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Markets Continue Downward Spiral; President Obama Holds Financial Summit

Aired February 23, 2009 - 22:00   ET


ANDERSON COOPER, CNN ANCHOR: Tonight: dramatic new developments on the economy and the president's efforts to save it.

Right now, the White House, the president putting final touches on tomorrow night's address to Congress; today, an event at the White House unlike any we have seen before, the president taking on political opponents on camera, even answering a question from former rival John McCain.

We will have the latest on the extraordinary meeting and the president's new promise to cut the deficit in half by the end of his first term.

But we begin right now with Wall Street, the markets continuing their spiral downward. Take a look, the digits unwinding, the Dow industrials losing, ultimately, 250, dropping to its lowest point since 1997, nearly 12 years since they have seen numbers this low.

It matters because we're talking about your money and your future.

Ali Velshi joins us now.

Ali, stocks rallied in the morning, then fell, with both the Dow and S&P reaching almost a 12-year low. What's going on?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, take a look. You mentioned they started -- rallied in the morning. So, that red line is where the Dow closed yesterday. So, the morning, we were OK. We were doing better. This was about that banking stuff.

You know, there's some feeling that the Obama administration's decision to maybe, reportedly, take a big stake in Citigroup or convert some of its stake into stock ownership was going to be a good thing. But look at this. Look what happened. Through the course of the day, the drop in the end, 250 points, down 7114.

We have seen way bigger drops than 214 points. This is about a 3.4 percent drop in a day. We have seen drops that were double as much. The issue is that we are down to levels that we have not seen, as you said, since May of 1997.

Take a look at the Dow since 1997. Hard to get a picture of this, but this is where we were way back then. Now look exactly all these years later, 11 years later. We're at the same place. That's the yellow line. That's the Dow. The blue line is Citigroup. Same thing. Take a look at where Citigroup stock was back then. Now take a look at where it is, a big plunge.

Banking stocks make up a very, very big part of the economy. And they make up a very, very big part of your 401(k)s or IRAs, which is why they're having such a big influence. Think back, Anderson, to the early part of this decade, when we saw the Internet bubble burst.

It wasn't that everybody was invested in the Internet, but they became such a big part of the economy, that, when they plunged, the market plunged with it. And that's what we're seeing right now with banking stocks Internet -- banking stocks bringing the market down -- Anderson.

COOPER: The president certainly has a lot on his plate. Today, President Obama pledged to cut the deficit in half by -- by 2013. But, with all this government spending, like the stimulus, how much room does the president really have to -- to cut spending from the budget?

VELSHI: Well, it's going to be tough to do that.

Let's take a look at the kind of things that make up government spending in 2009. Of this big pie, really, two-thirds of it are things that they don't really have a lot of wiggle room on. Mandatory spending, like Medicare and Social Security, we're going to talk about that in a few minutes. So, really, only one-third of the pie is what we call discretionary spending.

And you can identify with this in your own budget, where there's only -- there are some things that have to be paid, and there are some things you can play with. But, of discretionary spending, of that one-third of the pie, almost half of it is defense spending. Now, that is an area that President Obama says he's going to look at cutting in order to trim the deficit from where it is today in half by 2013.

But the issue is, when you have a deficit, you have got to spend less than you bring in. Now, let's take a look at the deficit and the debt and the comparison between the two. Back in 2008, for the whole fiscal year, the deficit was $455 billion. That means the government took in $455 billion less than it spent, or it spent $455 billion more than it took in.

The -- that accumulation of all of these annual deficits accumulate and become the national debt. The national debt is now $10.8 trillion. So, while President Obama is talking about cutting the deficit, the bottom line is that's -- we're -- we're -- the ball's getting away from us.

It's typical to spend a lot of money and run into deficits in a recession. But we were running deficits before this recession, largely because of the wars in Iraq and Afghanistan -- Anderson.

COOPER: Yes. All right. It makes your head hurt, Ali. Thanks.

More now on today's remarkable session at the White House. We have seen presidents taking questions from reporters before. But, today, President Obama, on national television, stood face to face with all the politicians who have been hammering away at his economic plans and answered their questions and their critiques.

Ed Henry has the "Raw Politics."


ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): In a word, extraordinary -- the president ending a fiscal responsibility summit by opening the floor to 45 minutes of questions from top economists, business leaders, and lawmakers, beginning with a familiar face.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm going to start with -- with John McCain, because -- and -- and, you know, he and I had some good debates about these issues.


B. OBAMA: But -- and I mean what I say here -- I think John has also been extraordinarily consistent and sincere about these issues. And I want to see if you've -- John, you've got some thoughts about where we need to go and some priority areas.

HENRY: John McCain zeroed in on the president's new helicopters, slated to cost $400 million each, $11 billion for the whole fleet.

SEN. JOHN MCCAIN (R), ARIZONA: Your helicopter is now going to cost as much as Air Force One. I don't think that there's any more graphic demonstration of how good ideas have -- have cost taxpayers an enormous amount of money.

We have to make some tough decisions, or you, Mr. President, are going to have to make some tough decisions about not only what we procure, but how we procure it.

