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Desperation behind Palace Walls; Middle Class Assault; Deficit Panel; Al Sharpton Interview; Aid in Haiti

Aired January 25, 2010 - 19:00   ET


WOLF BLITZER, CNN ANCHOR: And happening now, dramatic pictures from the new front line for Haiti relief. This hour we're taking you behind the fences of the presidential palace for the first time since the earthquake.

Plus, it's the most widely produced aircraft in the world that it was involved in a deadly crash today, we're going to tell you what we're learning about your airline safety.

And President Obama's new plan to stop what he calls the assault on the middle class; we're investigating his record on the economy and whether billions of stimulus dollars actually helped Americans get jobs.

I'm Wolf Blitzer in CNN's Command Center for breaking news, politics and extraordinary reports from around the world. You're in THE SITUATION ROOM.

Haiti's presidential palace is a powerful symbol of what the country was before the earthquake and the destruction and desperation almost two weeks after the earthquake. We're getting a first close-up look at what's going on at the palace, the crowds and the clamor to get aid. CNN's Gary Tuchman is joining us now from Port-au-Prince with more. Gary, you got inside there. What did you see?

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: Well, Wolf, the Haiti presidential palace is the equivalent of the White House. The president works there, he lives there. So imagine the shock if an earthquake destroyed the White House. That's what the people are going through in Haiti, totally demolished the building and it's twice the size of the White House.

They haven't let the public or reporters anywhere near the complex because it's precarious in danger of collapsing more. But they gave CNN the opportunity to spend a little bit of time close by and take a look and it's so pitifully sad. This very ornate building that was constructed in 1914, we were able to peek inside windows.

For example, we peeked inside one of the chapel windows which supposedly had some beautiful arts and now all you see is rubble inside. The residential corridors for President Rene Preval destroyed; he was not there when the earthquake happened. If he was there, he certainly would have been injured or killed. One of the sad things is, it's not clear how many people were killed inside, there were people in the presidential palace when this earthquake happened, but they haven't been able to get to much of it, particularly on the third floor of the palace because it's so heavily destroyed. Ultimately they hope to rebuild this. But first they certainly have to take care of their people here before they do anything and this is an amazing fact.

The palace is destroyed, in addition to that, the parliament building is destroyed and the palace of justice, which is the equivalent of the U.S. Supreme Court, also destroyed. All three branches of government, their main buildings destroyed. There are still workers who are reporting to work every day at the presidential palace. They're not doing very much, but we're told something interesting, pay day is in three days. And according to the chief of staff to the president, the workers who are supposed to be inside the palace but are now just hanging around will indeed get paid -- Wolf, back to you.

BLITZER: Is there any indication, Gary, whether they can actually rebuild, or do they have to level the whole thing and start from scratch?

TUCHMAN: I'm not an architect, but I will tell you, Wolf that based on covering previous disasters, they're going to have to rebuild this whole thing. Such an interesting history of this building, construction starting in 1914, it's not the first time it's been destroyed though. In 1915, a year after they began construction, a mob went into the building, burned it down, and assassinated the Haitian president at that time.

There's such a history in that building and there's been a lot of scoundrels in there. Jean-Claude Duvalier, his father, Papa Doc Duvalier, a lot of history in there right now. And one other thing, a lot of classified information inside the building and right now they can't get to that either.

BLITZER: Gary Tuchman getting some exclusive access for us. Gary thanks very much. The Haitian government now says at least, at least 150,000 people have died in the earthquake. Many of them are buried in mass graves and will never be identified.

Also new today, the State Department reports 59 U.S. citizens were killed in the quake, 37 other Americans are presumed dead right now. Secretary of State Hillary Clinton says the Obama administration is considering whether to allow more Haitian immigrants to come to the United States legally. She joined foreign ministers from more than a dozen other countries at a meeting on rebuilding Haiti held in Montreal today. We're going to have a lot more coming up on Haiti, much more as we continue to watch what's going on.

But let's get to the economy in the United States right now. President Obama says make no mistake, the dreams of America's middle class are under assault. So he's laying out a five-part proposal that will be included in his proposed fiscal year 2011 budget. The president hopes to almost double the child care tax credit for families making under $85,000 a year.

Also, a $1.6 billion plan to increase child care funding, the largest one-year increase in two decades, to make college more affordable, a cap on federal student loan payments to 10 percent of the student's income above a basic living allowance. For middle class retirement savings, the president hopes employers will give workers the option of a workplace individual retirement account. The White House is also proposing expanding tax credits to match some retirement savings.

