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President Obama Pitches Health Plan in Pennsylvania; GOP Reaction to Final Push for Health Reform; Schools Shutting Down?

Aired March 8, 2010 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


TONY HARRIS, CNN ANCHOR: OK, so a lot there. The president taking on the insurance companies big time, as you heard there.

The president really stumping for health care reform, you'd have to say, in what looked like a campaign stop from the presidential election cycle. The president in Glenside, Pennsylvania.

Look, the jacket came off. The sleeves are rolled up. The president getting down to business here.

The president taking on the insurance companies, as you heard, big time over rising premium costs. And the plan to buy some insurance companies, according to president, to make money moving forward, even if they lose customers in the process.

We will talk about a lot of this during the course of this hour.

Let's do this -- let's revisit just a portion of the speech. President Obama making his push for health care reform, trying to get it over the finish line, as you heard, over the next couple of weeks. The president is trying to build public support for his plan.

And just moments ago, he told the audience there at Arcadia University insurance companies are putting profits over people. Let's have a listen.

(BEGIN VIDEO CLIP)

OBAMA: So how much higher do premiums have to rise until we do something about it? How many more Americans have to lose their health insurance? How many more businesses have to drop coverage?

All those young people out here, after you graduate you're going to be looking for a job. Think about the environment that's going to be out there when a whole bunch of potential employers just tell you, you know what? We just can't afford it. Or, you know what? We're going to have to take thousands of dollars out of your paycheck because the insurance companies just jacked up our rates.

(END VIDEO CLIP)

HARRIS: All right. White House Correspondent Dan Lothian is traveling with the president in Glenside, Pennsylvania.

And boy, Dan, it is -- it turned out to be pretty much as you predicted last hour, a bit of a rally, as we see the president shaking hands there at the university, and also some specifics on what is in his plan.

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: That's right. I mean, you heard the president talk about how, you know, students, college students, those up to 26 years old, under his plan would still be covered under their parents' insurance. He talked about people with pre-existing conditions not being dropped.

But yes, it really was sort of a pep rally. The president pointing out how there is no time to waste here, how they can't go another year, and certainly not another day without getting insurance reform not only for everyday Americans, but also for small businesses, which he says is the engine to job creation.

But, you know, Tony, I should tell you, this was really a mostly a friendly audience like we've seen at a lot of these health care events and other events the president held across the country, with the exception though of this one individual. He was standing right in front of me, just a few feet away, and he was just shaking his head no throughout the entire speech, and at one point said, you know, this is monopoly money that the president is an talking about, tried to shout down the president several times.

But for the most part, a friendly audience here. And the president, as you heard, encouraging everyone to sort of take the ball and run with it. Go home, knock on doors, work the phones, and try to clear up any confusion that might be out there, because he says this country needs health care reform now.

HARRIS: Yes. And Dan, to be clear here, were we talking about more than just this one person? Because I certainly heard a couple of moments when, whoever this person was, was trying to clearly shout down the president. Was it more than just one person or just that one person?

LOTHIAN: Right. You know, I could only see this one person since he was just a few feet away from me, in front of me, but I did hear at different times there were a couple of other sort of dissenting voices, probably two or three other people that were on the other side, appeared to be on the other side of the gymnasium.

I couldn't hear what they were saying. It certainly was going at a different rhythm than the majority of the crowd. But this one individual is the one who I could see and hear. And that's the only one I could talk about.

HARRIS: OK. So, for the record, we're talking about a few dissenting voices in a largely pro-Obama, pro-health care crowd.

LOTHIAN: That's right.

HARRIS: It feels like we are back in the campaign here.

And one other point here, because we're trying to get our Mark Preston up to offer some analysis on the speech, as well. The president was really taking on insurance companies, wasn't he, here?

And suggesting that, look, when is the time? The premiums are going to continue to rise for all of you. And saying that, look, the insurance companies are even now working on plans and schemes to raise your premiums and to continue to make money even with fewer customers.

LOTHIAN: That's right. And this was sort of a punch at not only the insurance companies, but also Wall Street.

The president pointing out that Wall Street sees these insurance companies as a good investment because there's not as much competition out there, so that they can continue to raise these rates, be profitable, and don't feel like they need to do anything. Because even if people drop out, they can still make money off of those who are paying those high rates.

That's the view from the president and from this administration. And that's what they're really hitting at over the last few days.

It really has ramped up, where the president continues to these read e-mails and letters he gets from people across the country who talk about how difficult it is for them because their insurance premiums have just skyrocketed -- 25, 35, 45 percent. And the president saying that Americans can't handle this increase.

