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State of the Union Speech; Toyota Recall
Aired January 31, 2010 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CNN HOST, YOUR MONEY: I'm Christine Romans. Welcome to YOUR MONEY. Ali Velshi is off this week.
News this week the economy is growing at the fastest pace in six years. But a nagging question, mainly, when will it lead to job growth? President Obama spent the week laying out a new agenda to create jobs and bolster the economy.
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BARACK OBAMA, PRESIDENT OF THE U.S: Jobs must be our number one focus in 2010 and that's why I'm calling for a new jobs bill tonight.
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ROMANS: Beyond the applause, a tough road ahead for this president. Of course, this is on top of the stimulus bill with a price tag that is now rising. New total this week, $862 billion. Republicans remain skeptical.
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RUDY GIULIANI, FMR. MAYOR OF NEW YORK CITY: I think, yes, Republicans could clap for a jobs bill. Is it really going to be a jobs bill or is it just going to be a remake of the stimulus which has been a disaster?
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ROMANS: So when do the words turn into jobs? Let's ask CNN senior political analyst David Gergen and CNN senior political correspondent Candy Crowley. David Walker author of "Come Back America Turning the Country Around and Restoring Physical Responsibility" and Joanne Lipman, the former editor of Conde Nast Portfolio. Let's start with you David when do the jobs start coming? Because the president is making some big promises for this year.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I'm not an economist, but the ones I trust including the congressional budget office are predicting a very agonizing and slow recovery on jobs. Richard Freeman, he is a major labor economist in this country. I was with him the other day. He said it might be 2016 before we return to the kind of job levels we saw before the great recession. So this is going to be -- even though the economy grew at a robust pace in the fourth quarter, we have a long way to go and much, much work to do to restore the vitality of the economy. ROMANS: So Candy then politically this president is saying look, this is going to be the jobs year, 2010. He gets it, he feels your pain. This is the number one priority. But if we are looking tough sledding to 2013, 2015, 2016, this carries political risk too.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Tremendous political risk. But he is at probably no more risk having said this is the year of jobs I'm going to restore jobs, then he would be if he had not said anything. It's going to be in the numbers. What's that jobless rate going to be come November? The Democrats are braced for a loss. They're now talking about how big a loss at the polls when you have the entire house and a third of the Senate seats up for grabs.
So what they're looking at is, if you go into this election with 9.5 or a 10 percent unemployment rate, anything around there, it's going to be a huge failure for the Democrats, and they're going to pay for it at the polls.
ROMANS: Joanne, we have a poll I wanted to ask to get your response to. You know this is a CNN Opinion Research poll that we took January 22nd and 24th. It says Obama has made -- paid more attention to financial institutions, 60 percent, middle class, 28 percent, those are tough numbers.
JOANNE LIPMAN, FMR. EDITOR N CHIEF, CONDE NAST PORTFOLIO: Those are really tough numbers, but that's -- this is the issue he faces, that he aligned himself with his economic advisers who were seen as closely related to Wall Street. I do think that his problems, that he has with the business community conversely, the business community has also been complaining that he's attacking them.
ROMANS: And 77 percent of investors polled by Bloomberg said the president is to anti-business. It takes business to create jobs. They're concerned on the other side of the fence.
LIPMAN: That is right. And so what he has to do is there's a balancing act that he really needs to walk this year that is so crucial. Right. On the one hand, he can't be seen as too close to business and he already has been. Even his anti-business measure, such as that $90 billion tax on the banks, you know what it's nothing. It's $9 billion a year over ten years and you compare that to what the banks are paying themselves just this year is $145 billion.
ROMANS: Just in compensation.
LIPMAN: Just in compensation.
ROMANS: David Walker, let me ask you, then, this poll by the way, was taken before the president's State of the Union Address, where two- thirds, three quarters of that speech was all about jobs. The president also maybe with a nod to fiscal conservatism saying in 2011 they'll try to freeze a portion of federal spending, discretionary spending. Is he striking the right tone trying to create jobs and spend money on the one hand but with an eye to deficits down the road?
DAVID WALKER, AUTHOR, "COMEBACK AMERICA:" Two things that the American people care about and number one the economy and jobs. Number two, escalating deficits and debt and what can result from that. So 2010, he has to focus on trying to make sure that we have an economic recovery. Do something about jobs. And put a process in place through this fiscal future commission that will engage the American people, make recommendations so Congress can make tough choices in 2011.
ROMANS: But is Congress equipped to make tough choices? That is my question. Because the tough choices that they have been tackling right now, it seems like the big issue is re-election year. That's the big issue and appealing to the middle class?
WALKER: It is. The fact is that the president's making a good first step by saying he's going to freeze for three years a portion of the discretionary spending. But that discretionary spending is less than 20 percent of total spending. We have to do a lot more than that to put our financial house in order.