And the president wants to help families caring for elderly relatives, the idea, increase federal spending for caregiver support programs. Let's bring in our senior White House correspondent, Ed Henry; he is watching all of this. All right so Ed, what sparked this announcement on this day?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well when you talk to the top White House aides, Wolf, they say look the president is under great pressure to come up with job creation right now. But they believe he has been working on this since day one of his administration. They insist it's not just a reaction to the Massachusetts special election results last week. But when I pressed Robert Gibbs today about how much will this really help with job creation, you get kind of an interesting answer.

Robert Gibbs basically said, look, this is going to improve sort of the atmosphere for creating jobs. Not necessarily directly creating jobs, getting businesses to hire people. Because this is sort of atmospheric, you know helping people with child care, tuition, you know student loan assistance, as you mentioned. That can be helpful to people in trouble right now.

But it's sort of almost emergency assistance, not actual job creation. And that's what the American people are demanding right now. That's what the president is under pressure from both Republicans and Democrats since the election year on. And this is why he's really going to have his work cut out for him in the State of the Union on Wednesday night -- Wolf.

BLITZER: The president, you know he's sending this message that things are slowly but surely working, this economic stimulus package which we're focusing in a lot this week. But over the weekend on the Sunday talk shows, three of his aides had three different numbers that they reported on how many jobs have either been created or saved. I know you raised this issue over at the White House today.

HENRY: Yes, I did ask Robert Gibbs about that. And basically, you're right, David Axelrod said it was over two million saved or created jobs, Robert Gibbs himself said 1.5 million. Valerie Jarrett said thousands and thousands, wasn't too specific. Gibbs said, look, there's a report last week that the White House put out where they think they can verify it's somewhere between 1.5 million and two million.

That's maybe why they're being a little bit vague, but I think that gets to the point that this is not an exact science, so it's difficult for them to be precise about how many jobs have been saved or created, number one. And number two, when you've got aides giving different numbers, that can add to a disconnect with the American people, that they've already acknowledged on health care, maybe now on the stimulus as well, where people are wondering, you know how can you really sell this plan and show the American people it's working when you're giving different answers about exactly what it's doing -- Wolf.

BLITZER: Ed Henry working the story for us at the White House, as he always does. President Obama speaking skills will certainly be on display Wednesday night when he delivers his State of the Union address before a joint session of the Congress and to the nation. Join us for our prime time coverage beginning at 8:00 p.m. Eastern right here on CNN.

We're getting new information into THE SITUATION ROOM right now about the plane that crashed off the coast of Lebanon today, including surveillance video that might shed some clues and late word about an American who may have died as well. Stand by. We have details.

And the Reverend Al Sharpton, he's here in THE SITUATION ROOM walking in right now. What should the president be doing next? We'll ask the Reverend Sharpton when we come back. Welcome.


BLITZER: Let's check in with Jack for "The Cafferty File" -- Jack.

JACK CAFFERTY, CNN ANCHOR: Wolf, President Obama is backing a bill to create a bipartisan budget commission which would force Congress to do something about the country's skyrocketing deficits, the likes of which we haven't seen since World War II. Force Congress, because they don't seem to have the backbone to be able to do anything about it on their own. Here's the catch.

The panel would report after the November elections, and Congress would vote on its recommendations in December. Don't want the lawmakers to have to vote on either raising taxes or cutting spending before the midterm elections, right? President Obama says the deficits didn't happen overnight. They won't be solved overnight.

He adds the only way to solve long-term fiscal challenge is with Democrats and Republicans working together. Haven't we heard that song before like with health care? And not even starting the process for at least 10 more months, guarantees that nothing will happen overnight. The proposed panel is getting pushed back from members of both parties.

Most Republicans don't want an entity that would likely lead to tax increases even though most economists agree that deficits cannot be brought under control by spending cuts alone, although there are no spending cuts happening at the moment. As things stand, officials expect the U.S. will hit the current $12.4 trillion cap on borrowing in the next few weeks.

So Democrats are trying to raise the ceiling, the debt ceiling by almost $2 trillion, which would allow the government to keep operating through the rest of this year. This is key -- the Democrats then wouldn't have to try to raise the debt ceiling again ahead of the November elections. The Democrats just increased the debt ceiling by $300 billion last month.

The Republicans want to keep these increases small so the Democrats have to keep going back and voting to raise the debt ceiling right up to the election in November. It's all fairly nauseating actually. Here's the question. How effective is a deficit panel that cannot force Congress to act until after the November elections? Go to Post a comment on my blog. Nauseating -- Wolf.

BLITZER: All right Jack, thank you.

The entire country wants to know how will turnaround the ailing economy. Democrats especially want to know how to turn around their political fortunes, which are certainly ailing right now, so virtually everyone will be watching President Obama at his State of the Union address Wednesday night.

Joining us now is the civil rights leader, the Reverend Al Sharpton. He's president of the National Action Network. Reverend Sharpton, thanks very much for coming in.


BLITZER: What one thing do you think is most important that he does immediately, the president, maybe in the State of the Union address that would start to turn things around?

