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President Obama to Unveil New Jobs Plan

Aired September 8, 2011 - 18:00   ET


WOLF BLITZER, CNN ANCHOR: Happening now, it could be make or break, a moment for this presidency. President Obama about to unveil just one hour from now his plan to boost jobs and jumpstart a flat- lining economy amid escalating fears that the United States potentially is on the brink of another recession.

The Republican Party has its own plans to send the president an embarrassing message tonight. And some Republicans are even planning to boycott the speech altogether.

CNN is covering this pivotal address from every angle, including what it means for all of you. And when the president speaks, we will of course bring it to you live.

We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer. You are in THE SITUATION ROOM.

Let's go straight to our chief White House correspondent, Jessica Yellin.

Jessica, I know that it will still be an hour before we hear from the president, but they are releasing already some excerpts, what he is planning on saying.


And we know that the president tonight wants to dramatically switch gears from the sort of gridlock we felt in Washington when Congress was last in town to now a sense of urgency and action for Congress to get business done on the economy. And in one of the excerpts we have, the president will say tonight -- quote -- "The question is whether in the face of an ongoing national crisis, we can stop the political circus and actually do something to help the economy."

So, expect some political rhetoric, lots of specifics, something the president has been criticized for lacking in the past, a real sense of urgency in the speech and an explicit call for the Congress to act now on his plan.

BLITZER: And, Jessica, what's going to be the specific message that the president will deliver to the Republicans who are the majority in the House, the minority in the Senate?

YELLIN: In a nutshell, pass these measures is his message to the Republicans or he will accuse them of essentially holding up the U.S. economy.

In the speech, the president will say -- quote -- "There should be nothing controversial about this piece of legislation. Everything in here is the kind of proposal that has been supported by both Democrats and Republicans, including many who sit here tonight, and everything in this bill will be paid for, everything."

We should point out that there's been no indication that the White House has consulted with or briefed top Republicans on what's in this bill, but they have said that in the past many of these provisions are things that Republicans have supported.

Now, his top aides, Wolf, have said in the past that if Republicans especially in the House don't get on board and support these measures, they will take their case to the American people. So Wolf, if that happens, hello campaign 2012.

BLITZER: So there is a bottom-line tone you think the president will bring forward tonight?

YELLIN: In essence, urgency, action, switching gears from a sense of government that is stuck in gridlock to a government that hopefully can get something done for the American people.

BLITZER: Jessica will stand by with us.

Thank you.

Not every Republican member of Congress is attending tonight's speech. In the House, the Georgia Representative Paul Broun and the Illinois Representative Joe Walsh claim the president is -- quote -- "campaigning." And they plan to meet with constituents instead.

Texas Representative and Republican presidential candidate Ron Paul is staying out there on the campaign trail and at least three lawmakers are heading to their home states to contend with natural disasters and family emergencies.

On the Senate side, South Carolina's Jim DeMint says he is tired of president's speeches, plans to read the text. Florida Senator Marco Rubio says he is dealing with pressing family matters. Louisiana Senator David Vitter had planned to host a party for tonight's NFL season opener in his home state. Saints-Packers will be the game. But now he says he will attend.

Let's go straight to Capitol Hill, where the Republican House speaker, John Boehner, could be looking to embarrass the president a little bit tonight through the people he has invited to join him in the gallery.

Our congressional correspondent Kate Bolduan is working this part of the story for us.

Kate, what's going on here?

KATE BOLDUAN, CNN CORRESPONDENT: Well, Wolf, it seems that the House speaker, John Boehner, at least wants to send a message to the president in the people that he has invited to sit in the speaker's box.

House Speaker John Boehner has invited about a dozen employers that he says are suffering right now because of the president, because of overbearing, excessive federal regulations as you know and as we have talked about. Rolling back federal regulations especially in the area of labor and the environment as well as in the health care arena are a major focus of the jobs agenda that House Republicans are pushing.

Listen here to House Speaker John Boehner when he was asked about the guests he has invited.


REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: All year, we have been focused on the regulatory onslaught that is coming out of the administration.

There hundreds and hundreds of regulations that are going to cost hundreds of billions of dollars. And what that does it raises the cost of doing business in the United States and makes it more difficult for employers to expand their business and in many cases forcing employers to relocate their facilities overseas, denying Americans the opportunity to have those jobs.

I think bringing those employers here does put a real face on how these regulations impact these businesses specifically.


BOLDUAN: Now, the employers, if you will, that House Speaker John Boehner has invited to be his guests in the speaker's box this evening they come from really a range of industries. Two of probably the most well-known names that our viewers will have at least some recognition of would be the head of White Castle as well the head of Gibson Guitars.

And that inclusion as a guest, the head of Gibson Guitars, has raised some eyebrows around here. Because our viewers may remember that the head of Gibson Guitars been in the headlines recently as federal agents have actually raided the company as they have been investigating importing of illegal wood.

No charges have been filed, but it definitely has raised some eyebrows around here. But House Speaker John Boehner says that company as well is suffering from excessive federal regulations. It's interesting, Wolf, as you were just speaking to Jessica talking about the tone that the president will try to put forth, trying to move away from this gridlock, it sure seems that House Speaker John Boehner is trying to send a very clear message of where House Republicans at least stand on what will grow jobs in who he has chosen to sit in his box this evening -- Wolf.

BLITZER: Kate Bolduan up on the Hill for us. She's not going away. Thank you very much.

Let's stay up on the Hill.

Our chief national correspondent, the anchor of "JOHN KING, USA," is up there.

John, why did the Republicans decide -- normally after the president delivers a half-hour or 40-minute address before a joint session, there is usually a Republican response and they get the airtime as well. They decided this time not to ask for that. Why?