HARRIS: I'm really interested in the pushback. We're trying to get some GOP reaction to this. I'm really interested in the pushback to what you just cited, the undeniable fact that premiums are going up.

Look, we saw what happened in California with Anthem. In some cases, premiums going up some 30, 35 percent. So, we're trying to muster up a little GOP reaction to it.

Dan, appreciate it.

Our White House correspondent, Dan Lothian, for us.

Checking our other big stories now.

Conflicting reports over whether al Qaeda's American-born spokesman has been captured. Pakistanis officials say they have captured an American member of al Qaeda.

Yesterday, two senior Pakistani government officials told CNN it was Adam Gadahn, but U.S. intelligence officials doubt it's him. Gadahn is a 31-year-old California native. He has appeared in several videos threatening the West and has been charged with treason.

Elections in Iraq being called a success. Millions turned out yesterday to cast ballots. Turnout is believed to be over 50 percent. That's despite militant attacks that killed 38 people.

It may be several days before we get election results and months before government actually takes shape. But the U.S. ambassador to Iran tells CNN Iraqis deserve congratulations. (BEGIN VIDEO CLIP)

CHRISTOPHER HILL, U.S. AMBASSADOR TO IRAQ: We think it was a very, very good election. We have to wait for the results of the election. And after that, we'll move on to something called government formation, where the Iraqis will need to sit down and figure out how to piece together a new government from this.

But overall, this was a very successful election. The Iraqi people deserve a lot of congratulations for this.

(END VIDEO CLIP)

HARRIS: Defense Secretary Robert Gates is in Afghanistan right now. He says he is there to get an update on the military campaign against militants in Marjah, as well as looking ahead to future offensives in that war zone. Gates plans to meet with Afghanistan's president and with the top U.S. commander there.

More now on our top story -- President Obama's push for health care reform. He is on the road today making his case to the public.

We want to get an update on what happens next in Congress, sort of a process report here. Congressional Correspondent Brianna Keilar joining us from Capitol Hill.

And Brianna, what kind of plan, speaking of process here, are congressional leaders hoping to come up with?

BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT: We're expecting, Tony, that it's going to include a lot of what we have been talking about for months. Right?

This is expected to include the elimination of pre-existing conditions so insurance companies would not be able to deny coverage on the basis of a pre-existing condition. Also, it's expected to expand coverage. There's a lot of people who are uninsured who would be insured under this plan, about 31 million more Americans, because they would be told they have to get insurance, and a lot of them would be given subsidies to help them pay for it.

And then we're expecting that a big part of this health care reform, the way you pay for it, would be that tax on Cadillac plans, those high-end expensive health care plans. It's a tax that the insurance companies would pay, but, of course, some critics, Tony, say that cost would be passed on to consumers who have these plans.

HARRIS: Yes.

And Brianna, let's dig a little deeper on process here. What has to happen here to get this passed? And is there a timetable?

KEILAR: There is, and the House -- really, the ball is in the court of the House of representatives right now. The House will have to pass -- and this is the plan -- will have to pass the Senate bill, Tony, that the Senate has already pass, that they passed before they lost that supermajority they had with that Massachusetts election.

As you know, the House, they don't love the Senate bill. We're talking about Democrats here, because they're expecting to do this without any Republican support.

So, then, after they pass that Senate bill and President Obama signs it into law, they would then go and pass another bill, a bill of changes to that Senate bill. They have to put their heads together with Democrats in the Senate and with the Congressional Budget Office to crunch numbers on this, come up with something that's palatable to everyone before they could go ahead and vote on that.

We're expecting that could come as early as next week. They're hoping to do this before President Obama leaves overseas, which is going to be next Thursday.

Then, Tony, as you know, since the Senate will have passed the health care bill already and the House will have passed it, the Senate then would have to pass that bill of changes. The hope right now is that they can do that before the end of March.

As you know, these things always slide. And it's that vote on the bill of changes that is kind of the controversial one.

This is the one that would require that process of reconciliation where they only need 51 votes. But here's what's really interesting about this process, Tony. You can only pass things that deal with the budget.

HARRIS: Right.

KEILAR: So you've got really, like, sticky issues, right, on immigration, making sure that illegal immigrants don't benefit from the system. And on abortion, making sure that federal dollars don't go to pay for abortion. That can't be dealt with in this bill of changes, so --

HARRIS: So you can't even deal with those kinds of issue in the reconciliation process.

KEILAR: You can't. So then, if they wanted to make changes, or they have to make changes, it would have to be perhaps another bill. I mean, this is a really fuzzy area about how they would deal with these sticky issues.