SHARPTON: Jobs. I think what he started doing today, to address jobs, the economy, the hurting of people is what he needs to do and what he will do. I think that the president understands better than he's given credit for that people in this country are suffering economically, even though it is not his fault, it is his task. And I think he's up for the task.

BLITZER: You've heard these calls from the members of the Congressional Black Caucus say he hasn't done enough specifically to create jobs in the minority community. Do you agree?

SHARPTON: I think that the question is creating jobs and as we create jobs, I think the minority communities and other communities will benefit. What we must be careful of, we have specific needs because in many of our communities we're doubly unemployed, that needs to be addressed, but we do not need to allow ourselves to go for the bait of giving the right wing the bait of saying, oh, so this is a race bill, this is a race job program. Because then it will emotionally satisfy some people, but in the long run it will be a disservice to our community because they will use that to (INAUDIBLE) that effort and not get jobs for any Americans.

BLITZER: But unemployment in the minority community, in the African-American community is double or triple. SHARPTON: Double and triple, but it also means that we must be strategic in how we address that. We need a jobs initiative. We need an initiative for the middle class that includes knowing that we need some specific things for minorities. But if we make it a minority bill, we're only teeing up for the right wing to racialize it and deny it. They're denying it for all Americans. What would make me think they care about any specific group of Americans?

BLITZER: You know Harold Ford Jr., the former congressman from Tennessee is now thinking about running for the Democratic senatorial nomination in your state of New York.


BLITZER: He writes in "The New York Times" this today. "With one out of five Americans unemployed or underemployed, President Obama and the Democratic Party need to shift attention away from health care and toward a bold effort to create jobs, improve the economy and rein in the size of government." Do you agree with Harold Ford?

SHARPTON: Well I think the president started that today. I think that Harold Ford is correct to insist that we need to concentrate on exactly what the president and vice president outlined today, but I also...

BLITZER: (INAUDIBLE) health care?

SHARPTON: But I think that we forget that health care creates a lot of jobs. Do you know how many jobs we would create if we put this health care legislation through?

BLITZER: Do you want the president to go forward with the health care plan that the Senate and the House basically have approved?

SHARPTON: I definitely want them to go forward. I do not think that we have to choose between our health and our work. I think we need both.

BLITZER: Except he doesn't have the votes.

SHARPTON: Well I think -- but I think he needs to press on. I think that he needs to make those that want to oppose health care for seniors, and for children, to go on record as he pursues the jobs bill. I don't think that we have to trade off good health for the economy.

BLITZER: So you want...

SHARPTON: I think he's doing it right.

BLITZER: But you want him to have legislation that comes up that will fail? Wouldn't that advertise...

SHARPTON: Well I don't know that it will fail. I think that in the end of the day, if the president pursues the way I think he will, and takes the stand, I think a lot of people that are balking will at the end of the day have to back up, because they will have to go in front of their constituents and explain how they would oppose him on jobs and health care.

BLITZER: I'm just curious, would you be with Harold Ford Jr. if he runs or Kirsten Gillibrand, the incumbent senator from New York?

SHARPTON: Well I don't know that Harold Ford is running.

BLITZER: If he runs, if he runs...

SHARPTON: He came to our headquarters Martin Luther King Day, he has not told me he's running. I'll make that decision when he makes that decision...

BLITZER: Because right now you're on her Web site as a supporter.

SHARPTON: I have endorsed her. And again, there's no candidate for me to even speculate on what I'm going to do. Why would I make a decision before Harold makes a decision?

BLITZER: Let's talk about Haiti right now. You wanted to go, but you haven't gone yet.


BLITZER: What's the problem?

SHARPTON: Well what I want to do is go in -- we're going to announce Wednesday, Wyclef Jean and I, an initiative bringing doctors in, Wyclef is back there again. We're going to announce a major company is going to send in tens of thousands of dollars worth of clothes. I don't think we need -- Basinski (ph) was right on this station yesterday, just some photo-ops.

We need to go in with aid. We need to go in to show we're healing. This is very serious. And I'm also concerned that the public attention will shift as media shifts. CNN has done a good job. And I'm sometimes critical of you guys.


SHARPTON: You've done a very good job.

BLITZER: Haven't we done a great job?

SHARPTON: Well let me let you earn it in about three weeks. I want to make sure that when the cameras leave, the aid doesn't leave, as was just shown on your program. The palace had fell, the House of Justice, the Hall of Justice has fell. The three branches of government is there. This is going to take a long-standing commitment and I'm going to be working with Wyclef and others. This is not about photo-ops in Haiti. This is about brining in real aid.

BLITZER: You're a tough critic. Because if you don't think we've done a great job, I don't know what else we could have done. SHARPTON: You should see some of the criticism y'all (ph) give me.