ROMANS: All right. Everyone stick with us we're going to continue talking about this and we are also going to talk about independence. It sounds simple. If you win the hearts of the independent voters you win the elections. One problem, who are these people? What do they want exactly? We'll put that to our panel next.
ROMANS: All right. Think back to high school. The most popular kids in the class right now, without a doubt, the independent voters. Everyone in Washington wants to be their friends. Who are these people? What are the issues that will get these independent voters to pick side? Back with panel now to go over these answers. Joanne, you said everyone is an independent voter now. In uncertain times everyone is kind of up for grabs?
LIPMAN: That is right. Absolutely everybody is an independent voter, you've got an issue with the president in that you saw that the State of the Union Address, if you read his books, there's a theme running through the president's approach, which is, I overreached. Because of hubris, I failed. I had my comeuppance (ph) and I learned. And it is a theme you saw over and again. And now you see again with him talking about jobs, you see with him talking about health care, and unfortunately, voters don't want him to be learning and making mistakes on their watch.
ROMANS: Candy, you go across the country every day. You have been everywhere talking to independent voters. What do they want?
CROWLEY: One of the reasons we call them independent voters, is that they want a lot of different things. The facts is, is that you've got a country where right now in registration and there are a lot of states obviously that don't have registration by party, but you know high 20 percentile Republican, mid-30 percent are Democrats, and everybody else is an independent. If you push them further, most people will say, well, I'm independent, but I lean Republican.
What do they want, they want Washington to stop fighting and do something. I mean if there is an overriding theme, because they do look differently at the economy or jobs or that sort of thing. You can have liberal, more liberal leaning independents, more conservative leaning independents. But they mostly would like to see something done. By and large I think when we looked at the figures; about 50 percent of males identify themselves at independents, only about a third of women. They tend to be somewhat less educated independent voters, believe it or not, and also tend to be less tuned in to the day to day activities of politicians.
So they have sort of the 50,000-foot slew, but those are the people that have always and for so long swayed elections, they are a tough crowd to attract in bulk.
GERGEN: Christine, I think a lot of us are now scrambling to try to understand the types of the independents. I think there are, I can be pointing this in the right direction, there is two main groups. One is what we call the moderates. The traditional moderates usually play politics between the 40 yard lines and they lean one way or the other but they can be swayed. One party gets to extreme then they'll be swayed to go to the other party. And they used to be the group that everybody would -- in presidential elections, that's where you went. You went to the middle to find those independents to win the election.
But there is a second group of independents now that are more closely identified with the tea parties. And who are much more populist, they are much more grass roots, they're much more blue collar. And they, they're coming at this from a different way. There is a strong strain of libber terrorism. They just don't like big government. They want to keep the government out of their lives. They want to keep the deficits down. They don't like all the spending. They don't like the health care and they're fueling a lot of the energy behind some of these populace candidates like Scott Brown.
GERGEN: They made a big, big difference in his campaign.
ROMANS: David Walker, weigh in here on this. Especially those independents who have this very big fear of these deficits and this spending right now?
WALKER: Well first, I'm an independent. And I'm now in Dallas, Texas, in the Ross Perot Studio doing this and I've been in 46 states in the last four years. What we saw in Massachusetts was the rise of the independent. What we saw is that people absolutely disgusted with the gridlock in Washington. It's not just partisanship. It's the ideological divide. Washington is over promised and under delivered. It's out of touch and out of control.
And, you know, the Republicans better be careful not to overestimate what happened in Massachusetts, and the Democrats better pay attention, because it's really more of an anti-incumbent move than anything else.
ROMANS: Stephen you said something interesting during the break. You were talking about courage on the hill in terms of deficits. Tell me a little about or maybe the lack of courage in terms of tackling deficits?
WALKER: Well, I'm a John F. Kennedy fan and Theodore Roosevelt among others. And you know John F. Kennedy wrote "Profiles in Courage" it was a pretty thin book. It could almost be nonexistent today. Today we could write "Profiles in Cowardice" and one example is, on the Conrad Gregg Amendment, it was voted on earlier this week, seven of the co- sponsors of the bill didn't vote for the amendment. That's a profile in cowardice, but I won't mention any names.
GERGEN: But they did run for the hills, right? As President Obama State of the Union?
WALKER: Well what happened, David, is that you know you have the far right, the fringe right, and the fringe left that frankly would flunk math. They don't understand how the numbers work. And they have totally unrealistic ideas about what it's going to take to put our financial house in order and those seven caved.
ROMANS: All right.
LIPMAN: Christine, if you go back to your main question, right, which is what can Obama do to win back these swing voters? The independent voters. I think the answer to all the groups that we've all been talking about here is, jobs. It's a very simple answer. If the employment picture improves, the voters will come back.
GERGEN: They are looking for deeds more than words right now.
ROMANS: All right.