HARRIS: Right. Right.

Brianna, appreciate it. It is complicated. It really is. We're watching the sausage being made, and it's ugly.

Brianna Keilar on Capitol Hill for us.

Brianna, thank you.

Let's see. Do we have Mark? Is he with us now?

Let's get to CNN's political editor, Mark Preston. He's in Washington.

Mark, look, we have been hashing these issues out on health care for months. The goal being here to cover more people and to reduce the overall costs in the system.

The reality is, as you know, Mark, Republicans and Democrats have put all kinds of ideas on the table. OK? That is just the simple truth of this.

Now something is taking shape. The president is highlighting those bullet points, if you will.

What's the pushback going to continue to be from Republicans?

MARK PRESTON, CNN POLITICAL EDITOR: Well, you know, Tony, not only have we been talking about this for months, we've been talking about this for over a year now. It was this time last year the president talked about how this would be his top domestic issue. Of course, he had a lot of other things on his plate. But the fact of the matter is, right now the argument has not changed --

HARRIS: It really hasn't, has it?

PRESTON: -- as far as Republicans have gone. And we saw over the year, Tony, from this time last year up through the summer, we saw really the tide turn against health care.

We saw a lot of angry constituents saying look, the way that Democrats are going about this, we don't agree. And you were asking about Republican reaction. Let me just look down at my BlackBerry, because this just popped up right now.

This is from House Minority Leader John Boehner. And this is basically, Tony, what we've been hearing over the past year. Their argument hasn't changed.

"President Obama's latest health care sales pitch is just like all the others were, heavy on snake oil and light on the harsh reality Americans would face under his plan -- higher taxes, reduced Medicare benefits and lost jobs. It's now up to the president's fellow Democrats to choose between siding with their constituents and joining his crusade for a government takeover of health care."

Now, let's just focus on that, a government takeover of health care, Tony. And that's the GOP talking point.

HARRIS: Are they making specific arguments not in generalities, but, for example, in the area of lost jobs? Are Republicans explaining why this plan would mean -- would be a job killer? I've heard that repeatedly. Are they giving us concrete examples that we can fact-check?

PRESTON: You know what probably the biggest argument when it comes to jobs? Is that President Obama should have been focused on jobs and he should have been focused on the economy. And what Republicans would say is that President Obama decided to take on this massive overhaul of health care. We've never seen anything like it in our lifetime, anyway. We've seen -- it goes all the way back to, what, the 1940s, when we've seen the last major overhaul.

And at a time when the economy was crashing, the housing bubble had burst, President Obama decided to take this on, as well . And that's why, Tony, that President Obama not only had opposition from Republicans, he also had opposition from Democrats within his own party who said, you know something, Mr. President? You should have focused on jobs.

HARRIS: The other point that we hear over and over again -- you hear it more than I do because you have to listen, I, at some point, can turn things off -- is that it's too expensive, that what's being proposed is too expensive. And the counter-argument is, is the CBO saying that this plan would save money, would help the deficit over the course of 10 years?

What is the pushback to that?

PRESTON: I think you're right. You know, and what Democrats will say is whenever the CBO, the Congressional Budget Office, scores the bill, in fact, the deficit decreases because of what President Obama says are reforms that he would implement regarding Medicare payments and what have you.

Republicans flat out say look, they can say that, but if you look at this bill there really is no way that they think that the deficit would actually go down. And then they go back to their core argument -- a government takeover of health care. How could that be less than expensive when, in fact, it is really private industry is what drives down costs? Or so Republicans say.

HARRIS: Mark, appreciate you hustling up to join us this hour. Appreciate it.

PRESTON: Thank you, Tony.

HARRIS: Mark Preston in Washington for us.

Schools shouting down, teachers getting laid off because teachers can't foot the bill. I will talk to two educational officials in the thick of it for real.

(COMMERCIAL BREAK)

HARRIS: Education crisis in Kansas City, Missouri. With the city on the brink of bankruptcy, the school district is considering closing almost half of its schools.

Twenty-nine of 61 schools could be shut down to deal with a $50 million budget shortfall. The superintendent wants to slash 700 jobs. That's more than a quarter of the payroll. The school board votes on the plan this coming Wednesday. Schools in Des Moines, Iowa, also taking drastic measures. Three hundred teachers have been told their positions are being eliminated next year. The move is, again, about money. The district is facing a budget shortfall of almost $28 million, and about 85 percent of the operating budget goes to salaries and benefits.

You know, it feels like it's the economy versus education, kids losing out.

Joining me to discuss this, Kansas City school superintendent John Covington. And in Washington Dan Domenech.

