Return to Transcripts main page
THE SITUATION ROOM
President Obama Prepares to Address Joint Session of Congress; Tracking the Economy
Aired February 24, 2009 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, HOST: I'm Wolf Blitzer. You're in the SITUATION ROOM.
President Obama will tell Americans tonight that they must pull together to confront the worst economic crisis in decades. And that if they do, the nation will rebuild and recover. An excerpt from the speech was released just a short while ago. Let's go to our White House correspondent, Dan Lothian. He's standing by with more.
DAN LOTHIAN, CNN CORRESPONDENT: Wolf, in the excerpts the president will talk about how America, despite what it's going through right now, it will emerge much stronger. We'll have more on those experts in just a little bit but the speech is expected to last about an hour. We're told by aides that it will have really broad themes. The president not really -- will not get down into the details because these aides believe that Americans want to know more about the game plan, but not about every single move out on the field. The game plan, of course, is fixing the economy.
LOTHIAN (voice-over): As the president prepares to address a joint session of Congress, the economic picture is sobering: mounting job losses, a housing meltdown, consumer spending on life support, and a credit crunch.
Senior advisers say Mr. Obama will mix sober talk with an optimistic tone.
CHRISTINA ROMER, COUNCIL OF ECONOMIC ADVISERS: He's like a doctor; right? The patient's in his office. He's going to tell us the truth. We have a serious problem. But the important thing is he has a plan.
There's this treatment and we will get better. And I think that is the ultimate message of hope that he's going to give.
LOTHIAN: And one prescription that the president is expected to highlight is the $787 billion stimulus package.
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Giving tax cuts to the American people and creating jobs, the bill has already done that. But you'll hear him talk about financial stability, about a housing plan for responsible homeowners that have played by the rules. LOTHIAN: The president will also touch on energy independence, education reform, and health care, all components of the administration's overall economic agenda. Senior aides say Mr. Obama will only deal briefly with foreign policy issues like Iraq and Afghanistan.
The president's address will be closely watched by Americans who are looking for some good news. When asked in a recent CNN/Opinion Research poll if Obama's speech will make you feel more confident about the economy, 62 percent said likely; 37 percent said not likely. High expectations for a president who, after a month in office, still has an approval rating of over 60 percent.
Despite stumbling on some cabinet appointments and a blow to bipartisanship, Mr. Obama gets high marks from some political observers.
ALLAN LICHTMAN, PRESIDENTIAL HISTORIAN: I would give Obama an A in policy accomplishment for getting the biggest spending bill through the Congress in history in just a month.
LOTHIAN: More now on the excerpts released by the White House this evening.
The president will say -- quote -- "But while our economy may be weakened and our confidence shaken, though we are living through difficult and uncertain times, tonight, I want every American to know this. We will rebuild. We will recover. And the United States of America will emerge stronger than before. The weight of this crisis will not determine the destiny of this nation" -- Wolf.
WOLF BLITZER, CNN ANCHOR: All right, a powerful statement from the president. We will be watching, of course, tonight.
Dan Lothian, thank you.
Presidents generally wait until a year after in office to deliver a formal -- a formal State of the Union address. President Obama will be the 12th chief executive to speak in person before a joint session of Congress within a couple of months of his inauguration.
Since World War II, most presidents have addressed a joint session of Congress early in their tenure, including Dwight Eisenhower and John F. Kennedy. He appeared before Congress a little more than a week after he was sworn in. Jimmy Carter dedicated his first speech to Congress to his national energy plan, setting a trend for new presidents to focus their early addresses on a particular theme.
This won't be a formal State of the Union address, but it will be an address before a joint session of Congress.
Let's zero in on the dire economic straits President Obama and all of us are facing right now. A new report shows consumer confidence took a nosedive this month, with Americans more scared than ever about losing their jobs and their retirement savings. And several big stores, Target, Home Depot, and Macy's, are reporting a big drop in profits in the last three months of 2008.
Our senior business correspondent, Ali Velshi, is here.
Ali, as we see all of these numbers, and they're not very encouraging right now, here's the question. Is it really as bad as it seems out there?
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Well, there's many ways to measure this.
But this economy, more so than any other major economy, Wolf, depends on how consumers feel. And, as you said, a new measure of consumer confidence shows the lowest reading we have ever seen in that.
So, we here at CNN have put together the real feel economic indicators. We have taken five indicators that touch you, and to see how they compare to any other time in a generation. We have gone back to 1980. And we have been through some recessions. Let's see what these five measures are.
We have got a scale of zero to 10, zero being the worst it's been in that period from 1980 to now, 10 being the best. And we have scaled these things. So, unemployment, 7.6 percent right now. In 2000, unemployment was as low as 3.9 percent. That's the 10 on our scale. In 1980, unemployment was 10.8 percent. So, today's 7.6 percent is not even halfway up on the scale.
Let's switch it to the next measure, average personal income. We have adjusted this for inflation. The low end of our scale was 1993, when the average person was making about $32,600. In 1980, they were up as high as $39,000. Right now, we're at $34,676. That's a little better than three on our zero to 10 scale.
