homes and provide for their children. That's 3.6 million Americans who need our help.

I'm sure that at the other end of Pennsylvania Avenue members of the Senate are reading these same numbers this morning. And I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious.

These numbers demand action. It is inexcusable and irresponsible for any of us to get bogged down in distraction, delay or politics as usual while millions of Americans are being put out of work. Now is the time for Congress to act. It's time to pass an economic recovery and reinvestment plan to get our economy moving.

This is not some abstract debate. It is an urgent and growing crisis that can only be fully understood through the unseen stories that lie underneath each and every one of those 600,000 jobs that were lost this month.

Somewhere in America, a small business has shut its doors; somewhere in America a family said goodbye to their home; somewhere in America a young parent has lost their livelihood, and they don't know what's going to take its place.

These Americans are counting on us, all of us in Washington. We have to remember that we're here to work for them, and if we drag our feet and fail to act, this crisis could turn into a catastrophe. We'll continue to get devastating job reports like today's, month after month, year after year.

It's very important to understand that, although we had a terrible year with respect to jobs last year, the problem is accelerating, not decelerating. It's getting worse, not getting better.

Almost half of the jobs that were lost have been lost just in the last couple of months. These aren't my assessments. These are the assessments of independent economists.

If we don't do anything, millions more jobs will be lost.

More families will lose their homes. More Americans will go without health care. We'll continue to send our children to crumbling schools and be crippled by our dependence on foreign oil. That's the result of the inaction, and it's not unacceptable to the American people.

They did not choose more of the same in November. They did not send us to Washington to get stuck in partisan posturing, to try to score political points. They did not send us here to turn back to the same tried and failed approaches that were rejected because we saw the results. They sent us here to make change with the expectation that we would act. Now, I have repeatedly acknowledged that given the magnitude and the difficulties of the problem we're facing, there are silver bullets and there ware no easy answers. The bill that's emerged from Congress is not perfect, but a bill is absolutely necessary. We can continue to improve and refine both the House and Senate versions of these bills. There may be provisions in there that need to be left out, there may be some provisions that need to be added.

But broadly speaking, the package is the right size, it has the right scope and it has the right priorities: To create 3 to 4 million jobs and to do it in a way that lays the groundwork for long term growth, by fixing our schools; modernizing health care to lower costs; repairing our roads, bridges, levees, and other vital infrastructure; move us toward energy independence. That is what America needs. It will take months, even years, to renew our economy. But every day that Washington fails to act, that recovery is delayed.

Now we also know that no single act can meet the challenges of this moment. This process is just the beginning of a long journey back to progress and growth and prosperity. Given the scope of this crisis, we'll need an all hands on deck approach to figure out how we are going to move forward.

And I'm pleased to have an extraordinary team, of -- of folks in my administration, Tim Geithner at Treasury, Larry Summers, Christina Roemer, Peter Orszag they're all here in the White House. I also want to be sure that we're tapping a broad and diverse range of opinion from across the country, because a historic crisis demands a historic response.


BLITZER: And in the midst of all the frantic negotiations under way right now over the stimulus plan, what matters most to President Obama? Would it be getting his way, getting everything he wants, or getting bipartisan support? I will speak about that and a lot more with his senior adviser at the White House, David Axelrod. He's standing by live.

Plus, President Obama's getting an earful about his plans to close the Guantanamo Bay prison camp. There are growing fears right now, at least among some, about whether justice will be served.

And a rock group wants you to know that your cell phone may be contributing to a war.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: And joining us now from Williamsburg, Virginia, at a Democratic political leadership retreat is David Axelrod. He's the senior adviser to the president of the United States.

David, thanks very much for joining us.


BLITZER: Let's talk a little about the key issue right now, the economic recovery plan.

It was intriguing to hear what the vice president, Joe Biden, said earlier today. I will play this little clip for you, because I'm anxious to get your response.

Listen to what Joe Biden said.



JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: If we do everything right, if we do it with absolutely certainty, we stand up there and we make really tough decisions, there's still a 30 percent chance we're going to get it wrong.


BLITZER: That's not very encouraging, a one out-of-three chance that, even if you get everything you want, David, the president gets everything he wants, it's still going to be wrong?

