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The Reluctant Recovery; Interview With BP CEO Tony Hayward; Damage From Tennessee Flood
Aired May 7, 2010 - 11:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: 290,000 jobs added in April. That is the most in four years. Unfortunately, one of those positions did not go to John Jarrell of Maryland. CNN photojournalist, John Beha (ph) profiles the out of work truck driver who is doing whatever it takes to get by. It is today's "Jobs in Focus" segment.
JOHN JARRELL, UNEMPLOYED: A little exercise, trying to stay as fit as I can. Enjoy it. As a matter of fact, it's not many other people do it. This is heavy stuff. It's a lot of work. That's how we do. You never know when life is going to throw a physical challenge at you and you need to be prepared. When I can't find a job, I come home aggravated with that and I get on these and start all over again the next day. I was driving a truck before I had a driver's license.
I've been in construction, demolition, running equipment. Last job I had was pumping out port-o-potties. This is mine. Gross. The others like it, but this one is mine. I didn't like that at all. This one is not gross and disgusting. I'm single father of two little girls, so I'll do anything I got to do to keep a roof over their heads. So, I cleaned those potties to where my daughters would use them.
LEXUS JARRELL, DAUGHTER OF UNEMPLOYED WORKER: He liked it because it's another thing that he could check off his list. He would always come home and tell me all the weird things he found in them.
J. JARRELL: Scrub it down. Scrub it down. Every day was an adventure. You lift the lid. When you open that door, you never know what you were going to get. Fire the pump up. That's when everybody runs away. That was a humbling experience, I assure you. Roll on to the next one. I've always had a job. This is my first time with this. I guess it's a classic case of, well, that's not going to happen to me. Well, here I am.
UNIDENTIFIED MALE: In today's market, I'm not going to take any risk.
J. JARRELL: Unemployment sent me a letter saying it was mandatory class and walking in there I didn't know what to expect. Very informative. I mean, a lot of good advice. I met a lot of different people from all different facets of work. And everything they were teaching us were just tools that you can use if you want. I found a lot of them to be valuable.
We have a public library up the street. I've never had any training on a computer, so she's my little teacher. She's learned it all in school. And we'll go up there, and there's one right next to each other, so that's how we do it. And that way I don't have to yell, ah, freak out.
I'm applying at two or three places a week, leaving applications. Everybody is like, "Well, we'll give you a call if something comes up." And as bad as it is, it could be a lot worse. You know?
L. JARRELL: I wish that he could find a job that he enjoyed and was, like, "All right, I'm going to work," and be happy about it.
J. JARRELL: I see the future as being bright. I'm not going to be on this forever because I know something is going to happen better. Something is coming my way. I just have to believe in that. It's a good morning.
HARRIS: Good morning.
Hi, again, everyone. I'm Tony Harris. Top of the hour in the CNN NEWSROOM, where anything can happen and usually does.
Here are some of the people behind today's biggest stories.
One of the lowest foreclosure rates in the nation and an unemployment rate under six percent. What are they doing right in Nebraska?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We have a tendency to do things, kind of crazy things, like only spend money when we have money.
(END VIDEO CLIP)
HARRIS: Lessons from Omaha on surviving tough times.
And surviving the historic floods. They've lost their possessions, but they haven't lost hope.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I lost everything. Everything is ruined.
UNIDENTIFIED MALE: I keep stopping and thinking, I'm alive. You know, everything else, the rest of my life, if I have to fight cancer or whatever, I mean, it's going to be a piece of cake to what I went through.
(END VIDEO CLIP)
HARRIS: Wow. OK. We know a lot of you are online right now, and we are, too. Ines Ferre is following the top story, trending online -- Ines.
INES FERRE, CNN CORRESPONDENT: That's right, Tony.
On CNN.com, you've got some of the top stories on the oil leak, capturing the leaking oil. And also, stocks tumble anew. The stock market and the April jobs report, those are some of the big stories that we're seeing.
HARRIS: Terrific, Ines. Thank you.
Let's do it, let's get started.
The economic arrows are moving in the opposite directions today. Payrolls in April show their biggest increase in four years, but it is not a tonic to calm investors.
The stock slide continues down more than 200 at one point this morning. Nothing compared to yesterday, when the Dow jumped off a cliff in mid-afternoon. The index down almost a breathtaking 1,000 points. And just as quickly, the Dow recovered most of the loss, to close down 348 on the day.
Even today's jobs report has its downside. The unemployment rate crept up to 9.9 percent. That's even after companies added 290,000 jobs. So we'll explain.
Let's get to CNN's Christine Romans and CNNMoney.com's Poppy Harlow on today's big financial news.
And Christine, let me start with you.