The president's treasury secretary got a grilling on Capitol Hill this week. Second guessing from both parties on events surrounding the AIG bailout. I sat down with the treasury secretary and found why he's speaking a little positively these days.
ROMANS: A day after a grilling on the hill, the treasury secretary Timothy Geithner sat down exclusively with me for a coffee and to talk about stimulus jobs and political heat. That heat over his role in paying billions to other banks through the AIG bailout.
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ROMANS (voice over): Was it a mistake to not, Ben Bernanke, either treasury or Fed or New York Fed to not negotiate a better deal on those counterparties? I mean this keeps coming back. You're going to get hammered on this until mid-term elections are over.
TIMOTHY GEITHNER, TREASURY SECRETARY: I will carry for my life the burdens of decisions we made in that context. As I said yesterday and I've said consistently and I think the record will show this, we looked at all alternatives. There was no alternative, except default and collapse, much greater costs and expense to the taxpayer to the one we close. We think we did what was in the best interests of the public and taxpayer and have an outcome today which is much less damaging because of what we did then.
ROMANS: A lot of people will say that you know American people just got a raw deal.
GEITHNER: American people in the crises got a very raw deal. But their deal would have been much worse if the government had stepped back and let that firm fail or tried to default selectively at a time when the financial system was literally falling apart. The rivets were coming off the submarine. People were saying, I do not have confidence in anything. When that happens, if you let that go on it is perilous and causes grave danger.
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ROMANS: Candy Crowley, the treasury secretary says he will bear the burden of AIG and the decisions made there for the rest of his life. Will he bear them through and will the president bear those decisions with him through the mid-term elections?
CROWLEY: If they have a, 8 1/2, 9, 91/2, 10 point unemployment rate they certainly will. I think that certainly AIG and more generally the perception that the banks got bailed out and Wall Street was -- Main Street was left to wither is certainly one that they're going to have to fight. We saw in those enormous poll numbers, with people thinking that banks were helped.
That Wall Street was helping and they weren't. I think the problem for this administration and something we haven't yet talk about yet is, when David mentioned earlier on how many of these initiatives the president is talking now about jobs and so forth are small, but the psychology of politics is every bit as important as the size of the initiatives here, and what this White House has to overcome, using Timothy Geithner, which they hope to do and others in the administration, is to say, we understand, but things really are better than you think they are.
Because no one -- you know, someone says, gee, the GDP went up. Or, you know, jobs are a lagging indicator. All people really get, what everybody gets, is 9 1/2 percent unemployment. My job, my neighbor's job, my kid's job, whatever it is. That is very tough to fight psychologically.
ROMANS: Will everyone weigh in here. Because at the beginning of the week, Timothy Geithner, it was in the "Wall Street Journal" the embattled Timothy Geithner, The "Financial Times" a weakened Timothy Geithner. Politically, where does he stand right now?
Ben Bernanke was confirmed.
GERGEN: At the end of the week, Ben Bernanke was an embattled Ben Bernanke and he emerged with a victory, to be sure was a high vote against him but he did emerge with a victory. I think the Bernanke confirmation is very symbolic of what is going to happen to rest of the team, I think the president will keep this team through the rest of the year. I think he believes that they'll be vindicated on their policy decisions but they also realize they have to get to change the psychology. That they are living on the edge of a volcano. If that volcano erupts in November, a lot of people will be swept away.
ROMANS: Can they put this AIG stuff behind them? I mean this 10,000 pages of e-mail for crying out loud, that we are also going through. I mean are they going to be able to put this behind them?
LIPMAN: You know what Geithner's credibility has been so damaged. It is not just AIG. It goes back to the confirmation hearing, a lack of paying the taxes and his relationship with Wall Street beforehand. It's going to be very difficult for him to regain his credibility, and not only that, but a lot of the economic numbers that we're seeing here, you know, we have to take them with a grain of salt. The GDP number better than expected. That is fantastic, that is great for Geithner, but you have to understand that a lot of that is rebuilding inventory and that number is probably going to get revised and you know that number may not be sustainable.
ROMANS: I asked Timothy Geithner in this meeting, I said look you are taking a lot of political heat right now. Compare that with sort of the economic heat of a couple years ago. I said how hot it is for you when you're sitting there under the spotlight in Capitol Hill and all of these people are hammering you about AIG. And this is what he said.
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TIMOTHY GEITHNER, TREASURY SECRETARY: The economy today is in dramatically stronger shape. You know, we've got a thing growing now for six months after shrinking for a year and a half. We are just at the point now where you see businesses starting to invest and grow again. With that will come greater confidence. It will come, greater -- faster growth and incomes, and that will help restore some of the damage and trust and confidence the people left with.
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ROMANS: David Walker, basically he says that after what he has lived through in the crisis in September and months after rebuilding, a little heat on Capitol Hill he can take. He's not going to show any weakness there, David.