B. OBAMA: This is going to be one of our highest priorities.

By the way, I have already talked to Gates about a thorough review of the helicopter situation. The helicopter I have now seems perfectly adequate to me.


B. OBAMA: Of course, I have never had a helicopter before.


B. OBAMA: So, you know, maybe -- maybe I have been deprived and I -- I didn't know it.


HENRY: In his first address to a joint session of Congress on Tuesday night, the president will promise to cut the nation's $1.3 trillion budget deficit in half. To do that, Mr. Obama will have to stop the exploding cost of health care. He said there's promise and peril in the upcoming battle.

B. OBAMA: I think that some of us get on our high horse and say, "We've got the answer to health care."

Well, it turns out that, you know, there are costs involved on the front end. Even as the benefits accrue, you know, in -- in the out-years, there are situations in terms of people, if they have got health insurance sort of like, and what they have got now they just want it for cheaper.

Some of these things will ultimately involve some tough decisions and some tough votes.

HENRY: Republican Joe Barton warned the president he will not succeed on such big-ticket items unless he leans on Speaker Nancy Pelosi to include more Republicans in the process, a fascinating confrontation, because Mr. Obama did not give an inch.

REP. JOE BARTON (R), TEXAS: This is a good first step. But if this is all we do, it's a sterile step.

On the other hand, if you really follow up and include everybody in the process, you're more than likely to get a solution that everybody signs off on.

And I have set or stood behind every president since Reagan in this room at bill-signing ceremonies that were the result of consensus.

B. OBAMA: On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive.

And so to the -- to the extent that on many of these issues we are able to break out of sort of the rigid, day-to-day politics and think long term, then what you should see, I think, is the majority saying, "What are you ideas?" The minority's got to then come up with those ideas and not just want to blow the thing up.

HENRY: Republican Eric Cantor, who has clashed with the president over taxes, had nothing but warm words, though Mr. Obama could not resist a good-natured jab.

REP. ERIC CANTOR (R-VA), HOUSE MINORITY WHIP: Mr. President, I, too, want to thank you very much for having us. It's -- it's a great opportunity, I think, for us to really come together on some of these very, very big issues.


B. OBAMA: I -- I'm going to keep on talking to Eric Cantor. Some day, sooner or later, he's going to say, "Boy, Obama had a good idea."


B. OBAMA: It's going to happen. You watch. HENRY (on camera): Senior aides tell me the latest draft of the president's big speech to Congress is running nearly an hour long. There will be a heavy focus on the economy, with one top official telling me the president will declare, America's best days are still ahead, a sign Mr. Obama has heard the criticism that he needs to mix the sober talk with a bit of optimism.

Ed Henry, CNN, the White House.


COOPER: Up next, our panel weighs in on the latest economic news, what it means for you.

Let's -- let us know how you're doing. Join the live chat happening now at And check out Erica Hill's live Webcasts during our commercial breaks tonight.

Just ahead, President Obama has said he's going to make sure the $787 billion of your money is being spent wisely, but can he really promise that? Well, today, we learned who his enforcer is going to be. And we will introduce you to the man with a fearsome for keeping them honest

And, later, you already know about octomom, probably more than you want to. Well, get ready to meet the man who claims to be octodad. The question is, is he really? The latest strange twist ahead.

And a rare look inside the White House kitchen with Michelle Obama and the kids.


MICHELLE OBAMA, WIFE OF SENATOR BARACK B. OBAMA: I think they have another test, because they're feeding kids. And sometimes kids are like, it's green. And that bright green color is horrible- looking.

So, they have some interesting challenges just meeting the taste issues of a 7- and a 10-year-old.


COOPER: I know what they mean. I don't like green food.

Dinner, dessert and more -- when 360 continues.



B. OBAMA: My sense is that, despite partisan differences, despite regional differences and different priorities, everybody is concerned about the legacy we're leaving to our children. And the hope was is that, if we had a forum like this to start talking about these issues, that it would turn out that there are real opportunities for progress.


COOPER: That was President Obama today handing over the floor to lawmakers from both parties, taking questions, as we said, from his critics, including Senator John McCain and Congressman Eric Cantor, but the markets still nervous about the banks, another newspaper chain going belly up, and barely a single piece of economic good news, except that U.S. Airways is dropping its $2 charge for soft drinks.


We're digging deeper with senior political analyst David Gergen, Ali Velshi, and Krishna Guha, chief U.S. economist -- economics correspondent at "The Financial Times."

David, how unusual is it, unprecedented is it for the president to take questions from members of Congress on camera, like we saw today?


I'm trying to rack my brain for previous examples. I -- I think President Ford went up to the Congress to answer questions about his pardon of Richard Nixon. But it's hard to think of many other examples. I must tell you, though, I think it's -- it had a good feel about it.

And I think it's one of the kind of things the country likes to see is civil discourse, the president answering questions. I don't think we want the president engaging in a question session like British prime ministers do having to go before parliament, but this was a healthy exercise today.

COOPER: Ali, we talked about, a little bit, this earlier. Was there actual progress made today?