BLITZER: Between -- between Sanjay Gupta and Anderson Cooper and Ivan Watson, our entire team down there, they have been amazing.

SHARPTON: They've been very good -- amazing, I would say that and I think Anderson you should put in there. And I think you've done...

BLITZER: I did mention Anderson Cooper.

SHARPTON: But I think that it's being that you guys have always been hard on me thy reaps what thou sows, Brother Wolf.

BLITZER: OK. We're not leaving Haiti...


BLITZER: We're going to say on top of this story...

SHARPTON: I hope so.

BLITZER: Because a lot of people's lives are still at risk right now.

SHARPTON: That's serious. That's very serious.

BLITZER: I agree. All right, thanks very much for coming in.

SHARPTON: Thank you.

BLITZER: Three more detainees have been shipped out of Guantanamo Bay, and they're going somewhere a bit unusual. You're going to find out when we come back.


BLITZER: Let's check in with Lisa Sylvester. She's monitoring some of the other top stories in THE SITUATION ROOM right now. Lisa, what else is going on?

LISA SYLVESTER, CNN CORRESPONDENT: Hi there, Wolf. The infamous Iraqi general dubbed Chemical Ali has been executed. Ali Hasan Al- Majid was put to death by hanging today. His punishment was imposed by an Iraqi court January 17th for the 1988 poison gas attack that killed 5,000 Kurds. Al-Majid was notorious for leading campaigns that killed tens of thousands of people. He was one of the last key members of Saddam Hussein's regime still on trial in Iraq. He was also Saddam's cousin.

Three inmates held at Guantanamo Bay Naval Base are no longer in custody at the detention center. The Justice Department today announced that they were handed over to the government of Slovakia yesterday. The statement does not disclose their names and their departure reduces the number of Guantanamo detainees to 193. Well, the U.S. Census is under way in Alaska's Arctic hinterland. The Census Bureau director flew to Noorvik, an Eskimo community of 650 people, to kick off the 2010 count of the nation's residents. Workers are going to be fanning out over the next several weeks to 217 remote Alaskan communities that have in the first to be counted since the 1990 Census. The 10 question Census form will be mailed to most other U.S. residents March 15th.

Well, oops, it just doesn't cover this next story. A woman visiting New York's Metropolitan Museum of Art lost her balance and stumbled right into a Picasso 6'4" painting "The Actor". She damaged the priceless work of art putting a six-inch tear in the lower right- hand corner. The good news though the museum says that it can be repaired and in time for its Picasso exhibition in late April. I don't know what you say after an accident like that, Wolf.

BLITZER: I think these museums, they got to move these paintings further away from the general public. I don't know what else they can do, but you know you want to be able to get close. On the other hand, you don't want a horrible situation like that to unfold.

SYLVESTER: Yes and that is one of the things that they are now looking at. They're obviously reviewing their procedures and I think we could probably expect some changes. I'm going to bet they're going to have to make some changes going forward -- exactly your point Wolf.

BLITZER: Yes, something's got to be done. All right, thanks very much. Lisa, don't go away.

Dr. Sanjay Gupta, he is on the ground in Haiti, has been from the very beginning. We're going to Port-au-Prince and Dr. Gupta -- that's coming up.

And grieving relatives rush to the shores of Lebanon, where a jetliner crashed. We have new information about just who was on that flight.


BLITZER: Desperately needed aid has arrived at one sprawling refugee camp in Haiti, Catholic Relief Services now distributing 100- pounds of -- bags -- 100 pounds of oil, beans and grain to tens of thousands of people who are living in a tent city on a golf course. The U.S. Army is assisting in what's being described as an orderly handout. For more on the medical situation on the ground, just a little while ago, I spoke with our chief medical correspondent, Dr. Sanjay Gupta, and I asked him whether things were getting any better.


DR. SANJAY GUPTA, CNN SR. MEDICAL CORRESPONDENT: Yes, there's no question. Things are better today than they were yesterday, which was better than the day before. If you go to some of these hospitals which we've been visiting over the last couple of weeks now, Wolf, you've seen some of the images from before and you're about to see some of the images of what they look now. But as often is the case, new problems have presented themselves as well, mainly due to still persistent lack of organization. Take a look.

We're in a lobby here at General Hospital (ph) and one of the things that you'll notice right away, I noticed is that things are definitely better here than they were even just a couple of days ago, lots of different equipment here, gloves. We didn't even have gloves to perform some of these operations here just a couple of days ago, all kinds of suture. One thing that's worth pointing out though even in the midst of all this you still have incidents like this -- that's a Black and Decker drill.

That's what they have to use to be able to -- to perform these operations to actually put the pins into the legs, so it's by no means perfect. But if you look around here, take a look at all the operations that are going on this is better than it was three days ago. But here's something I didn't expect. I actually think there may be too many doctors.