Let's move it over to personal savings. The bottom of our scale, 2005, when we were negative 0.7 percent is what we were saving. We were spending more than we earned. Back in 1981, 12.2 percent of our income is what we banked, which meant that, if there was a recession, you could make it through, because you had savings. Right now, we're at 3.6 percent, again, a little better than three on a zero to 10 scale in an entire generation.
Let's move it to the next one, industrial production. That is the measure of how much we produce compared to how much we produced a year ago. So, it's a measure of an increase or a decrease vs. a year ago. Right now, we're 12.1 percent lower than we were a year ago.
Back in 1997, when we were doing pretty well, we were 10.7 percent up. So, that's our scale. Right now, we are right at the bottom end of the scale. We're zero on a scale of zero to 10.
And, finally, average home prices, the increase in the average home price. Back in 2005, home prices went up 9.7 percent. That was the height of the home bubble. Right now, the first time they have been down as low as they have had, 6 percent lower than they were a year ago. That, again, puts us at zero.
So, of the five measures that touch you, two of them are at zero, and we're worse than we were when President Obama was elected president. This is what he has to confront. This is why people are feeling so negative -- Wolf.
BLITZER: And, Ali, if you adjust average personal income for inflation, you're telling me that Americans were making more money back in 1980 than they're making today?
VELSHI: Than they are today. That's exactly right.
BLITZER: Wow. All right, that's pretty depressing.
Thanks very much, Ali Velshi, for that.
After months of delay, the Senate has confirmed Hilda Solis as President Obama's labor secretary. The final vote was 80-17. The congresswoman had faced Republican concerns about her pro-union connections. And she had to answer questions about some tax liens filed against her husband. But, in the end, she was confirmed overwhelmingly.
Embattled Senator Roland Burris is rejecting new prodding to step down. Burris met today with the number-two Democrat in the Senate, Dick Durbin, also of Illinois. Durbin says he told his colleague that he's disappointed by recent disclosures about Burris' contacts with disgraced former Governor Rod Blagojevich.
(BEGIN VIDEO CLIP)
SEN. RICHARD DURBIN (D), ILLINOIS: I told him that, under the circumstances, I would consider resigning, if I were in his shoes.
He said he would not resign. And that was his conclusion. And, so, at this point, I suggested to him he had to do everything in his power to bring all the facts out as completely as possible.
(END VIDEO CLIP)
BLITZER: The Senate Ethics Committee has launched an investigation of Senator Burris. And just a short while ago, we caught up with Senator Burris in the hallway. Burris said he would not be taking Durbin's advice to resign.
Let's go to Jack Cafferty. He has got "The Cafferty File." He's here.
JACK CAFFERTY, CNN ANCHOR: They had a chance to keep him from being seated in the Senate. And they backed down, remember...
BLITZER: I remember.
CAFFERTY: ... when Harry Reid said, no, we're not going to seat him? Then it's, well, maybe we should.
President Obama gets ready to make the joint session of Congress address tonight. He's going to talk to a nation that's pretty uncomfortable about where we're headed. A new CNN/Opinion Research Corporation poll shows 71 percent of Americans are angry about where we're going -- 73 percent are scared.
These are not encouraging numbers -- 79 percent of those surveyed think things in the United States are going badly. The silver lining is, most people are still fairly upbeat about their own personal situation -- 77 percent say things are going well for them.
Nevertheless, we are being warned that these rough economic times are far from over. Federal Reserve Chair Ben Bernanke said today he hopes the recession will end later this year, but a full economic recovery, according to Bernanke, could take two or three more years.
Many Americans are reshaping their lifestyles to adjust to these shaky circumstances. They're downsizing. They're actually trying to live within their means, instead of the culture of credit that was the law of the land for too many years. Many are saving more now. Others are trying to figure out how to get by on one less salary, while trying to pay rising bills for things like health care and education, all the while sitting on a home that's lost much of its value.
So, here's the question. How has your daily life changed because of the economic crisis?
Go to CNN.com/caffertyfile. Post a comment on my blog.
Seventy percent are scared -- 71 percent don't like the direction -- 79 -- these are -- this is horrible. The national psyche is badly damaged.
BLITZER: We get a lot of criticism that we're just showing the negative. But people are worried out there. We're supposed to report what is going on.
CAFFERTY: Show me the positive. I will be glad to do it.
CAFFERTY: Where is it? I -- I'm -- there's not a lot of positive out there right now.
BLITZER: Let's hope it changes, though.
BLITZER: Is the Pentagon speeding head-on into an all-out financial collision?
(BEGIN VIDEO CLIP) SEN. JOHN MCCAIN (R), ARIZONA: As far as defense acquisition is concerned and the defense budget is concerned and spending is concerned, we're facing a train wreck.
(END VIDEO CLIP)
BLITZER: Senator John McCain worries about a financial crash in defense spending. Wait until you hear why and what the Pentagon is doing.
Also, in this time of belt-tightening, why are lawmakers from both parties are hoping to spend eye-popping amounts on pet projects?
And Sarah Palin is ready to pay. We have received word that the Alaska governor will pay cash for some things that have sparked a lot of controversy. We will explain that and more right here in THE SITUATION ROOM.
BLITZER: President Obama sends his 2009 budget blueprint to Congress two days from now, but billions and billions worth of spending is in the pipeline right now awaiting congressional approval. And watchdogs say it's packed with wasteful projects that the nation can't afford.