VELSHI: Well, I think the progress, Anderson, is in the area that we have got nothing but grim news. This administration has done a remarkable job in its short time in office of convincing everybody how serious the situation is.

We do have a bigger problem that we need to look for. This recession will end, one way or the other, at some point. But this country is a country in debt. We're carrying massive deficits. And that is going to be something that is a legacy left to our children. So, the president has done a good job of saying, OK, we have got these problems now. We have got those other problems that we have to deal with. Let's start thinking about that.

It could shift the focus a little bit. It could be a good thing, so we don't focus every day just on the stock market and all the bad things that are happening. COOPER: Krishna, you know, this summit came -- came basically as the White House indicated it may be more open to essentially nationalizing some of the country's banks -- or more open to it than the president's team had previously indicated.

How does that complicate what is already a massive government -- government effort to try to turn this economy around?

KRISHNA GUHA, "THE FINANCIAL TIMES": Well, the administration understands that, at the end of the day, if you don't fix the banks, the economy won't turn around.

The stimulus will buy you a bit of time, but it doesn't solve the underlying problems in the financial system. Now, the authorities don't want to have to nationalize the banks any more than they absolutely have to. But what they did today was to set out a framework that could lead them to take significant share holdings in many of the country's largest banks, particularly if the economy gets worse from here.

And in the case of Citigroup, we could find out in the space of a day or two that the government has become a large shareholder.

COOPER: David, I mean, if -- if they're nationalizing banks like Citibank, Citigroup, or Bank of America, it essentially wipes out all stockholders. And there are a lot of stockholders in the U.S. who -- who own these stocks.

I think I -- I may own some of them. Does that weaken investor confidence, though, in the markets? I mean, if folks are getting wiped out, if their stocks are basically use -- worthless, then, because of government nationalizing it, are people going to be less likely, then, to -- to invest down the road?

GERGEN: Anderson, talking to business leaders here in Columbus, Ohio, and elsewhere, what I'm finding is, is it's the lack of a firm, clear plan by the administration on dealing with the banks that is really weakening confidence right now.

No one knows quite where this is going to bounce. They have -- they have said that they don't want nationalization. And, yet, they seem to be sliding toward that. The Citigroup example just cited seems to be another step in that direction.

But nobody is sure, you know, quite where they're going. And they're beginning to ask in the business community -- community, do they know where they're going? And I think it's that, plus the fact that that the stocks will likely be wiped out in a formal -- if nationalization occurs, is dampening consumer confidence.

I think they have got to get a plan and stop -- they just can't wait for weeks for stress tests, as what they're now planning.


VELSHI: Yes. David and you and I spoke almost two weeks ago exactly -- it was a Tuesday -- when Timothy Geithner was supposed to come out with this plan. And, two weeks ago, on a Monday, President Obama sort of said, I don't want to steal Tim Geithner's thunder.

COOPER: Right.

VELSHI: And then he came out with this plan that wasn't really a plan.

So, we have got a stimulus plan that you might like or you might not, but it's there. we have a housing and mortgage plan that you might or might not like, but it's there.

We're not entirely sure what the second half of TARP is going to do and whether or not there's a plan for the banks. And I think David is right. If we had certainly, even though it might reduce the stock prices, ultimately, if we know these banks are going to survive and they're going to be there to extend credit to individuals and to businesses, you might see more confidence.

But it is this uncertainty that is hurting this market a great deal. Once you get certainty, I think you're going to start to see a change in direction.

COOPER: Krishna, there's also, you know, the concern about certainty and how this money is going to be spent, the stimulus money.

I want to play just some of what President Obama said earlier today.


B. OBAMA: The casual dishonesty of hiding irresponsible spending with clever accounting tricks, the costly overruns, the fraud and abuse, the endless excuses -- this is exactly what the American people rejected when they went to the polls. They sent us here to usher in a new era of responsibility in Washington; to start living within our means again, and being straight with them about where their tax dollars are going, and empowering them with the information they need to hold all of us, their representatives, accountable.


COOPER: Earlier, he named the guy who's going to be his enforcer, if you will. And we're going to have a profile with him a little bit later on.

But, Krishna, can the president really guarantee transparency before the money is spent?

GUHA: Well, the president can and is putting in a whole bunch of safeguards to try to make this stimulus spending program a lot more transparent and ensure that the money is reasonably well spent.

But, look, it's a pretty safe bet that, when you're distributing $787 billion, some of it is going to end up going into relatively inefficient programs. There's going to be mistakes. What the government is trying to do is to set up a transparent process up front, so people understand where the bulk of the money is going.

COOPER: We're -- we're going to have more with Krishna and David Gergen and Ali Velshi in just a moment. Stay with us.

We should also mention that David writes on our blog about the budget, President Obama, and accountability. Check that out at

More with the panel on how the president can reconcile massive stimulus spending with promises to cut the deficit in half, while not using accounting tricks of the past. Lots of luck.

Also, how would you feel if you couldn't get needed benefits because your governor turned down federal money? Why would some governors turn down the money? Well, some say they will. We will find out why ahead.