JOHN KING, HOST, "JOHN KING, USA": Two big reasons. Number one they are trying to play down the speech. Speaker Boehner has said this is not the State of the Union. Republicans are trying to cast this more of a political speech, not a policy address.

They're trying to say the president is giving this speech ,Wolf, only because he knows he is in danger of having a very tough reelection campaign. The Republicans on the one hand trying to say this is not a big event, this is not a national event. We should not respond. That's their public line.

There is also a political element to this in the sense that some conservative members will come out and say everything the president proposed is awful. We don't like it and we won't support it. Some Republicans though in more vulnerable districts next year might need to say for their own reelection prospects, I want to work with the president. I like that specific proposal. Maybe if the president would give us this, I will work with him on that.

You have a Republican majority that has to defend that majority in a year in which we know the congressional approval numbers are way down. Voters are mad not only at the president. They're mad at all incumbents. Different Republicans would give different answers to the president's speech. The speaker making the political decision we won't elevate it with a single response and we will give all of our members a chance to answer their local news media.

And those answers, it will be fascinating to pick up the newspapers, watch the local TV stations tomorrow and see how different and varied the answers are among those Republicans especially, Wolf, the House Republicans we know are in very competitive races come 2012.

BLITZER: And listen to this little clip, John. This is the speaker once again, John Boehner. He is taking a little dig, a little slap at the president. Listen to this.


BOEHNER: This is not a State of the Union address. The American people shouldn't be forced to watch some politician they don't want to listen to.


BOEHNER: And, frankly, most of them would rather watch a football game.


BLITZER: He is referring to the opener of the Saints-Packers game that will air later after the president's speech.

But when he calls the president some politician, he's the president of the United States after all. That was a nice little dig there.

KING: It is a dig and he also could be saying they don't want to listen to me or some -- a Republican politician responding as well. But it is a dig.

And again we have seen this play out. There is a war of wills, a test of wills going on between the Democratic president and the Republican House speaker. John Boehner is trying to stand up and be the representative to the conservative base that says stand up to this president and don't give him any more stimulus money, the Republicans would call it.

Some would have a more political argument and don't give him anything and help us win in the election. But Speaker Boehner is taking that hit for his caucus. He also knows -- and if you talk to Republicans privately up here in both the House and the Senate, they realize something is likely to get done.

If the president will give them some ground on regulations, the Republicans say, they are willing to give him some ground on the other things. Look for the House, Republican-run House to pass some separate incremental jobs legislation, some of it the president might kill and some of it he won't.

But what I'm told tonight is when it gets over to the Senate, the posture of Senate Republicans is because it will cost more money and because you will have to look for things to cut to pay for it, they want to fold all of this into to that big super committee that already has the gargantuan political challenge of coming up with more cuts for deficit reduction.

BLITZER: All right, John, thanks. Stand by for a moment.

By the way, the president just tweeted on Twitter @BarackObama, his handle over there, "I am going to Congress to present them with the American Jobs Act. Please watch and join me in urging them to act," signed B.O. That would be Barack Obama, @BarackObama.

He is using Twitter as we can see to try to get some interest going for his speech. Certainly this is not the first time President Obama has taken his push for new jobs to Congress. Listen to this.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now is the time to jump-start job creation, restart lending and invest in areas like energy, health care and education that will grow our economy. Jobs must be our number-one focus in 2010 and that's why I'm calling for a new jobs bill tonight.

All these investments in innovation, education and infrastructure will make America a better place to do business and create jobs.


BLITZER: All right, let's bring in our chief political analyst Gloria Borger and our senior political analyst David Gergen.

Gloria, first to you. We're going to hear a very similar message, those earlier clips from the president tonight.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: John Boehner said this is not a State of the Union, but it is kind of a State of the Union speech.

Only, we are hearing it in September. The White House has made a concerted decision here to raise the stakes for this presidential speech. They believe that it will convey a sense of urgency and it will lay down a challenge to the Republican-led House to pass some kind of jobs legislation. This is a president whose leadership numbers have suffered after the debt ceiling debacle.

They think this is their moment. And there could be a real risk for them here. They think this is their moment to show the American public they can lead and they are going to send up legislation and as one senior White House adviser told me earlier today, he is going to challenge the Congress and if they decide they don't want to go along, they will have to tell the American public why.

BLITZER: In the past couple, three days, David, we have basically learned most of the major headlines out of this package. Today, we learned it will be a little bit more. It's going to be about $400 billion or $450 billion as opposed to $300 billion. That's a significant new piece of information we learned today.

But why do you think the White House was unveiling slowly but surely the details in the days leading up to tonight's speech as opposed to just letting it all come as one big surprise?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: I'm not sure, Wolf. I think they have been trying to build an audience for this speech.

A senior counselor to the president told me today that they were trying to hit the reset button and that after the debt ceiling fight, they wanted to reset the agenda in Washington, reset the narrative for his presidency.

And as Gloria says, they are trying to make it heads we win, we get a bill, or tails they lose because they look like they are trying to block it. But the president has a lot riding on this. He has got some real dangers. First of all, he may get a very small audience, 7:00, and his numbers -- his audiences have been going down. He's given so many prime-time speeches, some 15 in all so far. And the numbers have been going down. It may sound like same old, same old. But the biggest danger over time is the Republicans may give him a bill and then not much may happen, because a lot of the spending in this bill is just to keep things going. It's not to create fresh jobs. It's to keep the brakes on the payroll taxes in place and not let them expire, keep unemployment benefits going. That doesn't create fresh jobs. It does protect people, but it doesn't create fresh jobs.