Let's go to our senior congressional correspondent, Dana Bash.
Dana, what's going on?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: What's going on, Wolf, is that President Obama is scheduled, of course, to address Congress in just a few hours and make the case that there obviously is a troubled economy, and that they should really do some belt- tightening, have some fiscal responsibility.
But even as he is saying that, lawmakers are working on legislation that has billions in pet projects.
UNIDENTIFIED MALE: The gentleman from North Carolina.
BASH (voice-over): Democratic Congressman Heath Shuler bucked his party and voted against the president's stimulus bill because of too much excess spending. But now he's poised to spend $870,000 taxpayer dollars for a red Wolf breeding center in his North Carolina district.
It's an earmark Shuler's spokesman calls critical to protect an endangered species, but congressional watchdog groups call that and other pet projects now moving through Congress business as usual.
RYAN ALEXANDER, PRESIDENT, TAXPAYERS FOR COMMON SENSE: Members of Congress heard -- you know, may have heard the call for change, but they also heard the call to make sure that they delivered projects to their districts and to their campaign contributors.
BASH: In fact, tucked inside a $410 billion package to fund the government for the rest of this year, 8,570 earmarks totaling $7. 7 billion. And bringing home that bacon is bipartisan.
Even Republican Senator Lindsey Graham, who campaigned alongside John McCain as he railed against earmarks, is getting $950,000 for a convention center in Myrtle Beach, in his home state of South Carolina. Democrat Jerry Nadler has $381,000 for jazz education at Lincoln Center.
Compared to previous years, Congress is cutting back on its earmarks, but some say the process is still distorted.
ALEXANDER: The general problem with earmarks is the decisions are made on the basis of political muscle.
BASH: For example, Senate Majority Leader Harry Reid of Nevada is securing $951,500 to make Las Vegas more environmentally friendly.
SEN. HARRY REID (D-NV), MAJORITY LEADER: Congressionally- mandated spending is part of our job. That's what we do. We shouldn't depend on bureaucrats downtown to take care of our individual states.
BASH: And while the Senate Republican leader blasted the price tag of the spending bill...
SEN. MITCH MCCONNELL (R), MINORITY LEADER: It strikes us that we're on a spending spree of gargantuan proportions here.
BASH: ... he would not disavow pet projects. His home state of Kentucky will get millions of dollars.
BASH: Now, President Obama demands there be no earmarks in the $787 billion stimulus package. In fact, when he signed it, he boasted there was no pork barrel spending.
And, Wolf, the White House has not said yet what he thinks or what he will do when he gets this bill on his desk that's moving through Congress that does have, as you just heard, billions in that pork barrel spending.
BLITZER: If he vetoes it, he risks alienating a lot of his closest Democrats, Dana, because a lot of them are putting some of those so-called earmarks into the legislation.
BASH: It's bipartisan. And we certainly haven't heard a veto threat. And I don't expect we're going to hear one, Wolf.
BLITZER: All right, thanks very much. Tough decision for the president.
The tough recession is forcing many organizations to decide between what they want and what they really need. The Pentagon is facing those tough financial decisions.
Let's go to our Pentagon correspondent, Chris Lawrence. He's working this story with enormous ramifications for national security and for the economy -- Chris.
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Yes, exactly, Wolf.
For example, the president has already put new Marine One helicopters on hold while he reviews the costs, which has soared past the price of Air Force One. But, really, that's just the tip of the iceberg.
LAWRENCE (voice-over): The price of the new Marine One helicopters nearly double within just a few years of the contract being signed, it's just one example of what lawmakers call a broken system of defense spending.
SEN. JOHN MCCAIN (R), ARIZONA: We're facing a train wreck.
LAWRENCE: Senators John McCain and Carl Levin introduced legislation to reform how the Pentagon buys weapons and equipment. Levin said, the Pentagon's largest acquisition programs are, on average, two years behind schedule and are over budget by $300 billion. He cited the Navy's combat ship program as an example.
SEN. CARL LEVIN (D-MI), ARMED SERVICES COMMITTEE CHAIRMAN: The initial goal was $220 million a ship and a two-year construction cycle. We're now at $500 million a ship, and it's way beyond two years.
LAWRENCE: They want the Defense Department to make tradeoffs early on between cost and performance, use more competitive prototypes to make sure new technologies work before trying to build them, and establish an independent director to give unbiased assessment of costs.
Now, some of these are recommendations the defense secretary himself has made.
ROBERT GATES, U.S. SECRETARY OF DEFENSE: We must have the courage to make hard choices.
LAWRENCE: McCain wonders why private companies develop technologies, yet still manage to tell their customers how much it's going to cost, then produce the product.
MCCAIN: Why can't we do that in -- in defense acquisition?
LAWRENCE: The legislation is aimed at cutting costs outside the most expensive part of the budget, personnel. Lawmakers are reluctant to cut costs associated with troops, especially with 17,000 more now headed to Afghanistan.
LEVIN: Whether it's in terms of pay, benefits, their families, their health care, we're -- we're not going to do that.