And mystery solved -- long-awaited answers in the murder of Washington intern Chandra Levy -- eight years after her death and all those false suspicions about a congressman, word that an arrest is imminent. We have got late details tonight on 360.



B. OBAMA: We cannot and will not sustain deficits like these without end.

Contrary to the prevailing wisdom in Washington these past few years, we cannot simply spend as we please and defer the consequences to the next budget, the next administration or the next generation.

We are paying the price for these deficits right now.


COOPER: President Obama this afternoon at the White House fiscal responsibility summer, Mr. -- summit -- Mr. Obama basically trying to balance short-term spending with longer-term budget cuts.

Back with our panel now, David Gergen, Ali Velshi, and Krishna Guha.

David, the president says he wants to cut the deficit in half by 2013. We just talked to Ali about it. Do you think it's realistic?

GERGEN: I think Ali was right. It will be a miracle if he can do that.

You know, the Brookings Institution has a study out saying, instead of way down, and to $533 billion four years out, we're likely to be looking at trillion-dollar deficits for several years to come. Good for the president putting more honesty into the system, but very, very difficult to get to the goal he's envisioning.

COOPER: So, Krishna, if he can't do it, why is he saying it?

GUHA: Well, I think he wants to lay down a marker that he's serious about getting the long-term fiscal house of this nation in order.

I mean, look, he's got two things to worry about. The first, obviously, is the political side of this, that the Republicans are scoring hits by blaming Democrats for a lot of red ink, a lot of deficit spending. But, also, he's got to worry about the bond markets.

You know, there's a tide of American government debt going out there. And investors at some point are going to get uneasy about funding this. So, he needs to convince the markets: Don't worry. We have a plan.

And there's two essential aspects to this. The first is a medium-term budget goal. This is the halving of the budget deficit by 2013. But the bigger game is about the long-term. It's about identifying what you do to improve long-term public finances, and that is cut the rate of health cost inflation.

COOPER: He also, Ali, addressed the Republican criticism that there's a lot of wasteful spending in the stimulus plan. I want to -- I want to show our viewer what he is said.


B. OBAMA: But I just want us to not lose perspective of the fact that most of the things that have been the topic of argument over the last several days amount to a fraction of the overall stimulus package. This sometimes gets lost in the cable chatter.

For example, I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance. What hasn't been noted is, is that that is $7 billion of a $787 billion program.


COOPER: Addressing head-on with Republicans' concerns -- I'm not sure he's going to convince any of them, though.

VELSHI: Yes. And -- and I'm not sure the cable chatter was about extending unemployment benefits.

The things that people were criticizing in the stimulus plan were things that were not -- unclear as to how they were going to stimulate the economy. We get that food stamps and unemployment benefits and Cobra extensions are necessary, particularly in these times. They happen to be stimulative, because they often go to people who will spend that money very immediately. The issue here is, he's got to be able to provide -- to -- to create some long-term goodwill by saying, we are in a big crisis, we're going to have to spend a lot of money to get out of this, but, if there's some sense that, at the end of the road, we will be in a better fiscal position, then there's some chance that all of us are not going to be paying higher taxes.

Right now, it is unclear how we are going to go 15 and -- and 20 years further, and not be paying higher taxes than we are today. They have got to get that deficit under control. And the deck start -- has to come down after a while in order for us to have some future that doesn't involve substantially higher taxes.

COOPER: David, I remember, a couple weeks ago, you saying that -- that the president can't be the only one out in front selling this stuff.

And there had been, I guess, a lot of hope in the administration that Tim Geithner would be front and center. I mean, he's -- he's, like, gone into, you know, like, Dick Cheney's private cave.


COOPER: He's -- you know, I guess he's working on, you know, the mistakes -- or the details of his plan. But there's no one else out there right now.

GERGEN: Anderson, I -- I know Tim Geithner has got his hands full. And God bless him. I hope he gets it right with his bank plan and other things.

But I do think there's -- there's -- there's a vacuum here. I don't think the administration -- Press Secretary Gibbs has done a first-class job. But they just do not have an economic spokesman who's out there now with the authority that they need who can calm these markets and help people see that they have got -- that they have got a firm hand on the wheel.

And I think, right now, the public is with the administration. The public is very -- is very strongly for President Obama. But I must tell you, there are -- there's an erosion of confidence now in a lot of circles about whether they really have a firm grip on where they're going.

I think it's really, really important tomorrow night to demonstrate that.

COOPER: I'm sorry. I have someone else speaking in my ear.

Ali, tomorrow, how specific do you think the president is going to get?

VELSHI: I think he's going to get very specific.

I think you have got two things that are happening this week that will happen in tandem. One is the conversation that he's going to have with Congress and the country tomorrow, something like a State of the Union address. And, then, on Thursday, you're going to see a budget.

Now, by the time we get to Thursday, he will have set the tone. And what we're going to see is a discussion about cap and trade, capping emissions and making companies trade for the amount that they put out there. That will create revenue for the government.

