Obama's Grand Bargain; Dow Down
NINA DOS SANTOS, HOST: A grand bargain. The US president is making his pitch for more spending on jobs. We'll bring you his speech live. Plan B for Barclay's. The bank asks investors to help it cover $20 billion gap. And also on the show, from the Champions League to the courtroom. Bayern Munich's president is charged with tax evasion. Hello, I'm Nina Dos Santos, and this is QUEST MEANS BUSINESS. Welcome to the program. President Barack Obama is about to propose, in the words of the White House, what he calls a "grand bargain." It's a promise to work with lawmakers to cut taxes for business in return for investment to try and create more middle class jobs. Republicans don't seem to be too keen to strike a deal, though, saying that this so-called bargain leaves families and small business behind. These are the live pictures as you can see there at Amazon.com's distribution center in Tennessee. Let's listen in to the president this hour.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The kind of economic growth that's broad-based, the foundation required to make this century another American century. But as I said last week, and as every middle class family will tell you, we're not there yet. Even before the financial crisis hit, we were going through a decade where a few at the top were doing better and better, but most families were working harder and harder just to get by.</s>OBAMA: And reversing that trend should be Washington's highest priority.</s>OBAMA: It's my highest priority, but so far for most of this year, we've seen an endless parade of distractions and political posturing and phony scandals, and we keep on shifting our way -- shifting our attention away from what we should be focused on, which is how do we strengthen the middle class and grow the economy for everybody.</s>OBAMA: And as Washington heads towards yet another budget debate, the stakes couldn't be higher. And that's why I'm visiting cities and towns like this one, to lay out my ideas for how we can build on the cornerstone of what it means to be middle class in America. A good job with good wages. A good education.</s>OBAMA: A home to call your own.</s>OBAMA: Affordable health care that's there for you when you get sick.</s>OBAMA: A secure retirement even if you're not rich.</s>OBAMA: More chances for folks to earn their way into the middle class as long as they're willing to work for it.</s>OBAMA: And most importantly, the chance to pass on a better future for our kids.</s>OBAMA: So, I'm doing a series of speeches over the next several weeks, but I came to Chattanooga today to talk about the first and most important cornerstone of middle class security, and that's a good job in a durable, growing industry.</s>OBAMA: It's hard to get the other stuff going if you don't have a good job. And the truth is, everything I'm going to be talking about over the next several weeks really is about jobs. Because preparing our children and our workers for the global competition they'll face, that's all about jobs. A housing finance system that makes it easier and safer to buy and build new homes, that's about jobs in the construction industry. Health care that frees you from the fear of losing everything after you've worked so hard, and then having the freedom to maybe start your own business because you know you'll be able to get health care, that's about jobs. And obviously, retirement benefits speaks of the quality of our jobs. And let me say this, something everybody here understands. Jobs are about more than just paying the bills. Jobs are about more than just statistics. We've never just defined having a job as having a paycheck here in America. A job is a source of pride. It's a source of dignity. It's the way you look after your family.</s>OBAMA: It's proof that you're doing the right things and meeting your responsibilities and contributing to the fabric of your community and helping to build the country. That's what a job's all about. It's not just about a paycheck. It's no just about paying the bills, it's also about knowing that what you're doing is important. That it counts. So, we should be doing everything we can as a country to create more good jobs that pay good wages. Period.</s>OBAMA: Now, here's the thing Chattanooga. The problem is not that we don't have ideas about how we can create even more jobs. We've got a lot of ideas out there. There are plenty of independent economists, plenty of business owners, people from both parties, agree on some of the ingredients that we need for creating good jobs. And you've heard them debated again and again over these past few years. I've proposed a lot of these ideas myself. Just two years ago, I announced the American Jobs Act, full of ideas that every independent economist said would create more jobs. Some were passed by Congress, but I've got to admit, most of them weren't. Sometimes --</s>DOS SANTOS: Barack Obama, as you can see, there, speaking in Chattanooga, Tennessee at a distribution center of Amazon.com. That company also announcing plans today to hire about 7,000 new workers. This is all part of what's being pitched as a "grand bargain" by the White House. You could here, there, the US president saying that he wants to be able to offer people the promise -- middle class people in America the promise of having good jobs. Which means that they can also afford a good lifestyle, and that includes education, having your own home, as well as access to affordable health care for people who need it most and retirement packages and the chance to pass on something better to the next generation. Let's bring in Maggie Lake at CNN New York, who's been following this story, and she's also been speaking to key Amazon executives from that particular distribution plant that the US president was talking from just a moment ago. Maggie, first of all, many countries are taking a look at exactly what it means to be middle class these days, but it's extremely important in America, because there's so many people who lost their jobs in 2008 and still remain under-employed.