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ANDERSON COOPER 360 DEGREES

House of Representatives Approves Obama Stimulus Plan; America's Crumbling Infrastructure

Aired January 28, 2009 - 22:00   ET

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


ANDERSON COOPER, CNN ANCHOR: We begin with breaking news.

President Barack Obama's massive plan to save the economy has cleared its first hurdle. As you know, the House roll call happened earlier this everything. It was the first major test of Barack Obama east presidency. The bill passed, didn't ace the exam, however. Not a single Republican broke ranks to support it.

The plan is expensive and expansive. President Obama's been on a full-court press this week to win over Republicans. In fact, this very evening, after the vote, he's been hosting a cocktail party at the White House for about two dozen key Democrats and Republicans -- that's some folks arriving at the party -- hoping, no doubt, to build more bridges, backing for his bill among Republicans in the future.

The party ended about an hour ago.

Ed Henry has all the details on this dramatic day.

(BEGIN VIDEOTAPE)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT (voice-over): While President Obama was visiting the Pentagon for the first time to discuss Iraq and Afghanistan with the military brass...

REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: The bill is passed.

HENRY: House Democrats and Republicans were waging a war of their own, with the fate of the president's signature economic plan hanging in the balance.

REP. DAVID OBEY (D-WI), HOUSE APPROPRIATIONS COMMITTEE CHAIRMAN: Every week that we delay is another 100,000 or more people unemployed. I don't think we want that on -- on any of our consciences.

REP. DAN BURTON (R), INDIANA: We have given Wall Street and the bankers $700 billion in the bailout, $14 billion to the auto industry, and this bill is $825 billion -- quote -- "an economic stimulus package."

HENRY: In the end, the president won the first battle, but he won ugly, and will now face questions about how much juice he really has. Not a single Republican supported the president's stimulus plan, despite his extraordinary lobbying effort on Capitol Hill Tuesday and call for dramatic action Wednesday. BARACK OBAMA, PRESIDENT OF THE UNITED STATES: All those who live in fear that their job will be next on the cutting blocks, they need help now. They are looking to Washington for action, bold and swift.

HENRY: Perhaps even more stinging, 11 fellow Democrats rejected it.

REP. GENE TAYLOR (D), MISSISSIPPI: President Obama ran on change. This isn't change. George Bush, during the height of a war, cut taxes, increased spending, doubled the national debt on his watch. And -- and this is just more of the same, in my opinion.

HENRY: But a win is a win. So, the White House strategy is to take the long view: Maybe the Senate will take out more of the controversial pork projects and tweak the tax cuts to win over more Republicans.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: This is a many-vote, many-day process. There will be a vote tonight. There will be a vote next week. There will be votes the weeks after that, until we eventually have what we think will be a bipartisan proposal to get this economy moving again.

HENRY: True, but this is not how he wanted to come out of the gate, not this president, who spent so much time insisting his campaign vows about changing the tone in Washington are for real.

That's why he invited Republican and Democratic leaders over to the White House for a cocktail reception immediately after the House vote, as if to bury the hatchet right away. He's determined to continue the charm offensive. After all, this is just the first of many battles in the four years ahead.

(END VIDEOTAPE)

COOPER: So -- so, he wins round one, but he didn't get the -- the bipartisan support, clearly, that he wanted. How does he now regroup to try to make things in the future more bipartisan? More -- more happy hours at the White House?

(LAUGHTER)

HENRY: Well, I'm not sure the happy hours can go much further. He opened up the Red, Blue, and Green rooms tonight to make sure everyone got a full tour of the White House. That only goes so far.

The bottom line is that, eventually, he's going to have to start moving towards the middle, giving Republicans some concessions on spending and tax measures, give them something they can go back to their voters, their party, and say, look, we got something out of this, before they're ready to jump on board.

It's going to take more than just outreach. That's important. It's more than George W. Bush did over the last eight years. So, it's a good first step for this president. But, in the end, it's going to be about substance, not just sort of reaching out and having a cocktail party -- Anderson.

COOPER: All right, Ed Henry, thanks from the White House tonight.

As Ed talked about, despite all the talk of bipartisanship, the plan to fix the economy is getting intense pushback from Republicans, who are framing it, the bill, really, as old-fashioned big-government spending.

Candy Crowley has that in "Raw Politics."

(BEGIN VIDEOTAPE)

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): The Republican Party is in search of itself, an identity crisis playing out in the debate over a stimulus plan.

REP. JOHN J. "JIMMY" DUNCAN JR. (R), TENNESSEE: We simply cannot afford this so-called stimulus package. All it is, is really a short- term fix for our addiction to spending.

CROWLEY: After an eight-year run-up in the federal deficit, House Republicans are trying to relocate the party back to its Reagan roots, less government spending, more tax cuts to grow the economy, and not this plan, which spends half as much on tax cuts as it does in additional government spending.

REP. KEN CALVERT (R), CALIFORNIA: Will it truly provide more middle-class jobs or improve infrastructure? The answer, sadly, no.

CROWLEY: The House Republican Conference, which develops GOP policy, says the Democratic plan funds federal subsidies, pet projects, and bureaucracy.

Objections include $50 million for the National Endowment For the Arts, $1 billion for the 2010 census, $400 million for NASA climate change research, and $150 million for building repairs at the Smithsonian.

Politically, Republicans think this bill is less about creating jobs than about putting Democrats' long-time agenda inside the urgency of a stimulus package.