I think it's a fourth month now of this economy adding jobs. Break out, if you would, for us the good, the bad, and I won't say the ugly, of the jobs report.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, there's always a little ugly when you're talking about the jobs market no matter what you write, Tony.
OK, 290,000 jobs created overall. Much more than people thought. But the jobless rate ticked up to 9.9 percent. Wow. That's really close to 10 percent unemployment. There's nothing good about that.
But that's actually, according to Christina Romer in the White House Council of Economic Advisers, natural, because people are entering the workforce because they think things are getting better and maybe there's going to be a chance for them to get a job. So that's why you the unemployment rate going up to 9.9 percent.
Two things here happening, Tony. On one end, people are finding opportunities for the first time in a long time in the jobs market. Make no mistake, they are finding opportunities. They are finding jobs. On the other end, 46 percent of the people who don't have a job have been unemployed for six months or longer. That is unheard of in a modern economy. Very dangerous.
It means there are people who are being left behind in the recovery. I want to be clear about that.
ROMANS: Where is that jobs growth coming? It's coming in professional and business services, 80,000 jobs created there. The Census created 66,000 jobs.
You had some people saying that, oh, any kind of economic growth is only going to be Census-related. No. There's a lot of private sector jobs here. Census was 66,000. Leisure, hospitality, manufacturing, health care, all of these adding jobs. And that was pretty broad-based overall.
So, again, on one hand, the economy is starting to work for some people. On the other hand, millions of people have been left out and haven't been able to find a job yet. So that's what we're still watching.
HARRIS: OK, Christine. Stand by for just a second.
Let's get to Poppy Harlow now, I believe on the floor of the New York Stock Exchange.
And Poppy, we're looking at a pretty good number of jobs added in April, and yet -- and yet, the markets still struggling.
POPPY HARLOW, CNNMONEY.COM: The markets struggling, but if we can pull up the Big Board for folks, Tony, I'm watching it down here. We're off 35 points. That's near the best levels of the day. The jobs number, as Christine emphasized, it was strong, but many people left out of this recovery.
The big question that we're dealing with here on the floor yesterday is that we saw the biggest point decline for the Dow Industrials in history. About a trillion dollars in wealth was lost in 10 minutes. That is unbelievable. We saw a recovery, but we still had the worst day here, Tony, yesterday that we have had in a year.
So, talking to a lot of traders on the floor, asking just what happened. And is this to blame on electronics, on technology?
One trader said to me it was already a bad day, made worse by technology. I want to play some sound for you to hear from the traders directly about what they think caused this and what it means on a broader scale.
Take a listen.
(BEGIN VIDEO CLIP) JONATHAN CORPINA, MERIDIAN EQUITY PARTNERS: Clearly, we have had pressure on the market. This just added on top of it. It made the problem even worse.
And it shows investors that, you know, you have to look at the markets where you're trading. You have to understand that human interaction is something that we need. And speed isn't always the answer.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
TED WEISBERG, SEAPORT SECURITIES: This is the new trading world. It's great for the professional trader, but it is terrible for the public.
HARLOW: It's terrible for the average investor?
WEISBERG: Oh, absolutely, because the average investor -- and that can be an institutional customer or an individual -- didn't sign up for this volatility.
(END VIDEO CLIP)
HARLOW: And he is exactly right.
HARRIS: Absolutely right.
HARLOW: Volatility, Tony, as a matter of fact, traders here only trade about 30 percent of the stocks. Most of it's done by computers, Tony, and you can't stop computers all the time.
HARRIS: Poppy, appreciate it. Christine, appreciate it. Good to see you both. Thank you.
Got to tell you, the CEO of BP is on the hot seat over the oil gushing into the Gulf of Mexico.
CNN's David Mattingly joins us live with Tony Hayward from Venice, Louisiana.
David, good to see you.
And our thanks to the BP CEO for joining you for a couple of minutes here.
DAVID MATTINGLY, CNN CORRESPONDENT: That's right, Tony. Going straight to the top for answers on this disaster.
You've got that containment dome on its way down to the bottom of the Gulf of Mexico. How confident are you that this is going to work?
TONY HAYWARD, CEO, BP: Well, the dome this morning is about 200 feet above the leak, being lowered very carefully on to the leak. And then we have the task over the next three to four days of doing the plumbing, taking a pipe up to the vessel on the surface to process the oil.
This has never been done in 5,000 feet of water. It's a technology first. It works in 300 to 400 feet of water, but the pressures and temperatures are very different here. So we cannot be confident that it will work, and that is why we continue with other significant interventions.
MATTINGLY: Do you have something ready to go just in case this fails?
HAYWARD: Well, the ready to go is, of course, ,containing the spill for the maximum extent possible. And then there is a further operation on the blowout preventer, which will probably take two to three weeks to bring into place.