BLITZER: But, Gloria, there is no doubt that there is enormous concern at the White House that if they don't do anything, if they just leave it alone, this country could get into a whole worse economic situation, maybe even a double-dip recession.

BORGER: Right. I think there are some people at the White House who would like to do even more than they are proposing.

But there is also concern that people in this country do not see Barack Obama as a leader. You see his leadership ratings were at 70 percent when he was inaugurated. Now they are almost half that, just a little bit more than half that. They understand that they have a real problem.

The people that Barack Obama can pick on are the ones who are doing worse than he is. And those are members of Congress, particularly the Republican Congress and the Republican-led House. That's what he is doing. He is going to essentially pull a Harry Truman. If they don't do what he wants them to do, he will then run against the Congress and say it's a do-nothing Congress.

But you're right, Wolf. They are very, very worried at the White House. And they want to do what they can do, understanding that there aren't that many tools left in the toolbox.

BLITZER: And as important as the politics, David -- we like to focus on politics -- as important as the politics are right now, let's not forget, 14 million unemployed Americans and millions more who are underemployed, millions more beyond that who have just given up any hope of even finding a job. And for these people and so many people who do have jobs who are worried about losing their jobs potentially if there is a further economic downturn, the stakes really are enormous, not just for the president, but for the Republicans in Congress as well.

GERGEN: Absolutely. And the Republicans have a lot -- they is some real danger to the Republicans they overplay their hand.

But, Wolf, I think what this speech is going to expose tonight is just as there are significant, deep differences between Republicans and Democrats over how to cut the deficits, over tax increases vs. spending cuts, there are also deep differences between these parties over how to create jobs.

The Democrats want to spend money targeting construction workers and targeting and trying to help people who are unemployed and the like. The Republicans want to create a different environment through regulatory reform, through tax reform, which is very fundamental and they will have a hard time reconciling those two philosophies before this welcome.

We may come out with a small bill. I am hopeful, in fact, optimistic, they will come up with a small jobs bill. But whether they can actually change the direction of the economy is a much tougher question.


BLITZER: Hold on, Gloria, because we will take a quick break, but both of you are staying with us for our coverage tonight leading up to the speech, our post-speech analysis as well, much more coming up.

We are only, what, about 45 minutes or so away from the president of the United States being introduced before a joint session of the House and the Senate. We will of course have live coverage.

When we come back, we will speak with a rising star in the House of Representatives, a Tea Party supporter, Kristi Noem. She is standing by live.

Much more of our coverage when we come back.


BLITZER: All right, let's get some Republican insight now on the president's big speech tonight before a joint session of Congress.

Joining us, the congresswoman from South Dakota, Kristi Noem. She is a member of the Republican leadership in the House of Representatives.

Congresswoman, thanks very much for coming in.

SEN. KRISTI NOEM (R), SOUTH DAKOTA: Yes, thank you for having me, Wolf. Appreciate it.

BLITZER: It is fair to describe you as a Tea Party supporter, is that right?

NOEM: Well, I certainly have a lot of ideals that agree with what the Tea Party supports as well. So, a lot of my supporters back home are members of the Tea Party.

BLITZER: Now, you support reduced taxes for everyone, right?

NOEM: I do. Well, I think we need to have competitive tax rates in order to create jobs in this country. And I think it should be fair. We have a need for some real tax reforms in this country. And that's been one of the goals that I came here to Congress to accomplish.

BLITZER: So, can we just assume that all the tax cuts that the president will unveil tonight for the middle class, the payroll tax cuts, tax cuts for businesses that hire unemployed individuals or veterans, that you're automatically going to support those tax cuts? NOEM: Well, I am always in favor of the American people keeping more money in their pockets. Some of those tax cuts may be appropriate. Some may not at this point in time. What I'm truly looking for is something that will be effective, because at this point in time, people are frustrated and they want real solutions.

BLITZER: Well, which tax cuts that the president might unveil tonight -- and you know the general outlines of what he's talking about -- would not be effective, would you oppose voting in favor of those tax cuts?

NOEM: I haven't seen anything that the president has laid out there so far or a lot of the gossip that's been out there talking about what he might lay out tonight. I haven't seen any of them that right now I could say I am totally against it.

So, as far as I'm concerned, I am willing to talk about anything.

BLITZER: Well, you also -- are you open to some increased spending, assume it can be paid for, to build bridges and new roads and better schools, hiring more teachers, first-responders? Those kinds of ideas are going to be in the president's plan tonight to get jobs going. Is that something you could support?

NOEM: Well, I'm very concerned about that, because we tried that already. The president did that in the last stimulus package. And it wasn't effective.

We have lost more jobs. So I'm looking for things that will actually work. And really, honestly, Wolf, if we're going to talk about more spending, our kids are the ones that are going to be paying for it. So when I look at spending more dollars, I look at the fact, do I really want my kids and your kids and everybody else's kids in this country to have to pay that bill? Because we are certainly not going it pay for it.

BLITZER: When you say the country has lost more jobs, what do you mean? Because since then, there have been increases, albeit very modest increases? And there were zero jobs created in August. But it hasn't gone down 100,000 or 500,000 or 700,000, as was the case during the final months of the Bush administration.

NOEM: We're haven't seen a long-term increase in jobs, though.

And people talk about the stimulus package and the jobs that it was supposed to create, it certainly didn't have the intended effects that everybody was hoping for or that the president and administration certainly was hoping for. So I think it's time to lay some new solutions on the table, some new ideas.

And, honestly, when I go home and I talk to people who own small businesses and who are the job creators in this country, they want the regulations gone. They want the administration to stop giving them more requirements that cost them more money and more time because they spend more time investing dollars into that, rather than hiring people and putting them back to work. BLITZER: The proposals for tax increases for the wealthiest Americans or for some big corporations who are making billions in profits, the president presumably still supports all of that. Is that something you categorically reject?