WALKER: Look, the fact is, the American public believes that the financial institutions didn't take enough of a haircut in connection with AIG. You know what? They're right. They didn't take enough of a haircut and we're seeing that with regard to what's happening with regard to record profits now. And so we need to learn lessons from that.
The other thing is, is that both Paulson and Geithner were trying to say, we would have had the great depression and 25 percent unemployment. I'd like to see their sophisticated methodology to how they came up with those numbers. You can't prove a negative. Ultimately we have to remember what Ben Franklin said, good deeds are better than good words, and the American people are looking for results. Good deeds and results.
ROMANS: All right. One more quick reaction on Geithner and whether this president can overlook this AIG stuff. Quickly, can they get beyond this as we go through the spring and summer?
LIPMAN: I actually don't think that he can get behind it. There's still e-mails coming out, there is still the re-creation of that period of time.
LIPMAN: And -- more to come.
GERGEN: I disagree. Unless there's something new and explosive, I think he's going to put AIG behind him.
ROMANS: There is no smoking gun at this hearing. This is a lot of posturing for mid-term elections.
GERGEN: Results. Its results.
CROWLEY: I was going to say what will undo Geithner is not AIOG and memos. But if they get to this summer and the economy is not showing in unemployment, in housing prices, in bankruptcy, if it's not showing any improvement in those things, somebody's going to go, and it would seem to me that the weakest spot in the circle at this point would be Geithner.
ROMANS: Candy Crowley, thank you so much. David Walker, David Gergen and Joanne Lipman, everyone thank you for some fantastic analysis.
Chances are you at least know someone who owns one of the millions of cars recalled this week. Find out which cars are on the list, what's wrong with them and what it all means for the future of one of the top-selling automakers in world.
ROMANS: Drive a Toyota? A lot of you probably do or you probably know somebody who does. Two recent major recalls by the auto maker cause for concern. The first problem, the gas pedal getting stuck on the edge of the removable floor mat, 14.2 million vehicles were recalled for this reason back in November. Then added to the list this week, the 2008 to 2010 Highlander, the 2009, 2010 Corolla, the '09, the '10 Venza, and the same Matrix and the 2009, 2010 Pontiac Vibe, the Pontiac makes the list because of a partnership between the car companies.
The second recall is for sudden unintended acceleration or gas pedals that get stuck, this one affecting some of Toyotas best sellers. Over 5 million vehicles recalled, what does this mean for Toyota and what can you do if your car suddenly accelerates? Our Deborah Feyerick took a drive with the editor of "Popular Mechanics" Magazine.
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DEBORAH FEYERICK, CNN CORRESPONDENT (voice over): It happens without warning. Now I am going to hit the brake while the throttle is floored.
FEYERICK: Oh, my god. The technical term is sudden unintended acceleration. But Toyota's latest problem involves a new twist. The gas pedal gets stuck even after the driver lifts their foot. Larry Webster, an editor of "Popular Mechanics" Magazine says Toyota's decision to recall millions of vehicles and halt production is unprecedented.
LARRY WEBSTER, EDITOR, "POPULAR MECHANICS" MAGAZINE: Nobody knows how long it is going to take for Toyota to fix this. I don't think Toyota knows how long it is going to take to fix it and that's why they've stopped production.
FEYERICK: Are we talking about a major parts change?
WEBSTER: You know, they don't know yet, the recall is unclear. They run the gamut. Sometimes it is replacing a part. Sometimes it is adding a part or sometimes it's just sort of adjusting of parts.
FEYERICK: The recall affects eight models including Toyota's three most popular in the U.S. the Camry, Corolla and Rav4 SUV. Toyota believes the problem may be a faulty gas pedal assembly, the claim the pedal manufacturer disputes.
WEBSTER: I don't know why they had to stop production because usually you use two suppliers. So in case you have a problem with one the other one can take up the slack. So it is a little bit of a mystery right now what's going on.
FEYERICK: Dealers don't know how to fix the problem yet. But if it happens to you, if you're driving and the car all of a sudden begins to accelerate, do you take your foot off the pedal and put your foot on the brake with both feet or one foot?
WEBSTER: It doesn't matter. Just press the brake as hard as you can with all your force and then move the shift lever from drive to neutral and then turn the car off.
FEYERICK: It's not smooth but as we see it definitely works. So as long as the driver knows how to stop the car, in the event the accelerator doesn't return -- you should be OK?
WEBSTER: I think we need to come up with a song or something like, hit the brake, shift to neutral. Hit the brake, shift to neutral.
FEYERICK: The hit, Toyota's reputation cannot be underestimated. It's not even clear when Toyota will resume production.
Deborah Feyerick, CNN, New York.
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ROMANS: Hit the brake, shift to neutral.