AXELROD: Well, I don't know exactly about what that math was, but I know this, that there's 100 percent chance we're going to get it wrong unless we pass a very substantial economic recovery package now.

Wolf, you saw the statistics today -- staggering -- 600,000 jobs lost, the most in 35 years. Just to put it in perspective, that would be equivalent to every job in the state of Maine. That would be equivalent to all the jobs in the city of Pittsburgh or in Cleveland just wiped out in a month.

And I don't think the American people are going to sit still and wait for Washington much longer. There is great anger and eagerness and anticipation out there that we're going to do something. And I think we have to.

BLITZER: Because some people, critics of this, say, you know what? Take your time, even John McCain saying, start all over again from the beginning, because it's better to get it right than to rush into something, which you're critics say you're doing.

AXELROD: We have an economic catastrophe.

This -- this -- this package has been discussed for the better part of the last couple -- even before the president got to Washington, and he -- and before he was inaugurated. We -- we don't have time to wait.

We -- every single day, the economy is sliding further. And every economist agrees that the federal government is going to have to do something to help turn the situation around. And it has to be sizable. Now, what the president has said is, let's -- let's do this plan. This plan, by all accounts, will create three to four -- create or save three to four million jobs in the next couple of years. It will also put people to work doing work that needs to be done, creating alternative -- doubling our renewable energy, building classrooms all over this country that -- and new labs and libraries for our kids, so they can learn, repairing roads and bridges and levees and dams, so we don't have more Katrinas and bridge collapses.

And there's -- the benefits go on and on...

BLITZER: All right.

AXELROD: ... by doing this.

So, we want to do is put people to work doing things that will have a long-lasting value to the people...

BLITZER: It's...

AXELROD: ... to the United States of America.

BLITZER: It -- it passed the -- the House with all the Democrats basically on board, except for 11, no Republicans. At that point, it was, what, $819 billion. Now it's well over $900 billion, approaching $1 trillion. And some of the more moderates say it's got to be below $800 billion and maybe closer to $700 billion.

BLITZER: Is the president willing to go and compromise in order to get that kind of bipartisan support?

AXELROD: Well, we believe that it has to be a substantial program in order to have the impact.

And every economists agrees we're losing a trillion dollars of output in our economy. And, in order to -- in order to offset that, we have to have a sizable program.

But I would add that, you know, a number of the items that were added were -- were tax cuts that some of the opponents of the plan have added, even as they complain about the growing size of it.

We -- we want to see the Senate act. We want to move this plan forward. Let's give people some hope that we can move quickly and bring some relief, so that we're not faced month after month after month with the prospect of even worse news.

BLITZER: Here's what John McCain said.

And I'm going to play the little clip for you, because, in the past, he's often been willing to work closely with Democrats on sensitive issues, like immigration reform, campaign finance reform. But, on this, he's very upset.

Listen to this.


SEN. JOHN MCCAIN (R), ARIZONA: It's a spending bill. Most of us weren't under the impression that what we wanted a job creation and economic stimulus bill. We can pass spending bills all the time. We do it all the time.


BLITZER: All right. It looks like he's not going to go along and support what the president wants. And there are plenty others who agree with him.

AXELROD: Look, we have a great deal of respect for Senator McCain.

But we had an election last November. And what -- one of this things that was tested in that election was the economic theory that has governed this country for the last eight years, that, oh -- that, somehow, if we just cut taxes more and more and more for corporations and -- and the well-to-do that that will solve all our -- all our problems.

Everybody agrees that the kinds of things that we're suggesting that Senator McCain objects to would have a huge -- would make a huge difference in terms of jobs. And that's why his program and the alternative he's proposed would -- would do so much less in terms of job creation, more -- more than a million jobs less. It's just not adequate to the task.

We have tested that old -- the old approach. We have to do something new.

BLITZER: All right, David, I want you to stand by for a moment, because I want to continue this conversation. We're going to continue with David Axelrod in just a moment.

And I will press him on this issue; What's more important for the president, bringing Republicans on board, or trying to do it strictly along partisan lines, with only the Democrats?

Also, we have been reporting who is slashing jobs, but guess who's hiring workers right now? You're going to find out.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: Welcome back.

We're continuing our conversation with David Axelrod, the president's senior adviser.