NOEM: Well, a lot of what the president has talked about in the past has been raising taxes on those small business and job creators.

So I'm not in favor of doing that at this point in time. But there is some tax reforms we could do. We could close some loopholes and some exemptions that were put in decades ago could be looked at and reevaluated, because, honestly, we have a convoluted and a complicated tax system that it has essentially been the government coming in and picking winners and losers. And that needs to stop.

We need to have it more fair. We need to broaden our base and make sure that we're contributing.

BLITZER: So would you support closing some of those loopholes that would require General Electric, for example, to start paying federal income tax or for ExxonMobil, which is making billions, to stop getting certain tax breaks? Would you support that?

NOEM: I think that we can talk about all different kinds of specifics and loopholes, but, absolutely, some of those. If we can say that those tax cuts would actually create jobs and not increase the cost for American people out there, I think those are solutions that we could consider.

BLITZER: Those wouldn't be tax cuts. They would be tax increases for those specific individuals or for the campaigns, GE, for example, and for ExxonMobil. Those would be tax increases, in effect, for them. They would not be tax cuts.

One final question, Congresswoman, before I let you go. Some of your colleagues, Joe Walsh, for example, of Illinois and others, they have decided to boycott the president coming before a joint session of Congress.

You will be there on the floor tonight; is that right?

NOEM: Oh, absolutely. I think it's unfortunate that people won't come and hear the president speak. He is the leader of our country. He says that he has got some solutions. Hopefully, he will cast a vision.

And, essentially, we need everybody at the table. We need to fix this for the American people.

BLITZER: Kristi Noem is the U.S. congresswoman from South Dakota, a wonderful state indeed.

NOEM: Yes, it is.

BLITZER: Congresswoman, thanks very much. I know you are going to be walking into the House floor very, very soon. We will check in with you later. Thanks so much.

NOEM: Sounds great. Thanks, Wolf. Appreciate it.

BLITZER: Kristi Noem is from South Dakota, a Republican.

The president getting ready to leave the White House. We will show you live pictures. There are some live pictures over there. You see Valerie Jarrett in the red over there. She's getting ready to drive over with the president and the first lady. She will be sitting up in the gallery with the first lady tonight.

The president momentarily will leave. will make the short drive in this rainy Washington, D.C., weather up to Capitol Hill. And in about a half-an-hour or so, he will walk into the House of Representatives. There is Bill Daley, the White House chief of staff. He's getting ready to go over for the speech as well.

All right, so you see them walking out. Then the president and the first lady will be walking out momentarily as well. He doesn't have an umbrella. He will get a little wet as he goes into the cars over there, the motorcade. We will watch the motorcade drive up to Capitol Hill.

An important speech by the president of the United States -- much more of our coverage coming up right here in THE SITUATION ROOM.


BLITZER: That's not a well-lit shot. You can see it's getting dark here in Washington and it's raining. But that's the White House. The president and the first lady getting ready to leave that south of the South Portico. The limousine is standing by to take them up to Capitol Hill. The motorcade will be there. It's a short drive when the president goes from Pennsylvania Avenue up to Capitol Hill.

We're watching. As soon as we see the president get ready to drive up to Congress to deliver his important speech tonight, you will see it, of course, all of it, right here in THE SITUATION ROOM.

But let's bring in Erin Burnett right now. She's our newest anchor. She's the host of "ERIN BURNETT OUTFRONT," the new program that debuts here on CNN this fall, weeknights 7:00 p.m. Eastern, let me just remind our viewers.

Erin, we expect the president will announce an extension of unemployment benefits. He's got to get that through Congress, obviously.

What impact normally does this kind of a move have overall on the economy and job creation?

ERIN BURNETT, CNN CORRESPONDENT: It's interesting, because this is one of the most -- the biggest hot topics there is when it comes to stimulating the economy, Wolf, as of course you know.

But I found some interesting studies today that actually show that when you increase the time where people can get unemployment benefits -- as you know, now we're at 99 weeks -- that increased the average time that people spend out of work, somewhere between 5 and 11 weeks.

And part of that is, some people may choose to -- to not get a job. A lot of people, though, in this economy would rather wait rather than taking a lower paying job than the one they had before. They wait until the unemployment benefits run out.

So when the unemployment benefits run out, you actually see a jump in the number of people who didn't have jobs getting jobs. It doesn't mean it doesn't work at all, but it does mean there's going to be a very big political fight on whether we get enough bang for our buck. There are studies done by institutions on the left and the right, Wolf, both of which conclude that extending unemployment benefits actually temporarily increases the unemployment rate. So that's going to be a big fight for him to get through.

BLITZER: That's going to be a major part of his initiative. Tonight, he's got a lot of details coming up. But let's be honest, Erin. Washington gridlock -- and there is a lot of that right now, as we all know -- that could really kill any thought of an economic recovery.

BURNETT: It really could. And you know what's amazing, Wolf. The frustration with Washington and the lack of leadership is felt by the American people, but it's also felt by business leaders and big companies as well as small companies.

And when we talk about gridlock, I'm not just talking about this bill specifically. I mean, we can debate the merits of that, but big picture. We haven't gotten clarity on a lot of things that business needs. You look at the big financial reform bill, Dodd-Frank, some of the most crucial components in there about how much money people have to put down on a mortgage, we still don't know the answers to those questions.

So there -- it's gridlock. It's a lack of finishing the job. And it all adds up to a lack of confidence. It's a big problem.