Joining me now to break down exactly what this recall means for Toyota, Toyota owners is CNN Money autos writer Peter Valdes-Diapena. OK, if you own this car, if you own this car and you are worried what do you do? You take it to the dealer, you call, what do you do?
PETER VALDES-DAPENA, SR. WRITER, CNNMONEY.COM: Well for right now if you own a car involved in the first recall about floor mats, if you haven't taken your car to the dealer yet, take it to the dealer. Because there's a fix for that, it can alter the gas pedal so that that won't happen.
ROMANS: That was for the four million cars, the first 4.2 million.
VALDES-DAPENA: This 3.2 million many of which are also involved by the way in the other recall they don't have a fix for that yet but they wanted to put it out there so people would know. In this case it started happening to you, you know what is going on and to take your car to a dealer. If you have a Camry take your car to the dealer right away. I would say because they can tell you immediately. Not all Camry's are involved in this. They can check your gas pedal and tell you whether it is or not. If you are concerned about it take your car to a dealer anyway they can check your gas pedal and see if there's any problem accruing with it, this happens slowly over time. And then wait for your recall notice. When it comes in, get your car fixed.
ROMANS: You know that there have been some deaths, the National Highway Transportation Board said there have been a few deaths related to these, but there are so many of these cars on the road. Millions of people are driving these and have nothing wrong, no symptoms.
VALDES-DAPENA: Right. These situations are extremely rare. By the way, those deaths happened in just two accidents. So these situations are extremely, extremely rare. As the gentleman explained in the segment, if it happens to you, the dangerous part about it is the panic and not knowing what to do. So you can actually do something about it.
ROMANS: So hit the brake, shift to neutral. Hit the brake, shift to neutral.
All right. Peter Valdes-Dapena thank you so much.
He is the man in charge of hundreds of billions of dollars in taxpayer money and Earl Devaney, watchdog of the $862 billion stimulus has yet to speak out until now. See firsthand how he's handling your money in an exclusive interview, next.
ROMANS: $862 billion dollars is a whole lot of money, but someone has to follow that very large sum of cash allotted for the stimulus and that someone is Earl Devaney. Appointed by President Obama to keep those doling out the money honest. Until now, Mr. Devaney has declined to do a television interview. CNN's Kate Bolduan now with an exclusive look inside the life of the stimulus watchdog.
(BEGIN VIDEO CLIP) KATE BOLDUAN, CNN CORRESPONDENT (voice over): An early morning carpool with his wife arriving at a non-descript building just steps from the White House. Probably not what you'd expect from the man in charge of overseeing $862 billion in taxpayer money.
His name, Earl Devaney, official title, chairman of the Recovery Accountability and Transparency Board. Affectionately known at the rat board. Sixty two years old and ready to retire, Devaney was appointed by President Obama just days after the stimulus bill was passed.
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BARACK OBAMA, PRESIDENT OF THE U.S: I pointed out just when I Earl, he looks like an -- he's tough. Barely crack as smile.
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BOLDUAN: The president announced Devaney's appointment just ten minutes after he formally accepted the job. His wife got the news from a co-worker who saw it on TV.
EARL DEVANEY, CHAIRMAN, RECOVERY BOARD: I had a hard time coming up with the right birthday present this year.
JOE BIDEN, VICE PRESIDENT OF THE U.S: I think he done a tremendous job. All about credibility.
DEVANEY: Thank you, sir.
BOLDUAN: Devaney reports directly to Vice President Biden. We spent a day with him to find out how he does this job watching out for your money.
Anyone coming up saying, where are my tax dollars today?
DEVANEY: No. Nobody today, but I wouldn't be surprised. I think -- I really do think that if you're going to steal money, this is not the money to steal. There's too many eyeballs on this.
BOLDUAN: His staffers call him the big guy. He is a former college football lineman; later a secret service agent turned inspector general. He is best known for helping uncover the Jack Abramoff lobbying scandal at the Interior Department.
Why should the American public trust you, trust Earl Devaney with their tax dollars?
DEVANEY: All I've ever done is tried to ensure that the American people don't get ripped off or have their money wasted.
BOLDUAN: Devaney says his goal for recovery.gov is to provide unprecedented transparency but he is dealing with data collected by the people receiving the stimulus money, and that data is not always correct. We've seen reports on the website riddled with errors and inaccuracy and some cases stimulus jobs recorded in zip codes that don't even exist. You said transparency can be embarrassing. From an embarrassment you mean kind of from the bottom up and top down from the average Joe to the 1600 Pennsylvania Avenue?
DEVANEY: Yes. I think embarrassing; there was enough embarrassment to go around on the first reporting phase.
BOLDUAN: Despite coming under fire for those so called clerical errors, Devaney has so far maintained a rare reputation in Washington. Well respected by even the toughest critics of the stimulus program.