REP. JOHN CULBERSON (R), TEXAS: This four -- excuse me -- 647- page bill represents one of the worst abuses of power, I think, that we have probably ever seen in the -- in the history of the Congress.

CROWLEY: Some Republicans think Democrats have built a backdoor entrance to universal health care with $127 billion in health care spending. That includes access to Medicaid for anyone who gets an unemployment check, regardless of income or assets.

Critics also see a significant shift in the federal role in education with $150 billion, which would double the current budget at the Education Department. The problem in the second week of the Obama era is saying no without seeming like a naysayer. REP. PAUL RYAN (R), WISCONSIN: We are here not simply as the opposition party. We are here as the proposition party.

CROWLEY: The Republican stimulus plan has more tax cuts. They say it will cost half as much and create twice as many jobs. It was defeated. So, in the first test of bipartisan spirit in the Obama era, no House Republican voted for the Democrats' stimulus plan.

REP. JACK KINGSTON (R), GEORGIA: We can do better. And I would like to work with the Democrats and the president, as would all the other Republicans, and try to make a better craft, a better package than what we're looking at today.

CROWLEY: Bipartisanship is one thing. Rolling over is another.

Candy Crowley, CNN, Washington.

(END VIDEOTAPE)

COOPER: Well, what do you think about the stimulus package? Too heavy on spending, not enough on tax cuts?

Let us know. A live chat happening now at AC360.com. Also, check out Erica Hill's live Webcasts during the breaks tonight.

Just ahead, our panel weighs in, David Gergen, Paul Begala, and Amy Holmes.

We're also hearing just now about a bus crash in Phoenix, a school bus crash. We're waiting for video. We're waiting for more information. As many as 40 children were on board, two in critical condition at this -- at this time. We're trying to get more information. We are going to have that breaking news for you coming up as well.

Also tonight, a government agency slated to get billions of dollars from the stimulus bill has a porn scandal. You're not going to believe this. Some of its employees have been spending your tax dollars to surf for porn while at work. They're now under investigation. We're "Keeping Them Honest."

And an appetite for porn is just one of the allegations Ted Haggard's newest accuser is talking about very publicly. Tonight, we will hear from the former volunteer at Haggard megachurch. And Haggard, himself, appeared on "Oprah Winfrey" today. Hear for yourself what he's saying now.

And first daughter frenzy -- practically overnight, Sasha and Malia Obama have become the new "it" girls. Modeling agencies and marketers are scrambling to try to find look-alikes to market more products. Is that a good thing or is that crossing a line? We will examine that -- ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I understand what makes an idea sound is not whether it's Democrat or Republican, but whether it makes good economic sense for their workers and companies. And they understand that, when it comes to rebuilding our economy, we don't have a moment to spare.

(END VIDEO CLIP)

COOPER: President Obama earlier today, before the House passed a stimulus bill without the help of a single Republican or the 11 Democrats who broke ranks and voted against the plan.

Critics of the bill are skeptical that it's going to what -- that it won't do what it's designed to do, which is create jobs and jump- start the economy.

So, where does it go from here?

Want to talk about that with our panel, senior political analyst and a former presidential adviser David Gergen, Democratic strategist and contributor Paul Begala, and contributor Amy Holmes.

David, I -- I was reading a "New York Times" report today that basically was saying the stimulus doesn't do much to change the way government is spending money, that it's basically throwing money at existing programs.

And I want to read you one thing that "The Times" wrote. They said: "The bill could create a small-scale version of an infrastructure bank, a freestanding entity that could make more merit- based decisions than Congress does, an idea that Mr. Obama supports. The bill could also finance the creation of new state offices to conduct cost-benefit analysis, none of which it actually does."

So -- so, are you concerned at all about how this money is going to be spent?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Yes, I am, Anderson. And I think a lot of Americans.

It's been interesting in reading your blog site over the last few days. There are these doubts that are creeping into the comments by many people on the blog site. And I think that's shared by a lot of Americans.

But, even so, you know, we can question fundamentals. I think the bill was sold to -- to the country, basically, as improving roads and bridges, infrastructure, doing a lot of work like that. And it turns out less than 5 percent of the money in this bill actually goes into roads, bridges, transportation -- and urban transportation.

And there's -- so, there's a lot of Republicans, I think, who are voting against it do have deep philosophical differences, as Ed Rollins was pointing out last night.

Even so, I think most economists will support this, will support the thrust of it. And, as an economic matter, it doesn't make much difference whether Democrats or Republicans vote for it. When it passes by this margin, it's going to pass. And when those dollars go out the door, they don't have Democrat or Republican stamped on them. They just have Uncle Sam on them. And that makes the difference.

Politically -- just one more point -- it's important to remember that Bill Clinton, when he was president -- and Paul Begala will remember this -- he didn't get a single Republican vote on his budget plan in the beginning. Republicans said it was going to lead on the road to perdition. And it actually worked out very well.

So, there's a -- we have got a lot to -- we have got a long way to go on this journey.

COOPER: Paul, you're a Democrat, and no doubt support the president, support this package.

Can you honestly tell Republican who are listening tonight that -- that the way the money is being spent is all appropriate, that it's not just pork barrel spending?

PAUL BEGALA, CNN POLITICAL ANALYST: Well, there's, you know, an economic theory, which I think is reality, called the leaky bucket.