He's going to talk about increasing the marginal tax rate on the highest earners in this country to 39.6 percent, increasing taxes. And, if we don't get this situation under control, that could spread to more people.

He's going to talk about these sort of changes, including the deficit. He will hint at them tomorrow night, but I think you're going to have a very specific conversation about the economy.

COOPER: All right, we have got to leave it right there.

Ali, Ali Velshi, thanks very much, Krishna Guha, as well, David Gergen, as well, as always.

Just ahead: President Obama's new stimulus sheriff, the man now in charge of making sure $787 billion of our tax money is being spent wisely -- coming up, what this man brings to the job.

Plus, Bill Clinton and Al Gore teaming up again -- kind of -- brought together by the clean energy cause. Were there any sparks between them? We will show you that ahead.

And first lady Michelle Obama putting her personal stamp on White House entertaining, opening up the kitchen to local culinary students, and revealing how the first family is adjusting to the royal treatment.


M. OBAMA: We're like any other family. The kids have breakfast. You have got lunches, dinners. And we try to maintain a consistent routine.

UNIDENTIFIED FEMALE: Again, does the staff here make...

M. OBAMA: That I like? You know...




OBAMA: Joe and I can't think of a more tenacious and efficient guardian of the hard-earned tax dollars of the American people who entrusted us to wisely invest. I told you guys when I saw him here, he looks like an inspector there. He's tough. You know, he barely cracks a smile. Earl is here with us today. And I thank him for his willingness to take on this difficult new assignment.


COOPER: President Obama talking to the nation's governors today. He was describing Earl Devaney, the man he's tapped to be his stimulus sheriff and watchdog to make sure the $787 billion in the economic recovery plan is spent wisely.

Devaney is going to have to hit the ground running. Mr. Obama also said the first $15 billion is going to begin reaching states Wednesday to help cover Medicaid payments to the poor.

So who is this new sheriff? And is he up to the job? Well, we wanted to know. Tom Foreman has been doing some digging -- Tom.

TOM FOREMAN, CNN CORRESPONDENT: Yes, Anderson, he's got the right kind of name for a sheriff, Earl Devaney. And we're looking specifically at his record. Because look at his resume here. It's pretty impressive.

He was a police officer, started off in Massachusetts. Moved on from there to become a Secret Service member. Headed up the fraud unit for the folks there. Then he went on to the EPA. And he became the inspector general there, looking at some very high-profile things. He dug up dirt on lobbyists Jack Abramoff and those sketchy deals involving gambling on Indian reservations. You may recall that. He also uncovered a sex-for-drugs scandal.

He's widely regarded as one of the country's top experts on white-collar crime. And I'll tell you something. That's not a bad qualification to have when you look at his to-do list, because it's huge.

The simple truth is, you may recall earlier this month the committee looking into some of how that bailout bank money was being spent to buy up troubled assets. Well, what they found was that it was not going so well. Listen.


ELIZABETH WARREN, CHAIR, CONGRESSIONAL OVERSIGHT PANEL FOR THE TARP: Treasury substantially overpaid. According to the data we've investigated, treasury put in about $254 billion, for which it received about $176 billion in value from the financial institutions. That's a short fall of about $78 billion."


FOREMAN: Seventy-eight billion dollars overpaid. People don't like that.

So look at the to-do list for Devaney here. First of all, he's got to keep track of this $787 billion stimulus. That's the first thing on his list.

Once he gets that information, he's going to have to scrutinize thousands of federal, state and local agencies and their wallets. He'll have to report on this for Congress. Let them know who got the money, what they did with it. And he'll have to red flag any instances of potential waste, fraud or abuse, because people are worried about that in this program.

All of this is aimed at fulfilling the president's promise that the stimulus plan will include very high levels of accountability and transparency in all of this. That you, the taxpayers, are supposed to know all throughout this process where your tax dollars are going.

Devaney will be the guy with the receipts. If they don't add up, Anderson, he'll be the guy to bring in the guys with the handcuffs.

COOPER: Tough job. All right. Thanks very much.

Up next, why some governors are rejecting tens of millions of dollars of stimulus money heading their way to help the unemployed. The governors say the string attached simply are not worth it. We're talking, of course, about your money, your future. So are they making the right decision? You decide, ahead.

Also ahead, a dramatic break in a murder mystery that rocked Washington eight years ago, cost a congressman his career, some said. New details in the Chandra Levy case.

And could this story get any stranger? An ex-boyfriend of the woman who gave birth to octuplets is demanding a paternity test. Why he thinks DNA analysis could link him to the eight tiny infants.



OBAMA: When I hear people say, "Well, there's -- there's a lot of waste in this program," well, from my perspective at least, keeping teachers in the classrooms is not wasteful. From my perspective, tax cuts to 90 percent of working families is not wasteful.


COOPER: President Obama talking to the nation's governors as they wrapped up their winter meeting. His words were directed at critics who charged that his stimulus plan is full of pork.

It's not the only pushback, of course, he's getting. At least six Republican governors plan to turn down some of the money offered in the stimulus plan. Louisiana Governor Bobby Jindal is leading the charge. Last week, he said he's reject part of the expanded unemployment benefits that are headed his way. Tens of millions altogether. He says he's just looking out for his state's best interest. As always, we let you decide.