LAWRENCE: And Secretary Gates says the Pentagon can save money if the services start sharing more technology. In other words, that means building systems that are compatible throughout all the branches, instead of the Army, Marines, Air Force all building their own -- Wolf.
BLITZER: Chris Lawrence, thank you.
We're counting down to the president's first speech before a joint session of the United States Congress. We're only two hours and 40 minutes or so away from the speech. We're learning new details about what we can expect to hear tonight. Stay with us. We will share what we know.
Also, going to extremes to deal with the economic crisis -- what one state is forcing workers to do.
And putting a face on the crumbling economy -- I-Reporters sharing some desperate stories -- all that, and more, coming up right here in THE SITUATION ROOM.
BLITZER: The Dow Jones, by the way, went up about 236 points today, so they were -- the markets were clearly reassured to a certain degree. We will see what happens tomorrow.
Here's a question. Which states are being hit the hardest by the economy? A new map on CNN.com is tracking everything from unemployment to foreclosure rates state by state.
Let's go to our Internet reporter, Abbi Tatton. Abbi, what's on the map?
ABBI TATTON, CNN INTERNET REPORTER: Wolf, the numbers we're tracking right now are pretty grim.
The U.S. Department of Labor reports in their latest report that the unemployment is on the rise now in all 50 states. That's the first time that's happened since record-keeping began in the '70s. Those are the numbers we're tracking here on the economy tracker on CNN.com.
This is the unemployment rate state by state across the country, the darker the state, the worse off they are, Michigan, Rhode Island over 10 percent at this point, other states, like Wyoming, doing better, just over 3 percent unemployment.
The knock-on effects as well also being tracked on this new map that we have at CNN.com, foreclosure rates, again, across the country, which states are doing better than others right now. But, of course, it's the stories behind all these statistics that we want to hear from as well. And we're posting these, the voices of the people who are suffering from the economy right now online.
Take a listen to this I-Reporter, John Stevens. He's in Torrington, Connecticut, tells us that last year at this time, he was earning about $80,000 a year. At this point, he's unemployed, facing foreclosure.
(BEGIN VIDEO CLIP)
JOHN STEVENS, I-REPORTER: I don't know what to do. I can't afford an attorney. I keep calling HUD counselors that are approved in my area. I can't get them to return my phone calls.
I can't get through to them because they are so swamped with people. I don't know what to do.
(END VIDEO CLIP)
TATTON: These are voices of the people that we are posting on CNN.com, posting on ireport.com, people, Wolf, who are going to be listening to what President Obama has to say in a couple of hours.
BLITZER: Abbi, thank you.
We're also getting early word right now into THE SITUATION ROOM on the Republican response to the president's speech tonight. The Louisiana governor, the stimulus critic Bobby Jindal may be setting the stage for his own White House bid.
Also, it's payback time for Sarah Palin. The dust-up over personal expenses she charged to her state is going to cost her.
And a new lawsuit against Senator John McCain filed by a Rock and Roll Hall of Famer. We will explain right here in THE SITUATION ROOM.
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now: President Obama gets ready for his speech on the economy, after hosting his first head of state over at the White House, the Japanese prime minister sitting down with President Obama for an hour of talks.
An optimistic note today on Wall Street -- the Dow Jones industrial average posted a 236-point gain, to close at 7350.
And a NASA project manager calls today's satellite crash a huge disappointment. The spacecraft crashed into the ocean near Antarctica minutes after launch. NASA blames an equipment malfunction -- all of this, plus the best political team on television.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
Two-and-a-half-hours from now, President Obama will experience a huge moment of his new presidency. He will come out in front of the entire U.S. Congress, both houses, millions of American viewers, indeed millions more around the world, and he will outline his plans to fix the nation's economy. It all comes with a huge challenge.
Our national political correspondent, Jessica Yellin, is joining us with more on -- on this challenge.
It's -- you have been briefed over at the White House, Jessica. Tell us a little bit about the enormous challenge he faces.
JESSICA YELLIN, CNN CONGRESSIONAL CORRESPONDENT: Wolf, first of all, I am told the president's speech had to go to the printer at 3:00 this afternoon, so it is now locked in and final.
My sources tell me the president really sees this as his opportunity to explain in plain English what is going on with the economy. His lead speechwriter has been studying FDR's fireside chats.
And I'm told that's because President Obama wants to do what Roosevelt did so well. Instead of using lofty rhetoric, he used frank language to lay out what's really causing these massive financial problems, and then explain the solutions.
So, for example, many Americans are frustrated about the bank bailouts. Well, I'm told the president sees this as his chance to do what FDR did, break it down, explain how the bailouts are related and can have a cascade effect. They free up credit. That can help in your hometown and get you a new job, for example.
And one person described the speech tonight as a frank, sober assessment of where we are. And, of course, it wouldn't be a presidential address without making a case for his big initiative. So expect the president to play professor for a bit and then promoter for his ambitious agenda -- Wolf.
BLITZER: And he's very good at that.
We know that after the president finishes his remarks, he'll walk through the chamber and shake hands, say good-bye. Once he leaves that door, there will be five minutes -- a five minute break between then and the time that we hear the Republican response. And the Republican response this time will be come -- come from a rising star in the GOP, the Louisiana governor, Bobby Jindal.
What do we know about what he's likely to say?