Doctors stepping over one another, lack of organization. People watching what's happening and come flooding down into an area like this. We're about to go into this meeting where they're actually getting all the chiefs from the various departments together to try and coordinate this so they can try and be as efficient as possible.

UNIDENTIFIED MALE: I think all of the groups are well staffed. (INAUDIBLE) the staff...


UNIDENTIFIED MALE: And not repeating or overlapping.


GUPTA (voice-over): So that means some of these doctors may be sent to other hospitals where they are short surgeons.

UNIDENTIFIED MALE: First in the area where we think all the sick patients are and then have a way to go through to sweep the campus (INAUDIBLE).

GUPTA (on camera): If you've ever been curious how they set up an operating theater, a whole system in the middle of an earthquake? You're looking at it over here, literally writing on the wall (INAUDIBLE) two. Here's a triage area. They've got post-op areas over here and here, pre-op areas over here. They actually separated this by the Haitian doctors, the natives, doctors, there's only one operating room (INAUDIBLE) over here, Swiss operating room over here.

That's how it works, lots of maps, lots of coordination going on. But one thing I want to point out, and I think this is really important. We are still talking about Port-au-Prince, which is over here. We now know that so much -- there's been a lot of impact in the other areas as well (INAUDIBLE) and the plan is to now to start taking some of those medical capabilities and moving them to some of the outlying areas.

They call them mobile surgical units, Wolf, and it's very important to take some of the capabilities that are sort of located in downtown and move them out to some of these areas that haven't seen as much medical care. It's also becoming one of those situations now where some of these surgeons, some of these doctors have been working sort of nonstop over the last several days. They're going to start hopefully getting them into shift work as well so people can get some rest now as things sort of progress and really with no end in sight (INAUDIBLE) -- Wolf.

BLITZER: So is it fair to say, Sanjay, that we should -- if a doctor or a nurse is watching us right now here in the United States or around the world, maybe now is not the best time, wait a few weeks, maybe a month, they're going to need help for a long time to come and there's got to be a orderly rotation because you can get burned out pretty quickly in a situation like this.

GUPTA: Yeah. There's no question, Wolf. I think you're absolutely right. A lot of people want to come now. Because hearing the stories and seeing the images. But a month from now, even two months from now there am still be a need.

I will say with regard to nurses, the work forces of the hospital, there is still probably a shortage of nurses at many of these hospitals. There's more of a surge of surgeons at some of these places and they need to distribute them a little bit more effectively. They're also going to need rehab doctors, a lot of amputations have been performed here. Eventually you're going to need prosthetics for those who have lost limbs. There's going to be a lot of different needs that are unmet right now. They've got to be smart and strategic about this. They're gaining more information along those lines every day, Wolf.

BLITZER: Sanjay Gupta speaking with me just a little while ago. We're going to continue to monitor what's going on in Haiti. Stand by.

Meanwhile, American, British, French and Cypra crews are searching the Mediterranean right now off the coast of Lebanon for victims of a plane crash. Lisa's back, working this story for us. What are we seeing?

LISA SYLVESTER, CNN CORRESPONDENT: Wolf, we have the video we want to bring to you, these pictures. We want to share it with you. It's airport cameras that captured the images. Look at the corner of the screen. What appears to be two flashes of light. It flies out of the camera's view and seconds later it went down. The Ethiopian airliner had just taken off headed from Beirut to Ethiopia's capital when it caught fire and crashed into the sea. The plane was carrying 90 people, including the wife of the French ambassador to Lebanon. CNN has confirmed she is originally from the United States.

Now, rescuers have been combing the water for survivors. So far they have not found anyone. They have recovered more than two dozen bodies. Meanwhile, grieving relatives arrived at the site. One man identified his 3-year-old nephew from the overalls that he was wearing. A mother holding on to hope, she pleaded with rescue crews to please find her son. Officials say that they don't suspect terrorism. But one thing that they are looking at early on is the weather. There was a very nasty storm in the area at the time. Ethiopian Airlines, though, the airlines itself, the carrier is actually known as being very safe. The plane, the Boeing 737, is in use worldwide.


ROBERT FRANCIS, FORMER NTSB VICE CHAIRMAN: It's the most produced air carrier, aircraft in the history of the world. There are thousands and thousands and thousands of them out there. And they get safer and safer every time they make another one. So this is the latest generation of Boeing 737s. And they are safe, safe, safe airplanes.


SYLVESTER: The plane went down just a couple of miles offshore. So investigators should have no problem recovering the flight data recorder and the cockpit voice recorder, which should, Wolf, at least provide some answers. So hopefully we'll get some news as to what exactly caused this crash.

BLITZER: The recovery effort I take it is pretty substantial?