David, what's more important to President Obama, to get this stimulus package passed the way he wants it, more or less, or to make major concessions to Republicans in order to bring a few Republicans on board?

AXELROD: Wolf, we're not into -- this is not a process question for us. It's not a partisan question for us.

The country is in an economic crisis. And we want a plan that will help bring us out of that crisis and lay the foundation for future economic growth. And we want to -- we want to -- we want to bring as many people with us as possible. But we want our program to be intact.

And that's -- the main thing is to address the issue. Every single elected representative in Washington is being called upon to stand up for the country right now, because people are losing jobs every single day all over, in every district, in every state. And the American people are saying, it's time to act.

The president has a -- a very strong concept of what we need to do to move this country forward. The American people supported that. I they think support it now. And we want Congress to act, so we can get this -- get this process of -- of restoring our economy going.

BLITZER: Does -- does Harry Reid, the Senate Democratic leader, the majority leader, have the 60 votes needed to end the debate and move on?

AXELROD: Well, they are obviously -- they are meeting now. We're hopeful.

I think anybody who read the newspapers this morning and saw these -- or the -- the -- looked at the news reports this morning -- saw these horrendous job numbers, and understands that we have to act.

And I would hope that that would be sobering for everyone and would change the tenor of the debate. We need to move this country forward.

BLITZER: Talk a little bit about the president, because, last night, we heard him step up the rhetoric. It was clear -- clearly -- I guess it's part of his frustration that it hasn't passed yet.

AXELROD: Well, I think the president is -- you know, he feels a sense of urgency.

He was -- he -- he, I think, has a strong -- when he sees reports like he did this morning, I think he thinks about people he's met all over this country, families who are wondering how they're going to pay their bills, how -- whether they're going to stay in their home, how they're going to take care of their kids, and they're looking to him and to the Congress to act.

So, I think that he -- he believes in -- in -- in a constructive process of back-and-forth. He doesn't believe he's -- he's cornered the market on all wisdom. But I think he feels it's time to act, because we are sliding into a more and more serious situation.

And, Wolf, the whole world is watching us. The entire world economy is in distress. We are the leaders. And people are waiting for us -- for us to do what needs to be done to pull our economy out of the ditch that we have inherited here. So, I do feel he -- I think there is a sense of -- of impatience on his part. And -- and that's pretty appropriate, given the -- given the nature of the crisis we face.

BLITZER: David Axelrod -- thanks very much, David, for joining us.

AXELROD: Good to be with you, Wolf.

BLITZER: Thank you.

And we're keeping close tabs on the Senate, what is going on now, the efforts to try to reach a compromise on this stimulus package.

A lot of Americans, though, are wondering how might this package actually help them and if it would actually help them.

Here's our congressional correspondent, Brianna Keilar.


BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT (voice-over): Taneytown, Maryland, just 70 miles from Washington, D.C., but talk to folks in this rural community, and they will tell you it's another world.

UNIDENTIFIED MALE: I don't think government really realizes how bad it is out here.

KEILAR: Unemployment here is the highest it has been in 10 years. Businesses have closed. And residents are facing tax hikes to fund the city's crumbling infrastructure.

JIM MCCARRON, MAYOR OF TANEYTOWN, MARYLAND: Our water system and our sewage system probably goes back 55, 60 years.

KEILAR: Taneytown's mayor, Jim McCarron, has a plan to help this city. He's launched an all-out lobbying effort to get a piece of the billions Washington could spend to jump-start the economy, drawing up a list of projects that could begin within 90 days, meeting with members of Congress, talking to the governor's office.

(on camera): Kind of the full-court press, isn't it?

MCCARRON: It is indeed. It's -- you know, it's the old squeaky-wheel theory. I have subscribed to that for -- for many years.

This is not fluff. This is not expanding the city hall or -- or buying another staff car. This is stuff that affects everybody's lives and affects everybody's pocketbooks.

KEILAR (voice-over): On Mayor McCarron's $20 million to-do list, drilling a new well like this one for the city's at-capacity water system, replacing more deteriorating water pipes, and building a road.

MCCARRON: This is Antrim Road, and this is the extension.

KEILAR: A road to open up land for new businesses that McCarron says will bring new jobs to the area.