YELLIN: Well, the Louisiana Republican, as you say, is one of the biggest upcomers in the Republican Party and has been an outspoken critic of the stimulus package. He's even considered a presidential contender.
So expect him to hit the message hard that the Republican Party has really strayed from its roots, that it needs to recommit to being the party of fiscal discipline. Expect Jindal to say that the party has lost its way and, in particular: "You elected Republicans," he'll say, "to champion limited government, fiscal discipline and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington. Republicans lost your trust and rightly so."
So Wolf, he'll make a forceful case that Republicans like him are prepared to regain that trust by opposing what they consider excessive government spending and finding other ways to get out of this financial hole.
And you know a lot of Republicans think that's the key to regaining control of Congress and the White House -- Wolf.
BLITZER: And the Democrats will say they had their chance over eight years, they didn't do it, why trust them now?
So that fight will continue.
Jessica, thanks very much.
Freezing New York weather could cause frostbite, but swarms of people lined up in the frigid cold with one hope -- finding a job. At this job fair, lines ran as far as the eye could see.
CNN's Deborah Feyerick was over at the job fair. She's here with us now in THE SITUATION ROOM.
What a sight.
DEBORAH FEYERICK, CNN CORRESPONDENT: Absolutely. You know, standing among all those people, the president's message really hit home that the economy could get worse before it gets better.
FEYERICK (voice-over): The line stretched around the block and doubled back -- taking even veteran job hunters by surprise.
UNIDENTIFIED FEMALE: It's crazy. But you do what you got to do to get that job.
FEYERICK: More than 5,000 people showed up for 1,000 job openings offered by 40 employers. Among the hopefuls, recent college grad Jennis Elsado (ph).
JENNIS ELSADO: But I mean everyone is hurting. My parents are hurting. Everybody's hurting.
FEYERICK (on camera): Just by a show of hands, how many of you lost your jobs?
(voice-over): There were women and men of all ages, backgrounds, experiences and careers, like P.A. as in personal assistant, I.T. as in information technology, Joe Cologne's specialty.
JOE COLOGNE: Once you're over 40, it's rough in this field, because they give a lot of the jobs to the younger crowd. And it's hard to compete with that when you have family, you know.
UNIDENTIFIED FEMALE: I would do anything right now because there's nothing out there.
FEYERICK (voice-over): Mary Mercer (ph) worked as a church administrator before quitting nine months ago to find a higher paying job -- a move she regrets.
MARY MERCER: I thought it would take a few months. I have good skills. I have good education. And I just -- you know, just people aren't hiring.
FEYERICK (on camera): When you think of all the people who are here who are also looking for work, how do you process that?
UNIDENTIFIED FEMALE: It's overwhelming. It's definitely overwhelming. But I haven't given up hope. I'm still very hopeful.
FEYERICK (voice-over): The job fair was sponsored by Women for Hire. The doors were open to men for the first time. The organizers said turnout was three times what it was at a similar fair last November.
UNIDENTIFIED FEMALE: When I hear the president and economists talk about things getting worse before they get better, I cannot even fathom that.
(END VIDEO TAPE)
FEYERICK: Now, some people found the job fair helpful. Others did not. The thing about it was that everyone there really wanted to find work. The money is running out. They'll take any job they can get. They're considering whatever change they need to in order to survive -- Wolf.
BLITZER: Yes. They just want to put food on the table...
FEYERICK: That's it.
BLITZER: ...for themselves and their kids.
FEYERICK: That's the bottom line.
BLITZER: Thanks very much, Deb Feyerick.
FEYERICK: Thank you.
BLITZER: Let's go to CNN's Brian Todd right now.
He's working on another story involving the governor of Alaska, Sarah Palin.
What's going on -- Brian?
BRIAN TODD, CNN CORRESPONDENT: Well, Wolf, it appears that Governor Palin owes her state some money. The governor's office confirmed to us just a moment ago a settlement has been reached with Alaska's personnel board, saying that Palin has about four months to reimburse the state for costs regarding trips taken by her children.
The personnel board had hired an investigator to look into an ethics complaint filed against Palin. According to the Associated Press, that investigator interpreted state ethics rules as saying that the state should only pay for those trips if the first family serves an important state interest. And the complaint said that some of this travel does not meet that standard.
Now, Palin will have to pay the state for costs associated with about nine trips taken by her children. But a Palin aide told me a moment ago that's out of 70 trips examined in this investigation.
Her office also stresses that this inquiry has resulted in no allegations of wrongdoing. And the governor's aide points out this could be politically motivated. And he says the ethics complaint on this was filed by Democratic opponents of hers -- Wolf.
BLITZER: Thanks very much.
President Obama telling it like it is when it comes to the country's economic crisis.
(BEGIN VIDEO CLIP)
SEN. HARRY REID (D-NV), MAJORITY LEADER: President Obama has told it to us very straight. He hasn't sugar-coated anything.
(END VIDEO CLIP)
BLITZER: But some say he may have gone too far.
Will we hear a different tone in the president's speech before a joint session of Congress tonight?
And is the president biting off more than he can chew -- taking on too many tasks at once?
The best political team on television is standing by for that and more.