BLITZER: One thing, John King, the president is going to say tonight, is that so many of the parts of his plan which he will unveil are things that Republicans always have supported, whether infrastructure and development, tax cuts for the middle class. And he's going to be concerned, I assume, that just because he supports it, there will be an automatic knee-jerk reaction from some Republicans to hate it.

JOHN KING, CNN ANCHOR: Well, and it helps the president make his case to say Republicans in the past have supported, say, this payroll tax cut. The president will call for the extension today. He wants to let businesses also pay less into their Social Security part of payroll taxes. And the president's hope is that Republicans have traditionally supported tax cuts. Many Republicans have supported this idea of an infrastructure bank in the past. But what the Republicans say, Wolf, is yes, we have supported those things in the past, but A, we can't afford them now. That's one of their arguments. Or B, they say isn't working.

Part of the president's challenge today, yes, it's a political speech and a policy speech, but there's a huge psychological challenge. To the point Erin was just making. What we have seen in this economy, people are so nervous. People are in such a funk. Eight in 10 Americans think the economy will either stay the same or get worse over the course of the next year. So what is happening?

Even though they might be getting modest tax cuts, they're not spending them. That's usually what happens. Because if you look at the economy, they're saving the money, because they're afraid it could get worse around the corner.

So even some of these policy proposals that people have signed onto in the past, saying they'll stimulate the economy, there's a lot of evidence that right now people are so scared and so in a funk, they're not spending it.

BLITZER: You know, I know White House officials are very sensitive to this, Erin, this notion that the president is, quote, "anti-business, anti-big business." Wall Street is obviously going to be watching this speech tonight by the president very closely. We'll see how it reacts tomorrow, obviously.

But what are they saying up in New York, the big business community, about this president and how he deals with business?

BURNETT: Well, you know, they're not thrilled. And I mean, and I'm telling you something, of course, you do already know. But when it comes to tonight's speech, they don't think this is just rhetoric. I mean, they care. And I talked to a few people and said, "Do you care? Do you think this just, you know, going to be hot air?" No, they care very much.

But they -- and by the way, to John's point, they are obviously for a payroll tax cut, even if they don't get the benefit from it.

But what I found interesting, Wolf, is talking to a lot of them, a lot of people in big business were enamored with Obama, and they voted for him. Even ones that are self-described Republicans. And they are feeling incredibly disenfranchised now. So that's been the big shift that I've seen. But I think it might surprise a lot of people that these folks did support this president in his election.

BLITZER: You see the speaker, John Boehner, in Statuary Hall, getting ready to walk in. He's going to be, of course, up right behind the president. And the vice president,. Joe Biden is the president of the Senate.

You see members beginning to come through the Statuary Hall. All the statues; that's why it's called Statuary Hall up on Capitol Hill. As they walk in, we're watching to see if they stop by our cameras and say a few words. And this is the South Portico at the White House. It's raining outside. The president momentarily will be walking outside with the first lady, getting into the motorcade to drive up to Capitol Hill.

Some of what the president, John King, is going to be proposing tonight, he says all of it's going to be paid for. There's not going to be any net increases in spending. But some of that revenue will come in from increased taxes. Is there any chance the Republicans will support increased taxes to pay for some of these initiatives?

KING: At the moment, no, and especially the way we understand the president is going to suggest it, that down the road a couple of years, starting to increase taxes on the rich. It's the same debate we have had so many times before, Wolf. The Bush tax cuts are about to expire. Do you keep them in place for those under $250,000 a year and let taxes go up for those above that? The Republicans say no way.

In the super committee, in the bigger conversations about deficit reduction, could there be talk of tax reform? Most people think not until after the next presidential election. We'll get a new Congress. We'll see who wins the White House and then have that debate.

There are some who still think it is possible -- possible, lower case "p," I would say, possible -- to have a tax reform conversation in which you lower tax rates for everybody and Washington, in the end, actually gets more revenue, because you're taking away a lot of the loopholes.

But in terms of the president's specific proposal tonight, most Republicans tell you in how he wants to pay for things, it's dead on arrival.

Still, that doesn't mean there won't be a jobs bill. The House will pass the proposals. Then the Senate will have it's -- the Senate is part of the super committee debate. Most people in the Senate think they think the best way to get it through the Senate chamber, where you know the other rules all kick in -- you need 60 votes or things get controversial -- is to put some of the jobs provisions in the bigger super committee legislation. But again, Wolf, you have to pay for it.

When you have to pay for it, you're talking about either raising taxes, cutting defense spending, getting into Medicare and Social Security, and that's where you have what we just went through this summer, which was ugly, which was polarizing, which was partisan and what convinced most of the country that Washington doesn't work very well right now. And in fact, at times it looks like a daycare center.

BLITZER: You can see they're getting ready and beginning to walk out from the South Portico of the White House to get in the motorcade. I think the president and first lady will be walking out very, very soon. There's not a whole lot of time to drive up to Capitol Hill.

On the right part of your screen, you see the floor of the House of Representatives. The members are inside. At least, a lot of them are already inside. Many, many more will be walking in. Members of the diplomatic core will be inside. Members of the cabinet, others who will be coming to listen to the president. This is not a formal State of the Union address, but it is an address before joint session of Congress. So the members are there getting ready to hear what the president has to say.

We'll see the president leave momentarily, and then we'll show our viewers a little bit of that ride up to Capitol Hill. They're opening the door. I suspect the president is about to walk out. As we watched the South Portico of the White House and the president and first lady getting ready to walk out, I think it's fair to say -- there they are.

There's the first -- the first couple, the president and first lady, as always. I'm sure everybody will be talking about her dress. A lot of people will be talking about that. She'll be up in the gallery, I suspect. Erin, a lot of people are not going to be talking about the president's suit and tie. Although I will, just to show that I'm equal opportunity observer of what the president and the first lady have to wear. He has a new tie on for this special occasion, as we watch their limousine getting ready to drive in rainy weather out to Capitol Hill.