Tonight, Candy Crowley has the "Raw Politics."

(BEGIN VIDEOTAPE) CANDY CROWLEY, CNN CORRESPONDENT (voice-over): A rising star in the Republican Party, Louisiana Governor Bobby Jindal is taking some heat for his decision not to take some of the federal stimulus money. You'd be surprised who understands.

OBAMA: I think there are some very legitimate concerns on the part of some about the sustainability of expanding unemployment insurance.

CROWLEY: At issue, states that take federal unemployment money aimed at part-time laid-off workers are required to change state laws to broaden benefits. The Louisiana governor told NBC's "Meet the Press" that's great until Washington stops writing checks.

GOV. BOBBY JINDAL (R), LOUISIANA: Within three years the money is gone. We've got now a permanent change in our laws. We have to pay for it. Our businesses pay for it.

CROWLEY: Jindal will refuse about $100 million out of the $4 billion available to Louisiana. And he remains critical of the stimulus plan, citing wasteful spending that will not create jobs: a billion for the Census Bureau; $300 million to buy hybrid and electric cars for the federal government; $50 million for the National Endowment for the Arts. You will not be surprised who disagrees.

OBAMA: Somehow it's being characterized in broad brushes. Wasteful spending? That starts sounding more like politics.

CROWLEY: There are other Republicans like Mississippi Governor Haley Barbour and South Carolina's Mark Sanford who will also refuse some money.

But the focus is on the young, charismatic Bobby Jindal, the first governor of Indian descent. He was seen as a possible running mate for John McCain. And after McCain lost, Jindal went to Iowa to address a conservative group. There is talk, which he does not deny, that he may make a presidential run in 2012, which is to say there is more to the stimulus discussion than dollars and cents. He is taking political hits back home.

His Democratic lieutenant governor suggests Jindal needs to choose whether he represents Louisiana or the Republican Party. "It puts the governor at risk of sending mixed messages," he said. Louisiana should be very aggressive in going to get this money."

In another political swipe, the two New York senators released a letter sent to the president, saying they'd be happy to take any money refused by governors.

Republicans look to Jindal to help change the face of their party. He was tapped to give the Republican response to the president's speech to Congress.

JINDAL: We're going to look for every opportunity to reach across the party line to work with him. CROWLEY (on camera): Jindal's response on behalf of Republicans is a bit of a political coming out party. He needs to be bipartisan while challenging the policies of a president with approval ratings over 60 percent. Being the face of the party is not as easy as it sounds.

Candy Crowley, CNN, Washington.


COOPER: Not easy at all.

Next, could Washington's most famous cold case actually be solved? Police say they know who killed this young woman, Chandra Levy. Why did it take eight years, though?

And Michelle Obama takes us inside the White House kitchen, describing what the White House staff is up against in the war between kids and vegetables.


MICHELLE OBAMA, FIRST LADY: I think they have another test because they're feeding kids. And sometimes kids are like, it's green. That bright green color is horrible looking. You know, so they have some interesting challenges just meeting the taste issues of a 7- and a 10-year-old.




SUSAN LEVY, CHANDRA LEVY'S MOTHER: I mean, you want justice. You want the person, you know, incarcerated.


LEVY: And you want...

UNIDENTIFIED MALE: Want them put away.

LEVY: So I feel the word "closure" is not...

UNIDENTIFIED MALE: Yes, we don't like that word.

LEVY: There's no such word.


COOPER: The mother of slain Washington intern Chandra Levy speaking out on justice, eight years in the making. The 2001 murder rocked Washington. Now police tell Chandra's mother, Susan Levy, that they have cracked the case. Word is they have enough evidence to convict.

Randi Kaye has the latest in tonight's "Crime & Punishment" report.


RANDI KAYE, CNN CORRESPONDENT (voice-over): From the beginning police thought this man may have killed Chandra Levy.

LEVY: Eight long, hard years. And there's not a day or night that is not on our mind.

KAYE: But 27-year-old Ingmar Guandique, an immigrant from El Salvador, was never charged. Media reports say he was questioned after he was convicted and sentenced to prison in the assault of two female joggers in the same park where Levy disappeared. But that's where it ended.

JEFFREY TOOBIN, CNN LEGAL ANALYST: This was a botched investigation. I think it's safe to say.

KAYE: Levy, a California native, worked as an intern for the Federal Bureau of Prisons. Her remains were found a year after she was last seen, May 2002. She was just 24.

(on camera) So why, after the case had gone cold, have police decided to take another look at Guandique? Investigators have reportedly collected and retested DNA. And a source close to the investigation tells CNN Guandique has been, quote, "running his mouth" in prison.

(voice-over) "The Washington Post" reports Guandique has denied any involvement.

TOOBIN: Guandique is not a surprise.

KAYE: Yet investigators years ago turned their attention to this man. Then California Congressman Gary Condit.

LARRY KING, HOST, "LARRY KING LIVE": Did you have a relationship with Chandra Levy.