BLITZER: Throughout his campaign and now, the first weeks of his presidency, our president, President Obama, has told it to us very straight. He hasn't sugar-coated anything. He hasn't sugar-coated the challenges we face or tried to paint a rosy picture of a rapid recovery.
(END VIDEO CLIP)
BLITZER: The Senate majority leader, Harry Reid, assessing what's going on. Let's bring in our senior political analyst, Gloria Borger; our political analyst, Roland Martin; and our chief national correspondent, the host of "STATE OF THE UNION," John King.
They're all part of the best political team on television.
It's a delicate tightrope he has to walk.
GLORIA BORGER, SENIOR POLITICAL ANALYST: Yes. He's got a -- he's got a tough job this evening, because he's got to convince the American public that all of this government spending that we're doing right now is the right thing to do. But then he's also got to tell them, you know, it's not going to go on like this forever, I care about deficits, we can't continue to spend our way out of this and so, therefore, I'm going to halve the deficit by the end of my first term.
So two very different kind of tasks.
BLITZER: Do you think he can do this?
Because it's a tough mission tonight -- on the one hand, telling everyone it's awful out there; on the other end, saying you know what, we see light at the end of the tunnel?
ROLAND S. MARTIN, CNN POLITICAL ANALYST: What's interesting is the administration has really spent a lot of time today not underplaying this speech. I've heard words from folks that it's a killer speech, that he is going to lean in and have confidence in the American people. And so they're not trying to lower expectations. They're making it clear that he is going to look them straight in the eye and say, yes, we have short-term issues, long-term issues. But we can get through this together; but, also, going to challenge them with some tough love and inspiration.
And so if he can pull that off, I think that folks will be saying the great -- you know, the great communicator is back, if you will.
BLITZER: That's a major challenge...
BLITZER: John, you and I and a few other journalists were invited to have lunch with the president at the White House today. And he certainly does project an air of confidence that he knows what he's doing.
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Without a doubt. And the question is, that confidence -- one of our colleagues reminded me earlier in the Bush days some called that cockiness.
President Obama is more quiet and he is confident. And one of the analogies used around the table -- the president was there, as you noted, and a couple of his senior aides -- was the challenge tonight is to go to the American people. Some have said the president's talking down the economy too much. It's to make clear that you want to be realistic, as Senator Reid just noted there, say the patient is sick. And the patient needs a lot of care. But the prognosis is good in the long-term.
So to sort of tell the American people the economy is sick, it's going to take awhile and it's going to take a lot of government action. But in the end, it's going to be good.
So a mix of things -- the patient may be hospitalized for a while, but I can assure you tonight -- and that's the president's goal -- we will come through this.
BLITZER: You know, the attention span in Washington is limited, as you know -- Gloria.
BORGER: Have you noticed?
BLITZER: And he's got an unbelievable agenda out there, not only dealing with the economy, but reforming education, getting health care reform off the table, energy -- making the country less dependent on foreign sources of energy.
Can he do all that or is he biting off too much?
BORGER: Well, you know, there are some people who believe that he is, that he's trying to do too much at once. When you talk to people in the White House -- I talked to one senior adviser today. He said to me, there's no choice. There is no choice but to do all of this now, because they're all interconnected.
And that's, you know, that's going to be another part of his speech tonight, which is to say, I'm going to lay out this economic blueprint. And if we want to cut back on the budget deficit, we do have to do something about health care spending. We have to do something about energy costs. We have to do something about education.
BLITZER: And in the midst of all of this, remember, we're in two wars right now. Even though he's not going to spend a lot of time talking about foreign policy or national security tonight, hovering over all this domestic stuff is the notion -- is the fact that the country still has two wars in Iraq and Afghanistan and fear of terrorism.
MARTIN: But, Wolf, the other piece is they are operating as if, look, we have four years. And this is not a question of well, let's do a little bit of this in the first term and then we can do it in the second term. They're saying there's no guarantee of a second term.
And so what they also are saying is that you're not going to see these massive -- like, OK, we're going to have this massive energy plan and massive health care plan. They're saying we're going to use the existing procedures to do a little bit of energy, do a little bit of health and lays the framework, if you will, for the larger issues.
And so he'll talk tonight about energy consumption, talking about getting off our dependence. They're saying executive orders; also policies through the EPA. But also, various measures could be passed by Congress that still gets to decreasing our dependence upon oil. It's a way...
BLITZER: All right...
MARTIN: It's a different way of doing it.
BLITZER: And, John, you know, the appropriators on the Hill, they're getting ready to send him a new appropriations bill, the annual spending bill, if you will. There's a lot of pork barrel spending -- earmarks in there. And he's going to face a dilemma once he gets that legislation.
KING: He's going to face a huge challenge because one of the things he's going to say when he gets that bill is that I don't like this. I campaigned saying let's end these practices. I don't want all these earmarks. We don't want all these special projects. If you're going to put something into the bill, do it in a more transparent way. Stand up and be honest with the American people.
And yet, with so many of the challenges you just mentioned, Wolf, moving on to the health care debate, the energy debate, the climate change debate, the president believes he can actually have a bipartisan work of progress with Republicans on the education issue, bonus pay for exceptional teachers.
So will he say, I'm going to fight you on this, I don't want all this pork?