Erin, when I say -- there she is, the first lady.

BURNETT: That is a beautiful dress.

BLITZER: When I say, Erin, that the stakes for the country, the country right now are enormous, forget about the politics. I think you agree with me right now. The stakes are enormous, because there is enormous fear of a double-dip recession.

BURNETT: There is enormous fear. And you know, Ben Bernanke spoke today to an economic club in the Midwest, and he really used words we don't always hear from him. Obviously, the chief of the Federal Reserve. And Wolf, you know, he's very reserved. He's not a scintillating speaker. But he used words like "trauma" and "crisis" and "depress" and "distressing" to describe where we were and really set gauntlet down for where we don't want to go.

And listening to him speak, I interpreted that he was trying to make a fair claim for yes, there's a time and a place for austerity, but austerity when it's too early and you're not growing again, is going to be the wrong decision. I think that was the message he was trying to send to Capitol Hill, that you don't try to cut before you're growing again. And that's something that the president will take as something that supports his plan to spend more money.

BLITZER: Miserable rainy night here in Washington, D.C., as we look at these live pictures of the White House. We'll go back up to Capitol Hill in just a moment.

Our special coverage leading up to the president's speech before a joint session of Congress on the economy and jobs. Our coverage continues right after this.

(COMMERCIAL BREAK) BLITZER: All right. Looking at live pictures of the White House. You saw just moments ago the president and the first lady, they got into the limousine, the motorcade to drive them there, Capitol Hill. The president will be addressing a joint session of Congress within the next 20 minutes or so.

There you see the speaker, John Boehner. He's already up there, getting ready. He'll be joined by the vice president, Joe Biden, who also served as president of the Senate. The numbers are gathered on the floor. The president will be introduced, will walk in. The diplomatic corps already has been introduced to the members.

It's a night a lot of people will be anxious to see the specifics of the president's plan, because it has -- potentially if it gets passed by Congress -- that's a big if -- it will have the potential of changing things around.

There you see some young people going in to watch the president of the United States in Statuary Hall.

Donna Brazile, our Democratic strategist. Alex Castellanos, our Republican strategist, they're watching, both of us, as well. Listen to the speaker for a moment as he speaks.


BLITZER: Joe Biden, the vice president, with the Senate majority leader and minority leader, escorted by them as he comes in to sit up there behind the president together with the speaker. Biden, as you know, is the president of the Senate, but his only responsibility as president of the Senate is to break a tie. If there's a tie, 50-50, the vice president breaks that tie. Sometimes that is very, very significant.

Only the other day, former vice president, Dick Cheney, reminded me that the 2003 Bush tax cuts, there was a 50-50 vote. He broke the tie; the tax cuts went into effect.

So you see some of the members. Let's listen in briefly as the vice president chats with some members

JOE BIDEN, VICE PRESIDENT OF THE UNITED STATES: Good to see you. Thank you. Good to see you, man.

BLITZER: All right. About 15 minutes, that's why you see a lot of empty seats there. The vice president meeting some members there.

Donna, I see a lot of Democrats so far. I haven't seen a whole lot of Republicans. Some are boycotting this session. Is that smart? Let me ask you, Alex, since you're the Republican. Smart for Republicans to boycott the president of the United States speaking before a joint session?

ALEX CASTELLANOS, CNN POLITICAL ANALYST: I'm not so sure, Wolf, that they're boycotting him as they're just not interested in giving him another political pass for... BLITZER: Joe (UNINTELLIGIBLE) made it clear to me he's boycotting it because he doesn't believe in the president.

CASTELLANOS: Because he doesn't believe in the president, because they don't -- they see this as a political speech, not a speech about turning the economy around. And in that sense, I think, you know, you get what you give in politics. If the president going to Congress to play politics, he gets politics back.

BLITZER: Is that a big or a little deal that some Republicans decided to stay home?

DONNA BRAZILE, CNN POLITICAL ANALYST: Well, you know, Wolf, the Republicans complained that they didn't have a seat at the table and voters got an opportunity to help govern the country. And for 240 days, they have basically acted as if they have no plan, no -- no interest in helping to create jobs.

The president tonight is going to lay out a very important jobs program.

BLITZER: There they are, the vice president and the speaker. Let's listen in a little bit.

BLITZER: You can't really hear them other than birdies and nine holes, stuff like that. Always a little dangerous for these kinds of leaders to be speaking about anything when you're not sure if those microphones are open or not.

Kate Bolduan is in there, congressional correspondent. Kate, where exactly are you? What do you see?

KATE BOLDUAN, CNN CONGRESSIONAL CORRESPONDENT: I'm sitting -- if you're looking in the chamber, I'm kind of in the upper gallery where I have a great bird's-eye view of the entire floor. Right below me is where member -- traditionally, Republican members of the House and Senate will sit, and then across the way is where the Democratic members of the House and Senate would sit.

You know, also in these moments there seems to be a bit of a jovial atmosphere, with so many members of Congress coming together in this room. Earlier today, House Speaker John Boehner did say that he was encouraging his members to attend but also kind of gave the footnote and the aside that he can't force them to, as there are so many, many members of his -- of his conference, that he could not control them, as you know. Some members are boycotting. Other members as Republican conference are actually not attending because of the flood situation in Pennsylvania for a couple of members.

But right now, as you're seeing, members have been flooding in. I will tell you that coveted center aisle, the prime location for seating, Wolf, that's where many members have been staking -- staking out a position since early this morning. We were actually told and found out that some members, especially on the Democratic side, have been staking out the position from as early at 9 a.m. this morning, trying to kind of save their seats, which isn't necessarily technically allowed. You have to actually be holding the seat physically and be there physically holding the seat.