GARY CONDIT, FORMER CALIFORNIA CONGRESSMAN: We're not going to go into that.

KAYE: Condit, who's married, later admitted to an affair with Levy. At the time Levy's parents called his behavior suspicious.

LEVY: I don't feel he's been very truthful to me.

KAYE: Condit was never charged in the murder, and the bad publicity ruined his political career. He moved to Arizona with his family and opened ice cream shops.

But with this latest news of an imminent arrest, Condit released a statement: "It is unfortunate that an insatiable appetite for sensationalism blocked so many from searching for the real answers for so long." Condit reportedly plans to write a tell-all book.

So did the Condit investigation throw investigators off course? Perhaps. For now the levies believe they have the right man and the evidence to prove it. Still, for them there will be no justice.

LEVY: We have a life sentence by having our child

KAYE: Knowing who killed their daughter won't bring her back. Randi Kaye, CNN, New York.


COOPER: A long time for justice.

Erica Hill is following several other stories tonight in our "360 News and Business Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, a reunion of sorts in Washington today as former President Bill Clinton joined Vice President Al Gore to champion clean energy. Speaking at a conference, both cited a clean energy economy as the solution for everything from global warming to national security threats.

George Clooney also in the nation's capital today at the White House, for a meeting with the president and vice president about the ongoing crisis in Darfur. Just back from neighboring Chad, that is, Clooney asked the president to appoint a high-level diplomat to try to end the conflict threatening millions. Tonight on "LARRY KING LIVE," Clooney praised the work by many in the Obama administration.


GEORGE CLOONEY, ACTOR: From the very beginning, long before they were Vice President Biden and President Obama and Secretary Clinton, they were all very much involved in this issue.


HILL: Fat cat bonuses, turns out, aren't just for Wall Street anymore. Congress will hold a hearing next month into why Postmaster General John Potter received more than a $100,000 bonus in 2008, and a nearly 40 percent pay raise since 2006.

The U.S. Postal Service, as you may recall, is facing a multibillion dollar short fall.

Nadya Suleman's ex wants paternity tests. The former boyfriend, Denis Beaudoin, tells ABC News Suleman asked him to donate sperm to her 10 years ago. Suleman denies, however, that he's the father of her children. Beaudoin has asked for a DNA test to confirm her story, Anderson.

COOPER: Well, just gets stranger and stranger.

Time now for our "Beat 360" winners. Our daily challenge to viewers to come up with a caption better than the one that we can come up with for a photo that we put on the AC 360 blog.

Tonight's picture, former president Bill Clinton listening as Speaker of the House Nancy Pelosi talks during today's energy summit in Washington.

Staff winner tonight is San. His caption: "From Bill, the Dow wasn't this low since May '97. What was I doing in May '97? D'oh!"


COOPER: Viewer winner is Greg from Austin, Texas. His caption: "Nancy Pelosi and Bill Clinton present the Academy Award for the best financial meltdown hosted by an industrialized nation.


Greg, your "Beat 360." T-shirt is on the way. Congratulations.

Coming up, a tour of the White House kitchen by none other than the first lady. We'll tell you what's on the president's list of favorite foods and what was served as the first official White House dinner. There's an argument raging on the blog about green vegetables. Join in at

And will the real Joaquin Phoenix please stand up? An Oscar worthy interview. It's "Our Shot" tonight.



M. OBAMA: One of the delights of living here is working with everyone here who has just gone above and beyond to make this place feel like a home. Everything from Bill, you know, helping the kids make desserts with friends to, you know, Tommy and the guys making French fries whenever you want. They can do this, but they can also make a mean batch of French fries, when you want it done.


COOPER: Mmm. French fries. My guess is French fries were not on the menu last night. In a black-tie event to rival the Oscars, President and Mrs. Obama hosted their first formal White House dinner. Their guests, the nation's governors and spouses in town for the National Governors Association meeting.

To the first lady it was more than a chance to wine and dine in style. Erica Hill takes us up close for a White House kitchen confidential, Michelle Obama style.


HILL (voice-over): Before the Obamas arrived in the state dining room for the administration's first official White House dinner, there was work to do, starting in the kitchen.

For the first lady, this continued a long-standing tradition. Reviewing the menu for the press with the White House chef.

CRISTETA COMERFORD: We tried to do really very (UNINTELLIGIBLE).

HILL: As part of her pledge to open up the White House, six local culinary students were also invited and encouraged to ask questions.

M. OBAMA: So you guys, any questions that you have, feel free.

CAPRICIA MARSHALL, SOCIAL SECRETARY, CLINTON WHITE HOUSE: I thought that inviting in those young culinary students was a wonderful idea. Really, really wonderful. Fresh idea to have those young people in to work with and learn from. Cristeta Comerford, I remember fondly from my days in the White House.

HILL: Capricia Penavic Marshall was White House social secretary during the Clinton administration. She gives the current first lady high marks.

MARSHALL: Ideally, you want several months. But she wasn't afforded that time. She had to learn everything there was in the White House. What kind of table cloths do they own? Linens. Do I need to find others? Learn about the china. There's a whole host of decisions that have to be made.