MATTINGLY: But you're drilling for oil a mile underneath the ocean. Why wasn't something ready to go in the event of this kind of a disaster?
HAYWARD: Well, this has never happened in 25 years in the industry.
MATTINGLY: Yes, I understand that, but --
HAYWARD: The failure of the blowout preventer has not occurred in 25 years.
MATTINGLY: -- this does seem like there are some risks involved in this. So, was this something that you just never, ever thought would happen?
HAYWARD: It was considered to be an extraordinary low, low probability. And what we've implemented is a spiral (ph) response pack (ph). And that is what you're seeing.
It's what you're seeing all around us here. It's what you're seeing with an armada of ships on the surface. It's what you're seeing with the dispersant attack.
What we've implemented is the spiral (ph) response pack (ph). Now, clearly, in the life of this incident, the industry will need to step back and determine what more might need to be done.
MATTINGLY: The accident aboard the drilling platform, you've made clear that that was the fault of that company, that drilling company. But it was your oil that was coming out here and is now poisoning the Gulf of Mexico.
What kind of oversight did you have on that drilling operation?
HAYWARD: We had the sort of oversight that an architect has on a building site, is the way the industry works. It's the industry structure. So we had oversight of the -- we had the design. They were doing the building.
But, you know, I think we can review the issues around that in the future. Our focus today is responding to the incident.
We're focused on eliminating the leak. Many options being pursued. The first one going into place as we speak. We're focused on containment on the surface, and we're focused on defending the shoreline. And that is what you see going on all around me now.
MATTINGLY: This spill is the size of a large island now. How much bigger is it going to get?
HAYWARD: That would depend on how successful we are in first eliminating the leak and then containing the spill. And none of us today can say with certainty what that is. What we are doing is throwing the full resources of the Coast Guard, BP, other federal agencies, the local communities at this problem.
MATTINGLY: You've also been applying a lot of dispersant to this spill. You've stopped applying it under water for a time.
Why did you stop doing that?
HAYWARD: This is the first time dispersant has been applied at a depth on the seabed. It appears to be having a very significant impact.
The NOAA and EPA scientists wish to establish a baseline such that we can track what is happening and learn for the future. And I would expect that within the next 12 or 18 hours, we will be back to applying dispersant, having established a very thorough and rigorous (INAUDIBLE) mechanism.
MATTINGLY: Now, the issue of responsibility, how much is BP prepared to pay for this cleanup and for compensation?
HAYWARD: We are the responsible party. We are going to clean this up fully and completely. And we have said very clearly, where there are legitimate claims for business interruption, then we will be good for them.
MATTINGLY: Legitimate claims for long term, short term?
HAYWARD: Legitimate claims.
MATTINGLY: How many years are you prepared to pay fishermen for a bad catch?
HAYWARD: I said legitimate claims. All those things we'll need to sort out.
What we're doing today is focusing on ensuring that people who have been immediately impacted are being dealt with. We have claims offices now opened here. They are paying money. Our immediate concern is to ensure that the fishermen here who aren't fishing are either working in the response and being paid for it, or if they're not, then we're providing them with the funds that they would have gotten from their fishing activity.
MATTINGLY: We know there's a $75 million limit, but how much are you willing to pay beyond that?
HAYWARD: We have said that it is inevitable that the $75 million limit has no relevance in this case.
MATTINGLY: Are you looking at billions?
HAYWARD: I think that's all for the future. We are absolutely, as I said, going to take full responsibility for cleaning this up, ,and we will honor legitimate claims.
MATTINGLY: Who will decide when enough is enough? Will BP decide that they've done enough or will the public decide?
HAYWARD: I'm certain that, ultimately, we will be judged in the course of public opinion by how we've responded to this, the scale of it, intensity of it, the quality of it, and ultimately the success of the response.
MATTINGLY: Tony Hayward, BP CEO, thank you very much.
Tony, back to you.
HARRIS: Yes. OK. Gentlemen, appreciate it. Thank you.
We have got much more on the oil spill for you, CNN's exclusive look at how the government trains for disasters like the one in the Gulf.
First, though, our "Random Moment" in 90 seconds.
HARRIS: Our "Random Moment of the Day," it is supersized for Friday.
America loves big. Since we're watching our weight, good thing they built the world's biggest burger in Canada. This 500 -- oh, that looks good. Oh, man, 590 pounds of burger. But the Guinness people have not made it official yet.
The chef built a special grille to hold the patty. He had no use something like a forklift to flip the burger.
Our "Random Moment," a half-million calories, as best we could figure.
HARRIS: OK. Another big story we've been following all week, Tennessee's massive flooding. People are going home to see the damage. Many of them have no flood insurance.
Martin Savidge brings us their personal stories.