REP. DARRELL ISSA, (R) CRITIC ON OVERSIGHT AND GOV'T REFORM: I think there's going to be one silver ling to the stimulus. That's going to be the work that Earl Devaney and the whole Recover.gov is doing.
BOLDUAN: This is the recovery operation center known as the rock room, where team Devaney tracks the stimulus money and who's getting it. This is the first time television cameras are getting a look. So this is essentially where all of the data is coming in that you put out on recovery.gov?
DEVANEY: Right. We take it in from the recipients. It comes in. In a data warehouse and then we start analyzing it.
BOLDUAN: This is the nerve center?
DEVANEY: This is the nerve center.
BOLDUAN: So far the Recovery Board received more than 1,000 complaints of wrongdoing, opened 106 investigations and has 25 criminal cases in the works.
DEVANEY: The board is set up as an independent board. Not to make judgments about whether or not the money should be used for that bridge or swimming pool. Those are political decisions. Now, if money goes inappropriately, destined to be spent for a swimming pool ends up going some place that it shouldn't go, we're going to be all over that.
BOLDUAN: Devaney won't release the details of ongoing investigations but lead investigator Doug Hassebrock walks us through one case they're actively working.
DOUG HASSEBROCK, ASST. DIR. OF INVESTIGATIONS, RECOVERY BOARD: That organization is linked to a dozen other companies; all of them have been debarred from government service. In fact in that particular instance they received over $10 million in recovery funds.
BOLDUAN: Do you think the recovery act is working?
DEVANEY: I think it is. I mean, my assessment is not a political assessment it is just an observation. It's that people are going to work because of this recovery money.
BOLDUAN: A politically savvy answer from not your typical Washington insider. So once all the money is out and it's in the system, what then for you?
DEVANEY: Well, then, then we hope to improve my golf game.
(END VIDEO CLIP)
BOLDUAN: Now, according to the actual Recovery Act legislation, the Recovery Board is set to expire in the fall of 2013, but clearly, Christine, Devaney and his team has a lot of work to do before that.
ROMANS: Makes important distinction between the political arguing about whether a bridge should be built here or whether you should send this money to a resort town and between the fraud. Finding the fraud, where people are actually ripping off taxpayers. Not just projects you might not like, but actually ripping off taxpayers. That is what they're looking at.
BOLDUAN: And that is a distinction that he wanted to make. Especially when you are talking jobs numbers. He says we put the jobs numbers up there. I asked him in job numbers and these projects are you ever going to be confident and count these job numbers to the decimal and he says Kate I probably wouldn't be able to do that.
But let me say this, it is my job to make sure the money goes to the right place. We report what they send back. There is a distinction there and he says they make sure it's very clear, because at the end of the day he says I'm a cop on a beat. I'm not a politician making a decision of what's a valuable project. I'm just making sure the money's going to the project they said it should go to.
ROMANS: Oh, I loved it when he said; don't try to steal this money. Because there are a lot of eye balls on this money. I was waiting for him to look at the camera and say, and I mean you.
All right. Kate Bolduan, great interview. Thanks Kate.
BOLDUAN: Thanks Christine.
ROMANS: All right. Tracking your stimulus dollars in just a few minutes we will check in with Josh Levs at the stimulus desk to find out how your money is being spent.
But first, the turnaround of a small business. How a free weekly newspaper found profit in a battered industry.
(BEGIN VIDEO CLIP)
ROMANS (voice over): Despite all the doom and gloom in the newspaper business, Jed Morey feels pretty good about where his paper stands.
JED MOREY, PUBLISHER, "LONG ISLAND PRESS:" Where are we?
ROMANS: Morey runs the "Long Island Press" free alternative news weekly launched in 2002 with a circulation of about 85,000, it was born as an offshoot of the family business. A handful of alternative rock radio stations based on Long Island. MOREY: With 2.7 million people without an alternative weekly like "Dailey Weekly" or the "Boston Phoenix." So we wanted to create something in that tradition with suburban sensibilities because we came from an alternative media background and it seemed like a no- brainer.
ROMANS: As the radio business changed the stations were sold and the paper became the company's focus. Local news laced with opinion. While the economic downturn slowed the paper which relies heavily on small business advertising to stay free, he says there were no mass layoffs. After several quarters of losses the company was back in the black by the end of last year. Morey credits the rise of the blogisphere was helping business on and offline.
MOREY: It is not about a newspaper, it is not about the physical product or even the experience. It's about the quality of the journalism. If you stay true to that, we think that there is several different places you can go with that. The web being one of them.
ROMANS: When the regions only daily newspaper "Cable Vision" own Newsday began charging non-subscribers for online content last year Morey saw opportunity. Long Island Press.com began running more general news, entertainment, sports stories all appealing to a larger local crowd, all free. Since then he said traffic has jumped 600 percent. The print edition meanwhile, remained true to its alternative roots.