Dan, pronounce your last name for me.

DAN DOMENECH, EXECUTIVE DIRECTOR, AMERICAN ASSOCIATION OF SCHOOL ADMINISTRATORS: Domenech.

HARRIS: Domenech. OK, I was close -- executive director of the American Association of School Administrators.

And Dan, let me start with you.

What is -- give me an overview here. What is going on nationally regarding budgets cuts, the economy, and how it is impacting education and our kids?

DOMENECH: Well, the economy is having a tremendous impact on schools throughout the country. And I get to travel around to most of the 50 states, and what we are seeing is that, basically, there isn't a system that hasn't had to make drastic budget cuts.

And it's a period now that we're into our second year. We're going to see even more drastic cuts for this coming school year, and the worst probably in year four. So, it's is the worst economic period that I've ever seen in my 40 years in education.

HARRIS: Do we need a new funding model for schools that's not sort of pegged to the boom and busts of housing cycles?

DOMENECH: Well, that's exactly the problem. As you know, nationally, 80 percent of the revenue that a school district gets is from the local property tax.

And, of course, we know the impact that the economy has had on property values. So, with 80 percent of your revenue going down and down and down, there is no question but that any kind of a change in that area -- but then, you know, the other taxes aren't doing that well either because the state portion is the state income tax and state sales tax. They're down as well.

So, right now, there really isn't any kind of formula that we could say would work better for education.

HARRIS: OK. I'm going to talk about the stimulus in a bit. But if you would, Dan -- and then, John, I'm going to get to you in just a minute here -- talk to us about the pressure of operating schools on less money with enrollments down and mounting pressure to close the achievement gap.

DOMENECH: Well, it's like the perfect storm. You have school districts with less money at a time when they're having an increase in the number of children on free and reduced lunch of the because of the economy, when they're having an increase in population as more students from private schools come back because their parents can't afford to pay the tuition.

So, with increased population and increased costs, we have less revenue, and we're trying to transform schools and close the achievement gap. Almost an impossible task.

HARRIS: What's happening with the federal stimulus dollars? You've called the stimulus money a shell game. What do you mean by that?

DOMENECH: Well, that's exactly what happened. We all appreciated the fact that a record amount of federal dollars were apportioned to education this year. But what actually happened were that the states basically took the federal dollars and used those moneys to supplant state funding.

So, the net gain for schools was not a gain at all. It was a loss. School systems around the country actually got less money than they had the previous year.

HARRIS: What the heck is that about?

Dan, stand by for a minute.

John, tell us the story of your district. Why are you facing closing 29 of 61 schools in your district?

JOHN COVINGTON, FORMER SUPERINTENDENT OF PUEBLO CITY SCHOOLS, COLORADO: Well, right now, Tony, we are using -- in terms of capacity, our middle schools are running at about 60 percent utilization in terms of the amount of seats that we have. We're approximately 40 percent at the middle school and even less than 40 percent at the high school.

We have less than 18,000 students. And so we have far more schools than we need based on our student enrollment. And with facing a shortfall of about $50 million, we're going to have to make some serious changes in how we do business.

HARRIS: John, how have you gone from, what, 35,000 students a decade ago to, as you mentioned a moment ago, fewer than 18,000? How did that happen?

COVINGTON: Well, actually, about 20 years ago, the district was about 75,000. Then 10 years ago, 35,000. Now we're down to approximately 17,500.

HARRIS: How did that happen?

COVINGTON: After the school district went through the desegregation period, white flight, as well as middle class flight set in, and people began to move away from the urban core to the suburbs. And as a result of that, we experienced declining enrollment over the last 20 years.

HARRIS: You've had some dollars over the years to try to get folks back. Why haven't you been able to retain and attract families and students?

COVINGTON: Well, I think after going through the desegregation period where the district received $2 billion to educate children and to attract some of those children and families back to the community, I think at that time, perhaps, the school district didn't have the capacity to handle that kind of revenue, ended up doing some things in terms of providing better facilities that was far more than what the district needed. And as a result of that, for a period of time, people came back, ,but after looking at the quality of education, that also began to decline. People chose to go to the suburbs.

HARRIS: John, do you have any recourse other than deep cuts?

COVINGTON: Right now, making these cuts is the only recourse that we have. It's a decision -- although it's painful, it's a decision that I'm hoping that my school board is going to make on Wednesday. We can't operate a school district at half capacity in terms of student enrollment.

HARRIS: And raising taxes, that's a nonstarter?

COVINGTON: Well, the school district, we haven't received a tax increase from the community since 1969.