(BEGIN VIDEOTAPE) MARTIN SAVIDGE, CNN CORRESPONDENT (voice-over): On West Hamilton Street, everything everyone ever had is now on the sidewalk for everyone else to see. Walk down the street and the flood stories still pour out.
WILLIE MAE STRICKLAND JORDAN, FLOODING VICTIM: The water just gushed in, and it had a force to it.
EVELYN PEARLBELL, FLOODING VICTIM: They put this rope around me and pulled me through this water. Scary. We were so scared.
RONNIE COLEMAN, FLOODING VICTIM: And the water line was there and here in the living room. You can see on my wall --
SAVIDGE (on camera): On you, that's chest high?
COLEMAN: Yes, yes. And I can't swim.
SAVIDGE (voice-over): Two days of rain and water from White's Creek did this to a working class neighborhood where most have lived for decades. And few have flood insurance. Everyone dreaded coming back.
REBA PERKINS, FLOODING VICTIM: And we prayed that we would not -- whatever we found, it would be something that we could learn from.
SAVIDGE: Soon the first trips to the curb began.
(on camera): What have you lost?
UNIDENTIFIED FEMALE: I lost everything. Everything is ruined.
SAVIDGE: Are you worried?
CAROLYN PHILLIPS, FLOODING VICTIM: Yes, but I'm going to be OK. We're going to be OK.
SAVIDGE (voice-over): Like they say, one man's trash is another's treasure. Kelando Hambric gets $135 a ton from the scrap dealer.
(on camera): And what are the things you carry away most?
KELANDO HAMBRIC, SCRAP DEALER: Refrigerator, washing machines, dryers, water heaters. The heavy stuff.
SAVIDGE (voice-over): Ronnie Coleman lost everything and gained something.
COLEMAN: I can't stop and thinking, I'm alive. You know, everything else, the rest of my life, if I have to fight cancer or whatever, I mean, it's going to be a piece of cake after what I went through.
SAVIDGE: I watched with Sherry Hathaway as the city truck loaded her stuff for the dump. (on camera): Is that your life going away?
SHERRY HATHAWAY, FLOODING VICTIM: Yes, it sure is. Children's lives, our lives.
SAVIDGE (voice-over): For her 24-year-old daughter Jamie (ph), it was too much.
HATHAWAY: What do you think?
JAMIE (ph) HATHAWAY, FLOODING VICTIM: It's hard to watch it. I mean, this is everything we own.
SAVIDGE: Martin Savidge, CNN, Nashville.
HARRIS: OK. We know a lot of you are online right now. We are, too.
And trending right now on CNN's Web site is the oil spill cleanup effort. People want to know exactly what's been done to fix that mess in the Gulf of Mexico. We have got some insights just a couple moments ago from David Mattingly's interview with the CEO of BP, Tony Hayward.
And Ines, CNN actually gained some exclusive access to oil slick cleanup technology, correct?
FERRE: Yes, that's right. The government's oil spill research and training facility, it's in the New Jersey coast. And CNN has gained exclusive access to this.
In fact, the first time that TV cameras have actually entered the facility. And this is where they test out techniques for cleaning oil spills.
And Allan Chernoff was there. Listen to this.
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: When trying to clean up a giant oil spill, ,how does the oil industry know exactly what to do, what techniques are going to work? The research is done right here at OHMSETT, the Oil and Hazardous Materials Simulated Environmental Test Tank. This facility is run by the Interior Department's Minerals Management Service, and it is the largest of its kind in the entire world.
CHERNOFF (voice-over): Oil sprays into the water, a slick forms and expands but it's all intentional.
(on camera): Here, the government creates controlled oil spills in a giant tank more than two football fields long. Operators create ocean wave conditions, and then they use various techniques to clean it all up. (voice-over): There are three primary plans of attack for cleaning oil spills in the water: burn the oil, apply chemical dispersants to break it down, or manually remove it. All three are at work in the Gulf of Mexico.
JOE MULLIN, MMS: You would try to use as many techniques as you can to remove the oil off the water and surface of the water.
CHERNOFF (on camera): You get out every form of artillery you've got?
MULLIN: Yes, sir.
CHERNOFF (voice-over): Today, cleanup experts are practicing manual techniques to remove oil.
(on camera): Taking oil off the surface of the water is kind of like peeling the filling off of an oil of cooking, you're skimming it. And that's what all these various devices do, they skim the oil off the water, depending upon the grade of oil, how heavy it is, you use a different type of skimmer.
(voice-over): At OHMSETT, All different types of oil are sprayed into the tank from a moving bridge. Workers can test skimmers, various dispersants, even burning -- all in a safe, enclosed environment that simulates the ocean's salinity and even its wave patterns.