Or, more likely, will he say, I don't like this. This is last year's appropriations. This is business you should have done when George W. Bush was president. You're getting to this late. I will accept this for now and move on.
That is a big question facing this president. We don't know the answer yet. But we do know that he has enormous political capital right now. And he wants to spend it on his agenda, not fighting the old fights.
MARTIN: And I think...
MARTIN: And by letting them have the first stimulus package, he's saying, I gave you your shot, now it's my turn.
BORGER: But he will take on his own Democrats. There is going to be a point when he'll have to do it.
BLITZER: We're going to be here watching the speech and assessing what's going on. So we're not going anywhere, guys.
Thanks very much.
A rock and roll Hall of Famer is suing John McCain over one of his songs. Now there's been a ruling in the case and we have new details.
Plus, the secret to speaking like Barack Obama -- a DVD promises to tell you how to do it -- of course, for a price.
CNN's Jeanne Moos takes a Moost Unusual look.
LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Coming up at 7:00 Eastern here on CNN, much more on the president's speech tonight to a joint session of Congress. President Obama expected to move away from the rhetoric of fear and embrace again the politics of hope.
Also tonight, the Reverend Al Sharpton joins me, intensifying his campaign against "The New York Post." Many say he's trying to use the power of government to restrict First Amendment rights. Al Sharpton joins me for what I'm sure will be a full and frank exchange of views on the issues.
And a startling proposal to help the State of California end its massive budget crisis. One state lawmaker suggesting California should legalize marijuana. Anything goes in the Golden State. We'll have that report.
And three of my favorite radio talk show hosts will be among my guests.
Please join us for that at the top of the hour and a great deal more.
BLITZER: The old Jackson Browne song, "Running On Empty," has Senator John McCain running into some legal trouble -- all because of a political advertisement used during his presidential campaign.
CNN's entertainment correspondent, Kareen Wynter, picks up the story -- Kareen.
KAREEN WYNTER, CNN CORRESPONDENT: Wolf, he may no longer be running for president, but Arizona Senator John McCain is trying to distance himself from a lawsuit -- this one filed by rock and roll Hall of Famer Jackson Browne. A judge presiding over this copyright infringement case in a recent ruling refused to remove McCain and the Republican National Committee from the lawsuit.
This all stems from a presidential campaign ad released last August that used the singer's popular song "Running On Empty" -- he claims without his permission -- to blast Obama's energy policy. Brown's attorneys yanked the ad from the airwaves and from YouTube, claiming the commercial falsely implied Browne had endorsed had endorsed McCain.
(BEGIN VIDEO CLIP FROM OCTOBER, 2008)
JACKSON BROWNE, SINGER: Your songs are your property. They're my -- it's my business. It's something that I make my living from. And the laws that protect intellectual property rights, you know, are very clear. You can't take someone's song and use it without paying them.
(END VIDEO CLIP)
WYNTER: Browne's attorneys told CNN: "We are very pleased that the court recognized that persons running for political office are subject to the same laws as everyone else and that celebrities have the right to associate with the political candidate of their choice."
McCain's camp also issued a statement calling this an early ruling that's not a victory or a loss, but says they're still: "..disappointed that the court declined to dismiss Jackson Browne's suit, despite the fact that the court found that Browne's claims arised out of protected speech activity and that the evidence was undisputed that Senator McCain played no part in the creation or dissemination of the video."
McCain's attorneys added: "The court has yet to rule on the merits of the case, which they'll continue to vigorously contest."
First Amendment Attorney Douglas Mirell says this first round of legal jousting may have gone to Browne's camp, but that there's a bigger message here.
(BEGIN VIDEO CLIP)
DOUGLAS MIRELL, FIRST AMENDMENT ATTORNEY: I suspect that in future campaigns other politicians and other committees will be much more hesitant to try to use this material without obtaining permission.
(END VIDEO CLIP)
WYNTER: We also reached out directly to Senator McCain to get his response on this latest ruling. Wolf, he offered no comment.
BLITZER: Kareen Wynter, thanks very much.
Let's go back to Jack Cafferty for The Cafferty File.
That was a terrific, very thorough report from Kareen...
CAFFERTY: It was.
BLITZER: But one thing was missing.
BLITZER: I want to hear "Running On Empty" by Jackson Browne.
CAFFERTY: Oh. OK.
BLITZER: I love that song.
CAFFERTY: Maybe they'll have him down to the White House the next time you go there to lunch.
BLITZER: Yes, I would like that.
CAFFERTY: You know who makes all the money on these is the lawyers.
CAFFERTY: This thing will go on and on and on.
BLITZER: It's a good song, though.
CAFFERTY: It's a great song.
CAFFERTY: And Jackson Browne, I think, has probably got a leg or two to stand on.
CAFFERTY: All right. The question this hour, how has your daily life changed because of the ongoing economic crisis?
Ann in New Hampshire: "We're doing OK for now. We're young enough to wait until the markets come back and replenish our 401(k)s. But we're definitely spending less. My mother lost her job. She's 63. We're looking at what we will need to do to help her with medications now that she has no health insurance, possibly her housing, etc. We worry, though, about our jobs and how much worse things will get for the country."