Any time you try to do something, there's going to be some that leaks out. In other words, tax cuts don't work perfectly. Spending doesn't work perfectly. Nothing works perfectly.

But I was impressed that -- that the president was meeting today with business executives from the private sector, not exactly a core Democratic constituency, meeting again tonight, as Ed Henry reported, with a bunch of Republicans.

He's trying everything he can do to reach out, in substance, as well as style. He took out family planning money, which is very popular with Democrats. In fact, he was attacked from the left for doing that. But the Republicans didn't like it, so he took it out. He added some pro-business tax cuts that a lot of Democrats are very skeptical about. And he got nothing.

You know, he -- to paraphrase his inaugural address, he extended his hand, and they returned with a clinched fist. It's a big mistake for the Republicans. You know, they -- they are on the wrong side of this deal. There's new Gallup data out that says the percentage of Americans who consider themselves Republicans is at a 20-year low, the percentage of Americans who consider themselves Democrats a 20-year high.

In fact, Gallup says there's only five red states left in America, only five states that are Republican in a -- by any kind of sizable margin, by seven points or more.

So, it's the -- Republicans have got to, I think, practice bipartisanship, the way that this president's trying to.

COOPER: Amy, flip the question, I guess, I asked Paul. Can you tell Democrats who are listening or independents listening in the audience tonight that -- that -- that the Republicans don't have politics in mind, when they're all voting, I mean, every single one of them, voting against this thing?

AMY HOLMES, CNN POLITICAL ANALYST: Well, they certainly do have politics in mind, because they have their own constituents that they need to serve.

But you also saw 11 Democrats that had politics in mind. You saw the congressman from Mississippi who said that this was not change; this was more of the same. And let's remember that Republicans lost control of the House and Senate in 2006 because of overspending.

So, the idea that, you know, this isn't necessarily going to be applauded simply because Barack Obama wants it, it didn't turn out that way for Republicans, when they thought that they could spend their way into a perpetual majority.

I think you can flip this around and look at the politics a little bit differently. Barack said he wanted 40 percent -- President Obama -- pardon me -- 40 percent of this package to be tax cuts. He didn't get -- he only got about a third. So, in fact, it looks like House Democrats were acting in a more partisan manner than Barack Obama, and they didn't give him what he was asking for.

COOPER: David, do you buy that?

GERGEN: Well, I guess there are partisan points to be made on both sides, Anderson.

Look, I do think that most serious people -- Alice Rivlin, who is President Clinton's budget director, testified yesterday that she thinks that some of this package is very worthwhile, the infrastructure spending, but some of the long-term investments ought to be broken off and put into a separate package, where more time can be given to actually sorting out whether they're going to work or not.

I think the fear that some skeptical Democrats -- the "Washington Post" reported on this, this morning -- there are some Democrats who do have some fear that this is going to be the biggest single spending proposal of the Obama administration, and that there are elements of it not that are not as well thought through as they might be, and that they're -- it's going to close the door on doing some things that they really want to do down the road.

So, I think both sides are approaching this with some qualms, but they also feel -- especially the Democrats feel -- they have no choice. The economy is in urgent need of -- to be addressed with a stimulus package. We have got a very popular president. They're going to support him and go forward.

And this package is going to pass. Some -- a version of this package is going to pass here in the next two or three weeks.

COOPER: Paul, though, I mean, to -- to some Republicans' point, they're saying, look, that, essentially, Democrats are trying to throw in money at social programs that they have always wanted to be able to fund and couldn't fund before. Now -- now it's kind of payback time and they're getting to throw money at it.

Is it -- do you -- I mean, does all this stuff really help stimulate the economy?

BEGALA: Well, absolutely.

In fact, the quickest way -- every economist agrees -- to jolt the economy is to put money into unemployment benefits, right? If a person is unemployed, that person gets extended benefits, he or she is going to put that right back into the economy. They're not going to put it in their mattress, right?

And, so, the -- the health care spending in here, the -- the Medicaid spending in here, the extended benefits for unemployment, that's an immediate jolt to the economy. That's the -- the quickest way to try to get these things going.

It also happens to be, as Democrats believe, progressive economic policy, progressive, because they -- they believe that we have a consumer-driven economy. That's the Democrats' theory. And, if we target middle-class and working folks and poor folks with aid, they will spend that money, and we will all get richer.

Republicans have a different theory, that elite investors drive the economy, in their theory, and we should target all the aid to them. You know, elections have consequences.

HOLMES: But -- but, Anderson...

BEGALA: Mr. Bush won, and we tried his theory.

COOPER: You got to keep it short, Amy.

BEGALA: Most Democrats think it didn't work. Now Mr. Obama has won. We will try his theory.

HOLMES: I don't think the kitchen-sink theory to government spending is what's going to grow the economy.

We saw that the CBO reported last week that less than half of this spending will even come online until the end of next year, when possibly we will be pulling out of the recession. So, we will have these high spending levels. How will this be supported? Are we going to be borrowing more money from China, which drives up interest rates? Are we going to be printing more money, which creates inflation?

You know, there are some real problems here.

COOPER: Just for accuracy -- just for accuracy, to restate, they actually did put out a report today which now estimates 64 percent of the money, $526 billion, would be spent by next September.

HOLMES: Well, then what do you do, still, with the 36 percent, which is then going to come online after we might be pulling out of this?

COOPER: OK.

HOLMES: It's a big problem.

COOPER: We have got to leave it there, unfortunately. I wish we had more time.