</s>MAGGIE LAKE, CNN INTERNATIONAL CORRESPONDENT: That's right, Nina. It is a very big theme. You heard the president mention that phrase already several times. You can expect him to keep hammering home at that point. This is sort of the theme. He's now out making a series of speeches, pushing his economic vision, agenda, which has pretty much been stalled. And what we're seeing in this speech, as the one before, and likely will follow the same pattern is he's sort of reminding everyone how far we've come, the fact that 7 million jobs have been created over the last 40 months, sort of ticking off the accomplishments, which a lot of people in the Obama administration feel they don't get enough credit for. But then sort of setting up the future, which is that much more needs to be done, especially addressing that sort of vacuum in the middle class. A lot of the jobs that have been created are on the lower end of the scale. We've seen some of those better-paying, what we could consider middle wage -- middle-class wage-earning jobs really not come back in the way that they had existed before. Incomes haven't really been rising. People still feel very strapped. That's a problem for the president. It's also something that he feels Republicans are vulnerable on. They haven't really been seen to be addressing problems of the middle class, so that's a theme he stays on very much. And today, sort of presenting what he says is a bargain, a way to jump- start the economic talks in Washington, offering what we believe, according to the administration, is the fact that he's going to -- he's willing to address tax reform, cut those corporate taxes if Congress will agree to spend on investment in jobs. They haven't been very keen on spending. So, he's trying to sort of reignite the debate in Washington, remind people how much progress has been made. But it's a tough sell, Nina. Republicans responding very coolly to what we believe the president's laying out in this speech right now, saying they don't feel there's anything new here.</s>DOS SANTOS: And he's continuing to talk this hour, there, in Tennessee from this distribution plant at Amazon.com. They're going to be offering several thousand new jobs here, but again, it all goes back, Maggie, doesn't it, to the issue of whether those jobs can provide that kind of middle-class lifestyle?</s>LAKE: Yes, exactly. And this is exactly a perfect example of the problem here. They're going to be training 7,000 jobs, but a lot of people have pointed out these are working in these vast warehouses, the salaries that they pay, the type of work it is, really hard to raise a family on. I actually put that to Dave Clark, an executive at Amazon who oversees that facility there, as well as others, and asked him about that, about the quality of the jobs. Here's what he had to say.</s>DAVID CLARK, VP OF WORLDWIDE OPERATIONS AND CUSTOMER SERVICES, AMAZON: We think these are great jobs. These jobs pay typically 30 percent more than a traditional retail job. They're full-time jobs, they start with benefits on day one. Our employees are stock owners and participate in stock programs for the company. We have 401Ks that are matched by the company.</s>LAKE: Now -- so the base salary maybe not as high, they're trying to upgrade it above the average, but Nina, when he's talking about all those other perks, trying to enhance the package, one of the things he also told me about that will likely really resonate with the president and the administration is that they offer employee education, tuition reimbursement. So that as you work at that fulfillment center, you can train up, increase your skills so that you'll be able to climb the ladder, not only at Amazon, but leave the company if you want, and get a better job someplace else. That is the type of thing that Obama is trying to push, not only from Washington, but from the private sector. Re-educate and retool. Easier said than done, but that's one of the things that Amazon and the president are pressing on today.</s>DOS SANTOS: Yes, Dave Clark certainly seems very much on message. Of course, all of this gears up to a key jobs report later on in the week.</s>LAKE: That's right, and this, again, is when we're going to be talking about where are the jobs being created? Are they coming from manufacturing? From white-collar segments that have been hard-hit. Financials, et cetera. Or are they again in the service, in retail -- which is not to dismiss them. A job is a job, especially if you don't have one. But again, what are the wages like in those jobs? Are a lot of people under-employed? Are they working several jobs instead of the one that would allow them to best support their families. So, we're really going to dig in the details there and talk about not just job creation overall, but the quality of the jobs being created. And I just want to circle around to show how complicated this is, Nina. When I was talking to Amazon, I also asked them, OK, so you're paying above the industry average, but what do you -- what's your dialogue like with local retailers? Because you're creating jobs that at the same time, people say killing off some of those small businesses, where traditionally, again, those were well-paying jobs. They say they have a good relationship. They try to giver everyone a platform. But it's a complicated situation as we really undergo this globalization and this technology revolution that's changing the labor force.</s>DOS SANTOS: It certainly is. Maggie Lake, there, in New York. Thanks very much for that. Let's see whether the US president, Barack Obama's speech has actually made any waves on the US stock markets. This is how the Dow Jones industrial average is trading. As you can see, we're currently down around about 0.19 of one percent, so around about a quarter of one percent on the day, 30 points on the Down, at 15,493 at the moment. As you can see, it has very much reversed its trend in just the last hour or so. It had been underpinned by better-than-expected housing data in the United States earlier on this session. But since the US president has started talking, it seems as though things have turned south. Now, after the break, mind the gap. Barclay's is certainly trying to. The British bank is asking shareholders for billions of dollars to help fill a gaping hole.