HARRIS: Oh, boy.

COVINGTON: And I think at some point, the school district lost credibility with community stakeholders. And as a result of that, haven't been able to get a tax passed since that time. With right- sizing our school district, I'm confident that we'll be able to move forward, increase the quality of education the children receive in Kansas City, and reverse that trend.

HARRIS: And Dan, last question to you. I know I'm way over time in this segment.

Sorry about that, Joe.

Any other recourse other than these cuts, these Draconian cuts in many cases?

DOMENECH: There really isn't because there isn't any revenue that we can tap into. And as John said, nobody's willing to raise taxes.

But what we see happening, basically, is that our administrators, our teachers, our educators are really going to do the best job they can with the kids and try to make sure that the children that would be hurt the most, which are the children of poverty, that the impact on them really is as little as possible.

HARRIS: Gentlemen, appreciate it. You hustled up to be here with us today. Appreciate it.

COVINGTON: Thank you, Tony.

HARRIS: John, good to see you.

Dan, good to see you as well.

DOMENECH: My pleasure.

HARRIS: We'll have you back to continue this discussion in the days, weeks and months ahead.

Still to come in the NEWSROOM, slashed budgets, layoffs and a shortage of classes are all symptoms of an increasingly challenging time for education in the United States. We want you to get us your thoughts, because maybe we can turn some of these around in the hour here, in the time that we have remaining.

Just go to my blog at CNN.com/Tony. Leave us your comments. We will share some of them a bit later here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Boy, got to love CNN. You ask around here and you get it.

Republican Congressman Charles Boustany is on the line with us. He's from Louisiana.

Representative Boustany, thank you for taking the time to talk to us.

REP. CHARLES BOUSTANY (R), LOUISIANA (via telephone): Thank you, Tony. Good to be with you.

HARRIS: Hey, you were in the health care summit almost two weeks ago now, and you are among the group who believes we need to start again. Really? You think we should scrap the work that's been done over the course of the last year and start again?

BOUSTANY: What we believe is that the bill currently before us has deep problems. It's deeply flawed. And we believe that there are a number of ideas that need to be incorporated into substantive health care reform.

HARRIS: And you believe those ideas have not been incorporated thus far?

BOUSTANY: That's correct. And we believe that what we ought to do is take a substantive step by step approach to this to bring down costs for families and small business owners and really do it in a way that we can bring the American people along to understand what they're getting. And that's the problem. This is way too complex. And there are a lot of unforeseen consequences in the current bill.

HARRIS: Do you believe Republicans could propose something that wasn't complex to fix health care?

BOUSTANY: We believe that we can take this step by step in a way that people can understand it with insurance reform to bring down the costs for families and small businesses.

HARRIS: Well, representative, what is the committee process about if that's not step by step? I watched a lot of the committee work going on, on C-SPAN, and I've got to tell you, that seemed step by step to me. I saw a lot of Republican ideas put on the table. I saw Republican ideas that, in some cases, were accepted. I saw a lot of Republican ideas in the committee process that were flat out rejected by other Republicans. So I'm a little confused by what's missing in the step by step process here.

BOUSTANY: Well, first of all, keep in mind that the American public, across the board, has spoken pretty loudly in town hall meetings that they really don't like this approach. And I can tell you, as a physician

HARRIS: Well, they seem to like details of it once they get more details on what's in it. Bits and pieces of it.

BOUSTANY: But they're still getting conceptual ideas, rather than what this is really going to do to bring down those costs. And I can tell you as a physicians who's looked at this very, very carefully, I have deep concerns because I don't think this is really going to control costs for families and small businesses.

HARRIS: Well, what do you say to the CBO scoring this as it reduces the deficit over 10 years?

BOUSTANY: Keep in mind that there are a number of budget gimmicks in the bill. And keep in mind also that the Congressional Budget Office

HARRIS: You know, you just can't say that. You've got to give us details. You just can't say they're gimmicks and that the gimmicks are leading to this scoring. You've got to

BOUSTANY: Well, let me say this.

HARRIS: OK.

BOUSTANY: There's a deeply flawed reimbursement formula for physicians.

HARRIS: I think we all understand that.

BOUSTANY: And that's a $300 billion fix that's been excluded from the cost of the bill. Keep in mind that we're talking about 10 years of tax revenues built into the bill that will pay for about six years of the so-called benefits, which, in the out years, is going to cause significant problems. Those are some of the fundamental issues in the financing of the bill.

And then, also keep in mind that you're going to cut Medicare in a number of areas to the tune of $500 billion, basically raiding the Medicare program to create a new entitlement rather than focusing on how we actually make Medicare a stronger program for seniors.