David Gergen, Paul Begala, Amy Holmes, thanks. Appreciate it.

In the days and weeks ahead, we're committed to showing you exactly what is in this stimulus plan, not just the politics, but the facts. Next on 360, Ali Velshi shows us exactly how the bailout money will be spent, what we know, at least, and how soon it's going to happen, and why Obama's plan has so many Republicans worried.

Also tonight, the damning new report on country's roads. David Gergen was talking about infrastructure and how we all think a lot of this money's going to infrastructure spending. It's not. And this new report out about the state of our bridges and tunnels is shocking. Are you safe when you drive? You will not believe how much it's going to take to fix our crumbling infrastructure.

And, later, surfing for sex on your dollar -- federal workers from the same agency punching the clock and prowling for porn. You will not believe this story. We're "Keeping Them Honest."

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I hope to sign an American Recovery and Reinvestment plan into law in the next few weeks.

Now most of the money that we're investing as part of this plan will get out the door immediately and go directly to job creation, generating or saving three to four million new jobs.

(END VIDEO CLIP)

COOPER: A plan, a promise to create jobs, lots of them, and stop the economy from freefall.

Democrats in the House believe in it. Now it's up to the Senate to approve President Obama's $819 billion stimulus package. The House approved it tonight. Three hundred billion of it is actually tax cuts. That leaves roughly half-a-trillion dollars to spend. But the question is where, how soon, and will it work?

Now, some Republicans, as we have been talking about, think it may all be wasted. So, let's look at the facts and see where the cash is going. We're talking about your money and your future, and it's important.

Ali Velshi has the figures and facts, joins us now. So, Republicans, Ali, are saying Obama's plan has too much spending, not enough tax cuts. The spending is estimated to be $550 billion. What's the money being used for?

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, that's two- thirds of it. So, let's take a look at that. Let's break that down. It breaks down into about six different categories.

And I want to give you a sense of it. That's your whole pie. Let's take that spending part out and -- and give you a sense of it. And we will start with education spending. There's $142 billion going to education spending. That's modernizing classrooms, extending Pell Grants, things like that. Maybe some of that is not all that immediate.

Some of it will be, because there will be some construction in there. Infrastructure, that's where most of the construction is going to go, highways, buildings, bridges, things like that, $90 billion.

Energy, that's mainly to update the country's electricity grid, work that has to be done. That will involve construction jobs, another big area, $54 billion there. Health care, $111 billion, the vast majority of that will be going to increasing Medicaid. But there will be a lot of it going toward automating hospital records. And that is a big area of savings. One of the most inefficient areas of health care in America is the way hospital records are handled.

Aid and benefit to seniors and the disabled, some emergency security, Social Security money, $72 billion there. It's also an increase in food stamps, some training, an extension of unemployment benefits.

And science and technology, $16 billion there, about $6 billion of that is estimated to be going into an area -- into areas where they don't have broadband high-speed Internet. A lot of people don't think of that as necessary, but think about the business that isn't done in places where they don't have broadband Internet. And there's a lot of parts of the country that don't.

So, that's how they are saying the spending part of this -- this bill will work.

COOPER: Let's talk about the timeline, because over -- a lot of people have been reporting different things over the last week or so about how quickly this money's going to be spent. What are -- what's the facts there?

VELSHI: Yes.

There was some reporting that only about 38 percent of it would be spent within the first 18 months, by next September. That looked like it was jumping the gun. The Congressional Budget Office, which is the nonpartisan budget arm of Congress, has now done a more full report, and says that about 64 percent of this money will be spent in the first 18 months. The Obama administration says it's 75 percent. So, there's still some discrepancy there. That, of course, is a complaint of Republicans. You want to get -- you talked to David and Paul Begala about this earlier. We're all trying to get the best bang for the buck. And, sometimes, that means, in some cases, at least, the soonest bang for the buck.

Still some discrepancy, but it looks like everybody's in agreement that the lion's share of it will be within the first 18 months.

COOPER: About 64 percent.

All right, Ali Velshi, thanks. Appreciate it.

Next: During President Obama's campaign, he promised to fix America's crumbling infrastructure. David Gergen mentioned this earlier on. But the latest report card from America's engineers has more bad news for us all. We will be -- we will take a look at that.

Also tonight, porn at work. You will not believe what a government agency has been caught doing on the clock. We're "Keeping Them Honest."

And Ted Haggard speaks to Oprah Winfrey today about his sex scandal and responds to new charges about him.

And breaking news out of Phoenix -- a school bus filled with kids goes out of control. Thirteen vehicles were caught in the pileup. The accident scene is a mile long, 26 people injured, the first pictures just coming in now. We will have the latest, tell you what we know.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: Even as this plan puts Americans back to work, it will also make the critical investments in alternative energy, and safer roads, better health care, and modern schools that will lay the foundation for long-term growth and prosperity.

(END VIDEO CLIP)

COOPER: Well, as you all remember, there was a lot of talk during the campaign about fixing our infrastructure, but today a reminder that the government needs to do more than just talk.

In a report card issued by the American Society of Civil Engineers, America's infrastructure earned the barely passing grade of D. From failing bridges, to leaky water mains, the country's infrastructure is in such bad repair, the report estimates it's going to take five years and $2.2 trillion to fix it.

Tom Foreman tonight is "Keeping Them Honest."

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: Anderson, Americans have witnessed dramatic infrastructure failures in recent years. It sounds boring, but it's really not.