But those are the very important positions, prime location. They can get that picture, that photo opportunity of shaking the hand with the president. And obviously see a lot of hand shaking going on right now, Wolf.

BLITZER: And you see members of the Senate right in the middle of your screen. You see John McCain and Lindsey Graham, Senator Dianne Feinstein. They're walking in; they're shaking hands. They're meeting with various House members as they walk in, as well. This is one of these little classical moments in the House and the Senate. They get together, and they share that opportunity to hear the president of the United States.

So there -- there you can see, Kate. You see right now, Kate. Raise your hand and wave to our viewers, if you can, Kate. Go ahead.

BOLDUAN: We're not supposed to gesture to the camera.

BLITZER: All right. We'll be hearing you.

BOLDUAN: If I do, I won't be able to sit here.

BLITZER: All right. That's Kate Bolduan. She's got a good view of what's going to happen. We're going to be checking back with you periodically, Kate.

BOLDUAN: Thanks, Wolf.

BLITZER: You'll tell us what's going on.

Let's stay up on Capitol Hill. John King is watching what's unfolding right now.

I don't know about you, John. I've been watching these kinds of joint sessions. Democratic presidents, Republican presidents for a long time. I get excited just seeing all the pomp and circumstance of knowing the history of what's going on. Give us your thoughts.

KING: I thought it was -- it's an interesting moment. This is a huge moment, not just for the president, but it's a huge moment for everybody who's on the ballot in 2012. And it's a huge moment for the Republican speaker, John Boehner, because he's trying to defend his majority.

Yes, we focused mostly on the presidential election, but next year is a very, very consequential election for Speaker Boehner and the Republican majority, as well. If you saw when the vice president got up there, Wolf, they had a pretty jovial embrace. They were joking about golf. Maybe they know there's an open microphone. But those two actually do get along.

There have been some examples where the vice president working with leader McConnell. The Republican leader in the Senate, Speaker Boehner, has helped broker compromise. So you're going to hear a lot of harsh criticism tonight from the president. That doesn't mean something won't get done in the end.

But for me the most fascinating dynamic here is, as we watch the president at this moment, we should remember this is the lowest political point of his presidency. His approval rating is at a low. His ratings when it comes to handling the economy are at a low. For the first time you see a generic Republican, a no-name Republican, saying more people say they would vote Republican than vote Democratic for president, and you see him in pretty much a tie race with the two leading Republican front-runners.

So fear is the greatest weapon in politics. The Republicans do not fear this president. Many Democrats or liberal interest groups do not fear this president.

You've seen criticism already from some Democrats, saying it's not big and bold enough. You see criticism from liberal groups, saying don't extend that Social Security payroll tax cut, because that undermines the Social Security program five, 10, and 20 years down the road.

So, at a time when very few people in politics fear him, how does the president rally the country? So he's not speaking to the people in that chamber tonight. He's speaking to the people out in the country, trying to say, "You need to work with me. I'm trying to help you."

And because of his own political weaknesses, Wolf, I think the external factors are in some ways more important. What you were just talking about before, the legitimate fears of a double-dip recession. The fact that a lot of these Republicans have to protect their own political interests. It is those dynamics that could push to a compromise more so than anything the president could say and do tonight, because at the moment, he does not have -- yes, he has the bully pulpit. But he does not have the political power he has had earlier in his presidency.

BLITZER: And John, just to be decisive, maybe Kate's got the answer to this one. They're not sitting together, the Republicans and the Democrats. They've decided that this is one of those nights the Democrats are going to be on one side, the Republicans on the other side. Is that your information?

BOLDUAN: I had heard that there's a possibility that maybe a couple -- a couple of Republicans and Democrats could be sitting together. But by and large, especially from what I'm seeing right here, it is back to, if you will, that traditional seating pattern of Republicans on one side and Democrats on the left. That bipartisan seating plan that we saw at the State of the Union seems to have not extended to this speech, Wolf.

BLITZER: All right. Let me bring John Avlon, one of our CNN political contributors, into this conversation. This -- this gridlock, if you will, John, the fact that Democrats and Republicans basically don't want to do anything together right now, what do you make of it? JOHN AVLON, CNN POLITICAL CONTRIBUTOR: I think it's a source of an enormous amount of frustration in America against Washington in general, anger at both parties. Anger at the economic situation and the stalemate.

And the reality of divided government is the only way we can see action on the economy is if they find some bipartisan legislation. The president's obligation in the speech is to define some common ground, and the real question is whether Republicans are so invested in opposing the president politically that they will turn their back on policy plans they backed in the past. That's one of the many questions that we're going to be see answered during the speech and in the aftermath.

But the people -- the American people and independent voters in particular are disgusted at the dysfunction in Washington. They're angry at the hyper partisanship, and they realize that they've got to find a way to work together to break the logjam to see some progress on the economy and there are a couple areas where we might be able to see some progress. Like an infrastructure bank if that's in the speech.

It's interesting as we saw the picture of the vice president, Joe Biden, and the speaker, John Boehner, together.

Gloria, you know, I know that the president -- he has a pretty decent personal relationship with John Boehner, but there's some concern that maybe John Boehner, you know, he's not necessarily able to deliver all of his own Republicans. Let me listen to hear what he has to say.

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: The joint session will come to order.

BLITZER: All right, I guess the speaker is trying to get everyone to sit down and take their seats. Gloria, go ahead. I wanted you to weigh in.

GLORIA BORGER, CNN POLITICAL ANALYST: Wolf, this is like they're all coming back from their summer break and they haven't seen each other in awhile, which is probably why they're -- they're so noisy.