Craig writes: "I've stopped using credit cards. I've started debt management. I got cheaper car insurance. I started doing more freelance work on the side in addition to my full-time day job."
Steve in California: "The current economic crisis is proving to be the most effective contraceptive for us. The decision to have or not have kids has become a point of daily discussion."
Kim says: "Not so much, because we've always lived within our means -- always needs first and wants if we have a lot of extra. Still, I'm more afraid to do any wants, because you don't know what's going to be hiding in the corner. Save, save, save."
Paul in Columbia, South Carolina: "I became a hermit four years ago when I got rid of my gold-digger girlfriend, my car, my home, retired after 50 years and I now live within my meager means. It's great to be out of the rat race." Finally, Jonathan said: "Since being laid off last month, I've spent a lot of time getting to know the delightful banter that you and Mr. Blitzer share each evening. It took a while to get the hang of it, but you guys might be onto a dialogue style which will fill the void of the network news anchor."
Gee, maybe we could be just like Katie Couric someday.
BLITZER: Never mind.
BLITZER: Thank you, Jack.
BLITZER: And thank you, Jonathan, for that, as well.
BLITZER: He's charismatic and holds great influence -- that would be Jack Cafferty. But we're also talking about the president of the United States.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Look at him. He looks supremely relaxed, comfortable, confident, as if he had not a single worry in the world.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: This country of ours has more wealth than any nation.
(END VIDEO CLIP)
BLITZER: All right, you can see how you can learn President Obama's secret. That's coming up right here in THE SITUATION ROOM.
BLITZER: The pilot who successfully landed a US Airways flight on the Hudson River will be among the VIPs on hand tonight for the president's speech. Captain Chesley "Sully" Sullenberger will be a guest in the House Speaker's box, along with the first officer and a flight attendant from Flight 1549.
Earlier today, the speaker, Nancy Pelosi, gushed over the miracle on the Hudson hero, asking for Captain Sullenberger's autograph. A lot of people are doing that.
We're a little more than two hours away from the president's big speech tonight. The world, of course, will be watch here on CNN and CNN International.
So CNN's Jeanne Moos has a Moost Unusual look at talking the talk.
JEANNE MOOS, CNN CORRESPONDENT (voice-over): If you want to bask in the reflected glory of Barack Obama, we've got a DVD for you.
(BEGIN VIDEO CLIP, COURTESY MEDIA TRAINING WORLDWIDE)
T.J. WALKER, CEO, MEDIA TRAINING WORLDWIDE: What's Barack Obama's secret?
Here's the secret that Barack Obama knows.
The number one secret, that there is no secret.
(END VIDEO CLIP)
MOOS: Which will be revealed in T.J. Walker's "Secret to Speaking Like Obama."
OBAMA: America, we have come so far.
MOOS: This is how far we've come. For $29.95, learn President Obama's techniques.
WALKER: He realizes that the speech starts before your mouth opens. When he's walking up there, he is smiling. He looks like a billion dollars. He looks like there's no place else in the world he would rather be.
(END VIDEO CLIP)
MOOS: Learn how not to sound like a robot, especially when using the teleprompter.
WALKER: You have to go a little faster, a little slower, a little louder, a little softer and, occasionally, you have to pause.
(END VIDEO CLIP)
MOOS: Media trainer T.J. Walker walks us through basics like eye contact.
(BEGIN VIDEO CLIP, COURTESY MEDIA TRAINING WORLDWIDE)
WALKER: Let's look at Barack Obama. Look at how he holds the eye contact here, for five seconds or so. Then he moves to the next place.
(END VIDEO CLIP)
MOOS: But does the master of public speaking himself have a master?
(on camera): He has a media trainer? WALKER: Well, a coach. The same one as Bill Clinton.
MOOS (voice-over): That would be a coach by the name of Michael Sheehan, who posts photos of his famous clients on his Web site. Not that Barack Obama has completely perfected his speaking style.
WALKER: When he is thinking, he fills the air with ahs and ums.
OBAMA: You know, the -- I think they're still working it through.
MOOS: Who are you going to call?
WALKER: The tick buster.
MOOS: A tiny little sticker indicating no ums or ahs allowed.
WALKER: Because I put it on the 12 on their watch. And now what happens is you look at your watch or your cell phone dozens of times a day.
MOOS: It's supposed to condition you so you become completely conscious of your ums. But no tick buster will save you when your teleprompter goes bust -- for instance, when the wrong State of the Union speech showed up in Bill Clinton's prompter.
(BEGIN VIDEO CLIP FROM 1994)
BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: My fellow Americans, I'm not at all sure what speech is in the teleprompter tonight, but I hope we can talk about the state of the union.
(END VIDEO CLIP)
MOOS: Even if the state of the teleprompter is impromptu.
Jeanne Moos, CNN, New York.
BLITZER: I hope that teleprompter works tonight.
Stay with CNN for continuing coverage of President Obama's first major address to Congress. I'll be back with the best political team on television -- Anderson Cooper and Campbell Brown, John King, the entire team. We'll have extensive coverage of the speech for you tonight.
Until then, thanks for watching.
I'm Wolf Blitzer in THE SITUATION ROOM.
Up next, "LOU DOBBS TONIGHT" -- Lou.