Think about the levee collapses in New Orleans during Katrina, all those lives lost, billions of dollars in damage done down there. Think about what happened up in Minneapolis, when that bridge fell down during rush hour, 13 people killed in 2007, a major commuter road shut down as well.

And, then just a few weeks ago, here in Washington, D.C., nobody killed, but a water main broke just outside of town and turned a road into river in seconds. Civil engineers have long warned of a tidal wave of these infrastructure problems.

Barack Obama talked about it on the campaign trail, too.

OBAMA: We can rebuild our electricity grid, put people back to work right now rebuilding our infrastructure.

Right now, repairing and rebuilding our roads and our bridges and our schools.

If we can spend $10 billion a month in Iraq, we can spend $10 billion here in the United States of America.

(CHEERING AND APPLAUSE)

FOREMAN: The latest report card from the American Society of Civil Engineers is stark. Out of 15 systems we use every day for transportation, drinking water, garbage disposal, the highest grade was a C-plus for the way we're managing solid waste. The vast majority, as you can see, got D's.

Some particular points of worry, bridges out there, one in four structurally deficient or obsolete. Four thousand dams are considered in need of some kind of attention, almost half high hazards, because they could flood communities downstream

And almost incredibly -- think about this -- the report found that we're losing seven billion gallons of clean drinking water every day through leaky pipes: public schools, parks, airports, railways, roads, and so much more since the last report card in 2005. The society says almost all have grown worse and the cost of fixing them has only gone higher -- Anderson.

COOPER: All right, Tom, thanks.

The costs are not just financial. Congested highways, fragile power grids, second-rate ports. Experts say that not only makes us less productive as a nation; it leaves us more vulnerable to terrorists. We're literally rotting from within.

At $2.2 trillion, however, the price tag almost tripled President Obama's current economic stimulus package. The question is, can we afford to fix it?

Let's dig deeper with Stephen Flynn, author of the book "Edge of Disaster" and a frequent guest on our program.

You know, this is not a sexy topic. It doesn't grab anyone in, but it is really a national security issue.

STEPHEN FLYNN, AUTHOR, "EDGE OF DISASTER": Well, it really is fundamentally one in that, when our competitiveness is at stake, our safety and quality of life is at stake, but also our national security. The more brittle we are, the more soft targets we essentially are. And so we get a three-for by investing in infrastructure. Better economy, better quality of life. We actually improve our security.

COOPER: I was surprised that David Gergen said, I think, 5 percent of this is being spent on these kind of road-building infrastructure things. Everyone thinks the stimulus is really all about rebuilding this infrastructure in a massive way. It's really not yet.

FLYNN: It's a very small down payment on what we really need to do. The big crisis we really never have talked about. Obviously, the president in this campaign trail highlighted it, and it's been the first time in almost 30 years we started talking about our failing infrastructure.

And I said we're like a generation who's inherited our grandparents' mansion and we decided to not do the upkeep anymore. Everybody's thinking it's a nice house, but the wiring's gone to heck. The plumbing has gone bad. And not investing in it is a bit like not changing your oil on your car because you think it's, you know, a hassle and a little expensive.

COOPER: And both Democrats and Republicans haven't been doing this. I mean...

FLYNN: Well, right now the debate in Washington is really almost the same old debate. It's simplistic to say there's just no jobs. There's no question this is an investment in our economy, and jobs over the long run will be produced by investing in this.

At the same time, this whole "this is robbing the taxpayer of his honest dollars." Well, you need infrastructure to be in an advanced society. Our grandparents and great-grandparents bequeathed to us the greatest legacy in terms of infrastructure since the Roman Empire. But this report today reads just like something that's going to leave (ph) of the collapse of the Roman Empire.

COOPER: The problem -- I read you said something that this is like in the last days of the Roman Empire. This is the kind of report card they would have gotten, which is a terrifying thought.

In terms of how the money is being spent, though, it seems like we're kind of just throwing the money at the states and letting the states decide what the priorities are for their infrastructure. Is that the way it should be done?

FLYNN: Well, in the near term, moving money quickly, there are a lot of projects the states have got cleared because of the environmental impact done. They're in the works but they ran out of cash. So getting cash into them probably makes sense as a Band-Aid.

But the real challenge, Anderson, we're not looking at the nation's infrastructure as a nation. It's a patchwork quilt, basically, of local projects. Some bridges are more important than others. Today we learned, yet again, 150,000 bridges in bad shape. There's probably a hundred of them that are more important than the other 150,000 that you don't have done. So where are they? We don't have a system in this country to even do this analysis. They pointed out levees...

COOPER: On a national level, we don't have a system?

FLYNN: There's nowhere you can say where are the top 100 bridges that are most broken...

COOPER: Really?

FLYNN: ... that we need to fix? Because historically, the federal government hasn't played that role. It's the states and governments that do it.

So the solution going forward is that one of the things that certainly the president can do to get out ahead of this problem is to put together a bipartisan commission, get the input from the states, and prioritize with the expertise we have in this country, like the American Society of Civil Engineers, the National Academy of Science.

We have shovel-ready expertise in the citizens in this country, the universities and so forth. We can do this. The thing that is amazing, is that we somehow decided that we can't afford to maintain an infrastructure that our forebears built with their sweat, with their equity, with their inventiveness, and not investing in it costs us a lot of money.