SYLVESTER: Yes. In fact, the U.S. military is helping out with the search and rescue. There's a warship on the scene right now. What they're trying to do is look for any of the bodies. The passengers, what they've been doing is using DNA, the bodies that they have recovered to identify the victims.

BLITZER: Heartbreaking story out of Lebanon. The Ethiopian plane. Thank you very much, Lisa, for that.

We'll continue our coverage. Lots more coming up. We're watching what's happening in Haiti. Also, the president's economic stimulus package, what's happening? We're getting new information on that front.


BLITZER: President Obama says the Federal Reserve chairman Ben Bernanke has done a good job and has his strong support. Mr. Obama commenting in a new interview with ABC News. Amid concerns about whether Bernanke has enough Senate support to be confirmed to a second term. The fed chairman met with Dick Durbin. Dana Bash is up on the hill working the story for us. Dana, you had a chance to find out what they're saying about this. What are they saying?

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, I talked to senior Democratic sources who are trying to gather the votes for Bernanke's confirmation, to confirm him for a second term. And they say that they are -- that the prospects for that be looking better. At this hour they still do not have the 60 votes that are need locked up. The 60 yeses locked up to be comfortable. That it is a sure thing he will get the second term. That's why the fed chief was here today. He met with the number two Democrat in the Senate, Dick Durbin, who happens to be the vote counter and it is also why in talking to a number of wavering senators as I did earlier tonight in the hallways, it's very interesting, they are getting bombarded with calls from the president on down inside the administration trying to convince them of the following. And that is, that they -- at the white house, they say they understand there is concern, political concern especially about voting to confirm Ben Bernanke at a time that Democrats especially are hearing populist anger back home, especially anger about Wall Street, about mismanagement of Wall Street and those big bank bailouts. Think understand there is a lot of, again, concern about voting for Ben Bernanke. However, the big argument that the white house is pushing is that he was not the only one who was to blame. There were members of Congress who were to blame. And perhaps the other one, Wolf, is that they're very concerned about what will happen to Wall Street if Ben Bernanke's nomination goes down. They're concerned that ultimately that will have a worse effect on the economy than what would happen if they give Ben Bernanke a second term and give him another chance.

BLITZER: By the end of this week we should know whether he's confirmed or not?

BASH: That's right. There will be a vote toward the end of the week. His first term is up January 31st. So they're running up against the clock here. We expect it to be probably Thursday or Friday for this big vote. 60 votes are needed for Ben Bernanke to get that second term.

BLITZER: Thanks very much, Dana.

This is what CNN does. On the economic stimulus desk right now, from morning until night every day this week, we're sifting through the raw data so you don't have to. Reporting on the stories you want to know about. As we check the facts, if we find something interesting, good or bad, we'll tell you what we're doing, and what our investigation uncovers. Let's go to the stimulus desk right now. Our chief business correspondent Ali Velshi is standing by.

It's a complicated, complicated story for you and for all of our journalists, for everyone watching. But what's the bottom line right now, Ali? Is the stimulus plan doing what it was supposed to do?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: That's exactly the project we're engaged in, Wolf. $787 billion. We know about $288 billion of that is in tax cuts. That leaves a lot of money given out to projects. We're phoning companies. Every one of these binders, this is only about half of them, contain details on 56,000 individual grants that have been given out to companies, grants and loans. We're making phone calls here. This is the stimulus desk. We're making phone calls on them and finding ones that are of interest and checking out what happened.

Here's one that Emily Smith over here found as she was going through things. A company named Always Bagels in Bohemia, New York. It received a $4 million loan. We confirmed with them they got $4 million. They used the loan to build a bagel factory in Lebanon, Pennsylvania. You can see it here on the website. It even shows you the construction of the factory. Now, they use this money to build this factory, and then the building of that factory, 75 jobs were created for three years. Now, the company said to us, they wouldn't have actually had to lay anybody off if they didn't get the money. But they wouldn't have expanded. When you think of that, 75,000 jobs over three years, that's $17,000, $18,000 a year per job. Doesn't sound particularly excessive. And they've created environmental benefit from doing that. All those people who have been employed are actually able to spend that money elsewhere. Those are the kind of projects we're digging into. Not all of them are success stories like that, but that's just one example.

BLITZER: Created 75 jobs, not 75,000 jobs.

VELSHI: 75 jobs, that's right.

BLITZER: Ali, you'll be with us all week. We're working hard on this story. Thanks very much.

Coming up tomorrow, right here in THE SITUATION ROOM, he's the one man keeping track of the $787 billion stimulus. Now he's tracking a fraud and waste of your tax dollars in an exclusive with Earl Devaney tomorrow here in THE SITUATION ROOM.

President Obama said there is one campaign promise he shouldn't have made. That's coming up.

The balance of power in Congress, now the vice president's son, Beau Biden, makes a major decision.


