(CNN Student News) -- October 23, 2009
Executive Pay Cuts - Find out why the White House wants to cut some executives' salaries.
More Stimulus? - Consider the debate in Congress surrounding further economic aid.
Pay to Play - Learn about one Maryland town's battle over who can use a public park.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CARL AZUZ, CNN STUDENT NEWS ANCHOR: You know what's not as awesome as Fridays? Stagnation. We'll explain why in just a minute. I'm Carl Azuz and this is CNN Student News!
AZUZ: The Federal Reserve wants a review of how executives are paid at nearly 30 of the nation's largest banks. The suggestion is just that, it's a suggestion. But the White House is demanding massive salary cuts for top executives at seven of the country's largest companies. How's that possible? Well, these seven companies all got money from last year's economic bailout.
Government officials say the salaries of the 25 highest paid employees at these companies should be cut by about 50 percent. And top executives' pay would be reduced by more than 90 percent, on average. Some of the lost salary would be replaced by stocks. So basically, part of the employees' pay would be determined by how well the company does down the road.
Some critics argue that the pay cuts could lead top employees to find jobs at other companies that don't owe money to the government, and that loss of top talent could weaken the companies that do, which might mean the bailout money wouldn't get repaid. But President Obama says the salary cuts aren't a punishment. He believes they're a way of protecting the country's investment in these companies.
U.S. PRESIDENT BARACK OBAMA: I've always believed that our system of free enterprise works best when it rewards hard work. This is America. We don't disparage wealth, we don't begrudge anybody for doing well; we believe in success. But it does offend our values when executives of big financial firms, firms that are struggling, pay themselves huge bonuses even as they continue to rely on taxpayer assistance to stay afloat.
Word to the Wise
BARBARA HILL, CNN STUDENT NEWS: A Word to the Wise...
stagnation (noun) a time period of little or no growth in the economy
AZUZ: The country's unemployment rate has doubled since the start of this economic downtown nearly two years ago. And last week, 531,000 people filed for unemployment for the first time. That's up 11,000 from the week before. That could be part of the reason why some experts think the country is in danger of stagnation. As Dana Bash explains, those concerns have lawmakers and economists considering what can be done about it.
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Four-hour meeting with economists where House Democratic leaders heard a lot of doom and gloom.
MARK ZANDI, MOODY'S ECONOMY.COM: And the possibility of the economy slipping back into recession next year are uncomfortably high.
ALLEN SINAI, PRESIDENT, DECISION ECONOMICS : It's an unsatisfactory recovery still with a lot of risks.
ROBERT KUTTNER, ECONOMIC COLUMNIST: We've avoided great depression, but we are still at risk of a great stagnation.
BASH: The economists offered a slew of ideas to address the still ailing economy. Some, no coincidence, mirrored what Democrats are already considering: Extending unemployment insurance benefits now set to expire at the end of the year through 2010. Extending the tax credit for first-time home buyers expiring next month into 2010. Sending emergency funds directly to the states and extending some tax breaks to small businesses.
KUTTNER: I think just about everybody in the room feels that there needs to be more stimulus.
BASH: But when we asked the House Speaker if she planned to push a second stimulus package, the answer was no.
REP. NANCY PELOSI (D-CA), HOUSE SPEAKER: We do not have plans for an additional stimulus package. But we do have plans to stimulate the economy in the work that we are doing here.
BASH: In other words, Democrats will try to pass new proposals intended to spur the sluggish economy, but do it piecemeal to avoid the label "stimulus." Democratic leadership sources tell CNN there are two big political reasons why. One is this:
UNIDENTIFIED MALE: Show us what a world-class credit binge looks like.
BASH: Bailout and spending fatigue in the country and Congress. Second, CNN is told the White House opposes anything appearing to be "Stimulus II" for fear it would be a tacit admission that the president's $787 billion package didn't work and undermine arguments like this:
OBAMA: There's no question that our recovery act has given a boost to every American who works in a small business or owns one.
BASH: Regardless of what Democrats call any new economic proposals they are pushing, Republicans have a refrain that they are not letting go of: that the president's economic stimulus plan, so far, has not created enough of what everyone agrees matters most: jobs. Dana Bash, CNN, Capitol Hill.