COOPER: Stephen Flynn, you've been raising this warning for a long time. We appreciate you being on tonight. Thank you.

FLYNN: Thanks for having me.

COOPER: More now on the collapse of our infrastructure and what it's costing you. Don't miss Stephen Flynn's blog at AC360.com. Interesting blog today.

Next, government workers spending as much as 20 percent of the day online, sounds fine, right? Turns out they are looking at porn. We have the details of an investigation into a government organization. We're "Keeping Them Honest."

Plus, you know about the recall of some peanut-butter products, but today we learned the peanut-butter company whose products sickened more than 500 people, turns out they knowingly shipped out their product. We're going to tell you how they did it and why it's totally legal.

And you've heard about the Sasha and Malia dolls. It is not just a toy company trying to make money off the Obama girls. How modeling agencies and marketers are now searching for similar-looking girls to help sell their products.

(COMMERCIAL BREAK)

COOPER: So you will not believe what's been going on inside the National Science Foundation lately. With a budget of $6 billion and a mission to promote the progress of science, employees were apparently using your tax-paying money to -- your dollars to download porn from the Internet, and a lot of porn.

The question is, how did this happen? Who was watching? Tonight, we're "Keeping Them Honest."

Here's Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT (voice-over): There's no way to tell how pervasive the problem is: employees at the National Science Foundation surfing for porn on computers paid for with your money.

What we do know is the inspector general took a look at just one of the foundation's computer servers and discovered, quote, "six cases of employees viewing, downloading, saving, and or sharing pornographic images and videos. And on top of that, one case of extensive participation in pornographic chat Web sites."

(on camera) But what's attracted attention on Capitol Hill is this case. A man described as a senior foundation official, apparently a big shot, who retired after being told he was about to be fired.

He was allegedly spending up to 20 percent of his official work time over a period of two years viewing sexually explicit images and engaging in explicit online chats with various women.

(voice-over) The I.G. also took a look at this guy's salary and figured his personal time online at work exploring the Internet's wild side was worth about 58,000 bucks. Senator Charles Grassley calculates that as eight hours a week of wasted work time over 24 months, and now he's writing letters and demanding explanation.

SEN. CHARLES GRASSLEY (R), IOWA: He was either fired or he quit before he was fired so he's no longer there, so he's not doing it. But what is the oversight of people higher up, that senior executives can be spending so much time doing non-productive work when they're on the taxpayer's payroll?

JOHNS: In a statement the foundation said that it has new controls on its computer system, that "the small handful of employees found to have engaged in the type of conduct highlighted in the I.G. report were notified that they were either going to be dismissed from the agency or suspended."

And that, quote, "NSF employees and contractors know that, because they are using taxpayer resources, they can expect no right to privacy for any information used or shared on an NSF system."

Senator Grassley is wondering what these guys at NSF are doing with your money, because they do get quite a bit of it.

GRASSLEY: But it is disconcerting when you have an agency that gives out $6 billion, and you also have that same agency getting $3 billion on top of that in the stimulus package.

JOHNS: Grassley says the government is looking at other computer servers at the foundation to get a sense of whether anybody else is surfing for sex instead of science.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

COOPER: Coming up, Ted Haggard takes his case to Oprah Winfrey, but first, Erica Hill joins us with a "360 Bulletin" -- Erica.

ERICA HILL, CNN ANCHOR: Anderson, we begin with breaking news out of Phoenix, the story we've been following since just before we went on the air.

More than two dozen people now have been injured in a school bus crash. More than 40 kids were on board the elementary school bus. Some of them actually fled the scene, we're told, in fear. Luckily, no children were among the injured.

But here's what happened. The driver reportedly lost consciousness before losing control of the bus. We just learned none of those injuries are considered life-threatening, but we're going to continue to follow this.

A Georgia peanut plant knowingly shipped contaminated products, poisoning hundreds and killing as many as eight. U.S. health officials charge that testing for positive for -- after testing positive for salmonella, the Peanut Corporation of America went lab shopping, apparently looking for better results.

The FDA does not require food companies, by the way, to report bad test results. Comforting.

Your postman -- or postal carrier, I believe, is the correct term these days -- may not be troubled by rain, sleet, snow, or gloom of night, but a massive budget deficit could mean that you'll see a little less of them. That's right: at least one less day a week. The postmaster general asking Congress today to cut mail delivery from six days down to five. Get rid of those Saturday bills, perhaps, on the up side, Anderson.

COOPER: Wow, I'm trying to wrap my mind around the fact the FDA doesn't require bad test results to be sent to them. HILL: Isn't that amazing? Hey, we think we have salmonella, but we don't have to tell you.

COOPER: Unbelievable.

HILL: Somehow that's wrong.

COOPER: Yes.

Coming up next, the confessions of Ted Haggard. His new interview with Oprah Winfrey. His surprising new comments about his sexuality and the phone calls between the preacher and a former church member who alleges the pastor had an inappropriate sexual relationship with him.

Also tonight, you saw the Sasha and Malia dolls. Now modeling agencies and marketers are looking for Sasha and Malia look-alikes. Producers, agents, Hollywood is waiting. Is this appropriate or a line being crossed?

And later, Beyonce's "Single Ladies" video, yes we can't get enough of it on this program. It's been copied countless times. Now it's President Obama's turn to give it a try. It's our "Shot" coming up.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TED HAGGARD, FORMER EVANGELICAL PASTOR: You know all the surveys say that evangelicals have the best sex life of any other group.