MOREY: The best that we can offer out to people is a different viewpoint. So the more things get vanilla, the more, you know, mint chocolate chip you have to put out there, because the people will want it. They will crave it.
ROMANS: Christine Romans, CNN, New York.
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ROMANS: All this week we've been focusing on the president's biggest economic initiative so far. The $862 billion stimulus plan or recovery act. But how is your money being spent? Who's it helping and who's abusing this program. Josh Levs is at stimulus desk in Atlantic keeping track of all this. Josh, wow, $862 billion, 57,000 projects, walk us through the process of how the stimulus desk is investigating how the money is being spent and what kind of projects are being funded.
JOSH LEVS, CNN CORRESPONDENT: You got it, absolutely. Take a look at these binders right here in front of me; these binders right here have information in them about many of the 57,000 projects that have gotten some of those billions of dollar. So many projects and in a lot of cases we're seeing tens of thousands of dollars. The desk behind me, a bunch of crack researchers working 24/7 and Christine this is just a handful of what we've got. Our global resources really are committed to breaking this down for you. Showing you where a lot of this money is ending up. I have a couple examples that are pretty interesting. Want to check them out?
ROMANS: Go for it.
LEVS: Let's take a look at this one. I like this one; it is about the Colorado wildfires. One reason this is interesting, is that this is a very serious problem in Colorado bases it is a statewide problem there and they've gotten $10.7 million in Colorado for this statewide program especially focused on clearing out the brush that causes problems every year.
They're telling us 53 jobs have been created so far and officials there also sent us some photos of some people who they say have gotten jobs because of the stimulus. These are some examples that they're showing to us, but we've also been looking at all sorts of other examples. Some of them involve research grants. Some of them involve other construction.
There is one that sticks out from this week because it's interesting. I have a screen for you here. It's about picnic tables. One reason for this, that the government is actually not happy with the way this specific money was spent. This was a $110,000 that was given to a company in Cherokee, Iowa, for mostly picnic table and what is happening is various army corps of engineers around the country are using the picnic tables and some other things to kind of spruce up national parks. The government is now saying they're actually not happy with that specific expenditure and they don't want to see that happen again.
ROMANS: So interesting Josh, because maybe six months ago I looked into that same story with the Cherokee, Iowa, I'm an Iowa native so I was looking at all the Iowa projects. It was interesting because I called there and they didn't even know that they were recipients of that money. They always had a certain number of orders every year and this year it just happened that the federal money was coming from a different pot. It wasn't coming from the normal pot.
So in their view, it wasn't a waste. It was just the same number of orders they always got. Interesting some of the dynamics behind these projects.
LEVS: The government's not criticizing them. They are criticizing the army corps of engineers that chose that.
ROMANS: Right in some cases it is moving budget money around too. The geographically stimulus money, show us how that's being spent.
LEVS: All right. So what we've been doing is taking a look at as many products as we possibly can. This is our stimulus desk map right here, the green, which has gotten all sorts of information, yellow products we still are looking into. I'll tell you something, it keeps growing, and this map is going to keep growing in the coming days, weeks, months ahead as we here at CNN keep looking into more and more information on where these billions of dollars have gone.
ROMANS: All right. Josh Levs, Recovery.gov, and there is all kinds of interesting things. So excellent. All right. Thanks. You'll be coming back.
LEVS: Thank you.
ROMANS: This week we visited several different communities where stimulus is making a difference for better or worse. In one town, Thedford, Nebraska, residents just can't understand why the government is spending $7 million to build a bridge over a railroad that runs through the town.
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MARV BLAUVELT, THEDFORD RESIDENT: We just feel like that sold us down the river.
ROMANS (voice over): Maybe not a river, but a railroad. A railroad bridge to be exact. The citizens of Thedford all 168 of them will get this new $7 million bridge, to replace this railroad crossing on the way into town and right through Marv's front yard. Can you explain to me what the point is of this bridge?
BLAUVELT: Well, really in all honesty, we don't know what the point is, except some design engineer in Lincoln decided that this is what needed to be done.
ROMANS: So who is building the bridge? Not Nebraskans, a Colorado contractor won the bid using its own out-of-state workers. A few locals were hired as temps.
TRINA MINTEL, THEDFORD RESIDENT: I didn't gain anything from it except a part-time job for a couple of months. That's it.
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ROMANS: Be a little more part-time work later this spring when they actually pave the top of the road, but most folks in that town just say we didn't get the stimulus money.
In Franklin, North Carolina, we talked though with one man who is depending on stimulus money.
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ROMANS (voice over): Robert Carlucci never thought he would carry home his groceries in a box from a food pantry.
ROBERT CARLUCCI, FOOD BANK CLIENT: I'm the one that is usually donating around Thanksgiving time, Christmas time, now here I am needing that.
ROMANS: Carlucci's dinners are now paid for in part with $100 million of stimulus money.