BLITZER: Hold on, Gloria.

BOEHNER: ... members of the committee on the part of the House escort the president of the United States into the chamber.

The gentleman from Virginia, Mr. Cantor; the gentleman from California, Mr. McCarthy; the gentleman from Texas, Mr. Hensarling; the gentleman from Texas, Mr. Sessions; the gentleman from Georgia, Mr. Pryce; the gentlewoman from Washington, Ms. Morris Rogers; the gentleman from Texas, Mr. Carter; the gentlewoman from California, Ms. Pelosi; the gentleman from Maryland, Mr. Hoyer; the gentleman from South Carolina, Mr. Clyburn; the gentleman from Connecticut, Mr. Larsen; the gentleman from California, Mr. Becerra; the gentleman from Maryland, Mr. Van Hollen; and the gentlewoman from New York, Ms. Opal. BIDEN: The president of the Senate, at the direction of the body, appoints the following senators as members of the committee on the part of the Senate to escort the president of the United States into the House chamber.

The senator from Nevada, Mr. Reid; the senator from Illinois, Mr. Durbin; the senator from New York...

BLITZER: They're introducing the delegation that's going to escort the president of the United States, the leaders of the Senate, the leaders of the House, Democrats and Republicans. They will bring the president in. He'll be obviously warmly received, and then he'll deliver his remarks, some of which won't necessarily be warmly received, especially by the Republicans in the House of Representatives and the Senate.

Gloria, I interrupted you, but go ahead, finish your point.

BORGER: Well, you asked about John Boehner's relationship with the president. I think they do have a warm relationship, but when I talked to senior advisers at the White House, it really seems to be a sense, Wolf, that John Boehner is a captive of the freshmen in his caucus, the Tea Party Republicans, if you will.

And that there are many times that he believes he can get something done and do some things, as in that grand bargain that he was -- he had almost done with the president, but then he goes back to his caucus, and -- and he gets pulled back.

So, while they like John Boehner personally, they believe that his hands are tied, and that very often he cannot do what his instincts tell him to do, you know. He's -- he's been around a while, and he's a legislator who wants to get things done. But there have been some difficult moments for him, particularly during the debt ceiling crisis. So they like to work with him, but they're not always sure he can deliver.

BLITZER: Yes, it's a good point. Jessica Yellin has got some information on the president and the speaker, as well. Jessica, what are you learning?


One White House official confirms that the president did call both Speaker Boehner and Senate Minority Leader Mitch McConnell today to brief them on the contents of the speech. We have talked significantly about the fact that they believe that a lot of the measures in the speech are bipartisan measures that they should be able to support, but they have not consulted with the Republicans.

Well now, while there had not been prior consultations, they have at least gotten the courtesy phone call in advance. And it is, in particular, these tax credits, tax breaks, tax measures in the package that the White House is quite optimistic that the Republicans, in one way or form, will support ultimately, even if they don't support the entire package down the road, Wolf. And I will say that, while Gloria's absolutely right, that while White House officials are concerned that the Republicans are captive in the House to their freshmen caucus, they're also optimistic that there are elements of this deal that will ultimately pass in pieces, even though there's no actual overwhelming sense that the whole plan will ultimately pass in the end. They like it, but they don't think it's going to happen -- Wolf.

BLITZER: All right. We just heard the sergeant at arms introduce the diplomatic corps. These are the ambassadors who are in Washington. The chief of protocol, just walking in, as well as the various ambassadors. I don't see a lot of ambassadors walking in, but we did see the dean of the diplomatic corps walking in. Usually, there's a whole bunch of ambassadors with him, as well. Maybe not necessarily tonight.

David Gergen, you know, this speech that the president is delivering tonight, he originally wanted -- wanted to deliver it last night, but there was sort of a miscommunication. Any big deal as a result of that fallout?

DAVID GERGEN, CNN POLITICAL ANALYST: Not a big deal, but it is odd for the president to be going at 7 p.m. at night as a prelude to a football game.

But Wolf, the news in the last few minutes, "Washington Post" has just reported that the package itself has grown to some $450 billion. Now, the president, I think, has got a good shot of getting elements of that package through, but $450 billion of new deficits is a nonstarter for a lot of folks. That's a big number.

BLITZER: David, you can see the first lady walking in, first lady Michelle Obama, walking to her seat. There you see Dr. Jill Biden in the red dress. They're applauding her over there. Giving each other a little kiss. As we watch this, you see their special guests that they invited tonight. Go ahead, finish your thought, David.

GERGEN: Well, I just -- I think this. The Republicans will rally to some of the tax cuts. But at $450 billion, if that's the number, that's rapidly going to be called stimulus two. You know, stimulus one, when the White House proposed it, was $830 billion. And this is half as big as that. And there are a lot of Republicans, especially Republicans, who think it didn't work. And they'll come right at them. A package that big will please Democrats, but it will give the Republicans something to go back on him.

BLITZER: All right. Let's listen to this introduction.

UNIDENTIFIED FEMALE: Mr. Speaker, the president's cabinet.

BLITZER: It's the deputy sergeant of arms. She's introducing the various folks coming in. There you see the secretary of state, Hillary Clinton, followed by the secretary of the treasury, Timothy Geithner. They're coming in seniority of the cabinet positions there, the oldest as opposed to the newest, as well. We're getting ready to hear from the president of the United States. Once all the members of the cabinet are introduced, the president at some point will be introduced, as well. There you can see Eric Holder and the new secretary of defense, Leon Panetta, right in the middle of your screen. There he is, right there. Leon Panetta, as so many of our viewers know, was a member of the House of Representatives for a long time.

We're getting ready for the president's big speech on jobs.