UNIDENTIFIED MALE: Oh, come on.

UNIDENTIFIED FEMALE: No way.

HAGGARD: Oh, yes.

(END VIDEO CLIP)

COOPER: Joking about sex and religion, that was Ted Haggard at, really, the height of his power. The former pastor was the head of the National Association of Evangelicals, a group with 30 million members.

In 2006, the man who'd preached against gays and lesbians was found to have had a relationship with a male prostitute from whom he'd also bought crystal meth.

The married father of five is now on a redemption tour of sorts. The subject of an HBO documentary that airs tomorrow night. Haggard is also opening up about what he calls his ongoing struggles with same-sex attraction. Here's what he told Oprah Winfrey today.

(BEGIN VIDEO CLIP) HAGGARD: (UNINTELLIGIBLE) And it was the first time that that dark area of my life that I'd worked so hard to keep secret and fight against was coming to the surface. And so to say it and to talk about it was so shameful and so shocking, even to me, much less to my wife, to my children, to the congregation, to the people that I loved so dearly.

(END VIDEO CLIP)

COOPER: Well, that's just the beginning for a man who continues to struggle with his identity and his faith. David Mattingly has an up close look.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: So you don't know why he would be bringing up these allegations against you?

HAGGARD: No, I don't.

DAVID MATTINGLY, CNN CORRESPONDENT (voice-over): Three years after a scandal involving allegations from a former male prostitute, disgraced evangelist Ted Haggard tries to answer the big question on Oprah.

OPRAH WINFREY, TALK SHOW HOST: Do you think -- and do you think you're gay?

HAGGARD: No, I don't think I'm gay. I did wonder about that. After this crisis when I went to therapy, I said, "I need to know am I gay, am I straight, am I bi? What am I?"

And my first therapist said, "You are heterosexual with homosexual attachments."

MATTINGLY: But there are now even more questions about another alleged encounter that, until now, had remained private.

GRANT HAAS, FORMER CHURCH MEMBER: He wanted me pretty much to purchase him pornography, purchase him some drugs, the party formula pretty much. He told me, you know, we don't have to do anything with each other. We can just, you know, watch porn, get high, and masturbate.

MATTINGLY: Brent Haas was once a volunteer at Haggard's mega church. He says in 2006 he and Haggard shared a hotel bed while Haggard pleasured himself.

HAAS: He really thought he was invincible, because he used to say to me, "You know what, Grant? You can become a man of God, and you can have a little bit of fun on the side."

MATTINGLY: After the original scandal that cost Haggard his job, Haas says he also threatened a lawsuit. That's when he says he taped a phone conversation with Haggard.

HAGGARD: Here's the way it works. I wasn't an honorable pastor.

MATTINGLY: We can hear what sounds like Haggard trying to convince Haas to not go public about their encounter.

HAGGARD: We need to figure out a way to make life successful instead of figuring out a way to make life painful for each other. I would never make life painful for you.

MATTINGLY: The man in the recording complains of falling on hard times. He pleads for time to rescue his marriage, and he talks of his struggle with sin.

HAGGARD: That addiction that -- one moment you're enslaved by -- I'm enslaved by sin, and the next moment I'm seeking God with all my heart. And that's the horror of it.

MATTINGLY (on camera): CNN is unable to confirm the authenticity of this recording. We spoke with Haggard and asked if he could verify that the conversation took place. Instead, he referred us to a P.R. company representing him.

Haggard, who is promoting a new documentary about his fall from grace, earlier released this statement through HBO, which like CNN is owned by Time Warner. Haggard said, "Although there was no physical contact, I have regretted my irresponsible behavior. Once again, I ask Grant for his forgiveness, as well as the people of the church."

(voice-over) By speaking out about his relationship with Haggard, Haas violates the terms of a settlement agreement with Haggard's former church worth $179,000, but the current senior pastor says the church will honor that agreement and do the right thing for the right reasons.

David Mattingly, CNN, Atlanta.

(END VIDEOTAPE)

COOPER: Don't forget: tomorrow night, Ted Haggard sits down with Larry King to talk about sex, lies, family, and faith.

We've heard about the controversy over the next Sasha and Malia dolls and whether they are inappropriate or not. Now another attempt to cash in on the first daughters. Next on 360, the star search for Sasha and Malia look-alikes. Is it good business or crossing a line?

And later, "The Shot." President Obama just a couple days before taking the oath of office, making jokes about music videos, "Saturday Night Live," and dance moves with Beyonce.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: My children's school was canceled today because of what? Some ice?

UNIDENTIFIED MALE: Chicago.

OBAMA: As my -- as my children pointed out, in Chicago school is never canceled. In fact, my 7-year-old pointed out that you'd go outside for recess.

(END VIDEO CLIP)

COOPER: Parent and President Barack Obama today, bemoaning the fact that his kids' private school was shut down because of a little bit of ice in Washington, D.C.

Both President Obama and first lady Michelle Obama have made it clear they will protect Sasha and Malia's right to privacy, as they should. Others, though, are hoping to profit from their fame or market for it. Some families think the best way is with casting calls.

Deborah Feyerick tonight in "Uncovering America."

(BEGIN VIDEOTAPE)

DEBORAH FEYERICK, CNN CORRESPONDENT (voice-over): When it comes to fashion, there's nothing like a powerful brand to boost sales, especially if that brand is a dynamic first family.