HARRIS: So you just totally reject the idea that most of the Medicare costs are about streamlining the system, making it more efficient, taking some of the waste out of it?

BOUSTANY: Well, I do disagree with that because I think the way the Medicare costs are structured, you're talking about some hospital reimbursements that are going to particularly hurt rural hospitals. We're seeing significant cuts in home health, in hospice care. These are very important services that have actually been very beneficial in the long run to providing good streamlined care for seniors.

HARRIS: So you don't believe there's even a basis to -- in this bill and the bill, at least the Senate bill, you don't believe there is a basis to build upon in the legislation that's being proposed now? You really want to start over with this?

BOUSTANY: Well, I'd like to restructure the bill and rewrite the bill.

HARRIS: Well, that's not starting over. That's not starting over. Are you -- is that a slight change from earlier? I mean restructuring is not starting over.

BOUSTANY: No, no. No, what we mean is basically rewriting a bill, going step by step with the insurance reforms, with the way health care can be delivered more efficiently, focusing on quality. These things are missing in the bill. And we believe that if Democrats are willing to work with us, we could come up with a bipartisan bill that has wide acceptance.

HARRIS: I know I'm running -- I'm running a little long here with you. I know you've got to run here in a second. But what is your response to Anthem, the insurance company in California, in some cases looking to increase premiums by what, 35, 39 percent?

BOUSTANY: Well, this is clearly unacceptable. I was a small business owner as a physician. I ran a practice. And I saw those kinds of premium increases. We need to have some accountability with the insurance companies. There's no question about it. And we need a full explanation of why they're building in these kinds of cost increases.

HARRIS: Do you not know?

BOUSTANY: But to keep in mind, the cost --

HARRIS: Do you not know why they're building in these kinds of increases?

BOUSTANY: I don't know specifically what they are pointing to in their proposal over in California, but I do know that the cost of health care is still escalating and there are no built-in features in the Senate bill that we're looking at that will actually start to bring down those costs.

HARRIS: OK, representative, thanks for your time.

BOUSTANY: Thank you.

HARRIS: We appreciate it.

Let's get to break. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: We'd like to direct your attention to CNNmoney.com at this time. The headline story there today, the fall of a one-time Wall Street high flyer. The CEO of Lehman Brothers.

You know, the financial team here at CNN does a terrific job. If you want the latest financial news and analysis, and we know you do, it's just a click away at CNNMoney.com.

Better than three hours into the trading day. Let's look at the Dow, New York Stock Exchange. I think we were in positive territory. We're not anymore. As you can see, the Dow is down 12 points. The Nasdaq, at last check, was up four. So we've got a mixed day going. We'll follow these numbers throughout the day for you.

We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: And let's get you caught up on our top stories now.

A plain to pull U.S. combat troops out of Iraq by September is proceeding on schedule. That's the assessment from the top U.S. general in Iraq. General Ray Odierno says the Iraqi military performed superbly during Sunday's mostly peaceful election.

Defense Secretary Robert Gates arrived in Afghanistan today. He is getting an update on the offensive against Taliban fighters around the town of Marjah. Gates was scheduled to meet with the top U.S. commander, General Stanley McChrystal and Afghan President Hamid Karzai.

President Obama says now is the time for health care reform. The president made his pitch during a campaign style rally in Pennsylvania just a short time ago. He accused insurance companies of putting profits over people.

(COMMERCIAL BREAK)

HARRIS: I need you to reach out to the program. I need you to talk to me directly. A couple of ways that you can do that. First of all, CNN.com/tony takes you directly to this, bam, our blog page. If you'd like to send us your thoughts on Facebook, here's what you do. TonyHarrisCNN and post your comments here. And here's my twitter address, TonyHarrisCNN. One other way for you to contact us directly, talk to the show, call us, pick up the phone, 1-877-742-5760. Let's have more of your views, more of your thoughts on the program. CNN NEWSROOM with Tony Harris.

(END VIDEO CLIP)

HARRIS: OK. Now a look at some of the stories generating a buzz over the Internet. A lot of the chatter today about the Oscars. Ines Ferre joining me once again.

What are you seeing? What are you hearing? What's on the Internet?

INES FERRE, CNN CORRESPONDENT: Lots of talk about the Oscar, Tony. "The Hurt Locker" winning best picture and best director. That went to Kathryn Bigelow. The first woman to win that award in the history of the Oscars.

HARRIS: OK. Both.

FERRE: Yes, and check this out. This is on CNN.com. If you consider yourself a fashion critic. This is what Tony's been using all morning.