BLITZER: Just getting word that the president's about to make a major announcement. Let's go to our senior white house correspondent Ed Henry.

Ed, what are you learning?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: We're learning from senior officials here at the white house that the president in his state of the union address will have a major announcement basically that he is going to propose that all non-security discretionary spending be frozen for the next three years. Beginning in October, over the next three budget years, all discretionary spending, save for homeland security, the wars in Iraq, Afghanistan, he wants to carve that out and say we still need to have full spending on that, but all domestic programs will be frozen, education, health care, everything else will be frozen at a level of $447 billion, which is the current level.

We should be clear that within that parameter, individual federal agencies can decide, we're going to increase spending on one education program, but cut another. But they have to stay at that frozen level of $447 billion, the entire federal government, in terms of discretionary spending. What it means is what Congress can specifically decide that they're going to fund, the sort of non- entitlement programs, you know the big ones like social security and Medicare, that are just steaming along. These are the more politically popular domestic programs.

The point of this, when you talk to senior officials, this president wants to get serious about fiscal discipline, he's heard all the criticism about Washington spending so much money. We're told that the state of the union address is going to have a lot on fiscal discipline. The president clearly trying to burnish his credentials on that. Mixed reaction I'm getting from Republicans, some saying they can work with the president on this. Others saying it's just a fraction of the federal debt right now and really not going to be enough.

The big problem for this president is going to be very senior Democrats on the hill don't want their power of the purse taken away. I'm already talking to top Democratic aides on the hill saying the president is going to face some real opposition, because there's going to be some really popular programs that liberals will not want to cut.

BLITZER: Stand by. Gloria Borger, our senior political analyst, is here. Do I hear echoes, Gloria, of the president saying, in effect, the era of big government is over?

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yeah. I think you do. But you have to keep in mind here, Wolf, that discretionary spending that Ed is talking about, is only about one-sixth of the entire federal budget. That, you know, this isn't defense spending. This isn't spending on entitlement programs like social security or Medicare. This is discretionary spending. And so it's a lot of money. But it's not really the bulk of where our money is spent. So you're going to have Republicans saying it's not enough. And you're going to have liberal Democrats as Ed was saying, it's too much.

BLITZER: Do you know, Ed, what the president is going to say about raising taxes?

HENRY: We have not heard specifically, whether he'll address taxes. It seems likely -- let's point out in his interview tonight with Diane Sawyer, the president specifically said he doesn't think it makes sense to raise taxes right now in the middle of this recession still going. I would expect he would stay consistent with what he said tonight. Let's take a step back and look at the politics of this. It won't necessarily hurt this president to pick a fight with Democrats on the hill. Coming out of the Massachusetts special election, we've heard so much about how Scott Brown in Massachusetts, and other Republicans around the country, are really beating up on Nancy Pelosi, Harry Reid saying they're spending like drunken sailors. It wouldn't be such a bad political move for this president to say, I'm separate from those guys. They're the ones who are spending. I'll try to institute discipline. And having liberals beating up on the president is something he can use right now. While there's a serious policy proposal, there's also politics played out in the days ahead.

BORGER: I might add when I was speaking with the senior administration official about this, this official went out of his way to say, look, this has been under serious consideration since the summer. Because clearly, they don't want this to look contrived, as if they just decided to do this yesterday. Because they had some problems in the state of Massachusetts last week. But rather, they are -- they have been working on this deficit issue for quite some time and they're taking great pains to point that out.

BLITZER: I'm hearing the president is going to have no choice but to go small right now in the health care reform. He doesn't have the votes for the ambitious program he wanted. He's going to have to go small on this and that will become clear over the next few days. Ed Henry's at the white house doing his job as he always does. Gloria, thanks to you as well.

We'll take a quick break. Jack Cafferty is standing by. We're also watching what's happening in Haiti. Our coverage continues after this.


BLITZER: Major decision made by the president as far as trying to reduce the annual budget deficit. The president getting ready to make that announcement in a state of the union address. Ed Henry is with us over at the white house. Ed, before we get to that, I want to play this clip. The president gave an interview today to Diane Sawyer over at ABC News, and he was very forceful in making the claim, making the point that he's not backing down from his agenda. Listen to this.


DIANE SAWYER, ABC NEWS ANCHOR: Health care. Going forward, should all the conversations, all the meetings be on C-Span?

PRES. BARACK OBAMA (D), UNITED STATES: You know, I think your question points out to a legitimate mistake that I made during the course of the year, and that is that we had to make so many decisions quickly in a very difficult set of circumstances, that after a while we started worrying more about getting the policy right than getting the process right. But I campaigned on process.