MARLENE WALLACH, WILHELMINA KIDS & TEENS: We have gotten several calls for look-alikes.

FEYERICK: Marlene Wallach is president of Wilhelmina Kids and Teens.

WALLACH: It's a trend because what little girl doesn't want to emulate the first kids?

FEYERICK: The modeling agency represents 6-year-old Ariel Vance (ph), who recently scored big in a Benetton ad.

(on camera) Is that Tyra Banks?

UNIDENTIFIED FEMALE: Yes.

FEYERICK (voice-over): She then scored as a first daughter look- alike to faux Obama mama Tyra Banks in September's "Harper Bazaar."

(on camera) This could really open up a lot of possibility for your daughter for other different ad campaigns.

DAWN CROOKS, ARIEL'S MOTHER: I think it will and hope it does.

FEYERICK (voice-over): Unlike the Bush twins or Chelsea Clinton, global branding experts say the appeal of the Obama girls is unique and infinitely marketable.

DAVID ROGERS, GLOBAL BRAND EXPERT: Marketers are finally waking up to it. You know, black is beautiful. It's just going to become part of the fabric of the fashion imagery, of pop culture, which is a great thing.

FEYERICK: After the first kids appeared in their J. Crew outfits inauguration day, the company's Web site got so many hits, it crashed. But when a toy company recently tried selling unauthorized Sasha and Malia dolls, first lady Michelle Obama's office called it inappropriate.

Still, many companies believe the look-alike effect will rub off.

WALLACH: You know, if all these young tweens are aspiring to be these girls, I would assume that that's their intention.

FEYERICK (on camera): And often that works?

WALLACH: And often that works.

FEYERICK (voice-over): Which will likely mean more work for kids like Ariel Vance (ph).

UNIDENTIFIED FEMALE: I actually have a go see for you guys to go to right now. It's for Saks. They're looking for five to six girls.

FEYERICK (on camera): Some branding experts say there's a fine line between positive marketing and being tacky, but the feeling is because of the Obamas, there will be an increase in the number of African-American models in fashion magazines and ad campaign, taking diversity to a whole new level.

Deborah Feyerick, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, let us know what you think about it: AC360.com. Join the live chat happening now.

So do you want to see the president's impression of Beyonce? Mr. Obama shows us his best "Single Ladies" move. It's our "Shot," and it's coming up.

And at the top of the hour, serious stuff. Breaking news on the House passing the economic stimulus package and President Obama celebrating with drinks at the White House. Not everyone, of course, is happy. We'll talk about that ahead.

(COMMERCIAL BREAK)

COOPER: All right, Erica, time for "The Shot."

Tonight, President Obama, just days before the most important day of his life in the historic inauguration, and he's talking about Beyonce, talking -- and her fun video, "Single Ladies." Watch, listen, and enjoy.

(BEGIN VIDEO CLIP)

OBAMA: What's going on, man? How you doing? We saw each other. UNIDENTIFIED FEMALE: Mr. President, you didn't tell Beyonce about "Single Ladies," your rendition?

OBAMA: But I'm not like Justin. I didn't put on the outfit. I didn't put on the outfit. But I didn't want my girls thinking that I couldn't, you know. I got a little something. This part I got.

(END VIDEO CLIP)

COOPER: There he is. He's kind of got the hand gesture down. Let's see how the president compares, though, to "Single Ladies," the way Beyonce and her friends did it.

(BEGIN VIDEO CLIP)

(MUSIC: "Single Ladies")

(END VIDEO CLIP)

HILL: You know, it's funny, he may have had part of that down, but I think that the gentlemen here in the studio could really give the president a run for his money. And maybe Beyonce, too.

COOPER: The folks in the floor crew have been practicing.

HILL: There's some booty shaking going on here tonight.

COOPER: You can't help it with this song.

HILL: Like a new theme song, I think.

COOPER: This is really just an excuse to show that video again.

HILL: Yes.

COOPER: You can see all of the most recent "Shots" on our Web site, AC360.com.

I find it interesting, though, to know that the president actually knew I Justin Timberlake had been on "Saturday Night Live" doing the Beyonce thing.

HILL: I thought the same thing. I wonder if Justin Timberlake knows that the president knows who he is and what he did.

COOPER: He does right now.

HILL: He does. Because he's watching us every night.

COOPER: Right.

HILL: Yes.

COOPER: All right. Time now for our "Beat 360" winners, our daily challenge to viewers to come up with a caption better than the one that we can think up around here. Here's the picture, former vice president, of course, Al Gore gesturing today before he testifies about his climate change or about climate change at the Senate Foreign Relations Committee on Capitol Hill.

So our staff winner, Candy Crowley, no less.

HILL: Nice!

COOPER: Her caption: "I'm not commander in chief, but I play one on TV."

(SOUND EFFECT: LAUGHTER)

COOPER: Our viewer winner is Mike from Ithaca, New York. His caption: "Captain Climate Change reporting for duty."

(SOUND EFFECT: DRUM BEAT)

HILL: Also very clever.

COOPER: All is good. Mike, congratulations, your "Beat 360 T- shirt" is on the way.

Seems still excited about Beyonce, though.

Just ahead at the top of the hour, President Obama's stimulus plan passes its first vote in the House without the support of a single Republican. What that says about the fight ahead.

And Ted Haggard opening up about his life, with Oprah Winfrey. We'll have all the details ahead.

(COMMERCIAL BREAK)