HARRIS: Nice.

FERRE: He's -- yes. Yes.

HARRIS: Nice.

FERRE: You can vote, actually, on which outfits you think are the best. So let's say that you think, I don't know, Penelope Cruz, maybe --

HARRIS: OK.

FERRE: You've got Mo'Nique.

HARRIS: Yes.

FERRE: So, oh, right(ph) here. Oh, see, I'm not that great at this.

HARRIS: No, it's OK. I understand.

FERRE: No, you're better, Tony.

HARRIS: You're better than I am.

FERRE: Oh, no. OK. But now let's hear from some of the celebrities themselves showing off their outfits on the red carpet.

HARRIS: Nice.

FERRE: Listen to this. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Good luck, Kristoff.

KRISTOFF: Thank you.

ANNA KENDRICK, ACTRESS: I'm wearing Elie Saab. I was actually supposed to wear something else and at the last minute the dress wasn't working and I tried this dress on and it was immediately love at first sight.

MO'NIQUE: Tadashi Soji, face by Derrick Rutledge, hair by Lena Palm and jewels by Chopard.

MILEY CYRUS: My mom's being mean to me and won't trade me shoes. My feet are hurting. I know hers are lower than mine and I want to trade, but she's not letting me. So I'm about to throw a fit and everyone can see my rebellious trade (ph) then (ph).

GABBY SIDIBE: Marchesa with Lorain Towart's (ph) jewels, because I love it.

UNIDENTIFIED MALE: Gabby, this way.

UNIDENTIFIED MALE: Gabby, give me a smile.

UNIDENTIFIED MALE: Meryl. Meryl.

MERYL STREEP: Hi, guys.

UNIDENTIFIED MALE: Meryl.

UNIDENTIFIED MALE: Meryl.

UNIDENTIFIED MALE: Meryl, this way.

UNIDENTIFIED MALE: Meryl.

UNIDENTIFIED FEMALE: And have you seen Meryl Streep on the carpet?

SANDRA BULLOCK: Not yet, but we will see each other and it will be -- it will be a love -- we love each other. It's been -- people like to pit people up against each other, you know? But I love that woman. She's extraordinary.

MAGGIE GYLLENHAAL: I'm wearing Dries Van Noten. I'm a fan of his. I asked him if he'd make me a dress. And he made my wedding dress. You know, I love him.

HELEN MIRREN: Well, I'm wearing Badgley Mischka, from top to bottom basically. Why? Because I put their dresses on and they fit me. And they're just wonderful, wonderful evening dress designers.

VERA FARMIGA: You know, the dress reminded me of a pink peony in bloom. And I'm so sick of the winter in New York. UNIDENTIFIED MALE: George, this way. Guys. George --

UNIDENTIFIED MALE: George, this way.

UNIDENTIFIED MALE: George -- guys, turn this way together, please. This way together.

CAREY MULLIGAN: I mean, I haven't got a job yet, so I'm kind of here looking for a job. That's what I'm going to be doing tonight.

(END VIDEOTAPE)

HARRIS: Wow. OK. All right.

FERRE: Looking pretty fabulous.

HARRIS: Yes, I thought so. Let me see that -- what's her name? Miley -- Miley Cyrus?

FERRE: Miley Cyrus, yes.

HARRIS: That was a good-looking dress.

FERRE: Yes, that's nice.

HARRIS: And Helen Mirren, that was good as well. So I can go and I can vote right there online at CNN.com.

FERRE: You can vote -- you can vote right -- you know you've been doing this, so don't give me that. Don't pretend. Don't pretend, yes.

HARRIS: All right, CNN.com. Appreciate is, Ines. Thank you.

FERRE: Thank you.

HARRIS: California's deepening budget crisis has taken a really disturbing turn. It is making it increasingly difficult to care for children with mental health issues. We're back in a moment.

(COMMERCIAL BREAK)

HARRIS: California's budget crisis takes on a new twist, hitting mental health services for poor children. Thelma Gutierrez talked to one of the victims.

(BEGIN VIDEOTAPE)

THELMA GUTIERREZ, CNN CORRESPONDENT, (voice over): South Los Angeles, a community of working class families hit hard by the economy.

As a parent, I often wonder what I would do if one of my kids needed mental health care and I couldn't afford it. I met a boy here who's trapped in that very predicament.

GUTIERREZ (on camera): This is where he lives. And this is his story.

CARLOS, 8 YEARS OLD: My name is Carlos. I am eight years old.

GUTIERREZ (voice-over): Carlos lives here with his sister and parents. They're unemployed, uninsured, barely scraping by.