BLITZER: All right, the president of the United States speaking to ABC News. Ed Henry is still with us, Gloria Borger is here as well. We're talking about the breaking news, this three-year commitment. When would that start? A commitment to free spending, nonessential spending as its called, discretionary spending not including social security or Medicare or defense, but the three-year freeze, when will that start, Ed?

HENRY: It's a good question. It would start at beginning of fiscal year 2011. What that means for all our viewers who don't understand the ridiculous Washington budgetees if you will and it's October 1st of this year and it's a good question because that's when it begins and it will carry through three fiscal years. Over that time the white house believes they will save $250 billion. But to underscore Gloria's point, this is essentially -- this discretionary spending about one-sixth of the entire federal budget, and white house aides are up front I should say about noting this is not going to solve the deficit problem long term, which is well over a trillion dollars per year. In fairness to them, you do have to start somewhere, so they're going to try to sell this in the state of the union, the president will as a positive step forward and a lot more steps need to be taken, number one. I think, number two since this doesn't start if it's passed until October 1st, there's a lot more spending that can happen between now and October 1st, and I have Republicans already saying, what's the president going to do on this jobs plan for the middle class he was talking about today? That's new spending. Is he going to try to sneak more spending in before October 1st? That's a big fight ahead as well, Wolf.

BLITZER: It's one thing to make this proposal. It's another thing for both houses of Congress to approve it.

BORGER: Yeah. It's interesting that Congress isn't even going to be able to approve tomorrow a deficit commission that's supposed to operate like a base closing commission and really cut spending and not put it to a vote of Congress and just get it done. They can't even do that, Wolf. So it's going to be interesting to see whether they're going to approve this kind of cuts in the federal budget, particularly, particularly those Democrats who at eight years of George W. Bush in the white house, there's so much pent-up demand for spending as we have seen, given this economy right now, lots of plans for more jobs programs, et cetera, as we saw today. Middle class programs. How are they going to do this and cut this spending? I guarantee you that when Republicans see what he wants to cut, they may want to cut some more.

BLITZER: All right. A big story that we're going to continue to follow because the ramifications are significant. We'll see if the house and Senate goes along with the president of the United States. We'll continue to watch this sorry. A lot more coming up throughout the night here on CNN. We'll take a quick break. Jack Cafferty will be back after this.


BLITZER: Right back to Jack for the Cafferty file. Jack?

JACK CAFFERTY, CNN CORRESPONDENT: The question this hour is how effective is a deficit reduction commission that cannot force Congress to act until after the mid-term elections in November?

Mark writes from Pennsylvania, "The panel will not be effective at all. Zip. This is simply a facade for Obama, our newly created populist president, to show the working man he is angry and will fight for us. Bull. Plain and simple, this is politics at its very worst. Make promises to the American vote only after we vote."

Ron writes, "Not effective at all. We are in a perpetual campaign for virtually every elected office in Washington. Not what the founders envisioned in our Constitution. Term limits might help but George Washington was right, party politics will be the ruination of our government."

Jim in Wyoming writes, "The deficit panel is highly important because it lets the president, the congress and the political parties find cover until after the next elections. As a real solution to anything, it's worthless of course."

Joe writes, "It's like throwing a Dixie cup of water at the towering inferno. What really annoys me is that while our representatives play partisan politics, our future and our children's future is getting flushed down the toilet by these clowns. I hope all incumbents in the next election will get flushed as well."

Mike writes, "An appointed panel that is charged with making congress act on reducing deficit? Is that constitutional? How and why do the voters deserve another layer of government to make the elected officials do their job?"

And Steve in Virginia writes, "About as effective as a president who needs a deficit panel to tell him he's spending too much money."

If you want to read more on this, go to my blog at

BLITZER: Let my pick your brain on this breaking news out of the white house. The president in the state of the union address Wednesday night will announce he's freezing all discretionary spending, non-Medicare, non-social security, non-defense starting next fiscal year, which begins October 1st of this year for three years. What do you make of this?

CAFFERTY: It's a great idea if he can do it, but like you said, he's got to get it through Congress, doesn't he?

BLITZER: There's only two ways you can cut that deficit. You can cut spending, which is difficult as all of us know in Washington, or you raise taxes. Other than that, there aren't a whole lot of other options out there.

CAFFERTY: The Congress isn't going to vote to raise taxes with the mid-term elections coming up, and nobody in either chamber has done anything meaningful about reducing spending ever.

BLITZER: I guess they're going to talk about that. Spending keeps going up and up and up.

CAFFERTY: We're broke.

BLITZER: Not yet but we're getting there.

CAFFERTY: Yeah, we're broke. $12 trillion in debt. We're broke.

BLITZER: All right. Jack, we'll talk about this tomorrow.


BLITZER: Thank you. Jack Cafferty.

You can follow what's going on behind the scenes here in THE SITUATION ROOM. I'm on twitter. Get my tweets at Up next is Campbell Brown.