(on camera): We all know oil is lighter than water. That's an advantage when it comes to cleaning up a spill because the oil sits on top of the water. Using those booms, oil can actually be pushed into that skimmer and then it sucked up using this giant vacuum.
(voice-over): Cleanup workers from private industry, government and 24 countries around the world have come here to practice and research such techniques, including responders trying to clean the Gulf of Mexico right now.
MULLIN: You want to be prepared. So, you know, firemen have fire training centers. You know, paramedic staff have paramedic training centers and stuff. So, for responders, you have the OHMSETT tank right here.
CHERNOFF: The Gulf cleanup presents an immense challenge. Indeed, high waves have made it difficult to contain some oil, but the Minerals Management Service says industry and government are better prepared to handle this catastrophe than the Exxon Valdez disaster more than 20 years ago.
MULLIN: There's more equipment. There's more technology. Folks are better planned and better trained.
CHERNOFF (on camera): Thanks to the OHMSETT facility, the folks who are in the Gulf right now know exactly which techniques to use in each marine environment to clean up the mess.
Allan Chernoff, CNN, Leonardo, New Jersey.
FERRE: And Tony, I'll be back later to show you some of the most popular stories on the Web.
HARRIS: That's what I need. All right, Ines. Appreciate it. Thank you.
HARRIS: This is one of "those" stories. A community coming together to make a little girl's dream come true.
MacKenzie has been battling brain cancer for four years, but doctors say there's nothing more they can do. So the town threw her a big birthday party and raised money for a trip to Disney World.
Producer Lesa Jansen has the story from Mount Airy, Maryland.
MACKENZIE STUCK, BATTLING BRAIN CANCER: My favorite color is purple.
UNIDENTIFIED FEMALE: Your dress is beautiful.
STUCK: Thank you.
UNIDENTIFIED FEMALE: You're very welcome.
STUCK: All I really know is that I'm having kind of a big party today.
I saw this dress, and I was, like, oh, my gosh, that dress looks exactly like Tinkerbell's. And I always wanted to look like Tinkerbell. And now I do.
SUE STUCK, MACKENZIE'S MOM: Mount Airy is what I wish every community in America was like in the world. When MacKenzie was originally diagnosed, they were there. Somebody set up a bank account for people to just contribute money to, to help with bills.
We have had food delivered. My community has carried us through this, through all the hard times, through the good times, and holding us up.
You look beautiful.
So today is all about celebrating her living.
M. STUCK: I think it's awesome.
S. STUCK: She has fought for four (ph) years, and I want to see that glow and that look of pure surprise on her face.
M. STUCK: I feel like a princess.
UNIDENTIFIED FEMALE: Happy birthday, MacKenzie!
UNIDENTIFIED GROUP: Happy birthday!
SHARON PERFETTI, CO-FOUNDER, COOL KIDS CAMPAIGN: The Mount Airy community has been amazing. People that don't even know MacKenzie, have never had a child with cancer, I mean, they just stepped up and said, what can we do?
ADELINE POPLAWSKI, MOUNT AIRY, MARYLAND: It's a small town, and everybody cares about everybody.
UNIDENTIFIED MALE: What do you think?
M. STUCK: I love it.
UNIDENTIFIED FEMALE: MacKenzie, we met her four years ago with her first brain tumor. She started really working with us, talked to large audiences. You know, what it's like to have cancer, the experiences that the kids go through.
S. STUCK: But it has never been "Me, me, me." She has never said, "It's not fair."
We had to tell her that there is no more treatment that we can do to kill this cancer. And so we want to make sure that the time that we have together is things that she wants to do.
One of the things we say, and it's from a children's storybook called "I Love You Forever" --
I love you forever.
M. STUCK: I like you for always.
S. STUCK: As long as I'm living.
M. STUCK: My mommy you'll be.
S. STUCK: My baby you'll be.
UNIDENTIFIED GROUP (singing): Happy birthday to you
S. STUCK: I wish that every community, if everybody just reached out and did one thing for somebody else, the world would change.
HARRIS: OK. So let's see here. Italy, Spain and Germany today approved their contributions to a bailout plan for Greece. The debt crisis in Greece is really reverberating on Wall Street and in markets around the world.
So, what does it mean to your finances? Jeanne Sahadi of the CNN Money team is with us and she's joining us from New York to talk about that.
Jeanne, great to see you, as always.
JEANNE SAHADI, SENIOR WRITER, CNNMONEY.COM: Good to see you.
HARRIS: Explain to us why you believe what's happening in Greece is important for us all to pay attention to? In particular to what happened yesterday.
SAHADI: Right. There are two lessons from yesterday's plunge. One is that markets do pay attention to sovereign debt problems.