RICK VINCENT, CNN STUDENT NEWS: Time for the Shoutout! What city is hosting the 2010 Winter Olympics? If you think you know it, shout it out! Is it: A) Calgary, Canada, B) Lake Placid, New York, C) Nagano, Japan or D) Vancouver, Canada? You've got three seconds -- GO! The 2010 Winter Games will be held in Vancouver from February 12 to 28. That's your answer and that's your Shoutout!
AZUZ: The torch for those games was lit yesterday in Olympia, Greece, the same spot where the ancient Olympics took place. And this is cool: The flame was lit by focusing sunlight on a mirror! The torch will travel around Greece for about a week. Then it's off to Canada, where thousands of runners will carry it across more than 25,000 miles. That is the largest relay in a single country in torch history! The Olympic flame will arrive in Vancouver in February, just in time for the start of next year's Olympic Games.
AZUZ: Back in the states, some of you might like to hang out at your local public park. Many of them are set up with young people in mind. But what if your town said you couldn't use it? Can they do that? Why would they want to? Deborah Feyerick has that answer in a town battling over a park.
DEBORAH FEYERICK, CNN CORRESPONDENT: These days, the girls from Brookewood School walk down the road for recess. It's not far, but they used to play here, right across the street from their classes in Kensington, Maryland. Not anymore. They were banned from using this public park, and headmaster Joe McPherson says it's just wrong.
FEYERICK: So, we can't even step on the park. We can't even step on the grounds here.
JOSEPH MCPHERSON, HEADMASTER, BROOKEWOOD SCHOOL: No. That's why I'm still here in the sidewalk, because it's illegal for any adult without a child five or under to go in the park during a daytime.
FEYERICK: The mayor and town council passed a resolution earlier this month making Rinehart Park off limits from 9:00 to 4:00, not only for the not-for-profit, all girls' school, but for all kids older than 5.
Can you ban people from using a public park?
JOHN THOMPSON, COUNCILMAN, KENSINGTON, MARYLAND: Can we? Yes. It is our park. It is a facility owned and operated by the town of Kensington.
FEYERICK: The entire town of Kensington is a half square mile. Town hall, where the mayor and city council passed the resolution, is across from the school which is across from the public park. The controversy began after a group of Kensington moms complained to the mayor, accusing the K-12 girls of breaking swings, harming trees, littering and generally overwhelming toddlers.
THOMPSON: The moms and their small children felt they were being crowded out when the, you know, large body of middle-aged school students showed up in the park.
FEYERICK: The girls disagree.
UNIDENTIFIED GIRL: The mayor thinks that we sort of didn't... disuse the park, abused it and scared the little kids, but I don't really think we did.
CLAIRE, BROOKEWOOD STUDENT: We picked up trash, and there were, like, cigarettes, and we don't smoke.
FEYERICK: There was also the issue of money. The town council wanted a fee similar to one paid by another school in the area.
MCPHERSON: Just paying $4,000, it strikes me as somehow wrong in principle that a not-for-profit group has to pay money for using a public park.
FEYERICK: The town council says the school has ignored attempts to work out a compromise.
THOMPSON: It is not about the money. It is about coming to an understanding, which has yet to take place.
FEYERICK: The girls of Brookewood are upset that the controversy has cast them in a bad light. Still, they say they miss their park, which now stands empty most of the time.
By a show of hands, do you guys want to go back to the old park? (All girls raise their hands)
FEYERICK: The moms who lodged the complaints did not want to be interviewed by us. The school and its family say that they'd love to help maintain the park, maybe even plant flowers. The town council is considering it. In a recent meeting, council members reduced the fee to $2,000, saying they were pleased that the school finally came to the table. Deborah Feyerick, CNN, New York.
AZUZ: Tons of comments come in on stories like this. When there's a controversy, you respond, and we like it! So, should kids over five have an unlimited right to use the park? Or should the town keep the rule? Go to CNNStudentNews.com and tell us what you think. There are no wrong answers and no last names either.
Before We Go
AZUZ: Before we go, a story out of Texas that has us fired up. It's time to lock and load. But this cannon's ammo is edible. The owner built it with one goal in mind: to fire fruit! And the whimsical weapon does its job well. The owner says it can launch lunch items up to a mile away at 500 miles per hour. Most of the produce is blown apart right away.
AZUZ: But occasionally, he gets to see a fruit fly. That's our only shot for today. We hope you guys have a great weekend. For CNN Student News, I'm Carl Azuz.
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