CARLOS: I'm going to show you where I sleep. My dad sleeps here and my mom sleeps there. I always dream about my house will be clean, really clean.

GUTIERREZ (on camera): Yes. Do you want it to be big?

CARLOS: And shiny. Shiny, big. That's for a president (ph) when he comes, they could get impressive stuff there.

GUTIERREZ: Oh, you want someone to come and be impressed by your house?

CARLOS: Yes.

GUTIERREZ (voice-over): Among Carlos' many challenges in life, he also suffers from severe anxiety and ADHD.

(on camera): So you were talking about the things that you wish you could change. What would you change?

CARLOS: I would change my life.

GUTIERREZ: You'd change your life?

CARLOS: I was going to -- I dream about, I was going to change my life.

GUTIERREZ (voice-over): We caught a glimpse into why at St. John's Community Clinic in south Los Angeles. This is where he regularly meets with Elena Fernandez (ph), director of behavioral health. She's trying to unlock the causes of his angst.

ELENA FERNANDEZ: Choose one marker.

GUTIERREZ (on camera): Elena's about to begin an art therapy session with Carlos to help him express things that are going on in his life. You might be wondering, why a family would allow a camera into a private therapy session like this. But Carlos' mother says she believes it's critical that people understand how important these services are.

FERNANDEZ: The family fights. So now is that what's happening in this picture here?

CARLOS: Yes.

FERNANDEZ: Yes.

CARLOS: So this my mom.

FERNANDEZ: That's your mom? Uh-huh.

CARLOS: And this my dad.

FERNANDEZ: That's your dad? Uh-huh. And how does that make you feel?

CARLOS: Sad.

FERNANDEZ: It makes you sad.

CARLOS: I cry.

FERNANDEZ: You cry.

GUTIERREZ (voice-over): Carlos tells Elena his dad used to drink. That led to fighting between mom and dad. He says at home, there was no escape. That was six months ago.

FERNANDEZ: And now what do you tell them?

CARLOS: I tell them not to fight. Well, I tell them, if you fight, I'm out of here.

FERNANDEZ: He first came to me because he was having lots of problems at home and mom did not know how to modify his behavior. The teacher was frustrated, did not know how to help Carlos and was basically just writing him up or sending him to the office or wanting him out of the classroom instead of working with him.

GUTIERREZ: Carlos's mom, Letia (ph), tells me she worried her son was being written off at the age of eight. He felt labeled as a bad kid and rejected by his teacher.

GUTIERREZ (on camera): Does he have insurance?

(voice-over): Letia says she knew he needed mental health care, so she searched for clinics that accepted Medical (ph), a state public health program for the poor.

(on camera): So Letia said she tried really hard to get Carlos help. She says she took him to four different clinics and each time she was told he didn't qualify because he wasn't considered an emergency.

(voice-over): Carlos would have to be physically violent or suicidal to get help.

(on camera): It sounds extreme, but an official with the Los Angeles County Department of Mental Health told us that right now clinics are so overloaded and underfunded, they're having to triage children. So that means kids like Carlos who need ongoing therapy are not a priority.

FERNANDEZ: Our session today was very positive.

GUTIERREZ (voice-over): After nearly a year of searching, Letia finally found St. John's, a free clinic.

(on camera): They look like fists.

FERNANDEZ: Yes, like fists. So -- and that's what he was able to express. He was able to express the anxiety he feels when his family fights.

GUTIERREZ: If Carlos were not able to come to a therapy session, would he be at risk?

FERNANDEZ: Of course he would be at risk. He would be at risk behaviorally and academically.

GUTIERREZ (voice-over): But now St. John's and other clinics like it are also facing California's bruising budget cuts. Will Carlos be next?

(END VIDEOTAPE)

(COMMERCIAL BREAK)

HARRIS: So earlier we asked you how the economy is affecting your school and if you have any solutions. Here's what some of you are saying.

Kent in New Jersey says, "we need to stop spending millions of dollars in every community across the country building new school buildings. We can cut down on new buildings by school consolidations and having online classes." You know what, Kent, I think that is happening.

Charles says, "if we took all the money we are spending on both wars and applied it to America's problems, we can eliminate a lot of our shortfall."

Laura from California says, "my hometown has declared bankruptcy and has some of the highest paid law enforcement and firefighters in the country. There are ways they can save money and not have the schools suffer. I believe if they tried really, really, really, really hard, they could find other ways to help the school and the city.

Of course you can weigh in. Just do that by going to my blog page. It is CNN.com/tony.

Let's take it to the next level. CNN NEWSROOM continues right now with Ali Velshi.