SAHADI: And, two, they turn very, very quickly when they decide they have doubts about a country's ability to handle those debt problems. You know, yesterday there was a lot of doubt about the aid package for Greece and there was a lot of doubt about - or concern, rather, about contagion. You know, that problem spreading throughout the EU.
SAHADI: So the United States has its own fiscal problems. And while we're in better shape than Greece, we are not as far away from their situation as anyone is comfortable with.
SAHADI: I was at a meeting this week with some leading budget and fiscal experts and they were talking about what a tipping point for a fiscal crisis? One of the things one of the participants said was, you have to be on an unsustainable fiscal path, which the United States is, and you have to have a fiscal policy that is not credible with the markets.
So we've met that first requirement. That's why experts are saying, look, now is the time to come up with a credible plan to reduce the deficit over time. It's not a plan we're going to implement right away. We're going to wait for the economy to be in better shape. We've heard a lot of good economic news today, and that's.
SAHADI: You know, there's still some more development to go there. But the idea is to come up with a serious plan that the markets take seriously, so they can rest assured that when the time comes, that the United States can afford to cut spending and increase taxes without unduly harming economic growth or job creation. Great. That's --
HARRIS: Well, Jeanne, you've hit upon it. And, look, the politicians, it seems to me, it feels to me, are hoping for cover for the tough decisions to come from this fiscal commission that's working on this right now. The truth is, it really is time for someone to begin to tell the American people the truth about what is going to be required. And we're talking about, as you mentioned, cuts in government spending and tax increases to get our fiscal house in order, correct?
SAHADI: Well, if it's going to be palatable, yes. There, you know, there are people who believe all we have is a spending problem, so we should just cut on the spending side. But the truth is, those cuts would need to be so severe that it may not fly. You know, you might need to cut discretionary spending 40 percent.
SAHADI: That's - discretionary spending is only a third of our budget. So cutting that 40 percent is an enormous hit to many of the things that government does.
HARRIS: But before you go too far here, before you -
SAHADI: Sure. Sure.
HARRIS: When you talk about discretionary spending and cuts that might be necessary there, what are you talking about? Are you talking about education? Are you talking about infrastructure? Maybe defense?
SAHADI: Everything. Everything except Medicare, Medicaid, Social Security and interest on the debt primarily.
SAHADI: Those are mandatory spending items. And there are a couple of other things that are mandatory, but those are the primary ones. So, really, everything else government does falls into the discretionary pot. So it may not be realistic to go that deep that quickly. So if you come up with a measure that would cut spending some and raise taxes some, that will be -- that will go down a little easier. Even though there's a lot of partisan warfare over this, that's the - that's the problem.
SAHADI: It's the lack of political will to do something that would worry markets more than an actual solution.
HARRIS: So, Jeanne -
SAHADI: You're going to need political will.
HARRIS: So, Jeanne, I anoint you as the person who is going to be responsible for doling out the tough news to America, OK?
SAHADI: Yes, OK. HARRIS: It's all on you, Jeanne. Jeanne Sahadi from cnnmoney.com.
HARRIS: Jeanne, good to see you, as always. Thank you.
Living the good life in Omaha. The town manages to survive, even thrive during the recession. How does Nebraska do it?
HARRIS: I want to get you to the best website for financial news on the web. That is cnnmoney.com. And take a look at the cover story at cnnmoney.com, "296 funked up stocks," that is the Parliament Funkadelic headline of the day, "296 funked up stocks - trades canceled." So for the best financial news and analysis, cnnmoney.com.
Better than three hours into the trading day now. Let's get you to the big board, New York Stock Exchange. We are certainly off of session lows. We were close to, what, 200 points in negative territory earlier in the day. We rebounded quite a bit here, but we are still down 84 points. The Nasdaq is down -- what was that, Sonya (ph) -- 31 points. We're following these numbers throughout the day for you right here in the CNN NEWSROOM.
It seems like we've been talking about this economic downturn that the country has been going through for the last couple of years, to be sure. You know, one state that has weathered the downturn amazingly well is Nebraska. How has Nebraska done it? We sent our Poppy Harlow to Nebraska to find out.
POPPY HARLOW, CNNMONEY.COM (voice-over): A high-end boutique selling thousand dollar purses and books about Paris, not exactly the fields you'd expect in Omaha, Nebraska.
ALICE KIM, OWNER, TROCADERO: It was this kind of childhood fantasy of mine since I was seven to move to Omaha.
HARLOW: So Alice Kim moved, from the big apple, to the big "o," as they call it here, and opened her boutique at the peak of the recession.
KIM: I knew that there was going to be kind of like great steady wealth here.
HARLOW: As for the hangover from the deep recession? Well, let's just say Omaha skipped the headache.
UNIDENTIFIED MALE: We have a tendency to kind of grow steadily, so we don't end up with bubbles. It's a slow growth, conservative approach to doing business.