KITTY SCHALLER, MANNA FOOD BANK: It is not a waste of taxpayer money. The economic stimulus package has helped us to provide for the most basic needs for people who are truly in need. ROMANS: As for Robert Carlucci, the stimulus bill may not have given him a job, but it did keep him and his daughters, Samantha and Allison from going hungry.
CARLUCCI: My kids have to eat, we all have to eat.
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ROMANS: Big update for you on Robert Carlucci, he just got a job. He is a carpenter building log cabins. That is the wonderful update on that story. That one stimulus program helping the Carlucci family.
We found a town with two different stimulus projects, one controversial, but both are helping one woman we talked with.
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ROMANS (voice over): How long have you lived here?
ELEANOR WHALEY, WEST REBOBOTH BEACH: About 20, 25 years.
ROMANS: Eleanor Whaley lives in West Rehoboth, Delaware. She helped to get a $130,000 stimulus grant to winterize homes here. It is also training residents to do the work themselves. But this isn't the only stimulus program helping out Eleanor and her neighbors. Two miles down the road is Rehoboth Beach. Construction workers rebuilding the town's boardwalk with $5.5 million stimulus dollars. This project wouldn't be happening right now without the federal stimulus dollars?
STAN MILLS, COMMISSIONER, CITY OF REHOBOTH BEACH: Absolutely. Meaning, there would be no workers here, there would be no workers potentially even getting paychecks.
ROMANS: The project landed on a Republican list of wasteful projects. Some people say this isn't a waste for you?
WHALEY: Oh, my god, no. I think it is the best thing that could have happened not only for me, but other residents that are living here in the community.
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ROMANS: Josh that is a sampling of some of the people who are touching and feeling the stimulus every single day. You've been combing through a lot of different projects, so many various different projects. Every so often you come across one that makes you say what?
LEVS: It does. One thing that has been so interesting is finding out these projects exist at all. We didn't even know about it. Here is an interesting project we learned this week from the University of Texas at Austin. The numbers here show you they are getting about $220,000 to do a study about romance and heartache. What they are doing is they are studying a bunch of couples, basically people who have recently entered into nonmarital relationships, and they are tracking what happens with them. How do they feel, what happens if their relationship breaks up. One thing they are looking at is why do some people get more devastated than others at the end of a romantic relationship? All sorts of things about romance they are studying in the study at UT Austin, $220,000 and they are telling us two jobs have been created for grad students so far, they are expecting another three jobs to come from it. While they track these couples and individuals and see what happens to them if something goes wrong.
ROMANS: The economics and psychology of heartbreak.
LEVS: I didn't see that coming. When we were looking through it, we were like, what? There you go.
ROMANS: All right. Very interesting. Josh Levs on the stimulus desk thanks Josh. Have a great weekend.
LEVS: Thanks a lot.
ROMANS: It should be the most-talked about meeting of the week; it should be the most influential gathering of the year. But something's happening to what was once the most important gatherings of financial minds in the world. Richard Quest is on it next.
ROMANS: Our roman's numeral this week, 41. What could that be? That is the record number of heads of state in government that are in Davos figuring out future of the world. Sounds important, so why is no one paying attention accept of course our good friend Richard Quest who is in the Swiss Alps there for us. We sent him there specifically for this broadcast this afternoon. Richard, I have to ask you though, except for you, has Davos lost its relevance?
RICHARD QUEST, CNN'S HOST, "QUEST MEANS BUSINESS:" Oh, Chris, for goodness sake. No, and no again. Look, yes, that's right. You jump on the old populous bandwagon that says Davos is a waste of time up a mountain. The reality is that it does give a forum that allows decision makers, government, CEOs, bankers to discuss the great issues they've got to put forward.
I'll give you one example. Let's just take today. Today I have spoken to President Li of South Korea, President Crimson of Iceland, the Greek prime minister. I just had a chat with Mark Dekent (ph) of Coca- Cola and I still got to see her majesty Queen Rainient (ph). Now I am just having two or three minute conversations with them but they are all meeting amongst each other and they are mingling amongst the snow flakes. No, it's not a waste of time.
ROMANS: I just wish when they were all over the past ten years getting together and skiing and having their cappuccinos, they would have figured out this is all going to happen in the first place. Richard Quest in the mountains.
QUEST: Come on, come on, and get your other cliche out that we all go skiing. I've only ever skied once per trip and that's always for the camera. If you look, you'll find the pictures of me doing a bit of that.
ROMANS: All right. Apres ski is next. All right. Thank you so much, Richard Quest.
Thank you for joining us for YOUR MONEY. You can follow us on facebook and twitter at Ali Velshi and at Christine Romans. Make sure you join each of us every week for YOUR MONEY, Saturdays at 1:00 pm Eastern and Sunday's at 3:00. You can also log on 24/7 to CNNMONEY.com. Have a great weekend everybody.