You would think more government spending would be a tough sell to people in this conservative stronghold, angry with the Wall Street bailout, but they see this economic rescue as Main Street's chance to get the help it needs.

UNIDENTIFIED MALE: As long as it gets down to the -- the lower levels, like to Taneytown and some of the other small towns, it would be beneficial.


BLITZER: Everybody is hurting out there, it seems -- Brianna Keilar reporting.

By the way, on Saturday -- that would be tomorrow -- 6:00 p.m. Eastern -- the Saturday edition of "THE SITUATION ROOM." Among my guests tomorrow, 6:00 p.m. Eastern, independent Senator Bernard Sanders of Vermont. He will be joining us. He's got some very strong views on what's going on right now. He will be among our guests tomorrow, 6:00 p.m. Eastern, THE SITUATION ROOM.

Another actor is thinking of following the lead of Arnold Schwarzenegger. You are going to find out who's considering the role of a lifetime as governor.

And, later, why wounded U.S. troops in Afghanistan may have to wait twice as long for medical help as those in Iraq, and that could be critical.

And one reason why President Obama has gone from pushing lawmakers to passing a stimulus plan to giving them a big shove.

Stay with us. You're in THE SITUATION ROOM.


BLITZER: On our "Political Ticker" today: The president's choice to head the CIA says it's time for the agency to move forward and not dwell on controversies during the Bush administration -- Leon Panetta appearing before the Senate Intelligence Committee for a second day of confirmation hearings.

The former Clinton White House chief of staff, an ex-congressman, has acknowledged to the panel that he has little experience in intelligence field, but added he knows how Washington works.

An actor who once played Batman on the big screen now considering a new role, the governor of New Mexico. Val Kilmer tells the Associated Press he may run for the office in 2010, when fellow Democrat Bill Richardson will be forced out by term limits. Kilmer may be best known for playing the title role in the 1995 film "Batman Forever."

Remember, for the latest political news any time, you can always check out

Let's go back to Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: The question this hour is, how important is it to save America's newspapers? "TIME" magazine's cover story suggesting that they may be on the way out.

Steve in Florida writes: "Kind of a tricky question. With the almost instantaneous transfer and availability of information on the Internet, a breaking headline is old news before the papers can turn the press on. Then, of course, that headline becomes a breaking story for a week or two on cable news. What I think is most important is to save honest, unbiased, in-depth reporting, no matter what format. Anybody still doing that?"

Jim in Chicago: "It's essential. There is a huge difference between an informed opinion and just forming an opinion. Newspapers are a critical source of information, particularly about local issues."

Erico writes: "Not too long ago, we used the teletype ticker tape, essential for many functions, such as tracking the landing and takeoff of aircraft, keeping tabs on the stock market. The teletype is a symbol of what will become of newspapers as we know them now. The electronic media is sweeping across the board, eliminating old technologies and industries. By eliminating my newspaper subscription, I have been able to upgrade my Internet services and communications."

David in Orlando says: "Unfortunately, our society is leaving behind many of the values that kept us safe and free. With all due respect to the electronic media of all sorts, it is the quick, easy access to information without sufficient standards of accuracy that have helped to get us into this situation. There was a time when a newspaper article was well-researched and fact-checked, and was therefore a dependable source of accurate information. Today, TV news has often had its various faces slathered in egg because of the misguided desire to be first, rather than right. And the Internet is 10 times worse than that. But none of this matters. Newspapers, as we knew them, are dinosaurs."

And, finally, Maurice in Two Rivers, Wisconsin: "Newspapers are absolutely essential to our freedom, no bias, no bull."

If you didn't see your e-mail here, you can go to my blog at Look for yours there, among hundreds of others -- Wolf.

BLITZER: Jack, thank you.

And, to our viewers, you're in THE SITUATION ROOM.

Happening now: another month of horrible job losses, but could the bad news be just what President Obama needs politically? He's seizing on the new numbers. He's increasing pressure to pass his stimulus plan.

Also, new raids targeting medical marijuana, the very raids candidate Obama says he opposed. Are federal drug officials thumbing their noses at the new administration? And your cell phone possibly helping to fund a brutal and deadly civil war thousands of miles away, it has one American rock band singing a new tune.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.