HARLOW: That conservative attitude helped keep the housing bubble at bay and, as a result, Omaha has one of the nation's lowest foreclosure rates. And the city's diversified economy, from farming, to insurance, to railroads has helped Omaha get by with an unemployment rate of just 5.9 percent, far below the nearly 10 percent national average.
And on a sunny Saturday afternoon, the home of Warren Buffett and the college world series is buzzing. Here in the old market, warehouses are turning into condos, shoppers are buying, and Ron Samuelson's two restaurants are filling up for lunch.
HARLOW (on camera): You've made it through the recession and is business good?
RON SAMUELSON, CO-OWNER, M'S PUB: Business has been very good. I mean we've had our ups and downs. It hasn't been, you know, a cakewalk for the last couple of years. We try to concentrate on what we do well.
KIM: Right now, with all the building of the condos and all the real estate really being snatched up, at this point, you know, I just continue to see, you know, lots of growth.
HARLOW (voice-over): So what's their secret for riding out the recession? Living within their means.
UNIDENTIFIED MALE: We have a tendency to do things kind of crazy things, like only spend money when we have money.
UNIDENTIFIED MALE: For people in a place like Nebraska, or Omaha, it's just common sense. I mean it's not rocket science.
HARLOW: Poppy Harlow, CNN Money, Omaha, Nebraska.
HARRIS: OK. We are going to take you globetrotting on the top stories of the day, including the oil spill and Britain's big election results. We're back in a moment. You're in the CNN NEWSROOM.
HARRIS: All right. Let's try this from the touch screen. Let's get you caught up on our top stories right now.
And we get started with political disarray in the U.K. Conservative outperformed the labor party in parliamentary elections. Now both the incumbent labor party prime minister and the conservative party leader are trying to make deals to form a new government. We'll continue to follow that story.
Now let's take you to Washington. There you go. And we're just learning -- the White House announcing just moments ago that Afghan President Hamid Karzai is traveling to Washington. He is scheduled to meet with President Obama at the White House. That's scheduled for Wednesday.
And one more top story for you here. There you go. That 100-ton concrete and steel box is close to being in place to cover the blowout well in the Gulf of Mexico. It is supposed to collect as much as 85 percent of the leaking oil and funnel it into a tanker. We will, of course, continue to follow that story.
Still to come, just last year he was a favorite on "Dancing with the Stars." Now famous ex-linebacker Lawrence Taylor is out on bail and denying charges of third degree rape. That's the story coming up for you on the other side of the break. We're in the CNN NEWSROOM.
HARRIS: Weight loss company Nutrisystem has ended its relationship with former NFL star Lawrence Taylor as a spokesman. Taylor, as you know, was charged with rape yesterday in upstate New York. He is also charged with patronizing a prostitute in the case involving a 16-year-old girl. Taylor's attorney denies the charges.
(BEGIN VIDEO CLIP)
ARTHUR AIDALA, LAWRENCE TAYLOR'S ATTORNEY: My client was in town to work. He was going to play some golf with some friends and he was going to work. And then this nightmare unfolded before him. Lawrence Taylor did not rape anybody. Am I clear?
(END VIDEO CLIP)
HARRIS: Financial experts answer your questions on a home loan modification and health insurance for your children. Here is Stephanie Elam at "The Help Desk."
STEPHANIE ELAM, CNN CORRESPONDENT: Time now for "The Help Desk" where we get your answers to your financial questions. Joining me this hour, Greg McBride is a senior financial analyst for bankrate.com, and Jack Otter, he's executive editor of moneywatch.com.
All right, gentlemen, our first question comes in from David who writes in, I have never missed a mortgage or credit card payment in my life and I am having trouble modifying my loans with my mortgage lenders. When I call to refinance, they said that I was ineligible because I was unemployed. They also told me that I would not qualify for a loan modification because I didn't miss any mortgage payments. Is there anything I can do?"
Sounds like he's getting penalized for doing the right thing, Greg.
GREG MCBRIDE, SR. FINANCIAL ANALYST, BANKRATE.COM: Well, when it comes to refinancing, you do have to be able to show that steady income in order to qualify. It's just like getting a new loan. So that option's off the table. But you do not have to be behind on your payments to get a mortgage modification. And the government's home affordable modification program contain a specific provision designed of help unemployed homeowners in this situation. So be persistent with the lender. It's frustrating that the information you get often depends on who answers the phone. But be persistent because there are options out there. ELAM: All right, so David needs to keep calling.
All right. Our next question comes from Dean. And he writes in, "how long will it be before we can take advantage of the new federal law extending the age that our dependents can stay on our health benefits through work to the age of 26? Is this big enough to constitute a change in life status so we don't have to wait until open enrollment or will this go into effect right away at work?"