HILL: Mrs. Obama decided on the Wilson china. A close-up here with the huckleberry cobbler dessert. The place settings were brought to the White House in 1918 and chosen by this first lady because they didn't take away from the food.

M. OBAMA: This was a very simple, approachable, but elegant pattern. And this will probably be one that we use a lot.

HILL: As for the meal, a heavy focus on American ingredients. Many of them local, like the crab cakes. And also healthy. The creamed spinach wasn't made with any cream at all. The main course included a favorite of the president.

M. OBAMA: The president loves scallops.

HILL: The president is also a big fan of the pastry chef, William Yosses. He dubbed him the Crust Master. These culinary students seem to agree with the president's assessment.

With the tastings behind them, the Obamas welcomed 130 governors and their guests.

B. OBAMA: The last thing I want to do is hold up the food. So Michelle and I want to say welcome.

HILL: After dinner, a chance to let loose with music from Earth, Wind and Fire. And perhaps for the president and Mrs. Obama to reflect on the first of many dinners to come.

(END VIDEOTAPE) HILL: Little boogying down there with Earth, Wind and Fire. Another thing that I found interesting at one point, when the students got over their shyness and did start asking questions, Anderson, one of them said, "Do you ever take interns?"

And they said, "Absolutely. We're always looking for part-time help."

COOPER: Really?

HILL: Especially around the holidays. We love new ideas, so send in your resumes.

COOPER: Wow. Did I hear huckleberry pie?

HILL: It was actually a huckleberry cobbler. And I don't know exactly what huckleberry is. I'm guessing it's sort of blackberry- esque. But I heard the chef talking about how it was a small blueberry, according to Marshall.

COOPER: I know what Huckleberry Hound is. I mean...

HILL: Right. Which is totally different. I don't think that serve that as dessert, so much.

COOPER: OK. I like Huckleberry Hound. Not to eat.

HILL: It's a berry, which I believe I heard the chef talking about. But it's difficult to find in the wild. Maybe you could use huckleberry hounds to find the wild huckleberries to bring home for the cobbler.

COOPER: Maybe that's what the Huckleberry Hound does. The Huckleberry Hound?

HILL: It may be.

COOPER: Erica, thanks.

Up next, an unexpected award last night. The Oscar for Best Joaquin Phoenix impersonation. It's our shot. Was I looking in the wrong camera? No. OK.

And at the top of the hour, your money, your future. Was I pulling a Joaquin Phoenix right there? A Q&A session at the White House really unlike any we've seen before. Pretty remarkable. John McCain got to ask a question. When 360 continues.


COOPER: By the way, our staff immediately found a picture of Huckleberry Hound. Do we have that? There's Huckleberry Hound. Not huckleberry berry. That's not a huckleberry cobbler. That's Huckleberry Hound.

Anyway, tonight's "Shot" -- that is not tonight's "Shot." That's a little added bonus. That's what you get here at 360.

HILL: Happy Monday. Woo-hoo.

COOPER: That's right. Earlier this month you might recall actor Joaquin Phoenix made a rather odd appearance, to put it mildly, on the David Letterman show. Take a look.


DAVID LETTERMAN, HOST, "LATE SHOW WITH DAVID LETTERMAN": I'll come to your house and chew gum.

JOAQUIN PHOENIX, ACTOR: I don't have to...

LETTERMAN: Just relax.

PHOENIX: I won't chew the gum.

LETTERMAN: What will you do now?

PHOENIX: I've been working on my music. I do more of the hip- hop music.

LETTERMAN: Hip-hop music?

PHOENIX: Um, yes, I do.


COOPER: It went on and on like that, I think, for like ten minutes. Viewers were left wondering if Phoenix was just totally out of it or maybe just putting -- you know, maybe it was a hoax. No one still knows.

In case you missed it last night at the Academy Awards, the Oscar for Best Joaquin Phoenix Impersonation went to Ben Stiller.


NATALIE PORTMAN, ACTRESS: I'm sorry. This is ridiculous. You're chewing gum at the Oscars.


PORTMAN: What's going on with you?

STILLER: Nothing. I just want to retire from being the funny guy. That's all.

PORTMAN: You look like you work at a Hasidic meth lab. What do you want to do? What do you want to do?

STILLER: I don't know. I -- maybe cinematography?


COOPER: All right. So let's put them side by side and compare. You can be the judge. Not bad. Not bad at all.

HILL: Pretty good, I think.

COOPER: And there's been a raging debate on the blog about green vegetables?

HILL: There has been.


HILL: You don't hate all green vegetables it's important to point out.

COOPER: Yes. It's very important. On the live chat, it's been raging. You'll have to log in to see what...

HILL: Tomorrow, recipes.

COOPER: Coming up at the top of the hour, why the markets keep falling. Somebody please explain this. Ali Velshi with the bottom line.

And later, see what happens when President Obama invites the opposition over for a little on camera Q&A. So unlike anything we've seen before, at least for a long while. Stay tuned.