What do you say, Jack?
JACK OTTER, EXEC. EDITOR, MONEYWATCH.COM: Well, companies are not required to make this change until January 1, 2011. So not necessarily. The good news is, some companies, some employers and some insurance companies are actually moving ahead and doing this early, which is amazing to hear. So that's good news. So he's going to have to check with his own HR department.
I would give him one bit of warning. While companies will be required to add 25-year-olds, 24-year-olds to the roles, they're not necessarily required to subsidize that insurance cost. So it may not be free.
And one more point. If your child is employed, they're not actually required to offer coverage until 2014.
ELAM: So there's a lot of questions in there that he just has to go and dig in and find out the answers to.
ELAM: All right, Greg and Jack, thanks so much.
Now, "The Help Desk," it's all about getting answers to your questions. So send us an e-mail to email@example.com or log on to cnn.com/helpdesk to see more of our financial solutions. You can also pick up the latest issue of "Money" magazine. It's on newsstands now.
HARRIS: (INAUDIBLE) what's hot, music? That's pretty good.
INES FERRE, CNN CORRESPONDENT: I don't know. It sounds like it is.
HARRIS: OK. So we know a lot of you are online right now surfing the web and we're there with you. Ines Ferre is back with us.
All right, lady, what's hot?
FERRE: OK. So we took a look at the most popular stories and actually you've got the stocks right here, but right below it --
HARRIS: I love this because this is the Parliament Funkadelic influence headline, "296 funked up stocks."
HARRIS: OK. All right. Had to say that.
FERRE: That's right, but for a while today, for a long while you had Tom Cat's "Dirty Dance" that was actually the most popular.
HARRIS: Well, what is that?
FERRE: Yes, this is a dance that they did at a benefit in Los Angeles and --
HARRIS: OK, so this is Cruise and Katie Holmes.
HARRIS: Oh, oh, oh, oh.
FERRE: And now, you know, the magazines are saying, well, that maybe they're not getting divorced. Maybe their marriage isn't on the rocks. It's all --
HARRIS: Well - well, stop with the rumors. Let people -
HARRIS: All right. And, oh, we love this from "Dirty Dancing" from Paramount Pictures.
All right, what's the next piece of video you have for us?
FERRE: OK. So the next piece of video that we're going to put up is actually from YouTube. And this video is from some University of Oregon students and this is going to come up in any minute now.
HARRIS: What happened? Oh, there it is. Is that it?
FERRE: It's on the air. There it is.
HARRIS: Oh, it's on the air. OK.
FERRE: Exactly. So you can see right there, these are some University of Oregon students and they're singing a cappella, your favorite. Your favorite, Tony.
HARRIS: I love it. So we've got Gaga on the air again.
FERRE: Lady Gaga.
HARRIS: OK, can we listen to it for just a little bit? Do we have time, guys?
FERRE: It's gone viral.
HARRIS: I love it. I love it. OK, we're flat out of time. That worked out kind of OK, right?
FERRE: Yes, it did.
HARRIS: All right. We're back in a moment. You're in the CNN NEWSROOM.
HARRIS: I got to tell you, the emotional impact of being out of work for months is becoming more evident across America. In today's "Jobs in Focus," a photojournalist, Oliver Janney introduces us to Jose Torres-Reyes at his workshop, helping people cope with job loss.
JOSE TORRES-REYES, WORKSHOP FACILITATOR: My wife is active duty Air Force. Every two to three years we've had to move to our next assignment. And I find great jobs, but I have to leave them and so I have to reinvent myself constantly.
We are at the Columbia Workforce Center in Columbia, Maryland. What they do is teach professionals how to compete on a professional level with their peers.
Good morning. My name's Jose. And I hope each one of you is wearing a name tag so we can refer to each other by our first name.
I train the unemployed individuals the best ways to find job and all the skills that they need to develop and work on in order to find the kind of work that they're really looking for.
What is the value of this bill? This is a $20 bill, right? I can devalue this - t he value of this bill.
A lot of them are angry from losing their job.
What is the value now? Still $20. What I want to tell you is that this bill is you. You are not devalued. No matter what happened to you, you are still the same person with the same values, the same dedication to your job with the same sense of, I want to do the right thing.
What happens if the ranges from $40,000 to $80,000, just think of which part of that range your resume can support? If people don't know you're out of a job, can they help you?
Fulfilling doesn't begin to describe -- the reason you see a smile on my face, the reason you saw me smile the whole time I was teaching, the reason I'm able to interject my personality is because it's not -- it's not just a job. It's about the satisfaction that you get in really honestly helping other people.
HARRIS: Good weekend, everyone. CNN NEWSROOM continues right now with Don Lemon, in for Ali Velshi.